<PAGE>

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-QSB

 Quarterly Report Pursuant to Section 13 Or 15(d) Of The Securities Act Of 1934

                FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2004

                       Commission file number: 000-50760.

                      FINANCIAL TELECOM LIMITED (USA), INC.
                      -------------------------------------
        (Exact name of small business issuer as specified in its charter)

            Nevada                                        58-2670972
-------------------------------                ---------------------------------
(State or other jurisdiction of                (IRS Employee Identification No.)
incorporation or organization)

    308, Hang Bong Commercial Center, 28 Shanghai Street, Kowloon, Hong Kong
    ------------------------------------------------------------------------
                    (Address of principal executive offices)

                                  852 2868 0668
                                 --------------
                           (Issuer's telephone number)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities and Exchange Act of 1934
during the preceding 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 [ ]

State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date:

Common Stock: $0.001 par value: 15,100,000 shares outstanding as of September
30, 2004 (latest practicable date).

<PAGE>

                      FINANCIAL TELECOM LIMITED (USA), INC.
                                   FORM 10-QSB
                                      INDEX
                                                                           PAGE
                                                                           ----
PART I.  FINANCIAL INFORMATION

Item 1.  Financial Statements and Condensed Notes -
         Quarter Ended September 30, 2004                                     2

Item 2.  Management's Discussion and Analysis or Plan of Operation            7

Item 3.  Controls and Procedures                                             11

PART II. OTHER INFORMATION

Item 1.  Legal Proceedings                                                   13

Item 2.  Changes in Securities and Use of Proceeds                           13

Item 3.  Default Upon Senior Securities                                      14

Item 4.  Submission of Matters to a Vote of Security Holders                 14

Item 5.  Other Information                                                   14

Item 6.  Exhibits and Reports on Form 8-K                                    14

         Signatures                                                          14

<PAGE>

PART I.  FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS (UNAUDITED)

<TABLE>
                              FINANCIAL TELECOM LIMITED (USA), INC.
                                INTERIM CONSOLIDATED BALANCE SHEET
                               AS OF SEPTEMBER 30, 2004 (UNAUDITED)
                               ------------------------------------


(STATED IN U.S. DOLLARS)
ASSETS
------
<S>                                                                                  <C>
Current assets
   Cash and cash equivalents                                                         $     6,411
   Trade receivables                                                                      21,296
   Prepayments and other current assets                                                    3,167
                                                                                     ------------
Total current assets                                                                      30,874

Fixed assets, net                                                                          1,976
                                                                                     ------------
TOTAL ASSETS                                                                         $    32,850
                                                                                     ============

LIABILITIES AND STOCKHOLDERS' DEFICIENCY
----------------------------------------
Current liabilities
   Trade payables and accrued liabilities                                            $   473,366
   Deferred revenue                                                                       35,418
   Due to related parties                                                                394,813
                                                                                     ------------
Total current liabilities                                                                903,597

Minority interest                                                                        (84,530)

Stockholders' deficiency
      Common stock: $0.001 par value; 500,000,000 shares authorized;
         issued and outstanding shares:                                               15,100,000
      Common stock                                                                        15,100
      Additional paid-in capital                                                       1,770,202
      Obligation to issue shares (Note 3)                                                494,447
      Accumulated deficit                                                             (3,065,966)
                                                                                     ------------
Total stockholders' deficiency                                                          (786,217)
                                                                                     ------------

TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIENCY                                       $    32,850
                                                                                     ============

(SEE CONDENSED NOTES TO THE FINANCIAL STATEMENTS.)


