Blue Hat Interactive Entertainment Technology

Blue Hat Interactive Entertainment Technology

XIAMEN, China, Dec. 22, 2023 (GLOBE NEWSWIRE) — Blue Hat Interactive Entertainment Technology (“Blue Hat” or the “Company”) (NASDAQ: BHAT), primarily a company of commodity trading in China, today announced its unaudited financial results for the six months ended June 30, 2023 (“First Half of 2023”).

First Half of 2023 Financial Highlights

  • First Half of 2023 total revenues of US$46.30 million, compared to US$0.80 million in the prior-year period, due to that increased commodity trading.

  • First Half of 2023 gross profit of US$0.08 million, a decreased of 70.87% from US$0.26 million in the prior-year period. This is due to the lower gross profit margin of mass goods due to greater fluctuations in purchasing and selling prices.

  • First Half of 2023 loss from operations of US$4.07 million, an increase of 69.79% from loss from continuing operations of US$2.40 million in the prior-year period.

  • Net loss from continued operation increased 77.52% to US$4.36 million for the First Half of 2023, from US$2.46 million in the prior-year period.

  • Net income from discontinued operation is US$4,894 for the First Half of 2023, comparing with the net loss from discontinued operation of US$3.71 million in the prior-year period.

  • US$0.13 million in cash and cash equivalents as of June 30, 2023.

Management Commentary

The COVID-19 outbreak since early 2020 has had a negative impact on the global economy and our financial performance has been negatively impacted. Mr. Xiaodong Chen, CEO of Blue Hat, stated, “In order to cope with the current situation of the economy environment, some adjustments have been made to the Company’s business, and the Company has suspended the AR Immersive Course (ARIC), game and communication business, which were severely affected by the COVID-19 pandemic. The Company has been focusing on the commodity supply chain, commodity trading platform project and increasing the breadth of the Company’s business. At the same time, the Company has increased the investment and development in some new projects, which will provide more catalyst for the future development of the Company, to grow the Company steadily and maximize the value for the shareholders.”

Recent Operating Highlights

  • On March 31, 2023, Blue Hat closed a private placement of 4,000,000 ordinary shares, par value $0.01 per share (referred to hereinafter as the “ordinary shares”) at a price of $0.70 per share to one purchaser and its designated persons without a broker. The aggregate gross proceeds to the Company is approximately $2.80 million.

  • On May 23, 2023, the Company entered into a Consulting Service Agreement with Wei Deng (the “Consultant”). In consideration of the services to be provided by the Consultant to the Company for one year, the Company issued a total of 500,000 restricted shares of the Company ordinary shares at a price of $1.03 per share.

  • On June 8, 2023, Fujian Blue Hat Interactive Entertainment Technology Ltd., Fuzhou CSFCTECH Co. Ltd., Fujian Roar Game Technology Co. Ltd. and Fuzhou UC71 Co., Ltd. were deconsolidated from the Company as a result of the termination of the VIE agreements.

First Half of 2023 Results

Total revenues were US$46.30 million for the First Half of 2023, an increase of US$45.50 million, or 5,657.93%, compared to US$0.80 million in the prior-year period. It was due to the increase of commodity trading.

Revenues from sales of commodity trading were US$45.94 million for the First Half of 2023, compared to nil in the prior-year period.

Revenues from sales of information service were US$0.37 million for the First Half of 2023, compared to US$0.66 million in the prior-year period.

Revenues from sales of interactive toys (animation series) were nil for the for the First Half of 2023, compared to US$7,146 in the prior-year period.

Revenues from sales of interactive toys (game series) were nil for the First Half of 2023, compared to US$0.14 million in the prior-year period.

Gross profit decreased 70.87% to US$0.08 million for the First Half of 2023, from US$0.26 million in the prior-year period.

Total gross margin was 0.16% for the First Half of 2023, compared to 32.28% in the prior-year period.

Total operating expenses increased by US$1.49 million for the First Half of 2023, from US$2.65 million in the prior-year period, primarily as a result of increased bad debt expenses in the first half of 2023.

Loss from operations increased 69.79% to loss from operations of US$4.07 million for the First Half of 2023, from US$2.40 million in the prior-year period.

Net loss from continued operation increased 77.52% to net loss from continued operation of US$4.36 million for the First Half of 2023, from US$2.46 million in the prior-year period.

Net income (loss) from discontinued operation increased 100.13% to net income from discontinued operation of US$4,894 for the First Half of 2023, from net loss from discontinued operation of US$3.71 million in the prior-year period.

Basic loss per share from continued operation were US$0.36 for the First Half of 2023, compared to US$0.41 in the prior-year period.

Basic loss per share from discontinued operation were nil for the First Half of 2023, compared to US$0.46 in the prior-year period.

