Hartford Creative FY2026 net income falls 42%
Sentiment and the balance of points
Rhea-AI Sentiment reads the wording of the document, how positive or negative its language is on a 1 to 5 scale. The balance of points shown with the takes weighs what the document actually discloses, so the two can disagree, for example when a trial that missed its main goal is described in upbeat language.
Rhea-AI Filing Summary
Hartford Creative Group, Inc. (HFUS) reported fiscal 2026 revenue of $2.744 million for the year ended July 31, 2026, up 34.8% from $2.035 million. Operating income rose 19% to $1.461 million, while net income fell 42% to $641,767 from $1,099,110. Credit-loss expense was $497,966 for receivables still uncollected.
The company operates China social-media advertising and a developing mini-drama business. Its YYYS app launched in the United States on Google Play May 6, 2026 and the Apple App Store June 2, 2026, with over 160 dramas at launch. April 2026 framework agreements with several major customers had an aggregate gross contract value of approximately RMB 500 million; they were non-binding, and that value is not an estimate of future revenue.
Working capital was $749,187 at July 31, 2026, versus a $105,739 deficit at July 31, 2025, while operating activities used $636,298 in cash. The auditor and management cited substantial doubt about HFUS's ability to continue as a going concern; management said the doubt was not alleviated. Funding needs for the next 12 months are estimated to exceed $2 million. Disclosure controls were not effective because of a significant internal-control deficiency.
How this balance works
Rhea-AI gives every point it takes from this document a weight. Minor counts 1, Moderate 3 and Major 9, so one Major point outweighs several Minor ones. The bar adds up the weights on each side, and when neither side holds more than 65% of the total the balance reads Mixed.
It reads the document as published, with the same rules for every company, and it does not look at what the market expected or at how the stock traded, so a point can be objectively good on a day the stock falls.
Rhea-AI Sentiment measures something else, the tone of the wording.
Positive
- Moderate pointFiscal 2026 revenue rose 34.8% to $2.744 million.
- Moderate pointFiscal 2026 operating income increased 19% to $1,461,039.
Negative
- Major pointGoing-concern substantial doubt within one year was not alleviated.
- Moderate pointFiscal 2026 net income declined 42% to $641,767.
- Moderate pointDisclosure controls were not effective at July 31, 2026.
- Moderate pointOperating activities used $636,298 in cash in fiscal 2026.
- Moderate pointCredit-loss expense totaled $497,966 in fiscal 2026.
Filing Explained
At July 31, 2026, cash was $88,638 against $3,744,740 in contractor advances; no binding related-party funding commitment was reported.
The audited
Management's funding plan includes operating cash flow, potential debt or equity financing, and related-party support if needed, but no formal written loan agreement, standby financing arrangement, guarantee, or other binding related-party commitment had been executed as of the filing.
Key Figures
Key Terms
going concern financial
net basis financial
non-binding framework agreements financial
contract liabilities financial
valuation allowance financial
GILTI financial
FAQ
AI-generated questions and answers. How Rhea-AI works. Not financial advice.
What revenue did HFUS report for fiscal 2026?
How much net income did HFUS report in fiscal 2026?
Why did HFUS report substantial doubt about continuing as a going concern?
What were the terms of HFUS's RMB 500 million customer agreements?
When did HFUS launch the YYYS app in the United States?
AI-generated analysis. How Rhea-AI works. Not financial advice.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
FORM
For
the fiscal year ended
For the transition period from _____ to _____
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. Yes ☐
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
30, 2026 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 ☐ |
| Smaller
reporting company | |
| Emerging
growth company |
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 | ||
| 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 November 9, 2026.
TABLE OF CONTENTS
| PART I | ||
| ITEM 1: | BUSINESS | 4 |
| ITEM 1A: | RISK FACTORS | 5 |
| ITEM 1B: | UNRESOLVED STAFF COMMENTS | 5 |
| ITEM 1C: | CYBERSECURITY | 5 |
| ITEM 2: | PROPERTIES | 5 |
| ITEM 3: | LEGAL PROCEEDINGS | 5 |
| ITEM 4: | MINE SAFETY DISCLOSURES | 5 |
| PART II | ||
| ITEM 5: | MARKET FOR COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND PURCHASES OF EQUITY SECURITIES | 6 |
| ITEM 6: | [RESERVED] | 7 |
| ITEM 7: | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION | 8 |
| ITEM 7A. | QUANTATIVE AND QUALATATIVE DISCLOSURES ABOUT MARKET RISK | 13 |
| ITEM 8: | FINANCIAL STATEMENTS | 14 |
| ITEM 9. | CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANS ON ACCOUNTING AND FINANCIAL DISCLOSURE | 31 |
| ITEM 9A. | CONTROLS AND PROCEDURES | 31 |
| ITEM 9B: | OTHER INFORMATION | 32 |
| PART III | ||
| ITEM 10: | DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE | 33 |
| ITEM 11: | EXECUTIVE COMPENSATION | 36 |
| ITEM 12: | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS | 38 |
| ITEM 13: | CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE | 38 |
| ITEM 14: | PRINCIPAL ACCOUNTING FEES AND SERVICES | 38 |
| PART IV | ||
| ITEM 15: | EXHIBITS | 39 |
| SIGNATURES | 40 | |
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.
| 2 |
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. |
| 3 |
PART I
ITEM 1. BUSINESS.
General
Hartford Creative Group, Inc. (“HFUS,” “we,” “us,” or “Company”) 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
The Company is a media and marketing company. Following its exit from its legacy hospitality and early childhood education operations, the Company has, since January 2024, concentrated on two principal lines of business: (i) social media advertising and related marketing services in China, and (ii) a mini-drama content business, which includes a short-form drama streaming application launched in the United States. The Company conducts its advertising operations through operating subsidiaries in China and supports its short-form drama application with resources based in the United States.
Social Media Advertising and Marketing Services. The Company provides advertising placement and related marketing services on mainstream social media platforms, including TikTok, Toutiao, Kwai, RED, WeChat, and Baidu. These services are conducted principally through its subsidiaries Hartford ZY Culture Media (Shanghai) Co., Ltd. (“HFZY”), ShaoXing HuoMao Network Technology Ltd. (“SXHM”), which the Company acquired in June 2024, and Nanjing HaoYiPeng Information Technology Ltd. (“NJHY”), which HFZY established in May 2025 to further expand the advertising business. In the advertising placement arrangement, the advertisements are published on the media platforms selected by the customer; the Company does not control the underlying media traffic and therefore acts as an agent, reporting placement revenue on a net basis. The Company intends to provide vertical integration services, including advertising creative development, video production, editing, and advertising operations and campaign management. The Company also plans to develop overseas TikTok advertising campaigns for domestic Chinese customers seeking to reach international markets.
