Hartford Great Health Corp. - Quarter Report: 2022 October (Form 10-Q)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended: October 31, 2022

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE EXCHANGE ACT

For the transition period from ________ to ________

Commission File Number: 000-54439

HARTFORD GREAT HEALTH CORP.

(Exact Name of Registrant as Specified in its Charter)

Nevada

(State or other jurisdiction of incorporation or organization)

51-0675116

(I.R.S. Employer Identification Number)

8832 Glendon Way, Rosemead, California 91770

(Address of Principal Executive Offices) (Zip Code)

Registrant’s telephone number including area code: (626)321-1915

Former name, former address, and former fiscal year, if changed since last report

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically, every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by checkmark whether the registrant is a large accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Securities registered pursuant to Section 12(b) of the Act:

State the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date: 100,108,000 shares of common stock outstanding as of November 27, 2022.

Index

HARTFORD GREAT HEALTH CORP.

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

The accompanying notes are an integral part of these condensed consolidated unaudited financial statements.

HARTFORD GREAT HEALTH CORP.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

The accompanying notes are an integral part of these condensed consolidated unaudited financial statements.

HARTFORD GREAT HEALTH CORP.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (UNAUDITED)

The accompanying notes are an integral part of these condensed consolidated unaudited financial statements.

HARTFORD GREAT HEALTH CORP.

CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT)

The accompanying notes are an integral part of these condensed consolidated unaudited financial statements.

HARTFORD GREAT HEALTH CORP.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

The accompanying notes are an integral part of these condensed consolidated unaudited financial statements.

HARTFORD GREAT HEALTH CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

This summary of significant accounting policies is presented to assist in understanding the Company’s financial statements. The financial statements and notes are the responsibility of the Company’s management. These accounting policies conform to accounting principles generally accepted in the United States of America (“US GAAP”) and have been consistently applied in the preparation of the financial statements. This disclosure should be read in conjunction with our audited financial statements for the year ended July 31, 2022, including footnotes, contained in our Annual Report on Form 10-K.

Organization

Hartford Great Health Corp. was originally incorporated in the State of Nevada on April 2, 2008 under the name PhotoAmigo, Inc. It changed its name to Hartford Great Health Corp. on August 22, 2018 and since then we have been engaged in activities to formulate and implement our business plans.

Through its wholly owned subsidiary - Hangzhou Hartford Comprehensive Health Management, Ltd (“HZHF) and HZHF’s 60 percent owned subsidiary - Hangzhou Longjing Qiao Fu Vacation Hotel Co., Ltd. (“HZLJ”), and through Shanghai Hartford Comprehensive Health Management, Ltd. (“HFSH”) and its 90 percent owned subsidiary - Shanghai Qiao Garden International Travel Agency (“Qiao Garden Int’l Travel”), the Company engages in hospitality industry in China. Qiao Garden Int’l Travel was disposed on December 31, 2020.

The Company started to engage in early childhood education industry at Hartford International Education Technology Co., Ltd (“HF Int’l Education”). On July 24, 2019 and March 23, 2020, HF Int’l Education established two 100% owned subsidiaries, Pudong Haojin Childhood Education Ltd. (“PDHJ”) and Shanghai Hongkou HaiDeFuDe Childcare Co., Ltd.(“HDFD”), respectively, to operate the early childhood education service under the brand name of “HaiDeFuDe” in Shanghai, China. On July 20, 2020, HF Int’l Education entered an agreement with two individuals to acquire the whole ownership of Shanghai Gelinke Childcare Education Center (“Gelinke”). Gelinke temporally ceased its operations by the end of August 2021. On August 31, 2021, PDHJ established one 96% owned subsidiary, Shanghai HDFD Zhongli Education Technology Co., Ltd. (“Zhongli”), two individual investors hold the remaining 4% ownership.

Impacted by the government regulation implemented in education industry and the restrictions posted by the Chinese government to control the pandemic in China since 2021, to avoid further operation losses, on August 1, 2022, HFSH entered a contract with a related party, Shanghai Oversea Chinese Culture Media Ltd. (“SH Oversea”), to sell 90 percent ownership of HF Int’l Education and its subsidiaries for $900 (RMB 5,850). On August 1, 2022, HFUS entered a contract with SH Oversea and another individual, to sell 100 percent ownership of HZHF and its subsidiaries for $1,000 (RMB 6,500). See Note 3 Acquisitions and Disposals.

