UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
FORM
For
the fiscal year ended
Commission
file number
(Exact Name of Registrant as Specified in its Charter)
(State or other jurisdiction of incorporation or organization)
(I.R.S. Employer Identification Number)
(Address of Principal Executive Offices) (Zip Code)
Registrant’s
telephone number including area code:
Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐
Indicate
by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.
Indicate
by check mark whether the issuer (1) filed all reports required to be filed by Sections 13 or 15(d) of the Securities Exchange Act of
1934 during the past 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.
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).
Indicate by checkmark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ☒
January
31, 2025 the last business day of the Registrant’s most recently completed second fiscal quarter, the aggregate market value of
the voting common stock held by non-affiliates of the Registrant (without admitting that any person whose shares are not included in
such calculation is an affiliate) was $
Indicate by check mark whether the registrant is a large accelerated filer, an 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.
| Large accelerated filer ☐ | Accelerated filer ☐ |
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Smaller
reporting company
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Emerging
growth company
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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.
If
securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant
included in the filing reflect the correction of an error to previously issued financial statements.
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
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:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
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OTC Markets Group | ||
Securities registered pursuant to Section 12(g) of the Act: Common Stock, Par value $
State the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date: shares of common stock outstanding as of October 13, 2025.
TABLE OF CONTENTS
ADDITIONAL INFORMATION
Descriptions of agreements or other documents contained in this report are intended as summaries and are not necessarily complete. Please refer to the agreements or other documents filed or incorporated herein by reference as exhibits. Please see the exhibit index at the end of this report for a complete list of those exhibits.
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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This report contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are subject to risks and uncertainties and are based on the beliefs and assumptions of management and information currently available to management. The use of words such as “believes”, “expects”, “anticipates”, “intends”, “plans”, “estimates”, “should”, “likely” or similar expressions, indicates a forward-looking statement.
The identification in this report of factors that may affect future performance and the accuracy of forward-looking statements is meant to be illustrative and by no means exhaustive. All forward-looking statements should be evaluated with the understanding of their inherent uncertainty.
Factors that could cause actual results to differ materially from those expressed or implied by forward-looking statements include, but are not limited to:
| 1. | The worldwide economic situation; |
| 2. | Any change in interest rates or inflation; |
| 3. | The willingness and ability of third parties to honor their contractual commitments; |
| 4. | The Company’s ability to raise additional capital, as it may be affected by current conditions in the stock market and competition for risk capital; |
| 5. | The Company’s capital costs, as they may be affected by delays or cost overruns; |
| 6. | The Company’s costs of revenue; |
| 7. | Environmental and other regulations, as the same presently exist or may later be amended; |
| 8. | The Company’s ability to identify, finance and integrate any future acquisitions; and |
| 9. | The volatility of the Company’s stock price. |
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PART I
ITEM 1. BUSINESS.
General
Hartford Creative Group, Inc. 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. On May 11, 2024, the Company further changed its name to Hartford Creative Group, Inc.
Overview
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 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 engaged in early childhood education industry at Hartford International Education Technology Co., Ltd (“HF Int’l Education”) and its subsidiaries setup or acquired. 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).
Beginning in January 2024, the Company embarked on the development of a new business within the Media and Marketing sector. As part of its rebranding strategy, on January 01, 2024, HFSH changed its legal name from Shanghai Hartford Health Management, Ltd. to Shanghai Hartford ZY Culture Media Ltd. (“HFZY”). HFZY mainly engages in social media advertising business on mainstream social media platforms such as Tik Tok, Toutiao, Kwai, RED, WeChat, and more. As an advertising partner of China’s major social media platforms, the Company relies on a high-quality and professional media strategy execution team and network to help customers use the massive media resources of different types of social media platforms and receive competitive prices due to large-scale media resource procurement to purchase media resources. It aims to become one of the total solution advertising providers for domestic social media industry in China and provide customers with vertical integration services from early-stage advertising video creativity, shooting, editing, to advertising operation and management on social media apps. Further expanding its business operations, HFUS reacquired full ownership of HZHF at no cost on April 1, 2024, and subsequently rebranded it as Hangzhou Hartford WP Culture Media Ltd. (“HZWP”). On April 11, 2024, HFUS continued its growth trajectory by establishing a new subsidiary named Shanghai DZ Culture Media Ltd. (“SHDZ”). However, due to prolonged inactivity, the Company entered agreements on December 9, 2024, and January 1, 2025, to transfer 70% ownership of HZWP and SHDZ to SH Oversea, with the remaining 30% transferred to an individual. These transfers were executed at no cost and realized a $21,362 gain from the disposal of these two subsidiaries. On June 18, 2024, HFUS successfully completed the acquisition of ShaoXing HuoMao Network Technology Ltd. (SXHM). The acquisition was executed at no cost, and there were no significant assets or liabilities exchanged during the transfer. On May 12, 2025, HFZY established a subsidiary, Nanjing HaoYiPeng Information Technology Ltd (“NJHY”), based in Nanjing, China. NJHY aims to expand and strengthen the Company’s social media advertising business.
Based on market research and discussions between the Board and third-party suppliers and experts, the Company developed a plan for a mini-drama business. The Company aims to attract significant attention and boost mini-drama revenue. Only preliminary activities relating to this objective have been undertaken and, therefore, there is no assurance that the business plan will be successful.
The Company’s independent auditors have issued a report raising substantial doubt about the Company’s ability to continue as a going concern. At present, the continuation of the Company as a going concern is dependent upon financial support from its stockholders, its ability to obtain necessary equity financing to continue operations and/or to successfully locate and negotiate with a business entity for the combination of that target company with the Company. There is no assurance that the Company will ever be profitable.
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Employees
As of October 07 , 2025, we have 19 employees.
ITEM 1A. RISK FACTORS
As a “smaller reporting company” as defined by Item 8 of Regulation S-K, the Company is not required to provide information required by this Item.
ITEM 1B. UNRESOLVED STAFF COMMENTS
None.
ITEM 1C. CYBERSECURITY
Management periodically evaluates potential cybersecurity risks and implements measures intended to prevent, detect, and respond to potential incidents. These measures include system monitoring, employee cybersecurity awareness practices, and engagement of external information technology consultants, assessors, or service providers, as deemed necessary, to review and enhance security controls.
As of the date of this report, the Company has not identified any cybersecurity incidents or threats that have materially affected its operations, financial condition, or results of operations. However, the Company faces ongoing risks from potential cybersecurity threats that, if realized, could materially affect its business, results of operations, or financial condition.
Cybersecurity: Governance
ITEM 2. PROPERTIES
The Company has entered into a lease agreement for office space located in Shanghai measuring approximately 543 square feet (50.4 square meters) with Shanghai DuBian Assets Management Ltd., which is managed by its major shareholder’s relatives. The lease is effective from February 18, 2024 to February 17, 2026, at a fixed monthly rent of USD638 (RMB 4,600).
The Company also uses the office, located at 8832 Glendon Way, Rosemead, CA 91770, which is owned by its former principal stockholder, for the minimal office facility needs, at a fixed monthly rent of USD 1,000.
ITEM 3. LEGAL PROCEEDINGS
We were not subject to any other legal proceedings during the year ended July 31, 2025, 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 4. MINE SAFETY DISCLOSURES
Not applicable to our Company.
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PART II
ITEM 5. MARKET FOR COMMON EQUITY. RELATED STOCKHOLDER MATTERS AND PURCHASES OF EQUITY SECURITIES
Market Information
Our common stock has been listed on the OTC Markets Group under the symbol “HFUS.” There has been limited trading in our shares, meaning that the number of persons interested in purchasing our common shares at any given time has been relatively small or non-existent. We have applied to have our common stock listed on the Nasdaq Capital Market under the symbol “HFUS”. There can be no assurance that our listing application will be approved.
On March 28, 2025, the Board of Directors approved by unanimous written consent a reverse stock split of the Company’s authorized shares and issued and outstanding shares of common stock, par value $0.001 per share, at a ratio of 1-for-4. As a result of the Reverse Split, every four shares of the Company’s pre-Reverse Split Common Stock has been combined into one share of the Company’s post-Reverse Split Common Stock, without any change in par value per share. Prior to the Reverse Split, the Company was authorized to issue (i) 300,000,000 shares of Common Stock and (ii) 5,000,000 shares of preferred stock, par value $0.001 per share (the “Preferred Stock”). As a result of the Reverse Split, the Company is authorized to issue 75,000,000 shares of Common Stock. The par value per share of the Common Stock will remain unchanged at $0.001 per share. The total number of shares of Preferred Stock authorized for issuance will not be impacted by the Reverse Stock Split.
On October 13, 2025, the closing price of our common stock reported on the OTC Markets was $2.27 per share. The following table sets forth, for each of the quarterly periods indicated, the high and low sales prices of our common stock, as reported on the OTC Markets.
| Fiscal 2024 | Low | High | ||||||
| First Quarter | $ | 2.68 | $ | 5.44 | ||||
| Second Quarter | $ | 1.05 | $ | 14.60 | ||||
| Third Quarter | $ | 1.42 | $ | 10.40 | ||||
| Fourth Quarter | $ | 1.42 | $ | 6.00 | ||||
| Fiscal 2025 | Low | High | ||||||
| First Quarter | $ | 2.27 | $ | 5.00 | ||||
Holders
As of October 13, 2025, 25,027,004 shares (reflecting the 1 for 4 Reverse Stock Split) of our common stock were issued and outstanding and were held by 19 stockholders of record.
