Blue Hat Announces Financial Results for the Fiscal Year 2023, of which the Revenue Increased by 33 Times


XIAMEN, China, April 30, 2024 (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 audited financial results for the fiscal year ended December 31, 2023 (“Fiscal Year 2023”), reflecting a remarkable surge in the revenue.

Fiscal Year 2023 Financial Highlights

Blue Hat achieved a revenue of $73.68 million in 2023, increasing 33 times than the previous year. This extraordinary achievement is credited to the company's robust expansion of its commodity trading business, particularly in the realms of jewelry and gold trading, since the fourth quarter of 2022. However, despite the substantial revenue growth, the company incurred a net loss of $21.72 million for the Fiscal Year 2023. The primary reasons for the loss include bad debts and asset impairment resulting from divested businesses. Notably, the Company’s new business line, commodity trading, contributed a profit of nearly $1.2 million to the company for the Fiscal Year 2023.

Management Commentary

Mr. Chen Xiaodong, CEO of Blue Hat, stated at the Company's annual summary meeting: "Our achievements in 2023 represent not only a breakthrough in financial data, but also a resounding affirmation of Blue Hat's business strategy transition. In 2024, we will continue leveraging on the technology and experience we have accumulated in past few years. We will deepen our commodity trading in jewelry, especially the diamond and gold trading, and meanwhile expanding online gold derivatives trading, which aim to deliver excellent performance and reward our investors. Furthermore, we are committed to embracing the era of artificial intelligence and inspired to set a new benchmark as a 'smart' gold trader."

Fiscal Year 2023 Financial Results

Please refer to Blue Hat’s annual report on Form 20-F for the fiscal year ended December 31, 2023 filed with the Securities and Exchange Commission on April 30, 2024 for a detailed analysis of Blue Hat’s financial results.

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: ir@bluehatgroup.net

 
CONSOLIDATED BALANCE SHEETS
     
  December 31, December 31,
  2023 2022
    (Restated)
     
ASSETS        
Current assets:        
Cash and cash equivalents $407,588  $69,273 
Restricted cash  1,587   1,129 
Inventories  17,545,153    
Accounts receivable, net  15,157,384   9,170,996 
Accounts receivable, related party  9,571    
Other receivables, net  4,182,706   4,704,455 
Other receivables, related party  1,941,723   1,427,829 
Prepayments, net  36,588   80,834 
Assets related to discontinued operation     6,077,554 
Total current assets  39,282,300   21,532,070 
Non-current assets:        
Operating lease, right-of-use asset  2,353,083   40,596 
Prepayments  2,388,435   2,495,570 
Property, plant and equipment, net  3,544,751   3,817,015 
Intangible assets, net     1,368,424 
Long-term investments  1,694,269   1,722,999 
Assets related to discontinued operation     3,300,184 
Total non-current assets  9,980,538   12,744,788 
Total assets $49,262,838  $34,276,858 
         
LIABILITIES AND EQUITY        
Current liabilities:        
Short-term loans - banks $273,713  $473,825 
Taxes payable  805,577   841,334 
Accounts payable  318,729   324,991 
Other payables and accrued liabilities  4,027,883   9,014,057 
Other payables - related party     22,643 
Operating lease liabilities - current  235,470   11,261 
Customer deposits  3,020   19,629 
Liability related to discontinued operation     6,700,468 
Total current liabilities  5,664,392   17,408,208 
Non-current liabilities:        
Operating lease liability  2,141,421   31,041 
Long-term loans banks      
Long-term loans – related party  834,950   914,771 
Convertible notes payable     1,393,499 
Total other liabilities  2,976,371   2,339,311 
Total liabilities  8,640,763   19,747,519 
Shareholder’s equity        
Ordinary shares, $0.01 par value, 500,000,000 shares authorized, 58,398,281 shares issued and outstanding as of December 31, 2023, 9,894,734 shares issued and outstanding as of December 31, 2022  583,982   98,947 
Additional paid-in capital  93,828,090   44,145,826 
Statutory reserves  2,143,252   2,143,252 
Retained earnings  (56,832,015)  (35,113,598)
Accumulated other comprehensive loss  898,766   834,513 
Total Blue Hat Interactive Entertainment Technology shareholders’ equity  40,622,075   12,108,940 
Non-controlling interests     2,420,399 
Total Equity  40,622,075   14,529,339 
         
