Hartcourt Chairman Reviews Operations and Corporate Planning With Shareholders

Apr 03, 2001, 01:00 ET from The Hartcourt Companies, Inc.

    LOS ANGELES, April 3 /PRNewswire/ -- The Hartcourt Companies Inc.
 (OTC Bulletin Board:   HRCT; Frankfurt: HCT), (www.hartcourt.com) today sent the
 following letter to its shareholders:
 
      Dear Shareholders:
 
     Oliver Wendell Holmes once said, "The greatest thing in this world is not
 so much where we are, but in what direction we are moving."  I remember that
 quotation well, because where we are right now is not pretty.  And compared to
 a year ago, it can be a bit depressing, especially if you bought into HRCT or
 other tech stocks at the market's highs.
     As we begin a new quarter in our operations, I would like to convey my
 belief that while these recent developments will likely cause delays of many
 pre-planned ventures in China, I believe that large over-extended multi-
 national and mid-cap corporations will be impacted to a greater degree than
 the activities of Hartcourt, and may even contribute to additional
 opportunities being available to those companies nimble enough to act quickly
 and work within the existing environment.
     Our business expansion will continue and I will be traveling to China
 later this week to seek out new opportunities while taking steps to close some
 of the transactions we have announced over the past months.
     In short, I am as optimistic and confident as ever of achieving our
 company mission and its objectives.  Let me summarize my reasons for this
 optimistic stance:
 
     1. In contrast with the US, Japan and other countries, China's GNP is
        expected to grow at a 7% pace in 2001.  The spending in technology
        solutions is still going strong; therefore, its tech sector is not
        expected to suffer from the earning malaise experienced by US
        technology companies.
     2. The Chinese stock markets are still appreciating thanks to the opening
        of B-shares to local residents.  Our SinoBull subsidiaries should do
        well in this environment.
     3. Due to the slowing economic growth in the US, Japan and Europe, many
        multi-national companies that might have posed strong competition to
        our ventures have shelved their plans to enter the China market.
        Therefore our subsidiaries and strategic investment partners should
        enjoy another year of dominance thanks to their current market
        penetration.
     4. All Hartcourt subsidiaries and strategic partnerships in Greater China
        have substantial cash on hand and incur relatively low expenses from
        their operations.  Even if the economy takes a turn for the worst, they
        appear to have sufficient cash flow from operations to sustain them for
        the foreseeable future.
     5. The plan for monetizing our assets is in place and we expect it to
        proceed according to schedule, despite the lower forecasts for the
        stock markets.  Consequently, I have little doubt that HRCT
        shareholders will be holding shares in three additional companies by
        this time next year.
     6. Our overall management team continues to attract new talent.  We are
        focused, determined and mentally unshakable.  We believe we will be
        successful because we are always prepared to take the extra step and do
        more than what is required of us.  We continue to aim for the top of
        the mountain.
 
     During the investor meetings we conducted in March, we answered many
 questions regarding the purchase of shares in some of the holdings we plan to
 spin-off through IPOs, as well as the distribution of dividend shares.  Let me
 again share with you our plan:
 
     a. Most of the IPO shares are pre-sold by underwriters to institutional
        investors.  However, to have a successful IPO with over-subscription,
        we need your participation in the subscription to purchase shares.
        Even though the amount of money involved is small, the psychological
        impact of US and European investors in the IPO process will boost the
        level of confidence in the market place.  We appreciate your support in
        this effort.
     b. Hartcourt remains committed to distribute shares of SA, SinoBull and
        ETNS to our shareholders.  We shall structure the distribution schedule
        of these dividends so as to provide the greatest benefit to long-term
        shareholders.  The distribution of any future dividends is not intended
        to be a one-time event, but rather a process that will be completed
        over the next two years.  Of course, the schedule might be adjusted to
        lessen tax consequences or to comply with other legal constraints.
     c. It is likely that you will receive these proposed dividends as shares
        listed on a foreign stock market.  Before we can apply for American
        Depository Receipts (ADRs), it is best that you open an international
        account with your broker enabling you to trade these issues.  Better
        yet, you could open an account with Koffman Securities and support our
        investment there too.  Koffman's applications can be requested through
        our office in Los Angeles.
 
     Overall, we are moving steadily in the right direction.  The vision is
 clear, the plan is essentially unchanged and the execution continues.  We
 might have run into a heavy storm, but our ship is sturdy and we plan to
 arrive at our port as expected.  While my feelings are that the next six
 months will be a difficult period for the financial markets, I also believe
 that afterwards it will be "Tech Stocks, Act II," and I believe Hartcourt will
 be a marquee player.
     China will still be China with its 1.4 Billion people, cutting edge
 technology will still be the driving force of our modern economy, and
 Hartcourt will still be one of the leading Internet companies in Asia.  My
 conviction and commitment to victory and success is as solid as ever.  My
 father used to tell me, "Life is like riding a bicycle.  You don't fall off
 unless you stop pedaling."  Let me assure you, our legs are strong and we are
 riding on.  The parade is waiting.
 
      Sincerely,
      Dr. Alan V. Phan
      Chairman
 
     Forward-looking statements
     Certain statements in this news release may constitute "forward looking"
 statements within the meaning of Section 21E of the Securities Exchange Act of
 1934.  Such forward looking statements involve risks, uncertainties and other
 factors, which may cause the actual results, performance or achievement
 expressed or implied by such forward looking statements to differ materially
 from the forward looking statements.
 