Basis of Presentation

The consolidated financial statements include the accounts of Hartford Great Health Corp, its wholly-owned subsidiaries and subsidiaries in which it has a controlling interest. The Company reports noncontrolling interests of the consolidated entities as a component of equity separate from the Company’s equity. All material inter-company transactions between and among the Company and its consolidated subsidiaries have been eliminated in the consolidation. The Company’s net income (loss) excludes income (loss) attributable to the noncontrolling interests.

Use of Estimates

The preparation of financial statements in conformity with US GAAP requires the Company’s management to make estimates and assumptions that affect the amounts of assets and liabilities, the identification and disclosure of impaired assets and contingent liabilities at the date of the financial statements, and the reported amounts of expenses during the reporting period. Actual results could differ from those estimates.

Reclassifications

Certain amounts on the prior-year consolidated balance sheet, consolidated statement of operations and cash flows were reclassified to conform to current-year presentation, with no effect on ending stockholders’ equity.

Income Taxes

The Company accounts for income taxes using the asset and liability method in accordance with ASC 740, Accounting for Income Taxes. The asset and liability method provides that deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial reporting and tax bases of assets and liabilities, and for operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using the currently enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company records a valuation allowance to reduce deferred tax assets to the amount that is believed more likely than not to be realized.

The Tax Reform Act permanently reduces the U.S. corporate income tax rate to a flat 21% rate, effective January 1, 2018. In addition, the 2017 Tax Act also creates a new requirement that certain income (i.e., Global Intangible Low-Taxed Income (“GILTI”)) earned by controlled foreign corporations (“CFCs”) must be included in the gross income of the CFCs’ U.S. shareholder income. The tax law in PRC applies an income tax rate of 25% to all enterprises. The Company’s subsidiary does not receive any preferential tax treatment from local government. The Company has been in loss position for years and zero amount of tax provisions, including GILTI. Deferred tax assets as of the reporting periods ended were fully reserved for valuation allowance as they are more likely than not to be realized.

Revenue Recognition

The Company adopted ASC Topic 606 Revenue from Contracts with Customers (“Topic 606) on August 1, 2019, applying the modified retrospective method to all contracts that were not completed as of August 1, 2019. Revenue is recognized when control of promised goods or services is transferred to our customers in an amount of consideration to which we expect to be entitled to in exchange for those goods or services. We follow the five steps approach for revenue recognition under Topic 606: (i) identify the contract(s) with a customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations in the contract, and (v) recognize revenue when (or as) we satisfy a performance obligation. Billings to customers for which services are not rendered are considered deferred revenue. ASC 606 has no material impacts on the Company’s financial positions. The Company’s revenue is recognized when it satisfies a single performance obligation by transferring control of its products or providing services to a customer. The Company’s general payment terms are short-term in duration. The Company does not have significant financing components or payment terms.

Impacted by the Covid-19 pandemic and Chinese regulation on education industry, both early childhood education services and hospitality services have been sold on August 1 2022. Thus, there was no revenue recognized from the two-revenue-stream for the three-month ended October 31, 2022. See Note 3 Acquisitions and Disposals.

Recent Accounting Pronouncements.

Recently issued accounting pronouncements not yet adopted

In June 2016, the FASB issued ASU 2016-13, “Financial Instruments—Credit Losses”. The standard, including subsequently issued amendments (ASU 2018-19, ASU 2019-04, ASU 2019-05, ASU 2019-10 and ASU 2019-11), requires a financial asset measured at amortized cost basis, such as accounts receivable and certain other financial assets, to be presented at the net amount expected to be collected based on relevant information about past events, including historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. In November 2019, the FASB issued ASU No. 2019-10 to postpone the effective date of ASU No. 2016-13 for public business entities eligible to be smaller reporting companies defined by the SEC to fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. The Company is evaluating the impact of this guidance on its consolidated financial statements.

NOTE 2. GOING CONCERN

The accompanying financial statements were prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of obligations in the normal course of business. However, Hartford Great Health Corp. has incurred losses since inception, resulting in an accumulated deficit of $6,920,218 as of October 31, 2022. These conditions raise substantial doubt about the ability of Hartford Great Health Corp. to continue as a going concern.