Mini-Drama Content Business. Beginning in June 2025, the Company established a mini-drama content business that involves acquiring non-exclusive licenses of mini-dramas, performing in-house editing, and licensing the completed content to customers. Because the Company controls the license rights before they are transferred, is responsible for fulfilling the arrangement, and independently establishes pricing, it acts as the principal in these transactions and recognizes the related revenue on a gross basis. This business is in an early, developmental stage.
In April 2026, the Company launched “YYYS,” a short-form drama streaming application. The application became available for testing on April 28, 2026, was released on Google Play in the United States on May 6, 2026, and became available on the Apple App Store in the United States on June 2, 2026. YYYS is positioned as a short-form drama platform aimed primarily at female users between the ages of 25 and 45 in the United States, and it focuses initially on romance and emotionally driven content, with additional genres such as suspense and science fiction under evaluation. The Company offers its programming through a combination of internally produced and third-party licensed content, draws on production resources in Los Angeles, and is evaluating the use of artificial intelligence-enabled tools in content production and post-production. The Company expects to grow the YYYS content library over time.
The Company intends to monetize the YYYS application through a one-time lifetime membership fee that provides users with access to platform content and through an advertising-supported model for non-paying users, including reward-based video advertisements. The Company’s user acquisition strategy combines organic traffic generated through social media platforms, such as YouTube, Facebook, and TikTok, with paid user acquisition campaigns conducted through third-party advertising platforms. Following its initial launch in the United States, the Company plans to pursue a phased international expansion strategy, subject to regulatory, operational, and commercial considerations. There can be no assurance that these strategies will be successful.
| 4 |
Employees
As of November 9, 2026, we have 22 employees.
ITEM 1A. RISK FACTORS
As a “smaller reporting company” as defined by Item 10(f)(1) 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 previously leased office space in Shanghai measuring approximately 543 square feet (50.4 square meters) from Shanghai DuBian Assets Management Ltd., which is managed by relatives of a major shareholder. The lease was effective from February 18, 2024 through February 17, 2026, at a fixed monthly rent of RMB 4,600 (approximately $638). Upon expiration of the lease, effective February 18, 2026, the Company entered into a lease agreement for small office space located at Room 113, Building 1, No. 4958 Xianghua Qingzhu Road, Chongming District, Shanghai, China, with approximately 15 square meters. The lease term is from February 18, 2026 through February 17, 2027, at a fixed annual rent of RMB 3,000 (approximately $400). The lease is subject to renewal upon mutual agreement.
Effective January 1, 2026, the Company entered into a lease agreement for office space located at B902/B903, Building BC, Huipu Plaza, Shangyu District, Shaoxing City, Zhejiang, China, with a total area of approximately 107.76 square meters. The lease term is from January 1, 2026 through December 31, 2026. The monthly rent was approximately RMB 3,000 (approximately $400), with annual rent of approximately RMB 34,000(approximately $4,800). The lease is subject to renegotiation and renewal by mutual agreement upon expiration.
Effective June 1, 2026, the Company entered into a lease agreement for office space located at Room 802, 8th Floor, Zhihui Park, Youzhi Building, No. 29 Kejian Road, Jiangning District, Nanjing, Jiangsu, China, with a total area of approximately 42 square meters. The lease term is from June 1, 2026 through May 30, 2027, at a fixed monthly rent of RMB 1,600 (approximately $200), or RMB 19,200 (approximately $4,800) for the annual lease term. The lease is subject to renegotiation and renewal by mutual agreement upon expiration.
The Company also uses the office, located at 8832 Glendon Way, Rosemead, CA 91770, which is owned by its former principal stockholder, for the office facility needs, at a fixed monthly rent of USD 1,000. The original lease term was from January 1, 2025 through December 31, 2025. Beginning January 1, 2026, the lease has continued on a month-to-month basis at a fixed monthly rent of $1,000.
ITEM 3. LEGAL PROCEEDINGS
We were not subject to any other legal proceedings during the year ended July 31, 2026, 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.
| 5 |
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 November 9, 2026, the closing price of our common stock reported on the OTC Markets was $2.0 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 2026 | Low | High | ||||||
| First Quarter | $ | 2.02 | $ | 5.00 | ||||
| Second Quarter | $ | 1.99 | $ | 5.36 | ||||
| Third Quarter | $ | 3.50 | $ | 7.52 | ||||
| Fourth Quarter | $ | 4.00 | $ | 4.00 | ||||
| Fiscal 2027 | Low | High | ||||||
| First Quarter | $ | 1.28 | $ | 4.00 | ||||
Holders
As of November 9, 2026, 25,027,004 shares (reflecting the 1 for 4 Reverse Stock Split) of our common stock were issued and outstanding and were held by 18 stockholders of record. This number does not include ‘beneficial owners’ whose shares are held in ‘street name’ by banks, brokers, and other financial institutions.
| 6 |
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 860 Blue Gentian Rd, Suite 320, Eagan, MN 55121 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. [RESERVED]
| 7 |
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, 2026, and the results of operations for the years ended July 31, 2026, and 2025. 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, 2026 and 2025, 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 and related marketing services in China. On January 10, 2024, Shanghai Hartford Health Management, Ltd. changed its legal name to Hartford ZY Culture Media (Shanghai) Co., Ltd. (“HFZY”). On June 18, 2024, the Company completed the acquisition of ShaoXing HuoMao Network Technology Ltd. (“SXHM”). HFZY and SXHM provide media and advertising services on mainstream social media platforms, including TikTok, Toutiao, Kwai, RED, WeChat, and Baidu. On May 12, 2025, HFZY established Nanjing HaoYiPeng Information Technology Ltd. (“NJHY”) to further expand the Company’s social media advertising business. The Company intends to provide vertical integration services, including advertising creative development, video production, editing, and advertising operations and campaign management. The Company also plans to develop overseas TikTok advertising campaigns for domestic Chinese customers seeking to reach international markets.
Since launching the advertising placement services business in January 2024, the Company has experienced significant growth and expansion. For the year ended July 31, 2026 and 2025, the Company generated net revenue of approximately $2.7 million and $2.0 million, respectively, from advertising placement services. The Company provides service to facilitate advertising placements. The advertisements are published on the targeted media platforms as determined by the customers. Revenue is recognized at a point in time when the Company satisfies its performance obligation. 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.
In response to the continued expansion of our advertising business, the Company initiated a strategic optimization of its advertising client portfolio and focused on strengthening relationships with high-quality customers, consolidating key accounts, and enhancing engagement with larger advertisers. In April 2026, the Company entered into non-binding framework agreements with several major customers with an aggregate contract value of approximately RMB 500 million. These framework agreements establish the basis for future advertising placement opportunities and are expected to enhance the visibility and stability of the Company’s business pipeline. The Company believe these initiatives position it to further expand its advertising placement services business and increase advertising transaction volume in future periods. However, revenues generated under the framework agreements will depend on the execution of individual service orders, customer advertising spending levels, market conditions, and other factors, and there can be no assurance regarding the amount or timing of revenues that may ultimately be realized from such arrangements.