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Penny Stock Rules
Due to the price of our common stock, as well as the fact that we are not listed on Nasdaq or a national securities exchange, our stock is characterized as “penny stocks” under applicable securities regulations. Our stock will therefore be subject to rules adopted by the Securities and Exchange Commission (“SEC”) regulating broker-dealer practices in connection with transactions in penny stocks. The broker or dealer proposing to affect a transaction in a penny stock must furnish his customer a document containing information prescribed by the SEC and obtain from the customer an executed acknowledgment of receipt of that document. The broker or dealer must also provide the customer with pricing information regarding the security prior to the transaction and with the written confirmation of the transaction. The broker or dealer must also disclose the aggregate amount of any compensation received or receivable by him in connection with such transaction prior to consummating the transaction and with the written confirmation of the trade. The broker or dealer must also send an account statement to each customer for which he has executed a transaction in a penny stock each month in which such security is held for the customer’s account. The existence of these rules may have an effect on the price of our stock, and the willingness of certain brokers to effect transactions in our stock.
Transfer Agent
The transfer agent and registrar for the Common Stock is Odyssey Transfer and Trust Company located at 2155 Woodlane Drive, Suite 100, Woodbury, MN 55125 and its telephone number is 1-855-584-2880.
Dividend Policy
We have not declared any cash dividends since our inception and we do not anticipate paying any dividends in the foreseeable future. Instead, we anticipate that all of our earnings will be used to provide working capital, to support our operations, and to finance the growth and development of our business. The payment of dividends is within the discretion of the Board and will depend on our earnings; capital requirements; financial condition; prospects; applicable Nevada law; and other factors our Board might deem relevant. There are no restrictions that currently limit our ability to pay dividends on our common stock other than those generally imposed by applicable state law.
Nevada law. Nevada law provides that no distribution (including dividends on, or redemption or repurchases of, shares of capital stock) may be made if, after giving effect to such distribution, the corporation would not be able to pay its debts as they become due in the usual course of business, or, except as specifically permitted by the articles of incorporation, the corporation’s total assets would be less than the sum of its total liabilities plus the amount that would be needed if the corporation were dissolved immediately following the distribution to satisfy the preferential rights of stockholders whose preferential rights are superior to those receiving the distribution.
Recent Sales of Unregistered Securities; Use of Proceeds from Unregistered Securities
None
ITEM 6. SELECTED FINANCIAL DATA
As a “smaller reporting company” as defined by Item 8 of Regulation S-K, the Company is not required to provide information required by this Item.
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ITEM 7. MANAGEMENTS’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION
The following discussion and analysis were prepared to supplement information contained in the accompanying financial statements and is intended to explain certain items regarding the financial condition as of July 31, 2025, and the results of operations for the years ended July 31, 2025, and 2024. It should be read in conjunction with the audited financial statements and notes thereto contained in this report.
Overview of the Business
Hartford Creative Group, Inc. (Formerly name 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. On May 11, 2024, the Company further changed its name to Hartford Creative Group, Inc.
Ability to continue as a “going concern ”.
The independent registered public accounting firms’ reports on our financial statements as of July 31, 2025 and 2024, includes a “going concern” explanatory paragraph that describes substantial doubt about the Company’s ability to continue as a going concern. Management’s plans regarding the factors prompting the explanatory paragraph are discussed in the financial statements, including footnotes thereto.
Plan of Operation
After years of experience in education and hospitality, the Company shifted its focus in January 2024 to social media advertising. On January 10, 2024, HFSH changed its legal name from Shanghai Hartford Health Management, Ltd. to Hartford ZY Culture Media (Shanghai) Co., Ltd., hereon refer to as “HFZY”. On June 18, 2024, the Company successfully completed the acquisition of ShangXing HuoMao Network Technology Ltd. (SXHM). HFZY and SXHM started to deliver media and advertisement services. On May 12, 2025, HFZY established a subsidiary, Nanjing HaoYiPeng Information Technology Ltd (“NJHY”), based in Nanjing, China. NJHY aims to expand and strengthen the Company’s social media advertising business. The pent-up demand from social media influencers’ marketing needs on social media apps lead the Company to seize the opportunity in providing advertisement services. The Company begins to engage in social media advertising business on mainstream social media platforms such as Tik Tok, Toutiao, Kwai, RED, WeChat, Baidu and more. As an advertising partner of China’s major social media platforms, it aims to provide customers with vertical integration services from early-stage advertising video creativity, photograph shooting, editing, to advertising operation and management on social media apps. The Company will also gradually launch overseas TikTok advertising campaign, providing social media advertising solutions for domestic Chinese customers to engage in international markets in the United States.
During the year ended July 31, 2025, the Company recognized revenue of $2.0 million from the advertisement placement services. The advertisements are published on the targeted media platforms as determined by the customers. Revenue is recognized at a point in time when the placement of advertisements is completed. As disclosed in Note 1 under category “Revenue Recognition”, the Company is not the principal in executing these transactions. The Company reports the amount received from the customers and the amounts paid to the media platforms or upside agent related to these transactions on a net basis.
Based on market research and discussions between the Board and third-party suppliers and experts, the Company has further developed a plan of mini-drama business. The Company is strategically positioned to capture considerable market interest and enhance revenue streams from our innovative mini-drama business. Only preliminary activities relating to this objective have been undertaken and, therefore, there is no assurance that the business plan will be successful. In July 2025, the Company completed its first mini-drama transaction, generating $36,000 in revenue.
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Results of Operations – Year ended July 31, 2025 Compared to Year ended July 31, 2024.
The following table presents certain consolidated statement-of-operations information and presentation of that data as a percentage of change from year to year.
| For the Years Ended July 31, | ||||||||||||
| 2025 | 2024 | Variance | ||||||||||
| Revenue | $ | 2,035,211 | $ | 1,399,945 | 45 | % | ||||||
| Cost of revenue | 112,618 | 55,505 | 103 | % | ||||||||
| Selling, general and administrative | 697,416 | 247,920 | 181 | % | ||||||||
| Total operating cost and expenses | 810,034 | 303,425 | 167 | % | ||||||||
| Operating income | 1,225,177 | 1,096,520 | 12 | % | ||||||||
| Other income | 45,944 | 6,971 | 559 | % | ||||||||
| Income before income taxes | 1,271,121 | 1,103,491 | 15 | % | ||||||||
| Income tax expense | 172,011 | 10,617 | 1520 | % | ||||||||
| Net income | $ | 1,099,110 | $ | 1,092,874 | 1 | % | ||||||
Revenue: During the year ended July 31, 2025, we reported net revenues of $2,035,211, an increase of about 45% compared to the revenue in the corresponding period of 2024. Of this total, over 98.2% was generated from advertising placement services, which grew by about 43% year-over-year, driven by our expansion in the advertising agency business. The remaining 1.8%, or $36,000, was attributable to our first mini-drama transaction, which involved acquiring multiple mini-dramas overseas and selling them to a customer in the United States.
Operating Cost and Expenses: Cost of revenue increased to $112,618 for the year ended July 31, 2025, compared to $55,505 during the corresponding period of 2024, primarily due to certain outsourced services related to advertising placement. During the year ended July 31, 2025, selling, general and administrative expenses increased to $697,416 compared to $247,920 during the comparable period of 2024. This increase was primarily due to investments in scaling our operations, including expanding our infrastructure, and increased marketing spend to support business growth and revenue expansion.
Other Income: Other income, net amounted to $45,944 for the year ended July 31, 2025, compared to $6,971 for the corresponding period of 2024. The increase in 2025 primarily reflected a gain of $21,362 from the disposal of subsidiaries SHDZ and HZHF, and a local government grant of approximately $21,000 received by SXHM in Shaoxing, Zhejiang. Additional contributions came from interest income of $21,457 on related party loan receivables, partially offset by interest expense of $18,354 on loans from related parties. In contrast, other income in 2024 was mainly attributable to a $29,022 recovery from the former primary shareholder related to a Section 16 infraction, as described in Note 5—Related Party Transactions, which was partially offset by $22,100 of related party loan interest expenses.
Income tax expense: The income tax recognized for the fiscal year ended July 31, 2025 and 2024, resulted from the income tax from the operating income in China and offset by the deferred tax effects of temporary differences, see Note 11—Income Taxes to our Consolidated Financial Statements. The deferred tax assets are expected to reduce future income tax liabilities.
Net Income: We recorded a net income of $1,099,110 or 0.04 per share for the year ended July 31, 2025, compared to a net income of $1,092,874 or $0.04 per share for the year ended July 31, 2024, due to the factors discussed above.
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Liquidity and Capital Resources
As of July 31, 2025, we had a working capital deficit of $105,739 comprised of current assets of $6,508,395 and current liabilities of $6,614,134. This represents a decrease of $3,460,226 in the working capital deficit from the July 31, 2024 amount of $3,565,965. The improvement was primarily due to the forgiveness of $2.5 million in related party payables and the positive operating results for fiscal year end of 2025. We had an accumulated deficit of $4,811,733 compared to $5,910,843 at the previous year end. To date, we have funded our operations through short-term debt and equity financing.