In view of these matters, continuation as a going concern is dependent upon several factors, including the availability of debt or equity funding upon terms and conditions acceptable to Hartford Great Health Corp., and ultimately achieving profitable operations. Management believes that Hartford Great Health Corp.’s business plan provides it with an opportunity to continue as a going concern. However, management cannot provide assurance that Hartford Great Health Corp. will meet its objectives and be able to continue in operation.

The financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the possible inability of Hartford Great Health Corp. to continue as a going concern.

NOTE 3. ACQUISITIONS AND DISPOSALS

In January 2019, HFSH entered agreements to acquire 100 percent equity interest of Shanghai Luo Sheng International Trade Ltd. (“SH Luosheng”). On August 1, 2022, HFSH decided to withdraw from the agreement entered in January 2019 to acquire 100 percent equity interest of Shanghai Luo Sheng International Trade Ltd. (“SH Luosheng”). There was no penalty levied or to be levied due to delayed execution or inexecution.

Impacted by the government regulation newly implemented in education industry and the restrictions posted by the Chinese government to control the pandemic in China since 2021, the Company’s business hasn’t been developed as planned and occurred significant loss from the early child education practice. To avoid further operation losses, subsequently on August 1, 2022, HFSH entered a contract with a related party, Shanghai Oversea Chinese Culture Media Ltd. (“SH Oversea”), to sell 90 percent ownership of HF Int’l Education and its subsidiaries for $900 (RMB 5,850). On August 1, 2022, HFUS entered a contract with SH Oversea and another individual, to sell 100 percent ownership of HZHF and its subsidiaries for $1,000 (RMB 6,500).

Net assets (liabilities) disposed of:

SCHEDULE OF NET ASSETS (LIABILITIES) DISPOSED OF SUBSIDIARY 

The total assets and liabilities of Education and hospitality segments that were classified as held for sale on the Company’s consolidated balance sheet as of July 31, 2022 as follows:

 SCHEDULE OF DISCONTINUED OPERATIONS OF FINANCIAL STATEMENTS

The unaudited Pro Forma Condensed Consolidated Financial Statements for the three months ended October 31, 2021 have been derived from the historical unaudited Condensed Consolidated Financial Statements included in the Quarterly Report on Form 10-Q for the quarterly period ended October 31, 2021 filed with the Securities and Exchange Commission (“SEC”) on December 15, 2021. The unaudited Pro Forma Condensed Consolidated Financial Statements for the years ended July 31, 2022 and 2021 have been derived from the historical audited Consolidated Financial Statements included in the Annual Report on Form 10-K for the year ended July 31, 2022 filed with the SEC on November 14, 2022. The unaudited Pro Forma Condensed Consolidated Statement of Operations for the three months ended October 31, 2021 and the years ended July 31, 2022 and 2021 give effect to the dispositions as if they had occurred on August 1, 2020, the beginning of the earliest period presented. The unaudited Pro Forma Condensed Consolidated Balance Sheet as of July 31, 2022 gives effect to the dispositions as if they had occurred on July 31, 2022.

The unaudited Pro Forma Condensed Consolidated Financial Statements were prepared for illustrative and informational purposes only and are not intended to represent what our results of operations or financial position would have been had the disposition occurred on the dates indicated. The unaudited Pro Forma Condensed Consolidated Financial Statements also should not be considered indicative of our future results of operations or financial position. The actual financial position and results of operations may differ significantly from the pro forma amounts reflected herein due to a variety of factors. The unaudited Pro Forma Condensed Consolidated Financial Information does not reflect the realization of any expected cost savings, synergies, or dis-synergies as a result of the dispositions.

The unaudited Pro Forma Condensed Consolidated Financial Statements and accompanying notes should be read in connection with the historical unaudited Condensed Consolidated Financial Statements and accompanying notes for the three months ended October 31, 2021, which are included in the Quarterly Report on Form 10-Q for the quarterly period ended October 31, 2021, as well as the historical audited Consolidated Financial Statements and accompanying notes as of and for the years ended July 31, 2022 and 2021, which are included in the Annual Report on Form 10-K for the year ended July 31, 2022.

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

For the three months ended October 31, 2021

SCHEDULE OF PRO FORMA INFORMATION

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

For the years ended July 31, 2022 and 2021

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET

As of July 31, 2022

NOTE 4. RELATED PARTY TRANSACTIONS

Related Party Receivables

As of July 31, 2022, $428,519 related party receivables were allocated to current assets held for sales. See Note 3 Acquisitions and Disposals.