Total liabilities and shareholders’ equity $49,262,838  $34,276,858 


 
CONSOLIDATED STATEMENTS OF INCOME (LOSS) AND COMPREHENSIVE INCOME (LOSS)
       
  Year ended Year ended Year ended
  December 31, December 31, December 31,
  2023 2022 2021
    (Restated) (Restated)
       
Revenues $73,686,733  $2,195,954  $12,139,500 
Cost of revenue  (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 expenses  (13,766,487)  (6,224,674)  (31,335,421)
Impairment loss  (13,693,305)  (33,397)  (14,632,931)
Total operating expenses  (30,037,627)  (9,152,990)  (57,517,758)
             
(Loss)/Income from operations  (28,883,776)  (7,915,474)  (51,160,922)
Other income (expense)            
Interest income  7   374   156,038 
Interest expense  (222,057)  (133,882)  (229,985)
Other finance expenses  (62,025)  (15,264)  (65,344)
Other income (expense), net  66,205   39,080   (191,499)
Total other expense, net  (217,870)  (109,692)  (330,790)
             
(Loss)/ income from Continuing Operations before income taxes  (29,101,646)  (8,025,166)  (51,491,712)
Provision for income taxes  (6,081)  (1,097,888)  (1,104)
(Loss)/ income from continuing operations  (29,107,727)  (9,123,054)  (51,492,816)
             
Discontinued Operations (Note 19)            
Gain on disposal of discontinued operations  7,389,310      1,493,945 
(Loss) from discontinued operations     (282,027)  (10,055,749)
             
Net Income (Loss)  (21,718,417)  (9,405,081)  (60,054,620)
Less: Net (loss) income attributable to non-controlling interest  (2,420,399)  (40,025)  (2,918,680)
             
Net (Loss) Income attributable to Blue Hat Interactive Entertainment Technology  (19,298,018)  (9,365,056)  (57,135,940)
             
Other comprehensive (loss) income            
Net (loss)/ Income 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) income - 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) income $(21,654,164) $(11,029,824) $(59,337,060)
             
Less: Net (loss) income attributable to non-controlling interest  (2,420,399)  (40,025)  (2,918,680)
             
Comprehensive income (loss) attributable to Blue Hat Interactive Entertainment shareholders  (19,233,765)  (10,989,799)  (56,418,380)
             
Weighted average number of ordinary shares            
Basic  29,722,950   7,639,482   5,053,727 
Diluted  30,975,275   8,565,163   5,800,048 
             
Earnings per share            
Basic (loss) 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 (loss) 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)

 

CONSOLIDATED STATEMENTS OF CASH FLOW
       
  Year ended Year ended Year ended
  December 31, December 31, December 31,
  2023 2022 2021
    (Restated) (Restated)
       