In addition to its social media advertising business, the Company has developed a mini-drama business. Beginning in June 2025, the Company commenced mini-drama transactions, which involve acquiring non-exclusive licenses of mini-dramas, performing in-house editing, and licensing the completed content to customers. Because the Company controls the license rights prior to transfer, is responsible for fulfilling the arrangement, and independently establishes pricing, it acts as the principal in these transactions and recognizes the related revenue on a gross basis. The Company completed its first mini-drama transaction in July 2025, generating approximately $36,000 in revenue, and completed a second transaction in December 2025 that contributed approximately $71,600 in revenue. These transactions represent early-stage commercial activities and should not be considered indicative of results in future periods.
| 8 |
In April 2026, the Company introduced “YYYS,” a new mini-drama application. Initial testing began on April 28, 2026, followed by an official launch on Google Play in the United States on May 6, 2026. The application was subsequently launched and made available on the Apple App Store in the United States on June 2, 2026. Upon launch, the platform offers over 160 short dramas with an aggregate runtime of more than 10,000 minutes. The Company intends to expand its content library to approximately 1,200 short dramas by the end of calendar year 2026 and approximately 5,000 short dramas by the end of calendar year 2027. However, these targets are forward-looking in nature and may not be achieved on the anticipated timeline, or at all.
YYYS is positioned as a short-form drama platform targeting primarily female users aged 25–45 in the United States. The platform currently focuses on romance and emotionally driven content, with additional genres such as suspense and science fiction under evaluation. The Company’s user acquisition strategy includes a combination of organic traffic generation through social media platforms (including YouTube, Facebook, and TikTok) and paid user acquisition campaigns through third-party advertising platforms. The Company’s monetization model consists of a one-time lifetime membership fee of approximately USD 35, which provides users access to platform content, as well as an advertising-supported model for non-paying users, including reward-based video advertisements. There can be no assurance that these monetization strategies will generate sufficient user conversion or advertising revenue.
 |
 |
 |
The Company leverages production resources in Los Angeles, a hub for short-form drama content production, and utilizes a combination of internally produced content and third-party licensed content to support initial platform offerings. The Company also intends to evaluate the use of artificial intelligence-enabled tools to assist in content production and post-production processes. Such technologies remain in early stages of development, and there can be no assurance that they will result in anticipated cost efficiencies or production scalability.
The Company plans to pursue a phased international expansion strategy following initial launch in the United States, including potential expansion into Southeast Asia, Europe, and the Middle East, subject to regulatory, operational, and commercial considerations.
| 9 |
Results of Operations – Year ended July 31, 2026 Compared to Year ended July 31, 2025.
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, | ||||||||||||
| 2026 | 2025 | Variance | ||||||||||
| Net revenue-advertising | $ | 2,672,429 | $ | 1,999,211 | 34 | % | ||||||
| Revenue-minidrama | 71,600 | 36,000 | 99 | % | ||||||||
| Total Revenues | 2,744,029 | 2,035,211 | 35 | % | ||||||||
| Operating cost and expenses: | ||||||||||||
| Cost of revenue | 7,081 | 112,618 | (94 | )% | ||||||||
| Selling, general and administrative | 777,943 | 697,416 | 12 | % | ||||||||
| Credit loss expense | 497,966 | - | 100 | % | ||||||||
| Total operating cost and expenses | 1,282,990 | 810,034 | 58 | % | ||||||||
| Operating income | 1,461,039 | 1,225,177 | 19 | % | ||||||||
| Other (expenses) income | (14,748 | ) | 45,944 | (132 | )% | |||||||
| Income before income taxes | 1,446,291 | 1,271,121 | 14 | % | ||||||||
| Income tax expense | 804,524 | 172,011 | 368 | % | ||||||||
| Net income | $ | 641,767 | $ | 1,099,110 | (42 | )% | ||||||
Revenue: For the year ended July 31, 2026, the Company generated net revenues of $2,744,029, an increase of $708,818, or approximately 34.8%, from $2,035,211 for the year ended July 31, 2025. The increase in net revenues was primarily attributable to higher revenue from the Company’s advertising placement services. Advertising placement services accounted for approximately 97.4% of total net revenues, compared with approximately 98.2% in the prior year, and increased by approximately 33.7% year over year. The increase primarily reflected growth in the Company’s advertising agency business, including changes in its customer portfolio and commercial terms with certain key customers. During the year ended July 31, 2026, the Company continued to optimize its customer portfolio and renegotiate commercial terms with certain customers, which management believes contributed to improved economics for certain advertising service arrangements.
For the years ended July 31, 2026 and 2025, the remaining 2.6% of net revenues, or $71,600, and 1.8% of net revenues, or $36,000, respectively, were generated from the Company’s mini-drama business. The mini-drama business was in the early stage of commercialization during the year ended July 31, 2026 and generated a relatively small portion of the Company’s total revenue during the period.
In April 2026, the Company entered into annual framework agreements with several major customers with an aggregate gross contract value of approximately RMB 500 million. These framework agreements establish potential advertising service arrangements with the customers; however, the amount and timing of revenue that may ultimately be recognized will depend on the actual services provided, customer orders or other applicable contractual conditions, and the Company’s satisfaction of the applicable revenue recognition requirements. Accordingly, the aggregate gross contract value of these framework agreements should not be considered an estimate of the Company’s future revenue.
Management expects to continue developing its mini-drama business through the YYYS App during fiscal 2027, including through marketing and promotional activities across major social media platforms. The Company expects to use these activities to increase awareness and user engagement with the YYYS App and its mini-drama content. The timing and amount of any resulting revenue will depend on market acceptance, user engagement, customer demand, monetization of the platform, and other factors.
Operating Cost and Expenses: Cost of revenue decreased significantly to $7,081 for the year ended July 31, 2026, compared with $112,618 for the year ended July 31, 2025, a decrease of $105,537, or approximately 93.7%. Because the Company recognizes revenue from its advertising placement services on a net basis, the related costs are net to gross revenue amount and generally not included in cost of revenue. Cost of revenue for the year ended July 31, 2026 primarily consisted of costs associated with the Company’s mini-drama content. In comparison, cost of revenue for the year ended July 31, 2025 primarily consisted of outsourced consulting service costs. The Company did not incur comparable outsourced consulting service costs during the year ended July 31, 2026, resulting in the significant decrease in cost of revenue.
During the year ended July 31, 2026, selling, general and administrative expenses increased to $777,943 from $697,416 during the year ended July 31, 2025. The increase was primarily driven by increased directors’ and officers’ (D&O) insurance premiums and higher audit fees. In addition, the Company recorded a credit loss expense of $497,966 for the year ended July 31, 2026, reflecting an allowance for expected credit losses established against accounts receivable that remained uncollected as of July 31, 2026, with no comparable charge in the prior year. This provision was the principal driver of the increase in total operating cost and expenses for fiscal 2026.
