PRESIDENT ;-)
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Clients
Advanced Battery Technologies, Inc.
Shuangcheng, Heilongjiang, People’s Republic of China
Manufactures and markets rechargeable polymerlithium-ion ("PLI") batteries used in consumer products such as portable computers, PDA's and cellular telephones.
www.hrbhx.com/zqnew/
Brendan Wood International
Toronto, ON
An independent global partnership providing predictive business intelligence, strategic advisory, transactional and investment related services to financial houses and corporate participants in the capital markets of the world.
www.brendanwood.com
chinadotcom (Nasdaq: CHINA)
Hong Kong, China
A leading integrated enterprise software and mobile applications company in China and internationally.
www.corp.china.com
Dollar Tree Stores (Nasdaq: DLTR)
Chesapeake, VA
Operates over 2,000 discount variety stores offering merchandise at the fixed price of $1.00.
www.dollartree.com
Federal Realty Investment Trust (NYSE: FRT)
Rockville, MD
REIT specializing in the ownership, management, development, and redevelopment of shopping centers and street retail properties located primarily in the Northeast, Mid-Atlantic, and California.
www.federalrealty.com
Grant Thornton
New York, NY
Founded in 1924, the leading global accounting, tax and business advisory firm dedicated to serving needs of middle-market companies.
www.grantthornton.com
Indian Motorcycle
Gilroy, CA
America’s first (1901) motorcycle company and a brand which is being re-launched.
www.indianmotorcycle.com
Moscow CableCom (Nasdaq: MOCC)
New York and Moscow
Parent company of ComCor-Tv, a Russian company that is wiring the city of Moscow to provide broadband services.
Pokemon, USA, Inc.
New York, NY
The leading merchandiser and licensor of trading card games.
www.pokemon.com
Right Management
New York, NY
World’s leading career transition and organizational consulting firm.
www.right.com
Rush Enterprises (Nasdaq: RUSHA and RUSHB)
New Braunfels, TX
Operates a network of heavy-duty truck dealerships and heavy construction equipment across the southern U.S.
www.rushenterprises.com
SORL Auto Parts (OTCBB: ECVL)
Wenzhou City, Zhejiang, People’s Republic of China
Manufactures and distributes automotive air brake valves and hydraulic brake valves to truck manufacturers in China and internationally.
www.sorl-autoparts.com
Turner Construction
New York, NY
The nation’s largest construction company.
www.turnerconstruction.com
Waste Industries (Nasdaq: WWIN)
Raleigh, NC
A major regional solid waste services company.
www.waste-ind.com
Workstream (Nasdaq: WSTM)
Ottawa, Canada
A leading provider of Web-enabled tools and professional services for Human Capital Management (HCM).
www.workstreaminc.com
About Adam Friedman Associates:
http://www.adam-friedman.com/
CORPORATE COMMUNICATIONS
Adam Friedman Associates ("AFA") is a leading independent public relations firm headquartered in New York City, specializing in the strategic practice of corporate and investor relations as well as marketing communications
Corporate communications is about breaking through the clutter and successfully establishing a presence for your company. But it takes more than persistence. It requires a clear vision, a consistent message and a targeted audience. We can help you do that by putting together all parts of the communications process.
We ask the important questions, like "How is your company different from its competitors?" and "How do you want to be perceived?" And then we help you come up with the answers and craft them into a cogent message. We coach and we counsel. Next, we develop a delivery system to get that message into the right hands – and minds.
Because communications is a loop, it needs constant tweaking so that it reflects the corporate message and achieves your goals. Our flexibility allows us to adapt to new inputs and modify the media, if warranted.
Regardless of your audience – investors, journalists, customers, employees – we can assist you in reaching them in the most effective manner using the most efficient means.
STRATEGIC INVESTOR RELATIONS
Before embarking on an IR program, we take the time to research investor perceptions so that we understand what drives current stock valuations. Once we have analyzed that data, we develop a strategy designed to address these drivers, deal with issues that have surfaced and change perceptions. Our strategy bridges the gap between a company's messages and the manner in which they are interpreted by investors. The tactical components of the program, including meetings, conference calls and press releases, work together to reinforce the strategy and communicate a consistent message. We help clients navigate the complexities of the changing environment making certain that they manage communications to stay within the boundaries of Reg FD and Sarbanes-Oxley. Clients also receive guidance on corporate governance issues, an area that is getting increasing scrutiny by investors.
The functions of a strategic program can be organized into three basic categories:
• Market Intelligence
to develop knowledge and expertise on the capital markets, investment process, investor behavior, investor perceptions and attitudes toward the company, and to track progress in the communications process.
• Message and Information Development
aimed at communicating the investment strengths, major factors and points of information important to the market that will help create fair value.
• Communications Vehicles
namely, the best ones to use in getting the message and information to investors, analysts and brokers in the most effective manner.
The investor relations process is a two-way street:
(1) providing investors and other constituents with the complete story so the company can be well understood and fairly valued; and
(2) bringing back to management relevant information and opinions that exist among investors, analysts and other major constituents to help management
NEWS!! The Hartcourt Companies, Inc. Appoints Adam Friedman Associates as Corporate Communications Advisor
via COMTEX
September 3, 2004
LOS ANGELES, CA, Sep. 03, 2004 (MARKET WIRE via COMTEX) --
The Hartcourt Companies, Inc. (OTC BB: HRCT) (Frankfurt: 900009), announced today that it has engaged Adam Friedman Associates LLC to be its corporate communications counsel specifically as it relates to investor and media relations. Hartcourt and TTC have mutually agreed to end their cooperation in the investor relations area.
Carrie Hartwick, CEO of Hartcourt, commented, "We are delighted having Adam Friedman Associates, a professional IR firm, to be a part of our investor relations program. We are expecting to enhance the investment research coverage and open more effective dialogue with institutional investors in the investment community."
Commenting on the news, Adam Friedman, principal, said, "We are looking forward to telling the Hartcourt success story in the United States and being an active partner in their upcoming endeavors."
NEWS!! The Hartcourt Companies, Inc. Appoints Adam Friedman Associates as Corporate Communications Advisor
via COMTEX
September 3, 2004
LOS ANGELES, CA, Sep. 03, 2004 (MARKET WIRE via COMTEX) --
The Hartcourt Companies, Inc. (OTC BB: HRCT) (Frankfurt: 900009), announced today that it has engaged Adam Friedman Associates LLC to be its corporate communications counsel specifically as it relates to investor and media relations. Hartcourt and TTC have mutually agreed to end their cooperation in the investor relations area.
Carrie Hartwick, CEO of Hartcourt, commented, "We are delighted having Adam Friedman Associates, a professional IR firm, to be a part of our investor relations program. We are expecting to enhance the investment research coverage and open more effective dialogue with institutional investors in the investment community."
Commenting on the news, Adam Friedman, principal, said, "We are looking forward to telling the Hartcourt success story in the United States and being an active partner in their upcoming endeavors."
Still lurking Dude! ;o)
Shareholders Q&A for August
1. Is it possible to get the financial #'s of the individual groups (subs)?
2. Can you explain the higher income taxes than before?
3. When will we get back the 24 million shares?
4. Are the contracts between the subs and Hartcourt achievement-oriented and have both sides the possibility to quit the contract if the targets are not reached?
5. With David Chen not returning, may we ask who is the candidate for his Chair position?..
6. Where will your roadshow take you in September?..Any specific locations that you can tell us about?
7. NewHuaSun and ZhongNan will be restructured out. What impact will we see on revenues and profit on an annual basis? When will the restructuring be executed? Is there any reactive impact on the numbers of Q1 2004 or Q2 2004 due to the termination of the ZhongNan contract?
8. What is the selling price for NewHuaSun? Do you have a lower threshold of pain? Any interesting parties?
9. What is the price per share for the redemption of the shares issued to ZhongNan?
10. Do HRCT employees receive wages and benefits that permit a viable standard of living?
11. Could you provide additional information on the specific types of IT services that will be provided by Challenger in the future?
12. When will the Financial Telecom spin off shares be delivered to hrct shareholders?
13. Thanks for all of your efforts to keep us informed. Looking forward to a more profitable quarter. 500andLong....
14. Thank you for the last Q&A... It was great. - Investorman
15. Now that it seems like we are divesting some subs and that a few of the previously stated goals will not be attained for this year, are you worried about the influx of restricted shares that will become unrestricted in 2005 and concerned with the devastating effect that could have on the pps?
16. Is Hrct actively seeking partnerships or joint ventures on the consumer or the commercial side?...Or are you going to try and go it alone and establish yourselves in a specific area of distribution, where you have complete control?..
17. Since we don't know the time frame for the application procedure and with the road show only weeks away, is it likely that there are institutional investors willing to listen to the "OTC" Hrct story if nothing major changes from now until then?
18. Do you think about new acquisitions before completely finishing the ERP-implementation process?
19. What will be the AMEX symbol for Hartcourt? :)
ESMC up 35% !!
??
Trying to gauge the 'Fox Factor'
Critics slam Fox News for toeing White House line. But do Americans expect more spin with their news?
Aug. 22, 2004. 08:41 AM
TIM HARPER
WASHINGTON—As U.S. and Iraqi fighters surrounded Moqtada al-Sadr in Najaf last week, Fox News viewers were given three takes on what the Americans should do next.
Or, as Fox likes to put it, what the " good guys" should do about the " bad guys."
Over the afternoon, the foreign policy debate went something like this:
Retired U.S. Army Col. David Hunt told the cable network al-Sadr should be brought out " on a plate."
Bernard Kerik, a former New York City police commissioner and an adviser to the Bush campaign, said: " I think it's time, he's got to be taken out."
Retired Maj.-Gen. Robert Scales: " He's simply got to go down."
Fox did bring on Michael O'Hanlon, a respected analyst at the non-partisan Brookings Institution to discuss al-Sadr and all interviewers did acknowledge that the U.S. military mustn't storm a holy shrine.
But was it the " Fair and Balanced" coverage that the Fox slogan promises?
No, says a growing legion of critics that condemns the network for parroting Republican ideology, waving the flag and glorifying American military might.
It is a view that has gained increasing currency with the surprising popularity of Outfoxed, filmmaker Robert Greenwald's detailed look at Fox's slavish adherence to the White House line.
Democrats have seized on the issue, with members of Congress demanding that Rupert Murdoch, chair of the network's parent company, abandon a campaign of " improving the president's standing with the American people on the basis of not news, but disinformation."
The right-wing network that has learned that, as a former producer says, " there is money in the flag," is under unprecedented attack.
But with a multiplicity of news sources available during this election season, some observers suggest that more and more Americans want — even expect — their news with a spin.
Instead of the oft-cited Red (Republican) and Blue (Democrat) states, they say, the country is really breaking down into adherents to Red and Blue media.
The left in this country has author/comedians Al Franken and Bill Maher and filmmaker/ author Michael Moore of Fahrenheit 9/11 fame. The right counters with a lineup that includes the Fox mainstays, Rush Limbaugh and a stable of other radio ranters. And rarely do these two solitudes interact.
With the presidential election a mere 10 weeks away, switching the channel may be too easy because some believe there is a " Fox Factor" lurking in this campaign.