$57,848 related party receivable as of October 31,2022 represents the operating advances made to the affiliates which are managed by the same management team. These advances do not bear interest and are considered due on demand.

Related Party Payables and loans

As of October 31, and July 31, 2022, amounts of $573,376 and $620,876, are payable to SH Qiaohong, respectively. The balances were mainly funding support from SH Qiaohong for operation. The funding support bears no interest and due on demand.

HFSH had payable balances to Shanghai Oversea Chinese Culture Media Ltd. (“SH Oversea”), an entity managed by the same management team, in the amounts of $3,265,326 and $3,531,064 as of October 31, and July 31, 2022, respectively. The payable is funding support from SH Oversea for operation, bears no interest and due on demand.

As of October 31 and July 31, 2022, amount of $320,000 and $290,000, respectively, borrowed in form of a short-term loan at 5% per annum from a related party, Hartford Hotel Investment Inc., an entity managed by the same management team. $4,089 and $2,461 of interest expenses were recorded during the three months ended October 31, 2022 and 2021, respectively. The unpaid principal and interest will be due on demand.

The remaining related party payable of $71,478 and $39,583 as of October 31, and July 31, 2022, respectively, represents the unpaid portion of operating advances made to the Company by affiliates which are managed by the same management team. These advances do not bear interest and are considered due on demand.

As of July 31, 2022, $1,317,690 related party payables were allocated to current liabilities held for sales. See Note 3 Acquisitions and Disposals.

Other Related Party Transactions

Office space at Rosemead, CA is provided to Hartford Great Health Corp. at no cost by the sole executive officer. No provision for these costs has been included in these financial statements as the amounts are not material.

NOTE 5. NONCONTROLLING INTERESTS

Noncontrolling interests consisted of the following as of October 31, 2022 and July 31, 2021:

SCHEDULE OF NONCONTROLLING INTERESTS 

The noncontrolling interest of negative $1,307,586 were disposed on August 1, 2022. See note 3 Acquisitions and Disposals.

NOTE 6. COMMITMENTS AND CONTINGENCIES

There has been no material contractual obligations and commitments as of October 31, 2022 except below:

On March 21, 2022, HF Int’l Education filed a civil case against the landlord demanding reductions of office rent due to mandatory business lockdown ordered by Shanghai health officials. The case has been accepted by the court and pending court date. However, since the disposition of HF Int’l Education on August 1, 2022, the new owner of HF Int’l Education has assumed all legal responsibility of the case.

NOTE 7. SEGMENT INFORMATION

The Company operated in following industry segments: hospitality (hotel and travel agency) and early childhood education industry in China.

Due to the disposal of subsidiaries on August 1, 2022, see Note 3 Acquisitions and Disposals, as of October 31, 2022 and for the three months ended October 31, 2022, except “Corporate and unallocated” segment, no other segments existed.

Segment information on assets as of October 31, 2021 and revenue generated during the three months ended October 31, 2021, as follows:

SCHEDULE OF SEGMENT INFORMATION 

NOTE 8. SUBSEQUENT EVENTS

In accordance with ASC 855, “Subsequent Events”, the Company has evaluated subsequent events through the date of issuance of these unaudited financial statements and has noted the following subsequent events to be disclosed..

On November 15, 2022, the Company borrowed a note in a total amount of $30,000, in form of a short-term loan at 5% per annum from a related party.

Forward-Looking Statements

This Form 10-Q contains or incorporates by reference “forward-looking statements,” as that term is used in federal securities laws, about our financial condition, results of operations and business. These statements include, among others:

These forward-looking statements are subject to numerous assumptions, risks and uncertainties that may cause our actual results to be materially different from any future results expressed or implied in those statements. Because the statements are subject to risks and uncertainties, actual results may differ materially from those expressed or implied. We caution you not to put undue reliance on these statements, which speak only as of the date of this report. Further, the information contained in this document or incorporated herein by reference is a statement of our present intention and is based on present facts and assumptions, and may change at any time and without notice, based on changes in such facts or assumptions.