Other (expense) income: Other expense, net amounted to $14,748 for the year ended July 31, 2026, compared to other income, net of $45,944 for the corresponding period of 2025. The change primarily reflected the absence in fiscal 2026 of a $21,362 gain on the disposal of subsidiaries and an approximately $21,000 local government grant recognized in fiscal 2025. In addition, the Company incurred net interest expense of $15,389 in fiscal 2026, compared with net interest income of $3,137 in fiscal 2025.
Income tax expense: The income tax recognized for the fiscal years ended July 31, 2026 and 2025 resulted primarily from income taxes on the operating income of the Company’s China-based operations and the deferred tax effects of temporary differences. Income tax expense was $804,524 for the year ended July 31, 2026, compared to $172,011 for the year ended July 31, 2025. The increase in income tax expense for fiscal 2026 was primarily due to higher current income taxes on the Company’s China-based operations and a valuation allowance of $350,845 recorded against the deferred tax asset related to GILTI; see Note 8—Income Taxes to our Consolidated Financial Statements. The net deferred tax assets are expected to reduce future income tax liabilities.
Net Income: We recorded net income of $641,767, or $0.03 per share, for the year ended July 31, 2026, compared to net income of $1,099,110, or $0.04 per share, for the year ended July 31, 2025, due to the factors discussed above.
| 10 |
Liquidity and Capital Resources
As of July 31, 2026, we had working capital of $749,187 comprised of current assets of $4,568,285 and current liabilities of $3,819,098. This represents an improvement of $854,926 from the July 31, 2025 working capital deficit of $105,739. The improvement was primarily due to the positive operating results for the fiscal year ended July 31, 2026. We had an accumulated deficit of $4,169,966 compared to $4,811,733 at the previous year end. To date, we have funded our operations through short-term debt and equity financing.
As of July 31, 2026, we have 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, we issued additional 250,000 shares of common stock to one of our significant shareholders 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
Management currently estimates that the Company’s funding requirements for the next twelve months will exceed $2.0 million. The Company is currently pursuing an uplisting of its common stock from the OTC market to the Nasdaq Capital Market. If the uplisting is successfully completed and market conditions are favorable, the Company may seek to raise additional capital through one or more equity financings. There can be no assurance that the Company will successfully complete the uplisting or that any financing will be available on acceptable terms, or at all.
Any proceeds from future financings, if completed, are expected to be used primarily to fund the Company’s working capital requirements, application development, content licensing, marketing and user acquisition activities related to the development and promotion of its mini-drama application, expenses associated with the proposed uplisting, and other general corporate purposes.
The Company may require additional financing to fund its operations and planned business activities. If the Company is unable to obtain sufficient additional financing when needed, it may be required to reduce, delay or discontinue certain planned operations and expenditures, including marketing and application development activities, dispose of assets, seek protection under applicable bankruptcy laws, or pursue other strategic alternatives. There can be no assurance that additional financing or other strategic alternatives will be available on commercially reasonable terms, or at all. Any inability to obtain sufficient financing could have a material adverse effect on the Company’s business, financial condition and results of operations.
Cash Flows – Year ended July 31, 2026 Compared to Year ended July 31, 2025
Operating Activities
Cash used in operating activities was $636,298 for the year ended July 31, 2026, as compared to $13,094 for the year ended July 31, 2025.
| 11 |
During the year ended July 31, 2026, the Company generated net income of $641,767 and recorded a non-cash credit loss expense of $497,966, a non-cash deferred tax adjustment of $191,956 and a gain on forgiveness of lease liability of $5,609. These amounts were offset by a net decrease of approximately $1,963,000 from changes in operating assets and liabilities. The principal usage of operating cash related to a decrease in contract liabilities of $4,764,048 and an increase in accounts receivable of $911,604, offset by a decrease in advance to contractors of $2,848,913, an increase in other current payable of $768,690, and an increase in accounts payable of $101,032.
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.
Investing activities
The cash used in investing activities was $20,325 for the year ended July 31, 2026, primarily as a result of the payment of Mini-drama APP development costs of $20,325.
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 repayment of $138,735, bearing a 3% interest rate.
Financing activities
Cash provided by financing activities was $686,026 for the year ended July 31, 2026, as compared to $284,305 for the year ended July 31, 2025. The cash provided by financing activities for the year ended July 31, 2026 was primarily due to proceeds from related party notes payable of $422,000 and advances from related parties of $373,310, partially offset by principal repayment of related party notes payable of $50,000 and payment of offering costs of $59,284.
The cash flows 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, offset by 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.
Off-Balance Sheet Arrangements
As of and subsequent to July 31, 2026, we have no off-balance sheet arrangements.
Contractual Commitments
As of July 31, 2026, except the commitments disclosed in Note 9, we have no other material contractual commitments.
| 12 |
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 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 Company satisfies its performance obligation, which is the facilitation of advertising placements. Control is transferred, and the performance obligation is satisfied, when the customer’s advertisement accounts are successfully charged and the platform access is secured. The Company is not the principal in this arrangement as the Company does not control the specified service (i.e., the traffic) before that service is delivered to the customer, because (i) it is the targeted media platform, rather than the Company, who is primarily responsible for providing the media publishing service; (ii) the media platforms are identified and determined by the customers, rather than the Company, and the Company does not commit to acquire the traffic before transferring to the customers. Therefore, the Company is not the principal in executing these transactions. Accordingly, the Company acts as an agent in these transactions and reports placement revenue on a net basis.
Beginning in June 2025, the Company commenced its mini-drama business, which involves acquiring non-exclusive licenses of mini-dramas, performing in-house editing, and licensing the completed content to customers. The Company completed its first mini-drama transaction in July 2025, generating approximately $36,000 in revenue, and completed a second transaction in December 2025 that contributed approximately $71,600 in revenue. In each transaction, the Company controls the license rights prior to transfer, is responsible to the customer, and sets pricing independently, and therefore acts as the principal and recognizes revenue on a gross basis. Because the license represents a right-to-use intellectual property (static content with no ongoing updates), revenue is recognized at a point in time when the license rights are made available to the customer at the start of the license term, and the related 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 10(f)(1) of Regulation S-K, the Company is not required to provide information required by this Item.
| 13 |
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
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 accumulated deficits and is in the early stage of transitioning to its new business model 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
Critical audit matters are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. We determined that there are no critical audit matters.
/s/
We have served as the Company’s auditor since 2019.
November 12, 2026
| 14 |
HARTFORD CREATIVE GROUP, INC.