The Pew Research Centre, in a major poll released last week, found that, for the first time since the Vietnam War era, foreign affairs and national security issues have emerged as two factors that could decide the race between incumbent George W. Bush and Democratic challenger John Kerry.
However, a poll published last fall found that 33 per cent of respondents who used Fox as their prime news source believed the U.S. had found weapons of mass destruction in Iraq. Sixty-six per cent believed Saddam Hussein had ties to Al Qaeda and had a hand in the Sept. 11 terrorist attacks.
Of those who said their prime news source was the moderate National Public Radio network, only 11 per cent said last autumn they believed weapons of mass destruction had been found and 16 per cent believed Saddam was linked to Al Qaeda.
" You'd be amazed how many Fox viewers think Saddam was flying one of the planes that morning," says Ed Wasserman, a professor of journalistic ethics at Washington and Lee University in Lexington, Va.
" Those numbers are horrifying. The use of facts on the network is so corrupt that, on the central issues of the day, viewers are being deceived.
" Now, if you talk to Fox journalists, they will tell you they never reported any of those things. But whatever category the Bush White House wants to put their initiatives in, that's the way the network reports them.
" Their reports from Iraq still use the logo 'War on Terror.'"
Andrew Kohut, director of the Pew Research Centre, says any argument that Americans are more or less ill-informed on electoral matters than in the past is " specious."
Says Kohut: " There is more partisanship in the media than in the past, but people still say they want objectivity and not spin.
" It is not that difficult for people to get a reasonable view of the world, because there are more sources of news."
Kohut also says the stakes are so high in this election that more Americans are making the effort to become informed.
Still, his polling also indicates that Republicans, predisposed to believe what they hear on Fox, increasingly turn to that network for their news, while Democrats increasingly turn to CNN.
(Fox has higher ratings when viewership is measured at any point during the day, but CNN has more total viewers on any given day. In the crucial Sunday talk-show arena, Fox places behind NBC, CBS and ABC. It had 1.64 million viewers last Sunday, compared with the 4.28 million who watched Tim Russert on NBC's Meet The Press.)
A Pew study released in June found that respondents calling themselves conservatives turned to local news (66 per cent), their daily newspaper (61 per cent) and Fox (41 per cent).
Those identifying themselves as liberals got their information and analysis from daily newspapers (56 per cent), local TV news (54 per cent), network evening news (36 per cent), National Public Radio (33 per cent) and CNN (30 per cent).
In another sign that much of the media are preaching to the converted, the Pew study found that 20 per cent of conservatives get their political news from religious radio shows, compared with 7 per cent of liberals.
Twenty-one per cent of conservatives relied on combative conservative Bill O'Reilly of Fox (The O'Reilly Factor), compared with 2 per cent of liberals.
Conversely, 14 per cent of liberals sought information from the Comedy Channel's satiric Daily Show With Jon Stewart, compared with 2 per cent of conservatives.
Last Thursday, a little slice of Fox (the network that O'Reilly says Ottawa is afraid to allow into Canada) included these highlights:
Analyzing the situation under a " So long Sadr?" logo, retired Col. Hunt told viewers that, if Iran had anything to do with the Najaf standoff, U.S. officials should fly over to Tehran, show them a little videotape of " Shock and Awe" and ask them whether they " wanted a piece of this."
However, he went on to say that he was not advocating an invasion of Iran.
Empty seats at the Athens Olympics indicated that Osama bin Laden must be smiling somewhere because he had scared tourists away from Greece, said host Neil Cavuto.
Howard Safir, another former New York City police commissioner, said he thought another terrorist attack would help Democrats because terrorists believe the Democrats would be softer on them and " I happen to agree with the terrorists."
A discussion on the FBI allegedly harassing protesters in advance of next week's Republican convention in New York featured author Michelle Malkin (whose most recent book, In Defence Of Internment, defends the wartime rounding-up of Japanese-Americans) excoriating the " whiners on the left" from the American Civil Liberties Union and the New York Times.
No " whiners" were there to defend themselves, but host John Gibbons said he thought it would be a good idea if the FBI was tricking protesters into promising not to assemble on the New York streets, then arresting them if they showed up.
To be fair, the network's reporting on the advertising controversy over Kerry's Vietnam service record was largely even-handed, even though a Kerry's spokesperson, Stephanie Cutter, told the Washington Post the campaign received calls from concerned war veterans every time one of Kerry's critics popped up on Fox last week.
Last month, Fox News catapulted itself back into controversy with its coverage of the Democratic convention, which largely consisted commentators talking over speeches and engineering confrontations with left-wing opponents.
The network has promised " No Spin" coverage of next week's Republican gathering.
OT: There are many resolutions...everywhere...against another country more than 100 and they don't attack they. ;o)
Nuff said to this topic...lets talk about the weather, it cloudy today...
Hallo B*****Frau
Ändern ist schwerer als sich neu anzumelden...aber nich das Du Dich BrasilsTanteSusi nennst!!..lol
Fragen sind notiert und werden nä. Mal mitgeschickt...
Gooo HRCT!! ;o)
OT: The German basic law prohibit attacks against another country without an UN-resolution...
And BTW...Iraq`s "Arsenal" Was Only on Paper...
For the six months ended June 30, 2004, revenues increased 23% to $1.9 million, versus revenues of $1.5 million for the same period last year. The net loss attributable to common stockholders decreased by 49% to $7.3 million, or $0.05 per common share, compared to a net loss of $14.3 million, or $1.70 per common share for the six months ended June 30, 2003. The net loss for the six months ended June 30, 2004 and 2003 included $1.0 million and $7.7 million, respectively, in non-cash charges that were primarily related to the grants of common stock and options and warrants as compensation for services and non-cash interest expense related primarily to the accounting for Calypte's convertible debt financing instruments.
Gute N8!! ;)
@HDL
Bis gestern waren sie nicht raus und nun sind noch welche dazu gekommen...ich denke wenn die Zeit dafür übrig ist werden sie beantwortet werden...wie schon geschrieben isses für mich ein gutes Zeichen wenn man Prioritäten setzt und sich um das 'Geschäftliche' zuerst kümmert, denn die Q&A's bringen Hartcourt nichts zählbares...was aber nicht heissen soll das ich diese Möglichkeit - etwas mehr zu erfahren - nicht auch selbst begrüsse...
Time will tell
Zum Nachgucken:
U. S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-QSB
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND
EXCHANGE ACT OF 1934
For the quarterly period ended: June 30, 2004
[ ] QUARTERLY REPORT PURSUANT TO SECTION 13 0R 15(d) OF THE SECURITIES AND
EXCHANGE ACT OF 1934
For the transition period from ______________ to _______________
Commission File Number: 001-12671
The Hartcourt Companies, Inc.
---------------------------------------------------------------
(Exact name of small business issuer as specified in its charter)
Utah
(State or other jurisdiction of incorporation or organization)
87-0400541
-------------------------------
(IRS Employer Identification No.)
15165 Venture Blvd. Suit 400 Sherman Oaks, CA 91403
---------------------------------------------------
(Address of principal executive offices)
(626) 844 2437
-------------------------
(Issuer's telephone number)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act 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:
Yes [ X ] No [ ].
As of August 13, 2004, The Hartcourt Companies, Inc. had 180,063,687 shares of
Common Stock Outstanding.
Transitional Small Business Disclosure Format (check one):
Yes [ ] No [ X ]
1
THE HARTCOURT COMPANIES, INC. AND SUBSIDIARIES
TABLE OF CONTENTS
Report on Form 10-QSB
For quarter ended
June 30, 2004
Page
----
PART I FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance sheet as of
June 30, 2004 (Un-audited) ........................................ 3-4
Consolidated Statements of Operations for the Three Months
and Six Months ended June 30, 2004 and 2003 (Un-audited) .......... 5-6
Consolidated Statements of Cash Flows for the Six Months
ended June 30, 2004 and 2003 (Un-audited) ........................... 7
Notes to the Consolidated Financial Statements ................... 8-10
Item 2. Management's Discussion and Analysis or Plan of Operations ...... 10-14
PART II OTHER INFORMATION
Item 1. Legal Proceedings .................................................. 15
Item 2. Changes in Securities .............................................. 15
Item 3. Defaults upon senior securities .................................... 16
Item 4. Submission of matters to vote of securities holders ................ 16
Item 5. Other information .................................................. 16
Item 6. Exhibits and Reports on Form 8-K ................................... 16
Signatures ................................................................. 16
2
THE HARTCOURT COMPANIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
June 30, 2004
(Un-audited)
-------------------------
ASSETS
Current assets:
Cash and cash equivalents $ 6,642,428
Accounts receivable, net 12,409,552
Inventories 15,401,317
Trade deposits 7,005,150
Prepaid expenses and other receivables 4,914,815
Notes receivable, current portion 269,222
Due from related parties 1,319,912
-------------------------
Total current assets 47,962,396
-------------------------
Property and equipment, net 890,100
Investments, net 410,163
Other assets
Goodwill, net 15,118,899
Notes receivable, net of current portion 1,827,509
-------------------------
Total other assets 16,946,408
-------------------------
Total assets $ 66,209,067
=========================
See accompanying notes to consolidated financial statements.
3
THE HARTCOURT COMPANIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
June 30, 2004
(Unaudited)
------------------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Bank Loans $ 7,522,004
Short-term Loans 2,629,575
Notes payable, current portion 2,519,392
Accounts payable 14,473,435
Deferred revenue 1,773,971
Accrued expenses and other current liabilities 3,299,196
Staff loans 859,473
Due to related parties 30,579
Due to shareholders 229,936
------------------------
Total current liabilities 33,337,561
Total liabilities 33,337,561
------------------------
Contingencies 1,300,000
Minority interests 7,867,216
Shareholders' Equity
Preferred stock:
Original preferred stock, $0.01 par value,
1,000 authorized, issued and outstanding 10
Common stock, $0.001 par value, 250,000,000 shares
authorized; 179,177,748 shares and 171,157,104
shares issued and outstanding at June 30, 2004 and
December 31, 2003 179,178
Additional paid-in capital 74,794,826
Treasury stock, at cost, 48,728 shares
at June 30, 2004 and December 31, 2003 (48,728)
Stocks subscription receivable (455,944)
Other comprehensive income 933,487
Accumulated deficit (51,698,539)
------------------------
Total shareholders' equity 23,704,290
------------------------
Total liabilities and shareholders' equity $ 66,209,067
========================
See accompanying notes to consolidated financial statements.
