Using a pocket PC with tiny keys, so will be brief. For those interested in FTL, the NASD has asked 2 rounds of questions and there is optomism that an OTC listing may be forthcoming without much additional delay.

HRCT owned 58% of FTL. A 100% ownership position was required for listing. 16M shares of FTL were outstanding. The addnl 42% were purchased with note, which will later be cnvrtd to apprx 10M shares.

The total O/S will be apprx 26M, all dist to HRCT shareholders of record date per previous PR. All shares wiil be in market float.

P4URS

Walsh - Good post. Interesting thing about this information is the tendency for it to become a self-fulfilling prophecy as it is communicated to the shareholder base. Our core group on the board has known for some time from HRCT's public communications that the AMEX application [Listing Standard #3] was being prepared.

Along came Stockgate, which dragged down most of the penny stocks by as much as 80 to 95%. HRCT's share price actually held up relatively well in comparison to most other penny stocks that I watch.

It certainly does not seem like it would take much in the way of additional public communication from HRCT to move us above a $50M market cap [the .30 share price that you reference]. After all, we were over a dollar last year without the building blocks for an AMEX listing assembled.

Many companies experience a nice bump in their share price after an AMEX listing, so there is a relatively small window of opportunity here in the 20 cent range to get in before we qualify for AMEX LS #3 based upon market capitalization.

I would not be at all surprised to find out that Carrie has been focused on the other qualitative listing requirements [qualitative factors such as the nature of a company's business, market for its products, reputation of its management, historical record and pattern of growth, financial integrity, demonstrated earnings power, and future outlook] including corporate governance and Sarbanes-Oxley compliance issues.

So it is entirely possible that we are closer than we think to an AMEX listing approval [IMO].

P4URS

For those attending the Shareholders Meeting in Las Vegas.


Ms. Carrie would like to invite shareholders to a dinner on Thursday evening before the shareholder meeting on Friday..Please add your name or PM me so that Hrct knows approximately how many will attend..Aloha

Tin-Berrygood
Little Red
EZ2
ndsmarket & son
Moody&Mrs Blue
Lucky5ive and son-in-law
Mocha Jet and guest (depending on dinner time - got 7:00pm show tickets)
kurt schaffert jr & wife
BoatRgirl (assuming everything is okay and she is going to be there)
MisterEC & date
Penny_4UR_Stocks and wife (depending upon dinner time - have 8:00pm show tickets)

K, ask and you shall receive. We vote to bring your spirit and optimism to Vegas. Add your name to the list below to bring K to Vegas with a $25.00 contribution for her nifty fifty. Need at least 10 folks willing to show K we want her there with a personal donation to her airfare if she shows!

Penny_4UR_Stocks

Not sure who submitted question #9 below, but please consider contacting Tin by P/M and retracting it. It’s just taking up valuable real estate on the Q & A.

[ 9. Is it possible that HRCT can pursue an SEC settlement of some kind any earlier than the March date given in the June Q&A? Are the HRCT attorneys out of options until March? ]

I'll answer it with some basic logic and Negotiation 101. It’s possible that an asteroid can hit the earth prior to March, but not at all likely. If HRCT were to aggressively pursue a settlement prior to the case, would they be likely to expose such intent publicly? They have indicated publicly that they are not guilty of the charges. Funds to handle a potential adverse verdict have already been set aside.

There are always options prior to March; however, I believe based upon their past performance and public communications that it is likely that they will choose to defend their character and pursue a trial unless a settlement offer is advanced by the SEC that is absolutely TOO compelling to ignore. There is a real cost associated with lengthy litigation and HRCT would be likely to make judicious business decisions in the best interests of the shareholders.

Not an attack on anyone for posting the question, just think we need to post questions which can be answered publicly by HRCT and advance the knowledge on the board.

P4URS

Tin, Added Question 5. P4URS

July Q&A***Shareholder's Question and Answer

1. Do you have a specific time frame for any of the spin offs?..If not specific, can you say whether they will be completed by 2004 year end?

2. I'm confused about the percentage of ownership, going to Hrct shareholders concerning the SinoBull spin off..As I recall, 17% was stated earlier..Has that percent changed in some way?.Or am I misreading your answer in the June Q&A?.

3. Not being specific, can I ask if there is still a road show planned for Sept.?..Before or after the Shareholders meeting?

4. We can see that David Chen is not on the ballot for Chairman of Hrct...Can you tell us about his future plans, or will there be a PR coming to address this?...Or will Hrct wait until the shareholders meeting to make this info available?

