This discussion updates our business plan for the six month periods ending January 31, 2022. It also analyzes our financial condition at January 31, 2022 and compares it to our financial condition at July 31, 2021. This discussion and analysis should be read in conjunction with our audited financial statements for the year ended July 31, 2021, including footnotes, contained in our Annual Report on Form 10-K, and with the unaudited financial statements for the interim period ended January 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, 2021 and 20120, 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

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").





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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 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, 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 a third party, 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 90% of its tuition revenue generated to HFHM as license usage fee.

After further ease of restrictions from the pandemic, the Company will re-run special franchise promotion. There will be a great reduction in franchise fees for the first twenty childcare center that join "HaiDeFuDe" brand. In doing so, the Company expect to generate a revised revenue of RMB8,000,000 from 25 franchisees by the end of 2022.





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Results of Operations - Three Months Ended January 31, 2022 Compared to Three Months Ended January 31, 2021

Revenue: We recognized $186,951 and $102,925 revenue in the three months ended January 31, 2022 and 2021, respectively. 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 Cost and Expenses: Cost of revenue increased to $281,596 for the three months ended January 31, 2022, compared to $194,593 during the comparable period of 2021. The increase of Cost of revenue was mainly due to the license fees paid to HFHM, see note 13. During the three months ended January 31, 2022, selling, general and administrative expenses decreased by $367,037 compared to the comparable period in 2021, primarily due to the reduction of payroll and rent cost because the company closed some education centers during the pandemic.

Other Income (Expense): Other income, net decreased to $40,407 for the three months ended January 31, 2022, compared to $102,207 for the corresponding period of 2021. Other income for the three months ended January 31, 2022 was mainly resulted from sublease income offset by interest expenses. Other income for the three months ended January 31, 2021 was mainly resulted from the gain on disposal of subsidiary.

Net Loss Attributable to Noncontrolling Interest: For the three months ended January 31, 2022, we recorded a net loss attributable to noncontrolling interest $63,099 compared to $222,087 for the corresponding period of 2021. 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 $520,098 or $(0.01) per share for the three months ended January 31, 2022, compared to a net loss of $644,061 or $(0.01) per share for the three months ended January 31, 2021, a decrease in loss of $123,963 due to the factors discussed above.

Results of Operations - Six Months Ended January 31, 2022 Compared to Six Months Ended January 31, 2021

Revenue: We recognized $356,763 and $182,312 revenue in the six months ended January 31, 2022 and 2021, respectively. 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 Cost and Expenses: Cost of revenue increased to $616,600 for the six months ended January 31, 2022, compared to $328,541 during the comparable period of 2021. The increase of Cost of revenue was mainly due to the license fees paid to HFHM, see note 14. During the six months ended January 31, 2022, selling, general and administrative expenses decreased by $472,001 compared to the comparable period in 2021, primarily due to the reduction of payroll and rent cost because the company closed some education centers during the pandemic.

Other Income (Expense): Other income, net decreased to $65,198 for the six months ended January 31, 2022, compared to $102,063 for the corresponding period of 2021. Other income for the six months ended January 31, 2022 was mainly resulted from sublease income offset by interest expenses. Other income for the six months ended January 31, 2021 was mainly resulted from the gain on disposal of subsidiary.

Net Loss Attributable to Noncontrolling Interest: For the six months ended January 31, 2022, we recorded a net loss attributable to noncontrolling interest $129,727 compared to $356,480 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 $1,101,630 or $(0.01) per share for the six months ended January 31, 2022, compared to a net loss of $1,168,818 or $(0.01) per share for the six months ended January 31, 2021, a decrease in loss of $67,188 due to the factors discussed above.

Liquidity and Capital Resources

As of January 31, 2022, we had a working capital deficit of $6,862,411 comprised of current assets of $925,708 and current liabilities of $7,788,119.

This represents an increase of $1,313,819 in the working capital deficit from the July 31, 2021 amount of $5,548,592. During the six months ended January 31, 2022, our working capital deficit increased primarily because the additional advances from related parties for business operating.

We believe that our funding requirements for the next twelve months will be in excess of $1,600,000. We are currently seeking for further funding through related parties' loan and finance.

As of January 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.





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Cash Flows - Six months ended January 31, 2022 Compared to Six months ended January 31, 2021





Operating Activities

During the six months ended January 31, 2022, $653,284 used in operating activities as compared to $1,318,650 used in the operations during the six months ended January 31, 2021. During the six months ended January 31, 2022, we recorded loss including noncontrolling interests of $1,231,357 , incurred non-cash depreciation of $63,010, prepaid and other current receivables decreased by $123,814, other assets decreased by $78,935 , other current payable increased by $15,877, contract liabilities increased by $147,461, related party payables net with receivables increased by $48,897, and operating lease liabilities net with operating lease assets increased by $83,483 as a result from the adoption of new lease guidance ASU No. 2016-02.

During the six months ended January 31, 2021, we recorded loss including noncontrolling interests of $1,525,298, incurred non-cash depreciation of $34,623, gain on disposal of subsidiary of $104,317, prepaid and other current receivables increased by $52,614, inventory increased by $294,976, other assets increased by $50,288, contract liabilities increased by $160,146, other current payable increased by $383,784, related party payables net with receivables increased by $21,190, other liabilities increased by $13,345 and operating lease liabilities net with operating lease assets increased by $95,006 as a result from the adoption of new lease guidance ASU No. 2016-02.





Investing activities

Cash used in investing activities was $174,317 for the six months ended January 31, 2022 as compared to $115,858 for the corresponding period in 2021. During the six months ended January 31, 2022, the cash used in investing activities was primarily due to the expenditure of leasehold improvements in HF Int'l Education.

During six months ended January 31, 2021, HF Int'l Education acquired a new entity, Gelinke with cash net inflow of $12,525, 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 $98,267.





Financing activities

Cash provided by financing activities was $784,576 for the six months ended January 31, 2022 as compared to $1,414,133 cash provided by financing activities for the six months ended January 31, 2021. The cash flows provided by financing activities for the six months ended January 31, 2022 was primarily attributable to $704,576 funding support from related parties, $80,000 proceeds of notes payable. The notes payable was borrowed from one related party with 5% annual interest rate. See Note 12 Related Party Transactions.

The cash flows provided by financing activities for the six months ended January 31, 2021 was primarily attributable to $1,345,843 funding support from related parties, $70,000 notes payable from one related party, $20,000 proceeds from stock issuance, offset by $21,710 finance lease principal payment.





Future Capital Expenditures

In January 2019, HFSH entered agreements to acquire 100 percent equity interest of Shanghai Luo Sheng International Trade Ltd. ("SH Luosheng"). As of January 31, 2022, the agreement has not yet taken effect as no consideration has been paid toward this acquisition. 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 the execute date. There was no penalty levied or to be levied due to delayed execution or no-execution of those agreements.





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Off-Balance Sheet Arrangements

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





Contractual Commitments

As of January 31, 2022, we have no other material contractual commitments except the office building and property leases which are included Note 11 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, 2021.

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