4
THE HARTCOURT COMPANIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
For the Three Months Ended June 30 For the Six Months Ended June 30
--------------------------------------- ------------------------------------
2004 2003 2004 2003
-------------------- ----------------- ---------------- -----------------
Net sales $ 70,655,261 $ 28,112,109 $ 138,378,366 $ 33,834,458
Cost of sales 67,148,651 27,012,645 131,353,497 32,343,510
-------------------- ----------------- ---------------- -----------------
Gross profit 3,506,610 1,099,464 7,024,869 1,490,948
-------------------- ----------------- ---------------- -----------------
Operating expenses:
Selling, general and administrative 2,636,358 760,206 5,305,424 1,191,001
Depreciation and amortization 42,087 18,550 55,583 47,250
Impairments - - - 14,816
-------------------- ----------------- ---------------- -----------------
Total operating expenses 2,678,445 778,756 5,361,007 1,253,067
-------------------- ----------------- ---------------- -----------------
Gain from continuing operations before other income 828,165 320,708 1,663,862 237,881
Other income (expense):
Gain(loss) on disposal of property and 109.359 - 109,359 (72,371)
equipment
Interest expense (232,539) (79,742) (465,780) (92,891)
Interest income 39,946 - 56,077 508
Other 176,992 42,433 292,244 42,463
-------------------- ----------------- ---------------- -----------------
Total other income (expense) 93,758 (37,309) (8,100) (122,291)
-------------------- ----------------- ---------------- -----------------
Gain from continuing operations 921,923 283,399 1,655,762 115,590
Less: gain/(loss) in subsidiary attributed to
minority interest (511,222) (228,397) (1,019,389) (247,504)
-------------------- ----------------- ---------------- -----------------
Gain/(loss) before discontinued operations 410,701 55,002 636,373 (131,914)
Discontinued operations:
Loss from discontinued operations - - - -
Gain on disposal of discontinued 466,655 - 466,655
operations -
-------------------- ----------------- ---------------- -----------------
Gain before income tax 410,701 521,657 636,373 334,741
Income tax (355,207) (58,270) (523,037) (58,270)
-------------------- ----------------- ---------------- -----------------
Net Gain $ 55,494 $ 463,387 $ 113,336 $ 276,471
-------------------- ----------------- ---------------- -----------------
Other comprehensive gain (loss):
Foreign currency translation gain (loss) - - - -
-------------------- ----------------- ---------------- -----------------
Comprehensive gain $ 55,494 $ 463,387 $ 113,336 $ 276,471
==================== ================= ================ =================
5
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) - continued
Basic and fully diluted gain/(loss) per common
share:
Gain/(loss) from continuing operations $ 0.000 $ 0.000 $ 0.000 $ (0.001)
Gain/(loss) from discontinued operations 0.000 0.004 0.000 0.004
-------------------- ----------------- ---------------- -----------------
Gain/(loss) per share $ 0.000 $ 0.004 $ 0.000 $ 0.003
-------------------- ----------------- ---------------- -----------------
Weighted average number of shares outstanding
- Basic and fully diluted 178,145,232 124,149,929 176,187,810 112,891,929
==================== ================= ================ =================
See accompanying notes to consolidated financial statements.
6
THE HARTCOURT COMPANIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOW (UNAUDITED)
Six Months Ended June 30,
---------------------------------
2004 2003
--------------- --------------
Cash flows from operating activities:
Net gain/(loss) $ 113,336 276,471
Adjustments to reconcile net loss to net cash
used in operating activities:
Loss/(gains) on abandonment of property and equipment (109,359) 72,371
Depreciation and amortization 55,583 62,066
Gain on sale of affiliate - (466,655)
Minority interest in loss/(gain) of subsidiaries 1,019,389 247,504
Equity in loss of affiliate - -
Shares issued in lieu of compensation and services 150,251 184,554
Changes in operating assets and liabilities:
(Increase) decrease in:
Accounts receivable (3,550,613) (93,034)
Advances to suppliers (2,633,886)
Inventories (8,056,259) 3,867,039
Prepaid expenses and other receivables 408,439 (139,927)
(Decrease) Increase in:
Accounts payable 8,303,193 (4,914,889)
Accrued expenses and other current liabilities 620,356 (418,949)
Deferred revenue 1,246,997 17,527
--------------- --------------
Net cash used in operating activities (2,432,573) (1,305,922)
--------------- --------------
Cash flows from investing activities:
Proceeds on notes receivable 339,351 100,000
Proceeds on return of investment - 243,755
Cash decreased due to merge - (32,006
Cash received for investments 231,934 -
Cash paid for investments - -
Cash received from disposal of property and equipment 222,029 -
Cash acquired in acquisitions 3,288,016 2,940,509
Purchase of property and equipment (341,832) (30,966)
--------------- --------------
Net cash provided by investing activities 3,739,498 3,221,292
--------------- --------------
Cash flows from financing activities:
Proceeds on sale of treasury stock - 48,813
Proceeds on stock subscriptions 1,386,382 -
Proceeds on loans and lines of credit 3,692,688 2,455,749
Proceeds from (payments to) related parties (747,752) 231,556
Proceeds on (repayments of) notes payable (1,481,918) 1,354,349
Payments on capital leases - -
--------------- --------------
Net cash provided by financing activities 2,849,400 4,090,467
--------------- --------------
Foreign currency translation - -
Net increase (decrease) in cash 4,156,325 6,005,837
Cash and cash equivalents, beginning of period 2,486,103 79,845
--------------- --------------
Cash and cash equivalents, end of period $ 6,642,428 6,085,682
--------------- --------------
See accompanying notes to consolidated financial statements.
7
THE HARTCOURT COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2004 (UNAUDITED)
Note 1: Organization and Nature of Operations:
The Hartcourt Companies, Inc. ('Hartcourt" or the "company") was incorporated in
Utah in 1983. It is a holding company of various majority owned subsidiaries
conducting distribution, retailing and services of IT and related products in
China.
The business is grouped into two divisions, the consumer product division and
the commercial product division. The consumer product division primarily
consists of exclusive wholesale distribution of Samsung monitors and specialty
IT product retail stores.
We have exclusive wholesale distribution rights of Samsung monitors in Shanghai,
Zhejiang and Guangdong provinces, as well as the Philips monitors in the
southern Zhejiang province. The monitors are primarily sold to retail stores and
third tier city distributors who then resell them to the local retail stores. We
provide warranty services to the customers on behalf of Samsung in our sales
territory
We operate 18 retail stores in Shanghai, 2 stores in Beijing and 8 stores in
Wenzhou. The retail stores primarily sell customized, store assembled desktop
computers, branded notebooks, computer peripherals and accessories. We provide
warranty services to our customers on our store assembled computers.
The commercial product division primarily consists of distribution of a wide
range of IBM products in the northern China territory and Shanghai. Our
customers are mostly small and medium sized enterprises, government agencies and
third tier city distributors. The product lines we distribute include servers,
storages, notebooks and desktop computers. We source our products from several
exclusive IBM wholesale agents in China.
Manufacturers of computer products and components in China contract with
distributors, such as Hartcourt, to augment their sales and marketing
operations. As a stocking, marketing and financial intermediary, distributors
reduce manufacturers' costs and personnel associated with stocking and selling
their products (including otherwise sizable investments in finished goods
inventories, accounts receivables and distribution networks), while providing
geographically dispersed selling, order processing and delivery capabilities.
Distributors are able to facilitate customers who require delivery of the
products on schedules that are generally not available on direct purchase from
manufacturers, or who have orders which are of insufficient size to be placed
directly with manufacturers.
Note 2. Basis of Presentation
The accompanying un-audited consolidated financial statements have been prepared
in accordance with generally accepted accounting principles for interim
financial information and the instructions of Form 10-QSB. Accordingly, they do
not include all of the information and footnotes required by generally accepted
accounting principles for audited financial statements and related notes.
In the opinion of management, the accompanying un-audited consolidated financial
statements contain all adjustments (which include only normal recurring
adjustments) necessary to present fairly the results of their operations and
8
Basis of Presentation - continued
their cash flows for the three months and six months ended June 30, 2004 and
2003, respectively. The financial statements for the three and six months ended
June 30, 2004 are consolidated to include the accounts of The Hartcourt
Companies Inc., its wholly owned subsidiaries Hartcourt Companies Ltd. and
Hartcourt Capital Inc., its wholly owned subsidiary Ai-Asia Inc. Hartcourt's
consolidated financial statements include the partially owned subsidiaries. They
are, 51% owned HuaQing Corporate Development Co., Ltd, 45% owned GuangDong
NewHuaSun Computer Co. Ltd., 50.5% owned Shanghai GuoWei Science and Technology
Co. Ltd, 51% owned WenZhou ZhongNan Group, and 51% owned Beijing Challenger
Group.
The results of operations for the three and six months ended June 30, 2004 are
not necessarily indicative of the results to be expected for the entire year.
The accounting policies followed by the Company are set forth in Note A to the
Company's financial statements as stated in its report on Form 10-KSB/A for the
fiscal year ended December 31, 2003, as filed on April 20, 2004.
Note 3. Gain/(Loss) per Share
Three Months Three Months Six Months Six Months
Ended Ended Ended Ended
June 30, 2004 June 30, 2003 June 30, 2004 June 30, 2003
---------------- ---------------- ---------------- ----------------
Net gain $ 55,494 $ 463,387 $ 113,336 $ 276,471
Effects of dilutive securities - - - -
---------------- ----------------- ---------------- ----------------
Weighted average shares outstanding 178,145,242 124,149,929 176,187,810 112,891,929
================ ================= ================ ================
Basic and dilutive earnings per share $ 0.000 $ 0.004 $ 0.000 $ 0.003
================ ================= ================ ================
On June 30, 2004, the Company had 33,010,239 and 10,300,000 warrants and options
outstanding, each exercisable into one share of common stock.
Note 4 Equity transactions during the period
During six months ended June 30, 2004, we issued 155,000 shares of restricted
common stock valued at $46,500 for consulting services rendered in prior years.
During the six months ended June 30, 2004, we issued 4,200 shares of restricted
common stock valued at $2,500 to a consultant for services.
During the six months ended June 30, 2004, we issued 841,270 shares of
restricted common stock to Mr. David Chen, Hartcourt's former CEO when he
exercised stock options granted to him as a part of his 2002 compensation in a
cashless transaction.
9
Gain/(Loss) per Share - continued
During the six months ended June 30, 2004, we issued 6,824,748 shares of
restricted common stock to the minority shareholders of Beijing Challenger to
acquire 51% equity of the company valued at $3.8 million.
During the six months ended June 30, 2004, we issued 80,000 shares of restricted
common stock valued at $40,000 to a consultant for his consulting services
During the six months ended June 30, 2004, we issued 115,426 shares of
restricted common stock valued at $61,250 to officers and directors in lieu of
cash compensation
Note 5. Subsequent Events
The Company and the minority owners of Wenzhou Zhongnan Group have reached
agreements to rescind the original acquisition contract entered into on June 28,
2003 to purchase 51% equity ownership of the group for a total consideration of
$5,011,352. The acquisition was paid for entirely by the issuance of 8,415,370
shares of restricted Hartcourt common stock. Zhongnan's financial results are
consolidated under the operation of Hartcourt starting October, 2003. All the
shares issued for the acquisition are to be returned to Hartcourt to prevent
unnecessary shareholder dilution.
The Board of Directors of the Company has authorized the sale of its 45% equity
interest in the Guangzhou New Huasun equity. A search is underway to find a
suitable buyer. On April 24, 2003, Hartcourt entered a purchase agreement to
acquire 45% of New Huasun equity for a total consideration of $3,304,597, paid
for entirely by the issuance of 13,769,156 shares of restricted Hartcourt common
stock. New Huasun's financial statements were consolidated under Hartcourt
starting May, 2003.