Balance Sheet Highlights

As of June 30, 2023, Blue Hat had cash and cash equivalents of US$0.13 million, working capital of US$4.86 million and total shareholders’ equity (excluding the non-controlling interest) of US$11.89 million, compared to cash and cash equivalents of US$0.07 million, working capital of US$4.12 million and total shareholders’ equity (excluding the non-controlling interest) of US$12.11 million, respectively, as of December 31, 2022.

During the First Half of 2023, the Company completed a private placement by issuing 4 million restrictive ordinary shares. Separate from the above transaction, the Company paid consulting services by issuing 0.5 million restrictive ordinary shares.

About Blue Hat

Blue Hat was formerly a provider of communication services and IDC business, as well as a producer, developer, and operator of AR interactive entertainment games, toys, and educational materials in China. Leveraging years of technological accumulation and unique patented technology, Blue Hat is expanding its business to commodity trading, aiming to become a leading intelligent commodity trader worldwide. For more information, please visit the Company’s investor relations website at http://ir.bluehatgroup.com. The Company routinely provides important information on its website.

Forward-Looking Statements

This release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended. All forward-looking statements are inherently uncertain as they are based on current expectations and assumptions concerning future events or future performance of the Company. Readers are cautioned not to place undue reliance on these forward-looking statements, which are only predictions and speak only as of the date hereof. In evaluating such statements, prospective investors should review carefully various risks and uncertainties identified in this release and matters set in the Company’s SEC filings. These risks and uncertainties could cause the Company’s actual results to differ materially from those indicated in its forward-looking statements.

Contacts:

Blue Hat Interactive Entertainment Technology
Phone: +86 (592) 228-0010
Email: [email protected]

  

 

BLUE HAT INTERACTIVE ENTERTAINMENT TECHNOLOGY AND SUBSIDIARIES
UNAUDITED CONSOLIDATED BALANCE SHEETS

 

 

 

June 30,

 

December 31,

ASSETS

 

2023

 

2022

 

 

 

 

(Audited)

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

133,150

 

 

$

69,273

 

Restricted cash

 

 

 

 

 

1,129

 

Accounts receivable, net

 

 

8,911,899

 

 

 

9,170,996

 

Other receivables, net

 

 

3,472,252

 

 

 

4,704,455

 

Other receivables – related party

 

 

1,365,938

 

 

 

1,427,829

 

Prepayments, net

 

 

1,865,330

 

 

 

117,587

 

Assets related to discontinued operation

 

 

7,747,405

 

 

 

6,040,801

 

Total current assets

 

 

23,495,974

 

 

 

21,532,070

 

 

 

 

 

 

 

 

 

 

Property and equipment, net

 

 

3,681,038

 

 

 

3,817,015

 

 

 

 

 

 

 

 

 

 

Other assets:

 

 

 

 

 

 

 

 

Prepayments

 

 

2,437,065

 

 

 

2,495,570

 

Operating lease, right-of-use asset

 

 

39,128

 

 

 

40,596

 

Intangible assets, net

 

 

1,240,556

 

 

 

1,368,424

 

Long-term investments

 

 

1,660,716

 

 

 

1,722,999

 

Assets related to discontinued operation

 

 

2,571,202

 

 

 

3,300,184

 

Total other assets

 

 

7,948,667

 

 

 

8,927,773

 

Total assets

 

$

35,125,679

 

 

$

34,276,858

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Short-term loans – banks

 

$

447,588

 

 

$

473,825

 

Accounts payable

 

 

437,063

 

 

 

324,991

 

Other payables and accrued liabilities

 

 

9,095,955

 

 

 

9,014,057

 

Other payables – related party

 

 

85,031

 

 

 

22,643

 

Operating lease liabilities – current

 

 

10,850

 

 

 

11,261

 

Customer deposits

 

 

3,375

 

 

 

19,629

 

Taxes payable

 

 

788,575

 

 

 

841,334

 

Liability related to discontinued operation

 

 

7,772,308

 

 

 

6,700,468

 

Total current liabilities

 

 

18,640,745

 

 

 

17,408,208

 

 

 

 

 

 

 

 

 

 

Other liabilities:

 

 

 

 

 

 

 

 

Operating lease liability

 

 

29,919

 

 

 

31,041

 

Convertible bonds payable

 

 

1,164,317

 

 

 

1,393,499

 

Long term payable -related party y

 

 

974,471

 

 

 

914,771

 

Total other liabilities

 

 

2,168,707

 

 

 

2,339,311

 

Total liabilities

 

 

20,809,452

 

 

 

19,747,519

 

 

 

 

 

 

 

 

 

 

COMMITMENTS AND CONTINGENCIES

 

 

 

 

 

 

 

 

Shareholders’ equity

 

 

 

 

 

 

 

 

