U. S. SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549


                                   FORM 10-QSB


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

                  For the quarterly period ended: June 30, 2004

[ ]  QUARTERLY  REPORT  PURSUANT  TO SECTION 13 0R 15(d) OF THE  SECURITIES  AND
     EXCHANGE ACT OF 1934

        For the transition period from ______________ to _______________

                        Commission File Number: 001-12671

                          The Hartcourt Companies, Inc.
         ---------------------------------------------------------------
        (Exact name of small business issuer as specified in its charter)

                                      Utah
         (State or other jurisdiction of incorporation or organization)

                                   87-0400541
                         -------------------------------
                        (IRS Employer Identification No.)

             15165 Venture Blvd. Suit 400 Sherman Oaks, CA 91403
             ---------------------------------------------------
                    (Address of principal executive offices)

                                  (626) 844 2437
                            -------------------------
                           (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 August 13, 2004, The Hartcourt  Companies,  Inc. had 180,063,687 shares of
Common Stock Outstanding.

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



                                       1
<PAGE>



                 THE HARTCOURT COMPANIES, INC. AND SUBSIDIARIES
                                TABLE OF CONTENTS

                              Report on Form 10-QSB
                                For quarter ended
                                  June 30, 2004
                                                                           Page
                                                                           ----
PART I  FINANCIAL INFORMATION

Item 1. Financial Statements

        Consolidated Balance sheet as of
        June 30, 2004 (Un-audited) ........................................ 3-4

        Consolidated Statements of Operations for the Three Months
        and Six Months ended June 30, 2004 and 2003 (Un-audited) .......... 5-6

        Consolidated Statements of Cash Flows for the Six Months
        ended June 30, 2004 and 2003 (Un-audited) ........................... 7

        Notes to the Consolidated Financial Statements ................... 8-10

Item 2. Management's Discussion and Analysis or Plan of Operations ...... 10-14


PART II OTHER INFORMATION

Item 1. Legal Proceedings .................................................. 15

Item 2. Changes in Securities .............................................. 15

Item 3. Defaults upon senior securities .................................... 16

Item 4. Submission of matters to vote of securities holders ................ 16

Item 5. Other information .................................................. 16

Item 6. Exhibits and Reports on Form 8-K ................................... 16

Signatures ................................................................. 16



                                       2
<PAGE>






                 THE HARTCOURT COMPANIES, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS



                                                                June 30, 2004
                                                                 (Un-audited)
                                                      -------------------------

ASSETS

Current assets:
   Cash and cash equivalents                             $            6,642,428
   Accounts receivable, net                                          12,409,552
   Inventories                                                       15,401,317
   Trade deposits                                                     7,005,150
   Prepaid expenses and other receivables                             4,914,815
   Notes receivable, current portion                                    269,222
   Due from related parties                                           1,319,912
                                                      -------------------------
Total current assets                                                 47,962,396
                                                      -------------------------

Property and equipment, net                                             890,100

Investments, net                                                        410,163

Other assets
   Goodwill, net                                                     15,118,899
   Notes receivable, net of current portion                           1,827,509
                                                      -------------------------
Total other assets                                                   16,946,408
                                                      -------------------------

Total assets                                             $           66,209,067
                                                      =========================

          See accompanying notes to consolidated financial statements.

                                       3
<PAGE>



                 THE HARTCOURT COMPANIES, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS


                                                                 June 30, 2004
                                                                 (Unaudited)
                                                        ------------------------


LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:
   Bank Loans                                             $           7,522,004
   Short-term Loans                                                   2,629,575
   Notes payable, current portion                                     2,519,392
   Accounts payable                                                  14,473,435
   Deferred revenue                                                   1,773,971
   Accrued expenses and other current liabilities                     3,299,196
   Staff loans                                                          859,473
   Due to related parties                                                30,579
   Due to shareholders                                                  229,936
                                                       ------------------------
Total current liabilities                                            33,337,561

Total liabilities                                                    33,337,561
                                                       ------------------------

Contingencies                                                         1,300,000

Minority interests                                                    7,867,216

Shareholders' Equity
   Preferred stock:
   Original preferred stock, $0.01 par value,
     1,000 authorized, issued and outstanding                                10
   Common  stock,  $0.001  par  value,  250,000,000  shares
      authorized;  179,177,748  shares  and  171,157,104
      shares issued and outstanding at June 30, 2004 and
      December 31, 2003                                                 179,178
   Additional paid-in capital                                        74,794,826
   Treasury stock, at cost, 48,728 shares
     at June 30, 2004 and December 31, 2003                             (48,728)
   Stocks subscription receivable                                      (455,944)
   Other comprehensive income                                           933,487
   Accumulated deficit                                              (51,698,539)
                                                       ------------------------

Total shareholders' equity                                           23,704,290
                                                       ------------------------

Total liabilities and shareholders' equity                $          66,209,067
                                                       ========================

          See accompanying notes to consolidated financial statements.