The company, together with its subsidiary Shanghai Huaqin, has decided not to
complete the acquisition of Shanghai Peng Yang computer Company, a retail chain
in Shanghai selling branded notebooks. The original acquisition was valued at
$1.8mm for 51% of its equity, payable in 1.53mm restricted shares of Hartcourt
common stock.
The transactions contemplated by the definitive purchase agreement signed on
February 6, 2004 between Hartcourt and Shanghai ServiceNet Company will not be
completed.
On December 30, 2003, the Company issued 4,605,816 shares of restricted
Hartcourt common stock to certain Chinese investors for the aggregate purchase
price of US$1,842,326, of which US$1,386,382 was paid and of which US$455,945
was to be paid on June 30, 2004. The Chinese investors have not paid the
remaining $455,945. As a result, the investors have agreed to return 1,139,863
shares of Hartcourt common stock to satisfy their outstanding obligation to the
Company of $455,945.
Item 2 Management's Discussion and Analysis or Plan of Operation
General
The following is a discussion of the results of operations and analysis of
financial condition for six months ended June 30, 2004 and June 30, 2003. The
following discussion may be understood more fully by reference to the financial
statements, notes to the financial statements, and the Management's discussion
and Analysis or Plan of Operation section contained in our Annual report on Form
10-KSB/A, filed with the Securities and Exchange Commission on April 20, 2004.
10
Plan of Operation
Results of Operations
The operations of Hartcourt for the three months and six months ended June 30,
2004 consisted of operations of Huaqing (51% ownership interest), GuoWei (50.5%
ownership interest), NewHuaSun (45% ownership interest), ZhongNan Group (51%
ownership interest), Challenger Group (51% ownership interest), Hartcourt
Capital Inc. (100% ownership interest), Hartcourt China, Inc (formerly known as
Hartcourt Companies Limited) (100% ownership interest), Ai-Asia Inc. (100%
ownership interest), and Hartcourt's investments in other entities located in
Hong Kong and China. The operations of Hartcourt for the three months and six
months ended June 30, 2003 consisted of the operations of Huaqing (45% ownership
interest acquired in February 2003), GuoWei (45% ownership interest acquired in
April 2003), NewHuaSun (45% ownership interest acquired in April 2003), FTL
(58.53% ownership interest), Hartcourt Companies Limited (formerly known as
Sinobull.com Inc.) (100% ownership interest), Ai-Asia Limited (100% ownership
interest), Hartcourt Capital Inc. (100% ownership interest) and Hartcourt's
investment and advances to other entities located in US, China and Hong Kong.
Net sales and cost of sales: The Company recorded net sales of $70,655,261 and
$138,378,366 for the three months and six months ended June 30, 2004, compared
to $28,112,109 and $33,834,458 for the same period in 2003. Net sales during the
three months and six months ended June 30, 2004 represented revenues derived
from sales of IT products and after sales services to commercial customers and
consumers. Net sales during the three months and six months ended June 30, 2003
primarily included the revenue derived from sales of IT products sold to
customers provided by HuaQing, Guowei and NewHuasun and the related Internet and
telephone services provided by FTL. The increase in sales was mainly due to
Huaqing, GuoWei, NewHuaSun, ZhongNan group and Challenger group, the five new
acquisitions made in 2003, compared with only two months' result of Guowei and
NewHuaSun and four months results of Huaqing consolidated in the quarter ended
June 30, 2003. Huaqing's results in the second quarter of 2004 increased 19%
over the same period of 2003.
Cost of sales amounted to $67,148,651 and $131,353,497 for the three months and
six months ended June 30, 2004 compared to $27,012,645 and $32,343,510 for the
same period in 2003. Cost of sales for the three months and six months ended
June 30, 2004 represented the cost of IT products sold to customers provided by
Huaqing, GuoWei, NewHuaSun, ZhongNan group and Challenger group. Cost of sales
for the three months and six months ended June 30, 2003 primarily included the
costs of IT products sold to customers provided by HuaQing, Guowei and
NewHuasun; cost of transmission and Internet services provided to FTL customers
The slight increase in operational margin was mainly contributed by the
commercial product group, together with a slight improvement in the consumer
product group operational margin.
Selling, general and administrative expenses: The selling, general and
administrative expenses were $2,678,445 and $5,361,007 for the three months and
six months ended June 30, 2004 compared to $778,756 and $1,253,067 for the same
period in 2003. The increase in expenses was mainly due to consolidation of
newly acquired business.
Depreciation and amortization expenses: the depreciation and amortization
expenses were $42,087 and $55,583 for the three months and six months ended June
30, 2004 compared to $18,550 and 47,250 for the same period in 2003. The
increase was mainly due to the depreciation effect for the new acquired fixed
assets.
11
Results of Operations - continued
Gain (loss) on disposal of property and equipment: the gain on disposal of
property and equipment of $109,359 for the three and six months ended June 30,
2004 compared to a loss of 72,371 for the same period in 2003. The gain was from
the disposal of one investment property owned by Huaqing.
Interest income: Interest income were $39,946 and $56,077 for the three and six
months ended June 30, 2004 compared to $0 and $508 for the same period in 2003,
the increase was mainly in line with the increase of cash and bank balances.
Interest expenses: Interest expenses were $232,539 and $465,780 for the three
months and six months ended June 30, 2004 compare to $79,742 and $92,891 for the
same period in 2003. The significant increase was mainly attributable by
borrowing cash from loans to finance the Samsung business growth.
Other revenue: Other revenue mainly represented the income from repairing
services and other after sales services.
Gain/(loss) in subsidiary attributed to minority interest: Gain/(loss) in
subsidiary attributed to minority interest represented the profit/loss shared by
the minority shareholders as mentioned above.
Income tax: The Company has a provision for income taxes of $355,207 and
$523,037 for the three and six months ended June 30,2004 compared to $58,270 for
the same period of 2003. The provision for taxes relates to the estimated amount
of taxes that will be imposed by taxing authorities in the PRC, the increase of
income tax provision was mainly due to the increase of profit generated by our
PRC subsidiaries.
Liquidity and Capital Resources:
Hartcourt's principal capital requirements during the year 2004 are to fund by
issuing additional stock, the acquisitions of growth and profitable, IT related
operating companies in China and the continuous support from the bank.
As shown in the accompanying financial statements, Hartcourt incurred a net gain
of $55,494 and $113,336 for the three and six months ended June 30, 2004 as
compared to a net loss of $3,268 and $190,184 for the same period in 2003 (after
excluding the one-time gain on disposal of discontinued operation). In addition,
Hartcourt's current assets exceeded its current liabilities by $14,624,834 at
June 30, 2004.
As of June 30, 2004, we had working capital of US$14,624,834. In addition to our
working capital on hand, we intend to obtain the required capital a combination
of bank debt and sales of our equity securities. However, there are no
commitments or agreements on the part of anyone to provide us with additional
bank financing or purchase our securities. The Company's auditor has expressed a
comment about the Company's ability to remain as a going concern. If we are
unable to raise the additional working capital, our proposed plan of operations
may be adversely affected.
Operating activities: During the six months ended June 30, 2004, net cash used
by operating activities increased to $2,432,573 compared to $1,305,922 during
the same period in 2003. The increase in cash used in operation activities was
mainly in line with the expansion of business of the Group.
The cash inflow in operating activities resulted primarily due to the increase
of accounts payable of $8,303,193, increase of accrued liabilities of $620,356,
increase of deferred revenue of $1,246,997, decrease of prepaid expenses of
12
Liquidity and Capital Resources - continued
$408,439, minority interest of $1,019,389, net operation gain of $113,336 and
other non-cash related expenses of $205,834. The outflow of operating activities
is mainly due to the increase of accounts receivable of $3,550,613, increase of
trade deposits to suppliers of $2,633,886, increase of inventories of $8,056,259
and gain on abandonment of property and equipment of $109,359.
Investing activities: Net cash provided by investing activities during the six
months ended June 30, 2004, was $3,739,498 compared to $3,221,292 for the same
period in 2003.
The increase was mainly due to the cash generated from the disposal of one
property by Shanghai Huaqing of $222,029 and increase in proceeds from the
recovery of notes receivables of $239,351.
Cash provided during the six months ended June 30, 2004 was primarily resulted
from $3,288,016 arising from the acquisition of Challenger and consolidation of
subsidiaries of Huaqing, GuoWei for the six months ended June 30, 2004, proceeds
from notes receivable of $339,351, proceeds from the investment into a new
subsidiary of NewHuaSun contributed by its minority shareholder of $231,934 and
gain on disposal of property and equipments of $222,029, netting off the payment
for acquiring property and equipment of $341,832.
Financing activities: Net cash provided by financing activities during the six
months ended June 30, 2004 was $2,849,400 compared to $4,090,467 during the same
period in 2003. To support the expansion of the Group's business in China,
Hartcourt and its subsidiaries got financing support from local banks
continuously.
Net cash was provided primarily due to proceeds from stock subscription
receivable of $1,386,382, proceeds from loans and credits of $3,692,688, netting
off the net payments on note payable of $1,481,918 and net payments to related
parties of $747,752.
As a result of the above activities, the company experienced a net increase in
cash of $4,156,325 for the six months ended June 30, 2004. Although around $4
million cash increased during the first six months of 2004, most of the increase
is due to one-off event, such as cash acquired from Beijing Challenger and
subsidiaries of $3,288,016, and the proceeds on stock subscription receivable of
$1,386,382
Off-Balance Sheet Arrangements: We do not have any off-balance sheet financing
arrangements.
Forward Looking Statements:
We make written and oral statements from time to time regarding our business and
prospects, such as projections of future performance, statements of management's
plans and objectives, forecasts of market trends, and other matters that are
forward-looking statements within the meaning of Section 27A of the Securities
Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Statements
containing the words or phrases "will likely result," "are expected to," "will
continue," "is anticipated," "estimates," "projects," "believes," "expects,"
"anticipates," "intends," "target," "goal," "plans," "objective," "should" or
similar expressions identify forward-looking statements, which may appear in
documents, reports, filings with the Securities and Exchange Commission, news
releases, written or oral presentations made by officers or other
representatives made by us to analysts, stockholders, investors, news
13
Forward Looking Statements - continued
organizations and others, and discussions with management and other
representatives of us. For such statements, we claim the protection of the safe
harbor for forward-looking statements contained in the Private Securities
Litigation Reform Act of 1995.
Our future results, including results related to forward-looking statements,
involve a number of risks and uncertainties that are described in our 2003
Annual Report on Form 10-KSB/A filed with the Securities and Exchange Commission
on April 20, 2004. No assurance can be given that the results reflected in any
forward-looking statements will be achieved. Any forward-looking statement made
by or on behalf of us speaks only as of the date on which such statement is
made. Our forward-looking statements are based upon assumptions that are
sometimes based upon estimates, data, communications and other information from
suppliers, government agencies and other sources that may be subject to
revision. Except as required by law, we do not undertake any obligation to
update or keep current either (i) any forward-looking statement to reflect
events or circumstances arising after the date of such statement, or (ii) the
important factors that could cause our future results to differ materially from
historical results or trends, results anticipated or planned by us, or which are
reflected from time to time in any forward-looking statement which may be made
by or on behalf of us.
