This discussion updates our business plan for the nine-month periods ending April 30, 2021. It also analyzes our financial condition at April 30, 2021 and compares it to our financial condition at July 31, 2020. This discussion and analysis should be read in conjunction with our audited financial statements for the year ended July 31, 2020, including footnotes, contained in our Annual Report on Form 10-K, and with the unaudited financial statements for the interim period ended April 30, 2021, 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, 2020 and 2019, 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 April 30, 2021, the company has issued a total of 100,108,000 shares of common stock. On December 11th, 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").

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. Recently, 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 incorporate existing market resources throughout other major cities and provinces in China. The promotion of HF Int'l Education franchise operation and management model is expected to attract other childcare education centers to join the "HaiDeFuDe" brand, and HF Int'l Education expects to generate revenue from franchise and management fees. Due to continued market uncertainties during the pandemic, we have reduced our revenue projection again from our last disclosure. We will run a special franchise promotion after the ease of restrictions caused by the pandemic. There will be a great reduction in franchise fees for the first twenty childcare center that join our brand. In doing so, the Company expect to generate a revised revenue of RMB4,000,000 by the end of 2021.





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Results of Operations - Three months ended April 30, 2021 Compared to Three months ended April 30, 2020.

Revenue and Cost of revenue: We recognized $137,892 and $10,310 revenue in the three months ended April 30, 2021 and 2020, respectively. Cost of revenue increased to $99,998 for the three months ended April 30, 2021, compared to $4,329 during the comparable period of 2020. The revenue was mainly generated from two industry segments, the hospitality housing in HZLJ and childhood education care services in HF Int'l Education. The other business lines with limited operations have not generated revenue yet.

Operating Expenses: Operating expenses increased to $624,852 for the three months ended April 30, 2021, compared to $420,605 during the comparable period of 2020. During the three months ended April 30, 2021, the increase of $204,247 was resulted from the increase of the selling, general and administrative expenses by $187,417, and the increase of depreciation and amortization expenses by $16,830. The increase of selling, general and administrative expenses was mainly resulted from the expenses incurred in the new operating subsidiaries in China for childcare education business development, including lease cost.

Other Income (Expense): Other expense, net increased to $ (11,491) for the three months ended April 30, 2021, compared to $3,988 of income for the corresponding period of 2020. The increase of other expense, net was mainly resulted from the interest expense of related party loans offset with the interest income from the related party receivable from SH Qiaohong, which was settled through three-way settlement agreement on December 30, 2020, see note 13, Related Party Transactions.

Net Loss Attributable to Noncontrolling Interest: For the three months ended April 30, 2021, we recorded a net loss attributable to noncontrolling interest of $130,040 compared to $108,680 for the corresponding period of 2020. The loss was allocated based on the ownership percentage of noncontrolling interest, which was mainly acquired through the acquisitions and Joint Ventures.

Net Loss Attributable to Hartford Great Health Corp: We recorded a net loss of $468,409 or $(0.00) per share for the three months ended April 30, 2021, compared to a net loss of $301,956 or $(0.00) per share for the three months ended April 30, 2020, an increase in loss of $166,453 due to the factors discussed above.

Results of Operations - The Nine months Ended April 30, 2021 Compared to Nine months Ended April 30, 2020.

Revenue: We recognized $320,204 and $66,219 revenue in the nine months ended April 30, 2021 and 2020, respectively. Cost of revenue increased to $219,276 for the nine months ended April 30, 2021, compared to $43,366 during the comparable period of 2020. The revenue was mainly generated from two industry segments, the hospitality housing in HZLJ and childhood education care services in HF Int'l Education. The other business lines with limited operations have not generated revenue yet.

Operating Expenses: Operating expenses decreased to $2,314,447 for the nine months ended April 30, 2021, compared to $2,326,918 during the comparable period of 2020. During the nine months ended April 30, 2021, the decrease of $12,471 was resulted from the decrease of Goodwill impairment by $991,803, offset by the increase of the selling, general and administrative expenses by $947,111 and the increase of depreciation and amortization expenses by $32,221. The increase of selling, general and administrative expenses was mainly resulted from the expenses incurred in the new operating subsidiaries in China for childcare education business development, including lease cost. The company's major business plans were halted as a result of COVID-10 pandemic. Management determined that the goodwill generated from acquisition was fully impaired as of January 31, 2020.

Other Income (Expense): Other income, net increased to $90,572 for the nine months ended April 30, 2021, compared to $11,723 of income for the corresponding period of 2020. Other income for the nine months ended April 30, 2021 was mainly resulted from the gain on disposal of subsidiary, see note 4 Acquisitions, Joint Ventures and Deconsolidation.

Net Loss Attributable to Noncontrolling Interest: For the nine months ended April 30, 2021, we recorded a net loss attributable to noncontrolling interest of $486,520 compared to $506,697 for the corresponding period of 2020. The loss was allocated based on the ownership percentage of noncontrolling interest, which was mainly acquired through the acquisitions and Joint Ventures.

Net Loss Attributable to Hartford Great Health Corp: We recorded a net loss of $1,637,227 or $(0.02) per share for the nine months ended April 30, 2021, compared to a net loss of $1,786,445 or $(0.02) per share for the nine months ended April 30, 2020, a decrease in losses of $149,218 due to the factors discussed above.





