U.S. SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   Form 10-QSB
(Mark One)

[X]      QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934

                  For the quarterly period ended March 31, 1997

[ ]      TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT


                     Commission file number ________________

                          THE HARTCOURT COMPANIES, INC.
       (Exact name of small business issuer as specified in its character)


             Utah                                         87-0400541
 -----------------------------                  -------------------------------
(State or other jurisdiction of                (IRS Employer Identification No.)
incorporation or organization)

              19104 S. Norwalk Boulevard, Artesia, California 90701
              -----------------------------------------------------
                    (Address of principal executive offices)

                                 (562) 403-1126
                            -------------------------
                           (Issuer's telephone number)

Check  whether the issuer (1) filed all reports  required to be filed by Section
13 or 15(d) of the  Exchange  Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports),  and (2) has been
subject to such filing requirements for the past 90 days: Yes [X] No [ ].

As of February 24, 1997, The Hartcourt Companies, Inc. had 10,687,380
shares of Common Stock Outstanding.

Transitional Small Business Disclosure Format (check one):
Yes [ ] No [X]


<PAGE>


                                TABLE OF CONTENTS
                 THE HARTCOURT COMPANIES, INC. AND SUBSIDIARIES

                              Report on Form 10-QSB
                                for quarter ended
                                 March 31, 1997

                                                                        Page

PART I - FINANCIAL INFORMATION

  Item 1. Financial Statements (Unaudited)

  Consolidated Balance Sheets -- March 31, 1997 and
  December 31, 1996                                                       3

  Consolidated Statement of Operations -- Three months ended
  March 31, 1997 and 1996                                                 5

  Consolidated Statement of Shareholders' Equity -- Three
  months ended March 31, 1997                                             6

  Consolidated Statements of Cash Flows -- Three months ended
  March 31, 1997 and 1996                                                 7

  Notes to the Consolidated Financial Statements                          8

  Item 2. Management's Discussion and Analysis of Financial
  Condition and results of Operations                                    11


PART II - OTHER INFORMATION

  Item 1. Legal Proceedings                                              12

  Item 2. Charges in Securities                                          12
 
  Item 3. Defaults upon Senior Securities                                12

  Item 4. Submission of Matters to Vote of Security Holders              12

  Item 5. Other Information                                              12

  Item 6. Exhibits and Reports on Form 8-K                               12

  Signatures                                                             13




                                       2
<PAGE>


Item 1.          THE HARTCOURT COMPANIES, INC. AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS

       ASSETS                                                          
                                                       March 31,    December 31,
                                                         1997          1996 
CURRENT ASSETS                                       (Unaudited) 
                                                     -----------    -----------
    Cash                                             $       815    $       822
    Accounts receivable, net of allowance
         for doubtful accounts of $19,034
         in 1997 and 1996, respectively                    7,938         19,034
    Trade dollar receivables                              35,492         72,054
    Inventory, net                                       312,354        311,424
    Interest receivable                                    7,660          3,877
    Note receivable, current portion                     131,225        133,764
    Prepaid expenses                                     318,042              -
    Prepaid consulting fees                              900,000        900,000
    Due from related party                                39,734         32,356
                                                     -----------    -----------

         TOTAL CURRENT ASSETS                          1,753,260      1,473,331

PROPERTY AND EQUIPMENT, net                               40,909         44,809

INVESTMENTS                                           17,906,520     17,906,520

NOTE RECEIVABLE                                        1,182,405      1,190,795

OTHER ASSETS                                             506,950          7,550
                                                     -----------    -----------

                                                     $21,390,044    $20,623,005
                                                     ===========    ===========
       LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES
    Accounts payable                                $   153,788     $   148,569
    Trade dollar payables                               145,304               -
    Accrued expenses                                      2,893         133,747
    Notes payable - current portion                      56,162          56,396
    Bank overdrafts                                         -             5,691
    Subscription deposits                               100,000          45,000
                                                    -----------     -----------

       TOTAL CURRENT LIABILITIES                        458,147         389,403

NOTES PAYABLE, net of current portion                   524,369         524,369
                                                    -----------     -----------

       TOTAL LIABILITIES                                982,516         913,772


  THE NOTES TO THE FINANCIAL STATEMENTS ARE AN INTEGRAL PART OF THIS STATEMENT


                                       3
<PAGE>


Item 1.          THE HARTCOURT COMPANIES, INC. AND SUBSIDIARIES

                      CONSOLIDATED BALANCE SHEETS (Cont'd)