                                                2
</TABLE>
<PAGE>

<TABLE>
                                            FINANCIAL TELECOM LIMITED (USA), INC.
                                        INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS
                                                         (UNAUDITED)
                                                         -----------

                                                               THREE MONTHS ENDED                   NINE MONTHS ENDED
                                                                  SEPTEMBER 30,                       SEPTEMBER 30,
                                                                  -------------                       -------------
                                                             2004              2003              2004              2003
                                                         -------------     -------------     -------------     -------------
<S>                                                      <C>               <C>               <C>               <C>
Net sales                                                $     60,658      $    121,901      $    210,468      $    295,892
Costs of sales                                                 52,829            78,111           205,580           226,107
                                                         -------------     -------------     -------------     -------------
Gross profit (loss)                                             7,829            43,790             4,888            69,785
                                                         -------------     -------------     -------------     -------------
Operating Expenses
        Selling, General and Administrative                    49,058            17,471           164,813           214,434
                                                         -------------     -------------     -------------     -------------
Operating profit (loss)                                       (41,229)           26,319          (159,925)         (144,649)

Other Income (Expense)
        Other income                                               --           (12,981)               33            54,283

        Interest expense                                      (10,734)           (9,887)          (31,241)          (28,769)
                                                         -------------     -------------     -------------     -------------
Total other income (expense)                                  (10,734)          (22,868)          (31,208)           25,514
                                                         -------------     -------------     -------------     -------------
Net profit (loss) before minority interest and taxes          (51,963)            3,451          (191,133)         (119,135)

Minority interest                                                  --                --           (31,577)               --

Provision for Income Taxes                                         --                --                --                --
                                                         -------------     -------------     -------------     -------------
Net profit (loss)                                        $    (51,963)     $      3,451      $   (222,710)     $   (119,135)
                                                         =============     =============     =============     =============

Basic and diluted profit (loss) per share                $     (0.003)     $      0.000      $     (0.015)     $      0.008
                                                         =============     =============     =============     =============
Weighted average shares outstanding                        15,100,000        15,100,000        15,100,000        15,100,000
                                                         =============     =============     =============     =============


(SEE CONDENSED NOTES TO THE FINANCIAL STATEMENTS.)


                                                              3
</TABLE>
<PAGE>

<TABLE>
                          FINANCIAL TELECOM LIMITED (USA), INC.
                      INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS
            FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2004 AND 2003(UNAUDITED)
            ----------------------------------------------------------------

(STATED IN U.S. DOLLARS)                                         2004           2003
                                                              ----------     ----------
<S>                                                           <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES
------------------------------------
Net (loss)                                                    $(222,710)     $(119,135)
                                                              ----------     ----------
      Adjustments to reconcile net loss to net cash flows
        provided by (used in) operating activities
      Depreciation                                                5,178          6,340
      Minority interest                                          31,577             --
   Changes in assets and liabilities
       Decrease (increase) in trade receivables                   4,589        (22,670)
       (Increase) in other current assets                        (2,751)       (31,244)
       Increase in trade payables                                29,254         80,878
       (Decrease) in deferred revenue                            (3,886)       (11,773)
                                                              ----------     ----------
Net cash flows (used in) operating activities                  (158,749)       (97,604)

CASH FLOWS FROM INVESTING ACTIVITIES
------------------------------------
    Purchases of fixed assets                                        --           (321)
                                                              ----------     ----------
Net cash flows (used in) investing activities                        --           (321)

CASH FLOWS FROM FINANCING ACTIVITIES
------------------------------------
   Advances from (repayments to) related parties                 74,386         17,105
   (Repayments to) director                                        (769)        (2,744)
   Advance from former shareholders                              39,298         80,069
                                                              ----------     ----------
Net cash flows provided by financing activities                 112,915         94,430
                                                              ----------     ----------

(DECREASE) IN CASH AND CASH EQUIVALENTS                         (45,834)        (3,495)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD                   52,245          3,825
                                                              ----------     ----------
CASH AND CASH EQUIVALENTS, END OF PERIOD                          6,411            330
                                                              ==========     ==========

CASH PAID FOR:
   Interest                                                      31,241         28,769
                                                              ==========     ==========
   Income taxes                                                      --             --
                                                              ==========     ==========


(SEE CONDENSED NOTES TO THE FINANCIAL STATEMENTS.)