                                       4
<PAGE>



                 THE HARTCOURT COMPANIES, INC. AND SUBSIDIARIES
                CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
<TABLE>
<CAPTION>
                                                        For the Three Months Ended June 30      For the Six Months Ended June 30
                                                      ---------------------------------------  ------------------------------------
                                                             2004                 2003              2004                2003
                                                      --------------------  -----------------  ----------------   -----------------
<S>                                                           <C>                   <C>                <C>                <C>
Net sales                                             $        70,655,261   $     28,112,109   $   138,378,366    $     33,834,458
Cost of sales                                                  67,148,651         27,012,645       131,353,497          32,343,510
                                                      --------------------  -----------------  ----------------   -----------------

Gross profit                                                    3,506,610          1,099,464         7,024,869           1,490,948
                                                      --------------------  -----------------  ----------------   -----------------

Operating expenses:
         Selling, general and administrative                    2,636,358            760,206         5,305,424           1,191,001
         Depreciation and amortization                             42,087             18,550            55,583              47,250
         Impairments                                                    -                  -                 -              14,816
                                                      --------------------  -----------------  ----------------   -----------------
Total operating expenses                                        2,678,445            778,756         5,361,007           1,253,067
                                                      --------------------  -----------------  ----------------   -----------------

Gain from continuing operations before other income               828,165            320,708         1,663,862             237,881

Other income (expense):
    Gain(loss)   on  disposal   of   property   and               109.359                  -           109,359            (72,371)
    equipment
         Interest expense                                        (232,539)           (79,742)         (465,780)            (92,891)
         Interest income                                           39,946                  -            56,077                 508
         Other                                                    176,992             42,433           292,244              42,463
                                                      --------------------  -----------------  ----------------   -----------------
Total other income (expense)                                       93,758            (37,309)           (8,100)           (122,291)
                                                      --------------------  -----------------  ----------------   -----------------

Gain from continuing operations                                   921,923            283,399         1,655,762             115,590

Less:   gain/(loss)  in  subsidiary  attributed  to
minority interest                                                (511,222)          (228,397)       (1,019,389)           (247,504)
                                                      --------------------  -----------------  ----------------   -----------------
Gain/(loss) before discontinued operations                        410,701             55,002           636,373            (131,914)

Discontinued operations:
         Loss from discontinued operations                              -                  -                 -                   -
         Gain on disposal of discontinued                                            466,655                 -             466,655
operations                                                              -
                                                      --------------------  -----------------  ----------------   -----------------
Gain before income tax                                            410,701            521,657           636,373             334,741

         Income tax                                              (355,207)           (58,270)         (523,037)            (58,270)

                                                      --------------------  -----------------  ----------------   -----------------
Net Gain                                              $            55,494   $        463,387   $       113,336    $        276,471
                                                      --------------------  -----------------  ----------------   -----------------
Other comprehensive gain (loss):
         Foreign currency translation gain (loss)                       -                  -                 -                   -
                                                      --------------------  -----------------  ----------------   -----------------
Comprehensive gain                                    $            55,494   $        463,387   $       113,336    $        276,471
                                                      ====================  =================  ================   =================

                                       5
<PAGE>

CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) - continued

Basic  and fully  diluted  gain/(loss)  per  common
share:
         Gain/(loss) from continuing operations       $             0.000   $          0.000   $         0.000    $         (0.001)
         Gain/(loss) from discontinued operations                   0.000              0.004             0.000               0.004
                                                      --------------------  -----------------  ----------------   -----------------


Gain/(loss) per share                                  $            0.000   $          0.004   $         0.000    $          0.003
                                                      --------------------  -----------------  ----------------   -----------------

Weighted average number of shares outstanding
  - Basic and fully diluted                                   178,145,232        124,149,929       176,187,810         112,891,929
                                                      ====================  =================  ================   =================
</table>
          See accompanying notes to consolidated financial statements.


