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    Blue Hat Announces Financial Results for Third Quarter of 2021, Highlighted by a 235.6% Increase in Total Revenues to US $13.3 Million

    12/6/21 11:39:00 AM ET
    $BHAT
    Recreational Games/Products/Toys
    Consumer Discretionary
    Get the next $BHAT alert in real time by email

    XIAMEN, China, Dec. 6, 2021 /PRNewswire/ -- 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 and nine months ended September 30, 2021 ("Third Quarter 2021" and "Nine Months 2021", respectively).

    Third Quarter 2021 and Nine Months 2021 Financial Highlights

    • Total revenues of US $13.3 million, up 235.6% from US $4.0 million in the prior-year period, driven primarily by increased sales from the IDC business with support from the mobile gaming and information technology services businesses
    • Gross profit of US $5.4 million, up 94.3% from US $2.8 million in the prior-year period
    • Income from operations of US $2.0 million, unchanged from US $2.0 million in the prior-year period
    • Net income of US $2.0 million, up 21.5% from US $1.7 million in the prior-year period
    • Nine Months 2021 total revenues of US $31.3 million, up 254.3% from US $8.8 million in the prior-year period
    • Nine Months 2021 gross profit of US $14.2 million, up 120.7% from US $6.4 million in the prior-year period
    • Nine Months 2021 income from operations of US $5.6 million, up 55.3% from US $3.6 million in the prior-year period
    • Nine Months 2021 net income of US $3.4 million, up 16.4% from US $2.9 million in the prior-year period
    • US $11.9 million in cash and cash equivalents at September 30, 2021

    Management Commentary

    Mr. Xiaodong Chen, CEO of Blue Hat, stated, "2021 has been a monumental year for Blue Hat, with significant gains generated due to a proactive acquisition strategy across our integrated businesses. The Company achieved record revenues of US $31.3 million in the first nine months of 2021, more than tripling our top line from the prior-year period with the launch of our communication services/IDC business with the acquisition of Xunpusen Technology Co., Ltd. ("Xunpusen") in late 2020. In addition, we continue to build an interactive entertainment platform including mobile games, augmented reality toys, and a fully immersive education curriculum. We are pleased with the improved results on the bottom line during Third Quarter 2021 as we have continued to integrate these businesses into Blue Hat's operations, and we remain confident in our ability to continue executing on our growth strategy to conclude the year on a strong note. We look forward to making continued investments in our various lines of business, including technology development and partnership expansions, which we believe will establish a firm foundation for long-term growth."

    Third Quarter 2021 Results

    Total revenues were US $13.3 million for Third Quarter 2021, an increase of US $9.3 million, or 235.6%, compared to US $4.0 million in the prior-year period. The revenue growth was primarily attributable to increased sales from the mobile games and communication services businesses, as well as contributions from the information technology services business, which launched in the fourth quarter of 2020.

    Revenues from communication services were US $5.8 million for Third 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.

    Revenues from mobile games increased to US $3.4 million for Third Quarter 2021, from US $0.6 million in the prior-year period, following the acquisition of Fuzhou Csfctech Co., Ltd. ("Csfctech") in January 2021.

    Revenues from information technology services were US $1.6 million for Third Quarter 2021, compared to nil in the prior-year period. This is a new line of business that the Company launched in late 2020, whereby Blue Hat provides products and technical services that enable users to access technical service platforms to utilize products and services from third-party platforms and medial channels (such as WeChat Official Account, Mini Program, APP, Tik Tok, Toutiao, Quick Worker, etc.).

    Revenues from sales of interactive toys (game series) were US $1.5 million for the Third Quarter 2021, compared to US $3.3 million in the prior-year period.  The decrease was due to the Company's focus on developing other areas of business during the period.

    Revenues from sales of interactive toys (animation series) were US $1.0 million for Third Quarter 2021, compared to US $0.02 million in the prior-year period.

    Revenues from AR education, previously included under interactive toys (animation series), were US $0.04 million for Third 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.

    Gross profit increased 94.3% to US $5.4 million for Third Quarter 2021, from US $2.8 million in the prior-year period. Gross margin was 40.7% for Third Quarter 2021, compared to 70.2% in the prior-year period. The decrease in gross margin was due to higher initial costs associated with establishing the new businesses and integrating acquisitions into the Company's operations.

    Total operating expenses increased to US $3.4 million for Third Quarter 2021, from US $0.8 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 was US $2.0 million for Third Quarter 2021, unchanged from US $2.0 million in the prior-year period.

    Net income increased 21.5% to US $2.0 million for Third Quarter 2021, from US $1.7 million in the prior-year period. The increase in net income is mainly attributable to the increase in total revenues.  