Item 3. Control and Procedures
Our management, with the participation of our Chief Executive Officer and Chief
Financial Officer, has evaluated the effectiveness of our disclosure controls
and procedures (as defined in Rule 15d-15e under the Securities Exchange Act of
1934) as of the end of the period covered by this report. Based on such
evaluation, the Chief Executive Officer and Chief Financial Officer have
concluded that our disclosure controls and procedures as of the end of the
period covered by this report were designed and functioning effectively to
provide reasonable assurance that the information required to be disclosed by us
in reports filed under the Security Exchange Act of 1934 is recorded, recessed,
summarized, and reported within the time periods specified in the SEC's rules
and forms. We believe that a controls system, no matter how well designed and
operated, cannot provide absolute assurance that the objectives of the controls
system are met, and no evaluation of controls can provide absolute assurance
that all control issues and instances of fraud, if any, within a company have
been detected.
As required by Rule 15e-15(e) under the Securities Exchange Act of 1934, our
management, including our Chief Executive Officer and Chief Financial Officer,
have evaluated our internal control over financial reporting to determine
whether any changes occurred during the most recent fiscal quarter that have
materially affected, or are reasonably likely to materially affect, our internal
control over financial report. Based on this evaluation, no such change in our
internal control over financial reporting occurred during the most recent fiscal
quarter.
14
Part II
Item 1. LEGAL PROCEEDINGS
Securities and Exchange Commission v. The Hartcourt Companies, Inc., et al.,
United States District Court for the Central District of California Case No.
CV03-3698LGB(PLAx),
The Securities and Exchange Commission has filed a complaint for alleged
security violations. The complaint alleges that the company illegally used an
S-8 registration statement in 1999 to improperly raise capital, and that false
and misleading press releases were issued by the company from September 9, 1999
through November 18, 1999, and the SEC is seeking disgorgement from the company
of approximately $800,000.00, civil penalties and interest, as well as an
injunction against future securities law violations. Court-ordered mediation
took place on April 22, 2004, at which the parties were unable to resolve the
dispute. Hartcourt requested that the Judge order another session of mediation
and order the SEC to send to mediation an individual with the power to settle
the case. A post-mediation status conference occurred on June 1, 2004, at which
time the District court set a trial date on March 29, 2005. The company has
reserved $1,300,000 as a contingent liability on its balance sheet for this
litigation.
Apollo Financial Network, LLC vs Hartcourt
Apollo Financial Network filed an action for breach of contract arising out of a
consulting agreement which was canceled in January of 1999. Hartcourt accepted
an offer to compromise which included the entry of judgment in the amount of
$11,500, which represent an amount less than the projected costs of defense.
Judgment in such amount was entered against the Company on November 20, 2002.
The Company has not made the payment to the plaintiff and the liability has been
accrued.
Item 2. Changes in Securities.
During six months ended June 30, 2004, we issued 155,000 shares of our common
stock valued at $46,500 to a consultant for services. The common shares were
issued pursuant to Regulation S under the Act. There was no underwriter involved
in this issuance.
During the six months ended June 30, 2004, we issued 841,270 shares of our
common stock upon the net issuance of outstanding options. The common shares
were issued pursuant to Regulation S under the Act. There was no underwriter
involved in this issuance.
During the six months ended June 30, 2004, we issued 6,824,748 shares of our
common stock upon acquisition of Beijing Challenger Group. The common shares
were issued pursuant to Regulation S under the Act. There was no underwriter
involved in this issuance.
During the six months ended June 30, 2004, we issued 80,000 shares of our common
stock valued at $40,000 to a consultant for services. The common shares were
issued pursuant to Regulation S under the Act. There was no underwriter involved
in this issuance.
During the six months ended June 30, 2004, we issued 115,426 shares of our
common stock valued at $61,250 to officers and directors. The common shares were
issued pursuant to Regulation S under the Act. There was no underwriter involved
in this issuance.
15
Item 3. DEFAULTS UPON SENIOR SECURITIES
Not applicable
Item 4. SUBMISSION OF MATTERS TO VOTE OF SECURITIES HOLDERS
None
Item 5. OTHER INFORMATION
None
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
31.1 Certificate of CEO as Required by Rule 13a-14(a)/15d-14
31.2 Certificate of CFO as Required by Rule 13a-14(a)/15d-14
32.1 Certificate of CEO as Required by Rule Rule 13a-14(b) and Rule
15d-14(b) (17 CFR 240.15d-14(b)) and Section 1350 of Chapter 63 of
Title 18 of the United States Code
(b) Reports on Form 8-K
Current report item, July 20, 2004 001-12671
Hartcourt's founder converts original preferred stock to common shares
Other events, June 8, 2004 001-12671
Hartcourt promotes Carrie Hartwick to CEO
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant has
caused this report signed on its behalf by the undersigned, thereunto duly
authorized.
The Hartcourt Companies, Inc.
Date: August 13, 2004 By: /s/ Carrie Hartwick
--------------------------------
Carrie Hartwick
Chief Executive Officer
Chief Financial Officer
Willkommen zurück Rattle,
hoffe Du hast Dich ordentlich erholt! :)
Was uns (und die Amis) noch stutzen lies war die verhältnissmässig hohe Einkommensteuer. Was wir mittlerweile ausschliessen können ist, dass es bei den Subs 'Neulinge' im Geschäft gibt und diese die ersten Jahre von der Einkommenssteuer befreit waren...die Beteiligungen sind alles seit Jahren 'gestandene' Unternehmen.
Diese Frage wurde u.a. noch an Hartcourt geschickt damit diese zusammen mit den July Q&A's beantwortet werden...das diese aus'm July noch nich beantwortet wurden lässt hoffen dass sie z.Zt. 'Besseres' zu tun haben!!!! ;)
ps: ruf doch mal an!! :)
Und doch nochwas...lol
Wer sagt uns denn dass die Beteiligungen, die wieder angegeben wurden nicht diejenigen waren, die den höheren Profit der verbleibenden 'aufgefressen' haben?? Im Umkehrschluss könnte das bedeuten, dass bei geringerem Umsatz der gleiche oder sogar mehr Profit gemacht wird...imo...aber wer weiss das schon...die nächsten Zahlen werdens zeigen! ;)
Nochwas...
(...)
Im zweiten Quartal 2004 fuehrten die durch die Zusammenlegung der Einzelhandelsbereiche von Huaqing und Guowei erreichten Synergien zu einer erheblichen Steigerung des Umsatzes und Gewinnes vor Steuern. Im Ergebnis wird die Zusammenlegung der noch verbleibenden Bereiche beider Unternehmen bis zum Jahresende abgeschlossen sein.
(...)
Ich habe vor Ort gesehen habe dass Huaqing und Guowei zusammen mit Hartcourt in einem Gebäude sitzen und Hand in Hand arbeiten...das umfasst u.a. den Einkauf und den wichtigen Punkt, sich nicht mehr gegenseitig - wie es bei den anderen Subs der Fall war und ist - die sowieso schon margenarmen Preise kaputt zu machen...und die Konkurenz sollte regional aufgrund einiger Alleinstellungmerkmale nicht allzugross sein:
"We have exclusive wholesale distribution rights of Samsung monitors in Shanghai,
Zhejiang and Guangdong provinces, as well as the Philips monitors in the
southern Zhejiang province. The monitors are primarily sold to retail stores and
third tier city distributors who then resell them to the local retail stores. We
provide warranty services to the customers on behalf of Samsung in our sales territory."
JMHO!! :)))
Mahlzeit Zusammen,
ich denke so schlecht wie's uns ein zweifelhafter Selbstdarsteller (mit imaginärem Fanclub..lol) weismachen will siehts nicht aus...von einer Pleite kann anhand der letzten Zahlen kaum zu sprechen sein mit >6 Millionen Cash....und da mir die 'weltweiten Informanten' fehlen (LOL) kann ich mich nur auf das berufen was öffentlich von Hartcourt propagiert wird, was aber nicht heissen soll das keine Fehler gemacht wurden indem z.B. ServiceNet aquiriert wurde ohne vorher auf die 'Verträglichkeit' mit anderen Subs wie Challanger zu gucken (ein Vergleich zu z.B. branchenunabhängigen Firmen wie z.B. Computer2000 erscheint mir unsinnig, da wir bei den von Hartcourt übernommenen Distributoren sehrwohl eine Abhängigkeit von HP repektive IBM erkennen müssen) was diese Fehler bei der Auswahl keinesfalls entschuldigen soll.
Auch erscheint mir die Erklärung, in eine Firma nicht investieren zu wollen in der man keine Mehrheitsstimmrechte besitzt und somit keine Kontrolle ausübt, schlüssig...
Ich denke HRCT zeigt durch die beiben neuen Mitarbeiter im Management dass man gewillt ist etwas zu ändern und die Flucht nach vorne anzutreten und auch Dr. Li der seit wenigen Monaten im BoD sitzt zeigt dass das Interesse seitens der Regierung weiter gegeben ist...
In diesem Sinne! :)
Repost!! ;)
Hartcourt strukturiert seine Geschaeftsbereiche um.
4. August 2004
Hartcourt Companies, Inc. (OTC Bulletin Board: HRCT, Frankfurt: 900009), www.hartcourt.com, Chinas IT-Produktvermarkter und Serviceprovider gab heute eine Neustrukturierung seines Geschaeftes in einen Privatkunden- und einen Geschaeftskundenbereich bekannt. Wir glauben, dass die Teilung die Wettbewerbsfaehigkeit von Hartcourt steigern wird und eine Konzentration auf die Erfuellung der Anforderungen unserer Kunden ermoeglicht.
Der Privatkundenbereich wird vor allem aus den zusammengelegten Operationen von Guowei und Huaqing bestehen, welche Hartcourt im April bzw. Februar 2003 uebernommen hat. Dieser neue Bereich wird als Plattform fuer die Ausdehnung unseres erfolgreichen Einzelhandelskonzeptes auf die Industrie dienen und zu einer erheblichen Steigerung unserer Marktanteiles fuehren. Der Geschaeftskundenbereich wird vor allem aus den Firmen der Challenger Gruppe bestehen, die Hartcourt im Dezember 2003 gekauft hat. Dieser Bereich wird Produkte und Dienstleistungen fuer den wachsenden Bedarf der 6,6 Mio. kleinen und mittelstaendischen Unternehmen in China anbieten.
Im zweiten Quartal 2004 fuehrten die durch die Zusammenlegung der Einzelhandelsbereiche von Huaqing und Guowei erreichten Synergien zu einer erheblichen Steigerung des Umsatzes und Gewinnes vor Steuern. Im Ergebnis wird die Zusammenlegung der noch verbleibenden Bereiche beider Unternehmen bis zum Jahresende abgeschlossen sein. Gleichzeitig hat Huaqing seine bereits angekuendigte Uebernahme von Pengyang, einem Notebook-Haendler in Shanghai, neu bewertet. Im Ergebnis kommt Huaqing zu dem Schluss, die Uebernahme wegen der aufzubringenden Barmittel und wegen der geringer als erwartet ausfallenden Gewinnspanne nicht weiter verfolgen wird. Huaqing hat ausserdem seine Beteiligung an seiner Tochter Hangzhou an eine dritte Partei verkauft. Wir glauben nicht, dass dieser Verkauf die Ergebnisse von Huaqing beeinflussen wird.
