Blue Hat Interactive Entertainment Technology 20-F for FY2023

Blue Hat Interactive Entertainment Technology (BHATF)

20-F 2024-04-30 For: 2023-12-31

Added on April 06, 2026

About this 20-F

Blue Hat Interactive Entertainment Technology filed this 20-F on April 30, 2024, covering the fiscal year ended December 31, 2023 (FY2023).

Headline figures

Fiscal year ended December 31, 2023, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $73.69M; up 3255.6% from $2.2M a year earlier
Net loss: $19.3M; compared with a net loss of $9.37M a year earlier
Diluted EPS: $0.30; up 900.0% from $0.03 a year earlier

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Title of each class		Trading symbol(s)		Name of each exchange on which registered
Ordinary Shares, par value $0.01 per share		BHAT		The Nasdaq Stock Market LLC

TABLE OF CONTENTS

INTRODUCTION	ii

FORWARD-LOOKING STATEMENTS	iv

PART I	1

ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS	1
ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE	1
ITEM 3. KEY INFORMATION	1
ITEM 4. INFORMATION ON THE COMPANY	36
ITEM 4A. UNRESOLVED STAFF COMMENTS	59
ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS	59
ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES	72
ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS	80
ITEM 8. FINANCIAL INFORMATION	81
ITEM 9. THE OFFER AND LISTING	81
ITEM 10. ADDITIONAL INFORMATION	82
ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	92
ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES	93

PART II	94

ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES	94
ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS	94
ITEM 15. CONTROLS AND PROCEDURES	94
ITEM 16. [RESERVED]	96
ITEM 16A. AUDIT COMMITTEE FINANCIAL EXPERT	96
ITEM 16B. CODE OF ETHICS	97
ITEM 16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES	97
ITEM 16D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES	97
ITEM 16E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS	97
ITEM 16F. CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT	98
ITEM 16G. CORPORATE GOVERNANCE	98
ITEM 16H. MINE SAFETY DISCLOSURE	98
ITEM 16J. INSIDER TRADING POLICIES	98
ITEM 16K. CYBERSECURITY	98

PART III	99

ITEM 17. FINANCIAL STATEMENTS	99
ITEM 18. FINANCIAL STATEMENTS	99
ITEM 19. EXHIBITS	99

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS	F-1

Selected Consolidated Balance Sheet Data:	December 31,		December 31,		December 31,
	2023		2022		2021
Total current assets	$	39,282,300	$	21,532,070	$	21,704,144
Total assets		49,262,838		34,276,858		36,511,577
Total current liabilities		5,664,392		17,408,208		18,281,724
Total liabilities		8,640,763		19,747,519		18,861,371
Total shareholders’ equity		40,622,075		12,108,940		15,189,782
Total liabilities and shareholders’ equity	$	49,262,838	$	34,276,858		36,511,577

	For the Years Ended December 31,
	2023			2022			2021
REVENUES	$	73,686,733		$	2,195,954		$	12,139,500
COST OF REVENUES		(72,532,882	)		(958,438	)		(5,782,664	)
GROSS PROFIT		1,153,851			1,237,516			6,356,836
OPERATING EXPENSES:
Selling		(7,677	)		(159,937	)		(315,600	)
Research and development		(2,570,158	)		(2,734,982	)		(11,233,806	)
General and administrative		(13,766,487	)		(6,224,674	)		(31,335,421	)
Impairment Losses		(13,693,305	)		(33,397	)		(14,632,931	)
Total operating expenses		(30,037,627	)		(9,152,990	)		(57,517,758	)
INCOME FROM OPERATIONS
OTHER EXPENSE		(28,883,776	)		(7,915,474	)		(51,160,922	)
Interest income		7			374			156,038
Interest expense		(222,057	)		(133,882	)		(229,985	)
Other finance expenses		(62,025	)		(15,264	)		(65,344	)
Other (expense) income, net		66,205			39,080			(191,499	)
Total other expense, net		(217,870	)		(109,692	)		(330,790	)
LOSS BEFORE INCOME TAXES		(29,101,646	)		(8,025,166	)		(51,491,712	)
PROVISION FOR INCOME TAXES		(6,081	)		(1,097,888	)		(1,104	)
LOSS FROM CONTINUING OPERATION		(29,107,727	)		(9,123,054	)		(51,492,816	)

