We provide an update on business activities at the Company, both completed and in progress, which we expect will make our business goal of becoming an Educational Group with substantial profits, a successful reality.
We enclose a summary of our recent strategic initiatives and highlights of our achievements during the past 232 days. We believe each of these accomplishments will position Hartcourt for success this year and beyond.
On July 23, 2008, Hartcourt closed the acquisition of Beijing Yanyuan, which was a subsidiary of Hartcourt from July 24, 2008. We completed the first step in restructuring Hartcourt to enter into the education/training market in China.
On September 2, 2008, Hartcourt released a practical business plan, with the strategic vision to be a for profit leading provider of education and training services in The People's Republic of China.
On October 31, 2008, Hartcourt closed the acquisition of China Arts and Science Academy, which was a subsidiary of Hartcourt from November 1, 2008. We completed another important step in restructuring Hartcourt to become a leading provider of educational services in China. Vocational education services are one of the cornerstones of Hartcourt’s educational service strategy. We see this successful acquisition as a further important step in implementing our business plan and toward Hartcourt becoming a leading provider of vocational education.
On October 15, 2008, Hartcourt filed 10Q for the first quarter of fiscal 2009 with revenues, which represented Hartcourt thoroughly turned around from a shell company without revenues, which marked the continuation of our ability to deliver solid earnings growth in the future.
Our two profitable subsidiaries, Beijing Yanyuan and China Arts & Science Academy, all finished their profits commitment successfully, which are above the expectation, in spite of the global financial crisis, the global economic slowdown or the economic slowdown in China. We believe this is because of the paramount priority that Chinese families place on the education of their child or children. Food, housing and education are the top three categories for disposable income in China, and spending on education is one of the last areas to be affected by shrinking consumption.
On January 14, 2009, Hartcourt filed 10Q for the second quarter of fiscal 2009 with profits. That showed we thoroughly turned around from the past and that also marked our continual ability to deliver solid earnings growth in the future.
We hereby make a summary of Net loss for the past 11 years. Net loss for the fiscal year 1998 was $ 21,295,653, Net loss for the fiscal year 1999 was $ 7,862,468, Net loss for the fiscal year 2000 was $ 6,790,879, Net loss for the fiscal year 2001 was $ 5,329,408, Net loss for the fiscal year 2002 was $ 2,559,409, Net loss for the fiscal year 2003 was $ 758,480, Net loss for the fiscal year 2004 was $ 15,452,296, Net loss for the fiscal year 2005 was $ 13,796,151, Net loss for the fiscal year 2006 was $ 2,834,960, Net loss for the fiscal year 2007 was $ 3,786,441, Net loss for the fiscal year 2008 was $ 1,973,477.
Revenues were $643,996 for the three months ended November 30, 2008 compared to zero for the same period in 2007. Net income from continuing operations for the three months ended November 30, 2008 was $274,633, compared to loss of $900,657 for the same period in 2007. As shown in our accompanying financial statements, we had a Net income of $251,571 for the six months ended November 30, 2008, as compared to a net loss of $1,146,873 for the same period in 2007.
The profits of the whole quarter (3 months) for Beijing yanyuan, and profits of 1 month for China Arts and Science Academy have been consolidated in the second quarter of fiscal year 2009; the relevant financial report of Q2 has been improved substantially. We are delighted with the financial performance in our all-important fiscal quarter in the face of formidable challenges.
Beijing yanyuan and China Arts and Science Academy have a good brand and solid reputation in the education business, which has brought them wide steady student resources. The unique brand and steady earning resources consist of the goodwill, which will bring Hartcourt continual earning growth in the future. The goodwill is not amortized, only is tested for impairment annually, which will have no negative effect for profits in the future.
The profits for the whole quarter (3 months) for Beijing yanyuan, and profits for the whole quarter (3 months) for China Arts and Science Academy will be consolidated in the third Quarter; the relevant financial report of Q3 will be improved substantially. We look forward to the profitable fiscal year 2009, which has never happened during the past 11 years.
The finished two successful acquisitions, which proved to be very profitable, were parts of our long-term strategy to gain a solid footing in China education field, with the foundation built, the further acquisitions will speed up.
Based on our great achievements during the past 232 days, several Chinese investors have will to loan fund to Hartcourt for further acquisitions using more cash, which is under negotiation now.
This latest financing gives us more confidence in our outlook for earnings growth and for continued growth in shareholder value.
Building upon our accomplishments in the past several months, we are eager to demonstrate additional progress in the near future. We expect to acquire more education subsidiaries that are profitable in the coming years. We dedicated to growing the shareholder value. We will continually search for ways to expand our horizons in the education markets in which we can create substantial value.
With the major hindrance behind us and aggressive restructuring and acquisitions under way, we believe Hartcourt can lead the way in delivering exceptional growth, value and opportunity to our shareholders in Fiscal 2009 and beyond.
Best Regards Victor Zhou Chief Executive Officer
About Hartcourt Hartcourt Company Inc. is an educational services provider in China focusing on professional education. Hartcourt offers a wide range of educational programs, services and products, primary and secondary school education, development and distribution of educational content, software and other technology, and online education. Hartcourt’s achievements and operations can be found on its web site: http://www.hartcourt.com
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