Der neue Privatkundenbereich wird nicht die Beteiligungen Newhuasun und Wenzhou Zhongnan beinhalten. Nach vielen Verhandlungsrunden war es Hartcourt nicht moeglich, die zusaetzlichen Anteile an Newhuasun zu uebernehmen um die Beteiligung an Newhuasun in eine Mehrheitsbeteiligung umzuwandeln. Ausserdem benoetigt Newhuasun zusaetzliches Betriebskapital, dessen Zahlung sich aus Sicht von Hartcourt nicht lohnt, ohne die Mehrheit an Newhuasun zu besitzen.Im Ergebnis sucht Hartcourt nun nach einem geeigneten Kaeufer fuer seinen Anteil an Newhuasun. Zeitgleich hat Hartcourt wegen der begrenzten Wachstumsaussichten in Wenzhou auch sein Investment in Wenzhou Zhongnan neu bewertet. Hartcourt hat mit den Minderheitsgesellschaftern von Wenzhou Zhongnan eine Vereinbarung ueber eine Aufhebung des urspruenglichen Beteiligungsvertrages und eine Rueckgabe und Entwertung der ausgegebenen Aktien treffen koennen.
Zusaetzlich zum organischen Wachstum von Challenger wird Hartcourt nach neuen Akquisitionen und strategischen Partnerschaften suchen, um neue Produkte und Dienstleistungen zielgerichtet an Chinas SME's und den Regierungssektor verkaufen zu koennen. Diese Produkte und Dienstleistungen werden die Bereiche Hardware, Software, Anwendungsunterstuetzung, Internetinhalte und digitale Kommunikation umfassen. Die bereits angekuendigte Uebernahme von ServiceNet, einem HP-Dienstleistungsunternehmen, wird nicht abgeschlossen, um moegliche Konflikte zwischen den Beziehungen von ServiceNet zu HP und den Beziehungen von Challenger zu IBM zu vermeiden.
Wir glauben, dass wir durch die Neuaufteilung unserer Geschaeftsbereiche weitere Synergieeffekte zwischen unseren Operationen erschliessen und damit unsere Ergebnisse in allen Bereichen verbessern koennen. Wir glauben, dass die Segmentierungsstrategie Hartcourt ermoeglichen wird, in lukrativere Geschaeftsbereiche mit einer Vielzahl an Produkten und Dienstleistungen fuer die wachsenden Beduerfnisse von Chinas kleinen und mittelstaendischen Unternehmen und den IT-Markt vorzustossen
Ueber Hartcourt
Hartcourts Erfolge und Operationen sind unter www.hartcourt.com abrufbar.
Hi FunArg,
ich denke wir sollten heute die nächsten Q&A's starten...das sind sicher Fragen die alle interessieren und ich weiss nicht ob diese Fragen einem Einzelnen beantwortet werden...
So isses...die Hoffnung stirbt zuletzt! ;)
Ich hoffe Du bekommst einen vernünftigen 'Nachtzuschlag'!!..lol
N'abend unclescrooge,
kannst Du wieder gucken??..lol
Es bleibt jetzt abzuwarten wie sich Harcourt unter der neuen Ausrichtung entwickelt...wenn tatsächlich die faulen Eier aus dem Nest genommen wurden und im nächsten Quartal mit weniger Umsatz und den konsolidierten, verbleibenden Beteiligungen mehr Gewinn dabei raus kommt solls mir Recht sein!
Es bleibt spannend!! :)
Einen schönen Abend wünsche ich Dir auch!
Guten Abend HDL,
erstmal herzlich Willkommen im IHub!
Bzgl. des Börsenwechsels gab es in den vergangenen Q&A's schon einige Antworten:
Q: Is the company on pace with meeting previously projected time frames (i.e. Exchange
application) or have they been extended?
A: Yes. We are now preparing the documents. The formal application will be submitted after the filing of the 10K Annual Report.
Q: Please give us an update on our application to another exchange. Is there a new timeline for this to happen, and if so, why?
A: On advice from the law firm of Preston Gates, we will refrain from any comment on this subject, until we are approved and be ready for the new listing.
Q: Has HRCT ruled out a Reverse Split as an option for transition to legitimate exchanges such as AMEX or NASDAQ since the timeline announced by the CEO is in the 1st Qtr?
A: The company plans to apply for listing on another exchange as soon as the audited statements and the 10K filing for 2003 are completed. The whole process will be handled by an outside law firm and we shall listen to the alternatives they propose.
Klarstellung zu #9286
HRCT zahlt überhaupt keine Steuern in China da sie eine
Holding sind. Die einzelnen Firmen weisen Ihre Gewinne
gegenüber der Chinesischen Regierung getrennt aus und
können deshalb auch nicht gegengerechnet werden. HRCT
als Holding weist nur die konsolidierten Ergebnisse
zusammen mit den Betriebskosten der Holding im 10Q aus.
Einige/alle der Subs haben mehr Gewinn erwirtschaftet als vorher. Dies kann auch durch geringere Kosten/ weniger Abschreibungen usw. zustandekommen.
[[tnx @ Miura!]]
Dell revidiert Wachstumsprognose in China nach unten
Der amerikanische Computerhersteller Dell Inc. teilte am Montag mit, dass er sich aus dem dem Low-End Preissegment in China zunächst zurückziehen wird. Als Begründung nannte Dell, dass dort ein extremer Preiskampf herrsche. So würden die Konkurrenten wie der dortige Marktführer Lenovo PCs für 3.000 Yuan (ca. 300 Euro) anbieten. Diese seien jedoch mit den günstigeren AMD Prozessoren und nicht mit Microsoft-Betriebssystem ausgerüstet. Da Dell jedoch ein exklusives Abkommen mit dem AMD-Konkurrenten Intel hat, kann Dell preislich nicht mithalten.
Nach Angaben eines Dell-Sprechers werde man sich zukünftig stärker auf die höherpreisigen Segmente konzentrieren. Dies habe jedoch zur Folge, dass Dell in diesem Jahr in China nur doppelt so schnell und nicht wie zu Beginn des Jahres geplant, dreimal so schnell wie der chinesische Markt wachsen wird.
Dell war im ersten Quartal mit einem Marktanteil von 7,4 Prozent der drittgrößte PC-Anbieter in China. Für Dell ist China der viertgrößte Markt hinter den USA, Europa und Japan.
Die Aktie notierte zuletzt bei 34,51 Dollar mit einem Plus von 4,2 Prozent.
Autor: SmartHouseMedia (© wallstreet:online AG / SmartHouse Media GmbH),08:21 16.08.2004
Last: 0.217
High: 0.219
Low: 0.195
Open: 0.205
Change: +0.02
Volume: 158,700
%Change: 11.2%
Es schein so dass der Markt auf diese Fakten positiv reagiert:
Consolidated revenue was US$70.7 million, up 151% compared to the same period last year. While a sizeable revenue growth was contributed by acquisitions made after the second quarter of last year, the internal growth of the retail business was up 47% compared to the year-ago quarter while its gross margin increased 82%.
Hartcourt's profitability was up strongly from a year ago, both in absolute terms and as a percentage of revenue. Second quarter operating income was US$922k, up 225% from a year ago same quarter. Net income was US$55k, despite higher tax expenditures.
repost: !!! Interesting on the income tax end of things.
Income tax: The Company has a provision for income taxes of $355,207 and
$523,037 for the three and six months ended June 30,2004 compared to $58,270 for
the same period of 2003. The provision for taxes relates to the estimated amount
of taxes that will be imposed by taxing authorities in the PRC, the increase of
income tax provision was mainly due to the increase of profit generated by our
PRC subsidiaries.
For the Three Months Ended June 30 For the Six Months Ended June 30
--------------------------------------- ------------------------------------
2004 2003 2004 2003
-------------------- ----------------- ---------------- -----------------
Net sales $ 70,655,261 $ 28,112,109 $ 138,378,366 $ 33,834,458
Cost of sales 67,148,651 27,012,645 131,353,497 32,343,510
-------------------- ----------------- ---------------- -----------------
Gross profit 3,506,610 1,099,464 7,024,869 1,490,948
-------------------- ----------------- ---------------- -----------------
Operating expenses:
Selling, general and administrative 2,636,358 760,206 5,305,424 1,191,001
Depreciation and amortization 42,087 18,550 55,583 47,250
Impairments - - - 14,816
-------------------- ----------------- ---------------- -----------------
Total operating expenses 2,678,445 778,756 5,361,007 1,253,067
-------------------- ----------------- ---------------- -----------------
Gain from continuing operations before other income 828,165 320,708 1,663,862 237,881
Other income (expense):
Gain(loss) on disposal of property and 109.359 - 109,359 (72,371)
equipment
Interest expense (232,539) (79,742) (465,780) (92,891)
Interest income 39,946 - 56,077 508
Other 176,992 42,433 292,244 42,463
-------------------- ----------------- ---------------- -----------------
Total other income (expense) 93,758 (37,309) (8,100) (122,291)
-------------------- ----------------- ---------------- -----------------
Gain from continuing operations 921,923 283,399 1,655,762 115,590
Less: gain/(loss) in subsidiary attributed to
minority interest (511,222) (228,397) (1,019,389) (247,504)
-------------------- ----------------- ---------------- -----------------
Gain/(loss) before discontinued operations 410,701 55,002 636,373 (131,914)
Discontinued operations:
Loss from discontinued operations - - - -
Gain on disposal of discontinued 466,655 - 466,655
operations -
-------------------- ----------------- ---------------- -----------------
Gain before income tax 410,701 521,657 636,373 334,741
Income tax (355,207) (58,270) (523,037) (58,270)
-------------------- ----------------- ---------------- -----------------
Net Gain $ 55,494 $ 463,387 $ 113,336 $ 276,471
-------------------- ----------------- ---------------- -----------------
Other comprehensive gain (loss):
Foreign currency translation gain (loss) - - - -
-------------------- ----------------- ---------------- -----------------
Comprehensive gain $ 55,494 $ 463,387 $ 113,336 $ 276,471
==================== ================= ================ =================
test
For the Three Months Ended June 30 For the Six Months Ended June 30
--------------------------------------- ------------------------------------
2004 2003 2004 2003
-------------------- ----------------- ---------------- -----------------
Net sales $ 70,655,261 $ 28,112,109 $ 138,378,366 $ 33,834,458
Cost of sales 67,148,651 27,012,645 131,353,497 32,343,510
-------------------- ----------------- ---------------- -----------------
Gross profit 3,506,610 1,099,464 7,024,869 1,490,948
-------------------- ----------------- ---------------- -----------------
Operating expenses:
Selling, general and administrative 2,636,358 760,206 5,305,424 1,191,001
Depreciation and amortization 42,087 18,550 55,583 47,250
Impairments - - - 14,816
-------------------- ----------------- ---------------- -----------------
Total operating expenses 2,678,445 778,756 5,361,007 1,253,067
-------------------- ----------------- ---------------- -----------------
Gain from continuing operations before other income 828,165 320,708 1,663,862 237,881
Other income (expense):
Gain(loss) on disposal of property and 109.359 - 109,359 (72,371)
equipment
Interest expense (232,539) (79,742) (465,780) (92,891)
Interest income 39,946 - 56,077 508
Other 176,992 42,433 292,244 42,463
-------------------- ----------------- ---------------- -----------------
Total other income (expense) 93,758 (37,309) (8,100) (122,291)
-------------------- ----------------- ---------------- -----------------
Gain from continuing operations 921,923 283,399 1,655,762 115,590
Less: gain/(loss) in subsidiary attributed to
minority interest (511,222) (228,397) (1,019,389) (247,504)
-------------------- ----------------- ---------------- -----------------
Gain/(loss) before discontinued operations 410,701 55,002 636,373 (131,914)
Discontinued operations:
Loss from discontinued operations - - - -
Gain on disposal of discontinued 466,655 - 466,655
operations -
-------------------- ----------------- ---------------- -----------------
Gain before income tax 410,701 521,657 636,373 334,741
Income tax (355,207) (58,270) (523,037) (58,270)
-------------------- ----------------- ---------------- -----------------
Net Gain $ 55,494 $ 463,387 $ 113,336 $ 276,471
-------------------- ----------------- ---------------- -----------------
Other comprehensive gain (loss):
Foreign currency translation gain (loss) - - - -
-------------------- ----------------- ---------------- -----------------
Comprehensive gain $ 55,494 $ 463,387 $ 113,336 $ 276,471
==================== ================= ================ =================
@CE...
