Blue Hat Announces Financial Results for the First Half of 2023, Highlighted by 5,657.93% Increase in Revenues to $46.30 million
Blue Hat Interactive Entertainment Technology (NASDAQ: BHAT) announced unaudited financial results for the first half of 2023, reporting total revenues of US$46.30 million, a 5,657.93% increase from the prior-year period. However, gross profit decreased by 70.87% to US$0.08 million, and the company reported a net loss from continued operations of US$4.36 million. Blue Hat's focus has shifted to commodity trading and increasing the breadth of its business, with a particular emphasis on new projects to maximize shareholder value.
Positive
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.
Negative
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.
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.
12/22/2023 - 04:05 PM
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 of 70.87% 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 of 69.79% 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$46.30 million for the First Half of 2023, an increase of US$45.50 million , or 5,657.93% , compared to US$0.80 million in the prior-year period. It was due to the increase of commodity trading.
Revenues from sales of commodity trading were US$45.94 million for the First Half of 2023, compared to nil in the prior-year period.
Revenues from sales of information service were US$0.37 million for the First Half of 2023, compared to US$0.66 million in the prior-year period.
Revenues from sales of interactive toys (animation series) were nil for the for the First Half of 2023, compared to US$7,146 in the prior-year period.
Revenues from sales of interactive toys (game series) were nil for the First Half of 2023, compared to US$0.14 million in the prior-year period.
Gross profit decreased 70.87% to US$0.08 million for the First Half of 2023, from US$0.26 million in the prior-year period.
Total gross margin was 0.16% for the First Half of 2023, compared to 32.28% in the prior-year period.
Total operating expenses increased by US$1.49 million for the First Half of 2023, from US$2.65 million in the prior-year period, primarily as a result of increased bad debt expenses in the first half of 2023.
Loss from operations increased 69.79% to loss from operations of US$4.07 million for the First Half of 2023, from US$2.40 million in the prior-year period.
Net loss from continued operation increased 77.52% to net loss from continued operation of US$4.36 million for the First Half of 2023, from US$2.46 million in the prior-year period.
Net income (loss) from discontinued operation increased 100.13% to net income from discontinued operation of US$4,894 for the First Half of 2023, from net loss from discontinued operation of US$3.71 million in the prior-year period.
Basic loss per share from continued operation were US$0.36 for the First Half of 2023, compared to US$0.41 in the prior-year period.
Basic loss per share from discontinued operation were nil for the First Half of 2023, compared to US$0.46 in the prior-year period.
Balance Sheet Highlights
As of June 30, 2023, Blue Hat had cash and cash equivalents of US$0.13 million , working capital of US$4.86 million and total shareholders’ equity (excluding the non-controlling interest) of US$11.89 million , compared to cash and cash equivalents of US$0.07 million , working capital of US$4.12 million and total shareholders’ equity (excluding the non-controlling interest) of US$12.11 million , respectively, as of December 31, 2022.
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, $0.01 par value, 100,000,000 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 )
What are Blue Hat Interactive Entertainment Technology's (BHAT) total revenues for the first half of 2023?
Blue Hat reported total revenues of US$46.30 million for the first half of 2023, marking a significant increase from the prior-year period.
What is the focus of Blue Hat Interactive Entertainment Technology's business strategy?
Blue Hat's business strategy has shifted to focus on commodity trading and increasing the breadth of its business, with a particular emphasis on new projects to maximize shareholder value.
What was the net loss from continued operations for Blue Hat Interactive Entertainment Technology in the first half of 2023?
The net loss from continued operations for Blue Hat in the first half of 2023 was US$4.36 million.
What was the gross profit for Blue Hat Interactive Entertainment Technology in the first half of 2023?
The gross profit for Blue Hat in the first half of 2023 decreased by 70.87% to US$0.08 million.
What is the ticker symbol for Blue Hat Interactive Entertainment Technology?
The ticker symbol for Blue Hat Interactive Entertainment Technology is BHAT.