Blue Hat Interactive Entertainment Technology 6-K, filed Oct 25, 2021
Blue Hat Interactive Entertainment Technology (BHATF)
About this 6-K
Blue Hat Interactive Entertainment Technology filed this 6-K on October 25, 2021.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16 UNDER THE
SECURITIES EXCHANGE ACT OF 1934
For the month of October 2021
Commission File Number 001-39001
Blue Hat Interactive Entertainment Technology
(Translation of registrant’s name into English)
| 7th
Floor, Building C, No. 1010 Anling Road Huli District, Xiamen, China 361009 (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 October 25, 2021, announcing its unaudited financial results for the quarter and six months ended June 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: October 25, 2021
| BLUE HAT INTERACTIVE ENTERTAINMENT TECHNOLOGY | ||
| By: | /s/ Xiaodong Chen | |
| Name: Xiaodong Chen | ||
| Title: Chief Executive Officer | ||
Exhibit 99.1
Blue Hat Announces Financial Results for Second Quarter and First Half of 2021, Highlighted by 269.6% Increase in Revenues to $17.9 Million for First Half 2021
Xiamen, China – October 25, 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 months ended June 30, 2021 (“Second Quarter 2021”) and six months ended June 30, 2021 (“First Half 2021”).
Second Quarter 2021 and First Half 2021 Financial Highlights
| ● | Second Quarter 2021 total revenues of US $8.0 million, compared to US $2.6 million in the prior-year period, driven by increased sales across all major business lines, particularly mobile games and communication services. |
| ● | Second Quarter 2021 gross profit of US $4.7 million, up 138.4% from US $2.0 million in the prior-year period |
| ● | Second Quarter 2021 income from operations of US $1.9 million, up 159.0% from US $0.7 million in the prior-year period |
| ● | Second Quarter 2021 net income of US $0.2 million, compared to US $0.5 million in the prior-year period, as a result of increased expenses related to bad debt provision. |
| ● | First Half 2021 total revenues of US $17.9 million, compared to US $4.9 million in the prior-year period |
| ● | First Half 2021 gross profit of US $8.8 million, up 140.9% from US $3.7 million in the prior-year period |
| ● | First Half 2021 income from operations of US $3.6 million, up 124.9% from US $1.6 million in the prior-year period |
| ● | First Half 2021 net income of US $1.4 million, up 9.6% from US $1.3 million in the prior-year period |
| ● | US $11.5 million in cash and cash equivalents at June 30, 2021 |
Management Commentary
Mr. Xiaodong Chen, CEO of Blue Hat, stated, “We continued to see strong growth across all our lines of business in Second Quarter 2021, which resulted in strong top line growth during the Second Quarter 2021 and First Half 2021. We more than tripled growth on the top line in First Half 2021, achieving US $17.9 million in total revenues, largely driven by US $7.1 million in contributions from our new IDC business and an additional US $4.7 million in contributions from mobile games following the integration of recent acquisitions and ongoing development of these businesses in First Half 2021. We remain optimistic about the ongoing growth potential of all of our business segments and were pleased to announce earlier this month that our operating subsidiary Xunpusen Technology Co., Ltd. (“Xunpusen”) was engaged as the provider of SMS channel services for JD Cloud, a leading cloud computing brand under tech company JD Technology Group. We believe this new client win further solidifies our position as a leader in communication services and look forward to building upon the positive momentum the Company has established with these results in First Half 2021.”
Recent Operating Highlights
| ● | In October 2021, Blue Hat announced that Xunpusen signed an agreement to provide SMS channel services for JD Cloud. Xunpusen has been engaged as the channel and port provider for JD Cloud’s SMS channels services. The agreement is in effect through May 25, 2022. |
Second Quarter 2021 Results
Total revenues were US $8.0 million for the Second Quarter 2021, an increase of US $5.4 million, or 206.4%, compared to US $2.6 million in the prior-year period. While COVID-19 posed negative impact on revenues in the prior-year period, the significant revenue growth was primarily attributable to increased contributions from the mobile games and communication services businesses, as well as the acquisitions of Xunpusen and Fuzhou Csfctech Co., Ltd. And its two subsidiaries (“Csfctech”) in the Second Quarter 2021.
