6-K
Blue Hat Interactive Entertainment Technology (BHATF)
UNITEDSTATES
SECURITIESAND EXCHANGE COMMISSION
Washington,D.C. 20549
FORM6-K
REPORT OF FOREIGN PRIVATE ISSUER PURSUANTTO RULE 13a-16 OR 15d-16 UNDER THE
SECURITIES EXCHANGE ACT OF 1934
For the month of December 2021
Commission File Number 001-39001
BlueHat Interactive Entertainment Technology
(Translation of registrant’s name into English)
| 7thFloor, Building C, No. 1010 Anling Road <br>HuliDistrict, Xiamen, China 361009<br> (Address of principal executive office) |
|---|
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F. Form 20-F ☒ Form 40-F ☐
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ☐
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):☐
Blue Hat Interactive Entertainment Technology furnishes under the cover of Form 6-K the following:
| Exhibit No. | Description of Exhibit |
|---|---|
| 99.1 | Press Release dated December 6, 2021, announcing its unaudited financial results for the three and nine months ended September 30, 2021 |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Date: December 6, 2021
| BLUEHAT INTERACTIVE ENTERTAINMENT TECHNOLOGY | |
|---|---|
| By: | /s/<br>Xiaodong Chen |
| Name: Xiaodong<br>Chen | |
| Title: Chief Executive<br>Officer |
Exhibit 99.1
Blue Hat Announces Financial Results for Third Quarter of 2021, Highlighted by a 235.6% Increase in Total Revenues to US $13.3 Million
Xiamen, China – December 6, 2021:Blue Hat Interactive Entertainment Technology (“Blue Hat” or the “Company”) (NASDAQ: BHAT), a leading communication services and internet data center (“IDC”) business provider and developer, and an operator of mobile games and augmented reality (“AR”) education curricula and products in China, today announced its unaudited financial results for the three and nine months ended September 30, 2021 (“Third Quarter 2021” and “Nine Months 2021”, respectively).
Third Quarter 2021 and Nine Months 2021Financial Highlights
| ● | Total<br> revenues<br> of<br> US<br> $13.3<br> million,<br> up<br> 235.6%<br> from<br> US<br> $4.0<br> million<br> in<br> the<br> prior-year<br> period,<br> driven<br> primarily<br> by<br> increased<br> sales<br> from<br> the<br> IDC<br> business<br> with<br> support<br> from<br> the<br> mobile<br> gaming<br> and<br> information<br> technology<br> services<br> businesses |
|---|---|
| ● | Gross<br> profit<br> of<br> US<br> $5.4<br> million,<br> up<br> 94.3%<br> from<br> US<br> $2.8<br> million<br> in<br> the<br> prior-year<br> period |
| --- | --- |
| ● | Income<br> from<br> operations<br> of<br> US<br> $2.0<br> million,<br> unchanged<br> from<br> US<br> $2.0<br> million<br> in<br> the<br> prior-year<br> period |
| --- | --- |
| ● | Net<br> income<br> of<br> US<br> $2.0<br> million,<br> up<br> 21.5%<br> from<br> US<br> $1.7<br> million<br> in<br> the<br> prior-year<br> period |
| --- | --- |
| ● | Nine<br> Months<br> 2021<br> total<br> revenues<br> of<br> US<br> $31.3<br> million,<br> up<br> 254.3%<br> from<br> US<br> $8.8<br> million<br> in<br> the<br> prior-year<br> period |
| --- | --- |
| ● | Nine<br> Months<br> 2021<br> gross<br> profit<br> of<br> US<br> $14.2<br> million,<br> up<br> 120.7%<br> from<br> US<br> $6.4<br> million<br> in<br> the<br> prior-year<br> period |
| --- | --- |
| ● | Nine<br> Months<br> 2021<br> income<br> from<br> operations<br> of<br> US<br> $5.6<br> million,<br> up<br> 55.3%<br> from<br> US<br> $3.6<br> million<br> in<br> the<br> prior-year<br> period |
| --- | --- |
| ● | Nine<br> Months<br> 2021<br> net<br> income<br> of<br> US<br> $3.4<br> million,<br> up<br> 16.4%<br> from<br> US<br> $2.9<br> million<br> in<br> the<br> prior-year<br> period |
| --- | --- |
| ● | US<br> $11.9<br> million<br> in<br> cash<br> and<br> cash<br> equivalents<br> at<br> September 30,<br> 2021 |
| --- | --- |
Management Commentary