SHAREHOLDERS' EQUITY
    Original preferred stock, $0.01 par
       value 1,000 shares authorized;
       issued and outstanding                                10              10
    Common stock, $0.001 par value,
       50,000,000 (10,000,000 in 1995)
       shares authorized; 11,952,024
       shares outstanding at March 31, 1997
       and 10,560,352 at December 31, 1996               11,952          10,560
    Treasury stock, at cost                            (279,928)       (279,928)
    Additional paid-in capital                       24,002,712      23,204,260
    Retained deficit                                 (3,327,218)     (3,225,669)
                                                    -----------     -----------

       TOTAL SHAREHOLDERS' EQUITY                    20,407,528      19,709,233
                                                    -----------     -----------

                                                    $21,390,044     $20,623,005
                                                    ===========     ===========


  THE NOTES TO THE FINANCIAL STATEMENTS ARE AN INTEGRAL PART OF THIS STATEMENT


                                       4
<PAGE>


                 THE HARTCOURT COMPANIES, INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (Unaudited)


                                                          Three months ended
                                                                March 31,
                                                      -------------------------
                                                         1997            1996
                                                      ---------       ---------
 REVENUES
    Product sales                                     $   4,106       $ 237,958
                                                      ---------       ---------

         TOTAL REVENUES                                   4,106         237,958

COST OF SALES                                             4,399         205,696
                                                      ---------       ---------

    Gross profit                                           (293)         32,262

OPERATING EXPENSES
    General and administrative                          102,657         210,179
    Depreciation                                          4,725         236,801
                                                      ---------       ---------

         TOTAL OPERATING EXPENSES                       107,382         446,980
                                                      ---------       ---------

LOSS FROM OPERATIONS                                   (107,675)       (414,718)

OTHER INCOME (EXPENSES)
    Minority interest                                       -           300,429
    Interest expense                                     (2,241)       (343,105)
    Interest income                                       8,744          12,963
                                                      ---------       ---------

         TOTAL OTHER INCOME (EXPENSE)                     6,503         (29,713)
                                                      ---------       ---------

NET LOSS BEFORE INCOME TAXES                           (101,172)       (444,431)
    Income taxes                                            377            (218)
                                                      ---------       ---------

NET LOSS                                              $(101,549)      $(444,213)
                                                      =========       =========

NET LOSS PER COMMON SHARE                             $    (.01)      $    (.16)
                                                      =========       =========
WEIGHTED AVERAGE NUMBER OF SHARES
    OUTSTANDING                                      10,827,412       2,749,303
                                                     ==========       =========

  THE NOTES TO THE FINANCIAL STATEMENTS ARE AN INTEGRAL PART OF THIS STATEMENT


                                       5
<PAGE>


                 THE HARTCOURT COMPANIES, INC. AND SUBSIDIARIES

                 CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY

                    FOR THE THREE MONTHS ENDED MARCH 31, 1997
                                   (Unaudited)


<TABLE>
<CAPTION>
                                                                                           Additional                     Total
                                   Common Stock     Preferred Stock   Treasury Stock         Paid-in      Retained     Shareholders'
                                 Shares    Amounts   Shares  Amount  Shares     Amount       Capital       Deficit        Equity
                              -----------  --------  ------  ------  ------   ---------    -----------   -----------   ------------

<S>                           <C>          <C>       <C>       <C>   <C>      <C>          <C>           <C>           <C>        
Balance, December 31, 1996    10,560,352   $10,560   1,000     $10   24,364   $(279,928)   $23,204,260   $(3,225,669)  $ 19,709,233

  Shares issued for settle-
  ment of payables                 2,672         3       -       -        -           -          5,341             -          5,344

  Shares issued for
  consulting agreement           100,000       100       -       -        -           -        149,900             -        150,000

  Shares issued to present
  and former employees and
  Board of Directors             289,000       289       -       -        -           -        144,211             -        144,500

  Sale of shares under
  Regulation S                 1,000,000     1,000       -       -        -           -        499,000             -        500,000

  Net loss                             -         -       -       -        -           -              -      (101,549)      (101,549)
                                                                                                                
                              ----------   -------   -----     ---   ------   ---------    -----------   -----------   ------------
Balance, March 31, 1997       11,952,024   $11,952   1,000     $10   24,364   $(279,928)   $24,002,712   $(3,327,218)  $ 20,407,528
                              ==========   =======   =====     ===   ======   =========    ===========   ===========   ============
</TABLE>

