Cover
Cover | 12 Months Ended |
Dec. 31, 2022 shares | |
Entity Addresses [Line Items] | |
Document Type | 20-F |
Amendment Flag | false |
Document Registration Statement | false |
Document Annual Report | true |
Document Transition Report | false |
Document Shell Company Report | false |
Document Period End Date | Dec. 31, 2022 |
Document Fiscal Period Focus | FY |
Document Fiscal Year Focus | 2022 |
Current Fiscal Year End Date | --12-31 |
Entity File Number | 001-39001 |
Entity Registrant Name | Blue Hat Interactive Entertainment Technology |
Entity Central Index Key | 0001759136 |
Entity Incorporation, State or Country Code | E9 |
Entity Address, Address Line One | 7th Floor |
Entity Address, Address Line Two | Building C |
Entity Address, Address Line Three | No. 1010 Anling Road Huli District |
Entity Address, City or Town | Xiamen |
Entity Address, Country | CN |
Entity Address, Postal Zip Code | 361009 |
Title of 12(b) Security | Ordinary Shares, par value $0.01 per share |
Trading Symbol | BHAT |
Security Exchange Name | NASDAQ |
Entity Well-known Seasoned Issuer | No |
Entity Voluntary Filers | No |
Entity Current Reporting Status | Yes |
Entity Interactive Data Current | Yes |
Entity Filer Category | Non-accelerated Filer |
Entity Emerging Growth Company | true |
Elected Not To Use the Extended Transition Period | false |
Document Accounting Standard | U.S. GAAP |
Entity Shell Company | false |
Entity Common Stock, Shares Outstanding | 9,894,734 |
ICFR Auditor Attestation Flag | false |
Auditor Name | Audit Alliance LLP |
Auditor Location | Singapore |
Auditor Firm ID | 3487 |
Business Contact [Member] | |
Entity Addresses [Line Items] | |
Entity Address, Address Line One | 7th Floor |
Entity Address, Address Line Two | Building C |
Entity Address, Address Line Three | No. 1010 Anling Road, Huli District |
Entity Address, City or Town | Xiamen |
Entity Address, Country | CN |
Entity Address, Postal Zip Code | 361009 |
City Area Code | + 86 |
Local Phone Number | 592-228-0081 |
Contact Personnel Name | Xiaodong Chen |
Contact Personnel Email Address | ir@bluehatgroup.net |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 76,535 | $ 135,562 |
Restricted cash | 1,129 | |
Inventories | 108,623 | |
Accounts receivable, net | 13,491,494 | 16,679,694 |
Other receivables, net | 4,704,455 | 2,976,482 |
Other receivables, related party | 1,428,913 | |
Prepayments, net | 1,829,544 | 1,803,783 |
Total current assets | 21,532,070 | 21,704,144 |
Non-current assets: | ||
Operating lease, right-of-use asset | 40,596 | 155,223 |
Prepayments | 2,495,570 | 1,704,812 |
Property, plant and equipment, net | 3,834,651 | 4,149,145 |
Intangible assets, net | 4,650,972 | 6,916,107 |
Long-term investments | 1,722,999 | 1,882,146 |
Total non-current assets | 12,744,788 | 14,807,433 |
Total assets | 34,276,858 | 36,511,577 |
Current liabilities: | ||
Short-term loans - banks | 1,261,944 | 860,915 |
Taxes payable | 2,737,499 | 3,287,640 |
Accounts payable | 885,530 | 959,198 |
Other payables and accrued liabilities | 11,447,052 | 11,389,737 |
Other payables - related party | 164,943 | 186,503 |
Operating lease liabilities - current | 11,261 | 97,054 |
Customer deposits | 899,979 | 1,500,677 |
Total current liabilities | 17,408,208 | 18,281,724 |
Non-current liabilities: | ||
Operating lease liability | 31,041 | 62,057 |
Long-term loans banks | 517,590 | |
Long-term loans – related party | 914,771 | |
Convertible notes payable | 1,393,499 | |
Total other liabilities | 2,339,311 | 579,647 |
Total liabilities | 19,747,519 | 18,861,371 |
Shareholder’s equity | ||
Ordinary shares, $0.01 par value, 100,000,000 shares authorized, 9,894,734 shares issued and outstanding as of December 31, 2022, 5,382,383 shares issued and outstanding as of December 31, 2021 | 98,947 | 53,824 |
Additional paid-in capital | 44,145,826 | 36,281,992 |
Statutory reserves | 2,143,252 | 2,143,252 |
Retained earnings | (35,113,598) | (25,748,542) |
Accumulated other comprehensive loss | 834,513 | 2,459,256 |
Total Blue Hat Interactive Entertainment Technology shareholders’ equity | 12,108,940 | 15,189,782 |
Non-controlling interests | 2,420,399 | 2,460,424 |
Total Equity | 14,529,339 | 17,650,206 |
Total liabilities and shareholders’ equity | $ 34,276,858 | $ 36,511,577 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 2022 | Dec. 31, 2021 |
Statement of Financial Position [Abstract] | ||
Ordinary shares par value | $ 0.01 | $ 0.01 |
Ordinary shares authorized | 100,000,000 | 100,000,000 |
Ordinary shares issued | 9,894,734 | 5,382,383 |
Ordinary shares outstanding | 9,894,734 | 5,382,383 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Income Statement [Abstract] | |||
Revenues | $ 7,376,009 | $ 15,155,074 | $ 24,599,923 |
Cost of revenue | (3,377,660) | (8,672,150) | (11,179,903) |
Gross profit | 3,998,349 | 6,482,924 | 13,420,020 |
Operating expenses: | |||
Selling | (1,133,625) | (3,799,640) | (480,368) |
Research and development | (4,461,888) | (13,169,157) | (246,923) |
General and administrative expenses | (6,369,245) | (32,032,186) | (2,488,320) |
Impairment loss | (33,397) | (18,439,524) | |
Total operating expenses | (11,998,155) | (67,440,507) | (3,215,611) |
(Loss) Income from operations | (7,999,806) | (60,957,583) | 10,204,409 |
Other income (expense) | |||
Interest income | 374 | 156,038 | 147,820 |
Interest expense | (331,277) | (398,963) | (439,607) |
Other finance expenses | (15,564) | (66,233) | (82,311) |
Other income (expense), net | 39,080 | (143,763) | (109,490) |
Total other expense, net | (307,387) | (452,921) | (483,588) |
(Loss)/ income from Continuing Operations before income taxes | (8,307,193) | (61,410,504) | 9,720,821 |
Provision for income taxes | (1,097,888) | (138,061) | (1,672,957) |
(Loss)/ income from continuing operations | (9,405,081) | (61,548,565) | 8,047,864 |
Discontinued Operations (Note 20) | |||
Gain on disposal of discontinued operations | 1,493,945 | ||
Income from discontinued operations | 233,153 | ||
Net Income (Loss) | (9,405,081) | (60,054,620) | 8,281,017 |
Less: Net (loss) income attributable to non-controlling interest | (40,025) | (2,918,680) | 111,404 |
Net Income (Loss) attributable to Blue Hat Interactive Entertainment Technology | (9,365,056) | (57,135,940) | 8,169,613 |
Other comprehensive (loss) income | |||
Net (loss)/ Income from continued operations | (9,405,081) | (61,548,565) | 8,047,864 |
Foreign currency translation adjustment continued operation | (1,624,743) | 717,560 | 3,220,363 |
Comprehensive (loss) income - continued operation | (11,029,824) | (60,831,005) | 11,268,227 |
Income from discontinued operation | 1,493,945 | 233,153 | |
Foreign currency translation adjustment - discontinued operation | |||