Mr. Xiaodong Chen, CEO of Blue Hat, stated, “2021 has been a monumental year for Blue Hat, with significant gains generated due to a proactive acquisition strategy across our integrated businesses. The Company achieved record revenues of US $31.3 million in the first nine months of 2021, more than tripling our top line from the prior-year period with the launch of our communication services/IDC business with the acquisition of Xunpusen Technology Co., Ltd. (“Xunpusen”) in late 2020. In addition, we continue to build an interactive entertainment platform including mobile games, augmented reality toys, and a fully immersive education curriculum. We are pleased with the improved results on the bottom line during Third Quarter 2021 as we have continued to integrate these businesses into Blue Hat’s operations, and we remain confident in our ability to continue executing on our growth strategy to conclude the year on a strong note. We look forward to making continued investments in our various lines of business, including technology development and partnership expansions, which we believe will establish a firm foundation for long-term growth.”
Third Quarter 2021 Results
Total revenues were US $13.3 million for Third Quarter 2021, an increase of US $9.3 million, or 235.6%, compared to US $4.0 million in the prior-year period. The revenue growth was primarily attributable to increased sales from the mobile games and communication services businesses, as well as contributions from the information technology services business, which launched in the fourth quarter of 2020.
Revenues from communication services were US $5.8 million for Third Quarter 2021, compared to nil in the prior-year period. The gain was due to the acquisition of Xunpusen in the second half of 2020.
Revenues from mobile games increased to US $3.4 million for Third Quarter 2021, from US $0.6 million in the prior-year period, following the acquisition of Fuzhou Csfctech Co., Ltd. (“Csfctech”) in January 2021.
Revenues from information technologyservices were US $1.6 million for Third Quarter 2021, compared to nil in the prior-year period. This is a new line of business that the Company launched in late 2020, whereby Blue Hat provides products and technical services that enable users to access technical service platforms to utilize products and services from third-party platforms and medial channels (such as WeChat Official Account, Mini Program, APP, Tik Tok, Toutiao, Quick Worker, etc.).
Revenues from sales of interactivetoys (game series) were US $1.5 million for the Third Quarter 2021, compared to US $3.3 million in the prior-year period. The decrease was due to the Company’s focus on developing other areas of business during the period.
Revenues from sales of interactivetoys (animation series) were US $1.0 million for Third Quarter 2021, compared to US $0.02 million in the prior-year period.
Revenues from AR education, previously included under interactive toys (animation series), were US $0.04 million for Third Quarter 2021. Growth in the AR education business has been primarily driven by the roll-out and implementation of Blue Hat’s ARIC system to various schools. This business may be subject to seasonality as the Company anticipates higher revenues from AR education in the first and third quarters of a year, coinciding with the beginning of school terms in February and September.
Gross profit increased 94.3% to US $5.4 million for Third Quarter 2021, from US $2.8 million in the prior-year period. Gross margin was 40.7% for Third Quarter 2021, compared to 70.2% in the prior-year period. The decrease in gross margin was due to higher initial costs associated with establishing the new businesses and integrating acquisitions into the Company’s operations.
Total operating expenses increased to US $3.4 million for Third Quarter 2021, from US $0.8 million in the prior-year period, as a result of increased selling expenses related to marketing the Company’s new businesses and promoting newly-launched mobile games following the acquisition of Csfctech, as well as increased R&D expenses related to the development of new mobile games.