CONSOLIDATED BALANCE SHEETS
| July 31, 2026 | July 31, 2025 | |||||||
| ASSETS | ||||||||
| Current Assets | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Licensed mini-drama content assets, net | ||||||||
| Accounts receivable, net | ||||||||
| Advance to contractors | ||||||||
| Prepaid and other current receivables | ||||||||
| Deferred offering costs | ||||||||
| Total Current Assets | ||||||||
| Non-current Assets | ||||||||
| Property and equipment, net | ||||||||
| Mini-drama APP | ||||||||
| Other assets | ||||||||
| Deferred tax assets | ||||||||
| Total Non-current Assets | ||||||||
| TOTAL ASSETS | $ | $ | ||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Current Liabilities | ||||||||
| Accounts payable | $ | $ | ||||||
| Related party loan and payables | ||||||||
| Contract liabilities | ||||||||
| Current operating Lease liabilities | ||||||||
| Other current payable | ||||||||
| Total Current Liabilities | ||||||||
| TOTAL LIABILITIES | ||||||||
| Commitments and contingencies | ||||||||
| Stockholders’ Equity | ||||||||
| Preferred stock - $ par value, shares authorized, shares issued and outstanding | ||||||||
| Common stock - $ par value, shares authorized, shares outstanding at both of July 31, 2026 and 2025* | ||||||||
| Additional paid-in capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Accumulated other comprehensive income | ||||||||
| Total Stockholders’ Equity | ||||||||
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | $ | ||||||
| * |
The accompanying notes are an integral part of these consolidated financial statements.
| 15 |
HARTFORD CREATIVE GROUP, INC.
CONSOLIDATED STATEMENTS OF INCOME
| Years ended July 31, | ||||||||
| 2026 | 2025 | |||||||
| Revenue | $ | $ | ||||||
| Revenue - Minidrama | ||||||||
| Total Revenue | ||||||||
| Operating cost and expenses: | ||||||||
| Cost of revenue | ||||||||
| Cost of revenue - Minidrama | ||||||||
| Selling, general and administrative expenses | ||||||||
| Credit loss expense | ||||||||
| Total operating cost and expenses | ||||||||
| Operating income | ||||||||
| Other Income | ||||||||
| Interest income (expense), net | ( | ) | ||||||
| Gain on disposal of subsidiary | ||||||||
| Other income, net | ||||||||
| Total other income, net | ( | ) | ||||||
| Income before income taxes | ||||||||
| Income Tax Expense | ||||||||
| Net income | ||||||||
| Net income per common share: | ||||||||
| Basic and diluted | $ | $ | ||||||
| Weighted average shares outstanding: | ||||||||
| Basic and diluted* | ||||||||
| * |
The accompanying notes are an integral part of these consolidated financial statements.
| 16 |
HARTFORD CREATIVE GROUP, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
| Years ended July 31, | ||||||||
| 2026 | 2025 | |||||||
| Net income | $ | $ | ||||||
| Other Comprehensive income, net of income tax | ||||||||
| Foreign currency translation adjustments | ||||||||
| Total Other Comprehensive Income | ||||||||
| Total Comprehensive income | $ | $ | ||||||
The accompanying notes are an integral part of these consolidated financial statements.
| 17 |
HARTFORD CREATIVE GROUP, INC.
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT)
| Common Stock* | Additional
Paid - in | Accumulated | Accumulated
Other Comprehensive | Total Stockholders’ Equity | ||||||||||||||||||||
| Shares | Amount | Capital* | (Deficit) | income | (Deficit) | |||||||||||||||||||
| Balance, July 31, 2024 | ( | ) | ( | ) | ||||||||||||||||||||
| Net income | - | |||||||||||||||||||||||
| Related party payable forgiveness | - | |||||||||||||||||||||||
| Foreign currency translation adjustment | - | |||||||||||||||||||||||
| Balance, July 31, 2025 | ( | ) | ||||||||||||||||||||||
| Net income | - | |||||||||||||||||||||||
| Foreign currency translation adjustment | - | |||||||||||||||||||||||
| Balance, July 31, 2026 | ( | ) | ||||||||||||||||||||||
| * |
The accompanying notes are an integral part of these consolidated financial statements.
| 18 |
HARTFORD CREATIVE GROUP, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
| Years ended July 31, | ||||||||
| 2026 | 2025 | |||||||
| Cash flows from operating activities: | ||||||||
| Net income | $ | $ | ||||||
| Adjustments to reconcile net income to net cash used in operating activities: | ||||||||
| Depreciation | ||||||||
| Credit loss expense | ||||||||
| Disposal gain of subsidiaries | ( | ) | ||||||
| Gain on forgiveness of lease liability | ( | ) | ||||||
| Deferred tax assets | ( | ) | ||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | ( | ) | ||||||
| Prepaid and other current receivables | ( | ) | ||||||
| Licensed mini-drama content assets, net | ( | ) | ||||||
| Advance to contractors | ( | ) | ||||||
| Related party receivables and payables | ||||||||
| Contract liabilities | ( | ) | ||||||
| Accounts payable | ( | ) | ||||||
| Other current payable | ||||||||
| Operating lease assets and liabilities | ||||||||
| Net cash used in operating activities | ( | ) | ( | ) | ||||
| Cash flows from investing activities: | ||||||||
| Payment of APP development cost | ( | ) | ||||||
| Disposal of subsidiaries | ( | ) | ||||||
| Purchases of property and equipment | ( | ) | ||||||
| Related party loan receivable* | ( | ) | ||||||
| Repayment of related party loan receivable | ||||||||
| Net cash used in investing activities | ( | ) | ( | ) | ||||
| Cash flows from financing activities: | ||||||||
| Proceeds of related party notes payable | ||||||||
| Repayment of related party notes payable | ( | ) | ( | ) | ||||
| Advances from related parties | ||||||||
| Repayment of related party advances* | ( | ) | ||||||
| Payment of offering costs | ( | ) | ( | ) | ||||
| Net cash provided by financing activities | ||||||||
| Effect of exchange rate changes on cash | ||||||||
| Net change in Cash and cash equivalents | ( | ) | ||||||
| Cash and cash equivalents at beginning of period | ||||||||
| Cash and cash equivalents at end of period | $ | $ | ||||||
| Supplemental Cash Flow Information | ||||||||
| Interest paid | $ | $ | ||||||
| Income taxes paid | $ | $ | ||||||
| Supplemental Disclosure For Noncash Investing And Financing Activities: | ||||||||
| Related party payable forgiveness | ||||||||
| Related party loan receivable settled with Related party payable | ||||||||
| Related party paid offering expenses on behalf of the company | ||||||||
| * |
The accompanying notes are an integral part of these consolidated financial statements.
| 19 |
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.
Historically, the Company conducted hospitality and early childhood education businesses in China through its subsidiaries. Due to changes in industry regulations and operating conditions, the Company exited these legacy operations during fiscal years 2021 through 2023 through a series of subsidiary disposals.