 

SOURCE The Hartcourt Companies, Inc.
    LOS ANGELES, April 3 /PRNewswire/ -- The Hartcourt Companies Inc.
 (OTC Bulletin Board:   HRCT; Frankfurt: HCT), (www.hartcourt.com) today sent the
 following letter to its shareholders:
 
      Dear Shareholders:
 
     Oliver Wendell Holmes once said, "The greatest thing in this world is not
 so much where we are, but in what direction we are moving."  I remember that
 quotation well, because where we are right now is not pretty.  And compared to
 a year ago, it can be a bit depressing, especially if you bought into HRCT or
 other tech stocks at the market's highs.
     As we begin a new quarter in our operations, I would like to convey my
 belief that while these recent developments will likely cause delays of many
 pre-planned ventures in China, I believe that large over-extended multi-
 national and mid-cap corporations will be impacted to a greater degree than
 the activities of Hartcourt, and may even contribute to additional
 opportunities being available to those companies nimble enough to act quickly
 and work within the existing environment.
     Our business expansion will continue and I will be traveling to China
 later this week to seek out new opportunities while taking steps to close some
 of the transactions we have announced over the past months.
     In short, I am as optimistic and confident as ever of achieving our
 company mission and its objectives.  Let me summarize my reasons for this
 optimistic stance:
 
     1. In contrast with the US, Japan and other countries, China's GNP is
        expected to grow at a 7% pace in 2001.  The spending in technology
        solutions is still going strong; therefore, its tech sector is not
        expected to suffer from the earning malaise experienced by US
        technology companies.
     2. The Chinese stock markets are still appreciating thanks to the opening
        of B-shares to local residents.  Our SinoBull subsidiaries should do
        well in this environment.
     3. Due to the slowing economic growth in the US, Japan and Europe, many
        multi-national companies that might have posed strong competition to
        our ventures have shelved their plans to enter the China market.
        Therefore our subsidiaries and strategic investment partners should
        enjoy another year of dominance thanks to their current market
        penetration.
     4. All Hartcourt subsidiaries and strategic partnerships in Greater China
        have substantial cash on hand and incur relatively low expenses from
        their operations.  Even if the economy takes a turn for the worst, they
        appear to have sufficient cash flow from operations to sustain them for
        the foreseeable future.
     5. The plan for monetizing our assets is in place and we expect it to
        proceed according to schedule, despite the lower forecasts for the
        stock markets.  Consequently, I have little doubt that HRCT
        shareholders will be holding shares in three additional companies by
        this time next year.
     6. Our overall management team continues to attract new talent.  We are
        focused, determined and mentally unshakable.  We believe we will be
        successful because we are always prepared to take the extra step and do
        more than what is required of us.  We continue to aim for the top of
        the mountain.
 
     During the investor meetings we conducted in March, we answered many
 questions regarding the purchase of shares in some of the holdings we plan to
 spin-off through IPOs, as well as the distribution of dividend shares.  Let me
 again share with you our plan:
 
     a. Most of the IPO shares are pre-sold by underwriters to institutional
        investors.  However, to have a successful IPO with over-subscription,
        we need your participation in the subscription to purchase shares.
        Even though the amount of money involved is small, the psychological
        impact of US and European investors in the IPO process will boost the
        level of confidence in the market place.  We appreciate your support in
        this effort.
     b. Hartcourt remains committed to distribute shares of SA, SinoBull and
        ETNS to our shareholders.  We shall structure the distribution schedule
        of these dividends so as to provide the greatest benefit to long-term
        shareholders.  The distribution of any future dividends is not intended
        to be a one-time event, but rather a process that will be completed
        over the next two years.  Of course, the schedule might be adjusted to
        lessen tax consequences or to comply with other legal constraints.
     c. It is likely that you will receive these proposed dividends as shares
        listed on a foreign stock market.  Before we can apply for American
        Depository Receipts (ADRs), it is best that you open an international
        account with your broker enabling you to trade these issues.  Better
        yet, you could open an account with Koffman Securities and support our
        investment there too.  Koffman's applications can be requested through
        our office in Los Angeles.
 
     Overall, we are moving steadily in the right direction.  The vision is
 clear, the plan is essentially unchanged and the execution continues.  We
 might have run into a heavy storm, but our ship is sturdy and we plan to
 arrive at our port as expected.  While my feelings are that the next six
 months will be a difficult period for the financial markets, I also believe
 that afterwards it will be "Tech Stocks, Act II," and I believe Hartcourt will
 be a marquee player.
     China will still be China with its 1.4 Billion people, cutting edge
 technology will still be the driving force of our modern economy, and
 Hartcourt will still be one of the leading Internet companies in Asia.  My
 conviction and commitment to victory and success is as solid as ever.  My
 father used to tell me, "Life is like riding a bicycle.  You don't fall off
 unless you stop pedaling."  Let me assure you, our legs are strong and we are
 riding on.  The parade is waiting.
 
      Sincerely,
      Dr. Alan V. Phan
      Chairman
 
     Forward-looking statements
     Certain statements in this news release may constitute "forward looking"
 statements within the meaning of Section 21E of the Securities Exchange Act of
 1934.  Such forward looking statements involve risks, uncertainties and other
 factors, which may cause the actual results, performance or achievement
 expressed or implied by such forward looking statements to differ materially
 from the forward looking statements.
 
 SOURCE  The Hartcourt Companies, Inc.