As of July 31, 2025, the Company has issued a total of 25,027,004 shares (reflecting the 1 for 4 Reverse Stock Split) of common stock. On December 11, 2018, 24,022,500 shares of common stock were issued at the price of $0.08 per share to raise an additional $1,921,800 in capital. On November 24, 2020, the Company issued additional 250,000 shares of common stock to a significant shareholder of the Company at $0.08 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. If we are unable to raise sufficient capital, we will be required to delay or forego some of our business plan, which would have a material adverse effect on our anticipated results from operations and financial condition. Any sales of our securities would dilute the ownership of our existing investors.
Future Capital Expenditures
We believe that our funding requirements for the next twelve months will be in excess of $2,000,000. We are currently seeking further funding through related parties’ loan and finance.
We are in the process of uplisting the Company’s stock from the OTC market to the Nasdaq exchange. Assuming all conditions are met in our favor, we plan to raise capital through either debt or equity financing. The proceeds from this financing will be used to cover the costs related to the uplisting procedure.
Cash Flows – Year ended July 31, 2025 Compared to Year ended July 31, 2024
Operating Activities
Cash used in operating activities was $13,094 for the year ended July 31, 2025, as compared to $859,016 cash provided by operations for the year ended July 31, 2024.
During the year ended July 31, 2025, we recorded net income of $1,099,110, noncash adjustments for a deferred tax asset of $195,588 and a disposal gain of $21,362, an increase in contract liabilities of $3,514,536, a decrease in accounts receivable of $529,532, and an increase in other current payable of $154,320. These were offset by an increase in advance to contractors of $3,834,924 and a decrease in accounts payable of $1,285,101.
During the year ended July 31, 2024, we recorded net income of $1,092,874, noncash adjustments for a deferred tax asset of $204,901 a $1,315,786 increase of contract liabilities, a $1,327,509 increase of accounts payable, a $336,077 increase of other current payable, a $22,100 increase of related party payables, and offset by a $2,423,493 increase of advance to contract, a $573,790 increase of accounts receivable and $26,275 increase of prepaid and other current receivable.
Investing activities
The cash used in investing activities was $527,755 for the year ended July 31, 2025 primarily as a result of the addition of short term related party loan receivables of $665,927 offset by the repayment of $138,735, bearing 3% interest rate. The related party loan receivable has been fully settled through a four-party settlement agreement (see Note 4 for details).
The cash used in investing activities was $138,360 for the year ended July 31, 2024 as a result of a short term related party loan receivable with 3% interest rate, matured on July 24, 2025.
Financing activities
Cash provided by financing activities was $284,305 for the year ended July 31, 2025, as compared to $415,600 cash used in financing activities for the year ended July 31, 2024. The cash provided by financing activities for the year ended July 31, 2025 were primarily due to advances from related parties of $501,434 and proceeds from related party notes payable of $201,200. These were partially offset by the principal repayment of related party notes payable of $216,000, repayment of related party advancement of $93,927, and payment of offering costs of $108,402.
In addition, during the year ended July 31, 2025, related party payable in amount of $2,516,853 were forgiven and recorded as a contribution to additional paid-in capital. This forgiveness was a non-cash financing activity and, therefore, did not impact cash flows.
The cash flows used in financing activities for the year ended July 31, 2024 were primarily due to the repayment of notes payable $70,000 and repayment of related party advancement of $553,278, and offset by the proceeds of notes payable $207,678. The notes payable was borrowed from related parties with 5% annual interest rate. See Note 5 Related Party Transactions.
Off-Balance Sheet Arrangements
As of and subsequent to July 31, 2025, we have no off-balance sheet arrangements.
Contractual Commitments
As of July 31, 2025, except the commitments disclosed in Note 9, we have no other material contractual commitments.
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Accounting Policies and Pronouncements
Critical Accounting Policies and Estimates
Our consolidated financial statements are prepared in accordance with GAAP. GAAP requires us to make estimates and assumptions that affect the reported amounts in our consolidated financial statements. Critical accounting estimates are those that management believes are the most important to the portrayal of our financial condition and results and require the most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain and that have had, or are reasonably likely to have, a material impact on our financial condition or results of operations. Judgments and uncertainties may result in materially different amounts being reported under different conditions or using different assumptions. See “Part II, Item 8 – Financial Statements – Note 1 –Summary of Significant Accounting Policies” for a summary of our significant accounting policies.
The following summarizes our most significant critical accounting estimates:
Foreign Currency: The accounts of the Company’s foreign subsidiaries are translated in accordance with FASB ASC 830. Foreign currency transaction gains and losses are recognized in other expense, net, at the time they occur. Net foreign currency exchange gains or losses resulting from the translation of assets and liabilities of foreign subsidiaries whose functional currency is not the U.S. dollar are recorded as a part of accumulated other comprehensive loss in stockholders’ equity. The Company does not undertake hedging transactions to cover its foreign currency exposure.
Revenue Recognition: The Company follows 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. 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.
The Company is developing business plan and aim to provide customers with vertical integration services from early-stage advertising video creativity, shooting, editing, to advertising operation and management on social media apps. Most of the advertising revenue will be generated by placing ad products on Tik Tok, Toutiao, Kwai, RED, WeChat, Baidu and other third-party affiliated websites and mobile applications. Currently, the Company provides traffic acquisition service to place the advertisements produced by the advertisers. The advertisements are published on the targeted media platforms as determined by the customers. Besides, the Company provides advertisements account charging service to customers upon the request from customers. Revenue is recognized at a point in time when the distribution of advertisements and charging of advertisement accounts are completed upon the completion confirmation from the customers and suppliers.
In July 2025, the Company completed its first mini-drama transaction, generating $36,000 in revenue. The content was sourced from a supplier oversea and sold to a customer in the United States. During the transaction, the Company controls the license rights prior to transfer, assumes responsibility to the customer, and sets pricing independently, thus acting as the principal and recognizing revenue on a gross basis. As the license represents a right-to-use intellectual property (static dramas with no updates), revenue is recognized at a point in time when the licenses are made available to the customer at the start of the license term. The procurement cost is recorded as cost of revenues.
Recent Accounting Pronouncements.
See “Part II, Item 8 – Financial Statements – Note 1 –Summary of Significant Accounting Policies – Recent Accounting Pronouncements” for a full description of recent accounting pronouncements including the respective expected dates of adoption and expected effects on the Company’s consolidated financial position, results of operations or liquidity.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
As a “smaller reporting Company” as defined by Item 8 of Regulation S-K, the Company is not required to provide information required by this Item.
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ITEM 8. FINANCIAL STATEMENTS
Report of Independent Registered Public Accounting Firm
Shareholders and Board of Directors
Hartford Creative Group, Inc.
Opinion on the Consolidated Financial Statements
We have audited the accompanying consolidated balance sheets of Hartford Creative Group, Inc. and subsidiaries (the “Company”) as of July 31, 2025 and 2024, the related consolidated statements of income and comprehensive income, changes in stockholders’ deficit and cash flows for each of the two years in the period ended July 31, 2025, and the related notes to the consolidated financial statements. In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of July 31, 2025 and 2024, and the results of its operations and its cash flows for each of the two years in the period ended July 31, 2025, in conformity with accounting principles generally accepted in the United States of America.
Going Concern Uncertainty
The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As described in Note 2 to the consolidated financial statements, the Company has suffered recurring negative working capitals and accumulated deficits that raise substantial doubt about its ability to continue as a going concern. Management’s evaluation of the events and conditions and management’s plans regarding these matters are also described in Note 2. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Basis for Opinion
These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing separate opinions on the critical audit matter or on the accounts or disclosures to which it relates.
Revenue recognition – determination of principal versus agent
As described in Note 1 to the consolidated financial statements, the revenue is recognized on a gross or net basis based on whether the Company acts as a principal by controlling the service provided to the consumer, or whether it acts as an agent by arranging for third parties to provide the service to the consumer. During the year ended July 31, 2025, the Company provides traffic acquisition service to place the advertisements produced by the advertisers. The advertisements are published on the targeted media platforms as determined by the customers. Revenue is recognized at a point in time when the distribution of advertisements and charging of advertisement accounts are completed upon the completion confirmations provided by customers and suppliers, respectively. The Company is therefore acting as an agent.
We identified the determination of principal versus agent for revenue recognition related to the advertisement placement service as a critical audit matter. Specifically, subjective auditor judgment was required to evaluate whether the Company acted as either a principal or an agent with respect to whether the Company controls the promised service.
The primary procedures we performed to address this critical audit matter included:
| Ø | Obtained understanding of the service agreements between the Company and customers, the Company and media platforms or agent of the media platforms for advertisement placement services provided. |
| Ø | Performed walkthroughs of sales and purchase transactions to confirm the working flows of the key business cycles. |
| Ø | Obtained revenue recognition memo including analysis of principal versus agent along with the management’s conclusion. |
| Ø | Assessed management’s conclusion by analyzing whether the Company controls the promised service provided pursuant to the terms and conditions with media platforms and/or agent of media platforms, including but not limit to latitude in establishing price and taking risk of service cost. |
| Ø | Sent sales confirmations and interviewed customers on a sample basis to verify the service delivered and the parties who delivered the service. |
| Ø | Leveraged the testing result of substantive testing of revenue recognition to further evaluate the management’s conclusion. |
/s/
We have served as the Company’s auditor since 2019.