Item 2. Management’s Discussion and Analysis or Plan of Operation Overview

This discussion updates our business plan for the three-month periods ending October 31, 2022. It also analyzes our financial condition at October 31, 2022 and compares it to our financial condition at July 31, 2022. This discussion and analysis should be read in conjunction with our audited financial statements for the year ended July 31, 2022, including footnotes, contained in our Annual Report on Form 10-K, and with the unaudited financial statements for the interim period ended October 31, 2022, including footnotes, which are included in this quarterly report.

Overview of the Business

Hartford Great Health Corp. was originally incorporated in the State of Nevada on April 2, 2008, under the name PhotoAmigo, Inc. It changed its name to Hartford Great Health Corp. on August 22, 2018, and since then we have been engaged in activities to formulate and implement our business plan as set forth below.

Ability to continue as a “going concern”.

The independent registered public accounting firms’ reports on our financial statements as of July 31, 2022, includes a “going concern” explanatory paragraph that describes substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regard to the factors prompting the explanatory paragraph are discussed in the financial statements, including footnotes thereto.

Plan of Operation

As of July 31, 2022, the company has issued a total of 100,108,000 shares of common stock. On December 11, 2018, 96,090,000 shares of common stock were issued at the price of $0.02 per share to raise an additional $1,921,800 in capital. On November 24, 2020, the Company issued additional 1,000,000 shares of common stock to a significant shareholder of the Company at $0.02 per share.

On December 28, 2018, the Company acquired Hangzhou Hartford Comprehensive Health Management, Ltd (“HZHF”). On March 22, 2019, the Company acquired 60 percent of Hangzhou Longjing Qiao Fu Vacation Hotel Co., Ltd. (“HZLJ”). On March 20, 2019, the Company acquired Shanghai Hartford Comprehensive Health Management, Ltd. (“HFSH”) with 90 percent of Shanghai Qiao Garden International Travel Agency (“Qiao Garden Int’l Travel”), which was disposed on December 31, 2020, and formed a joint venture entity, Hartford International Education Technology Co., Ltd (“HF Int’l Education”).

The subsidiary of HFUS in Shanghai (HFSH) advances operating funds from two related party entities, SH Qiao Hong and SH Oversea Chinese Culture Media Ltd. The main purpose of the funding is to invest in Hartford International Education Technology (Shanghai) Co., Ltd. (HF Int’l Education). Upon signing of supplemental agreement, HFUS currently holds 75.5% ownership of HF Int’l Education and maintains control over HF Int’l Education. On July 24, 2019, HF Int’l Education established a 100% owned subsidiary, Pudong Haojin Childhood Education Ltd. (“PDHJ”). On October 28, 2019, PDHJ had its childhood education center opened. On March 23, 2020, HF Int’l Education established Shanghai Hongkou HaiDeFuDe Childcare Co., Ltd.(“HDFD”) and was approved the business license to conduct childcare operations in Shanghai, China. On July 20, 2020, HF Int’l Education entered an agreement with two individuals to acquire the whole ownership of Shanghai Gelinke Childcare Education Center (“Gelinke”). During the board meeting, SH Jingyu and another noncontrolling shareholders also sold a total of 14.5% equity at zero value to HFSH. As a result, HFSH holds 90% of HF Int’l Education and a total of 10% equity is held by two individual noncontrolling shareholders.

HF Int’l Education has developed an enhanced model of childcare franchise management program and registered a new brand name, “HaiDeFuDe”. HF Int’l Education has recruited a team of knowledgeable childcare teachers to develop series of independent textbooks designed to targeted age of young children and register for the copyrights for these textbooks in September of 2020. Since then, HF Int’l Education has begun marketing and promoting the enhanced model of franchise operation and management packaged program, under “HaiDeFuDe” brand, to an initial of 50 franchisees throughout different regions of China. To achieve that, HF Int’l Education has incorporated existing market resources throughout other major cities and provinces in China. The promotion of HF Int’l Education franchise operation and management model was expected to attract other childcare education centers to join the “HaiDeFuDe” brand, and HF Int’l Education expected to generate revenue from franchise and management fees.