Revenues from sales of interactive toys (animation series) were US $0.4 million for the Second Quarter 2021, compared to US $148 in the prior-year period.
Revenues from sales of interactive toys (game series) were US $2.4 million for the Second Quarter 2021, up 17.8% from US $2.0 million in the prior-year period.
Revenues from mobile games increased to US $3.4 million for the Second Quarter 2021, from US $0.6 million in the prior-year period, following the acquisition of Csfctech in January 2021.
Revenues from AR education, previously included under interactive toys (animation series), were US $850 in Second 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.
Revenues from communication services were US $1.8 million for the Second 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.
Gross profit increased 138.4% to US $4.7 million for the Second Quarter 2021 from US $2.0 million in the prior-year period. Gross margin was 58.9% for the Second Quarter 2021compared to 75.7% in the prior-year period. The decrease was due to higher initial costs associated with establishing the new businesses and integrating acquisitions into the Company’s operations.
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Total operating expenses increased to US $2.8 million for the Second Quarter 2021, from US $1.2 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.
Income from operations increased 159.0% to US $1.9 million for the Second Quarter 2021, from US $0.7 million in the prior-year period.
Net income was US $0.2 million for the Second Quarter 2021, compared to US $0.5 million in the prior-year period. The decrease was primarily driven by the increase in operating expenses described above and an increase in other expenses related to bad debt provision in the Company’s AR toys business. The Company counts accounts receivable within 3 to 12 months as bad debt, and currently expects to collect such debts.
Basic and diluted earnings per share were US $0.003 for the Second Quarter 2021, compared to US $0.014 for the prior-year period.
First Half 2021 Results
Total revenues were US $17.9 million for the First Half 2021, an increase of US $13.1 million, or 269.6%, compared to US $4.9 million in the prior-year period. While COVID-19 had a negative impact on revenues in the prior-year period, revenue growth was primarily attributable to increased contributions from the Csfctech mobile games business acquired in the First Half 2021 and the Xunpusen communication services business acquired in the First Half 2021.
Revenues from sales of interactive toys (animation series) were US $0.5 million for the six months ended June 30, 2021, compared to US $54 in the prior-year period.
Revenues from sales of interactive toys (game series) were US $4.3 million for the First Half 2021, compared to US $3.7 million in the prior-year period.
Revenues from mobile games were US $5.8 million for the First Half 2021, compared to US $1.2 million in the prior-year period.
Revenues from AR education, previously included under interactive toys (animation series), were US $0.2 million for the First Half 2021.
Revenues from communication services were US $7.1 million for the First Half 2021, compared to nil in the prior-year period.
Gross profit increased 140.9% to US $8.8 million for the First Half 2021, from US $3.7 million in the prior-year period.
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| ● | Interactive toys (animation series): 10.7%, or US $0.05 million | |
| ● | Interactive toys (game series): 57.6%, or US $2.5 million | |
| ● | Mobile games: 83.5%, or US $4.9 million | |
| ● | AR education: 93.8%, or US $0.2 million | |
| ● | Communication services: 16.5%, or US $1.2 million |
Total gross margin was 49.0% for the First Half 2021, compared to 75.2% in the prior-year period.
Total operating expenses increased to US $5.2 million for the First Half 2021, from US $2.0 million in the prior-year period, primarily as a result of increased expenses as described above in the Second Quarter 2021 Results.
Income from operations increased 124.9% to US $3.6 million for the First Half 2021, from US $1.6 million in the prior-year period.
Net income increased 9.6% to US $1.4 million for the First Half 2021, from US $1.3 million in the prior-year period.
Basic and diluted earnings per share were US $0.03 for the First Half 2021, compared to US $0.04 in the prior-year period.
Balance Sheet Highlights
As of June 30, 2021, Blue Hat had cash and cash equivalents of US $11.5 million, working capital of US $35.9 million and total shareholders’ equity of US $81.6 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.