...is sinnlos, habs auch grade bemerkt! :))
Aber wenn so viel Müll geschrieben wird, gelogen und betrogen kann ich halt nich anders...
@FunArg..
...werde mal gucken was sich machen lässt aber zum Anrufen isses heute schon zu spät.
10QSB: HARTCOURT COMPANIES INC
(EDGAR Online via COMTEX) -- Item 2 Management's Discussion and Analysis or Plan of Operation
General
The following is a discussion of the results of operations and analysis of financial condition for six months ended June 30, 2004 and June 30, 2003. The following discussion may be understood more fully by reference to the financial statements, notes to the financial statements, and the Management's discussion and Analysis or Plan of Operation section contained in our Annual report on Form 10-KSB/A, filed with the Securities and Exchange Commission on April 20, 2004.
Plan of Operation
Results of Operations
The operations of Hartcourt for the three months and six months ended June 30, 2004 consisted of operations of Huaqing (51% ownership interest), GuoWei (50.5% ownership interest), NewHuaSun (45% ownership interest), ZhongNan Group (51% ownership interest), Challenger Group (51% ownership interest), Hartcourt Capital Inc. (100% ownership interest), Hartcourt China, Inc (formerly known as Hartcourt Companies Limited) (100% ownership interest), Ai-Asia Inc. (100% ownership interest), and Hartcourt's investments in other entities located in Hong Kong and China. The operations of Hartcourt for the three months and six months ended June 30, 2003 consisted of the operations of Huaqing (45% ownership interest acquired in February 2003), GuoWei (45% ownership interest acquired in April 2003), NewHuaSun (45% ownership interest acquired in April 2003), FTL (58.53% ownership interest), Hartcourt Companies Limited (formerly known as Sinobull.com Inc.) (100% ownership interest), Ai-Asia Limited (100% ownership interest), Hartcourt Capital Inc. (100% ownership interest) and Hartcourt's investment and advances to other entities located in US, China and Hong Kong.
Net sales and cost of sales: The Company recorded net sales of $70,655,261 and $138,378,366 for the three months and six months ended June 30, 2004, compared to $28,112,109 and $33,834,458 for the same period in 2003. Net sales during the three months and six months ended June 30, 2004 represented revenues derived from sales of IT products and after sales services to commercial customers and consumers. Net sales during the three months and six months ended June 30, 2003 primarily included the revenue derived from sales of IT products sold to customers provided by HuaQing, Guowei and NewHuasun and the related Internet and telephone services provided by FTL. The increase in sales was mainly due to Huaqing, GuoWei, NewHuaSun, ZhongNan group and Challenger group, the five new acquisitions made in 2003, compared with only two months' result of Guowei and NewHuaSun and four months results of Huaqing consolidated in the quarter ended June 30, 2003. Huaqing's results in the second quarter of 2004 increased 19% over the same period of 2003.
Cost of sales amounted to $67,148,651 and $131,353,497 for the three months and six months ended June 30, 2004 compared to $27,012,645 and $32,343,510 for the same period in 2003. Cost of sales for the three months and six months ended June 30, 2004 represented the cost of IT products sold to customers provided by Huaqing, GuoWei, NewHuaSun, ZhongNan group and Challenger group. Cost of sales for the three months and six months ended June 30, 2003 primarily included the costs of IT products sold to customers provided by HuaQing, Guowei and NewHuasun; cost of transmission and Internet services provided to FTL customers
The slight increase in operational margin was mainly contributed by the commercial product group, together with a slight improvement in the consumer product group operational margin.
Selling, general and administrative expenses: The selling, general and administrative expenses were $2,678,445 and $5,361,007 for the three months and six months ended June 30, 2004 compared to $778,756 and $1,253,067 for the same period in 2003. The increase in expenses was mainly due to consolidation of newly acquired business.
Depreciation and amortization expenses: the depreciation and amortization expenses were $42,087 and $55,583 for the three months and six months ended June 30, 2004 compared to $18,550 and 47,250 for the same period in 2003. The increase was mainly due to the depreciation effect for the new acquired fixed assets.
Results of Operations - continued
Gain (loss) on disposal of property and equipment: the gain on disposal of property and equipment of $109,359 for the three and six months ended June 30, 2004 compared to a loss of 72,371 for the same period in 2003. The gain was from the disposal of one investment property owned by Huaqing.
Interest income: Interest income were $39,946 and $56,077 for the three and six months ended June 30, 2004 compared to $0 and $508 for the same period in 2003, the increase was mainly in line with the increase of cash and bank balances.
Interest expenses: Interest expenses were $232,539 and $465,780 for the three months and six months ended June 30, 2004 compare to $79,742 and $92,891 for the same period in 2003. The significant increase was mainly attributable by borrowing cash from loans to finance the Samsung business growth.
Other revenue: Other revenue mainly represented the income from repairing services and other after sales services.
Gain/(loss) in subsidiary attributed to minority interest: Gain/(loss) in subsidiary attributed to minority interest represented the profit/loss shared by the minority shareholders as mentioned above.
Income tax: The Company has a provision for income taxes of $355,207 and $523,037 for the three and six months ended June 30,2004 compared to $58,270 for the same period of 2003. The provision for taxes relates to the estimated amount of taxes that will be imposed by taxing authorities in the PRC, the increase of income tax provision was mainly due to the increase of profit generated by our PRC subsidiaries.
Liquidity and Capital Resources:
Hartcourt's principal capital requirements during the year 2004 are to fund by issuing additional stock, the acquisitions of growth and profitable, IT related operating companies in China and the continuous support from the bank.
As shown in the accompanying financial statements, Hartcourt incurred a net gain of $55,494 and $113,336 for the three and six months ended June 30, 2004 as compared to a net loss of $3,268 and $190,184 for the same period in 2003 (after excluding the one-time gain on disposal of discontinued operation). In addition, Hartcourt's current assets exceeded its current liabilities by $14,624,834 at June 30, 2004.
As of June 30, 2004, we had working capital of US$14,624,834. In addition to our working capital on hand, we intend to obtain the required capital a combination of bank debt and sales of our equity securities. However, there are no commitments or agreements on the part of anyone to provide us with additional bank financing or purchase our securities. The Company's auditor has expressed a comment about the Company's ability to remain as a going concern. If we are unable to raise the additional working capital, our proposed plan of operations may be adversely affected.
Operating activities: During the six months ended June 30, 2004, net cash used by operating activities increased to $2,432,573 compared to $1,305,922 during the same period in 2003. The increase in cash used in operation activities was mainly in line with the expansion of business of the Group.
The cash inflow in operating activities resulted primarily due to the increase of accounts payable of $8,303,193, increase of accrued liabilities of $620,356, increase of deferred revenue of $1,246,997, decrease of prepaid expenses of
Liquidity and Capital Resources - continued
$408,439, minority interest of $1,019,389, net operation gain of $113,336 and other non-cash related expenses of $205,834. The outflow of operating activities is mainly due to the increase of accounts receivable of $3,550,613, increase of trade deposits to suppliers of $2,633,886, increase of inventories of $8,056,259 and gain on abandonment of property and equipment of $109,359.
Investing activities: Net cash provided by investing activities during the six months ended June 30, 2004, was $3,739,498 compared to $3,221,292 for the same period in 2003.
The increase was mainly due to the cash generated from the disposal of one property by Shanghai Huaqing of $222,029 and increase in proceeds from the recovery of notes receivables of $239,351.
Cash provided during the six months ended June 30, 2004 was primarily resulted from $3,288,016 arising from the acquisition of Challenger and consolidation of subsidiaries of Huaqing, GuoWei for the six months ended June 30, 2004, proceeds from notes receivable of $339,351, proceeds from the investment into a new subsidiary of NewHuaSun contributed by its minority shareholder of $231,934 and gain on disposal of property and equipments of $222,029, netting off the payment for acquiring property and equipment of $341,832.
Financing activities: Net cash provided by financing activities during the six months ended June 30, 2004 was $2,849,400 compared to $4,090,467 during the same period in 2003. To support the expansion of the Group's business in China, Hartcourt and its subsidiaries got financing support from local banks continuously.
Net cash was provided primarily due to proceeds from stock subscription receivable of $1,386,382, proceeds from loans and credits of $3,692,688, netting off the net payments on note payable of $1,481,918 and net payments to related parties of $747,752.
As a result of the above activities, the company experienced a net increase in cash of $4,156,325 for the six months ended June 30, 2004. Although around $4 million cash increased during the first six months of 2004, most of the increase is due to one-off event, such as cash acquired from Beijing Challenger and subsidiaries of $3,288,016, and the proceeds on stock subscription receivable of $1,386,382
Off-Balance Sheet Arrangements: We do not have any off-balance sheet financing arrangements.
10QSB: HARTCOURT COMPANIES INC
(EDGAR Online via COMTEX) -- Item 2 Management's Discussion and Analysis or Plan of Operation
General
The following is a discussion of the results of operations and analysis of financial condition for six months ended June 30, 2004 and June 30, 2003. The following discussion may be understood more fully by reference to the financial statements, notes to the financial statements, and the Management's discussion and Analysis or Plan of Operation section contained in our Annual report on Form 10-KSB/A, filed with the Securities and Exchange Commission on April 20, 2004.