                                           4
</TABLE>
<PAGE>

                      FINANCIAL TELECOM LIMITED (USA), INC.
           CONDENSED NOTES - INTERIM CONSOLIDATED FINANCIAL STATEMENTS

                               SEPTEMBER 30, 2004

NOTE 1 - BASIS OF PRESENTATION
------------------------------

The accompanying unaudited consolidated financial statements have been prepared
in conformity with generally accepted accounting principles in the United States
of America. However, certain information and footnote disclosures normally
included in financial statements prepared in accordance with generally accepted
accounting principles have been omitted or condensed pursuant to the rules and
regulations of the Securities and Exchange Commission ("SEC"). In the opinion of
management, all adjustments of a normal recurring nature necessary for a fair
presentation have been included. The results for interim periods are not
necessarily indicative of results for the entire year. These condensed financial
statements and accompanying notes should be read in conjunction with the
Company's annual financial statements and the notes thereto for the years ended
December 31, 2003 and 2002, included in its Annual Report on Form 10-SB12G, as
amended, filed with the Securities and Exchange Commission.

The accompanying financial statements have been prepared in conformity with
generally accepted accounting principles, which contemplates continuation of the
Company as a going concern. However, the Company has a negative working capital
and a significant accumulated deficit resulting in a net stockholders'
deficiency. In view of these matters, realization of a major portion of the
assets in the accompanying balance sheet is dependent upon the continued
operations of the Company, which in turn is dependent upon the Company's ability
to meet its financing requirements, and the success of its future operations. To
meet these objectives, certain directors have agreed to provide adequate funds
for the Company to meet its obligations as they become due. The Company may,
subsequent to its spin-off, also seek additional equity and raise funds through
private or public equity investment in order to support existing operations and
expand the range and scope of its business. There is no assurance that such
additional funds will be available for the Company on acceptable terms, if at
all. Should the Company be unable to continue as a going concern, it may have to
cease its operations. Management believes that actions presently taken to revise
the Company's operating and financial requirements provide the opportunity for
the Company to continue as a going concern. The Company's ability to achieve
these objectives cannot be determined at this time.

NOTE 2 - RELATED PARTY TRANSACTIONS
-----------------------------------

AMOUNTS DUE TO RELATED PARTIES ARE UNSECURED, INTEREST-FREE AND HAVE NO FIXED
TERMS OF REPAYMENT.

AMOUNTS DUE TO RELATED PARTIES:
   Due to related companies                          388,851
   Due to directors                                    5,962
                                                  -----------
                                                     394,813
                                                  ===========


                                       5
<PAGE>

THE FOLLOWING IS A SUMMARY OF SIGNIFICANT RELATED PARTY PURCHASE TRANSACTIONS,
WHICH WERE CARRIED OUT IN THE NORMAL COURSE OF THE COMPANY'S BUSINESS DURING THE
THREE MONTHS ENDED SEPTEMBER 30:

                                                              2004         2003
                                                             -------      ------
  Loan interest expense                             [1]      10,734       9,887
  Rental charge for leased office space                       9,073       9,038

[1] Bowland International Limited is a former shareholder of the Company. Loan
interest was charged at prime rate plus 3% per annum.

NOTE 3 - SETTLEMENT OF DEBT
---------------------------

On August 23, 2004, the Company received notifications from certain former
shareholders to convert the amounts owed to them by Financial Telecom Limited.
These former shareholders had one-year options, expiring on September 1, 2004,
to either (i) purchase a proportionate number of new shares of FTL common stock
or (ii) the option of converting amounts owed to them in lieu of purchasing a
proportionate number of new shares. These amounts were recorded in the
Stockholders' Equity section of the Balance Sheet as "Obligation to issue
shares" at September 30, 2004. The shares have been issued as of the date of
this filing.
The debts converted and the shares issued due to their conversion are as
follows:

                                                    DEBTS              SHARES
                                                  CONVERTED            ISSUED
                                                  ---------            ------
Tang Wing On                                         12,874             278,674
Bowland International Limited                       481,573          10,424,470
                                                ------------        ------------
                                                $   494,447          10,703,144
                                                ============        ============

NOTE 4 - EARNINGS PER SHARE
---------------------------

Basic loss per share is based on the weighted average number of common shares
outstanding and diluted loss per share is based on the weighted average number
of common shares outstanding and dilutive common stock equivalents. Earnings per
share are calculated by dividing the net profit (loss) for the period by the
weighted average shares outstanding during the period. All loss per share
amounts in these financial statements are basic loss per share as defined by
SFAS No. 128, "Earnings Per Share." Diluted weighted average shares outstanding
exclude the potential common shares from options because to do so would be
antidilutive.


                                       6
<PAGE>

NOTE 5 - ACCOUNTS PAYABLE AND ACCRUED EXPENSES
----------------------------------------------

ACCOUNTS PAYABLE AND ACCRUED EXPENSES CONSIST OF THE FOLLOWING:
---------------------------------------------------------------

SALARY AND STAFF BENEFITS                                            255,767
NETWORK CHARGES                                                      124,379
DATA SERVICE FEE                                                      34,035
PROFESSIONAL FEE                                                      24,410
OTHERS                                                                34,775
                                                                  -----------
                                                                  $  473,366
                                                                  ===========


NOTE 6 - SUBSEQUENT EVENTS
--------------------------

Trading symbol: The Company's application for trading of its common stock on the
Over-the-counter Bulletin Board (OTCBB) was approved and trading of the
Company's common stock commenced on November 1, 2004. The trading symbol is
FLTL.

Spin-off: On October 19, 2004, The Hartcourt Companies, Inc. ("Hartcourt")
revised the record date for the spin-off of Financial Telecom Limited (USA) from
October 17, 2003 to October 25, 2004 pursuant to the Rule 10b-17 notice filed
with NASDAQ in order to comply with the notice period for the setting of the
record date as required by NASDAQ. In the spin-off, Hartcourt shareholders of
record as of October 25, 2004 received 0.087965218 share of FTL common stock for
each share of Hartcourt common stock held by such shareholders.


ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

INTRODUCTION

Management's discussion and analysis of results of operations and financial
condition ("MD&A") is provided as a supplement to the accompanying financial
statements and footnotes to help provide an understanding of the Company's
financial condition, changes in financial condition and results of operations.
The MD&A is organized as follows:

    o    CAUTION CONCERNING FORWARD-LOOKING STATEMENTS AND RISK FACTORS. This
         section discusses how certain forward-looking statements made by the
         Company throughout the MD&A and in the financial statements are based
         on our present expectations about future events and are inherently
         susceptible to uncertainty and changes in circumstances.
    o    OVERVIEW. This section provides a general description of the Company's
         business, as well as recent developments that we believe are important
         in understanding the results of operations and to anticipate future
         trends in those operations.
    o    RESULTS OF OPERATIONS. This section provides an analysis of our results
         of operations for the quarter ended September 30, 2004 compared to the
         results of the quarter ended September 30, 2003. A brief description is
         provided of transactions and events of the results being analyzed.
    o    LIQUIDITY AND CAPITAL RESOURCES. This section provides an analysis of
         our financial condition and cash flows as of and for the quarter ended
         September 30, 2004 and September 30, 2003.


                                       7
<PAGE>

    o    CRITICAL ACCOUNTING POLICIES. This section provides an analysis of the
         significant estimates and judgments that affect the reported amounts of
         assets, liabilities, revenues and expenses, and related disclosure of
         contingent assets and liabilities.