                                       6
<PAGE>


                  THE HARTCOURT COMPANIES, INC. AND SUBSIDIARIES
                CONSOLIDATED STATEMENTS OF CASH FLOW (UNAUDITED)

<table>
<caption>
                                                                   Six Months Ended June 30,
                                                                ---------------------------------
                                                                     2004              2003
                                                                ---------------    --------------
<S>                                                                    <C>               <C>
Cash flows from operating activities:
   Net gain/(loss)                                              $      113,336           276,471
   Adjustments to reconcile net loss to net cash
   used in operating activities:
   Loss/(gains) on abandonment of property and equipment              (109,359)           72,371
     Depreciation and amortization                                      55,583            62,066
     Gain on sale of affiliate                                               -          (466,655)
     Minority interest in loss/(gain) of subsidiaries                1,019,389           247,504
     Equity in loss of affiliate                                             -                 -
     Shares issued in lieu of compensation and services                150,251           184,554
     Changes in operating assets and liabilities:
     (Increase) decrease in:
       Accounts receivable                                          (3,550,613)          (93,034)
       Advances to suppliers                                        (2,633,886)
       Inventories                                                  (8,056,259)        3,867,039
       Prepaid expenses and other receivables                          408,439          (139,927)
     (Decrease) Increase in:
       Accounts payable                                              8,303,193        (4,914,889)
       Accrued expenses and other current liabilities                  620,356          (418,949)
       Deferred revenue                                              1,246,997            17,527
                                                                ---------------    --------------

Net cash used in operating activities                               (2,432,573)       (1,305,922)
                                                                ---------------    --------------
Cash flows from investing activities:
   Proceeds on notes receivable                                        339,351           100,000
   Proceeds on return of investment                                          -           243,755
   Cash decreased due to merge                                               -           (32,006
   Cash received for investments                                       231,934                 -
   Cash paid for investments                                                 -                 -
   Cash received from disposal of property and equipment               222,029                 -
   Cash acquired in acquisitions                                     3,288,016         2,940,509
   Purchase of property and equipment                                 (341,832)          (30,966)
                                                                ---------------    --------------
 Net cash provided by investing activities                           3,739,498         3,221,292
                                                                ---------------    --------------
Cash flows from financing activities:
   Proceeds on sale of treasury stock                                        -            48,813
   Proceeds on stock subscriptions                                   1,386,382                 -
   Proceeds on loans and lines of credit                             3,692,688         2,455,749
   Proceeds from (payments to) related parties                        (747,752)          231,556
   Proceeds on (repayments of) notes payable                        (1,481,918)        1,354,349
   Payments on capital leases                                                -                 -
                                                                ---------------    --------------

Net cash provided by financing activities                            2,849,400         4,090,467
                                                                ---------------    --------------
Foreign currency translation                                                 -                 -

Net increase (decrease) in cash                                      4,156,325         6,005,837

Cash and cash equivalents, beginning of period                       2,486,103            79,845
                                                                ---------------    --------------

Cash and cash equivalents, end of period                        $    6,642,428         6,085,682
                                                                ---------------    --------------
</table>

          See accompanying notes to consolidated financial statements.


                                       7
<PAGE>

                 THE HARTCOURT COMPANIES, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                            JUNE 30, 2004 (UNAUDITED)


Note 1: Organization and Nature of Operations:

The Hartcourt Companies, Inc. ('Hartcourt" or the "company") was incorporated in
Utah in 1983. It is a holding  company of various  majority  owned  subsidiaries
conducting  distribution,  retailing and services of IT and related  products in
China.

The business is grouped into two divisions,  the consumer  product  division and
the  commercial  product  division.  The  consumer  product  division  primarily
consists of exclusive  wholesale  distribution of Samsung monitors and specialty
IT product retail stores.

We have exclusive wholesale distribution rights of Samsung monitors in Shanghai,
Zhejiang  and  Guangdong  provinces,  as well  as the  Philips  monitors  in the
southern Zhejiang province. The monitors are primarily sold to retail stores and
third tier city distributors who then resell them to the local retail stores. We
provide  warranty  services to the  customers  on behalf of Samsung in our sales
territory

We operate 18 retail  stores in  Shanghai,  2 stores in Beijing  and 8 stores in
Wenzhou.  The retail stores primarily sell customized,  store assembled  desktop
computers,  branded notebooks,  computer peripherals and accessories. We provide
warranty services to our customers on our store assembled computers.

The commercial  product  division  primarily  consists of distribution of a wide
range  of IBM  products  in the  northern  China  territory  and  Shanghai.  Our
customers are mostly small and medium sized enterprises, government agencies and
third tier city  distributors.  The product lines we distribute include servers,
storages,  notebooks and desktop computers.  We source our products from several
exclusive IBM wholesale agents in China.

Manufacturers  of  computer  products  and  components  in China  contract  with
distributors,   such  as  Hartcourt,   to  augment  their  sales  and  marketing
operations.  As a stocking,  marketing and financial intermediary,  distributors
reduce  manufacturers'  costs and personnel associated with stocking and selling
their  products  (including  otherwise  sizable  investments  in finished  goods
inventories,  accounts receivables and distribution  networks),  while providing
geographically  dispersed selling,  order processing and delivery  capabilities.
Distributors  are able to  facilitate  customers  who  require  delivery  of the
products on schedules  that are generally not available on direct  purchase from
manufacturers,  or who have orders which are of  insufficient  size to be placed
directly with manufacturers.