Comprehensive income - discontinued operation | 1,493,945 | 233,153 | |
Comprehensive (loss) income | (11,029,824) | (59,337,060) | 11,501,380 |
Comprehensive income (loss) attributable to Blue Hat Interactive Entertainment shareholders | $ (10,989,799) | $ (56,418,380) | $ 11,389,976 |
Weighted average number of ordinary shares | |||
Basic | 7,639,482 | 5,053,727 | 3,855,369 |
Diluted | 8,565,163 | 5,800,048 | 3,985,907 |
Earnings per share | |||
Basic (loss) earnings per share from continued operation | $ (1.23) | $ (11.60) | $ 2.09 |
Basic earnings per share from discontinued operation | 0.26 | 0.06 | |
Diluted Earnings per share: | |||
Diluted (loss) earnings per share from continued operation | (1.09) | (10.11) | 2.02 |
Diluted earnings per share from discontinued operation | $ 0.26 | $ 0.06 |
CONSOLIDATED STATEMENT OF STOCK
CONSOLIDATED STATEMENT OF STOCKHOLDERS EQUITY - USD ($) | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings Statutory Reserve [Member] | Retained Earnings Unrestricted [Member] | AOCI Attributable to Parent [Member] | Noncontrolling Interest [Member] | Total |
Beginning balance, value at Dec. 31, 2020 | $ 38,554 | $ 23,466,482 | $ 2,204,174 | $ 31,387,398 | $ 1,489,779 | $ 111,404 | $ 58,949,708 |
Balances at beginning (in shares) at Dec. 31, 2020 | 3,855,369 | ||||||
Issuance of ordinary shares - cash | $ 13,450 | 11,903,355 | 11,916,805 | ||||
Issuance of common stock - cash, (in shares) | 1,345,000 | ||||||
Issuance of ordinary shares-conversion of debt | $ 1,570 | 756,580 | 758,150 | ||||
Issuance of common stock for conversion of debt, (in shares) | 157,014 | ||||||
Share based payment service | $ 250 | 155,575 | 155,825 | ||||
Share based payment service, (in shares) | 25,000 | ||||||
Net loss from continued operation | (58,629,885) | (2,918,680) | (61,548,565) | ||||
Net loss from continued operation | 1,493,945 | 1,493,945 | |||||
Statutory reserves | |||||||
Acquisition of Fresh Joy | 5,379,104 | 5,379,104 | |||||
Disposition of Discontinue operation | (60,922) | (111,404) | (172,326) | ||||
Foreign currency translation | 969,477 | 717,560 | |||||
Ending balance, value at Dec. 31, 2021 | $ 53,824 | 36,281,992 | 2,143,252 | (25,748,542) | 2,459,256 | 2,460,424 | 17,650,206 |
Balances at ending (in shares) at Dec. 31, 2021 | 5,382,383 | ||||||
Issuance of ordinary shares - cash | $ 784 | 87,808 | 88,592 | ||||
Issuance of common stock - cash, (in shares) | 78,400 | ||||||
Issuance of ordinary shares - prepayment for acquisition of assets | $ 10,000 | 3,510,000 | 3,520,000 | ||||
Issuance of common stock prepayment for acquisition of assets, (in shares) | 1,000,000 | ||||||
Issuance of ordinary shares-conversion of debt | $ 4,147 | 252,668 | 256,815 | ||||
Issuance of common stock for conversion of debt, (in shares) | 414,786 | ||||||
Share based payment service | $ 21,400 | 2,426,150 | 2,447,550 | ||||
Share based payment service, (in shares) | 2,140,000 | ||||||
Net loss from continued operation | (9,365,056) | (40,025) | (9,405,081) | ||||
Share-based payments - omnibus equity plan | $ 6,000 | 1,590,000 | 1,596,000 | ||||
Share-based payments omnibus equity plan, (in shares) | 600,000 | ||||||
Statutory reserves | |||||||
Foreign currency translation | (1,624,743) | (1,624,743) | |||||
Issuance of ordinary shares – cashless exercise | $ 2,705 | (2,705) | |||||
Issuance of common stock - cashless exercise, (in shares) | 270,492 | ||||||
Reverse split senders | $ 87 | (87) | |||||
Reverse split senders, (in shares) | 8,673 | ||||||
Ending balance, value at Dec. 31, 2022 | $ 98,947 | $ 44,145,826 | $ 2,143,252 | $ (35,113,598) | $ 834,513 | $ 2,420,399 | $ 14,529,339 |
Balances at ending (in shares) at Dec. 31, 2022 | 9,894,734 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOW - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | |||
Net (loss) income | $ (9,405,081) | $ (60,054,620) | $ 8,281,017 |
Net income from discontinued operation | 1,493,945 | 233,153 | |
(Loss)/ income from continuing operations | (9,405,081) | (61,548,565) | 8,047,864 |
Adjustments to reconcile net income to net cash used in operating activities: | |||
Depreciation of property, plant and equipment | 278,562 | 411,020 | 268,233 |
Amortization of intangible assets | 1,680,334 | 3,451,000 | 740,641 |
Impairment of goodwill | 3,681 | 3,806,593 | |
Impairment of intangible assets | 14,632,931 | ||
Impairment of Property, plant and equipment | 29,716 | ||
Interest expenses related to convertible note | 100,314 | ||
Share-based payments | 4,043,550 | ||
Provision for doubtful accounts | (819,413) | 29,048,252 | 972,671 |
Deferred income taxes | 255,673 | 63,107 | |
Changes in operating assets and liabilities: | |||
Accounts receivable | 3,986,645 | (42,080) | (3,151,363) |
Accounts receivables related party | 1,906,101 | (1,906,101) | |
Other receivables | 385,105 | (2,058,397) | (1,159,776) |
Inventories | 116,115 | (41,460) | 34,495 |
Prepayments | (823,597) | (5,682,689) | 58,441 |
Operating lease assets | (2,182) | (15,185) | |
Accounts payable | (73,666) | 746,840 | (82,419) |
Other payables and accrued liabilities | 52,501 | (2,584,323) | (1,882,550) |
Customer deposits | (600,698) | 901,749 | |
Taxes payable | (550,379) | (5,472,210) | 3,049,172 |
Net cash (used in) generated from operating activities - continued operation | (1,598,493) | (22,284,750) | 5,052,415 |
Net cash (used in) generated from operating activities - discontinued operation | 2,477,398 | (8,692) | |
CASH FLOWS FROM INVESTING ACTIVITIES: | |||
Purchases of property and equipment | (3,429) | (142,914) | (2,207,894) |
Proceeds from disposal of equipment | 9,760 | 52,799 | 11,285 |
Prepayments for intangible assets | 240,157 | ||
Purchase of intangible assets | (16,385,451) | (9,657,844) | |
Proceeds from disposal of intangible assets | 12,985,106 | 852,406 | |
Disposal of a subsidiary | (866,075) | ||
Acquisition of subsidiaries, net of cash received | 5 | (141,820) | |
Net cash from investing activities | 6,336 | (4,498,355) | (10,761,890) |
CASH FLOWS FROM FINANCING ACTIVITIES: | |||
Proceeds from issuance of new shares | 88,592 | 12,830,780 | 2,698,046 |
Gross proceeds from issuance of convertible note | 1,550,000 | 739,189 | |
Repayment of convertible note | (739,189) | ||
Proceeds (Repayment) from other payables - related party | 893,211 | 160,666 | |
Change in restricted cash | (1,129) | ||
Repayments of short-term loans - banks | (4,663,292) | (4,349,339) | |
Short-term loans - banks | 3,477,422 | ||
Repayments of long-term loans - third party | (14,117) | (72,208) | |
Net cash generated from financing activities | 2,530,674 | 7,574,848 | 2,493,110 |
EFFECT OF EXCHANGE RATES ON CASH | (997,544) | 1,113,717 | 3,547,033 |
NET CHANGES IN CASH AND CASH EQUIVALENTS | (59,027) | (15,617,142) | 321,976 |