CASH FLOWS FROM OPERATING ACTIVITIES:            
Net (loss) income $(21,718,417) $(9,405,081) $(60,054,620)
Net income (loss) from discontinued operation  7,389,310   (282,027)  (8,561,804)
Net (loss) from continuing operation  (29,107,727)  (9,123,054)  (51,492,816)
Adjustments to reconcile net income to net cash used in operating activities:            
Depreciation of property, plant and equipment  260,883   185,083   241,265 
Amortization of intangible assets  159,579   169,149   1,557,016 
Impairment of goodwill     3,681   14,537 
Impairment of intangible assets  1,075,997      14,632,931 
Impairment of Property, plant and equipment  17,308   29,716    
Impairment of inventory  12,600,000         
Interest expenses related to convertible note  146,322   100,314    
Share-based payments  3,659,080   4,043,550    
Issuance of common stock to pay for goods  42,420,000       
Provision for doubtful accounts  10,246,270   (1,060,782)  (29,661,273)
Deferred income taxes        119,127 
Changes in operating assets and liabilities:            
Accounts receivable  (14,915,499)  4,762,503   9,091,390 
Accounts receivables related party        1,906,101 
Other receivables  (1,208,861)  385,779   24,850,497 
Inventories  (17,545,153)  116,115   (41,460)
Prepayments  41,367   (773,671)  14,189,940 
Operating lease assets  22,102   276   (13,025)
Accounts payable  (6,260)  (21,891)  134,526 
Other payables and accrued liabilities  (4,986,175)  92,607   5,179,130 
Customer deposits  (16,609)  12,549   5,532 
Taxes payable  (35,756)  (395,191)  (5,337,785)
Net cash (used in) generated from 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)
CASH FLOWS FROM INVESTING ACTIVITIES:            
Purchases of property and equipment     (3,429)  (140,962)
Proceeds from disposal of equipment     9,760   52,799 
Purchase of intangible assets        (16,385,451)
Proceeds from disposal of intangible assets        12,985,106 
Disposal of a subsidiary  (15,380)     (866,075)
Acquisition of subsidiaries, net of cash received     5   (162,326)
Net cash from investing activities – continued operation  (15,380)  6,336   (4,516,909)
Net cash from investing activities  – discontinued operation        (1,952)
CASH FLOWS FROM FINANCING ACTIVITIES:            
Proceeds from issuance of new shares  2,998,397   88,592   12,830,780 
Gross proceeds from issuance of convertible note     1,550,000    
Repayment of convertible note  (449,999)     (739,189)
Proceeds (Repayment) from other payables - related party     905,171   6,406 
(Repayment) from loan payables - related party  (102,464)     (14,117)
Change in restricted cash  (1,587)  (1,129)   
Repayments of short-term loans - banks  (138,393)     (4,663,292)
Net cash generated from financing activities – continued operation  2,305,954   2,542,634   7,420,588 
Net cash generated from financing activities – discontinued operation  (52,322)  (11,960)  154,260 
EFFECT OF EXCHANGE RATES ON CASH  210,505   (1,319,437)  1,439,535 
NET CHANGES IN CASH AND CASH EQUIVALENTS  337,186   26,086   (15,617,142)
CASH AND CASH EQUIVALENTS, beginning of year  70,402   50,449   15,752,704 
CASH AND CASH EQUIVALENTS, end of year $407,588  $76,535  $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 $407,588  $69,273  $50,449 
SUPPLEMENTAL CASH FLOW INFORMATION:            
             
Cash and cash equivalents $407,588  $76,535  $135,562 
CASH AND CASH EQUIVALENTS, end of year $407,588  $76,535  $135,562 
             
Provision for doubtful trade receivables $(8,929,110) $(1,035,345) $(6,037,274)
Provision for doubtful other receivables  (1,207,145)  (22,869)  (13,484,319)
Reversal for doubtful prepayments  (110,014)  4,925   (10,166,240)
Allowance for inventory     (7,492)  26,561 
(Reversal)/Provision for doubtful accounts $(10,246,269) $(1,060,781) $(29,661,272)
             
Cash paid for income tax $6,081  $1,097,888  $1,529,850 
             
Cash paid for interest $222,057  $133,882  $229,985 
             
SUPPLEMENTAL NON-CASH INVESTING INFORMATION:            
Additional of operating lease, right-of-use asset $2,353,083  $40,596  $118,272 
             
SUPPLEMENTAL NON-CASH FINANCING INFORMATION:            
Operating lease liabilities $235,470  $11,261  $57,645