Note 2. Basis of Presentation

The accompanying un-audited consolidated financial statements have been prepared
in  accordance  with  generally  accepted  accounting   principles  for  interim
financial information and the instructions of Form 10-QSB. Accordingly,  they do
not include all of the information and footnotes  required by generally accepted
accounting principles for audited financial statements and related notes.

In the opinion of management, the accompanying un-audited consolidated financial
statements   contain  all  adjustments  (which  include  only  normal  recurring
adjustments)  necessary to present  fairly the results of their  operations  and


                                       8
<PAGE>

Basis of Presentation - continued

their cash flows for the three  months  and six months  ended June 30,  2004 and
2003, respectively.  The financial statements for the three and six months ended
June 30,  2004  are  consolidated  to  include  the  accounts  of The  Hartcourt
Companies  Inc.,  its wholly owned  subsidiaries  Hartcourt  Companies  Ltd. and
Hartcourt  Capital Inc., its wholly owned  subsidiary  Ai-Asia Inc.  Hartcourt's
consolidated financial statements include the partially owned subsidiaries. They
are, 51% owned  HuaQing  Corporate  Development  Co.,  Ltd, 45% owned  GuangDong
NewHuaSun  Computer Co. Ltd., 50.5% owned Shanghai GuoWei Science and Technology
Co. Ltd, 51% owned WenZhou  ZhongNan  Group,  and 51% owned  Beijing  Challenger
Group.


The results of  operations  for the three and six months ended June 30, 2004 are
not necessarily indicative of the results to be expected for the entire year.

The accounting  policies  followed by the Company are set forth in Note A to the
Company's financial  statements as stated in its report on Form 10-KSB/A for the
fiscal year ended December 31, 2003, as filed on April 20, 2004.

Note 3.  Gain/(Loss) per Share

<table>
<caption>
                                               Three Months       Three Months       Six Months        Six Months
                                                   Ended             Ended             Ended             Ended
                                               June 30, 2004     June 30, 2003     June 30, 2004     June 30, 2003
                                              ----------------  ----------------  ----------------  ----------------
<S>                                                 <C>                <C>               <C>               <C>
Net gain                                      $        55,494    $       463,387   $       113,336   $       276,471
Effects of dilutive securities                              -                  -                 -                 -
                                             ----------------  -----------------  ----------------  ----------------


Weighted average shares outstanding               178,145,242        124,149,929       176,187,810       112,891,929
                                             ================  =================  ================  ================


Basic and dilutive earnings per share         $         0.000   $          0.004   $         0.000   $         0.003
                                             ================  =================  ================  ================
</table>

On June 30, 2004, the Company had 33,010,239 and 10,300,000 warrants and options
outstanding, each exercisable into one share of common stock.

Note 4 Equity transactions during the period

During six months ended June 30, 2004,  we issued  155,000  shares of restricted
common stock valued at $46,500 for consulting services rendered in prior years.

During the six months ended June 30, 2004,  we issued 4,200 shares of restricted
common stock valued at $2,500 to a consultant for services.

During  the six  months  ended  June 30,  2004,  we  issued  841,270  shares  of
restricted  common  stock to Mr.  David  Chen,  Hartcourt's  former  CEO when he
exercised stock options  granted to him as a part of his 2002  compensation in a
cashless transaction.

                                       9
<PAGE>

Gain/(Loss) per Share - continued

During  the six  months  ended  June 30,  2004,  we issued  6,824,748  shares of
restricted  common stock to the minority  shareholders of Beijing  Challenger to
acquire 51% equity of the company valued at $3.8 million.

During the six months ended June 30, 2004, we issued 80,000 shares of restricted
common stock valued at $40,000 to a consultant for his consulting services

During  the six  months  ended  June 30,  2004,  we  issued  115,426  shares  of
restricted  common stock valued at $61,250 to officers and  directors in lieu of
cash compensation

Note 5. Subsequent Events

The Company  and the  minority  owners of Wenzhou  Zhongnan  Group have  reached
agreements to rescind the original acquisition contract entered into on June 28,
2003 to purchase 51% equity ownership of the group for a total  consideration of
$5,011,352.  The  acquisition was paid for entirely by the issuance of 8,415,370
shares of restricted  Hartcourt common stock.  Zhongnan's  financial results are
consolidated  under the operation of Hartcourt  starting October,  2003. All the
shares  issued for the  acquisition  are to be returned to  Hartcourt to prevent
unnecessary shareholder dilution.