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Income from operations was US $2.0 million for Third Quarter 2021, unchanged from US $2.0 million in the prior-year period.
Net income increased 21.5% to US $2.0 million for Third Quarter 2021, from US $1.7 million in the prior-year period. The increase in net income is mainly attributable to the increase in total revenues.
Basic and diluted earnings per share were US $0.04 for Third Quarter 2021, compared to US $0.05 for the prior-year period.
Nine Months 2021 Results
Total revenues were US $31.3 million for Nine Months 2021, an increase of US $22.4 million, or 254.3%, compared to US $8.8 million in the prior-year period. The revenue growth was largely attributable to increased revenue contributions from the Company’s IDC and mobile games businesses, following the acquisitions of Xunpusen in late 2020 and Csfctech in January 2021.
Revenues from communication services were US $12.9 million for Nine Months 2021, compared to nil in the prior-year period.
Revenues from mobile games increased to US $9.2 million for Nine Months 2021, from US $1.8 million in the prior-year period.
Revenues from information technologyservices were US $1.6 million for Nine Months 2021, compared to nil in the prior-year period.
Revenues from sales of interactivetoys (game series) were US $5.9 million for Nine Months 2021, compared to US $7.0 million in the prior-year period.
Revenues from sales of interactivetoys (animation series) were US $1.4 million for Nine Months 2021, compared to US $0.02 million in the prior-year period.
Revenues from AR education, previously included under interactive toys (animation series), were US $0.2 million for Nine Months 2021.
Gross profit increased 120.7% to US $14.2 million for Nine Months 2021, from US $6.4 million in the prior-year period.
| ● | Interactive toys (animation series):<br> 3.2%,<br> or<br> US<br> $0.05<br> million |
|---|---|
| ● | Interactive toys (game series):<br> 58.3%,<br> or<br> US<br> $3.4<br> million |
| --- | --- |
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| ● | Mobile games:<br> 82.6%,<br> or<br> US<br> $7.6<br> million |
|---|---|
| ● | AR education:<br> 88.5%,<br> or<br> US<br> $0.2<br> million |
| --- | --- |
| ● | Communication services:<br> 20.3%,<br> or<br> US<br> $2.6<br> million |
| --- | --- |
| ● | Information technology services:<br> 18.8%,<br> or<br> US<br> $0.3<br> million |
| --- | --- |
Total gross margin was 45.5% for Nine Months 2021, compared to 73.0% in the prior-year period.
Total operating expenses increased to US $8.6 million for Nine Months 2021, from US $2.8 million in the prior-year period, primarily as a result of increased expenses as described above under “Third Quarter 2021 Results.”
Income from operations increased 55.3% to US $5.6 million for Nine Months 2021, from US $3.6 million in the prior-year period.
Net income increased 16.4% to US $3.4 million for Nine Months 2021, from US $2.9 million in the prior-year period.
Basic and diluted earnings per share were US $0.07 and US $0.06, respectively, for Nine Months 2021, compared to US $0.08 in the prior-year period.
Balance Sheet Highlights
As of September 30, 2021, Blue Hat had cash and cash equivalents of US $11.9 million, working capital of US $37.4 million and total shareholders’ equity of US $83.5 million, compared to cash and cash equivalents of US $15.8 million, working capital of US $34.0 million and total shareholders’ equity of US $58.9 million, respectively, at December 31, 2020.
About Blue Hat
Blue Hat is a leading communication services and IDC business provider as well as a producer, developer and operator of AR interactive entertainment games, toys and educational materials in China. Distinguished by its own proprietary technology, Blue Hat aims to create an engaging, interactive and immersive community for its users. 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.