5. Please provide information regarding HRCT's current approximate percentage of revenue derived from commissions on wireless communications, including cellular voice and data activations, and the plans (if any) for growing opportunities in this market through both retail and enterprise channels.

WHOS GO'N TO VEGAS LIST

NDSMARKET
68_Shovel (john)
Penny_4UR_Stocks

The "Blue Man" show runs at the Luxor. Remember the blue guys that did the Intel Pentium commercials years ago? Its very unusual and worth seeing once. Also, less costly than Celine Dion at Ceasars Palace.

Book online at the Luxor and save $10.00 on most rates from third-parties below.

Luxor
Room Type Thu Fri Sat Avg Nightly Rate
Standard $99.95 $189.95 $199.95 $163.28

P4URS

K, Is room 611 reserved yet! Has a date for the S/H meeting in Vegas been set?

P4URS

Little Red, Thanks for the PM. Can't PM back as I do not have the Premium account any longer. Yes, we did not connect at the last S/H meeting, but I'll see you in Vegas if you attend.

P4S

I3, That is a fascinating read. Thanks for the post.

P4S

Moody, I agree with you and brdsng. TFN does not seem to understand the difference between O/S and float. Further, he keeps using Yahoo as his credible "source" for the float.

Seriously, no one should base any investment decisions on any numbers and/or statistics published by Yahoo (LOL), as these are not always accurate. In fact, it is not unusual for these numbers to be grossly inaccurate and out-of-date.

So the float is considerably less than the shares outstanding. Case closed.

P4S

Aries, Great find. Thanks for the post.

P4S

OT: COMMONAME - My post was in response to your interest in the activity of MM's. I don't think that the average investor has any interest in this subject. Understanding how and why the MM's behave is a key factor to achieving extraordinary returns in the OTCBB marketplace (IMO).

Yes, it will indeed be interesting to see how things change for us and OTCBB stocks after April 1, when naked shorting should cease.

Interesting you should mention Richard Ney. I did not know that he was once an actor! I collect stock market books and classic works. Have Ney's "The Wall Street Jungle" (1970). A good read. The more things change the more they stay the same. I think it was Livermore that said something like "people change, times change, commodities change, but the markets never do".

No thanks necessary. Happy to share some of the MM black box with you.

P4S

COMMONAME, Market Maker Manipulation (MMM) is a hotly debated topic. I'll share some interesting information and examples of MMM with you to help explain. First, I want you to take a look at this Market Maker DTC Report showing the net change in Market Maker position for an OTCBB stock over the last year:

http://www.emaxcorp.com/documents/EMAXdtc.pdf

As an example of MMM, see the significant Net Change in position on the March 03, 2004 report. It is 2,850,656 shares (increased over prior period) held by all MM's in this stock.

The stock was trading at .014 on March 03, 2004. In the DTC Report for March 12, 2004, the Net Change in MM position was down to 620,560 or a retail distribution of about 2.2 million shares.

See the volume and close price over the intervening dates below. During this distribution, the volume decreased yet the price increased from March 03 (.014) to March 15 (.023).

ALLMOST A DOUBLE IN A WEEK on decreasing volume and a Net Decrease in positions by the MM's. Kind of appears that they are making a market for themselves, eh?

eMax Corp./eMax (EMAX) daily bars

Day Date Open High Low Close Volume
=== =========== ========== ========== ========== ========== ===========

Mon 15-Mar-2004 0.0230 0.0230 0.0230 0.0230 31600
Fri 12-Mar-2004 0.0230 0.0250 0.0200 0.0200 291250
Thu 11-Mar-2004 0.0220 0.0230 0.0180 0.0220 113000
Wed 10-Mar-2004 0.0200 0.0200 0.0200 0.0200 24500
Tue 09-Mar-2004 0.0200 0.0200 0.0160 0.0160 169400
Mon 08-Mar-2004 0.0170 0.0200 0.0170 0.0200 156500

Fri 05-Mar-2004 0.0130 0.0200 0.0130 0.0190 672000
Thu 04-Mar-2004 0.0165 0.0240 0.0130 0.0150 513500
Wed 03-Mar-2004 0.0200 0.0230 0.0140 0.0140 736050


Still not convinced...? MMM exists in the form of "front running", "churn", and "naked shorting" (hopefully soon to be managed out).

