The terms "HQDA", "Company", "we", "our", and "us" refer to HQDA Elderly Life Network Corp. (formerly Hartford Retirement Network Corp.) unless the context suggests otherwise.





                           FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q includes "forward-looking statements" as defined by the Securities and Exchange Commission, or SEC. We make these forward-looking statements in reliance on the safe harbor protections provided under the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical facts, included in this Form 10-Q that address activities, events or developments that we expect, believe or anticipate will or may occur in the future are forward-looking statements. These forward-looking statements are based on assumptions which we believe are reasonable based on current expectations and projections about future events and industry conditions and trends affecting our business. However, whether actual results and developments will conform to our expectations and predictions is subject to a number of risks and uncertainties that, among other things, could cause actual results to differ materially from those contained in the forward-looking statements, including without limitation the Risk Factors set forth in our Annual Report on Form 10-K for the year ended June 30, 2018 including the following:





  ? our failure to obtain additional financing;
  ? our inability to continue as a going concern;
  ? the unique difficulties and uncertainties inherent in the business;
  ? local and multi-national economic and political conditions, and
  ? our common stock.




General

HQDA Elderly Life Network Corp. (formerly Hartford Retirement Network Corp.) ("HQDA" or the "Company") was incorporated in the State of Nevada on January 21, 2004. Our principal offices are located at Suite J, 8780 Valley Blvd., Rosemead, California 91770. Our telephone number is (626) 877-8187.

The Company has not had any bankruptcy, receivership or similar proceeding since incorporation.

Our business plan is owning, leasing and/or operating senior living residences that provide seniors with a supportive, home life setting with care and services, including activities of daily living, life enrichment and health and wellness in certain cities in China. We also plan to operate a network carrier, providing scheduled air transportation to passengers, travel destination services to leisure travelers.





The Senior Living Industry

Through our newly acquired and wholly-owned subsidiary, Shanghai Hongfu Health management Ltd., we purchased senior living facilities in April 2018, launched a senior living residences business, which, hosts to mostly men and women over the age of 50. We intend to expand the business of owning, leasing and/or operating senior living residences that will provide seniors with supportive, home life setting with care and services, including activities of daily living, life enrichment and health and wellness in China.

The senior living industry encompasses a broad spectrum of senior living service and care options, which include independent living, assisted living and skilled nursing care. Our primary focus will be on the independent living services. Independent living is designed to meet the needs of seniors who choose to live in an environment surrounded by their peers where they receive services such as housekeeping, meals and activities, but are not reliant on assistance with activities of daily living (for example, bathing, eating and dressing), although we may offer these services through contracts with third parties.

Our operating philosophy is to provide services and care which meet the individual needs of its residents, and to enhance their physical and mental well-being, thereby allowing them to live longer and to "age in place." These facilities will offer, on a 24-hour basis, personal, supportive and home health care services appropriate for their residents in a home-like setting, which allow residents to maintain their independence and quality of life. We predict that the average of the residents at our facilities will be between 55 and 70.

Our primary focus will be in China, where we intend to grow and become a leader in senior living facilities. We also will seek to develop or acquire facilities and manage or cooperate with existing facilities as well. We believe that by concentrating or "clustering" our facilities in target areas with desirable demographics, can increase the efficiency of our management resources and achieve broad economies of scale.





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The long-term care industry encompasses a wide continuum of services and residential arrangements for elderly senior citizens. Skilled nursing facilities provide the highest level of care and are designed for elderly senior citizens who need chronic nursing and medical attention and are not able to live on their own. Further, skilled nursing facilities tend to be one of the most expensive alternatives while providing elderly senior citizens with limited independence and a diminished quality of life. On the other end of the continuum is home-based care, which typically is provided in an individual's private residence. While this alternative allows the elderly individual to "age in place" in his or her home and, in certain instances, can provide most of the services available at a skilled nursing facility, it does not foster any sense of community or the ability to participate in group activities.

Assisted living facilities generally are designed to fill the gap in the middle of this continuum. Assisted living facilities have been described by the Assisted Living Federation of America ("ALFA") as providing a special combination of housing and personal, supportive and home health care services designed to respond to the individual needs of those who need, or desire help with their activities of daily living, including personal care and household management. Services in an assisted living facility are generally available 24 hours a day to meet the scheduled and unscheduled needs of residents, thereby promoting maximum dignity and independence.

The assisted living industry is highly fragmented in China. At present, the industry is characterized by participants who operate only a limited number of facilities and who frequently can offer only basic assistance with a limited number of activities of daily living. We intend to be characterized by the following: (i) the ability to offer premium accommodations and a comprehensive bundle of standard services for a single inclusive monthly fee; (ii) sophisticated, professional management structures and highly trained employees; (iii) a cost-efficient, user-specific prototype facility; and (iv) experience in providing home health care services.