The Board of Directors of the Company has  authorized the sale of its 45% equity
interest  in the  Guangzhou  New Huasun  equity.  A search is underway to find a
suitable buyer.  On April 24, 2003,  Hartcourt  entered a purchase  agreement to
acquire 45% of New Huasun equity for a total  consideration of $3,304,597,  paid
for entirely by the issuance of 13,769,156 shares of restricted Hartcourt common
stock.  New Huasun's  financial  statements  were  consolidated  under Hartcourt
starting May, 2003.

The company,  together with its subsidiary  Shanghai Huaqin,  has decided not to
complete the acquisition of Shanghai Peng Yang computer Company,  a retail chain
in Shanghai selling branded  notebooks.  The original  acquisition was valued at
$1.8mm for 51% of its equity,  payable in 1.53mm  restricted shares of Hartcourt
common stock.

The  transactions  contemplated by the definitive  purchase  agreement signed on
February 6, 2004 between Hartcourt and Shanghai  ServiceNet  Company will not be
completed.

On  December  30,  2003,  the  Company  issued  4,605,816  shares of  restricted
Hartcourt common stock to certain Chinese  investors for the aggregate  purchase
price of  US$1,842,326,  of which  US$1,386,382 was paid and of which US$455,945
was to be paid on June  30,  2004.  The  Chinese  investors  have  not  paid the
remaining  $455,945.  As a result, the investors have agreed to return 1,139,863
shares of Hartcourt common stock to satisfy their outstanding  obligation to the
Company of $455,945.

Item 2 Management's Discussion and Analysis or Plan of Operation

General

The  following  is a  discussion  of the results of  operations  and analysis of
financial  condition  for six months ended June 30, 2004 and June 30, 2003.  The
following  discussion may be understood more fully by reference to the financial
statements,  notes to the financial statements,  and the Management's discussion
and Analysis or Plan of Operation section contained in our Annual report on Form
10-KSB/A, filed with the Securities and Exchange Commission on April 20, 2004.


                                       10
<PAGE>

Plan of Operation

Results of Operations

The  operations  of Hartcourt for the three months and six months ended June 30,
2004 consisted of operations of Huaqing (51% ownership interest),  GuoWei (50.5%
ownership  interest),  NewHuaSun (45% ownership  interest),  ZhongNan Group (51%
ownership  interest),  Challenger  Group  (51%  ownership  interest),  Hartcourt
Capital Inc. (100% ownership interest),  Hartcourt China, Inc (formerly known as
Hartcourt  Companies  Limited)  (100%  ownership  interest),  Ai-Asia Inc. (100%
ownership  interest),  and Hartcourt's  investments in other entities located in
Hong Kong and China.  The  operations  of Hartcourt for the three months and six
months ended June 30, 2003 consisted of the operations of Huaqing (45% ownership
interest acquired in February 2003),  GuoWei (45% ownership interest acquired in
April 2003),  NewHuaSun (45%  ownership  interest  acquired in April 2003),  FTL
(58.53%  ownership  interest),  Hartcourt  Companies  Limited (formerly known as
Sinobull.com  Inc.) (100% ownership  interest),  Ai-Asia Limited (100% ownership
interest),  Hartcourt  Capital Inc. (100%  ownership  interest) and  Hartcourt's
investment and advances to other entities located in US, China and Hong Kong.

Net sales and cost of sales:  The Company  recorded net sales of $70,655,261 and
$138,378,366  for the three months and six months ended June 30, 2004,  compared
to $28,112,109 and $33,834,458 for the same period in 2003. Net sales during the
three months and six months  ended June 30, 2004  represented  revenues  derived
from sales of IT products and after sales  services to commercial  customers and
consumers.  Net sales during the three months and six months ended June 30, 2003
primarily  included  the  revenue  derived  from  sales of IT  products  sold to
customers provided by HuaQing, Guowei and NewHuasun and the related Internet and
telephone  services  provided  by FTL.  The  increase in sales was mainly due to
Huaqing,  GuoWei,  NewHuaSun,  ZhongNan group and Challenger group, the five new
acquisitions  made in 2003,  compared with only two months' result of Guowei and
NewHuaSun and four months results of Huaqing  consolidated  in the quarter ended
June 30, 2003.  Huaqing's  results in the second  quarter of 2004  increased 19%
over the same period of 2003.

Cost of sales amounted to $67,148,651 and  $131,353,497 for the three months and
six months ended June 30, 2004 compared to $27,012,645  and  $32,343,510 for the
same  period in 2003.  Cost of sales for the three  months and six months  ended
June 30, 2004 represented the cost of IT products sold to customers  provided by
Huaqing, GuoWei,  NewHuaSun,  ZhongNan group and Challenger group. Cost of sales
for the three months and six months ended June 30, 2003  primarily  included the
costs  of IT  products  sold  to  customers  provided  by  HuaQing,  Guowei  and
NewHuasun; cost of transmission and Internet services provided to FTL customers

The  slight  increase  in  operational  margin  was  mainly  contributed  by the
commercial  product  group,  together with a slight  improvement in the consumer
product group operational margin.