DISCONTINUED OPERATIONS
Gain on disposal of discontinued operations		7,389,310			—			1,493,945
Loss from discontinued operations		—			(282,027	)		(10,055,749	)

NET LOSS		(21,718,417	)		(9,405,081	)		(60,054,620	)
Less: Net loss attributable to non-controlling interest		(2,420,399	)		(40,025	)		(2,918,680	)

Net Loss attributable to Blue Hat Interactive Entertainment Technology		(19,298,018	)		(9,365,056	)		(57,135,940	)

OTHER COMPREHENSIVE LOSS
Net loss from continued operations		(29,107,727	)		(9,123,054	)		(51,492,816	)
Foreign currency translation adjustment - continued operation		(199,032	)		(1,883,571	)		651,272
COMPREHENSIVE LOSS - CONTINUED OPERATION	$	(29,306,759	)	$	(11,006,625	)	$	(50,841,544	)

Income (loss) from discontinued operation		7,389,310			(282,027	)		(8,561,804	)
Foreign currency translation adjustment – discontinued operation		263,285			258,828			66,288
COMPREHENSIVE INCOME (LOSS) - DISCONTINUED OPERATION	$	7,652,595		$	(23,199	)	$	(8,495,516	)

COMPREHENSIVE LOSS	$	(21,654,164	)	$	(11,029,824	)	$	(59,337,060	)
Less: Net loss attributable to non-controlling interests		(2,420,399	)		(40,025	)		(2,918,680	)
Comprehensive loss attributable to Blue Hat Interactive Entertainment shareholders		(19,233,765	)		(10,989,799	)		(56,418,380	)
Basic		29,722,950			7,639,482			5,053,727
Diluted		30,975,275			8,565,163			5,800,048

Earnings per share
Basic earnings per share from continued operation	$	(0.98	)	$	(1.19	)	$	(10.19	)
Basic earnings per share from discontinued operation		0.33			(0.04	)		(1.12	)

Diluted Earnings per share
Diluted earnings per share from continued operation	$	(0.98	)	$	(1.19	)	$	(10.19	)
Diluted earnings per share from discontinued operation		0.33			(0.04	)		(1.12	)

	For the Years Ended December 31,
	2023			2022			2021
Net cash used in operating activities - continued operation	$	(9,773,132	)	$	(1,473,267	)	$	(14,624,367	)
Net cash (used in) generated from operating activities -discontinued operation		7,661,561			281,780			(5,488,297	)
Net cash (used in) generated from investing activities		(15,380	)		6,336			(4,516,909	)
Net cash used in investing activities – discontinued operation		—			—			(1,952	)
Net cash generated from financing activities		2,305,954			2,542,634			7,420,588
Net cash (used in) generated from financing activities – discontinued operation		(52,322	)		(11,960	)		154,260
EFFECT OF EXCHANGE RATE ON CASH		210,505			(1,319,437	)		1,439,535
NET CHANGE IN CASH AND CASH EQUIVALENTS		337,186			26,086			(15,617,142	)
Cash paid for income tax		6,081			1,097,888			1,529,850
Cash paid for interest		222,057			133,882			229,985
Cash and cash equivalents		407,588			76,535			135,562
Restricted cash		1,587			1,129			—
Total cash, cash equivalents, and restricted cash shown in the consolidated statements of cash flows	$	409,175		$	77,664		$	135,562
Less: cash and cash equivalents from the discontinued operations, end of year		—			(7,262	)		(85,113	)
CASH AND CASH EQUIVALENT, FROM THE CONTINUING OPERATIONS, end of year	$	409,175		$	70,402		$	50,449

●	We have a limited operating history. There is no assurance that our future operations will result in profitable revenues. If we cannot generate sufficient revenues to operate profitably, we may suspend or cease operations.

●	We operate in a highly competitive market and the size and resources of many of our competitors may allow them to compete more effectively than we can, preventing us from achieving profitability.

●	Our business depends significantly on our ability to maintain an efficient distribution network for our products and our failure to do so could adversely affect our financial condition, competitiveness and growth prospects.