October 15, 2025
| 12 |
HARTFORD CREATIVE GROUP, INC.
CONSOLIDATED BALANCE SHEETS
| July 31, 2025 | July 31, 2024 | |||||||
| ASSETS | ||||||||
| Current Assets | ||||||||
| Cash and cash equivalents | $ |
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$ |
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| Accounts receivable |
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| Advance to contractors |
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| Related party receivable ** | ||||||||
| Current loan receivable -related party ** |
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| Prepaid and other current receivables |
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| Deferred offering costs |
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| Total Current Assets |
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| Non-current Assets | ||||||||
| Property and equipment, net |
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| ROU assets-operating lease |
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| Deferred tax assets |
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| Total Non-current Assets |
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| TOTAL ASSETS | $ |
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$ |
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| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Current Liabilities | ||||||||
| Accounts payable | $ |
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$ |
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| Related party loan and payables ** |
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| Contract liabilities |
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| Current operating Lease liabilities |
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| Other current payable |
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| Non-interest-bearing payable ** | ||||||||
| Total Current Liabilities |
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| Lease liabilities, noncurrent |
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| TOTAL LIABILITIES |
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| Co mmitments and contingencies | ||||||||
| Stockholders’ Equity (Deficit) | ||||||||
| Preferred stock - $ par value, shares authorized, shares issued and outstanding | ||||||||
| Common stock - $ par value, shares authorized, shares outstanding at both of July 31, 2025 and 2024 * |
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| Additional paid-in capital |
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| Accumulated deficit |
(
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| Accumulated other comprehensive income |
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| Total Stockholders’ Equity (Deficit) |
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| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) | $ |
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$ |
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| * |
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The accompanying notes are an integral part of these consolidated financial statements.
| 13 |
HARTFORD CREATIVE GROUP, INC.
CONSOLIDATED STATEMENTS OF INCOME
| Years ended July 31, | ||||||||
| 2025 | 2024 | |||||||
| Revenue | $ |
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$ |
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| Revenue - Related Party |
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| Revenue - Minidrama |
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| Total Revenue |
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| Operating cost and expenses: | ||||||||
| Cost of revenue |
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| Cost of revenue - Related Party |
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| Cost of revenue - Minidrama |
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| Selling, general and administrative expenses |
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| Total operating cost and expenses |
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| Operating income |
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| Other Income | ||||||||
| Interest income (expense), net |
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| Gain on disposal of subsidiary |
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| Other income, net |
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| Total other income, net |
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| Income before income taxes |
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| Income Tax Expense |
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| Net income |
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| Net income per common share: | ||||||||
| Basic and diluted | $ | $ | ||||||
| Weighted average shares outstanding: | ||||||||
| Basic and diluted * | ||||||||
| * |
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The accompanying notes are an integral part of these consolidated financial statements.
| 14 |
HARTFORD CREATIVE GROUP, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
| Years ended July 31, | ||||||||
| 2025 | 2024 | |||||||
| Net income | $ |
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$ |
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| Other Comprehensive income, net of income tax | ||||||||
| Foreign currency translation adjustments |
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| Total Other Comprehensive Income |
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| Total Comprehensive income | $ |
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$ |
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The accompanying notes are an integral part of these consolidated financial statements.
| 15 |
HARTFORD CREATIVE GROUP, INC.
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT)
| Common Stock* |
Additional
Paid - in |
Accumulated |
Accumulated
Other Comprehensive |
Total
Stockholders’ Equity |
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| Shares | Amount | Capital* | (Deficit) | income | (Deficit) | |||||||||||||||||||
| Balance, July 31, 2023 |
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(
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(
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| Net income | - |
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| Foreign currency translation adjustment | - |
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| Balance, July 31, 2024 |
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(
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(
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| Net income | - |
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| Related party payable forgiveness |
- |
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| Foreign currency translation adjustment | - |
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| Balance, July 31, 2025 |
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(
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| * |
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The accompanying notes are an integral part of these consolidated financial statements.
| 16 |
HARTFORD CREATIVE GROUP, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
| Years ended July 31, | ||||||||
| 2025 | 2024 | |||||||
| Cash flows from operating activities: | ||||||||
| Net income | $ |
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$ |
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| Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||||||||
| Depreciation |
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| Disposal gain of subsidiaries |
(
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| Deferred tax assets |
(
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| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable |
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(
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| Prepaid and other current receivables |
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(
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| Advance to contractors |
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| Related party receivables and payables |
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| Contract liabilities |
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| Accounts payable |
(
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| Other current payable |
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| Operating lease assets and liabilities |
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(
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| Net cash (used in) provided by operating activities |
(
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| Cash flows from investing activities: | ||||||||
| Disposal of subsidiaries |
(
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| Purchases of property and equipment |
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| Cash proceeds from acquisitions |
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| Related party loan receivable * |
(
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| Repayment of related party loan receivable * |
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| Net cash used in investing activities |
(
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(
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| Cash flows from financing activities: | ||||||||
| Proceeds of related party notes payable |
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| Repayment of related party notes payable |
(
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(
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| Advances from related parties |
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| Repayment of related party advances * |
(
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(
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| Payment of offering costs |
(
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| Net cash provided by (used in) financing activities |
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(
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| Effect of exchange rate changes on cash |
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(
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| Net change in Cash and cash equivalents |
(
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| Cash and cash equivalents at beginning of period |
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| Cash and cash equivalents at end of period | $ |
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$ |
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| Supplemental Cash Flow Information | ||||||||
| Interest paid | $ | $ | ||||||
| Income taxes paid | $ |
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$ |
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Supplemental
Disclosure For Noncash Investing And Financing Activities:
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Related
party payable forgiveness
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| Related party loan receivable settled with Related party payable |
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| * |
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The accompanying notes are an integral part of these consolidated financial statements.
| 17 |
HARTFORD CREATIVE GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
This summary of significant accounting policies is presented to assist in understanding the Company’s consolidated financial statements. The consolidated 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.
Organization
Hartford Creative Group, Inc. (Formerly name 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. On May 11, 2024, the Company further changed its name to Hartford Creative Group, Inc.
Through
its wholly owned subsidiary - Hangzhou Hartford Comprehensive Health Management, Ltd (“HZHF) and HZHF’s
The
Company engaged in early childhood education industry at Hartford International Education Technology Co., Ltd (“HF Int’l
Education”) and its subsidiaries setup or acquired. 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
Beginning
in January 2024, the Company embarked on the development of a new business within the Media and Marketing sector. As part of its rebranding
strategy, on January 01, 2024, HFSH changed its legal name from Shanghai Hartford Health Management, Ltd. to Shanghai Hartford ZY Culture
Media Ltd. (“HFZY”). HFZY mainly engages in social media advertising business on mainstream social media platforms such as
Tik Tok, Toutiao, Kwai, RED, WeChat, and more. As an advertising partner of China’s major social media platforms, the Company relies
on a high-quality and professional media strategy execution team and network to help customers use the massive media resources of different
types of social media platforms and receive competitive prices due to large-scale media resource procurement to purchase media resources.
It aims to become one of the total solution advertising providers for domestic social media industry in China and provide customers with
vertical integration services from early-stage advertising video creativity, shooting, editing, to advertising operation and management
on social media apps. Further expanding its business operations, HFUS reacquired full ownership of HZHF at no cost on April 1, 2024,
and subsequently rebranded it as Hangzhou Hartford WP Culture Media Ltd. (“HZWP”). On April 11, 2024, HFUS continued its
growth trajectory by establishing a new subsidiary named Shanghai DZ Culture Media Ltd. (“SHDZ”). However, due to prolonged
inactivity, the Company entered agreements on December 9, 2024, and January 1, 2025, to transfer
Reverse Stock Split
On
March 28, 2025, the Board of Directors approved by unanimous written consent a reverse stock split of the Company’s authorized
shares and issued and outstanding shares of common stock, par value $
per share, at a ratio of 1-for-4. On March 31, 2025, the Company
filed a certificate of amendment with the Secretary of State of the State of Nevada to effect the
Basis of Presentation
The consolidated financial statements include the accounts of Hartford Creative Group, Inc., 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.
Use of Estimates
The preparation of consolidated 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.
| 18 |
Foreign Currency : The accounts of the Company’s foreign subsidiaries are translated in accordance with FASB ASC 830. Foreign currency transaction gains and losses are recognized in other expenses, net, at the time they occur. Net foreign currency exchange gains or losses resulting from the translation of assets and liabilities of foreign subsidiaries whose functional currency is not the U.S. dollar are recorded as a part of accumulated other comprehensive loss in stockholders’ equity. The Company does not undertake hedging transactions to cover its foreign currency exposure.
Comprehensive Income : For the years ended July 31, 2025 and 2024, the Company included its foreign currency translation gain or loss as part of its comprehensive income.
Fair value measurement : Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. Accounting Standard Codification (“ASC”) 820, Fair Value Measurements and Disclosures (“ASC 820”), describes a fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value, which are the following:
Level 1 - Quoted prices in active markets for identical assets or liabilities or funds.
Level 2 - Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.