CASH AND CASH EQUIVALENTS, beginning of year | 135,562 | 15,752,704 | 15,478,587 |
CASH AND CASH EQUIVALENTS, end of year | 76,535 | 135,562 | 15,800,563 |
Less: cash and cash equivalents from the discontinued operations, end of year | 47,859 | ||
CASH AND CASH EQUIVALENT, FROM THE CONTINUING OPERATIONS, end of year | 76,535 | 135,562 | 15,752,704 |
SUPPLEMENTAL CASH FLOW INFORMATION: | |||
Cash and cash equivalents | 76,535 | 135,562 | 15,752,704 |
CASH AND CASH EQUIVALENTS, end of year | 76,535 | 135,562 | 15,752,704 |
Provision for doubtful trade receivables | (798,445) | 5,747,069 | 909,223 |
Provision for doubtful other receivables | (20,554) | 13,471,554 | 12,691 |
Reversal for doubtful prepayments | 7,078 | 9,803,067 | 50,757 |
Allowance for inventory | (7,492) | 26,561 | |
(Reversal)/Provision for doubtful accounts | (819,413) | 29,048,251 | 972,671 |
Cash paid for income tax | 1,097,888 | 1,529,850 | 779,459 |
Cash paid for interest | 33,542 | 398,963 | 439,607 |
SUPPLEMENTAL NON-CASH INVESTING INFORMATION: | |||
Additional of operating lease, right-of-use asset | 40,596 | 155,223 | 231,988 |
SUPPLEMENTAL NON-CASH FINANCING INFORMATION: | |||
Operating lease liabilities | $ 11,261 | $ 97,054 | $ 242,046 |
ORGANIZATION AND PRINCIPAL ACTI
ORGANIZATION AND PRINCIPAL ACTIVITIES | 12 Months Ended |
Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
ORGANIZATION AND PRINCIPAL ACTIVITIES | ORGANIZATION AND PRINCIPAL ACTIVITIES Blue Hat Interactive Entertainment Technology (“Blue Hat Cayman” or the “Company”) is a holding company incorporated on June 13, 2018, under the laws of the Cayman Islands. The Company has no substantive operations other than holding all of the outstanding share capital of Brilliant Hat Limited (“Blue Hat BVI”) established under the laws of the British Virgin Islands on June 26, 2018. Blue Hat BVI is also a holding company holding all of the outstanding equity of Blue Hat Interactive Entertainment Technology Limited (“Blue Hat HK”) which was established in Hong Kong on June 26, 2018. Blue Hat HK is also a holding company holding all of the outstanding equity of Xiamen Duwei Consulting Management Co., Ltd. (“Blue Hat WFOE”) which was established on July 26, 2018 under the laws of the People’s Republic of China (“PRC” or “China”) and Fujian Blue Hat Group Co., Ltd (“Blue Hat Group”) which was established on August 23, 2021 under the laws of the PRC. The Company, through its variable interest entity (“VIE”), Fujian Blue Hat Interactive Entertainment Technology Ltd. (“Blue Hat Fujian”), a PRC company, and through its wholly owned subsidiaries, including Hunan Engaomei Animation Culture Development Co., Ltd. (“Blue Hat Hunan”) a PRC company, engages in designing, producing, promoting and selling interactive toys with mobile games features, online interactive educational program, original intellectual property and peripheral derivatives features worldwide. On September 10, 2018, the Company established its wholly owned subsidiary, Pingxiang Blue Hat Technology Co. Ltd. (“Blue Hat Pingxiang”), a PRC company. Blue Hat Pingxiang also engages in designing, producing, promoting and selling interactive toys with mobile games features, original intellectual property and peripheral derivatives features worldwide. On February 2021, the Blue Hat WFOE acquired additional 51.5% of Fujian Youth Hand in Hand Educational Technology Co., Ltd (“Fujian Youth”), and Fujian Youth is owned 48.5% by Blue Hat Fujian. On March 24 2021, a wholly owned subsidiary Fuzhou Qiande Educational Technology Co., Ltd (“Qiande”), a PRC company, was established under Fujian Youth. On February 20, 2021 and June 29, 2021, the Company established its wholly owned subsidiaries, Xiamen Bluehat Research Institution of Education Co., Ltd (“Bluehat Research”) and Fujian Lanyun Canghai Technology Co., Ltd (“Fujian Lanyun”), each a PRC company. On November 15, 2021, the Company deregistered Shenyang Qimengxing Trading Co., Ltd. During 2021, the Company disposed Xunpusen (Xiamen) Technology Co., Ltd (“Xunpusen”), and Xiamen Jiuqiao Technology Co., Ltd (“Jiuqiao”). On November 13, 2018, Blue Hat Cayman completed a reorganization of entities under common control of its then existing shareholders, who collectively owned all of the equity interests of Blue Hat Cayman prior to the reorganization. Blue Hat Cayman, Blue Hat BVI, and Blue Hat HK were established as the holding companies of Blue Hat WFOE. Blue Hat WFOE is the primary beneficiary of Blue Hat Fujian and its subsidiaries, and all of these entities included in Blue Hat Cayman are under common control which results in the consolidation of Blue Hat Fujian and subsidiaries which have been accounted for as a reorganization of entities under common control at carrying value. The consolidated financial statements are prepared on the basis as if the reorganization became effective as of the beginning of the first period presented in the accompanying consolidated financial statements of Blue Hat Cayman. On January 25, 2021, Blue Hat Cayman acquired 100% equity interest of Fresh Joy Entertainment Limited (“Fresh Joy”) which was established on January 7, 2020, a limited company established under the laws of the Cayman Islands through its affiliated Hong Kong Xinyou Entertainment Company (“Xinyou Entertainment”) which was established in Hong Kong on August 18, 2020. Xinyou Entertainment is also a holding company holds all the equity of Fujian Xinyou Technology Co., Ltd (“Xinyou Technology”) which was a PRC company established on September 29, 2020. Xinyou Technology signed a series of VIE agreements with its fully owned Fujian Roar Game Technology Co., Ltd (“Fujian Roar Game”), a PRC company established on December 6, 2019, and Fujian Roar Game holds 51% equity of Fuzhou Csfctech Co., Ltd (“Fuzhou CSFC”) and 100% equity of Fuzhou UC71 Co., Ltd (“Fuzhou UC71”), each a PRC company established on August 5, 2011, and October 25, 2016 respectively. On October 17, 2021, the Company deregistered Chongqing Lanhui Technology Co. Ltd. On September 30, 2022, Blue Hat Group acquired 100% of Xiamen Shengruihao (“Shengruihao”) Technology Co., Ltd, a PRC company established on June 30, 2021. On May 10, 2022, the Company has authorized and approved a 1-for-10 reverse stock split of the Company’s authorized (issued and unissued) shares of ordinary shares, effective May 27, 2022. The reverse stock split would be reflected in December 31, 2022, and December 31, 2021 statements of changes in stockholders’ equity, and in per share data for all period presented. The accompanying consolidated financial statements reflect the activities of Blue Hat Cayman and each of the following entities: Schedule of business activities Name Background Ownership Brilliant Hat Limited ● A British Virgin Islands company ● Incorporated on June 26, 2018 ● A holding company 100% owned by Blue Hat Interactive Entertainment Technology Blue Hat Interactive Entertainment Technology Limited ● A Hong Kong company ● Incorporated on June 26, 2018 ● A holding company 100% owned by Brilliant Hat Limited Xiamen Duwei Consulting Management Co., Ltd. ● A PRC limited liability company and deemed a wholly foreign owned enterprise (“WFOE”). ● Incorporated on July 26, 2018 ● Registered capital of $20,000,000 ● A holding company. 