HARTCOURT - Germany/Europe

[Franz Beckenbauer II]

SF Meeting:

Dr. Hu answered all questions directly and let us know that we could expect some good news before the weekend.

He has already targeted a number of institutions in the Shanghai area and hopes to confirm deals in the 3-6 month timeframe. These deals will focus on the business aspects of technical school education, not on real estate and capital goods.
All shareholders present agreed that Dr. Hu looked like the right man to lead Hartcourt forward.

Dr. Hu has turned around three companies in the past, and all are successful now. He has experience in the vocational education market. He has the connections in the business world, has a financial background, and discussed possible way to finance purchase of these schools in this $50 BILLION market with 70 million students who pay about $500 each year to attend school. Gross Margin at these schools is 30-50% and there are around ten under review by Dr. Hu, with two that look promising.

Key point he made: When he tells us something we will understand why it is happening, and how.

We promised not to reveal the results of the SECcase for24 hours!!! We are no longer interested in Jump,low profits, Control Tech is history,by by. Hua Qing will slowly be fased out after a few school acquisition



Franz ;)