The Company’s financial instruments consist of cash and cash equivalents, accounts receivable, related party receivable, prepaid and other current receivable, accounts payable, related party payable and other current payable. The carrying amounts of afore-mentioned accounts approximate fair value because of their short-term nature.
Cash
and Cash Equivalents
:
The Company maintains cash with banks in the USA and China. Should any bank holding cash become insolvent,
or if the Company is otherwise unable to withdraw funds, the Company would lose the cash with that bank; however, the Company has not
experienced any losses in such accounts and believes it is not exposed to any significant risks on its cash in bank accounts. In China,
a depositor has up to RMB
Deferred
offering costs
:
Deferred offering costs consisted of fees and expenses incurred in connection with the sale of the Company’s
common stock during the uplisting process, including the legal, accounting, printing and other offering related costs. Upon completion
of the uplisting, these deferred offering costs are to be reclassified from current assets to stockholders’ equity and recorded
against the net proceeds from the offering. As of July 31, 2025 and 2024, deferred offering costs amounted to $
Business Combinations : If an acquired set of activities and assets is capable of being operated as a business consisting of inputs and processes from the viewpoint of a market participant, the assets acquired and liabilities assumed are a business. Business combinations are accounted for using the acquisition method of accounting, which requires an acquirer to recognize the assets acquired and the liabilities assumed at the acquisition date measured at their fair values as of that date. Fair value determinations are based on discounted cash flow analyses or other valuation techniques. In determining the fair value of the assets acquired and liabilities assumed in a material acquisition, the Company may utilize appraisals from third party valuation firms to determine fair values of some or all of the assets acquired and liabilities assumed, or may complete some or all of the valuations internally. In either case, the Company takes full responsibility for the determination of the fair value of the assets acquired and liabilities assumed. The value of goodwill reflects the excess of the fair value of the consideration conveyed to the seller over the fair value of the net assets received. Acquisition-related costs that the Company incurs to affect a business combination are expensed in the periods in which the costs are incurred.
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.
On
December 22, 2017, the President of the United States signed into law the Tax Reform Act. The Tax Reform Act permanently reduces the
U.S. corporate income tax rate from a maximum of
| 19 |
Revenue Recognition
The Company follows 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. 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.
The Company is developing business plan and aim to provide customers with vertical integration services from early-stage advertising video creativity, shooting, editing, to advertising operation and management on social media apps. Most of the advertising revenue will be generated by placing advertisements of products on Tik Tok, Toutiao, Kwai, RED, WeChat, Baidu and other third-party affiliated websites and mobile applications. Currently, the Company provides traffic acquisition service to place advertisements produced by advertisers and provides advertisements account charging service to customers. The advertisements are published on the targeted media platforms as determined by the customers. Revenue is recognized at a point in time when the distribution of advertisements and charging of advertisement accounts are completed upon the completion confirmations by customers and suppliers, respectively.
During
the years ended July 31, 2025 and 2024, the Company had advertising service contracts with approximately 43 and 30 customers, receiving
advance payments of RMB
Additionally,
during the year ended July 31, 2025, the Company also generated $
Generally,
the Company pays suppliers upfront for media resources and collects prepayments from customers. Under certain status, credit terms of
up to 90 days may be granted. As of July 31, 2025 and 2024, the Company had $
Reclassification
Certain prior period amounts have been reclassified to conform to the current year presentation. These reclassifications had no impact on the Company’s net income, net cash flows, or stockholders’ equity.
| 20 |
Recent Accounting Pronouncements .
Recently adopted accounting pronouncements
In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280), Improvements to Reportable Segment Disclosures. The new guidance requires enhanced disclosures about significant segment expenses. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. We adopted this guidance in the annual reporting for the fiscal year ending July 31, 2025. See Note 10. Segment information.
Recently not yet adopted accounting pronouncements
In November 2024, the FASB issued ASU No. 2024-03, Disaggregation of Income Statement Expenses (“ASU 2024 03”), and in January 2025, the FASB issued ASU No. 2025-01, Clarifying the Effective Date (“ASU 2025-01”). The amendments are intended to enhance disclosures regarding an entity’s costs and expenses by requiring additional disaggregated information disclosures about certain income statement expense line items. The amendments, as clarified by ASU 2025-01, are effective for fiscal years beginning after December 15, 2026 and interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. We are currently evaluating the impact of adopting this guidance on our Consolidated Financial Statements.
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740), Improvements to Income Tax Disclosures. The new guidance requires enhanced disclosures about income tax expenses. The Company is required to adopt this guidance in the first quarter of the fiscal year 2026. Early adoption is permitted on a prospective basis. We are currently evaluating the impact of this ASU on our annual income tax disclosures.
The Company does not believe other recently issued but not yet effective accounting standards, if currently adopted, would have a material effect on the consolidated financial position, statements of operations and cash flows.
NOTE 2. GOING CONCERN
The
accompanying consolidated 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. As of July 31, 2025, The Company had a working capital deficit of $
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 the Company, and ultimately achieving profitable operations. Management believes that the Company’s business plan provides it with an opportunity to continue as a going concern. However, management cannot provide assurance that the Company 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 the Company to continue as a going concern.
NOTE 3. ACQUISITIONS AND DISPOSALS
On April 1, 2024, as part of its strategy to broaden its advertising business, the Company regained full ownership of HZHF without incurring any costs. Following this reacquisition, it was rebranded to Hangzhou Hartford WP Culture Media Ltd. (“HZWP”). On April 11, 2024, HFUS continued its growth trajectory by establishing a new subsidiary named Shanghai DZ Culture Media Ltd. (“SHDZ”).
Due
to prolonged inactivity, the Company entered agreements on December 9, 2024, and January 1, 2025, to transfer
On June 18, 2024, HFUS successfully completed the acquisition of ShangXing HuoMao Network Technology Ltd. (SXHM). The acquisition was executed at no cost, and there were no significant assets or liabilities exchanged during the transfer.
NOTE 4. CURRENT LOAN RECEIVABLE-RELATED PARTY
During
July and August 2024, the Company loaned $
On
July 31, 2025, the Company, KLZY, SH Qiaohong and Shanghai Oversea Chinese Culture Media Ltd. (“SH Oversea”), entered into
a four-party agreement under which the outstanding loan receivable from KLZY, consisting of principal of $
As
of July 31, 2025 and 2024, the outstanding loan receivable balances were
and $
| 21 |
NOTE 5. RELATED PARTY TRANSACTIONS
Related Party Payables Settlement and Forgiveness
The
Company’s related party relationship with SH Qiaohong and SH Oversea, previously based on shared management with HFSH, ceased on
August 15, 2024. However, on November 26, 2024, Ms. Erin SongWang acquired a
As
of July 31, 2025 and 2024, amounts payable to SH Qiaohong were
and $
As
of July 31, 2025 and 2024, net payable to SH Oversea were
and $
Related Party loans
HFUS
borrowed in the form of a short-term loan at
Since February 2024, the Company borrowed a total of $ in short-term loans at an annual interest rate of % from a relative of one of its current major shareholders (the former primary shareholder). On April 22, 2024, $ of the principal was used to offset profits that the former shareholder allegedly earned in violation of Section 16(b) of the Securities Exchange Act. As of July 31, 2024, the outstanding balance of principal and interest on these loans was $ , payable on demand. Interest expense of $ and $ were recorded for the year ended July 31, 2025 and 2024, respectively. On December 10, 2024, the outstanding loan balance of $ (principal and interest) was converted to a non-interest-bearing advance from the former shareholder. This advance, combined with other related party payables, resulted in a total of $ and $ in outstanding operating advances from the former primary shareholder as of July 31, 2025, and 2024, respectively. These advances are non-interest-bearing and due on demand.
Other Related Party Transactions
During the year ended July 31, 2024, the Company
generated $
The
Company has leased approximately
The
Company’s office space, located 8832 Glendon Way, Rosemead, CA 91770, is leased from a related party, a former primary shareholder
and relative of a current major shareholder. The lease term is from January 1, 2025 to December 31, 2025, at a fixed monthly rent of
USD
NOTE 6. ADVANCE TO CONTRACTORS AND CONTRACT LIABILITIES
In
the advertisement placement services, the Company makes prepayments to the downstream agents or the media platforms (“contractor”)
and receives advance payments from the customers. As of July 31, 2025 and 2024, the Company’s balance sheets reflect $
NOTE 7. OTHER CURRENT LIABILITIES
Other current payable consist as follows:
| July 31, 2025 | July 31, 2024 | |||||||
| Taxes payable | $ |
|
$ |
|
||||
| Accrued payroll |
|
|
||||||
| Payable to former owners |
|
|
||||||
| Other payables |
|
|||||||
| Other Current Liabilities | $ |
|
$ |
|
||||
NOTE 8. CONCENTRATION RISK
For
the year ended July 31, 2025 and 2024, three customers accounted for
For
the year ended July 31, 2025 and 2024, two contractors accounted for
| 22 |
NOTE 9. COMMITMENTS AND CONTINGENCIES
There have been no material contractual obligations and commitments as of July 31, 2025.