100% owned by Blue Hat Interactive Entertainment Technology Limited. Fujian Blue Hat Group Co. Ltd. ● A PRC limited liability company ● Incorporated on August 23, 2021. ● A holding company 100% owned by Blue Hat Interactive Entertainment Technology Limited. Fujian Blue Hat Interactive Entertainment Technology Ltd. ● A PRC limited liability company ● Incorporated on January 7, 2010 ● Registered capital of $4,697,526 (RMB 31,054,000). ● Designing, producing, promoting and selling animated toys with mobile VIE of Xiamen Duwei Consulting Management Co., Ltd Fujian Youth Hand in Hand Educational Technology Co., Ltd. ● A PRC limited liability company, acquired on February 2021. ● Incorporated on September 18, 2017 ● Registered capital of $3,106,214 (RMB 20,100,000) ● Educational consulting service and sports related. 51.5% owned by Xiamen Duwei Consulting Management Co., Ltd. 48.5% owned by Fujian Blue Hat Interactive Technology Co., Ltd. Hunan Engaomei Animation Culture Development Co., Ltd. ● A PRC limited liability company ● Incorporated on October 19, 2017 ● Registered capital of $302,540 (RMB 2,000,000) ● Designing, producing, promoting and selling animated toys with mobile games features, original intellectual property and peripheral derivatives features. 100% owned by Fujian Blue Hat Interactive Technology Co., Ltd. Pingxiang Blue Hat Technology Co. Ltd. ● A PRC limited liability company ● Incorporated on September 10, 2018 ● Registered capital of $302,540 (RMB 2,000,000) ● Designing, producing, promoting and selling animated toys with mobile 100% owned by Fujian Blue Hat Interactive Technology Ltd. Xiamen Bluehat Research Institution of Education Co., Ltd ● A PRC limited liability company ● Incorporated on February 20, 2021 ● Information Technology consulting service 100% owned by Xiamen Duwei Consulting Management Co., Ltd. Fujian Lanyun Canghai Technology Co., Ltd. ● A PRC limited liability company ● Incorporated on June 29, 2021 ● Software development, promoting and selling of toys and stationery 100% owned by Fujian Blue Hat Interactive Entertainment Technology Ltd Fuzhou Qiande Educational Technology Co., Ltd. ● A PRC limited liability company ● Incorporated on March 24, 2021 ● Information Technology consulting service 100% owned by Fujian Youth Hand in Hand Educational Technology Co., Ltd. Fresh Joy Entertainment Ltd ● A British Virgin Islands company, acquired on January 25, 2021 ● Incorporated on January 7, 2020 ● A holding company 100% owned by Fujian Lanyun Canghai Technology Co., Ltd. Hong Kong Xinyou Entertainment Company ● A Hong Kong company, acquired on January 25, 2021 ● Incorporated on August 18, 2020 ● A holding company 100% owned by Fresh Joy Entertainment Ltd Fujian Xinyou Technology Co., Ltd. ● A PRC limited liability company and deemed a wholly foreign owned enterprise (“WFOE”), acquired on January 25, 2021 ● Incorporated on September 29, 2020 ● A holding company 100% owned by Hong Kong Xinyou Entertainment Limited. Fujian Roar Game Technology Co. Ltd. ● A PRC limited liability company, acquired on January 25, 2021 ● Incorporated on December 6, 2019 ● Designing, producing, promoting and selling animated toys with mobile VIE of Fujian Xinyou Technology Co., Ltd. Fuzhou UC71 Co., Ltd. ● A PRC limited liability company ● Incorporated on October 25, 2016 ● Registered capital of $1,854,456 (RMB 12,000,000) ● Software development, Information technology consulting service 100% owned by Fujian Roar Game Technology Co., Ltd Fuzhou CSFCTECH Co. Ltd. ● A PRC limited liability company, acquired on January 25, 2021 ● Incorporated on August 5, 2011 ● Registered capital of $3,001,159 (RMB 20,000,000) ● Software development, animation design and web design 51% owned by Fujian Roar Game Technology Co., Ltd . Xiamen Shengruihao Technology Co., Ltd ● A PRC limited liability company, acquired on September 30, 2022 ● Incorporated on June 30, 2021 ● Registered capital of $ 4,463,754 (RMB 30,000,000) ● Software development, animation design and web design 100% owned by Fujian Blue Hat Group Co. Ltd. Contractual Arrangements Due to legal restrictions on foreign ownership and investment in, among other areas, the production, development and operation of AR interactive entertainment games and toys in China, including interactive educational materials, mobile games, and toys with mobile game features, the Company operates its businesses in which foreign investment is restricted or prohibited in the PRC through certain PRC domestic companies. As such, Blue Hat Fujian and Fujian Roar Game are controlled through contractual arrangements in lieu of direct equity ownership by the Company or any of its subsidiaries. Such contractual arrangements consist of a series of three agreements, along with shareholders’ powers of attorney (“POAs”) and irrevocable commitment letters (collectively the “Contractual Arrangements”). The significant terms of the Contractual Arrangements are as follows: Exclusive Business Cooperation Agreements Pursuant to the exclusive business cooperation agreement between variables interest entities, including Blue Hat WFOE and Blue Hat Fujian, Fresh Joy and Fujian Roar, variable interest entities equity holders has the exclusive right to provide our wholly owned entities with technical support services, consulting services and other services, including technical support, technical assistance, technical consulting, and professional training necessary for our wholly owned entities’ operation, network support, database support, software services, business management consulting, grant use rights of intellectual property rights, lease hardware and device, provide system integration service, research and development of software and system maintenance, provide labor support and to develop the related technologies based on wholly owned entities’ needs. In exchange, variable interest entities equity holders are entitled to a service fee that equals to all of the consolidated net income after offsetting previous year’s loss (if any) of wholly owned entity. The service fee may be adjusted by variable interest entity equity holders based on the actual scope of services rendered by variable interest entities equity holders and the operational needs and