Beginning in 2024, the Company shifted its business focus to media and marketing services in China. The Company currently provides social media advertising placement, creative content production, campaign management, and related marketing services through its subsidiaries, primarily on social media platforms including TikTok, Toutiao, Kwai, RED, WeChat, Baidu and more. In connection with this business transition, the Company’s wholly owned subsidiary, Shanghai Hartford Health Management, Ltd., changed its name to Shanghai Hartford ZY Culture Media Ltd. (“HFZY”) on January 1, 2024. To support the expansion of its media and marketing operations, the Company acquired ShaoXing HuoMao Network Technology Ltd. (“SXHM”) on June 18, 2024 and established Nanjing HaoYiPeng Information Technology Ltd. (“NJHY”) on May 12, 2025. Certain inactive subsidiaries were subsequently disposed of during fiscal 2025.
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.
| 20 |
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, 2026 and 2025, 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, 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
Accounts Receivable and Allowance for Credit Losses: Accounts receivable are stated at the amounts billed to customers, net of an allowance for credit losses. The Company generally collects prepayments from customers and, in certain circumstances, grants credit terms of up to 90 days. The Company generally does not require collateral.
| 21 |
The
Company estimates the allowance for credit losses in accordance with ASC 326, Financial Instruments – Credit Losses. Historically,
the Company has had no collection problems or credit losses in its advertising placement business, and customers have paid within the
Company’s credit terms. As a result, the Company has no past experience to estimate losses on balances that remain unpaid beyond
those terms. For customers without financial difficulty,
As
of the date these financial statements were issued, the July 31, 2026 balance, which is due from three customers, had not been collected.
These three customers are experiencing tight cash flow but remain in business, and the Company continues its collection efforts. The
Company evaluated these customers individually and recorded an allowance for credit losses of $
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, 2026 and 2025, deferred offering costs amounted to $
Income Taxes: The Company accounts for income taxes using the asset and liability method in accordance with ASC 740, Accounting for Income Taxes. The asset and liability method provides that deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial reporting and tax bases of assets and liabilities, and for operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using the currently enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company records a valuation allowance to reduce deferred tax assets to the amount that is believed more likely than not to be realized.
The
Company evaluates the tax consequences of income earned by its foreign subsidiaries under applicable U.S. tax laws, including the provisions
governing global intangible low-taxed income (“GILTI”). Under PRC tax law, the standard corporate income tax rate is
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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 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 Company satisfies its performance obligation, which is the facilitation of advertising placements. Control is transferred, and the performance obligation is satisfied, when the customer’s advertisement accounts are successfully charged and the platform access is secured. The Company is not the principal in this arrangement as the Company does not control the specified service (i.e., the traffic) before that service is delivered to the customer, because (i) it is the targeted media platform, rather than the Company, who is primarily responsible for providing the media publishing service; (ii) the media platforms are identified and determined by the customers, rather than the Company, and the Company does not commit to acquire the traffic before transferring to the customers. Therefore, the Company is not the principal in executing these transactions. Accordingly, the Company acts as an agent in these transactions and reports placement revenue on a net basis.
Additionally, beginning in June 2025, the Company commenced its mini-drama transaction, which involves acquiring non-exclusive license of mini-dramas, performing in-house editing, and licensing the completed content to customers. These activities are considered one single performance obligation. The Company controls the license rights prior to transfer, is responsible for fulfilling the arrangement, and independently establishes pricing. Accordingly, the Company is the principal in these transactions and recognizes revenue on a gross basis. Because the licenses convey a right-to-use intellectual property (i.e., static content without ongoing updates), revenue is recognized at a point in time—specifically, when the license rights are made available to the customer.
In April 2026, the Company launched a mini-drama application named “YYYS,” which was initially made available for testing on April 28, 2026 and formally launched through Google Play in the United States on May 6, 2026. The application was subsequently launched and made available on the Apple App Store in the United States on June 2, 2026. The Company aims to generate revenue from the YYYS application through membership subscription services and advertising-related services. Membership revenue will be derived from one-time lifetime membership fees that provide users with access to premium platform content. The related performance obligation is to provide continuous access to the application content over the estimated service period. Accordingly, membership revenue is recognized ratably over the estimated user benefit period. Advertising revenue will be generated from advertisements displayed to non-paying users, including reward-based video advertisements, and is recognized at the point in time when the advertisements are displayed or user engagement requirements are satisfied, based on usage data provided by the advertising platforms. There can be no assurance that these monetization strategies will generate sufficient user conversion or advertising revenue.
Mini-drama APP
The
Company capitalizes qualifying costs incurred during the application development stage of internally developed software in accordance
with ASC 350-40, Internal-Use Software. Capitalized costs primarily consist of payments to third-party developers and other direct costs
incurred in developing the Company’s proprietary short drama mobile application. Costs incurred during the preliminary project
stage and post-implementation stage are expensed as incurred. The development costs are recorded as APP development in progress until
the application is substantially complete and ready for its intended use, at which time the costs would be reclassified as “Mini-drama
APP” and amortized on a straight-line basis over the estimated useful life of the application, which management currently estimates
to be three years. The Company’s proprietary mini-drama mobile application was launched in May and June 2026 and was substantially
complete and available for its intended use at that time. Accordingly, as of July 31, 2026, the Company had capitalized approximately
$
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Licensed mini-drama content assets, net
The Company acquires licenses for mini-drama content for distribution and access by members through its Mini-drama App. The costs of licensed content are capitalized when the Company obtains the contractual rights to distribute and make the content available to users and the content is accepted. Capitalized content costs are amortized on a straight-line basis over the contractual license period, which generally approximates the period over which the Company expects to derive economic benefits from the content, and are recognized as cost of revenue. The Company evaluates capitalized licensed content costs for impairment when events or changes in circumstances indicate that the carrying amount may not be recoverable.
As
of July 31, 2026, the Company had licensed content assets, net of $
Segment Reporting
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.
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.
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.
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Recent Accounting Pronouncements.
Recently adopted accounting pronouncements
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 adopted this guidance for the fiscal year ended July 31, 2026 on a prospective basis. The adoption affected only the Company’s income tax disclosures in Note 8 and had no impact on the Company’s consolidated financial position, results of operations or cash flows.
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.
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 have been prepared on a going concern basis, which contemplates the realization of assets
and the settlement of liabilities in the ordinary course of business. As of July 31, 2026, the Company had a working capital of $
Management has developed plans intended to mitigate the conditions that raise substantial doubt. Based on the Company’s current operating plan, management expects continued revenue growth and projects the generation of operating income during the next twelve months, which is expected to improve operating cash flows and support ongoing operations.
In addition, management plans to fund any short-term working capital needs through a combination of operating cash flows, potential equity or debt financing, and continued financial support from related parties if necessary. Historically, related parties have provided financial support to the Company in the form of advances to fund operations. As of the date of this filing, no formal written loan agreements, standby financing arrangements, guarantees, or other binding commitments from related parties have been executed.
While management believes its plans are reasonable and that the company may be able to generate sufficient cash flows to support operations, such plans are dependent upon future events and circumstances, including achieving projected operating results and obtaining additional financing, if necessary, neither of which can be assured. Accordingly, management has concluded that substantial doubt about the Company’s ability to continue as a going concern has not been alleviated.