NOTE 10. SEGMENT INFORMATION
Operating segments are defined as components of an enterprise for which separate financial information is available and regularly evaluated by the chief operating decision maker (“CODM”) in allocating resources and assessing performance. The Company has identified its Chief Executive Officer as the CODM. The CODM manages the business, allocates resources, and evaluates performance on a consolidated basis; accordingly, the Company operates as a single operating and reportable segment.
In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. This guidance requires enhanced disclosures about reportable segments, including significant segment expenses regularly reviewed by the CODM and included in each reported measure of segment profit or loss. The Company adopted ASU 2023-07 for the fiscal year ending July 31, 2025. Adoption did not affect the Company’s consolidated financial position, results of operations, or cash flows, but resulted in expanded segment disclosures.
Reportable Segment and Measure of Profit or Loss
The CODM evaluates segment performance and allocates resources based on consolidated operating results, which represent the measure of profit or loss used by the CODM. This measure is consistent with income from operations as presented in the Company’s consolidated statements of income. The CODM also monitors consolidated total assets when assessing performance and making resource allocation decisions.
Significant Segment Expenses
In reviewing operating performance, the CODM considers consolidated revenues, gross margin, and operating expenses, including selling, general and administrative expenses. No additional categories of expense are regularly provided to or reviewed by the CODM.
NOTE 11. INCOME TAXES
The Company’s consolidated financial statements recognize the current and deferred income tax consequences that result from the Company’s activities during the current and preceding periods. The Company files consolidated federal, state, and foreign income tax filings. The Company recognizes current and deferred income taxes as a consolidated “C” corporation for periods ending.
The Company’s income before income taxes are subject to taxes in the following jurisdictions for the following periods:
| July 31, 2025 | July 31, 2024 | |||||||
| Pre-tax (loss) from U.S. operations | $ |
(
|
) | $ |
(
|
) | ||
| Pre-tax income from foreign operations |
|
|
||||||
| Total Pre-tax income | $ |
|
$ |
|
||||
The provision for income taxes consisted of the following:
| July 31, 2025 | July 31, 2024 | |||||||
| Current: | ||||||||
| Federal | $ | $ | ||||||
| State and local |
|
|
||||||
| Foreign |
|
|
||||||
| Total current |
|
|
||||||
| Deferred: | ||||||||
| Federal |
(
|
) |
(
|
) | ||||
| State and local |
(
|
) |
(
|
) | ||||
| Foreign | ||||||||
| Total deferred |
(
|
) |
(
|
) | ||||
| Total income tax expense | $ |
|
$ |
|
||||
| 23 |
Income taxes at the statutory rate are reconciled to reported income tax expense as follows:
| 2025 | 2024 | |||||||
| Federal income tax rate |
|
% |
|
% | ||||
| State income tax rate |
|
% |
|
% | ||||
| Foreign tax effect |
|
% |
|
% | ||||
| GILTI |
(
|
)% |
(
|
)% | ||||
| Usage of DTA |
(
|
)% |
(
|
)% | ||||
| Other |
(
|
)% |
(
|
)% | ||||
| Valuation allowance |
|
% |
|
% | ||||
| Effective Income tax expense (benefit) rate |
|
% |
|
% | ||||
The tax effects of temporary differences that give rise to significant portions of deferred tax assets as of July 31, 2025, are as follows:
| July 31, 2025 | ||||
| GILTI |
|
|||
| PY state taxes |
|
|||
| State tax effect |
(
|
) | ||
| NOL |
|
|||
| Total |
|
|||
| Valuation allowance | ||||
| Total Deferred Tax Assets |
|
|||
NOTE 12. 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 no material subsequent events were noted.
| 24 |
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
Not Applicable.
Item 9A. 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 Annual Report. Based on that evaluation, our management, including our Chief Executive Officer and Chief Financial Officer, concluded that, as of July 31, 2025 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 the significant deficiency in internal control over financial reporting described below.
Management’s Annual Report on Internal Control Over Financial Reporting.
Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Exchange Act Rule 13a-15(f). Our internal control system is intended to provide reasonable assurance to our management and board of directors regarding the preparation and fair presentation of published financial statements and that we have controls and procedures designed to ensure that the information required to be disclosed by us in our reports that we will be required to file under the Exchange Act is accumulated and communicated to our management as appropriate to allow timely and informed decisions regarding financial disclosure.
Our management assessed the effectiveness of our internal control over financial reporting as of July 31, 2025. Based on this assessment, management believes that we have taken concrete steps to remediate the material weakness identified in prior year. Specifically, the Company has hired an additional accounting manager with extensive accounting experience, bringing the total to two accounting managers, to strengthen its accounting team, improve internal control processes, and ensure the timely collection and retention of necessary supporting documentation.
However, despite these improvements, management concluded that our internal control over financial reporting was not effective as of July 31, 2025. The assessment identified the following significant deficiency:
| ● | For certain rebate arrangements with upstream and downstream business parties, the company relies on verbal agreements and case-by-case practices, with terms typically confirmed at the end of each month. While this approach provides flexibility and is partly mitigated by monthly confirmations, it still results in limited formalized documentation to ensure consistency and accuracy. This may lead to inconsistencies, errors, or disputes in recognizing and recording such arrangements. |
Inherent Limitations Over Internal Controls
Our management, including our Chief Executive Officer and Chief Financial Officer, does not expect that our disclosure controls and procedures or our internal controls will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Our control systems are designed to provide such reasonable assurance of achieving their objectives. Further, the design of a control system must reflect the fact that there are resource constraints and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within our Company have been detected. These inherent limitations include, but are not limited to, the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the control. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.
Changes in Internal Control Over Financial Reporting.
During the fiscal year ended July 31, 2025, we implemented the remediation measures described above, and management believes these actions have remediated the material weakness identified in the prior year. However, as part of our current assessment, management identified a new significant deficiency related to documentation of rebate arrangements. We are evaluating and implementing additional measures to address this deficiency and further strengthen our internal control environment.
Attestation Report of the Registered Public Accounting Firm.
This annual report does not include an attestation report of our independent registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by our independent registered public accounting firm pursuant to temporary rules of the SEC that permit us to provide only management’s report in this annual report on Form 10-K.
ITEM 9B. OTHER INFORMATION
| 25 |
PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
Directors and Executive Officers
The following individual presently serves as our officers and directors as of October 13, 2025:
| Name and Municipality of Residence | Age | Positions With the Company | Board / Management Position Held Since | |||
| Sheng-Yih Chang, Los Angeles, CA | 54 | President, Chief Executive Officer and Director | 2018 | |||
| Lili Dai, Los Angeles, CA | 49 | Chief Financial Officer | 2025 | |||
| Yuan Lu, Shanghai, China | 39 | Independent Director | 2019 | |||
| Xin Dong, Los Angeles, CA | 41 | Independent Director | 2018 | |||
| Guo Jurong, Shanghai, China | 62 | Independent Director | 2024 | |||
| Shen Yiqian, Shanghai, China | 68 | Independent Director | 2024 |
Each of the directors will serve until the next annual meeting of stockholders of the Company and until such director’s successor is elected and qualified or until such director’s earlier death, resignation or removal. The following is information concerning the business backgrounds of each member of the board of directors:
Sheng Yih Chang. Mr. Chang has served as the Chief Financial Officer of the Company since June 2018, and the General Manager at Hartford Hotel, a commercial hotel in Rosemead California since March 2018. Mr. Chang served as a Product Manager at Jowett Group, a textile manufacturing company in the USA, from November 2015 through September 2017, as an Operational Manager and General Manager at A-Concepts Designs, a houseware supplier company in the USA, from January 2004 through October 2015, as a General Manager at Long Arch International, a carving crafts supplier in the USA, from December 2000 through December 2003, as a Sales Manager at EZ Wholesale, a general merchandise wholesaler in the USA, from July 1998 through November 2000, and as a technician at Richcom Computer Corporation, a computer service provider in California, from July 1996 through November 1997. Mr. Chang studied electrical engineering at the University of British Columbia and holds a Bachelor of Science in Electrical Engineering from California State University, Northridge.
Lili Dai, Ms. Dai possesses a diverse background encompassing accounting, auditing, financial reporting, and management. Since December 2023, she has served as the principal of Green-Keen Consulting LLC. Prior to that, she served as Interim VP Controller at Inno Holdings Inc. From September 2021 to August 2023, she held the position of Director of Technical Accounting and Reporting at Tattooed Chef LLC, where she oversaw technical accounting matters and external financial reporting. From January 2018 to September 2021, Ms. Dai served as the Director of Accounting and Financial Reporting at Markwins Beauty Brands, responsible for managing global operational accounting and reporting functions. Earlier in her career, from October 2015 to December 2017, she worked as a Senior Technical Corporate Accountant at a multi-billion-dollar company, Monster Energy Drink. Ms. Dai’s tenure at PwC Los Angeles, from January 2012 to October 2015, involved supervising audit engagements for various large companies across diverse industries. She began her professional journey as an auditor at Frazer LLP, a regional CPA firm in California, from April 2008 to December 2011. Ms. Dai holds a Master of Science in Accountancy from California State University Fullerton and is an active Certified Public Accountant.
