Letter to Shareholders from Hartcourt Executives
Los Angeles, CA. 2/26/01 -- The Hartcourt Companies Inc. (OTC: HRCT; Frankfurt: HCT), www.hartcourt.com, today sent the following letter to its shareholders, dated Feb. 26:
First of all, we want you to know that we share your concerns regarding HRCT's share price. While we believe that much of the recent price erosion is related to the over-all meltdown of the Nasdaq exchange, it is still painful to look at the paper losses on our monthly statements.
And once again, quite a few short-sellers have moved in to take advantage of the situation, further driving down the share prices of many companies, including ours. We don't believe this will matter much in the long run, but if we really want to minimize this roller coaster effect, we should follow the advice Mr. Chana Schoenberger articulated in his recent article about the short-sellers titled, "Save Our Stock," published in the 2/19/01 issue of Forbes Magazine.
He said many companies have appealed to loyal shareholders to take their shares off the market, by placing a "no borrowing legend" on the shares, taking actual delivery of the share certificates, or by moving the shares from a margin account into a cash account, etc. Once the brokers cannot borrow shares from your account, the supply of shares tends to dry up and the short sellers must scramble to cover.
As for our current operations, we are pleased to inform you that most enterprises are progressing nicely. Of course, there are always daily problems and challenges from all sides; but nothing is un-solvable. The major focus now is to be ready with our marketing plan once StreamingAsia moves out of its quiet period. We are planning a road show in March with presentations in 9 major cities: New York, Orlando, Atlanta, St. Louis, Chicago, Dallas, San Francisco, Seattle and Los Angeles.
Similar road shows will be organized in Europe and Asia. Shareholders, institutional investors and brokers will be invited. Members of the management teams from Hartcourt and StreamingAsia will give detailed presentations of their current business models, market position, technological position and financial projections. We will be happy to answer questions regarding technical, financial or any other issues you might think of.
Since the road shows will be very important to our company's future value, we need your help to ensure that all these meetings will generate great publicity and positive results. This is the time when every shareholder will be asked to lend a hand in this process for our common good. This is the time for you to show your pride in the company so we can march triumphantly to the finish line. This is the time to join hands to show the world the true value of Hartcourt, SinoBull and StreamingAsia.
We need volunteers from everywhere, as many as possible, to help create a successful PR campaign that ensures that the road shows will draw significant crowds from the investment community. Please contact Ms. Grace Li at our office, (310) 410 7290 Ext 203 or Email her at firstname.lastname@example.org so we can coordinate our efforts on this project. We appreciate all of your anticipated assistance.
Operations other than StreamingAsia are also progressing well. New developments from the talks to merge SinoBull with a listed company are anticipated in the weeks ahead, and there should be additional information regarding the ETNS fiber network soon.
As for the Annual Report, Form 10K, we are confident that we will file on time. Many shareholders have also inquired about the effort to move HRCT off the OTC board. We don't believe that a listing on the OTC, Nasdaq or even NYSE would make any noticeable difference in our trading volume or market price at this time. Many China-related stocks listed on Nasdaq have experienced greater market value deterioration than HRCT. Instead of spending time and financial resources on this matter, we'd rather use these limited commodities on the important objective of monetizing all of our current operations. Finally, the management teams at each division are being strengthened by the addition of new and experienced talent. They are our future.
>From the Emails we received, we would like to confirm that yes, Dr. Phan took only in salary and bonus for the year 2000. And yes, he intends to give away all of his HRCT shares to the charitable organization he just established called "Water 4 The World." The mission of W4W is to bring potable clean water to every poor small village in rural Asia, Africa and Latin America. For those who want to participate in W4W, please Email Dr. Phan at email@example.com.
As this is a crucial period in Hartcourt's history, we appeal to you to spend a few hours a week to lend Hartcourt your talent and experience in creating the dream we have always pursued together. Let's join hands and be diligent in our coordinated effort to bring forth the Hartcourt message to the investment community. Nobody could stop Hartcourt when it was young and small; nobody should be able to stop it now that Hartcourt has matured and each division is ready for a corporate life of its own.
Looking back at our achievements, we cannot help but feel a great sense of gratitude. Your trust and support has allowed Hartcourt to weather many storms, business obstacles and a few mistakes. Together, we have accomplished what many thought impossible. Let us give thanks to the Lord who has brought us together in this journey. And let us always remember the wisdom of Jacob Riis, who wrote: "When nothing seems to help, I go out and look at a stonecutter hammering away at his rock, perhaps a hundred times without as much as a crack showing in it. Yet with the one-hundred and first blow, it will split in two, and I know it was not that blow that did it -- but all those that had gone before."
Dr. Alan V. Phan, Chairman
Dr. Charlie Yang, CEO