Blue Hat Announces Financial Results for the First Half of 2023, Highlighted by 5,657.93% Increase in Revenues to $46.30 million
- Total revenues for the first half of 2023 increased by 5,657.93% compared to the prior-year period.
- The company's focus on commodity trading has resulted in a shift in business strategy to maximize shareholder value.
- Gross profit decreased by 70.87% to US$0.08 million for the first half of 2023.
- The company reported a net loss from continued operations of US$4.36 million.
Insights
Analyzed from a financial perspective, the report indicates a significant increase in total revenues for Blue Hat, driven by an expansion into commodity trading. However, this revenue increase is coupled with a substantial decline in gross profit and a marked increase in net losses, both on a year-over-year basis. The shift in business strategy, including the suspension of some operations due to COVID-19, has resulted in a volatile gross profit margin, which has been impacted by fluctuations in purchasing and selling prices of mass goods.
The private placement of ordinary shares and the issuance of restricted shares for consulting services suggest that the company is seeking to raise capital and possibly restructure its operations. The deconsolidation of certain subsidiaries following the termination of VIE agreements could indicate a strategic reorientation or divestment from those areas. Investors should consider the potential for continued volatility in the company's performance, given the current economic conditions and the company's recent pivot to commodity trading.
From an industry analysis standpoint, the transition of Blue Hat into commodity trading marks a significant pivot from its previous focus areas. The decrease in gross profit margin reflects the inherent risks associated with commodity trading, such as price volatility and potential inventory management challenges. The company's ability to navigate these risks will be crucial for its long-term sustainability and growth.
The private placement and consulting service agreement are strategic moves that may provide the necessary capital and expertise to support the company's new direction. However, the high net loss and minimal cash reserves raise concerns about the company's liquidity and financial health. Stakeholders should monitor the company's ability to generate profits and manage expenses in the context of its new business model.
Examining the economic implications, the shift in Blue Hat's business strategy during a period of global economic uncertainty due to the COVID-19 pandemic could be seen as a response to changing market demands. The company's move towards commodity trading may be an attempt to capitalize on new opportunities arising from shifts in global supply chains and consumer behavior.
However, the reported financials show a company in a precarious economic position, with high operational losses and limited cash reserves. The reliance on external funding through share issuance could be a double-edged sword, providing necessary capital but also potentially diluting shareholder value. The long-term economic impact on the company will depend on its ability to achieve operational efficiency and to adapt to the post-pandemic market.
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 of70.87% 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 of69.79% 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
Revenues from sales of commodity trading were US
Revenues from sales of information service were US
Revenues from sales of interactive toys (animation series) were nil for the for the First Half of 2023, compared to US
Revenues from sales of interactive toys (game series) were nil for the First Half of 2023, compared to US
Gross profit decreased
Total gross margin was
Total operating expenses increased by US
Loss from operations increased
Net loss from continued operation increased
Net income (loss) from discontinued operation increased
Basic loss per share from continued operation were US
Basic loss per share from discontinued operation were nil for the First Half of 2023, compared to US
Balance Sheet Highlights
As of June 30, 2023, Blue Hat had cash and cash equivalents of US
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: ir@bluehatgroup.net
| 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, 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 | ) | ||||
FAQ
What are Blue Hat Interactive Entertainment Technology's (BHAT) total revenues for the first half of 2023?
What is the focus of Blue Hat Interactive Entertainment Technology's business strategy?
What was the net loss from continued operations for Blue Hat Interactive Entertainment Technology in the first half of 2023?
What was the gross profit for Blue Hat Interactive Entertainment Technology in the first half of 2023?
What is the ticker symbol for Blue Hat Interactive Entertainment Technology?