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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: ir@bluehatgroup.net
Investor Relations:
| The<br>Equity Group Inc. | In<br>China |
|---|---|
| Carolyne Sohn,<br>Vice President | Lucy Ma, Associate |
| (415) 568-2255 | +86 10 5661 7012 |
| csohn@equityny.com | lma@equityny.com |
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BLUE HAT INTERACTIVE ENTERTAINMENT TECHNOLOGYAND SUBSIDIARIESUNAUDITED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
| For the Three Months Ended September 30, | ||||||
|---|---|---|---|---|---|---|
| 2021 | 2020 | |||||
| Revenues | $ | 13,316,780 | $ | 3,967,824 | ||
| Cost of revenue | 7,903,014 | 1,181,586 | ||||
| Gross profit | 5,413,766 | 2,786,238 | ||||
| Operating expenses: | ||||||
| Selling | 1,432,284 | 120,574 | ||||
| General and administrative | 898,529 | 593,077 | ||||
| Research and development | 1,077,914 | 55,097 | ||||
| Total operating expenses | 3,408,727 | 768,748 | ||||
| Income from operations | 2,005,039 | 2,017,490 | ||||
| Other income (expense) | ||||||
| Interest income | 16,770 | 38,937 | ||||
| Interest expense | (28,026 | ) | (31,615 | ) | ||
| Other finance expenses | (3,109 | ) | (5,227 | ) | ||
| Other (expense) income, net | 894,465 | (41,628 | ) | |||
| Total other (expense) income, net | 870,100 | (39,533 | ) | |||
| Income before income taxes | 2,875,139 | 1,977,957 | ||||
| Provision for income taxes | 859,354 | 319,285 | ||||
| Net income | 2,015,785 | 1,658,672 | ||||
| Other comprehensive income (loss) | ||||||
| Foreign currency translation adjustment | (315,989 | ) | 1,467,387 | |||
| Comprehensive income | $ | 1,699,796 | $ | 3,126,059 | ||
| Less: Comprehensive income attributable to non-controlling interests | 735,923 | — | ||||
| Comprehensive income attributable to Blue Hat Interactive Entertainment shareholders | 963,873 | 3,126,059 | ||||
| Weighted average number of ordinary shares | ||||||
| Basic | 49,432,007 | 35,141,114 | ||||
| Diluted | 56,159,502 | 35,141,114 | ||||
| Earnings per share | ||||||
| Basic | $ | 0.04 | $ | 0.05 | ||
| Diluted | $ | 0.04 | $ | 0.05 |
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BLUE HAT INTERACTIVE ENTERTAINMENT TECHNOLOGYAND SUBSIDIARIESUNAUDITED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
| For the Nine Months Ended September 30, | ||||||
|---|---|---|---|---|---|---|
| 2021 | 2020 | |||||
| Revenues | $ | 31,259,344 | $ | 8,822,686 | ||
| Cost of revenue | 17,051,940 | 2,385,548 | ||||
| Gross profit | 14,207,404 | 6,437,138 | ||||
| Operating expenses: | ||||||
| Selling | 3,081,032 | 411,273 | ||||
| General and administrative | 3,026,529 | 2,189,895 | ||||
| Research and development | 2,455,231 | 200,276 | ||||
| Total operating expenses | 8,562,792 | 2,801,444 | ||||
| Income from operations | 5,644,612 | 3,635,694 | ||||
| Other income (expense) | ||||||
| Interest income | 151,655 | 146,821 | ||||
| Interest expense | (263,427 | ) | (155,275 | ) | ||
| Other finance expenses | (84,772 | ) | (15,395 | ) | ||
| Other (expense) income, net | (198,101 | ) | (20,766 | ) | ||
| Total other (expense) income, net | (394,645 | ) | (44,615 | ) | ||
| Income before income taxes | 5,249,967 | 3,591,079 | ||||
| Provision for income taxes | 1,853,066 | 672,644 | ||||
| Net income | 3,396,901 | 2,918,435 | ||||
| Other comprehensive income (loss) | ||||||
| Foreign currency translation adjustment | 994,794 | 887,995 | ||||