Plan of Operation
Results of Operations
The operations of Hartcourt for the three months and six months ended June 30, 2004 consisted of operations of Huaqing (51% ownership interest), GuoWei (50.5% ownership interest), NewHuaSun (45% ownership interest), ZhongNan Group (51% ownership interest), Challenger Group (51% ownership interest), Hartcourt Capital Inc. (100% ownership interest), Hartcourt China, Inc (formerly known as Hartcourt Companies Limited) (100% ownership interest), Ai-Asia Inc. (100% ownership interest), and Hartcourt's investments in other entities located in Hong Kong and China. The operations of Hartcourt for the three months and six months ended June 30, 2003 consisted of the operations of Huaqing (45% ownership interest acquired in February 2003), GuoWei (45% ownership interest acquired in April 2003), NewHuaSun (45% ownership interest acquired in April 2003), FTL (58.53% ownership interest), Hartcourt Companies Limited (formerly known as Sinobull.com Inc.) (100% ownership interest), Ai-Asia Limited (100% ownership interest), Hartcourt Capital Inc. (100% ownership interest) and Hartcourt's investment and advances to other entities located in US, China and Hong Kong.
Net sales and cost of sales: The Company recorded net sales of $70,655,261 and $138,378,366 for the three months and six months ended June 30, 2004, compared to $28,112,109 and $33,834,458 for the same period in 2003. Net sales during the three months and six months ended June 30, 2004 represented revenues derived from sales of IT products and after sales services to commercial customers and consumers. Net sales during the three months and six months ended June 30, 2003 primarily included the revenue derived from sales of IT products sold to customers provided by HuaQing, Guowei and NewHuasun and the related Internet and telephone services provided by FTL. The increase in sales was mainly due to Huaqing, GuoWei, NewHuaSun, ZhongNan group and Challenger group, the five new acquisitions made in 2003, compared with only two months' result of Guowei and NewHuaSun and four months results of Huaqing consolidated in the quarter ended June 30, 2003. Huaqing's results in the second quarter of 2004 increased 19% over the same period of 2003.
Cost of sales amounted to $67,148,651 and $131,353,497 for the three months and six months ended June 30, 2004 compared to $27,012,645 and $32,343,510 for the same period in 2003. Cost of sales for the three months and six months ended June 30, 2004 represented the cost of IT products sold to customers provided by Huaqing, GuoWei, NewHuaSun, ZhongNan group and Challenger group. Cost of sales for the three months and six months ended June 30, 2003 primarily included the costs of IT products sold to customers provided by HuaQing, Guowei and NewHuasun; cost of transmission and Internet services provided to FTL customers
The slight increase in operational margin was mainly contributed by the commercial product group, together with a slight improvement in the consumer product group operational margin.
Selling, general and administrative expenses: The selling, general and administrative expenses were $2,678,445 and $5,361,007 for the three months and six months ended June 30, 2004 compared to $778,756 and $1,253,067 for the same period in 2003. The increase in expenses was mainly due to consolidation of newly acquired business.
Depreciation and amortization expenses: the depreciation and amortization expenses were $42,087 and $55,583 for the three months and six months ended June 30, 2004 compared to $18,550 and 47,250 for the same period in 2003. The increase was mainly due to the depreciation effect for the new acquired fixed assets.
Results of Operations - continued
Gain (loss) on disposal of property and equipment: the gain on disposal of property and equipment of $109,359 for the three and six months ended June 30, 2004 compared to a loss of 72,371 for the same period in 2003. The gain was from the disposal of one investment property owned by Huaqing.
Interest income: Interest income were $39,946 and $56,077 for the three and six months ended June 30, 2004 compared to $0 and $508 for the same period in 2003, the increase was mainly in line with the increase of cash and bank balances.
Interest expenses: Interest expenses were $232,539 and $465,780 for the three months and six months ended June 30, 2004 compare to $79,742 and $92,891 for the same period in 2003. The significant increase was mainly attributable by borrowing cash from loans to finance the Samsung business growth.
Other revenue: Other revenue mainly represented the income from repairing services and other after sales services.
Gain/(loss) in subsidiary attributed to minority interest: Gain/(loss) in subsidiary attributed to minority interest represented the profit/loss shared by the minority shareholders as mentioned above.
Income tax: The Company has a provision for income taxes of $355,207 and $523,037 for the three and six months ended June 30,2004 compared to $58,270 for the same period of 2003. The provision for taxes relates to the estimated amount of taxes that will be imposed by taxing authorities in the PRC, the increase of income tax provision was mainly due to the increase of profit generated by our PRC subsidiaries.
Liquidity and Capital Resources:
Hartcourt's principal capital requirements during the year 2004 are to fund by issuing additional stock, the acquisitions of growth and profitable, IT related operating companies in China and the continuous support from the bank.
As shown in the accompanying financial statements, Hartcourt incurred a net gain of $55,494 and $113,336 for the three and six months ended June 30, 2004 as compared to a net loss of $3,268 and $190,184 for the same period in 2003 (after excluding the one-time gain on disposal of discontinued operation). In addition, Hartcourt's current assets exceeded its current liabilities by $14,624,834 at June 30, 2004.
As of June 30, 2004, we had working capital of US$14,624,834. In addition to our working capital on hand, we intend to obtain the required capital a combination of bank debt and sales of our equity securities. However, there are no commitments or agreements on the part of anyone to provide us with additional bank financing or purchase our securities. The Company's auditor has expressed a comment about the Company's ability to remain as a going concern. If we are unable to raise the additional working capital, our proposed plan of operations may be adversely affected.
Operating activities: During the six months ended June 30, 2004, net cash used by operating activities increased to $2,432,573 compared to $1,305,922 during the same period in 2003. The increase in cash used in operation activities was mainly in line with the expansion of business of the Group.
The cash inflow in operating activities resulted primarily due to the increase of accounts payable of $8,303,193, increase of accrued liabilities of $620,356, increase of deferred revenue of $1,246,997, decrease of prepaid expenses of
Liquidity and Capital Resources - continued
$408,439, minority interest of $1,019,389, net operation gain of $113,336 and other non-cash related expenses of $205,834. The outflow of operating activities is mainly due to the increase of accounts receivable of $3,550,613, increase of trade deposits to suppliers of $2,633,886, increase of inventories of $8,056,259 and gain on abandonment of property and equipment of $109,359.
Investing activities: Net cash provided by investing activities during the six months ended June 30, 2004, was $3,739,498 compared to $3,221,292 for the same period in 2003.
The increase was mainly due to the cash generated from the disposal of one property by Shanghai Huaqing of $222,029 and increase in proceeds from the recovery of notes receivables of $239,351.
Cash provided during the six months ended June 30, 2004 was primarily resulted from $3,288,016 arising from the acquisition of Challenger and consolidation of subsidiaries of Huaqing, GuoWei for the six months ended June 30, 2004, proceeds from notes receivable of $339,351, proceeds from the investment into a new subsidiary of NewHuaSun contributed by its minority shareholder of $231,934 and gain on disposal of property and equipments of $222,029, netting off the payment for acquiring property and equipment of $341,832.
Financing activities: Net cash provided by financing activities during the six months ended June 30, 2004 was $2,849,400 compared to $4,090,467 during the same period in 2003. To support the expansion of the Group's business in China, Hartcourt and its subsidiaries got financing support from local banks continuously.
Net cash was provided primarily due to proceeds from stock subscription receivable of $1,386,382, proceeds from loans and credits of $3,692,688, netting off the net payments on note payable of $1,481,918 and net payments to related parties of $747,752.
As a result of the above activities, the company experienced a net increase in cash of $4,156,325 for the six months ended June 30, 2004. Although around $4 million cash increased during the first six months of 2004, most of the increase is due to one-off event, such as cash acquired from Beijing Challenger and subsidiaries of $3,288,016, and the proceeds on stock subscription receivable of $1,386,382
Off-Balance Sheet Arrangements: We do not have any off-balance sheet financing arrangements.
OT: @Franzl,
sieht so Dein Millionär aus??
OT:OT: Jetzt wirds lustig...
Brasil schrieb: "Zu Carrie habe ich mich so ausgedrückt, das sie wegen dem grossen Einfluss von Phan bald mal zurücktreten wird, da ich sie pers. kennengelernt habe und erkannte das sie eine Persönlichkeit ist, die sich sowas sicher nicht lange gefallen lässt und schon gar nicht ausnützen lassen wird.
Yang und Chen und wie sie alle zuvor hiessen, haben sich lange viel zulange ausnützen lassen, Carrie ist hier ein anderes Kaliber und wird den Braten frühzeitig riechen und das sinkende Schiff rechtzeitig verlassen."
Ich habe grade mit Carrie telefoniert und sie auf den Namen Alexander Zirkelbach angesprochen...sie kennt diese Person DEFINITIV NICHT und hat auch noch NIEMALS mit ihm gesprochen!!...dieser Typ ist meiner Meinung nach komplett durchgeknallt!!!!...die Sonne in Brasilen soll ja ziemlich heiss sein!! :)))
Desweiteren ist Carrie weiterhin mit Hochdruck dabei, das bedeutet dass sie mit hohem Einsatz und oftmals auch das ganze Wochenende wie auch dieses arbeitet...würde jemand, der der Meinung ist sich 'ausnützen' zu lassen mit diesem elan dabei sein???? ;)))
Schönes Wochenende @all!! :)
Viele denken immer noch dass das Internet ein rechtsfreier Raum ist und man drauflospoltern darf ohne Rücksicht auf Verluste und ich würde es begrüssen wenn der eine oder andere mal zur Verantwortung gezogen wird...
BTW, es gibt tatsächlich andere Firmen die gegen soetwas vorgehen! ;)
Moinsen,
ich hab den Blödsinn von B***** mal zusammengefasst und an Dr. Phan geschrieben...hier ist seine Antwort:
G:
The Q2 filing this week will prove him wrong on the revenue and cash on hand will prove him lying on the Chapter 11. Carrie will be at the shareholder meeting in Vegas and that will prove him wrong about her position too.
Tell him if he put all his money on the line and make a bet with you. You win handily.
AP
MTS Medication Technologies (AMEX: MPP) Announces First Quarter Results Revenue up 43%; Pro Forma Net Income Available to Common Stockholders up 72%
via COMTEX
Looks good! :)
Tach Zusammen,
ich rechne fest damit dass die Zahlen PÜNKLICH kommen, d.h. in dieser Woche!!!...von mir aus auch am Freitag den 13.!!!..lol
Zur 'Umstrukturierung'...ich denke es ist besser weniger Beteiligungen mit mehr Gewinn zu haben als ständig einige mit 'durchzuschleppen'...es wurden IMO duch DC Fehler gemacht, die nun durch CH ausgebügelt werden dürfen...es wurde m.M. nach zu wenig hinter die Kulissen geguckt und die Stategie Wachstum durch Aquisitationen ist somit nicht aufgegangen...
Der Schritt der nun gemacht wurde ist nachzuvollziehen und er zeigt mir dass neue Besen (CH) gründlich kehren!! Es bleibt nun abzuwarten wie sich die Änderungen auf die Q.3 Zahlen auswirken...
Dass ich z.Zt. nicht mehr so häufig aktiv bin und nicht mehr täglich etwas ins Board schreibe hat ausschliesslich private Hintergründe, d.h. ich arbeite an 2 Projekten die Anfang des nä. Jahres starten und es ist eine Menge zu tun...die wenige Zeit die mir im Moment bleibt nutze ich hauptsächlich um das schöne Wetter zu geniessen.
M&M Man,
I knew this 'Alert Orange' is a fake just after hearing it...and I LMAO about this quote:
"What we're talking about here is a very serious matter based on solid intelligence," President Bush said.
Nothing new...