Hartcourt Companies (fka HRCT)

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On February 6, 2004, The Hartcourt Companies, Inc., a Utah
Corporation (Registrant), signed a definitive agreement to
purchase 51% percent of Shanghai Computer ServiceNet Co., Ltd
("ServiceNet"). The purchase price for 51 percent of
ServiceNet is 21 Million RMB (US$2.5 Million) payable in
3,576,751 restricted common shares of Hartcourt, calculated at
US$0.61 a share, and an investment of 3 Million RMB
(US$364,000) into ServiceNet to strengthen its growth.

Established in 2000, ServiceNet provides a wide range of IT
services to several multinational IT companies, such as HP,
Dell, Philips, Toshiba, Sony, Samsung, Seagate, etc. The types
of services include Authorized Service Center, On-site
Services, Hardware Support, System Maintenance, RMA
management, and FA Testing. It also provides IT outsourcing
services to multinational companies operating in China such as
BAT and Ericsson. Its service network covers 15 major cities
in China, including Shanghai, Guangzhou, Xiamen, Hangzhou,
Xi'an, Shenzhen, and Kunming, etc.