The accompanying consolidated 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. 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, 2026 and 2025, the outstanding loan receivable balances were . Interest income for the years ended July 31, 2026 and 2025
was and $
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NOTE 4. RELATED PARTY TRANSACTIONS
Related Party Payables Settlement and Forgiveness
The
Company’s related party relationships with SH Qiaohong and SH Oversea, which previously arose from shared management with HFZY,
ceased on August 15, 2024. On November 26, 2024, Ms. Erin SongWang acquired a
As
of July 31, 2026 and 2025, amounts payable to SH Qiaohong were $
As
of July 31, 2026 and 2025, net payable to SH Oversea were . The Company historically received advances from SH Oversea to support
for its operations. These advances were non-interest bearing, and due on demand. On July 31, 2025, $
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, 2026 and 2025, 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, 2026, and 2025, respectively. These advances are non-interest-bearing and due on demand.
Other Related Party Transactions
The
Company has leased approximately
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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 original lease term was from January 1, 2025 through December 31, 2025. Beginning January
1, 2026, the lease has continued on a month-to-month basis at a fixed monthly rent of $
NOTE 5. 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, 2026 and 2025, the Company’s balance sheets reflect $
NOTE 6. OTHER CURRENT LIABILITIES
Other current payable consist as follows:
| July 31, 2026 | July 31, 2025 | |||||||
| Taxes payable | $ | $ | ||||||
| Accrued payroll | ||||||||
| Payable to former owners | ||||||||
| Other payables * | ||||||||
| Other Current Liabilities | $ | $ | ||||||
| * |
NOTE 7. CONCENTRATION RISK
For
the year ended July 31, 2026 and 2025, two and three customers accounted for
For
the year ended July 31, 2026 and 2025, two contractors accounted for
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NOTE 8. 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 (loss) before income taxes are subject to taxes in the following jurisdictions for the following periods:
| July 31, 2026 | July 31, 2025 | |||||||
| 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, 2026 | July 31, 2025 | |||||||
| Current: | ||||||||
| Federal | $ | $ | ||||||
| State and local | ||||||||
| Foreign | ||||||||
| Total current | ||||||||
| Deferred: | ||||||||
| Federal | ( | ) | ||||||
| State and local | ( | ) | ( | ) | ||||
| Foreign | ( | ) | ||||||
| Change in valuation allowance | ||||||||
| Total deferred | ( | ) | ||||||
| Total income tax expense | $ | $ | ||||||
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The Company’s income tax expense differs from the amount computed by applying the U.S. federal statutory income tax rate to income before income taxes primarily because of state income taxes, foreign income taxes, the tax effects of cross-border tax provisions, including GILTI, and the change in valuation allowance. The reconciliation of income tax expense at the U.S. federal statutory rate to the reported income tax expense for the years ended July 31, 2026 and 2025 was as follows:
| Fiscal Year Ended July 31, 2026 | ||||||||
| Amount | Percent | |||||||
| Tax at rate | % | |||||||
| State income taxes, net of federal tax | ( | ) | ( | )% | ||||
| Foreign tax effect | % | |||||||
| Effect of cross-border tax laws-GILTI | % | |||||||
| Change in valuation allowance | % | |||||||
| Effective Income tax expense/ rate | % | |||||||
| Fiscal Year Ended July 31, 2025 | ||||||||
| Amount | Percent | |||||||
| Tax at rate | % | |||||||
| State income taxes, net of federal tax | ( | ) | ( | )% | ||||
| Foreign tax effect | % | |||||||
| Effect of cross-border tax laws- GILTI | ( | ) | ( | )% | ||||
| Other | % | |||||||
| Change in valuation allowance | % | |||||||
| Effective Income tax expense/ rate | % | |||||||
The tax effects of temporary differences that give rise to significant portions of deferred tax assets as of July 31, 2026 and 2025, are as follows:
| July 31, 2026 | July 31, 2025 | |||||||
| GILTI | ||||||||
| State tax effect | ( | ) | ( | ) | ||||
| Net operating loss carryforwards | ||||||||
| Allowance for credit losses – PRC | ||||||||
| Total | ||||||||
| Valuation allowance | ( | ) | ||||||
| Net Deferred Tax Assets | ||||||||
The Company presents net deferred tax assets as noncurrent assets in the consolidated balance sheets.
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Valuation
allowance. The Company assesses the realizability of deferred tax assets in each tax-paying jurisdiction by considering all available
positive and negative evidence, including historical operating results, the expected reversal of existing temporary differences, projected
future taxable income, and available tax-planning strategies. While management expects the Company’s mini-drama application business
to generate U.S. taxable income in future years, the deferred tax asset specifically related to GILTI depends upon the repatriation of
previously taxed earnings from its PRC subsidiaries. Due to a change in management’s intention to indefinitely reinvest these earnings
rather than distribute them, management concluded that it was more likely than not that the deferred tax asset related to GILTI would
not be realized, despite the projected overall U.S. profitability. Accordingly, the Company recorded a valuation allowance of $
Net
operating loss carryforwards. As of July 31, 2026, the Company had California net operating loss carryforwards of approximately $
Undistributed
foreign earnings. The Company intends to indefinitely reinvest the undistributed earnings of its PRC subsidiaries. Distributions of these
earnings to the U.S. parent would generally be subject to PRC dividend withholding tax at a rate of
Uncertain tax positions. The Company had no unrecognized tax benefits as of July 31, 2026 or 2025, and there were no changes in unrecognized tax benefits during either year. The Company did not recognize any interest or penalties related to uncertain tax positions during the years ended July 31, 2026 and 2025.
Income
taxes paid. For the years ended July 31, 2026 and 2025, the Company paid income taxes approximately $
Tax Years Subject to Examination. The Company’s U.S. federal income tax returns for the tax years ended July 31, 2023 through 2026, California income tax returns for the tax years ended July 31, 2022 through 2026, and PRC income tax returns for calendar years 2021 through 2025 remain subject to examination by the respective taxing authorities.
NOTE 9. COMMITMENTS AND CONTINGENCIES
There have been no material contractual obligations and commitments as of July 31, 2026.
NOTE 10. SUBSEQUENT EVENTS
In accordance with ASC 855, “Subsequent Events”, the Company has evaluated subsequent events through the date of issuance of these financial statements and no material subsequent events were noted.
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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, 2026 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 file and submit 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, 2026. Based on this assessment, management concluded that our internal control over financial reporting was not effective as of July 31, 2026. The assessment identified the following significant deficiency, which was first identified in the prior year and remained un-remediated as of July 31, 2026:
Significant Deficiency – Documentation of Rebate Arrangements
For certain rebate arrangements with upstream and downstream business counterparties, the Company has historically relied on verbal agreements and case-by-case arrangements, with the related terms generally confirmed at the end of each month. Although monthly written confirmations have been implemented, the Company has not yet fully formalized these arrangements through standardized written agreements. The limited formal documentation may increase the risk of inconsistent application of contractual terms, errors in the recognition and recording of rebate arrangements, and potential disputes with counterparties.