During the Second Quarter 2021, the Company completed a registered direct offering with two institutional investors for the purchase and sale of 6.29 million ordinary shares at a price of $0.90 per share, resulting in total gross proceeds of approximately $5.66 million before deducting the placement agent’s fees and other offering expenses. The net proceeds were approximately $5.23 million.
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 Equity Group Inc. | In China | |||
| Carolyne Sohn, 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 TECHNOLOGY
AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
| For the Three Months Ended June 30, | ||||||||
| 2021 | 2020 | |||||||
| Revenues | $ | 8,001,157 | $ | 2,611,204 | ||||
| Cost of revenue | 3,289,079 | 634,473 | ||||||
| Gross profit | 4,712,078 | 1,976,731 | ||||||
| Operating expenses: | ||||||||
| Selling | 1,068,702 | 117,549 | ||||||
| General and administrative | 812,223 | 1,057,108 | ||||||
| Research and development | 933,106 | 69,128 | ||||||
| Total operating expenses | 2,814,031 | 1,243,785 | ||||||
| Income from operations | 1,898,047 | 732,946 | ||||||
| Other income (expense) | ||||||||
| Interest income | 134,691 | 107,507 | ||||||
| Interest expense | (97,786 | ) | (51,053 | ) | ||||
| Other finance expenses | (40,693 | ) | 47,581 | |||||
| Other (expense) income, net | (1,113,075 | ) | 2,328 | |||||
| Total other (expense) income, net | (1,116,863 | ) | 106,363 | |||||
| Income before income taxes | 781,184 | 839,309 | ||||||
| Provision for income taxes | 630,566 | 338,919 | ||||||
| Net income | 150,618 | 500,390 | ||||||
| Other comprehensive income (loss) | ||||||||
| Foreign currency translation adjustment | 1,676,959 | 25,968 | ||||||
| Comprehensive income | $ | 1,827,577 | $ | 526,358 | ||||
| Less: Comprehensive income attributable to non-controlling interests | 221,402 | — | ||||||
| Comprehensive income attributable to Blue Hat Interactive Entertainment shareholders | 1,606,175 | 526,358 | ||||||
| Weighted average number of ordinary shares | ||||||||
| Basic | 47,384,286 | 35,141,114 | ||||||
| Diluted | 52,628,146 | 35,141,114 | ||||||
| Earnings per share | ||||||||
| Basic | $ | 0.003 | $ | 0.014 | ||||
| Diluted | $ | 0.003 | $ | 0.014 | ||||
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BLUE HAT INTERACTIVE ENTERTAINMENT TECHNOLOGY
AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
| For the Six Months Ended June 30, | ||||||||
| 2021 | 2020 | |||||||
| Revenues | $ | 17,942,564 | $ | 4,854,862 | ||||
| Cost of revenue | 9,148,926 | 1,203,962 | ||||||
| Gross profit | 8,793,638 | 3,650,900 | ||||||
| Operating expenses: | ||||||||
| Selling | 1,648,748 | 290,699 | ||||||
| General and administrative | 2,128,000 | 1,596,818 | ||||||
| Research and development | 1,377,317 | 145,179 | ||||||
| Total operating expenses | 5,154,065 | 2,032,696 | ||||||
| Income from operations | 3,639,573 | 1,618,204 | ||||||
| Other income (expense) | ||||||||
| Interest income | 134,885 | 107,884 | ||||||
| Interest expense | (235,401 | ) | (123,660 | ) | ||||
| Other finance expenses | (81,663 | ) | (10,168 | ) | ||||
| Other (expense) income, net | (1,082,566 | ) | 20,862 | |||||
| Total other (expense) income, net | (1,264,745 | ) | (5,082 | ) | ||||
| Income before income taxes | 2,374,828 | 1,613,122 | ||||||
| Provision for income taxes | 993,712 | 353,359 | ||||||
| Net income | 1,381,116 | 1,259,763 | ||||||
| Other comprehensive income (loss) | ||||||||