●	Our business is seasonal and therefore our annual operating results will depend, in large part, on our sales during the relatively brief holiday shopping season.

●	We will need to expand our organization, and we may experience difficulties in realizing or managing this growth.

●	Failure to adequately contribute to employee benefits plans required by PRC regulations.

●	A decline in discretionary consumer spending on jewelry may unfavorably impact BHAT Diamond’s future sales and earnings, particularly if such decline occurs during the holiday shopping season.

●	BHAT Diamond’s future results of operations may be adversely affected by input cost inflation.

●	The conflict mineral diligence process, the results from that process and the related reporting obligations could increase costs, adversely affect BHAT Diamond’s reputation and adversely affect BHAT Diamond’s ability to obtain merchandise.

●	If BHAT Diamond misjudges the demand for BHAT Diamond’s products and fail to manage inventory levels, it could have a materially adverse impact on BHAT Diamond’s business and results of operations.

●	BHAT Diamond relies on a limited number of suppliers for certain raw materials and supplied components, which may cause supply chain disruptions. BHAT Diamond may not be able to obtain sufficient raw materials or supplied components that meet BHAT Diamond’s operating needs and standards, or obtain such materials on favorable terms or at all, which could impair BHAT Diamond’s ability to fulfill orders in a timely manner.

●	BHAT Diamond maintains a relatively large inventory of jewelry products to support customer delivery requirements, and if this inventory is lost due to theft, BHAT Diamond’s results of operations would be negatively impacted.

●	The market for high value commodities is inherently unpredictable.

●	We may not be able to consolidate the financial results of some of our affiliated companies or such consolidation could materially adversely affect our operating results and financial condition.

●	Our current corporate structure and business operations may be affected by the Foreign Investment Law.

●	We face risks related to health epidemics, severe weather conditions and other outbreaks, including COVID-19.

●	We may not be able to adequately protect our proprietary intellectual property and information, and protect against third party claims that we are infringing on their intellectual property rights.

●	We may be unable to adequately protect our intellectual property rights, or we may be accused of infringing on the intellectual property rights of others.

●	Litigation or other proceedings or third parties claims of intellectual property infringement could require us to spend significant time and money and could prevent us from selling our products or affect our stock price.

●	Third parties may assert that our employees or consultants have wrongfully used or disclosed confidential information or misappropriated trade secrets.

●	Changes in China’s economic, political or legal system or social conditions or government policies could have a material adverse effect on our business and operations.

●	The economy of China had experienced unprecedented growth. This growth has slowed in the recent years, and if the growth of the economy continues to slow or if the economy contracts, our financial condition may be materially and adversely affected.

●	A severe or prolonged downturn in the Chinese and/or global economy could materially and adversely affect our business, financial condition and operating results.

●	Compliance with China’s new Data Security Law, Measures on Cybersecurity Review (revised draft for public consultation), Personal Information Protection Law (second draft for consultation), regulations and guidelines relating to the multi-level protection scheme and any other future laws and regulations may entail significant expenses and could materially affect our business.

●	Recent greater oversight by the CAC over data security, particularly for companies seeking to list on a foreign exchange, could adversely impact our business.

●	You may experience difficulties in effecting service of legal process, enforcing foreign judgments or bringing actions in China against us or our management named in the annual report based on foreign laws.

●	We may rely on dividends and other distributions on equity paid by our PRC subsidiaries to fund any cash and financing requirements we may have, and any limitation on the ability of our PRC subsidiaries to make payments to us could have a material and adverse effect on our ability to conduct our business.

●	Fluctuations in exchange rates could have a material and adverse effect on our operations.

●	Governmental control of currency conversion may limit our ability to utilize our net revenues effectively.

●	PRC regulations relating to the establishment of offshore special purpose companies by PRC residents may subject our PRC resident beneficial owners or our PRC subsidiaries to liability or penalties, limit our ability to inject capital into our PRC subsidiaries, limit our PRC subsidiaries’ ability to increase their registered capital or distribute profits to us, or may otherwise adversely affect us.

●	Failure to comply with PRC regulations regarding the registration requirements for employee equity incentive plans may subject our PRC citizen employees or us to fines and other legal or administrative sanctions.