Selling,   general  and  administrative   expenses:  The  selling,  general  and
administrative  expenses were $2,678,445 and $5,361,007 for the three months and
six months ended June 30, 2004 compared to $778,756 and  $1,253,067 for the same
period in 2003.  The  increase in expenses  was mainly due to  consolidation  of
newly acquired business.

Depreciation  and  amortization  expenses:  the  depreciation  and  amortization
expenses were $42,087 and $55,583 for the three months and six months ended June
30,  2004  compared  to  $18,550  and 47,250  for the same  period in 2003.  The
increase was mainly due to the  depreciation  effect for the new acquired  fixed
assets.

                                       11
<PAGE>

Results of Operations - continued

Gain  (loss) on  disposal of  property  and  equipment:  the gain on disposal of
property  and  equipment of $109,359 for the three and six months ended June 30,
2004 compared to a loss of 72,371 for the same period in 2003. The gain was from
the disposal of one investment property owned by Huaqing.

Interest income:  Interest income were $39,946 and $56,077 for the three and six
months ended June 30, 2004  compared to $0 and $508 for the same period in 2003,
the increase was mainly in line with the increase of cash and bank balances.

Interest  expenses:  Interest  expenses were $232,539 and $465,780 for the three
months and six months ended June 30, 2004 compare to $79,742 and $92,891 for the
same  period in 2003.  The  significant  increase  was  mainly  attributable  by
borrowing cash from loans to finance the Samsung business growth.

Other  revenue:  Other  revenue  mainly  represented  the income from  repairing
services and other after sales services.

Gain/(loss)  in  subsidiary  attributed  to minority  interest:  Gain/(loss)  in
subsidiary attributed to minority interest represented the profit/loss shared by
the minority shareholders as mentioned above.

Income  tax:  The  Company has a  provision  for income  taxes of  $355,207  and
$523,037 for the three and six months ended June 30,2004 compared to $58,270 for
the same period of 2003. The provision for taxes relates to the estimated amount
of taxes that will be imposed by taxing  authorities in the PRC, the increase of
income tax provision  was mainly due to the increase of profit  generated by our
PRC subsidiaries.

Liquidity and Capital Resources:

Hartcourt's  principal capital  requirements during the year 2004 are to fund by
issuing additional stock, the acquisitions of growth and profitable,  IT related
operating companies in China and the continuous support from the bank.

As shown in the accompanying financial statements, Hartcourt incurred a net gain
of $55,494  and  $113,336  for the three and six months  ended June 30,  2004 as
compared to a net loss of $3,268 and $190,184 for the same period in 2003 (after
excluding the one-time gain on disposal of discontinued operation). In addition,
Hartcourt's  current assets  exceeded its current  liabilities by $14,624,834 at
June 30, 2004.

As of June 30, 2004, we had working capital of US$14,624,834. In addition to our
working capital on hand, we intend to obtain the required  capital a combination
of  bank  debt  and  sales  of our  equity  securities.  However,  there  are no
commitments  or agreements  on the part of anyone to provide us with  additional
bank financing or purchase our securities. The Company's auditor has expressed a
comment  about the  Company's  ability to remain as a going  concern.  If we are
unable to raise the additional working capital,  our proposed plan of operations
may be adversely affected.

Operating  activities:  During the six months ended June 30, 2004, net cash used
by operating  activities  increased to $2,432,573  compared to $1,305,922 during
the same period in 2003.  The increase in cash used in operation  activities was
mainly in line with the expansion of business of the Group.

The cash inflow in operating  activities  resulted primarily due to the increase
of accounts payable of $8,303,193,  increase of accrued liabilities of $620,356,
increase  of deferred  revenue of  $1,246,997,  decrease of prepaid  expenses of


                                       12
<PAGE>

Liquidity and Capital Resources - continued

$408,439,  minority  interest of $1,019,389,  net operation gain of $113,336 and
other non-cash related expenses of $205,834. The outflow of operating activities
is mainly due to the increase of accounts receivable of $3,550,613,  increase of
trade deposits to suppliers of $2,633,886, increase of inventories of $8,056,259
and gain on abandonment of property and equipment of $109,359.

Investing  activities:  Net cash provided by investing activities during the six
months ended June 30, 2004, was  $3,739,498  compared to $3,221,292 for the same
period in 2003.

The  increase  was mainly due to the cash  generated  from the  disposal  of one
property  by  Shanghai  Huaqing of $222,029  and  increase in proceeds  from the
recovery of notes receivables of $239,351.