  THE NOTES TO THE FINANCIAL STATEMENTS ARE AN INTEGRAL PART OF THIS STATEMENT


                                       6

<PAGE>


                 THE HARTCOURT COMPANIES, INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)

                                                           Three months ended
                                                                March 31,
                                                         ----------------------
                                                            1997        1996
                                                         ---------    ---------
CASH FLOWS FROM OPERATING ACTIVITIES
  Net loss                                               $(101,549)   $(444,213)
  Adjustments to reconcile net income to net cash
    used in operating activities:
      Stock issued for services                            294,500            -
      Minority interest in loss of joint venture                 -      263,782
      Accrued interest income                               (3,783)           -
      Depreciation                                           4,500      236,801
      Changes in operating assets and liabilities:
        (Increase) decrease in:
         Accounts receivable                                47,658     (340,849)
         Note loans receivable                              10,929     (312,270)
         Inventory                                            (930)     182,403
         Prepaid expenses                                 (318,042)      35,515
      Increase in:
         Accounts payable and accrued expenses              25,013     (225,113)
         Due from related party                             (6,778)      92,307
                                                         ---------    ---------

NET CASH USED IN OPERATING ACTIVITIES                      (48,482)    (511,637)
                                                         ---------    ---------
CASH FLOWS FROM INVESTING ACTIVITIES
   Purchases of property and equipment                        (600)     (75,370)
   Investments                                                   -         (589)
   Deposits                                               (500,000)           -
                                                         ---------    ---------

NET CASH USED IN INVESTING ACTIVITIES                     (500,600)     (75,959)
                                                         ---------    ---------
CASH FLOWS FROM FINANCING ACTIVITIES
   Bank overdraft                                           (5,691)           -
   Other loans                                                (234)     164,838
   Issuance of common stock subscribed                      55,000            -
   Sale of common stock                                    500,000      347,882
                                                         ---------    ---------

NET CASH PROVIDED BY FINANCING ACTIVITIES                  549,075      512,720
                                                         ---------    ---------
NET DECREASE IN CASH                                            (7)     (74,876)
CASH, BEGINNING OF PERIOD                                      822      142,047
                                                         ---------    ---------
CASH, END OF PERIOD                                      $     815    $  67,171
                                                         =========    =========

  THE NOTES TO THE FINANCIAL STATEMENTS ARE AN INTEGRAL PART OF THIS STATEMENT


                                       7
<PAGE>


                 THE HARTCOURT COMPANIES, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)


Note 1.    Organization and Nature of Operations:

           Harcourt   Investments  (USA),  Inc.,   (Harcourt   Investments)  was
           incorporated on April 23, 1993. Principal business activities are the
           design, manufacture and sale of writing instruments. During its first
           two  years  of  operation,  Harcourt  Nevada  used  foreign  contract
           manufacturers to produce various types of pens and markers which were
           then imported for sale in the U.S. market.  In August 1994,  Harcourt
           Investments acquired a 60% interest in the Xinhui Harchy Modern Pens,
           Ltd. Joint Venture  (Xinhui JV) owned by a Hong Kong  corporation for
           common  stock valued at  $2,149,200.  The Xinhui JV is located in the
           Guangdong  Province of China.  Pursuant to an  amendment to the joint
           venture  agreement  governing  the Xinhui JV entered  into in October
           1995,  the  Company's  interest  was reduced to a 52% interest in the
           Xinhui JV.

           In  November  1994,  Stardust,  Inc.,  Production-Recording-Promotion
           (Stardust)  acquired  100%  of the  outstanding  shares  of  Harcourt
           Investments for 8,280,000 shares of its common stock in a transaction
           accounted  for as a  recapitalization  of Harcourt  Investments  with
           Harcourt   Investments   as  the  acquirer   (reverse   acquisition).
           Therefore,  the historic cost of assets and liabilities  were carried
           forward to the  consolidated  entity.  In 1996, a reverse stock split
           changed the number of shares issued and outstanding to 2,735,952. The
           consolidated  financial  statements  were  restated  to reflect  this
           capital  stock  transaction.  Stardust's  name  was  changed  to  the
           "Hartcourt Companies, Inc."

           Hartcourt  Pen Factory,  Inc.  (Hartcourt  Pen) was  incorporated  in
           October 1993.  Principal business  activities are the sale of writing
           instruments.  In December 1994, Harcourt Investments acquired 100% of
           the  outstanding  shares of the  common  stock of  Hartcourt  Pen for
           52,500  shares of its common  stock and 1,000  shares of its original
           preferred  stock in a transaction  accounted for similar to a pooling
           of  interests.  In 1995,  stock  dividends  and a reverse stock split
           changed  the number of shares  issued to 38,625 to acquire  Hartcourt
           Pen. The consolidated  financial  statements were restated to reflect
           these capital stock transactions.