●	PRC regulation of loans to and direct investment in PRC entities by offshore holding companies and governmental control of currency conversion may delay us from using the proceeds of offerings from the U.S. to make loans or additional capital contributions to our PRC subsidiaries, which could materially and adversely affect our liquidity and our ability to fund and expand our business.

●	We face uncertainty with respect to indirect transfers of equity interests in PRC resident enterprises by their non-PRC holding companies.

●	Our use of third parties manufacturers to produce our products presents risks to our business.

●	The Holding Foreign Companies Accountable Act, or the HFCAA, and the related regulations continue to evolve. Further implementations and interpretations of or amendments to the HFCAA or the related regulations, or a PCAOB determination of its lack of sufficient access to inspect our auditor, might pose regulatory risks to and impose restrictions on us because of our operations in mainland China.

●	An active trading market for our ordinary shares may not be sustained.

●	Our ordinary shares are considered to be penny stock.

●	Our disclosure controls and procedures may not prevent or detect all errors or acts of fraud.

●	We have identified material weaknesses in our internal control over financial reporting.

●	Because we do not anticipate paying any cash dividends on our capital stock in the foreseeable future, capital appreciation, if any, will be your sole source of gain.

●	Securities analysts may not publish favorable research or reports about our business or may publish no information at all, which could cause our stock price or trading volume to decline.

●	Recently introduced economic substance legislation of the Cayman Islands may impact us and our operations.

●	You may face difficulties in protecting your interests, and your ability to protect your rights through U.S. courts may be limited, because we are incorporated under Cayman Islands law.

●	Certain judgments obtained against us by our shareholders may not be enforceable.

●	any of our patents, or any of our pending patent applications, if issued, will include claims having a scope sufficient to protect our products;

●	any of our pending patent applications will issue as patents;

●	we will be able to successfully commercialize our products on a substantial scale, if approved, before our relevant patents we may have expire;

●	we were the first to make the inventions covered by each of our patents and pending patent applications;

●	we were the first to file patent applications for these inventions;

●	others will not develop similar or alternative technologies that do not infringe our patents; any of our patents will be found to ultimately be valid and enforceable;

●	any patents issued to us will provide a basis for an exclusive market for our commercially viable products, will provide us with any competitive advantages or will not be challenged by third parties;

●	we will develop additional proprietary technologies or products that are separately patentable; or

●	our commercial activities or products will not infringe upon the patents of others.

●	stop making, selling or using products or technologies that allegedly infringe the asserted intellectual property;

●	lose the opportunity to license our technology to others or to collect royalty payments based upon successful protection and assertion of our intellectual property rights against others; incur significant legal expenses;

●	pay substantial damages or royalties to the party whose intellectual property rights we may be found to be infringing;

●	pay the attorney’s fees and costs of litigation to the party whose intellectual property rights we may be found to be infringing;

●	redesign those products that contain the allegedly infringing intellectual property, which could be costly, disruptive and infeasible; and

●	attempt to obtain a license to the relevant intellectual property from third parties, which may not be available on reasonable terms or at all, or from third parties who may attempt to license rights that they do not have.

●	the volume and timing of sales of our products;

●	the introduction of new products or product enhancements by us or others in our industry;

●	disputes or other developments with respect to our or others’ intellectual property rights;

●	our ability to develop, obtain regulatory clearance or approval for, and market new and enhanced products on a timely basis;

●	product liability claims or other litigation;

●	quarterly variations in our results of operations or those of others in our industry;

●	media exposure of our products or of those of others in our industry;

●	changes in governmental regulations or in reimbursement;

●	changes in earnings estimates or recommendations by securities analysts; and

●	general market conditions and other factors, including factors unrelated to our operating performance or the operating performance of our competitors.

●	Consumer Groups - We believe that China's vast population demonstrates the market potential in China. With the continued growth of the Chinese population and the improvement of living standards, we believe that the demand for jewelry will continue to expand.

●	Consumption Patterns and Habits - We believe that the rapid economic growth in China has greatly influenced the consumption patterns of Chinese society. Consumer habits have shifted from basic needs to more aspirational desires, with a growing preference for products that enhance quality of life, particularly in the consumption of gold and jewelry accessories.