CAUTION CONCERNING FORWARD-LOOKING STATEMENTS/RISK FACTORS

The following discussion should be read in conjunction with the Company's
financial statements and the notes thereto and the other financial information
appearing elsewhere in this document. In addition to historical information, the
following discussion and other parts of this document contain certain
forward-looking information. When used in this discussion, the words "believes,"
"anticipates," "expects," and similar expressions are intended to identify
forward-looking statements. Such statements are subject to certain risks and
uncertainties, which could cause actual results to differ materially from those
projected due to a number of factors beyond our control. The Company does not
undertake to publicly update or revise any of its forward-looking statements
even if experience or future changes show that the indicated results or events
will not be realized. You are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date hereof. You are also
urged to carefully review and consider our discussions regarding the various
factors, which affect our business, included in this section and elsewhere in
this report.

Factors that might cause actual results, performance or achievements to differ
materially from those projected or implied in such forward-looking statements
include, among other things: (i) the impact of competitive products; (ii)
changes in law and regulations; (iii) limitations on future financing; (iv)
increases in the cost of borrowings and unavailability of debt or equity
capital; (v) the inability of the Company to gain and/or hold market share; (vi)
managing and maintaining growth; (vii) customer demands; (viii) market and
industry conditions, (ix) the success of product development and new product
introductions into the marketplace; (x) the departure of key members of
management; as well as other risks and uncertainties that are described from
time to time in the Company's filings with the Securities and Exchange
Commission.

OVERVIEW

The Company's wholly-owned subsidiary, Financial Telecom Limited (FTL HK), was
established in 1983 by a group of professionals in the financial service
industry. It was the first company in Hong Kong to provide real-time financial
information services using a wireless network for the dissemination of data. The
Company, through FTL HK, generates revenue through the provision of online
financial information services and the sale of well-known technical analysis
software and related Internet and telephone services.

With the recession in Hong Kong and the depressed stock market, FTL HK has
suffered a significant drop in revenue in the last two years. The situation was
further aggravated by the outbreak of sudden acute respiratory syndrome (SARS)
in the first of half of 2003. FTL HK has also suffered a drop in revenue due to
the suspension of our financial paging service in the first quarter of 2002.
Fortunately, the Hong Kong economy has shown certain signals of recovery. The
impressive economic growth in China also attracts the attention of international
investors. To take advantage of these favorable changes, the Company is
considering diversifying into other financial services.

RESULTS OF OPERATIONS
---------------------

COMPARISON OF THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2004 AND SEPTEMBER
30, 2003


                                       8
<PAGE>

During 2003, we suffered from an economic slump caused by SARS, which resulted
in declines in revenue and net income. In the second quarter of 2004, FTL HK
continued our strategy to maintain low operating expenses by keeping a low head
count, out sourcing jobs when required and reducing marketing expenses and
consolidating various professional services and data sources.

NET SALES AND COST OF SALES. We recorded net sales of $60,658 and $210,468 for
the three and nine months ended September 30, 2004, respectively, as compared to
$121,901 and $295,892 for the same periods in 2003. Net sales consisted
primarily of real-time financial data services, rental of equipment and
consultancy fee income. The demand for FTL HK's financial data service is
closely related to the local stock market activities. The decrease in service
income reflected the continuous deterioration of the general economic situation
in Hongkong after the outbreak of SARS in 2003.

Cost of sales included cost of capacity associated with the acquisition of
data-feed from various data sources (including the Honk Kong Stock Exchange, the
Future Exchange of Hong Kong, Bank of China and various international data
vendors) and communication network rental necessary to provide real-time
broadcasting and on-demand multimedia content delivery services via different
connection topology. Cost of sales for the three and nine months ended September
30, 2004, respectively, were $52,829 and $205,580 compared to $78,111 and
$226,107 for the same period in 2003, respectively. The Company's cost structure
is relatively inelastic. Most of the cost items, such as exchange data fee and
network charges, are fixed in nature.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general and
administrative expenses ("SG&A") expenses amounted to $49,058 and $164,813 for
the three and nine months ended September 30, 2004, respectively, compared to
$17,471 and $214,434 for the same periods in 2003. The increase in SG&A is
partly due to the higher professional and consultancy fees paid in connection
with its filing requirements with the Securities and Exchange Commission and
other fees incurred related to the spin-off from our parent corporation, The
Hartcourt Companies, Inc., a publicly traded company on the Over-the-counter
Bulletin Board.