expanding demands of our wholly owned entities. Pursuant to the exclusive business cooperation agreement, variable interest entities equity holders have the unilateral right to adjust the service fee at any time, and our wholly owned entities have no right to adjust the service fee. We believe that such conditions under which the service fee may be adjusted will be primarily based on the needs of our wholly owned entities to operate and develop its business in the augmented reality market. For example, if wholly owned entities need to expand its business, increase research input or consummate mergers or acquisitions in the future, variable interest entities equity holders have the right to decrease the amount of the service fee, which would allow our wholly owned entities to have additional capital to operate and develop its business in the augmented reality market. The exclusive business cooperation agreement remains effective for 10 years, and shall be automatically renewed for one year at the expiration date of the validity term. However, variable interest entity equity holders have the right to terminate this agreement upon giving 30 days’ prior written notice to wholly owned entity at any time. Call Option Agreements Pursuant to the call option agreements, among variable interest entities equity holders, our wholly owned entities and the shareholders who collectively owned all of the wholly owned subsidiaries, such shareholders jointly and severally grant variable interest entities equity holders an option to purchase their equity interests in our wholly owned entities. The purchase price shall be the lowest price then permitted under applicable PRC laws. Variable interest entities equity holders or the designated person may exercise such option at any time to purchase all or part of the equity interests in wholly owned entity until they have acquired all equity interests of our wholly owned entity, which is irrevocable during the term of the agreements. The call option agreements remain in effect until November 13, 2028 and December 2030 for Blue Hat Fujian and Fujian Roar Game respectively, and shall be automatically renewed for one year at the expiration date of the validity term. However, variable interest entity equities holders have the right to terminate these agreements upon giving 30 days’ prior written notice to our wholly owned entities at any time. Equity Pledge Agreements Pursuant to the equity pledge agreement, among variable interest entities equity holders, our wholly owned entities, and the shareholders who collectively owned all of our wholly owned entities, such shareholders pledge all of the equity interests in our wholly owned entities to variable interest entities equity holders as collateral to secure the obligations of our wholly owned entities under the exclusive business cooperation agreements and call option agreements. These shareholders are prohibited from transferring the pledged equity interests without the prior consent of variable interest entities equity holders unless transferring the equity interests to Blue Hat WFOE, Fresh Joy or its designated person in accordance to the call option agreements. The equity pledge agreements shall come into force the date on which the pledged interests is recorded, under our wholly owned entity register of shareholders and is registered with competent administration for industry and commerce of our wholly owned subsidiary until all of the liabilities and debts to variable interest entities equity holders have been fulfilled completely by our wholly owned entity. Our wholly owned entities and the shareholders who collectively owned all of our wholly owned entities shall not terminate these agreements in any circumstance for any reason. However, variable interest entities equity holders have the right to terminate these agreements upon giving 30 days’ prior written notice to our wholly owned entities at any time. Shareholders’ Powers of Attorney (“POAs”) Pursuant to the shareholders’ POAs, the shareholders of our wholly owned entity give variable interest entities equity holders an irrevocable proxy to act on their behalf on all matters pertaining to our wholly owned entities and to exercise all of their rights as shareholders of our wholly owned entities, including the right to attend shareholders meeting, to exercise voting rights and all of the other rights, and to sign transfer documents and any other documents in relation to the fulfillment of the obligations under the call option agreements and the equity pledge agreements. The shareholders’ POAs shall remain in effect while the shareholders of our wholly owned entities hold the equity interests in our wholly owned entities. Irrevocable Commitment Letters Pursuant to the irrevocable commitment letters, the shareholders of our wholly owned entities commit that their spouses or inheritors have no right to claim any rights or interest in relation to the shares that they hold in our wholly owned entities and have no right to impose any impact on the daily managing duties of our wholly owned entities, and commit that if any event which refrains them from exercising shareholders’ rights as a registered shareholder, such as death, incapacity, divorce or any other event, could happen to them, the shareholders of our wholly owned entity will take corresponding measures to guarantee the rights of other registered shareholders and the performance of the Contractual Arrangements. The letters are irrevocable and shall not be withdrawn without the consent of variable interest entity equities holders. Based on the foregoing contractual arrangements, which grant variable interest entity equity holders effective control of our wholly owned entity and enable variable interest entity equity holders to receive all of their expected residual returns, the Company accounts for Blue Hat Fujian and Fujian Roar Game as VIE. Accordingly, the Company consolidates the accounts of Blue Hat Fujian and Fujian Roar Game for the periods presented herein, in accordance with Regulation S-X-3A-02 promulgated by the Securities Exchange Commission (“SEC”), and Accounting Standards Codification (“ASC”) 810-10, Consolidation. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND PRACTICES | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND PRACTICES | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND PRACTICES Basis of presentation The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for information pursuant to the rules and regulations of the SEC. Discontinued operations On September 30, 2021, the Company entered into a share transfer agreement with a third party to sell Xunpusen (Xiamen) Technology Co., Ltd., pursuant to the terms of the Agreement, the buyer purchased 100% of the Company’s ownership of Xunpusen and 100% owned subsidiary Xingjuyun (Xiamen) Technology Co., Ltd. for a total price of $1,333,023, resulting in a gain on disposal of $ 683,688 On December 20, 2021, the Company sold 100% of the ownership of Xiamen Jiuqiao Technology Co., Ltd., and 100% owned subsidiaries to a third party for a total price of $8,368,930, resulting in a gain on disposal of $ 811,269 On November 15, 2021, Shenyang Qimengxing Trading Co., Ltd. (“Blue Hat Shenyang”) was deregistered, resulting in a loss on disposal of $ 1,012 Principles of consolidation The consolidated financial statements include the financial statements of the Company and its subsidiaries, which include the wholly- foreign owned enterprise (“WFOE”) and variable interest entities (“VIEs”) over which the Company exercises control and, when applicable, entities for which the Company has a controlling financial interest or is the primary beneficiary. All transactions and balances among the Company and its subsidiaries have been eliminated upon consolidation. Discontinued Operations On September 30, 2021, the Company entered into a share transfer agreement with a third party to sell Xunpusen (Xiamen) Technology Co., Ltd., pursuant to the terms of the Agreement, the buyer purchased 100% of the Company’s ownership of Xunpusen and 100% owned subsidiary Xingjuyun (Xiamen) Technology Co., Ltd. for a total price of $1,333,023. On December 20, 2021, the Company sold 100% of the ownership of Xiamen Jiuqiao Technology Co., Ltd., and 100% owned subsidiaries to a third party for a total price of $8,368,930, and on November 15, 2021, Shenyang Qimengxing Trading Co., Ltd. (“Blue Hat Shenyang”) was deregistered. Use of estimates and assumptions The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities as of the date of the consolidated financial statements and the reported amounts of revenues and expenses during the periods presented. Significant accounting estimates reflected in the Company’s consolidated financial statements include the useful lives of plant and equipment and intangible assets, capitalized development costs, impairment of long-lived assets, allowance for doubtful accounts, revenue recognition, allowance for deferred tax assets and uncertain tax position, and inventory allowance. Actual results could differ from these estimates. Going Concern The Company’s financial statements are prepared assuming that the Company will continue as a going concern. The Company incurred operating loss of $ 9.41 1.60 The ability of the Company to continue as a going concern is dependent upon its ability to successfully execute its new business strategy and eventually attain profitable operations. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. Foreign currency translation and transaction The reporting currency of the Company is the U.S. dollar. The Company in China conducts its businesses in the local currency, Renminbi (RMB), as its functional currency. Assets and liabilities are translated at the unified exchange rate as quoted by the People’s Bank of China at the end of the period. The statement of income accounts is translated at the average translation rates and the equity accounts are translated at historical rates. Translation adjustments resulting from this process are included in accumulated other comprehensive income. Transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in the results of operations as incurred. Translation adjustments included in accumulated other comprehensive income (loss) amounted to $ 834,513 2,459,256 1,741,696 6.96 6.38 6.52 6.70 6.45 6.90 Cash and restricted cash Cash and cash equivalents consist of cash on hand; demand deposits and time deposits placed with banks or other financial institutions and have original maturities of less than three months. Deposits in banks in the PRC are only insured by the government up to RMB500,000, and are consequently exposed to risk of loss. The Company believes the probability of a bank failure, causing loss to the Company, is remote. Cash that is restricted as to withdrawal for use or pledged as security is reported separately on the face of the consolidated balance sheets, and is not included in the total cash and cash equivalents in the consolidated statements of cash flows. Accounts receivable, net Accounts receivable include trade accounts due from customers. Accounts are considered overdue after 30 days. In establishing the required allowance for doubtful accounts, management considers historical collection experience, aging of the receivables, the economic environment, industry trend analysis, and the credit history and financial conditions of the customers. Management reviews its receivables on a regular basis to determine if the bad debt allowance is adequate, and adjusts the allowance when necessary. Delinquent account balances are written-off against allowance for doubtful accounts after management has determined that the likelihood of collection is not probable. As of December 31, 2022 and 2021, allowance for the doubtful accounts was $ 5,083,245 6,394,429 Other receivables, net Other receivables primarily include deposits for business acquisitions, setup of research center, advances to employees, and others. Management regularly reviews the aging of receivables and changes in payment trends and records allowances when management believes collection of amounts due are at risk. Accounts considered uncollectable are written off against allowances after exhaustive efforts at collection are made. As of December 31, 2022 and 2021, allowance for the doubtful accounts was $ 12,489,219 13,665,255 Inventories Inventories are comprised of finished goods and are stated at the lower of cost or net realizable value using the weighted average method. Management reviews inventories for obsolescence and cost in excess of net realizable value quarterly and records a reserve against the inventory when the carrying value exceeds net realizable value. Prepayments, net Current Prepayments are cash deposited or advanced to suppliers for future inventory purchases. This amount is refundable and bears no interest. For any advances to suppliers determined by management that such advances will not be in receipts of inventories or refundable, the Company will recognize an allowance account to reserve such balances. Management reviews its advances to suppliers on a regular basis to determine if the allowance is adequate, and adjusts the allowance when necessary. Delinquent account balances are written-off against allowance for doubtful accounts after management has determined that the likelihood of collection is not probable. The Company’s management continues to evaluate the reasonableness of the valuation allowance policy and