Churn causes a manipulation in the printed volume of OTCBB stocks. Did you ever notice that sometimes you see only one print for a percieved "buy" or "sale", and sometimes you two, e.g., an odd lot at 5128 shares 13:01 at .525 then the same number 5128 13:02 at .53? (Someone selling 5128 shares and someone else buying 5128 shares or MM's manipulating volume with MM to MM trades) MM to MM trades cause a perceived increase in volume when in effect no change in supply and demand has actually taken place.

Note the EMAX DTC Report how MM's become flat overall by trading amonst one another after they have distributed). As I have posted before, it's friendly co-opetition amongst MM's. I still challenge anyone to show me how OTCBB MM's are making a market (adjusting supply and demand to a 1:1 equilibrium) for anyone except themselves.

For more convincing evidence on this subject read the following excerpt from this 2000 letter to the SEC then follow this link:

http://www.sec.gov/rules/concept/s72499/klaser1.txt

"Market Maker to Market Maker transactions are recorded on the sell side only (same as an investor buy), in contrast, the ACT system records both buys and sells by Market Makers when the trade is being made with the general public.

Lets look at a few examples, and please note that the side of the trade is inverted depending upon the market participants "point of view." When a Market Maker buys from the general public, it's the same as an investor sell, it is recorded as an ACT system buy or "B". When a Market Maker sells to the General public, which is the same as an investor buy, it is recorded as an ACT system sell or "S".

So the Market Makers report both buys and sells to the general public. Unfortunately here is where the rules change to the detriment of the average investor: A Market Maker to Market Maker transaction is recorded solely on the sell side as an "S", not on the buy "B" side. If a Market Maker buys from another Market Maker, it is not recorded in the ACT system as a "B", it is only the selling Market Maker that reports it.

This is the core reason that it appears in the real time price stream for OTCBB stocks that a bid:ask ratio of greater than 1:3 is often required in order for prices to move up, since a Market Maker to Market Maker transaction represents no change in the supply demand equilibrium of a stock. The excess over 1:1 is Market Makers trading with each other.”

Tin, I agree with you and think that it is important that we have reasonable expectations given several factors, including the overall market sentiment at this time.

HRCT's share price reflects the relatively low net profit that we have brought to the bottom line to date. The SEC issue continues to restrict our upside potential (IMO).

While we will certainly see some price appreciation on the 2003 earnings PR, I don't anticipate a bigger move for another 45-60 days.

Preparation for the listing application is not trivial. I would anticipate that DC would like to settle the SEC suit prior to making the application.

A good set of numbers on the 10K won't surprise most of us, but we would be surprised by a triple play of even better Q1 earnings, settled SEC, followed by HRCT announces application to the "" exchange. At 62 to 65 we would be a great buying opportunity.

As for the discussion about where we are now at 50 cents... Where should we be? MM's are not Specialists nor do they behave like Specialists to "support" a stock. Large block limit orders are not being filled (personal experience over the last two weeks). MM's have slowly brought the price back close enough to the 200 day MA that most trades are at the bid (selling) but careful not to break support of 47 cents to trigger additional buying. They are quietly accumulating inventory from those that become impatient and move on.

A break in support of 47 would trigger selling but would also be likely to cause a premature technical run on the rebound. The MM's would give back the shares that they are holding for a larger run. These are full time professional traders with plenty of patience.

Some HRCT longs have become impatient and will decide to change strategies and sell into this next run. There may be some money to be made on a swing trade; however, it is a risk to try to swing in and out when we know of several pending forward events in the next 45-60 days with a high probability to move us to the next sustainable S/P level.

P4S

RWNT U/T to .025 X .026, volume coming in.

BTW MrEC, Did you notice a potential "cup and handle" forming?

<img src="http://stockcharts.com/def/servlet/SharpChartv05.ServletDriver?chart=HRCT%2Cuu%5Be%2Ca%5Ddhcayiay%5B....

P4S

MrEC, Pure speculative answer, Ok... I think that most of the smart swing money is already on the table for this next run. One reason for the low volume (and low volume trades) today. There are a couple points of entry for traders with cash and sidelined; a buy stop order above resistance at about .65 to be taken out in the run or a buy limit (.49) just above our strong support of .48, in the event MM’s run stops again intraday. Strategy depends upon how one likes to enter their trades.

As a second possible reason, the DOW and NAS are in a strong retracement and many penny stocks are retracing as well. Just a buying opportunity for most good traders as we retrace and find support on the majors. I don't think we'll see much smart money coming off the table between HRCT's current support and resistance (.48 and .64) while the good news is pending.