INTEREST EXPENSE. Interest expense represents payment of interest on loans from
FTL HK's former shareholders and related parties. The higher interest was a
result of the increase in such interest-bearing loans.

LIQUIDITY AND CAPITAL RESOURCES
-------------------------------

Our principal capital requirements during the third quarter of 2004 and the
year-to-date were to satisfy ordinary operating expenditures. We plan to
actively seek funding sources once we are spun-off from our parent company, The
Harcourt Companies, Inc. We plan to approach funding sources such as lenders
interested in lending funds to the Company to meet our working capital
requirements and investors interested in purchasing our common stock. We have no
commitments for any such funding and there are no assurances that any will be
secured on terms acceptable to the Company.

As shown in the accompanying financial statements, we incurred a net loss of
$222,710 for the nine months ended September 30, 2004. In addition, our cash
flows from operations were inadequate to meet our monthly expenses. Our ability
to continue as a going concern depends on the continued financial support from
related parties including former shareholders and the success of our future
plans to seek funding sources.


                                       9
<PAGE>

On August 23, 2004, the Company received notifications from certain former
shareholders to convert the amounts owed to them by Financial Telecom Limited.
These former shareholders had one-year options, expiring on September 1, 2004,
to either (i) purchase a proportionate number of new shares of FTL common stock
or (ii) the option of converting amounts owed to them in lieu of purchasing a
proportionate number of new shares. These amounts were recorded in the
Stockholders' Equity section of the Balance Sheet as "Obligation to issue
shares" at September 30, 2004. The shares have been issued as of the date of
this filing.

The debts converted and the shares issued due to their conversion are as
follows:

                                                      DEBTS             SHARES
                                                    CONVERTED           ISSUED
                                                    ---------           ------
Tang Wing On                                           12,874           278,674
Bowland International Limited                         481,573        10,424,470
                                                   -----------       -----------
                                                   $   94,447        10,703,144
                                                   ===========       ===========

Our operations are primarily financed by advances from related parties and
former shareholders, and remains as the major source of our financing. We plan
to aggressively seek new funds through the issuance of our common stock. There
is no assurance, however, that we will be successful in this.

On October 19, 2004, The Hartcourt Companies, Inc. ("Hartcourt") revised the
record date for the spin-off of Financial Telecom Limited (USA) from October 17,
2003 to October 25, 2004 pursuant to the Rule 10b-17 notice filed with NASDAQ in
order to comply with the notice period for the setting of the record date as
required by NASDAQ. In the spin-off, Hartcourt shareholders of record as of
October 25, 2004 received 0.087965218 share of FTL common stock for each share
of Hartcourt common stock held by such shareholders.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES
------------------------------------------

Our discussion and analysis or plan of operations are based upon our financial
statements, which have been prepared in accordance with accounting principles
generally accepted in the United States. The preparation of these financial
statements requires us to make estimates and judgments that affect the reported
amounts of assets, liabilities, revenues and expenses, and related disclosure of
contingent assets and liabilities. We base our estimates on historical
experience and on various other assumptions that are believed to be reasonable
under the circumstances, the results of which form the basis for making
judgments about the carrying values of assets and liabilities that are not
readily apparent from other sources. Actual results may differ from these
estimates under different assumptions or conditions.

An accounting policy is deemed to be critical if it requires an accounting
estimate to be made based on assumptions about matters that are highly uncertain
at the time the estimate is made, and if different estimates that reasonably
could have been used or changes in the accounting estimate that are reasonably
likely to occur could materially change the financial statements. We believe the
following critical accounting policies reflect our more significant estimates
and assumptions used in the preparation of our consolidated financial
statements:


                                       10
<PAGE>

REVENUE RECOGNITION

Revenue is recognized when the following criteria are met: persuasive evidence
that an arrangement exists; delivery has occurred or services have been
rendered; the price to the customer is fixed or determinable; and collectability
is reasonably assured. If all of the above criteria have been met, revenues are
principally recognized. Amounts received from customers in advance of revenue
recognition are deferred and classified on the balance sheet as "deferred
revenue."