Note 2.    Basis of Presentation:

           The accompanying unaudited financial statements have been prepared in
           accordance with generally accepted accounting  principles for interim
           financial  information  and with  the  instructions  to Form  10-QSB.
           Accordingly, they do not include all of the information and footnotes
           required by generally  accepted  accounting  principles  for complete
           financial  statements.  These financial  statements should be read in


                                       8

<PAGE>


                 THE HARTCOURT COMPANIES, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)


           conjunction with the financial  statements and related notes included
           in the Company's 1996 Form 10-KSB.

           In the opinion of management,  the accompanying  unaudited  financial
           statements   contain  all  adjustments  (which  include  only  normal
           recurring  adjustments) necessary to present fairly the balance sheet
           of The Hartcourt  Companies,  Inc. and  Subsidiaries  as of March 31,
           1997 and the results of their operations and their cash flows for the
           three  months  ended  March  31,  1997 and  1996,  respectively.  The
           financial  statements are consolidated to include the accounts of The
           Hartcourt  Companies and its subsidiary  Hartcourt Pen (together "the
           Company").

           Certain 1996 amounts have  reclassified  to conform to current period
           presentation.  These  reclassifications  have no effect on previously
           reported net income.

           The accounting policies followed by the Company are set forth in Note
           1 to the  Company's  financial  statements as stated in its report on
           Form 10-K for the fiscal year ended December 31, 1996.


Note 3.    Material Event:

           Sale of Harcourt Investments, Inc.

           In  September  1996 the  Company  sold its  wholly-owned  subsidiary,
           Harcourt  Investments  (USA), Inc.,  (Harcourt  Investments) to CKES,
           Inc. located in Sunnyvale,  California.  Harcourt Investments owned a
           52% interest in Xin Hui Harcy Modern Pens,  Ltd., a joint  venture in
           the  Peoples  Republic  of China.  All of the  outstanding  shares of
           Harcourt   Investments  were  sold  for  a  $3  million  dollar  note
           receivable  which is  payable  in 60 equal  monthly  installments  of
           $50,000 each,  beginning October 1, 1998.  Interest accrues at 6% per
           annum and is payable in full at the end of the loan period.  The note
           receivable is secured by a security agreement.  This agreement allows
           the Company to have a security interest in all assets of CKES, Inc.

           Investment in Peony Gardens

           In August 1996 the Company  purchased  an apartment  complex  located
           near Beijing, China for $22 million from NuOasis International,  Inc.
           The  purchase  price  included  the  issuance of 4 million  shares of
           common stock, valued at $10 million, and a promissory note to NuOasis
           for $12  million.  The Note is due and payable on August 17, 1997 or,
           if  construction  is not  complete,  then the note is extended to the
           date the  certificate  of occupancy  is  received.  Under the deposit
           method  of  accounting  in  accordance   with  Financial   Accounting


                                       9
<PAGE>


                 THE HARTCOURT COMPANIES, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)


           Standards No. 66 the  promissory  note for  $12,000,000  is currently
           being deferred until the complete  consummation  of the Peony Gardens
           sale.  Also the 4 million  shares of common  stock is  recorded  as a
           deposit at December 31, 1996.

           Investment in Alaskan Gold Claims

           In September  1996 the Company  purchased  several gold mining claims
           encompassing 320 acres of land in the state of Alaska for $6 million.
           The purchase was made by issuing  1,298,700  shares of the  Company's
           common  stock.  Under the deposit  method of accounting in accordance
           with Financial  Accounting  Standards No. 66, the 1,298,700 shares of
           common stock is recorded as a deposit at December 31, 1996.

Note 4.    Supplemental Disclosure of Non-cash Financing Activities:

           On January 29, 1997 the Company  issued 2,672 shares  valued at $2.00
           per share ($5,344) for services rendered in 1996.

           On February  12, 1997 the Company  issued  100,000  shares  valued at
           $1.50 per share  ($150,000) in connection with an investment  banking
           services agreement.

           On March 31, 1997 the Company  issued  289,000 shares valued at $0.50
           per share  ($144,500) for present and former  employees and directors
           as bonuses.

