XIAMEN, China, Sept. 30, 2020 /PRNewswire/ -- Blue Hat Interactive Entertainment Technology ("Blue Hat" or the "Company") (NASDAQ: BHAT), a leading producer, developer and operator of augmented reality ("AR") interactive entertainment games, toys and educational materials in China, today announced that it has signed an updated Letter of Intent to acquire the control of 51% of Fuzhou Csfctech Co., Ltd. ("Csfctech") and its two subsidiaries through the direct acquisition of 51% of the outstanding shares of its offshore holding company. Csfctech is a developer and distributor of mobile games in China with an international user base across Mainland China, Japan, Taiwan, the United Arab Emirates and Africa. The closing of the transaction is subject to satisfactory due diligence results and applicable regulatory requirements.
The Company previously announced the signing of a letter of intent in late 2019 (Link to: Press Release). The completion of the transaction was delayed as a result of the COVID-19 pandemic, however both management teams continued to work towards an agreement. The Company expects to close the transaction in the fourth quarter of 2020. There is no assurance that the proposed transaction will be consummated.
- The transaction is a combination of cash plus newly issued shares of Blue Hat's ordinary shares, calculated on the weighted average volume price of 20 trading days prior to closing, with the share component not to be priced lower than the Company's Initial Public Offering price of $4.00.
- There is a performance guarantee where the terms of the agreement will be amended if Csfctech does not achieve certain audited net profit for the calendar year ending December 31 based upon the following criteria:
- 2020: RMB 15 Million (equivalent to USD 2.2 million based on current exchange ratios);
- 2021: RMB 25 million (equivalent to USD 3.67 million); and
- 2022: RMB 40 million (equivalent to USD 5.88 million).
- The transaction has been valued at 4X the average of the three performance guarantee targets of Csfctech as referenced above.
- The original shareholders of Csfctech shall bear joint liability for performance and debt obligations.
Mr. Xiaodong Chen, CEO of the Company, stated, "We believe that this transaction represents a significant development in our strategy and ability to rollout a wider breath of augmented reality and mobile games to our growing audience in China. Csfctech's business covers more than 100 games available on a number of different platforms, and maintains a strong following of customers based in Asia and Africa. Through this acquisition, not only can we integrate the product development technology, operation and distribution resources of Csfctech, but also our combined resources may help strengthen the available distribution channels. In addition, we expect to leverage our combined expertise to improve the product structure and enhance the overall revenue scale and marketing capabilities."
Mr. Chen added, "Following the conclusion of this transaction, Blue Hat's three main business lines will be AR education, AR toys and online games. In the future, we will make full use of all three facets of our technology to improve the market competitiveness across all three lines. Ultimately, we believe this will improve the Company's overall profitability and create long-term market value for shareholders."
About Blue Hat
Blue Hat Interactive Entertainment Technology is a producer, developer and operator of AR interactive entertainment games and toys in China, including interactive educational materials, mobile games, and toys with mobile game features. The Company's interactive entertainment platform creates unique user experiences by connecting physical items to mobile devices, which creates a rich visual and interactive environment for users through the integration of real objects and virtual scenery. 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 https://ir.bluehatgroup.com/investor-relations. The Company routinely provides important information on its website.
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 the forward-looking statements.
Blue Hat Interactive Entertainment Technology
Phone: +86 (592) 228-0010
The Equity Group Inc. In China
Adam Prior, Senior Vice President Lucy Ma, Associate
(212) 836-9606 +86 10 5661 7012
View original content:http://www.prnewswire.com/news-releases/blue-hat-announces-progress-on-acquisition-of-mobile-game-developer-fuzhou-csfctech-co-ltd-301141908.html
SOURCE Blue Hat Interactive Entertainment Technology