TRADE RECEIVABLES AND ALLOWANCE FOR DOUBTFUL ACCOUNTS

We present trade receivables, net of allowances for doubtful accounts and
returns, to ensure accounts receivable are not overstated due to
uncollectibility. The allowances are calculated based on detailed review of
certain individual customer accounts, historical rates and an estimation of the
overall economic conditions affecting our customer base. We review a customer's
credit history before extending credit. If the financial condition of our
customers were to deteriorate, resulting in an impairment of their ability to
make payments, additional allowances may be required. There are currently no
allowances for doubtful accounts as of September 30, 2004, as management does
not deem any of the accounts are uncollectible.

INCOME TAXES

The Company accounts for income taxes under the provisions of Statement of
Financial Accounting Standards ("SFAS" No. 109), "Accounting for Income Taxes,"
whereby deferred income tax assets and liabilities are computed for differences
between the financial statements and tax bases of assets and liabilities that
will result in taxable or deductible amounts in the future, based on enacted tax
laws and rates applicable to the periods in which the differences are expected
to affect taxable income. Valuation allowances are established when necessary,
to reduce deferred income tax assets to the amount expected to be realized.

COMMITMENTS AND CONTINGENCIES

The outcomes of legal proceedings and claims brought against us are subject to
significant uncertainty. SFAS No. 5, Accounting for Contingencies, requires that
an estimated loss from a loss contingency such as a legal proceeding or claim
should be accrued by a charge to income if it is probable that an asset has been
impaired or a liability has been incurred and the amount of the loss can be
reasonably estimated. Disclosure of a contingency is required if there is at
least a reasonable possibility that a loss has been incurred. In determining
whether a loss should be accrued we evaluate, among other factors, the degree of
probability of an unfavorable outcome and the ability to make a reasonable
estimate of the amount of loss. Changes in these factors could materially impact
our financial position or our results of operations.

ITEM 3.  CONTROLS AND PROCEDURES

Under the supervision and with the participation of the Company's management,
including our principal executive officer and the principal financial officer,
the Company conducted an evaluation of the effectiveness of the design and
operation of its disclosure controls and procedures, as defined in Rules
13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as of the end
of the period covered by this report (the "Evaluation Date"). Based on this
evaluation, the Company's principal executive officer and principal financial
officer concluded as of the Evaluation Date, that the Company's disclosure
controls and procedures were effective such that the material information
required to be included in our Securities and Exchange Commission ("SEC")
reports is recorded, processed, summarized and reported within the time periods
specified in SEC rules and forms relating to the Company, including our
consolidating subsidiaries, and was made known to them by others within those
entities, particularly during the period when this report was being prepared.


                                       11
<PAGE>

Additionally, there were no significant changes in the Company's internal
controls or in other factors that could significantly affect these controls
subsequent to the Evaluation Date. We have not identified any significant
deficiencies or material weaknesses in our internal controls, and therefore
there were no corrective actions taken.


                                       12
<PAGE>

PART II.   OTHER INFORMATION

Item 1. Legal Proceedings.

As of the date of this report, neither the Company nor FTL HK is a party to any
material legal proceedings.

The Company's parent corporation, Hartcourt, is subject to pending litigation.
In 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 filed a complaint
against Hartcourt for alleged securities violations. The complaint alleges that
Hartcourt illegally used an S-8 registration statement in 1999 to improperly
raise capital, and that false and misleading press releases were issued by
Hartcourt from September 9, 1999 through November 18, 1999. The SEC is seeking
disgorgement from Hartcourt of approximately $800,000, civil penalties and
interest, as well as an injunction against future securities law violations.
Court-ordered mediation took place on April 22, 2004. All of the defendants
requested that the Judge order another session of mediation and order the SEC to
send an individual to mediation with the power to settle the case. The mediation
did not achieve any settlement or resolution to the case. A post-mediation
status conference took place on June 1, 2004. The Court set a trial date for
March 29, 2005.

