SHARE EXCHANGE WITH SINOBULL
On December 14, 2001, The Board of Directors of Global Telephone Communication, Inc. as well as persons holding a majority of the outstanding shares determined that it is in the best interest of the Company to enter into a Share Exchange Agreement, whereby the Company will acquire 100% of the issued and outstanding shares of Sinobull Financial Group, (Sinobull) a Hong Kong corporation, in exchange for the shares representing approximately 76.32% of the total issued and outstanding capital stock of the Company (See attached Appendix "A" Share Exchange Agreement). The proposed exchange is a private placement of restricted securities pursuant to Regulation S and Rule 506 of Regulation D. Following the transaction, Sinobull will operate as a wholly owned subsidiary of the Company.
The Board of Directors of the Company and shareholders representing a majority of the outstanding shares have based their decision to complete the share for share exchange based upon their due diligence, analysis and review of SEC filings & financial statements, interviews with the parent company of Sinobull, The Hartcourt Companies, Inc., interviews with its management team, review and analysis of Information Memorandum prepared by Ernst and Young and the physical onsite inspection of the four different entities within Sinobull.
At the present time, the current operations of GTCI have generated insignificant revenues and after careful consideration and evaluation of its operations by the auditing firm, Merdinger, Fruchter, Rosen, Corso, P.C., the company is reported
to be a going concern and will remain at risk until its operations generate revenues. The possibility of such revenues being generated from its current operations are minimal and the Company cannot guarantee its survival.
It is for these reasons that the management of GTCI decided to complete a merger with Sinobull.
Sinobull Financial Group develops financial technology, financial operating platforms and Internet-based financial services. Sinobull's operating companies include: Shanghai Sinobull Information Company Ltd., Sinobull Network Technology(formerly Shandgi Networks), WindInfo Ltd., Financial Telecom Ltd., Fintel wireless Ltd., Ton Bo software, HCTV Financial TV channel Ltd. and Sinobull Magazine Ltd. Sinobull.com is a financial information and stock trading website. Sinobull Group and its strategic partners provide news, data and analysis of financial information to the business community and media outlets. Services include; real-time pricing, historical pricing, indicative data, analysis of financial information and electronic communications. Clients include China's investment institutions, commercial banks, government offices and agencies,
corporations, and news/media organizations.
Sinobull Group is a financial technology developer and Internet service provider. Sinobull's subsidiaries include: Beijing UAC Stock Exchange Online, Shanghai Guo Mao Science & Technology, Sinobull Network Technology (formerly Shangdi Networks), Financial Telecom (FTL), StreamingAsia and LogicSpace. In addition to quality financial news, real-time market data, financial analysis and commentary via the Sinobull portals, Sinobull currently offers online trading platform services that allow users to trade online for shares listed on stock exchanges in Shenzhen and Shanghai. This trading platform is currently the only such trading platform available in the PRC. Sinobull also has one of the few financial portals, which offers a comprehensive range of Chinese financial content coupled with an online trading platform service in the PRC. Hence Sinobull faces limited competition from major financial portals, which typically only offer English content and limited or possibly no content in Chinese, and no online trading platform service in the PRC.
Below is a brief overview of the operations of Sinobull:
DIVISIONS
1. Content Management: Collection and analysis of comprehensive in-house Database of financial news and company reports.
2. Distribution Network: Distribute this content to customers via:
a. Business Terminals: using leased lines, broadband, satellite, Pagers, VBI.
b. Internet-Based: Web sites, wireless portals, SMS.
c. Cable TV Network: HCTV Financial TV.
3. Printed Media: Sinobull Magazine
4. Technology Solutions: Providing technology support to ensure clients get the most efficient solution for their application.
OPERATING COMPANIES
1. Financial Telecom Ltd: Manages and distributes content via terminals in Hong Kong. A 17 year-old company.
2. Fintel Wireless Internet Ltd: Distributes content via pagers in Hong Kong and China.
3. Sinobull Information Co., Ltd: Manages and distributes content via terminals in China. A 4-year old company with major banks and brokerages as clients.
4. Sinobull Network Technology Co., Ltd: Manages the most popular financial portal in China, www.sinobull.com. , which was awarded a medal in two consecutive years in Year 2000 & 2001 as one of the "Outstanding Chinese Financial Websites".
5. Ton Bo Software Ltd: Provides technology solutions to financial institutions. Distributes the well-known Equis products of Reuters.
6. HCTV Financial TV Channel Ltd: Will provide financial news and analysis via a network of cable TV in China (to be launched in 2002).
7. Sinobull Magazine Ltd: Will publish a monthly magazine in financial news and analysis (to be launched in 2002).