In theory, MM's adjust pricing to a point of demand and supply that achieves the greatest volume. In practice, it is not always in their best interest to induce additional volume if it leads to erosion of their long position during an anticipated positive forward event. This explains intraday swings that take out stops but don't give an equal chance for new money to enter at lower prices. (House odds rule the OTCBB as well, over the long haul MM's always win, some traders get lucky and win (patience and DD), and some who count cards (entry and exit strategy) maintain a competitive advantage and prosper as well).

Long answer to your short question. And just my 2 cents on the subject (JM2COTS).

P4S

TFN, Kind of hard for you to imagine HRCT succeeding? As you know, HRCT has stated publicly on its web site that it will be applying to list on another exchange.

This is extraordinarily good news to most HRCT investors.

HRCT has made significant progress as measured against their 2003 business objectives. There is no reason to believe that progress will not continue.

You in fact have no evidence that it is "going to be tough to get approved". Yet, you state it in your post as though you have some type of special knowledge in regards to HRCT's application! You are running out of time to bash this stock and this company...LOL!!

P4S

BoatRGirl, It is relatively expensive to prepare for, and submit an application for listing.

DC has a history of conservative money management. I suspect that HRCT would not invest the money in the application process without strong legal and financial opinions that they will be accepted on the new exchange.

P4S

BoatRGirl, I posted several times and included the evidence from the AMEX Listing Standard #3 requirements. Review my posts on this topic. There is no reverse split necessary to qualify for LS3 on AMEX (HRCT qualifies for the other requirements, IMO).

Refer TFN, MBR, and T/S to call the AMEX Membership Department, Trading Desk, Regional Sales Reps, or Listing Specialists if they have a problem reading the AMEX site. These departments all staff people that answer the phone. (No, they will not discuss current status of any company, but some will interpret the LS3 rules.)

P4S

$pooky, from the "About Us" page:

http://www.hartcourt.com/milestones.htm

Milestones & History

2003
Acquired 6 IT Distribution and Retail companies in China and became the fast growing IT Distribution Company in China.

P4S

BH,

It is currently being reprinted in softcover or you can almost always find a hardcover on ebay:

http://cgi.ebay.com/ws/eBayISAPI.dll?ViewItem&item=3592577460&category=23925

P4S

Garhart, I was referring to one of our previous monthly Q & A's over the last year that we were all waiting on, while a 10Q was also coming. I believe that Tin emailed DC about the outstanding Q & A and he informed us that HRCT was busy preparing the quarterly numbers (or similar) and would get to it when possible. As I recall, the Q & A came out after the earnings PR.

P4S

MBR, Good to hear that you are finally being straight with the board.

“I'm in the process of mending my evil ways and should be released in a week.” (MBR Post 48575).

We knew you would come to the light.

“Some desperate people out there. Really, really sad.” (MBR Post 48577)

Wait what's this?

http://mm.dfilm.com/mm2s/mm_route.php?id=1641591 (Thanks Moody, Post 48580)

Walsh, entirely possible given the volatilty that we have seen recently. MM's try to reduce open positions to eliminate their market exposure. They may or may not know the anticipated date of HRCT's expected positive earnings' release. These firms are all friendly competitors and need each other to balance their risk and open positions. These A/H block numbers may just be adjustments between those short and those long on inventory wanting to help each other get flat.

$pooky, I always thought that you were on the Cigar Team! Are you changing sides on us?

I3, FINE CIGARS !!!!!

MBR, Chances are we will not see the answers to the Q's prior to the earnings release (IMO) based on past experience. DC and crew are probably all at capacity trying to close out the years books and prepare the listing application to be filed sometime after HRCT has filed the 10K (need current financials to include with the listing application). This board should be smokin' the week of the 15th !!! (IMO).

P4S

SCHWAB on the inside bid again this morning. Spent most of yesterday on the inside bid untill about 3:50 when VERT and WIEN moved up. SCHB very eager to acquire shares. Just narrowed the spread from .53 X .55 to .54 X .55.

COMMONNAME, MM's trying to hold on to their shares. Look at the line up on L2 and notice the slightly wider spread between the current top five MM's (on the bid).

B vs. A:

SCHB .505 X .55
GVRC .50 X .555
WEIN .49 X .53
VIEW .49 X .55
PERT .49 X .62

4.5 to 6.5 cent spread. Eager to buy at .49 but don't want to give any shares up.

Tin. Agreed. Let's not miss the forest for the trees. Most of the insiders (approximately 2/3) have agreed to extend their restriction for an additional year. Obviously, most of the insiders are optimistic that they will be rewarded for this patience.