Due to continued market uncertainties during the pandemic, the board of HFSH adopted a new management approach to ease cash flow and reduce operation loss. In March 2021, HF Int’l Education entered agreements with Hartford Health Management (Shanghai), Co. Ltd. (“HFHM”). HFHM purchased seven education & intellectual property copy rights and ten “HaiDeFuDe” registered trademarks from HF Int’l Education for a total amount of RMB1.2M and RMB1.0M, respectively. In June 2021, HF Int’l Education and its three subsidiaries entered license agreements with HFHM for the rights to use the intellectual Properties (the “IPs”) HFHM owns. The IPs cover in the license agreements are four sets of curriculum structure designed and fifteen trademarks including “HaiDeFuDe” registered trademarks purchased from HF Int’l Education. As a return, on a monthly basis, HF Int’l Education and its subsidiaries pays 20% of its tuition revenue generated to HFHM as license usage fee.

However, due to China’s continual of zero-Covid policy implementation this year as well as Covid-19 lockdown for over two months in Greater Shanghai, childcare and childhood education center were forced to halt operations; therefore, the Company decides to divert its plan from childcare and childhood educational development industry. In the near future, the company is looking into wholesale trading and distribution of herbal supplement and other nutritional health products in China.  

Results of Operations – Three Months Ended October 31, 2022 Compared to Three Months Ended October 31, 2021.

Revenue: We recognized $- and $169,812 revenue in the three months ended October 31, 2022 and 2021, respectively. The revenue for the three months ended October 31, 2021 was mainly generated from two industry segments, the hospitality housing in HZLJ and childhood education care services in HF Int’l Education. These two business operations have been disposed on August 1, 2022. see Note 3 Acquisitions and Disposals.

Operating Cost and Expenses: We recognized $- and $335,004 cost of revenue in the three months ended October 31, 2022 and 2021, respectively. The cost of revenue was mainly due to the license fees paid to HFHM and rent cost of HDFD’s operating facility during the three months ended October 31, 2021. Operating expenses decreased to $ 54,648 for the three months ended October 31, 2022, compared to $507,759 during the comparable period of 2021. The decrease of operating cost and expenses was resulted from the discontinued operations in hospitality housing and childhood education care services since August 1, 2022. see Note 3 Acquisitions and Disposals.

Other Income (Expense): Other income, net increased to $535,050 for the three months ended October 31, 2022, compared to $24,791 for the corresponding period of 2021. Other income for the three months ended October 31, 2022 was mainly resulted from the gain on disposal of subsidiaries offset by interest expenses. Other income for the three months ended October 31, 2021 was mainly resulted from sublease income offset by interest expenses.

Net Loss Attributable to Noncontrolling Interest: For the three months ended October 31, 2022, we recorded a net loss attributable to noncontrolling interest of $- compared to $66,628 for the corresponding period of 2021. The loss was allocated based on the ownership percentage of noncontrolling interest, which has been disposed on August 1, 2022. see Note 3 Acquisitions and Disposals.

Net Income (Loss) Attributable to Hartford Great Health Corp: We recorded a net income of $480,402 or $0.00 per share for the three months ended October 31, 2022, compared to a net loss of $581,532 or $(0.01) per share for the three months ended October 31, 2021, due to the factors discussed above.

Liquidity and Capital Resources

As of October 31, 2022, we had a working capital deficit of $4,324,792 comprised of current assets of $75,635 and current liabilities of $4,400,427. This represents a decrease of $3,327,400 in the working capital deficit from the July 31, 2022 amount of $7,652,192. The decrease was primarily because the disposal of operations in hospitality housing and childhood education care services on August 1, 2022. see Note 3 Acquisitions and Disposals.

We believe that our funding requirements for the next twelve months will be in excess of $230,000.   We are currently seeking for further funding through related parties’ loan and finance.

As of October 31, 2022, the company has issued a total of 100,108,000 shares of common stock. On December 11, 2018, 96,090,000 shares of common stock were issued at the price of $0.02 per share to raise an additional $1,921,800 in capital. On November 24, 2020, the Company issued additional 1,000,000 shares of common stock to a significant shareholder of the Company at $0.02 per share.

We will seek additional financing in the form of debt or equity. There is no assurance that we will be able to obtain any needed financing on favorable terms, or at all, or that we will find qualified purchasers for the sale of our stock. Any sales of our securities would dilute the ownership of our existing investors.

Cash Flows – Three months ended October 31, 2022 Compared to Three months ended October 31, 2021

Operating Activities

During the three months ended October 31, 2022, $26,718 used in operating activities as compared to $412,091 used in the operations during the three months ended October 31, 2021. During the three months ended October 31, 2022, we recorded net income of $480,402, other current payable increased by $16,518 and related party payables net with receivables increased by $15,449, offset by non-cash item gain on disposal of subsidiaries of $539,230.