Cash provided  during the six months ended June 30, 2004 was primarily  resulted
from $3,288,016  arising from the acquisition of Challenger and consolidation of
subsidiaries of Huaqing, GuoWei for the six months ended June 30, 2004, proceeds
from notes  receivable  of $339,351,  proceeds  from the  investment  into a new
subsidiary of NewHuaSun  contributed by its minority shareholder of $231,934 and
gain on disposal of property and equipments of $222,029, netting off the payment
for acquiring property and equipment of $341,832.

Financing  activities:  Net cash provided by financing activities during the six
months ended June 30, 2004 was $2,849,400 compared to $4,090,467 during the same
period in 2003.  To support  the  expansion  of the  Group's  business in China,
Hartcourt  and  its  subsidiaries   got  financing   support  from  local  banks
continuously.

Net  cash  was  provided  primarily  due to  proceeds  from  stock  subscription
receivable of $1,386,382, proceeds from loans and credits of $3,692,688, netting
off the net payments on note payable of  $1,481,918  and net payments to related
parties of $747,752.

As a result of the above activities,  the company  experienced a net increase in
cash of $4,156,325  for the six months ended June 30, 2004.  Although  around $4
million cash increased during the first six months of 2004, most of the increase
is due to one-off  event,  such as cash  acquired  from Beijing  Challenger  and
subsidiaries of $3,288,016, and the proceeds on stock subscription receivable of
$1,386,382


Off-Balance Sheet  Arrangements:  We do not have any off-balance sheet financing
arrangements.

Forward Looking Statements:

We make written and oral statements from time to time regarding our business and
prospects, such as projections of future performance, statements of management's
plans and  objectives,  forecasts of market  trends,  and other matters that are
forward-looking  statements  within the meaning of Section 27A of the Securities
Act of 1933 and Section 21E of the Securities  Exchange Act of 1934.  Statements
containing  the words or phrases "will likely  result," "are expected to," "will
continue," "is anticipated,"  "estimates,"  "projects,"  "believes,"  "expects,"
"anticipates,"  "intends," "target," "goal," "plans,"  "objective,"  "should" or
similar expressions  identify  forward-looking  statements,  which may appear in
documents,  reports,  filings with the Securities and Exchange Commission,  news
releases,   written   or  oral   presentations   made  by   officers   or  other
representatives  made  by  us  to  analysts,   stockholders,   investors,   news


                                       13
<PAGE>

Forward Looking Statements - continued

organizations   and  others,   and   discussions   with   management  and  other
representatives of us. For such statements,  we claim the protection of the safe
harbor  for  forward-looking  statements  contained  in the  Private  Securities
Litigation Reform Act of 1995.

Our future results,  including  results related to  forward-looking  statements,
involve a number  of risks  and  uncertainties  that are  described  in our 2003
Annual Report on Form 10-KSB/A filed with the Securities and Exchange Commission
on April 20, 2004. No assurance  can be given that the results  reflected in any
forward-looking  statements will be achieved. Any forward-looking statement made
by or on behalf  of us speaks  only as of the date on which  such  statement  is
made.  Our  forward-looking  statements  are  based  upon  assumptions  that are
sometimes based upon estimates,  data, communications and other information from
suppliers,  government  agencies  and  other  sources  that  may be  subject  to
revision.  Except as required  by law, we do not  undertake  any  obligation  to
update or keep  current  either  (i) any  forward-looking  statement  to reflect
events or  circumstances  arising after the date of such statement,  or (ii) the
important  factors that could cause our future results to differ materially from
historical results or trends, results anticipated or planned by us, or which are
reflected from time to time in any  forward-looking  statement which may be made
by or on behalf of us.

Item 3.  Control and Procedures

Our management,  with the participation of our Chief Executive Officer and Chief
Financial  Officer,  has evaluated the effectiveness of our disclosure  controls
and procedures (as defined in Rule 15d-15e under the Securities  Exchange Act of
1934)  as of the  end of the  period  covered  by  this  report.  Based  on such
evaluation,  the Chief  Executive  Officer  and  Chief  Financial  Officer  have
concluded  that our  disclosure  controls  and  procedures  as of the end of the
period  covered by this report were  designed  and  functioning  effectively  to
provide reasonable assurance that the information required to be disclosed by us
in reports filed under the Security Exchange Act of 1934 is recorded,  recessed,
summarized,  and reported  within the time periods  specified in the SEC's rules
and forms.  We believe that a controls  system,  no matter how well designed and
operated,  cannot provide absolute assurance that the objectives of the controls
system are met, and no  evaluation  of controls can provide  absolute  assurance
that all control  issues and instances of fraud,  if any,  within a company have
been detected.