If there were any concern on the part of the insiders, we would not see most of them agreeing to the additional one year restriction. Quite the opposite, we would see most of them bail out, which is not happening. As you state, it is to be expected that some of these folks will want to take some of their profits now.

What we are seeing (IMO) is the typical draw-down on OTCBB stocks prior to an expected positive 10K and additional PR's (including the expected application for a new exchange listing).

We are all trading against the MM's. (Sure many here do not believe that, MM's are just creating an orderly market by balancing suppy and demand, right?) MM's are the real pro's here. Amateurs often panic in the face of draw-downs, selling low and then buying back high. We have now heard from more than one on the board that has panicked and sold out or wants to convince everyone else to do so.

If you want come out on top of this game you will need to learn to manage the two primary emotions (fear and greed) that motivate your behavior. Learn to recognize the folks on the board that panic and spread fear every time the stock drops.

Set aside your emotion and ask:

Has anything fundamentally has changed with the company?

Do I still have the same expectations for the company?

Should I expect MM's to be making a play for my shares at this time?

"Misery loves company." Are others taking advantage of a situation in an attempt to influence my behavior, opinion, or attitude toward the stock?

Group dynamics are very powerful. Individuals will behave differently in a group than they would alone. Can you resist the "group think" and make independent investment decisions based upon careful analysis devoid of your emotions?

Anyone can trade stocks. Penny stocks are (OTCBB and PK) are different. Most traders will be stopped out or panic when caught in a draw down, and give up their shares to the pros. Often, a regretful decision that leads to resentment of those investors that did not. Only a small percentage of the investing/trading population will make it to the right edge of the bell curve and achieve outstanding results.

Its great to see so many HRCT longs on the board that make investment decisions based upon reason and logic rather than emotion.

AMEN

Aries, nice find!!!!!! Especially Lesson 1:

"Lesson 1: Remember, BASHERS NEVER Bash A BAD STOCK. Check the boards for stocks with no potential. They never have any Bashers. Bashers only go after stocks that are moving up or have excellent potential to do so. Bashers work to bring the price down to either increase their position at the expense of others or help a Short make their bones."

T-Stud, please read lesson #7.

P4S

MARGIN MARGIN MARGIN!!! This new acquisition has some enormous ramifications to net profit and ultimately our S/P. ServiceNet has a 20% margin. The reason that Best Buy, Circuit City, and Conn's push the extended warranty so hard is because it is one of the highest margin products they sell. Most extended warranties never get used. If HRCT is successful upselling its customer base to the "service plan" at POS we could see a substantial increase in service revenue and resulting margins.

We have been valued by the market based upon net profit, not gross revenue. This acquisition is the first that has the potential to significantly increase net profit over the next year. Looks like our new President has already added strategic thought leadership and "Dell" type insight.

HRCT sells mobile phones as wells as computer equipment. The mobile phone market is exploding in China. Notice that Sony, Samsung, Toshiba, and Ericsson are ServiceNet customers. So in addition to the carrier rebate for initializing a phone, we should now be able to sell "insurance" (the service plan upsell for a replacement phone) for cell phones as well as computer equipment.

FROM THIS MORNINGS' PR:

"Established in 2000, ServiceNet provides a wide range of IT services to several multinationals in China, such as HP, Dell, Philips, Toshiba, Sony, Samsung, Seagate, etc. The types of services include Authorized Service Center, On-site Services, Hardware Support, System Maintenance, RMA management, and FA Testing. It also provides IT outsourcing services to other multinationals like BAT and Ericsson. Its service network covers 15 major cities in China, including Shanghai, Guangzhou, Xiamen, Hangzhou, Xi'an, Shenzhen, and Kunming, etc. It has over 200 engineers and recorded 4.6mil USD in net revenue in 2003 with about 20% net margin. ServiceNet expects to increase significantly its service offering and coverage, and to expand into the Northern China market in 2004. More details on ServiceNet can be obtained from its web sites, www.servicenet.com.cn."

COMMONAME. I have seen very little information regarding the fundamentals of FTL; so don't have an educated guess to share. I think that the current number of shares were mentioned in a previous PR, but who is to say what could happpen to the share base pre-spin off? Is FTL a shell or is there any revenue? Maybe someone on the board has info on the fundamentals? On the issue of FTL, this is a great "bonus". How many OTC companies dividend anything?!! I'll be happy with whatever we get!

ebula, you should try being more subtle when you are attempting to spread fear, uncertainty, and doubt. The "10:1 R/S has to come" is just not believable (especially when the board has already been presented with evidence that this is unecessary to obtain a listing).

Party of one?