Note 5.    Income (Loss) Per Common Share

           Income  (loss)  per  common  share is based on the  weighted  average
           number of common shares  outstanding  during the period.  No material
           dilution  of earnings  per share  would  result for the periods if it
           were assumed that all outstanding warrants were exercised.

Note 6.    Subsequent Event:

           On April  8,  1997  the  Company  entered  into a  preliminary  stock
           purchase agreement with Michael V. Caruana, officer and owner of Pego
           Systems,  Inc. The Company intends to acquire all outstanding  shares
           of Pego Systems, Inc. The parties are negotiating final terms of this
           agreement and estimates completion of the transaction mid year 1997.



                                       10

<PAGE>


Item 2.    Management's  Discussion  and  Analysis  of  Financial  Condition and
           Results of Operations:

           As discussed in the  Company's  annual  report,  the Company sold its
           interest in the XinHui  Joint  Venture  during  1996 and,  therefore,
           comparability of assets, liabilities, income and expenses between the
           first  quarter  of  1997  and  the  first  quarter  of  1996  is  not
           meaningful.

           Liquidity and capital resources.

           During the first  quarter of 1997 the Company  continued  its plan of
           restructuring  by liquidating  unprofitable  existing  operations and
           seeking  new  business  opportunities.   An  investment  advisor  was
           retained to assist in seeking  potential new  investments  as well as
           arranging appropriate financing for future acquisitions.  The Company
           issued the investment  advisor 100,000 shares of the Company's stock,
           valued at $150,000,  in  prepayment of services to be rendered over a
           twelve month period ending in February 1998.

           In March  1997,  the  Company  issued 1  million  shares  of stock to
           foreign investors,  under Regulation S of the Securities and Exchange
           Commission,  for $500,000. The proceeds will be used in the Company's
           acquisition program and is currently on deposit in an escrow account.

           Also in the first quarter 1997,  the Company issued 289,000 shares of
           stock to  current  and  former  employees  for past  services  to the
           Company.  Most of  these  past  service  costs  had been  accrued  at
           December 31, 1996.

           As  mentioned  in  the  annual  report,   the  Company  has  a  stock
           subscription  agreement with foreign  investors that will provide the
           Company  with up to $20,000 per month  during the twelve month period
           beginning  November  1996.  The Company  received  $55,000 during the
           first quarter under this agreement.  The deposits  received under the
           subscription   agreement   are  shown  in  current   liabilities   as
           subscription deposits and totaled $100,000 at March 31, 1997.

           Results of operations.

           The Company's operating  subsidiary,  Hartcourt Pen Factory Inc., had
           minimal  activity  during both first quarters of 1997 and 1996 due in
           part  because  sales  activity  in the first  quarter of the year are
           normally lower,  following the holiday season,  and because Hartcourt
           Pen, in 1997,  has reduced its marketing and sales  activities due to
           the pending  restructuring  referred to above.  Revenues of Hartcourt
           Pen in the first  quarter of 1996 were  $37,300 as compared to $4,100
           for 1997.  General and  administrative  expenses were relatively high
           during the first  quarter of 1997 due to higher legal and  accounting
           fees incurred in  connection  with the  Company's  annual audit,  SEC
           reporting and restructuring program.

           The  Company  plans to focus its future  acquisitions  on  profitable
           operating companies with adequate cash flows.  Currently,  cash flows
           are primarily from the issuance's of the Company's common stock.


                                       11
<PAGE>


                            PART II OTHER INFORMATION



Item 1.    LEGAL PROCEEDINGS

There have been no changes  since the  Company's  last  report in Item 3, "Legal
Proceedings" of Form 10-KSB for the fiscal year ended December 31, 1996.

Item 2.    CHANGES IN SECURITIES

           Not applicable.

Item 3.    DEFAULTS UPON SENIOR SECURITIES

           Not applicable.

Item 4.    SUBMISSION OF MATTERS TO VOTE OF SECURITY HOLDERS.

           None.

Item 5.    OTHER INFORMATION

           None.

Item 6.    EXHIBITS AND REPORTS ON FORM 8-K.

           (a)  Exhibits - None.

           (b)  Reports on Form 8-K - None.


 

                                      12
<PAGE>


                            PART II OTHER INFORMATION




                                   SIGNATURES

In accordance  with the  requirements  of the Exchange Act, the  registrant  has
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

                                                   THE HARTCOURT COMPANIES, INC.

Date: August 7, 1997                               By:  /s/ Alan V. Phan
                                                        ------------------
                                                        Dr. Alan V. Phan
                                                        President







                                       13