Our facilities will provide services and care which are designed to meet the individual needs of its residents, enhance their physical and mental well-being and promote a supportive, independent and home-like setting. Most of our facilities will be primarily designed as premium facilities at which residents receive a comprehensive, bundled package of standard services for a single monthly fee.

We will strive to combine in our facilities the best aspects of independent living with the protection and safety of assisted living, with trained staff members who provide 24-hour care and monitoring of every resident. The senior living facilities will be designed and decorated to have a home-like atmosphere. Residents will be encouraged to furnish their rooms with personal items they have collected during their lifetime. Our senior living facilities differ from skilled nursing facilities in that our senior living facilities will not provide the more extensive, and costly, nursing and medical care found in nursing homes.





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Results of Operations

                                       Three months ended December 31
                                     2020           2019         Changes

Revenue                           $  352,922     $  440,508     $  (87,586 )

Operating costs:
Cost of food and beverages            52,554        191,476       (138,922 )
General and administrative cost      172,560        329,926       (157,366 )
Litigation expenses                  298,898              -        298,898
Depreciation and amortization         41,134         36,377          4,757
                                     565,146        557,779          7,367
Operating loss                    $ (212,224 )   $ (117,271 )   $  (94,953 )




                                        Six months ended December 31
                                     2020            2019         Changes

Revenue                           $   508,362     $  612,684     $ (104,322 )

Operating costs:
Cost of food and beverages             99,409        197,457        (98,048 )
General and administrative cost       401,827        610,015       (208,188 )
Litigation expenses                   474,948              -        474,948
Depreciation and amortization          89,083         73,971         15,112
                                    1,065,267        881,443        183,824
Operating loss                    $  (556,905 )   $ (268,759 )   $ (288,146 )

Three months ended December 31, 2020 compared to three months ended December 31, 2019

The revenue for the three months ended December 31, 2020 decreased by $87,586 compared with the same period ended December 31,2019. The decrease is mainly due to the impact of COVID-19 small outbreak in Shanghai during the period.

The increase of operating loss amounted $94,953 for the three months ended December 31, 2020 as compared to the same period ended in 2019 was mainly due to the increase of Litigation reserve of $298,898, offset the decrease in G&A of $157,366 and cost of food beverages of $138,922.

Excluding the non-cash expenses of depreciation and amortization, the operating loss would have been $171,090 and $80,894, for the three months ended December 31, 2020 and 2019, respectively.

Six months ended December 31, 2020 compared to six months ended December 31, 2019

The revenue for the six months ended December 31, 2020 decreased by $104,322 compared with the same period ended December 31,2019. The decrease is mainly due to the impact of COVID-19 small outbreak in Shanghai during the last quarter in 2020.

The increase of operating loss amounted $288,146 for the six months ended December 31, 2020 as compared to the same period ended in 2019 was mainly due to the increase of Litigation reserve of $474,948, offset with the decrease of G&A expense approximately $208,188.

Excluding the non-cash expenses of depreciation and amortization, the operating loss would have been $467,822 and $194,788, for the six months ended December 31, 2020 and 2019, respectively.

Liquidity and Capital Resources

On December 31, 2020, we had cash on hand of $150,000 and liabilities of $5,937,825. We will require additional funding in order to cover all anticipated administration costs and to proceed with the Asset Purchase Agreement executed on April 2, 2018 and to seek out additional travel agents for similar contracts. We also intend to provide management services to retirement homes, commercial properties and apartment buildings in China, which will result in higher administrative costs in the future.





Capital Expenditures

On April 2, 2018, we entered into an Asset Purchase Agreement (the "APA") whereby we purchased land, buildings, and right to use, construction use rights and other property rights located in Shanghai from a third party. Properties are split into two groups:





  ? Property A: land use rights and adhesive substance use rights, right to own,
    and right to operate of the land located in Shanghai Pudong New Area
    Zhangjiang Ziwei Rd No. 372 and No. 376.

  ? Property B: land use right, adhesive substance under construction use rights,
    right to own, and right to operate of the land located in Shanghai Chongming
    District San Shuang Gong Lu No. 4797.

We have agreed to pay the purchase price totaling RMB 233,000,000 in instalments. Payments of $26,912,138 (RMB 176,000,000) have been made through December 31, 2020 and the remainder of $8,715,863 (RMB57,000,000) is not going to pay until this asset is free of the restrictions.





Employees

At present, we have 14 employees, other than our current officers and directors, who devote their time as required to our business operations.





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Off-balance Sheet Arrangements

As of December 31, 2020, we have no off-balance sheet arrangements that would require disclosure.





Critical Accounting Policies

Our interim financial statements are prepared in accordance with accounting principles generally accepted in the United States of America. Preparing financial statements in accordance with generally accepted accounting principles requires management to make estimates and assumptions which affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the balance sheet dates, and the recognition of revenues and expenses for the reporting periods. These estimates and assumptions are affected by management's application of accounting policies.

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