During the three months ended October 31, 2021, we recorded loss including noncontrolling interests of $648,160 , incurred non-cash depreciation of $28,219 , prepaid and other current receivables decreased by $116,580, other assets decreased by $74,757, other current payable increased by $35,152 , contract liabilities increased by $55,881, related party payables net with receivables decreased by $123,017, and operating lease liabilities net with operating lease assets increased by $39,003 as a result from the adoption of new lease guidance ASU No. 2016-02.

Investing activities

Nil of investing activities occurred during the three months ended October 31, 2022.

Cash used in investing activities was $127,928 for the three months ended October 31, 2021, primarily due to the expenditure of leasehold improvements in HF Int’l Education.

Financing activities

Cash provided by financing activities was $30,000 for the three months ended October 31, 2022 as compared to $529,995 cash provided by financing activities for the three months ended October 31, 2021. The cash flows provided by financing activities for the three months ended October 31, 2022 was from the proceeds of notes payable. The notes payable was borrowed from one related party with 5% annual interest rate. See Note 4 Related Party Transactions.

The cash flows provided by financing activities for the three months ended October 31, 2021 was primarily attributable to $469,995 funding support from related parties, $60,000 proceeds of notes payable. The notes payable was borrowed from one related party with 5% annual interest rate. See Note 4 Related Party Transactions.

Future Capital Expenditures

As of October 31, 2022, we have no future capital expenditures plan.  

Off-Balance Sheet Arrangements

As of and subsequent to October 31, 2022, we have no off-balance sheet arrangements.

Contractual Commitments

As of October 31, 2022, we don’t have material contractual commitments.

Critical Accounting Policies

Our significant accounting policies are disclosed in Note 1 of the footnotes to our unaudited financial statements above. There have been no other changes in our critical accounting policies since our most recent audit dated July 31, 2022.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

As a “smaller reporting company” as defined by Item 10 of Regulation S-K, we are not required to provide information required by this Item.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

An evaluation was performed under the supervision of our management, including our Chief Executive Officer and Chief Financial Officer (principal financial officer), of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act) as of the end of the period covered by this Quarterly Report. Based on that evaluation, our management, including our Chief Executive Officer and Chief Financial Officer, concluded that, as of October 31, 2022, our disclosure controls and procedures were not effective to ensure that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms due to material weaknesses in our internal controls described below.

Management’s Report on Internal Control over Financial Reporting

Management’s assessment identified several material weaknesses in our internal control over financial reporting. These material weaknesses include the following:

Changes in Internal Control

During the three months period ended October 31, 2022, there has been no change in internal control within the Company.

PART II – OTHER INFORMATION

Item 1. Legal Proceedings.

On March 21, 2022, HF Int’l Education filed a civil case against the landlord demanding reductions of office rent due to mandatory business lockdown ordered by Shanghai health officials. The case has been accepted by the court and pending court date. Since disposition of HF Int’l Education on August 1, 2022, the new owner has assumed all the legal responsibility of the court case.

We were not subject to any other legal proceedings during the three months ended October 31, 2022, and are not currently subject to any legal proceedings, and to the best of our knowledge, no such proceeding is threatened, the results of which would have a material impact on our results of operation or financial condition. Nor, to the best of our knowledge, are any of our officers or directors involved in any legal proceedings in which we are an adverse party.

Item 1A. Risk Factors.

As a “smaller reporting company” as defined by Item 10 of Regulation S-K, we are not required to provide information required by this Item.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

None

Item 3. Defaults Upon Senior Securities.

None

Item 4. Mine Safety Disclosures

Not applicable to our Company.

Item 5. Other Information

Not applicable to our Company.

Item 6. Exhibits.

The following exhibits are filed with or incorporated by referenced in this report:

31.1* Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 for Rose Hong Wang.

31.2* Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 for Sheng-Yih Chang

32.1* Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for Rose Hong Wang and Sheng-Yih Chang

101 Interactive Data Files

101.INS Inline XBRL Instance Document

101.SCH Inline XBRL Taxonomy Extension Schema Document

101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document

101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document

104 Cover Page Interactive Data File (embedded within the Inline XBRL document)

SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act of 1934, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.