    Basic and diluted earnings per share were US $0.04 for Third Quarter 2021, compared to US $0.05 for the prior-year period.

    Nine Months 2021 Results

    Total revenues were US $31.3 million for Nine Months 2021, an increase of US $22.4 million, or 254.3%, compared to US $8.8 million in the prior-year period. The revenue growth was largely attributable to increased revenue contributions from the Company's IDC and mobile games businesses, following the acquisitions of Xunpusen in late 2020 and Csfctech in January 2021.

    Revenues from communication services were US $12.9 million for Nine Months 2021, compared to nil in the prior-year period.

    Revenues from mobile games increased to US $9.2 million for Nine Months 2021, from US $1.8 million in the prior-year period.

    Revenues from information technology services were US $1.6 million for Nine Months 2021, compared to nil in the prior-year period.

    Revenues from sales of interactive toys (game series) were US $5.9 million for Nine Months 2021, compared to US $7.0 million in the prior-year period.

    Revenues from sales of interactive toys (animation series) were US $1.4 million for Nine Months 2021, compared to US $0.02 million in the prior-year period.

    Revenues from AR education, previously included under interactive toys (animation series), were US $0.2 million for Nine Months 2021.

    Gross profit increased 120.7% to US $14.2 million for Nine Months 2021, from US $6.4 million in the prior-year period.

    • Interactive toys (animation series): 3.2%, or US $0.05 million
    • Interactive toys (game series): 58.3%, or US $3.4 million
    • Mobile games: 82.6%, or US $7.6 million
    • AR education: 88.5%, or US $0.2 million
    • Communication services: 20.3%, or US $2.6 million
    • Information technology services: 18.8%, or US $0.3 million

    Total gross margin was 45.5% for Nine Months 2021, compared to 73.0% in the prior-year period.

    Total operating expenses increased to US $8.6 million for Nine Months 2021, from US $2.8 million in the prior-year period, primarily as a result of increased expenses as described above under "Third Quarter 2021 Results."

    Income from operations increased 55.3% to US $5.6 million for Nine Months 2021, from US $3.6 million in the prior-year period.

    Net income increased 16.4% to US $3.4 million for Nine Months 2021, from US $2.9 million in the prior-year period. 

    Basic and diluted earnings per share were US $0.07 and US $0.06, respectively, for Nine Months 2021, compared to US $0.08 in the prior-year period.

    Balance Sheet Highlights

    As of September 30, 2021, Blue Hat had cash and cash equivalents of US $11.9 million, working capital of US $37.4 million and total shareholders' equity of US $83.5 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.

    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.

    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: [email protected]

    Investor Relations:

    The Equity Group Inc.







    In China

    Carolyne Sohn, Vice President







    Lucy Ma, Associate

    (415) 568-2255







    +86 10 5661 7012

    [email protected]







    [email protected]

     



    BLUE HAT INTERACTIVE ENTERTAINMENT TECHNOLOGY AND SUBSIDIARIES

    UNAUDITED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME





    For the Three Months Ended September 30,



    2021



    2020

    Revenues

    $                      13,316,780



    $                   3,967,824

    Cost of revenue

    7,903,014



    1,181,586

    Gross profit

    5,413,766



    2,786,238









    Operating expenses:







    Selling

    1,432,284



    120,574

    General and administrative

    898,529



    593,077

    Research and development

    1,077,914



    55,097

    Total operating expenses

    3,408,727



    768,748









    Income from operations

    2,005,039



    2,017,490









    Other income (expense)







    Interest income

    16,770



    38,937

    Interest expense

    (28,026)



    (31,615)

    Other finance expenses

    (3,109)



    (5,227)

    Other (expense) income, net

    894,465



    (41,628)

    Total other (expense) income, net

    870,100



    (39,533)









    Income before income taxes

    2,875,139



    1,977,957

    Provision for income taxes

    859,354



    319,285

    Net income

    2,015,785



    1,658,672









    Other comprehensive income (loss)







    Foreign currency translation adjustment

    (315,989)



    1,467,387

    Comprehensive income

    $                        1,699,796



    $                   3,126,059

    Less: Comprehensive income attributable to non-controlling

    interests

    735,923



    -

    Comprehensive income attributable to Blue Hat Interactive

    Entertainment shareholders

    963,873



    3,126,059









    Weighted average number of ordinary shares







    Basic

    49,432,007



    35,141,114

    Diluted

    56,159,502



    35,141,114









    Earnings per share







    Basic

    $0.04



    $0.05

    Diluted

    $0.04



    $0.05

     