On October 15, 2004, all defendants in this action filed a joint Motion for
Summary Judgment. The Court has assigned a hearing date of November 29, 2004 for
this motion. The SEC has requested that the November 29, 2004 hearing date be
moved to December 13, 2004 to accommodate a motion for summary judgment which
the SEC alleges that it intends to file before the November 1, 2004 motion
cut-off imposed by the District Court. Defendants will not agree upon any such
continuance, and as of this date, have not received any motion for summary
judgment from the SEC.

John Furutani, legal counsel to Hartcourt and a director of the Company, was
subject to a separate private investigation by the SEC into trading in the
securities of Hartcourt. According to a public statement issued by the SEC, the
SEC served an administrative subpoena on Mr. Furutani seeking documents and
testimony in connection with its inquiry into, among other things, whether Mr.
Furutani sold Hartcourt securities while in possession of material nonpublic
information consisting of the SEC's intention to file a complaint against
Hartcourt in the above-described civil action. Mr. Furutani withheld the
documents requested under the subpoena on the grounds that they were protected
by the attorney-client and attorney work-product privileges.

In March 2004, the SEC filed an application in district court for an order to
enforce the investigative subpoena. Securities and Exchange Commission v. John
A. Furutani, Civil Action No. CV 04-1775-GAF (MANx) (C.D. Cal.). The district
court found that Mr. Furutani failed to demonstrate that the attorney-client
privilege and attorney work-product doctrine protected the documents and
testimony sought by the SEC and granted the SEC's application, ordering Mr.
Furutani to produce documents on April 26, 2004 and to provide sworn testimony
on May 3, 2004. Mr. Furutani subsequently produced documents and his deposition
took place on May 3 and May 11, 2004. The SEC filed a notice of substantial
compliance on June 9, 2004. On June 11, 2004, the district court issued a civil
minutes-general stating that in light of the SECs notice of substantial
compliance with the administrative subpoena, the court no longer needed to
retain jurisdiction over the case and considered the case closed.

Item 2.  Changes In Securities.

         None.


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<PAGE>

Item 3.  Defaults Upon Senior Securities.

         None.

Item 4.  Submission Of Matters To A Vote Of Security Holders.

         None.

Item 5.  Other Information.

         None.

Item 6.  Exhibits And Reports On Form 8-K

(a) See index to exhibits.
(b) No 8-K's were filed during the quarter ended September 30, 2004.

INDEX TO AND DESCRIPTION OF EXHIBITS

Exhibit Number         Description of Document
--------------         -----------------------

2.1*     Articles of Incorporation of Financial Telecom Limited (USA), Inc.

2.2*     Amended and Restated Bylaws of Financial Telecom Limited (USA), Inc.

2.3*     Agreement between Hong Kong Futures Exchange Limited and Financial
         Telecom Limited

2.4*     Market Service Datafeed Agreement between Stock Exchange Information
         Services Limited and Financial Telecom Limited

(* Filed with initial Registration Statement on Form 10-SB (File No. 000-50760)
dated May 13, 2004.)

31       Certification of Chief Executive Officer and Chief Financial Officer
         Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32       Certification of Chief Executive Officer and Chief Financial Officer
         Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.


                                   SIGNATURES

Pursuant to the requirements of Section 12 of the Securities Exchange Act of
1934, the registrant has duly caused this registration statement to be signed on
its behalf by the undersigned, thereunto duly authorized.

                                           FINANCIAL TELECOM LIMITED (USA), INC.

                                           By: /s/ Stephen Tang
                                               -----------------------
                                               Stephen Tang, President
Date: November 12, 2004


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