San Francisco meeting with Dr. Ching, not necessarily in order, at the meeting:
Manu Ohri, and Dr. Wallace Ching, who to me looked surprisingly young, were conducting the meeting. I arrived with my friend first and signed in. There were only 7 people who attended the meeting.
The main purpose of the meeting was to introduce Dr. Ching to investors. Manu Ohri was the first to speak. He gave us some background and then turned it over to Dr. Ching who told us more of how he got where he was. Dr. Ching met Dr. Phan while working at Prudential in Hong Kong. That is where Dr. Phan asked him if he would consider running HRCT. Both men seemed very well qualified and personable to me.
HRCT has about $400K cash. There are 3 employees in the United States. Alan Phan has 6-7 employees who work for him in Hong Kong. The hope is the company has turned the corner and will be profitable soon. Current expenses are being paid by the management fees HRCT collects from subsidiaries.
Fred Cohn is in New York. Jack Westfield did not want to commute to the new company headquarters in Orange County.
HRCT is a network of five operating lines, with twelve operating companies and about 200 employees. 2001 revenues were around $10 million and 2002 revenues are expected to be greater than $20 million.
The HRCT Company has developed a concrete business plan and goals to execute them to our full potential - Focused, persistent and aggressive.
Recent Capital Transactions:
HRCT capital appointed CC&E to help listing on the OTC BB.
Korean Telecom ONAC was mentioned as being acquired in some way.
A1 ASIA is the combined Logic Space and Streaming Asia to save costs. Recent additions have been Kangrin Technologies and IBM hardware distribution in China. Control Tek will be used to proceed with RTO listing.
HRCT Education is one of the better investments for HRCT. Only $100K has been put it thus far. HRCT Education has acquired one floor of a five floor building. CAL State Fullerton will help with the facilitation of a primarily business MBA program, for which there is a high demand in China. Progress of this program has been delayed because everyone wants control of it. One individual in particular was mentioned on which the detail could not be discussed. They are looking for an alternate partner in China. An investment banking institution was mentioned in the same breath.
Building in China is at a huge pace to ready for the 2008 Olympics. They want to have a new city in place the size of Manhattan. Shanghai is one of the nicest cities in the world. In three years it will be bigger than Hong Kong.
This is detailed in the 10K;
As of December 2001 there were around 74 million shares out standing. Five million of these are held by subsidiaries; Dr. Phan has around 2.3 million. A CEE corp. has about 45 million held in street name. The float is a problem for increasing share price. A reverse of the split is being looked into by the six on the board: Phan, Tang, Yang, Louie, and Ohri. (That is five, I know)
The time frame for the Sinobull/GTCI reverse merger is expected to take place around 5/31/02 time frame. The SEC has asked for financial statements which conform to GAAP.
ETLK will soon have $20 million in revenue and be profitable. The ET subsidiary, Elephant Talk Network Systems owns the fiber optic line in fifteen of the biggest Chinese cities and they lease these out to AT&T, MCI, etc.
ENOVA is a wholly owned subsidiary. In 1999 application was made to publicly trade the ENOVA shares. The SEC asked many questions. The process became too costly. Therefore this process was placed on hold. ENOVA will at some point be merged into something else.
Q. Was HRCT unable to pay ETLK a $1.25 million note due?
A. Yes, that is true. Negotiations are under way, and the date has been extended, the note will be paid.
The INNOSTAR joint venture did not happen. The business climate changed. The business relationship is still there however. The relationship of who you know is very important in China.
The SCHWARTZ $35 million equity line is very expensive to use. The source is still there if needed.
Did HRCT borrow money? The have used private placements in the past.
HRCT now has a strong asset base, after the boom and bust period is over; much better off than many companies.
Lexington Enterprises will be used to increase investor awareness of ETLK.
Manu did not care about bashers. He is too busy working for HRCT to worry what they say.
This is my note form. Use it to formulate your own questions. The feeling I got was is HRCT is happening, but nothing explosive is near.