    BLUE HAT INTERACTIVE ENTERTAINMENT TECHNOLOGY AND SUBSIDIARIES

    UNAUDITED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME





    For the Nine Months Ended September 30,



    2021



    2020

    Revenues

    $                      31,259,344



    $                   8,822,686

    Cost of revenue

    17,051,940



    2,385,548

    Gross profit

    14,207,404



    6,437,138









    Operating expenses:







    Selling

    3,081,032



    411,273

    General and administrative

    3,026,529



    2,189,895

    Research and development

    2,455,231



    200,276

    Total operating expenses

    8,562,792



    2,801,444









    Income from operations

    5,644,612



    3,635,694









    Other income (expense)







    Interest income

    151,655



    146,821

    Interest expense

    (263,427)



    (155,275)

    Other finance expenses

    (84,772)



    (15,395)

    Other (expense) income, net

    (198,101)



    (20,766)

    Total other (expense) income, net

    (394,645)



    (44,615)









    Income before income taxes

    5,249,967



    3,591,079

    Provision for income taxes

    1,853,066



    672,644

    Net income

    3,396,901



    2,918,435









    Other comprehensive income (loss)







    Foreign currency translation adjustment

    994,794



    887,995

    Comprehensive income

    $                        4,391,695



    $                   3,806,430

    Less: Comprehensive income attributable to non-controlling

    interests

    1,484,518





    Comprehensive income attributable to Blue Hat Interactive

    Entertainment shareholders

    2,907,177



    3,806,430









    Weighted average number of ordinary shares







    Basic

    49,432,007



    35,141,114

    Diluted

    56,159,502



    35,141,114









    Earnings per share







    Basic

    $0.07



    $0.08

    Diluted

    $0.06



    $0.08

     

    BLUE HAT INTERACTIVE ENTERTAINMENT TECHNOLOGY AND SUBSIDIARIES

    UNAUDITED CONSOLIDATED BALANCE SHEETS





    September 30,



    December 31,

    ASSETS

    2021



    2020

    Current assets:







    Cash and cash equivalents

    $                      11,887,108



    $                 15,800,563

    Restricted cash







    Short-term investments







    Accounts receivable, net

    32,333,303



    16,594,533

    Accounts receivable - related party





    1,906,101

    Other receivables, net

    16,225,702



    14,350,223

    Other receivables - related party

    33,381





    Inventories

    244,302



    117,075

    Prepayments, net

    3,134,782



    1,917,780

    Total current assets

    63,858,858



    50,686,275









    Property and equipment, net

    4,232,119



    4,258,121









    Other assets:







    Prepayments

    11,784,577



    4,164,274

    Operating lease, right-of-use asset

    199,061



    290,410

    Intangible assets, net

    27,089,943



    14,252,575

    Long-term investments

    1,850,310



    1,914,668

    Deferred tax assets

    255,335



    119,127

    Goodwill accounting

    787,047





    Total other assets

    41,966,273



    20,741,054

    Total assets

    $                 110,056,970



    $             75,685,450









    LIABILITIES AND SHAREHOLDERS' EQUITY







    Current liabilities:







    Short-term loans - banks

    $                        1,355,188



    $                   5,129,295

    Current maturities of long-term loans - third party

    0



    14,117

    Accounts payable

    3,813,233



    935,588

    Convertible bonds payable

    60,681



    739,189

    Other payables and accrued liabilities

    11,202,630



    1,846,917

    Other payables - related party

    216,885



    25,837

    Operating lease liabilities - current

    146,693



    300,468

    Customer deposits

    1,862,236



    941,877

    Accrual interest payable







    Taxes payable

    7,843,132



    6,802,454

    Total current liabilities

    26,500,678



    16,735,742









    Other liabilities:







    Operating lease liability

    59,731





    Long-term loans - third party







    Total other liabilities

    59,731





    Total liabilities

    26,560,409



    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

    53,667



    38,554

    Additional paid-in capital

    35,861,782



    23,466,482

    Statutory reserves

    2,204,174



    2,204,174

    Retained earnings

    33,299,781



    31,387,398

    Accumulated other comprehensive income (loss)

    2,736,490



    1,741,696

    Total Blue Hat Interactive Entertainment Technology

    shareholders' equity

    74,155,894



    58,838,304

    Non-controlling interests

    9,340,667



    111,404

    Total equity

    83,496,561



    58,949,708

    Total liabilities and shareholders' equity

    $             110,056,970



    $             75,685,450











     

    Cision View original content:https://www.prnewswire.com/news-releases/blue-hat-announces-financial-results-for-third-quarter-of-2021--highlighted-by-a-235-6-increase-in-total-revenues-to-us-13-3-million-301438082.html

    SOURCE Blue Hat Interactive Entertainment Technology

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