update it if necessary. As of December 31, 2022 and 2021, allowance for the doubtful accounts was $ 1,368,535 1,487,210 Non-current Non-current prepayment represents cash deposited or advanced for software development expenditure. This amount is refundable and bears no interest. Property and equipment, net Property and equipment are stated at cost less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the assets. The estimated useful lives are as follows: Schedule of estimated useful lives Category Depreciation method Estimated useful lives Building Straight-line 20 Electronic devices Straight-line 3 Office equipment, fixtures and furniture Straight-line 3 Automobile Straight-line 3 The cost and related accumulated depreciation of assets sold or otherwise retired are eliminated from the accounts and any gain or loss is included in the consolidated statements of income and comprehensive income. Expenditures for maintenance and repairs are charged to earnings as incurred, while additions, renewals which are expected to extend the useful life of assets, are capitalized. The Company also re-evaluates the periods of depreciation to determine whether subsequent events and circumstances warrant revised estimates of useful lives. Intangible assets The Company’s intangible assets with definite useful lives primarily consist of software development costs, patents and licensed software. The Company amortizes its intangible assets with definite useful lives over their estimated useful lives and reviews these assets for impairment. The Company typically amortizes its intangible assets with definite useful lives on a straight-line basis over the shorter of the contractual terms or the estimated useful lives of five to ten years. Software development costs The Company follows the provisions of ASC 350-40, “Internal Use Software”, to capitalize certain direct development costs associated with internal- used software. ASC 350-40 provides guidance on capitalization of the costs incurred for computer software developed or obtained for internal use. The Company expenses all costs incurred during the preliminary project stage of its development, and capitalizes costs incurred during the application development stage. Costs incurred relating to upgrades and enhancements to the application are capitalized if it is determined that these upgrades or enhancements add additional functionality to the application. The capitalized development cost is amortized on a straight-line basis over the estimated useful life, which is generally five years. Management evaluates the useful lives of these assets on an annual basis and tests for impairment whenever events or changes in circumstances occur that could impact the recoverability of these assets. Research and development Research and development expenses include salaries and other compensation-related expenses to the Company’s research and product development personnel, as well as office rental, depreciation and related expenses for the Company’s research and product development team. The Company expenses all costs that are incurred in connection with the planning and implementation phases of development, and costs that are associated with maintenance of the existing websites or software for internal use. Business Combinations The Company applies the provisions of ASC 805, Business Combination Goodwill Goodwill represents the excess of the purchase consideration over the acquisition date amounts of the identifiable tangible assets acquired and liabilities assumed from the acquired entity as a result of the Company’s acquisitions of interests in its subsidiaries. Goodwill is not amortized but is tested for impairment if events or changes in circumstances indicate that it might be impaired. The company assessed qualitative factors to determine if it is necessary to perform quantitative assessment. In the qualitative assessment, the company considers factors such as macroeconomic conditions, industry and market considerations, overall financial performance, and other specific information related to the operations, business plans and strategies. Impairment for long-lived assets other Long-lived assets, including property and equipment and intangible assets with finite lives are reviewed for impairment whenever events or changes in circumstances (such as a significant adverse change to market conditions that will impact the future use of the assets) indicate that the carrying value of an asset may not be recoverable. The Company assesses the recoverability of the assets based on the undiscounted future cash flows the assets are expected to generate and recognize an impairment loss when estimated undiscounted future cash flows expected to result from the use of the asset plus net proceeds expected from disposition of the asset, if any, are less than the carrying value of the asset. If an impairment is identified, the Company would reduce the carrying amount of the asset to its estimated fair value based on a discounted cash flows approach or, when available and appropriate, to comparable market values. As of December 31, 2022, 2021 and 2020, impairment for long-lived assets was $ 29,716 14,632,931 0 Long-term investments Long-term investments include cost method investment and equity method investments. Entities in which the Company has the ability to exercise significant influence, but does not have a controlling interest, are accounted for using the equity method. Significant influence is generally considered to exist when the Company has voting shares between 20% and 50%, and other factors, such as representation on the Board of Directors, voting rights and the impact of commercial arrangements, are considered in determining whether the equity method of accounting is appropriate. Under this method of accounting, the Company records its proportionate share of the net earnings or losses of equity method investees and a corresponding increase or decrease to the investment balances. Dividends received from the equity method investments are recorded as reductions in the cost of such investments. The Company accounts for investments with less than 20% of the voting shares and does not have the ability to exercise significant influence over operating and financial policies of the investee using the cost method. The Company records cost method investments at the historical cost in its consolidated financial statements and subsequently records any dividends received from the net accumulated earrings of the investee as income. Dividends received in excess of earnings are considered a return of investment and are recorded as reduction in the cost of the investments. Long-term investments are evaluated for impairment when facts or circumstances indicate that the fair