Remediation Plan
Management continues to implement measures to remediate this significant deficiency. The Company has implemented monthly written confirmations with its business counterparties. The Company’s remediation efforts focus on formalizing these rebate arrangements through standardized written agreements, rather than relying primarily on verbal agreements and case-by-case arrangements. Progress has been limited because rebate arrangements in China’s advertising facilitation industry are often handled based on customary business practices and case-by-case commercial arrangements, rather than standardized written agreements. These remediation efforts are being overseen by the general manager of the Company’s advertising business.
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As of the date of this report, discussions with business counterparties regarding standardized written agreements are ongoing. The timing of full remediation remains uncertain because implementation depends on the willingness of counterparties to accept and execute written agreements. Following implementation, management will monitor and evaluate the operating effectiveness of the revised controls over a sufficient period of time before concluding that the significant deficiency has been remediated.
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 three months ended July 31, 2026, there were no changes in the Company’s internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
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 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
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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 November 12, 2026:
| Name and Municipality of Residence | Age | Positions With the Company | Board / Management Position Held Since | |||
| Sheng-Yih Chang, Los Angeles, CA | 55 | Chief Executive Officer, Chairman of the Board and Director | 2018 | |||
| Lili Dai, Los Angeles, CA | 50 | Chief Financial Officer | 2025 | |||
| Yuan Lu, Shanghai, China | 40 | Independent Director | 2019 | |||
| Xin Dong, Los Angeles, CA | 42 | Independent Director | 2018 | |||
| Guo Jurong, Shanghai, China | 63 | Independent Director | 2024 | |||
| Shen Yiqian, Shanghai, China | 69 | 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 been re-appointed as the Company’s Chief Executive Officer and Chairman of the Board effective on September 21, 2026. He previously served as the Company’s Chief Executive Officer from April 1, 2024 and as Co-Chief Executive Officer from July 22, 2026 through September 1, 2026, and served as the Company’s Chief Financial Officer from June 2018 through April 1, 2024. He has also been 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.
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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
In connection with our proposed public offering and Nasdaq listing, our Board intends to 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.
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Audit Committee
In connection with our proposed public offering and Nasdaq listing, we intend to 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
In connection with our proposed public offering and Nasdaq listing, we intend to 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. |
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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 ended July 31, 2026 (“Fiscal Year 2026”).
For Fiscal Year 2026, the Company’s NEOs were:
| ● | Sheng-Yih Chang, Chief Executive Officer (“CEO”, appointed April 1, 2024, served as Co-Chief Executive Officer from July 22, 2026 until his resignation as Co-Chief Executive Officer and Chairman of the Board on September 1, 2026, and re-appointed as Chief Executive Officer and Chairman of the Board on September 21, 2026); former Chief Financial Officer; | |
| ● | Lili Dai, Chief Financial Officer (“CFO”, appointed April 2025); formerly Interim Chief Financial Officer since March 2024; and | |
| ● | Kewei Huang, a/k/a Kek Wee Ng, former Co-Chief Executive Officer (appointed Co-Chief Executive Officer effective July 22, 2026; served as Chief Executive Officer and Chairman of the Board from September 1, 2026 until his resignation effective September 21, 2026). No compensation was paid to Mr. Huang during these periods. |
Mr. Huang is included as an NEO because he served as Co-Chief Executive Officer, a principal executive officer position, during Fiscal Year 2026. The Company did not have any other NEOs for Fiscal Year 2026 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 2026.
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 2026, the CEO received monthly compensation of $9,000 and the CFO received monthly compensation of $13,300. No other officer or director received compensation during fiscal year 2026.
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.
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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”). Upon Mr. Chang’s re-appointment as Chief Executive Officer and Chairman of the Board effective September 21, 2026, his compensation remains unchanged from the compensation package previously approved for and provided to him in connection with his prior service as Chief Executive Officer, and he will not receive any additional compensation, bonus, or other material benefits solely as a result of his re-appointment, except as may be subsequently approved by the Board.
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 Chang 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.
In connection with Mr. Huang’s appointment as Chief Executive Officer and Chairman of the Board effective September 1, 2026, the Company entered into an Executive Employment Agreement with Mr. Huang, effective September 1, 2026 (the “Huang Employment Agreement”). The Huang Employment Agreement provided for annual base compensation of $60,000, subject to future adjustment by the Board, with an initial term ending August 31, 2027 and automatic renewal for successive one-year terms unless earlier terminated. Mr. Huang resigned as Chief Executive Officer and Chairman of the Board effective September 21, 2026, for health-related reasons. Mr. Huang’s resignation was not the result of any disagreement with the Company on any matter relating to its operations, policies, or practices.
Outstanding Equity Awards at 2026 Fiscal Year-End
The Company has not granted any incentive equity to its NEOs, and thus none of the NEOs had any outstanding equity awards in the Company as of July 31, 2026.
Potential Payments Upon Termination or Change in Control
None of the NEOs was eligible for additional payments upon termination or resignation of employment, or a change in control, as of the last day of Fiscal Year 2026.
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 report, 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 2026 or had any outstanding equity awards as of July 31, 2026. 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.
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ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
As of November 9, 2026, 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 | |||||||
| Officers and Directors | ||||||||||
| Sheng-Yih Chang | Chief Executive Officer, Chairman of the Board and Director | 11,446,700 | 45.7 | % | ||||||
| Lili Dai | Chief Financial Officer | 125,000 | * | |||||||
| Yuan Lu(2) | Independent Director | - | - | |||||||
| Xin Dong | Independent Director | - | - | |||||||
| Jurong Guo(2) | Independent Director | - | - | |||||||
| Yiqian Shen(2) | Independent Director | - | - | |||||||
| 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 3, Current Loan Receivable-Related Party and Note 4, 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, 2026:
| 2026 | 2025 | |||||||
| Audit Fees | $ | 60,000 | $ | 60,000 | ||||
| Audit Related Fees | 22,500 | 12,000 | ||||||
| All other fees | - | 5,000 | ||||||
| Total Fees | $ | 82,500 | $ | 77,000 | ||||
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.
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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.
32* Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for Sheng-Yih Chang and 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: | November 12, 2026 | 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, Chairman of the Board and Director | November 12, 2026 | ||
| Sheng-Yih Chang | (Principal Executive Officer) | |||
| /s/ Lili Dai | Chief Financial Officer | November 12, 2026 | ||
| Lili Dai | (Principal Accounting Officer) | |||
| /s/ Yuan Lu | Director | November 12, 2026 | ||
| Yuan Lu | ||||
| /s/ Xin Dong | Director | November 12, 2026 | ||
| Xin Dong | ||||
| /s/ Jurong Guo | Director | November 12, 2026 | ||
| Jurong Guo | ||||
| /s/ Yiqian Shen | Director | November 12, 2026 | ||
| Yiqian Shen |
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