●	Seasonal Factors - The majority of our sales typically occur in the second half of the year during traditional Chinese holidays, as increased holiday shopping contributes to higher sales.

●	better established credibility and market reputations, longer operating histories, and broader product offerings;

●	significantly greater financial, technical, marketing and other resources,

●	multiple product offerings, which may enable them to offer bundled discounts for customers purchasing multiple products or other incentives that we cannot match or offer.

●	brand recognition and reputation;

●	flexible purchasing and payment methods;

●	efficient operational process and services; and

●	the performance and reliability of products and platforms.

For the year ended December 31, 2023
Transfer from	Transfer to	Approximate value ($)		Note
Blue Hat Interactive Entertainment Technology	Blue Hat Interactive Entertainment Technology Limited		2,800,000.00		Loan
Blue Hat Interactive Entertainment Technology Limited	Fujian Blue Hat Group Co, Ltd		2,800,000.00		Investment

No.	Name of the Company	License No.	License/Permission	Established Date	Validity
1	Blue Hat Interactive Entertainment Technology	WC-338512	Business License	6/13/2018	Long-term
2	Brilliant Hat Limited	1983687	Business License	6/26/2018	Long-term
3	Golden Strategy Ltd	2121323	Business License	4/3/2023	Long-term
4	Blue Hat Interactive Entertainment Technology Limited	2714615	Business License	6/26/2018	Long-term
5	Golden Alpha Strategy Limited	3271611	Business License	4/18/2023	Long-term
6	BLUE HAT TECHNOLOGY LLC	937615	Business License	7/21/2023	Long-term
7	Fujian Blue Hat Group Co., Ltd.	91350100MA8TTRRQ4A	Business License Record Registration Form for Foreign	8/23/2021	8/22/2051
8	Xiamen Shengruihao Technology Co., Ltd	91350200MA8TGQ815M	Business License	6/30/2021	6/29/2071
9	Xiamen Duwei Consulting Management Co., Ltd.	91350200MA31XW6W0Q	Business License Record Registration Form for Foreign	7/26/2018	7/25/2048
10	Xiamen Bluehat Research Institution of Education Co., Ltd.	91350200MA8RFNMY91	Business License	2/20/2021	2/19/2071
11	Hunan Engaomei Animation Culture Development Co., Ltd.	91430111MA4M6YX69X	Business License	10/19/2017	10/18/2067
12	Fujian Youth Hand in Hand Educational Technology Co., Ltd	91350200MA2YKHW78G	Business License	9/18/2017	9/17/2067
13	Fuzhou Qiande Educational Technology Co., Ltd	91350102MA8RQTEH5R	Business License	3/24/2021	Long-term
14	Chongqing Duwei Chuangda Electronic Technology Co., Ltd	91500103MACMEAMG3Y	Business License	6/13/2023	Long-term
15	Guangzhou Huangxin Enterprise Management Co., Ltd.	91440106MACPKAYJXM	Business License Record Registration Form for Foreign	7/5/2023	Long-term

Name	Background	Ownership
Brilliant Hat Limited	● A British Virgin Islands company ● Incorporated on June 26, 2018 ● A holding company	100% owned by Blue Hat Interactive Entertainment Technology

Blue Hat Interactive Entertainment Technology Limited	● A Hong Kong company ● Incorporated on June 26, 2018 ● A holding company	100% owned by Brilliant Hat Limited

Xiamen Duwei Consulting Management Co., Ltd.	● A PRC limited liability company and deemed a wholly foreign owned enterprise, or WFOE ● Incorporated on July 26, 2018 ● Registered capital of $20,000,000 ● A holding company	100% owned by Blue Hat Interactive Entertainment Technology Limited

Fujian Youth Hand in Hand Educational Technology Co., Ltd	● A PRC limited liability company ● Incorporated on September 18, 2017 ● Registered capital of $3,106,214 (RMB 20,100,000) ● Educational consulting service and sports related.	100% owned by Xiamen Duwei Consulting Management Co., Ltd.