Yuan Lu . Ms. Lu graduated in 2008 with a Bachelor’s Degree from Anhui University of Technology in China majoring in International Trade and Economics. In 2013, Ms. Lu earned a Master’s Degree in International Language Arts from Shanghai University of Finance and Economics in China. From 2008-2009, Ms. Lu was an Assistant Teacher at New Channel International Educated Group, Ltd. From 2009-2010, Ms. Lu was a Customs Broker and Procurement Buyer at Shanghai Pan-Resources Imp&Exp Co., Ltd. From 2010 through the present, Ms. Lu has served as the Assistant CEO at Shanghai Overseas Chinese Culture Media Co., Ltd.
Xin Dong. Mr. Dong has served as the Executive Director and General Manager of Shanghai Huitong Health Management Company, a senior care and traditional health management company, in China since September 2017. From July 2016 through August 2017, Mr. Dong acted as the Vice President and General Manager of Shanghai Huicai Financial Information Service Co., Ltd., a financial service and small loan company, in China. Mr. Dong has also served as the General Manager of Shenzhen Maoli International Trading Co., Ltd., an international trading company in Shenzhen, China, from April 2012 through June 2016, and as a Project Manager and Market Representative at Nanjing Hongyuan Electronic Technology Company, an electronics manufacturing company, from July 2007 through March 2012. Mr. Dong holds a Masters in International Finance and Trade from Shanghai Jiaotong University and a degree in Computer Science from Jiangsu University.
| 26 |
Guo Jurong. Mr. Guo is a seasoned academic and business executive with a distinguished career. As the Dean of the United Business School (UBI) China and Chairman of the Advisory Committee at Detong Capital, he brings a wealth of experience to his leadership roles. His expertise extends to serving as an Independent Director on multiple publicly listed companies.
Prior to his current positions, Mr. Guo has served as the Assistant Dean of Antai College of Economics and Management, Shanghai Jiao Tong University, and the Director of EMBA Program, the Executive Dean of China Enterprise Development Research Institute, the Secretary General of the Academic Committee of the Research Institute of the Ministry of Commerce of the People’s Republic of China, the Professor and President of Qingdao Institute of Technology and the Founding President of Shanghai Medical University.
Shen Yiqian, Ms. Shen is a financial executive with over four decades of experience, holds a degree in accounting from Shanghai University of Finance and Economics. Throughout her career, Ms. Shen has held key financial leadership positions at leading companies in various industries. Her expertise includes serving as a Financial Director at Shanghai Jingyuan Real Estate Development Co., Ltd., Beijing Aodewei (Shanghai) Consulting Co., Ltd., and Shanghai Sirui Construction Technology Co., Ltd. Prior to these roles, she held positions in accounting and finance at Shanghai No. 19 Cotton Textile Factory and Watanabe Group (Shanghai) International Business Co., Ltd. Ms. Shen’s early career in logistics management at the Shanghai Haifeng Farm Brigade provided her with a solid foundation in operations and management.
Term of office
All officers and directors listed above will remain in office until the next annual meeting of our stockholders and until their successors have been duly elected and qualified or until removed from office in accordance with our amended and restated bylaws. There are no agreements with respect to the election of Directors. We have not compensated our Directors for service on our Board, any committee thereof, or reimbursed for expenses incurred for attendance at meetings of our Board and/or any committee of our Board. Officers are appointed annually by our Board and each Executive Officer serves at the discretion of our Board. We do not have any standing committees. Our Board may in the future determine to pay the Directors’ fees and reimburse the Directors for expenses related to their activities.
None of our Officers and/or Directors have filed any bankruptcy petition, been convicted of or been the subject of any criminal proceedings or the subject of any order, judgment or decree involving the violation of any state or federal securities laws within the past five (5) years.
Code of Ethics
Our Board plans to adopt a written code of business conduct and ethics (“Code of Ethics”) that applies to our directors, officers, and employees, including our principal executive officer, principal financial officer, and principal accounting officer or controller, or persons performing similar functions. We intend to post on our website a current copy of the Code of Ethics and all disclosures required by law regarding any amendments to, or waivers from, any provision of the Code of Ethics.
Board Leadership Structure and Risk Oversight
Our Board has responsibility for the oversight of our risk management processes and, either as a whole or through its committees, regularly discusses with management our major risk exposures, their potential impact on our business and the steps we take to manage them. The risk oversight process includes receiving regular reports from board committees and members of senior management to enable our Board to understand our risk identification, risk management, and risk mitigation strategies with respect to areas of potential material risk, including operations, finance, legal, regulatory, cybersecurity, strategic, and reputational risk. While the Company has not yet experienced a significant impact related to the situation in Ukraine caused by the Russian invasion, the Board will closely monitor the risks in relation to such developments, including but not limited to risks related to cybersecurity, sanctions, supply chains, suppliers, and service providers. Similarly, our Board is monitoring US-China relations to monitor risks such as political disruption, supply chain, and foreign exchange.
Board
Our business and affairs are managed under the direction of our Board. Our Board consists of five directors, four of whom qualify as “independent” under the listing standards of Nasdaq.
Directors serve until the next annual meeting and until their successors are elected and qualified. Officers are appointed to serve until their successors have been elected and qualified.
Committees of the Board
Effective as of the closing of the Offering, our Board will establish an audit committee and a compensation committee. Our Board has not yet adopted procedures by which stockholders may recommend nominees to the Board. The composition and responsibilities of each of the committees of our Board are described below. Members serve on these committees until their resignation or until as otherwise determined by our Board.
| 27 |
Audit Committee
Effective as of the effective date of this registration statement, of which this prospectus forms a part, we will establish an audit committee consisting of Yiqian Shen, Jurong Guo, and Yuan Lu. Yiqian Shen will be the chairman of the audit committee. In addition, our Board has determined that Yiqian Shen is an audit committee financial expert within the meaning of Item 407(d) of Regulation S-K under the Securities Act of 1933, as amended, or the Securities Act. The audit committee’s duties, which are specified in our Audit Committee Charter, include, but are not limited to:
| (a) | reviewing and discussing with management and the independent auditor the annual audited financial statements, and recommending to the Board whether the audited financial statements should be included in our annual disclosure report; | |
| (b) | discussing with management and the independent auditor significant financial reporting issues and judgments made in connection with the preparation of our financial statements; | |
| (c) | discussing with management major risk assessment and risk management policies; | |
| (d) | monitoring the independence of the independent auditor; | |
| (e) | verifying the rotation of the lead (or coordinating) audit partner having primary responsibility for the audit and the audit partner responsible for reviewing the audit as required by law; | |
| (f) | reviewing and approving all related-party transactions; | |
| (g) | inquiring and discussing with management our compliance with applicable laws and regulations; | |
| (h) | preapproving all audit services and permitted non-audit services to be performed by our independent auditor, including the fees and terms of the services to be performed; | |
| (i) | appointing or replacing the independent auditor; | |
| (j) | determining the compensation and oversight of the work of the independent auditor (including resolution of disagreements between management and the independent auditor regarding financial reporting) for the purpose of preparing or issuing an audit report or related work; | |
| (k) | establishing procedures for the receipt, retention, and treatment of complaints received by us regarding accounting, internal accounting controls or reports which raise material issues regarding our financial statements or accounting policies; and | |
| (l) | approving reimbursement of expenses incurred by our management team in identifying potential target businesses. |
The audit committee will be composed exclusively of “independent directors” who are “financially literate” as defined under the Nasdaq listing standards. The Nasdaq listing standards define “financially literate” as being able to read and understand fundamental financial statements, including a company’s balance sheet, income statement, and cash flow statement.
In addition, the Company intends to certify to Nasdaq that the committee has, and will continue to have, at least one member who has past employment experience in finance or accounting, requisite professional certification in accounting, or other comparable experience or background that results in the individual’s financial sophistication.
Compensation Committee
Effective as of the effective date of this registration statement, of which this prospectus forms a part, we will establish a compensation committee of the Board to consist of Yiqian Shen, Jurong Guo, and Yuan Lu, each of whom is an independent director. Each member of our compensation committee is also a nonemployee director, as defined under Rule 16b-3 promulgated under the Exchange Act. Jurong Guo will be the chairman of the compensation committee. The compensation committee’s duties, which are specified in our Compensation Committee Charter, include, but are not limited to:
| (a) | reviewing, approving, and determining, or making recommendations to our Board regarding, the compensation of our executive officers; | |
| (b) | administering our equity compensation plans; | |
| (c) | reviewing and approving, or making recommendations to our Board, regarding incentive compensation and equity compensation plans; and | |
| (d) | establishing and reviewing general policies relating to compensation and benefits of our employees. |
| 28 |
ITEM 11. EXECUTIVE COMPENSATION
As a “smaller reporting company,” we have elected to follow the scaled disclosure requirements for smaller reporting companies with respect to the disclosures required by Item 402 of Regulation S-K. Under such scaled disclosure, we are not required to provide a Compensation Discussion and Analysis, and certain other tabular and narrative disclosures relating to executive compensation.
This section discusses the material components of the executive compensation program for our named executive officers (“NEOs”) for the fiscal year ending July 31, 2025 (“Fiscal Year 2025”).
For Fiscal Year 2025, the Company’s NEOs were:
| ● | Sheng-Yih Chang, Chief Executive Officer (“CEO”, appointed April 1, 2024); Former Chief Financial Officer and | |
| ● | Lili Dai, Chief Financial Officer (“CFO”, appointed April 2025); formerly Interim Chief Financial Officer since March 2024. |
The Company did not have any other NEOs for Fiscal Year 2025 and no other individual’s position at the Company (or its subsidiaries) would make the individual an executive officer of the Company at any point during Fiscal Year 2025.