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Liquidity and Capital Resources

As of April 30, 2021, we had a working capital deficit of $5,530,212 comprised of current assets of $692,679 and current liabilities of $6,222,891. This represents an increase of $2,170,589 in the working capital deficit from the July 31, 2020 amount of $3,359,623.

During the nine months ended April 30, 2021, our working capital deficit increased primarily because the additional advances from related parties for business operating and the increase of rental payables.

We believe that our funding requirements for the next twelve months will be in excess of $800,000. We are currently seeking for further funding through related parties' loan and finance.

On December 11, 2018, the Company sold 96,090,000 shares of its common stock (the "Shares") to 15 individuals. The selling price was $0.02 per share for an aggregate of $1,921,800. All 15 investors executed subscription agreements. As of April 30, 2019, all proceeds have collected. Twelve of the 15 investors are Chinese citizens and purchased the shares in China. Due to the strict monitoring of China's foreign exchange investment policy, funds are not able to be transferred directly to HFUS. As a result, amount of $657,000 were collected in RMB from the Chinese investors. The Shares were sold in a private placement pursuant to an exemption from registration in accordance with Section 4(2) and/or Regulation S under the Securities Act of 1933, as amended. The Shares are all restricted shares and accordingly all stock certificates evidencing the Shares have been affixed with the appropriate legend restricting sales and transfers.

On July 3, 2020, the Company signed a subscription agreement to one of the current investors, selling 1,000,000 shares of common stock (the "Shares") priced at $0.02 per share. The stock shares were issued on November 24, 2020.

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 - Nine months ended April 30, 2021 Compared to Nine months ended April 30, 2020 (As restated)





Operating Activities

During the nine months ended April 30, 2021, $1,892,057 used in operating activities as compared to $619,385 used in the operations during the nine months ended April 30, 2020. During the nine months ended April 30, 2021, we recorded loss including noncontrolling interests of $2,123,747, incurred non-cash depreciation of $60,662, gain on disposal of subsidiary of $43,505, gain on disposal of noncontrolling interest of $60,812, prepaid and other current receivables increased by $75,917, inventory increased by $297,558, other assets increased by $45,456, other current payable increased by $572,873 , related party payables net with receivables increased by $26,308, other liabilities increased by $20,193 and operating lease liabilities net with operating lease assets increased by $74,147 as a result from the adoption of new lease guidance ASU No. 2016-02.

During the nine months ended April 30, 2020, we recorded losses including noncontrolling interests of $2,293,142, incurred non-cash depreciation of $28,441, Loss on disposal of property and equipment of $6,640, disposal of noncontrolling interest of $4,964, goodwill impairment loss of $988,446, prepaid and other current receivables decreased by $196,907, other assets increased by $35,251, other current payable increased by $340,060, related party payables net with receivables increased by $74,011, and operating lease liabilities net with operating lease assets increased by $81,335 as a result from the adoption of new lease guidance ASU No. 2016-02.





Investing activities

Cash used in investing activities was $154,997 for the nine months ended April 30, 2021 as compared to $227,795 used for the corresponding period in 2020. During nine months ended April 30, 2021, HF Int'l Education acquired a new entity, Gelinke with cash net inflow of $12,635, HFSH disposed its 90 percent owned subsidiary - Qiao Garden Intel Travel with cash net outflow of $30,116 , see note 4 Acquisitions, Joint Ventures and Deconsolidation., and Property and equipment purchases of $137,516.

During the nine months ended April 30, 2020, $227,795 of property and equipments have been purchased by HF Int'l Education's subsidiaries to provide childcare education services.





Financing activities

Cash provided by financing activities was $2,064,942 for the nine months ended April 30, 2021 as compared to $ 608,677 cash provided by financing activities for the nine months ended April 30, 2020. The cash flows provided by financing activities for the nine months ended April 30, 2021 was primarily attributable to $1,941,842 funding support from related parties, $125,000 notes payable from one related party, $20,000 proceeds from stock issuance, offset by $21,900 finance lease principal payment.

The cash flows provided by financing activities for the nine months ended April 30, 2020 was primarily attributable to $621,421 funding support from related parties, $7,080 contribution received from noncontrolling interest shareholder to the joint venture entity HF Int'l Education, offset by $19,824 finance lease principal payment.

Future Capital Expenditures

On January 2019, HFSH entered an agreement to acquire 100 percent equity interest of Shanghai Luo Sheng International Trade Ltd. ("SH Luosheng"). As of April 30, 2021, the agreement has not yet taken effective as no consideration has been paid toward those acquisitions. The agreement will be executed when the Company is financially ready to move forward, and the purchase price will be calculated based on the net assets of each entity on execute dates. There was no penalty levied or to be levied due to delayed execution or inexecution of this agreement.





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Off-Balance Sheet Arrangements

As of and subsequent to April 30, 2021, we have no off-balance sheet arrangements.





Contractual Commitments

As of April 30, 2021, we have no other material contractual commitments except the office building and property leases which are included Note 12 Leases.





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, 2020.

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