Fuzhou Qiande Educational Technology Co., Ltd	● A PRC limited liability company ● Incorporated on March 24, 2021 ● Information Technology consulting service	100% owned by Fujian Youth Hand in Hand Educational Technology Co., Ltd

Xiamen Bluehat Research Institution of Education Co., Ltd.	● A PRC limited liability company ● Incorporated on February 20, 2021 ● Information Technology consulting service	100% owned by Xiamen Duwei Consulting Management Co., Ltd. From December 31^st, 2022.

Fujian Blue Hat Group Co., Ltd.	● A PRC limited liability company ● Incorporated on August 23, 2021	100% owned by Blue Hat Interactive Entertainment Technology Limited.

Xiamen Shengruihao Technology Co., Ltd	● A PRC limited liability company, acquired on September 30, 2022 ● Incorporated on June 30, 2021 ● Registered capital of $ 4,463,754 (RMB 30,000,000) ● Software development, animation design and web design	100% owned by Fujian Blue Hat Group Co. Ltd.

Golden Strategy Ltd.	● A British Virgin Islands company ● Incorporated on April 3, 2023	100% owned by Blue Hat Interactive Entertainment Technology

Golden Alpha Strategy Ltd.	● A Hong Kong company ● Incorporated on April 18, 2023 ● Responsible for the international jewelry trading business.	100% owned by Golden Strategy Ltd.

Chongqing Duwei Chuangda Electronic Technology Co., Ltd.	● A PRC limited liability company ● Incorporated on June 13, 2023 ● Responsible for the jewelry trading business in mainland China.	100% owned by Xiamen Duwei Consulting Management Co., Ltd.

Guangzhou Huangxin Enterprise Management Co., Ltd.	●A PRC limited liability company and deemed a wholly foreign owned enterprise, or WOFE ● Incorporated on July 5, 2023	100% owned by Golden Alpha Strategy Ltd.

Blue Hat Technology LLC.	● A US company incorporated in New Hampshire ● Incorporated on July 21, 2023 ● handle upcoming business in the United States in future.	100% owned by Golden Strategy Ltd.

	For the Years ended December 31,
										Percentage
	2023			2022			Change			Change
Revenues	$	73,686,733		$	2,195,954		$	71,490,779			3,255.57	%
Cost of revenues		(72,532,882	)		(958,438	)		(71,574,444	)		7,467.82	%
Gross profit		1,153,851			1,237,516			(83,665	)		(6.76	)%
Selling expenses		(7,677	)		(159,937	)		152,260			(95.20	)%
Research and development		(2,570,158	)		(2,734,982	)		164,824			(6.03	)%
General and administrative expenses		(13,766,487	)		(6,224,674	)		(7,541,813	)		121.16	%
Impairment Loss		(13,693,305	)		(33,397	)		(13,659,908	)		40,901.60	%
Loss from operations		(28,883,776	)		(7,915,474	)		(20,968,302	)		264.9012	%
Other expense, net		(217,870	)		(109,692	)		(108,178	)		98.62	%
Provision for income taxes		(6,081	)		(1,097,888	)		1,091,807			(99.45	)%
Income from discontinued operations		—			(282,027	)		282,027			(100.00	)%
Gain on disposal of discontinued operations		7,389,310						7,389,310			—
Net loss		(21,718,417	)		(9,405,081	)		(12, 313,336	)		130.92	%

	For the Year		For the Year
	ended		ended
	December 31,		December 31,					Change
	2023		2022		Change			(%)

Revenues
Diamond trading	$	15,152,777	$	—		15,152,777			—
Interactive toys - animation series		—		6,903		(6,903	)		(100.00	)%
Interactive toys - game series		—		155,559		(155,559	)		(100.00	)%
Information service		415,955		884,329		(468,374	)		(52.96	)%
Commodity Trading		58,118,001		1,149,163		56,968,838			4957.42	%
Total revenues	$	73,686,733	$	2,195,954		71,490,779			3255.57	%

	For the Year ended December 31,		For the Year ended December 31,					Change
	2023		2022		Change			(%)

Cost of revenues
Interactive toys - animation series	$	—	$	3,420	$	(3,420	)		(100.00	)%
Interactive toys - game series		—		78,118		(78,118	)		(100.00	)%
Information service		549,242		826,096		(276,854	)		(33.51	)%
Diamond trading		13,901,688		—		13,901,688			—
Commodity Trading		58,081,952		50,804		58,031,148			114225.55	%

