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

 

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Description automatically generated

 

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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