Ordinary shares, $0.01 par value, 100,000,000 shares
authorized, 14,598,583 shares issued and outstanding as of June 30, 2023, and 9,894,734 shares issued and outstanding as of December 31, 2022

 

 

145,986

 

 

 

98,947

 

Additional paid-in capital

 

 

48,768,815

 

 

 

44,145,826

 

Statutory reserves

 

 

2,143,252

 

 

 

2,143,252

 

Retained earnings

 

 

(39,481,333

)

 

 

(35,113,598

)

Accumulated other comprehensive income

 

 

310,028

 

 

 

834,513

 

Total Blue Hat Interactive Entertainment Technology shareholders’ equity

 

 

11,886,748

 

 

 

12,108,940

 

Non-controlling interests

 

 

2,429,479

 

 

 

2,420,399

 

Total equity

 

 

14,316,227

 

 

 

14,529,339

 

Total liabilities and shareholders’ equity

 

$

35,125,679

 

 

$

34,276,858

 

 

BLUE HAT INTERACTIVE ENTERTAINMENT TECHNOLOGY AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

 

 

 

For the Six Months Ended June 30,

 

 

2023

 

2022

Revenues

 

$

46,304,236

 

 

$

804,182

 

Cost of revenue

 

 

46,228,625

 

 

 

544,622

 

Gross profit

 

 

75,611

 

 

 

259,560

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

Selling

 

 

3,922

 

 

 

143,899

 

General and administrative

 

 

2,865,496

 

 

 

1,069,647

 

Research and development

 

 

1,273,215

 

 

 

1,441,273

 

Total operating expenses

 

 

4,142,633

 

 

 

2,654,819

 

 

 

 

 

 

 

 

 

 

Loss from operations

 

 

(4,067,022

)

 

 

(2,395,259

)

 

 

 

 

 

 

 

 

 

Other income (expense)

 

 

 

 

 

 

 

 

Interest income

 

 

5

 

 

 

200

 

Interest expense

 

 

(291,703

)

 

 

(17,356

)

Other finance expenses

 

 

(11,099

)

 

 

(6,121

)

Other income, net

 

 

6,386

 

 

 

5,723

 

Total other expense, net

 

 

(296,411

)

 

 

(17,554

)

 

 

 

 

 

 

 

 

 

Loss before income taxes

 

 

(4,363,433

)

 

 

(2,412,813

)

Provision for income taxes

 

 

116

 

 

 

45,289

 

Loss from Continuing Operations

 

 

(4,363,549

)

 

 

(2,458,102

)

 

 

 

 

 

 

 

 

 

Discontinued Operations

 

 

 

 

 

 

 

 

Income (loss) from discontinued operations

 

 

4,894

 

 

 

(3,707,361

)

Less: Net income (loss) attributable to non-controlling interests

 

 

9,080

 

 

 

(922,670

)

Net Loss attributable to Blue Hat Interactive Entertainment Technology

 

 

(4,367,735

)

 

 

(5,242,793

)

 

 

 

 

 

 

 

 

 

Other comprehensive loss

 

 

 

 

 

 

 

 

Net loss from continued operations

 

 

(4,363,552

)

 

 

(2,458,102

)

Foreign currency translation adjustment – continued operations

 

 

(372,369

)

 

 

(1,019,403

)

Comprehensive loss – continued operations

 

$

(4,735,921

)

 

$

(3,477,505

)

 

 

 

 

 

 

 

 

 

Net income (loss) from discontinued operations

 

 

4,894

 

 

 

(3,707,361

)

Foreign currency translation adjustment – discontinued operations

 

 

(152,116

)

 

 

51,435

 

Comprehensive loss – discontinued operations

 

 

(147,222

)

 

 

(3,655,926

)

Comprehensive Income (Loss)

 

 

(4,883,143

)

 

 

(7,133,431

)

Less: Comprehensive income (loss) attributable to non-controlling interests

 

 

9,080

 

 

 

(922,670

)

Comprehensive income attributable to Blue Hat Interactive Entertainment shareholders

 

 

(4,892,223

)

 

 

(6,210,761

)

 

 

 

 

 

 

 

 

 

Weighted average number of ordinary shares

 

 

 

 

 

 

 

 

Basic

 

 

12,052,427

 

 

 

6,021,612

 

Diluted

 

 

13,333,094

 

 

 

6,947,050

 

 

 

 

 

 

 

 

 

 

losses per share

 

 

 

 

 

 

 

 

Basic loss per share from continued operation

 

$

(0.36

)

 

$

(0.41

)

Basic loss per share from discontinued operation

 

 

 

 

$

(0.46

)

Diluted losses per share

 

 

 

 

 

 

 

 

Diluted loss per share from continued operation

 

$

(0.33

)

 

$

(0.35

)

Diluted loss per share from discontinued operation

 

 

 

 

$

(0.40

)

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