| Foreign currency translation adjustment | 1,310,783 | (579,392 | ) | |||||
| Comprehensive income | $ | 2,691,899 | $ | 680,371 | ||||
| Less: Comprehensive income attributable to non-controlling interests | 748,596 | |||||||
| Comprehensive income attributable to Blue Hat Interactive Entertainment shareholders | 1,943,303 | 680,371 | ||||||
| Weighted average number of ordinary shares | ||||||||
| Basic | 47,384,286 | 35,141,114 | ||||||
| Diluted | 52,628,146 | 35,141,114 | ||||||
| Earnings per share | ||||||||
| Basic | $ | 0.03 | $ | 0.04 | ||||
| Diluted | $ | 0.03 | $ | 0.04 | ||||
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BLUE HAT INTERACTIVE ENTERTAINMENT TECHNOLOGY
AND SUBSIDIARIES
UNAUDITED CONSOLIDATED BALANCE SHEETS
| June 30, | December 31, | |||||||
| ASSETS | 2021 | 2020 | ||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 11,503,578 | $ | 15,800,563 | ||||
| Restricted cash | ||||||||
| Short-term investments | ||||||||
| Accounts receivable, net | 31,165,800 | 16,594,533 | ||||||
| Accounts receivable - related party | 1,906,101 | |||||||
| Other receivables, net | 14,733,377 | 14,350,223 | ||||||
| Other receivables - related party | 33,512 | |||||||
| Inventories | 200,279 | 117,075 | ||||||
| Prepayments, net | 2,403,234 | 1,917,780 | ||||||
| Total current assets | 60,039,780 | 50,686,275 | ||||||
| Property and equipment, net | 4,261,011 | 4,258,121 | ||||||
| Other assets: | ||||||||
| Prepayments | 12,544,199 | 4,164,274 | ||||||
| Operating lease, right-of-use asset | 278,528 | 290,410 | ||||||
| Intangible assets, net | 25,849,682 | 14,252,575 | ||||||
| Long-term investments | 1,857,556 | 1,914,668 | ||||||
| Deferred tax assets | 256,460 | 119,127 | ||||||
| Goodwill accounting | 787,047 | |||||||
| Total other assets | 41,573,472 | 20,741,054 | ||||||
| Total assets | $ | 105,874,263 | $ | 75,685,450 | ||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
| Current liabilities: | ||||||||
| Short-term loans - banks | $ | 1,360,495 | $ | 5,129,295 | ||||
| Current maturities of long-term loans - third party | 14,117 | |||||||
| Accounts payable | 3,571,783 | 935,588 | ||||||
| Convertible bonds payable | 57,336 | 739,189 | ||||||
| Other payables and accrued liabilities | 11,179,429 | 1,846,917 | ||||||
| Other payables - related party | 211,818 | 25,837 | ||||||
| Operating lease liabilities - current | 229,521 | 300,468 | ||||||
| Customer deposits | 789,117 | 941,877 | ||||||
| Accrual interest payable | ||||||||
| Taxes payable | 6,786,743 | 6,802,454 | ||||||
| Total current liabilities | 24,186,242 | 16,735,742 | ||||||
| Other liabilities: | ||||||||
| Operating lease liability | 59,965 | |||||||
| Long-term loans - third party | ||||||||
| Total other liabilities | 59,965 | |||||||
| Total liabilities | 24,246,207 | 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 | 53,417 | 38,554 | ||||||
| Additional paid-in capital | 35,693,329 | 23,466,482 | ||||||
| Statutory reserves | 2,204,174 | 2,204,174 | ||||||
| Retained earnings | 32,019,919 | 31,387,398 | ||||||
| Accumulated other comprehensive income (loss) | 3,052,478 | 1,741,696 | ||||||
| Total Blue Hat Interactive Entertainment Technology shareholders’ equity | 73,023,317 | 58,838,304 | ||||||
| Non-controlling interests | 8,604,739 | 111,404 | ||||||
| Total equity | 81,628,056 | 58,949,708 | ||||||
| Total liabilities and shareholders’ equity | $ | 105,874,263 | $ | 75,685,450 | ||||
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