| Comprehensive income | $ | 4,391,695 | $ | 3,806,430 | ||
| Less: Comprehensive income attributable to non-controlling interests | 1,484,518 | |||||
| Comprehensive income attributable to Blue Hat Interactive Entertainment shareholders | 2,907,177 | 3,806,430 | ||||
| Weighted average number of ordinary shares | ||||||
| Basic | 49,432,007 | 35,141,114 | ||||
| Diluted | 56,159,502 | 35,141,114 | ||||
| Earnings per share | ||||||
| Basic | $ | 0.07 | $ | 0.08 | ||
| Diluted | $ | 0.06 | $ | 0.08 |
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BLUE HAT INTERACTIVE ENTERTAINMENT TECHNOLOGYAND SUBSIDIARIESUNAUDITED CONSOLIDATED BALANCE SHEETS
| December 31, | |||
|---|---|---|---|
| ASSETS | 2020 | ||
| Current assets: | |||
| Cash and cash equivalents | 11,887,108 | $ | 15,800,563 |
| Restricted cash | |||
| Short-term investments | |||
| Accounts receivable, net | 32,333,303 | 16,594,533 | |
| Accounts receivable - related party | 1,906,101 | ||
| Other receivables, net | 16,225,702 | 14,350,223 | |
| Other receivables - related party | 33,381 | ||
| Inventories | 244,302 | 117,075 | |
| Prepayments, net | 3,134,782 | 1,917,780 | |
| Total current assets | 63,858,858 | 50,686,275 | |
| Property and equipment, net | 4,232,119 | 4,258,121 | |
| Other assets: | |||
| Prepayments | 11,784,577 | 4,164,274 | |
| Operating lease, right-of-use asset | 199,061 | 290,410 | |
| Intangible assets, net | 27,089,943 | 14,252,575 | |
| Long-term investments | 1,850,310 | 1,914,668 | |
| Deferred tax assets | 255,335 | 119,127 | |
| Goodwill accounting | 787,047 | ||
| Total other assets | 41,966,273 | 20,741,054 | |
| Total assets | 110,056,970 | $ | 75,685,450 |
| LIABILITIES AND SHAREHOLDERS’ EQUITY | |||
| Current liabilities: | |||
| Short-term loans - banks | 1,355,188 | $ | 5,129,295 |
| Current maturities of long-term loans - third party | 0 | 14,117 | |
| Accounts payable | 3,813,233 | 935,588 | |
| Convertible bonds payable | 60,681 | 739,189 | |
| Other payables and accrued liabilities | 11,202,630 | 1,846,917 | |
| Other payables - related party | 216,885 | 25,837 | |
| Operating lease liabilities - current | 146,693 | 300,468 | |
| Customer deposits | 1,862,236 | 941,877 | |
| Accrual interest payable | |||
| Taxes payable | 7,843,132 | 6,802,454 | |
| Total current liabilities | 26,500,678 | 16,735,742 | |
| Other liabilities: | |||
| Operating lease liability | 59,731 | ||
| Long-term loans - third party | |||
| Total other liabilities | 59,731 | ||
| Total liabilities | 26,560,409 | 16,735,742 | |
| COMMITMENTS AND CONTINGENCIES | |||
| Shareholders’ equity | |||
| Ordinary shares, 0.001 par value, 100,000,000 shares authorized, 53,417,200 shares issued and outstanding as of June 30, 2021, and 38,553,694 shares issued and outstanding as of December 31, 2020 | 53,667 | 38,554 | |
| Additional paid-in capital | 35,861,782 | 23,466,482 | |
| Statutory reserves | 2,204,174 | 2,204,174 | |
| Retained earnings | 33,299,781 | 31,387,398 | |
| Accumulated other comprehensive income (loss) | 2,736,490 | 1,741,696 | |
| Total Blue Hat Interactive Entertainment Technology shareholders’ equity | 74,155,894 | 58,838,304 | |
| Non-controlling interests | 9,340,667 | 111,404 | |
| Total equity | 83,496,561 | 58,949,708 | |
| Total liabilities and shareholders’ equity | 110,056,970 | $ | 75,685,450 |
All values are in US Dollars.
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