Total cost of revenues	$	72,532,882	$	958,438	$	71,574,444			7467.82	%

	For the Years ended December 31,
										Percentage
	2022			2021			Change			Change
Revenues	$	2,195,954		$	12,139,500		$	(9,943,546	)		(81.91	)%
Cost of revenues		(958,438	)		(5,782,664	)		4,824,226			(83.43	)%
Gross profit		1,237,516			6,356,836			(5,119,320	)		(80.53	)%
Selling expenses		(159,937	)		(315,600	)		155,663			(49.32	)%
Research and development		(2,734,982	)		(11,233,806	)		8,498,824			(75.65	)%
General and administrative expenses		(6,224,674	)		(31,335,421	)		25,110,747			(80.14	)%
Impairment Loss		(33,397	)		(14,632,931	)		14,599,534			(99.77	)%
Loss from operations		(9,152,990	)		(57,517,758	)		48,364,768			(84.09	)%
Other loss, net		(109,692	)		(330,790	)		221,098			(66.84	)%
Provision for income taxes		(1,097,888	)		(1,104	)		(1,096,784	)		99346.38	%
Loss from discontinued operations		(282,027	)		(10,055,749	)		9,773,722			(97.20	)%
Gain on disposal of discontinued operations		—			1,493,945			(1,493,945	)		(100.00	)%
Net loss		(9,405,081	)		(60,054,620	)		50,649,539			(84.34	)%

	Years Ended December 31			Years Ended December 31			Years Ended December 31,
	2023			2022			2021

Net cash used in operating activities - continued operation	$	(9,773,132	)	$	(1,473,267	)	$	(14,624,367	)
Net cash generated from operating activities - discontinued operation		7,661,561			281,780			(5,488,297	)
Net cash from investing activities – continued operation		(15,380	)		6,336			(4,516,909	)
Net cash from investing activities – discontinued operation		—			—			(1,952	)
Net cash generated from financing activities – continued operation		2,305,954			2,542,634			7,420,588
Net cash used in financing activities – discontinued operation		(52,322	)		(11,960	)		154,260
Effect of exchange rate change on cash, cash equivalents and restricted cash		210,505			(1,319,437	)		1,439,535
Net change in cash, cash equivalents	$	337,186		$	26,086		$	(15,617,142	)

			Payments Due by Period
			Less than						More than
Contractual obligations	Total		1 year		1 3 years		3 5 years		5 years
Loan obligations	$	273,713	$	273,713	$	—	$	—	$	—
Operating lease obligations		2,376,891		235,470		516,569		393,974		1,230,878
Long-term loans - related party		831,155		—		831,155		—		—
Convertible notes payable		—		—		—		—		—
Total	$	3,481,759	$	509,183	$	1,347,724	$	393,974	$	1,230,878

Name	Age		Position
Xiaodong Chen		56	Chief Executive Officer and Director
Caifan He		51	Chief Financial Officer and Director
Jianyong Cai		62	Chief Technology Officer and Director
Weicheng Pan		48	Chief Strategy Officer
Qinyi Fu(1)		38	Independent Director
Jun Ouyang(1)(2)(3)		41	Independent Director
Huibin Shen(3)		51	Independent Director
Can Su(1)(2)		35	Independent Director
Zhiyong Gong		41	Independent Director
Fan Guo		47	Joint Chief Executive Officer and Director

Board Diversity Matrix (As of Dec 31, 2023)

Country of Principal Executive Offices			People's Republic of China
Foreign Private Issuer			Yes
Disclosure Prohibited under Home Country Law			No
Total Number of Directors			9
	Female	Male	Non-Binary	Did Not Disclose Gender
Part I: Gender Identity
Directors	1	8	0	0
Part II: Demographic Background
Underrepresented Individual in Home Country Jurisdiction			0
LGBTQ+			0
Did Not Disclose Demographic Background			0

