Blue Hat Announces Financial Results for the First Half of 2023, Highlighted by 5,657.93% Increase in Revenues to $46.30 million

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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