The following discussion may contain forward-looking statements that are based on current plans, considerations, expectations and determinations regarding future compensation programs. Actual compensation programs that the Company adopts could vary significantly from historical practices and currently planned programs summarized in this discussion.
Compensation Program
During Fiscal Year 2025, the CEO began receiving monthly compensation of $9,000 and the CFO receives monthly compensation of $13,300, no other officer or director has received annual compensation since the beginning of the fiscal year.
We intend to begin to pay an annual stipend to our nonemployee directors when, and if, we complete a primary public offering for the sale of securities and/or we reach profitability, experience positive cash flow, and/or obtain additional funding.
At such time, we anticipate offering cash and noncash compensation to executive officers and nonemployee directors. The objective of the compensation program of the Company is to provide a total-compensation package to each NEO that will enable the Company to attract, motivate, and retain outstanding individuals; align the interests of our executive team with those of our stockholders; encourage individual and collective contributions to the successful execution of our short- and long-term business strategies; and reward NEOs for performance.
Summary Compensation
Employee Benefits
We do not have any health and welfare or retirement benefits in place, although we may adopt such benefits in the future. The executive officers, including the NEOs, will be eligible to receive the same employee benefits that are generally available to all full-time employees, subject to the satisfaction of certain eligibility requirements. In structuring these benefit plans, the Company will seek to provide an aggregate level of benefits that are comparable to those provided by similar companies.
Agreement with our NEOs
Mr. Chang is party to an amended and restated employment agreement with the Company, dated December 31, 2024 (the “Chang Employment Agreement”).
The initial term of the Chang Employment Agreement runs through July 31, 2025, and will automatically renew each year for an additional 12 months, absent the parties terminating the agreement. Pursuant to the CEO Employment Agreement, Mr. Chang is entitled to receive an annualized base salary of $108,000, paid monthly.
The Chang Employment Agreement provides that Mr. Chang must provide 60 days’ written notice prior to a resignation, with or without good reason. Upon receiving such notice, the Company must continue to pay Mr. Chang’s salary through his resignation date. In the event of Mr. Chang’s termination without Cause (as defined under the Chang Employment Agreement), Mr. Chang is entitled to a one-year continuation of his then-current base salary and 12-months of COBRA continuation premiums at the same level as other active employees. Mr. Chang is subject to a non-disclosure of confidential information covenant under the Chang Employment Agreement.
On April 3, 2025, the Company entered into an employment agreement with the CFO, Ms. Dai, establishing an at-will employment relationship with a monthly compensation of $13,300. The agreement may be terminated by either party at any time with 60 days’ prior notice. Under the terms of the agreement, Ms. Dai is also bound by a confidentiality covenant regarding the non-disclosure of confidential information.
Outstanding Equity Awards at 2025 Fiscal Year-End
The Company has not granted any incentive equity to its NEOs, and thus neither NEO had any outstanding equity awards in the Company as of July 31, 2025.
Potential Payments Upon Termination or Change in Control
Neither NEO was eligible for additional payments upon termination or resignation of employment, or a change in control, as of the last day of Fiscal Year 2025.
Employee Pension, Profit Sharing or other Retirement Plans
We do not have a defined benefit, pension plan, profit sharing or other retirement plan, although we may adopt one or more of such plans in the future.
Omnibus Incentive Plan
The Company intends to adopt an omnibus incentive plan, which shall become effective as of the later date the Company’s common stock first commences trading on the Nasdaq or the date the plan receives stockholder approval. The Company would like to adopt such a plan in order to (a) encourage the profitability and growth of the Company by offering short-term and long-term incentives under such plan that are consistent with the Company’s objectives; (b) give participants an incentive for excellence in individual performance; (c) promote teamwork among participants; and (d) give the Company a significant advantage in attracting and retaining key employees, nonemployee directors and consultants. To accomplish these purposes, the Company intends for the plan to provide for the grant of stock options, stock appreciation rights, restricted shares, restricted stock units, dividend-equivalent rights, and other share-based, share-related or cash-based awards (including performance-based awards). As of the date of this prospectus, such plan has not yet become effective.
Director Compensation Table
None of the Company’s nonemployee directors received any compensation related to their Board service in Fiscal Year 2025 or had any outstanding equity awards as of July 31, 2025. As mentioned under “Compensation Program” above, we intend to begin to pay an annual stipend to our nonemployee directors when, and if, we complete a primary public offering for the sale of securities and/or we reach profitability, experience positive cash flow, and/or obtain additional funding.
| 29 |
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
As of October 13, 2025, there are a total of 25,027,004 shares of our common stock outstanding, our only class of voting securities currently outstanding. The following table describes the ownership of our voting securities by: (i) each of our officers and directors; (ii) all of our officers and directors as a group; and (iii) each shareholder known to us to own beneficially more than 5% of our common stock. All ownership is direct, unless otherwise stated.
| Name and Address of Beneficial Owner (1) | Title |
Shares
of Common Stock Beneficially
Owned |
Percent of Class Before Offering | |||||||||
| Officers and Directors | ||||||||||||
| Sheng-Yih Chang | Chief Executive Officer and Director | 11,446,700 | 45.7 | % | ||||||||
| Lili Dai | Chief Financial Officer | 125,000 | * | |||||||||
| Yuan Lu (2) | Independent Director Nominee | - | - | |||||||||
| Xin Dong | Independent Director Nominee | - | - | |||||||||
| Jurong Guo (2) | Independent Director Nominee | - | - | |||||||||
| Yiqian Shen (2) | Independent Director Nominee | - | - | |||||||||
| Officers and Directors as a Group | 11,571,700 | 46.2 | % | |||||||||
| 5% Stockholders | ||||||||||||
| Erin Songwang (3) | 9,798,720 | 39.2 | % | |||||||||
| * | Less than 1% |
| (1) | Unless otherwise indicated the business address for each of the individuals is 8832 Glendon Way, Rosemead, CA 91770. |
| (2) | The address is RM 3806 218 Wusong Rd., Hongkou District, Shanghai, China. |
| (3) | Based upon information provided in the Schedule 13D, dated December 4, 2024, filed by Erin Songwang, which contains the following address for the stockholder: 729 Carriage House Drive, Arcadia, CA 91006. |
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
Except as disclosed in Note 4, Current Loan Receivable-Related Party and Note 5, Related Party Transactions, there were no transactions, nor any series of similar transactions, during the last two fiscal years to which we were or are to be a party, in which:
| ● | the amounts involved exceed or will exceed $120,000; and | |
| ● | any of our directors, executive officers or holders of more than 5% of our capital stock, or any member of the immediate family of any of the foregoing, had, or will have, a direct or indirect material interest. |
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
The following table sets forth fees billed by our principal accounting firms of Simon & Edward, LLP in the last two years ended July 31, 2025:
| 2025 | 2024 | |||||||
| Audit Fees | $ | 60,000 | $ | 27,500 | ||||
| Audit Related Fees | 12,000 | 6,000 | ||||||
| All other fees | 5,000 | 10,000 | ||||||
| Total Fees | $ | 77,000 | $ | 43,500 | ||||
It is the policy of our Board of Directors to engage the principal accounting firm selected to conduct the financial audit for our Company and to confirm, prior to such engagement, that such principal accounting firm is independent of our Company. All services of the principal accounting firm reflected above were approved by the Board of Directors.
| 30 |
PART IV
ITEM 15. EXHIBITS AND FINANCIAL STATEMENTS SCHEDULES
The following documents are filed as part of this Annual Report:
| 1. | Consolidated Financial Statements |
Our consolidated financial statements are listed under Part II, Item 8, of this Annual Report.
| 2. | Financial Statement Schedules |
All financial statement schedules have been omitted because they are not required or are not applicable, or the required information is shown in our Consolidated Financial Statements or the notes thereto.
| 3. | Exhibits |
The following exhibits are filed with or incorporated by referenced in this report:
21.1* Subsidiaries of the Company
31.1* Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 for Sheng-Yih Chang.
31.2* Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 for Lili Dai.
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)
* Filed herewith
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| HARTFORD CREATIVE GROUP, INC. | |||
| Date: | October 15, 2025 | By: | /s/ Sheng-Yih Chang |
| Sheng-Yih Chang | |||
| Chief Executive Officer | |||
Pursuant to the requirements of the Securities Exchange Act of 1934 this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
| Name | Title | Date | ||
| /s/ Sheng-Yih Chang | Chief Executive Officer, President, Dir. | October 15, 2025 | ||
| Sheng-Yih Chang | (Principal Executive Officer) | |||
| /s/ Lili Dai | Chief Financial Officer | October 15, 2025 | ||
| Lili Dai | (Principal Accounting Officer) | |||
| /s/ Yuan Lu | Director | October 15, 2025 | ||
| Yuan Lu | ||||
| /s/ Xin Dong | Director | October 15, 2025 | ||
| Xin Dong | ||||
| /s/ Jurong Guo | Director | October 15, 2025 | ||
| Jurong Guo | ||||
| /s/ Yiqian Shen | Director | October 15, 2025 | ||
| Yiqian Shen |
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