Name	Fees Earned in Cash	All Other Compensation	Total
Xiaodong Chen	$94,231 (RMB 663,600)	—	$94,231 (RMB 663,600)
Caifan He	$66,456(RMB 468,000)	—	$66,456 (RMB 468,000)
Qinyi Fu	$10,000 (RMB 70,423)	—	$10,000 (RMB 70,423)
Jun Ouyang	$10,000 (RMB 70,423)	—	$10,000 (RMB 70,423)
Huibin Shen	$10,000 (RMB 70,423)	—	$10,000 (RMB 70,423)
Can Su	$10,000 (RMB 70,423)	—	$10,000 (RMB 70,423)
Weicheng Pan	$13,333 (RMB236,138)	—	$13,333(RMB236,138)
Fan Guo	$33,333(RMB 234,743)	—	$33,333(RMB 234,743)

●	convening shareholders’ annual and extraordinary general meetings and reporting its work to shareholders at such meetings;

●	declaring dividends and distributions;

●	appointing officers and determining the term of office of the officers;

●	exercising the borrowing powers of our company and mortgaging the property of our company; and

●	approving the transfer of shares in our company, including the registration of such shares in our share register.

●	appointing the independent auditors and pre-approving all auditing and non-auditing services permitted to be performed by the independent auditors;

●	reviewing with the independent auditors any audit problems or difficulties and management’s response;

●	discussing the annual audited financial statements with management and the independent auditors;

●	reviewing the adequacy and effectiveness of our accounting and internal control policies and procedures and any steps taken to monitor and control major financial risk exposures;

●	reviewing and approving all proposed related party transactions;

●	meeting separately and periodically with management and the independent auditors; and

●	monitoring compliance with our code of business conduct and ethics, including reviewing the adequacy and effectiveness of our procedures to ensure proper compliance.

●	each beneficial owner of 5% or more of our outstanding ordinary shares;

●	each of our directors and executive officers; and

●	all of our directors and executive officers as a group.

Name of Beneficial Owner	Number of Shares Beneficially Owned		Percentage of Shares Beneficially Owned
5% or Greater Shareholders :
CEDE&CO		12,577,701		21.54	%
Directors and Executive Officers:
Xiaodong Chen(1)(2)		3,808,916		6.52	%
Caifan He(3)		100,495		0.17	%
Jianyong Cai(4)		0		0
Weicheng Pan		0		0
Qinyi Fu		0		0
Jun Ouyang		0		0
Huibin Shen		0		0
Can Su		0		0
Zhiyong Gong		1,000,000		1.71	%
Fan Guo		0		0
All current directors and executive officers as a group (9 persons)		4,909,411		8.40	%

(3)	Represents the 100,495 ordinary shares held by Celebrate Hat Limited, a British Virgin Islands company with a registered address at Vistra (BVI) Limited of Vistra Corporate Services Centre, Wickhams Cay II, Road Town, Tortola, VG1110, British Virgin Islands. Caifan He is the owner of Celebrate Hat Limited and holds the voting and dispositive power over the ordinary shares held by Celebrate Hat Limited.

(4)	Jianyong Cai is the brother of Juanjuan Cai, the wife of Xiaodong Chen.

●	does not have to file an annual return of its shareholders with the Registrar of Companies;

●	is not required to open its register of members for inspection;

●	does not have to hold an annual general meeting;

●	may issue shares with no par value;

●	may obtain an undertaking against the imposition of any future taxation;

●	may register by way of continuation in another jurisdiction and be deregistered in the Cayman Islands;

●	may register as a limited duration company; and

●	may register as a segregated portfolio company.

1)	No sufficient personnel with appropriate levels of accounting knowledge and experience to address complex U.S. GAAP accounting issues and to prepare and review financial statements and related disclosures under U.S. GAAP;

2)	Ineffective oversight of our financial reporting and internal control by those charged with governance; and

3)	Inadequate design of internal control over the preparation of the financial statements being audited.

●	We plan to add more qualified accounting and reporting personnel with appropriate knowledge and experience of U.S. GAAP and SEC financial reporting requirements;

●	We plan to organize regular training for our accounting and reporting personnel, especially training related to U.S. GAAP and SEC financial reporting requirements; and

●	We plan to complete an upgrade of our financial system to enhance its effectiveness and financial and system control.

	For the year ended
	December 31,
	2023		2022
Audit fees (1)	$	180,000	$	160,000
Audit-related fees (2)		—		—
Tax fees(3)		—		—
All Other Fees(4)		180,000		160,000