NY Meeting on Tuesday 11/19/02
The meeting started with the usual speech by David Chen and the presentation which all of you should have been familiar with by now (it’s on HRCT Web site).
On the Q&A, I only wrote down the stuff that LA and Florida shareholders have not reported:
On toothpaste project, David said it was meant as a joke. He cannot disclose details of the deal, but it should be in the same industry sector of one of Hartcourt divisions.
On the lack of PR, David said HRCT used to announce all letter of intents or MOU they signed. Even though it is legal and a common practice among public companies, it created a backlash when the deals were aborted for many reasons, even it’s not HRCT fault: due diligence proved the target provided wrong info; Chinese government did not approve the deals; the funding was not available etc. As a result, right now, HRCT will issue a PR only when the deal is completed and the escrow closed. He said he had 2 or 3 MOUs, but there would be no PR on these deals until completed.
On the lack of focus or lack of business plan details (I asked on behalf of Iman), David said that HRCT has 5 divisions with clear cut objectives. If HRCT share price had been maintained, the required funding and resources would have enabled HRCT to carry out successfully the business plans of all 5 divisions. However, the market crashed, and HRCT had no choice but to forgo 4 divisions to put all its resources into one. Once the deal is announced, you will know which division HRCT keeps, and the plan will be carried out as planned. The only thing they have not disclosed in their plan is which industry sector the new acquisition would belong to.
On the distribution of dividends after ETLK, he said some mergers and some spin-off will happen to the remaining assets. The bulk of these assets will be distributed in 2003.
On the value of ETLK dividend shares, David said that those who want us to focus in only one thing should be happy with ETLK. They are doing exactly the same thing for the last 10 years and probably for the next 10 years. It’s too bad that telecom sector is experiencing severe depression, but the good cycle should come back.
On what he is doing in NY for 3 days, he said he planned to meet with 2 important financiers and investors. They will be crucial for the funding of the new acquisition.
On why he accepted the challenges of being CEO of HRCT at the worst moment, David said he simply believe that HRCT would be a big success and he would be able to contribute positively to that goal. He said HRCT has good vision and plan, good assets, good market positions and good contacts in the fastest-growing market in the world. He believes that China will be huge and HRCT will be able to exploit this lifetime opportunity.