As required by Rule  15e-15(e)  under the  Securities  Exchange Act of 1934, our
management,  including our Chief Executive Officer and Chief Financial  Officer,
have  evaluated  our  internal  control  over  financial  reporting to determine
whether any changes  occurred  during the most recent  fiscal  quarter that have
materially affected, or are reasonably likely to materially affect, our internal
control over financial report.  Based on this evaluation,  no such change in our
internal control over financial reporting occurred during the most recent fiscal
quarter.

                                       14
<PAGE>


Part II

Item 1.  LEGAL PROCEEDINGS

Securities  and Exchange  Commission v. The Hartcourt  Companies,  Inc., et al.,
United States  District  Court for the Central  District of California  Case No.
CV03-3698LGB(PLAx),

The  Securities  and  Exchange  Commission  has filed a  complaint  for  alleged
security  violations.  The complaint  alleges that the company illegally used an
S-8 registration  statement in 1999 to improperly raise capital,  and that false
and misleading  press releases were issued by the company from September 9, 1999
through November 18, 1999, and the SEC is seeking  disgorgement from the company
of  approximately  $800,000.00,  civil  penalties  and  interest,  as well as an
injunction  against future  securities law violations.  Court-ordered  mediation
took place on April 22,  2004,  at which the parties  were unable to resolve the
dispute.  Hartcourt  requested that the Judge order another session of mediation
and order the SEC to send to  mediation an  individual  with the power to settle
the case. A post-mediation  status conference occurred on June 1, 2004, at which
time the  District  court set a trial date on March 29,  2005.  The  company has
reserved  $1,300,000  as a contingent  liability  on its balance  sheet for this
litigation.

Apollo Financial Network, LLC vs Hartcourt

Apollo Financial Network filed an action for breach of contract arising out of a
consulting  agreement which was canceled in January of 1999.  Hartcourt accepted
an offer to  compromise  which  included  the entry of judgment in the amount of
$11,500,  which  represent an amount less than the  projected  costs of defense.
Judgment in such amount was entered  against the Company on November  20,  2002.
The Company has not made the payment to the plaintiff and the liability has been
accrued.

Item 2.  Changes in Securities.

During six months ended June 30, 2004,  we issued  155,000  shares of our common
stock valued at $46,500 to a consultant  for  services.  The common  shares were
issued pursuant to Regulation S under the Act. There was no underwriter involved
in this issuance.

During  the six months  ended June 30,  2004,  we issued  841,270  shares of our
common stock upon the net issuance of  outstanding  options.  The common  shares
were issued  pursuant to  Regulation S under the Act.  There was no  underwriter
involved in this issuance.

During the six months ended June 30,  2004,  we issued  6,824,748  shares of our
common stock upon  acquisition of Beijing  Challenger  Group.  The common shares
were issued  pursuant to  Regulation S under the Act.  There was no  underwriter
involved in this issuance.

During the six months ended June 30, 2004, we issued 80,000 shares of our common
stock valued at $40,000 to a consultant  for  services.  The common  shares were
issued pursuant to Regulation S under the Act. There was no underwriter involved
in this issuance.

During  the six months  ended June 30,  2004,  we issued  115,426  shares of our
common stock valued at $61,250 to officers and directors. The common shares were
issued pursuant to Regulation S under the Act. There was no underwriter involved
in this issuance.

                                       15
<PAGE>

Item 3.  DEFAULTS UPON SENIOR SECURITIES

Not applicable

Item 4.  SUBMISSION OF MATTERS TO VOTE OF SECURITIES HOLDERS

None

Item 5.  OTHER INFORMATION

None

Item 6.  EXHIBITS AND REPORTS ON FORM 8-K

    (a) Exhibits

     31.1 Certificate of CEO as Required by Rule 13a-14(a)/15d-14

     31.2 Certificate of CFO as Required by Rule 13a-14(a)/15d-14

     32.1 Certificate  of CEO as  Required  by  Rule  Rule  13a-14(b)  and  Rule
          15d-14(b)  (17 CFR  240.15d-14(b))  and Section  1350 of Chapter 63 of
          Title 18 of the United States Code


    (b) Reports on Form 8-K

     Current report item,  July 20, 2004   001-12671
          Hartcourt's founder converts original preferred stock to common shares

     Other events,         June 8, 2004     001-12671
          Hartcourt promotes Carrie Hartwick to CEO




                                   SIGNATURES

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

                                The Hartcourt Companies, Inc.

Date:  August 13, 2004           By: /s/ Carrie Hartwick
                                    --------------------------------
                                         Carrie Hartwick
                                         Chief Executive Officer
                                         Chief Financial Officer

                                       16
<PAGE>