value of the long-term investments is less than its carrying value. Impairment is recognized when a decline in fair value is determined to be other-than- temporary. The Company reviews several factors to determine whether a loss is other-than-temporary. These factors include, but are not limited to, the: (i) nature of the investment; (ii) cause and duration of the impairment; (iii) extent to which fair value is less than cost; financial condition and near term prospects of the investments; and (v) ability to hold the security for a period of time sufficient to allow for any anticipated recovery in fair value. No event had occurred and indicated that other-than-temporary impairment existed and therefore the Company did no Fair value measurement The accounting standard regarding fair value of financial instruments and related fair value measurements defines financial instruments and requires disclosure of the fair value of financial instruments held by the Company. The accounting standards define fair value, establish a three-level valuation hierarchy for disclosures of fair value measurement and enhance disclosure requirements for fair value measures. The three levels are defined as follow: Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the assets or liability, either directly or indirectly, for substantially the full term of the financial instruments. Level 3 inputs to the valuation methodology are unobservable and significant to the fair value. Our cash and cash equivalents and restricted cash are classified within level 1 of the fair value hierarchy because they are value using quoted market price. Revenue recognition The Company adopted Accounting Standards Update (“ASU”) 2014-09 Revenue from Contracts with Customers (ASC 606). The ASU requires the use of a new five-step model to recognize revenue from customer contracts. The five-step model requires that the Company (i) identify the contract with the customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, including variable consideration to the extent that it is probable that a significant future reversal will not occur, (iv) allocate the transaction price to the respective performance obligations in the contract, and (v) recognize revenue when (or as) the Company satisfies the performance obligation. Sales of interactive toys The Company recognizes sales of interactive toys revenues upon shipment or upon receipt of products by the customer, depending on the terms, provided that: there are no uncertainties regarding customer acceptance; persuasive evidence of an agreement exists documenting the specific terms of the transaction; the sales price is fixed or determinable; and collectability is reasonably assured. Management assesses the business environment, the customer’s financial condition, historical collection experience, accounts receivable aging, and customer disputes to determine whether collectability is reasonably assured. The Company routinely enters into arrangements with its customers to provide sales incentives, support customer promotions, and provide allowances for returns and defective merchandise. Such programs are based primarily on customer purchases, customer performance of specified promotional activities, and other specified factors such as sales to consumers. The costs of these programs are recorded as sales adjustments that reduce gross sales in the period the related sale is recognized. The products sold in the PRC are subject to a Chinese value-added tax (“VAT”). VAT taxes are presented as a reduction of revenue. Mobile games Internal developed platform The Company operates the mobile games as live services that allow players to play for free. Within these games, players can purchase virtual currency to obtain virtual goods to enhance the game-playing experience. On the platform, players purchase virtual currency and/or virtual goods through various widely accepted payment methods offered in the games, including Alipay or WeChat and online bank transfer service providers. Advance payments from customers for virtual goods that are non-refundable that specify our obligations are recorded to deferred revenue. All other advance payments that do not meet these criteria are recorded as advances from customers. For virtual goods purchases upon immediately use with no future game-playing benefits, the Company recognizes such virtual goods purchase upon receipts of payment from the paying players. For virtual goods purchases for the conversion of future game-playing benefits or throughout the players’ playing life, the Company recognizes such virtual goods purchases ratably over the estimated average playing period of paying players for the applicable game, starting from the point in time when virtual items are delivered to the players’ accounts and all other revenue recognition criteria are met. The Company records revenue generated from mobile games on a gross basis as the Company is acting as the principal to fulfill all obligations related to the game operation. Fees paid to distribution channels and payment channels are recorded as cost of revenues. The Company considers the average period that players typically play the games and other game player behavior patterns, as well as various other factors to arrive at the best estimates for the estimated playing period of the paying players for each game. On a quarterly basis, the Company determined the estimated average playing period for paying players by analyzing paying players for that game who made their first virtual goods purchase during that period and counting their cumulative login days for each game. The Company then averages the time periods to determine the estimated paying playing period for that game. If a new game is launched and only a limited period of paying player data is available, then the Company considers other qualitative factors, such as the playing patterns for paying players for other games with similar characteristics and playing patterns of paying players, such as targeted players and purchasing frequency. While the Company believes its estimates to be reasonable based on available game player information, the Company may revise such estimates based on new information indicating a change in the game player behavior patterns and any adjustments are applied prospectively. Based on the Company’s analysis, the estimated average playing period of paying players is approximately one to three months, and this estimate has been consistent since the Company’s initial analysis. No change has been made in such estimate during any of the periods presented. Future usage patterns may differ from historical usage patterns and therefore the estimated average playing periods may change in the future. Third-party platform The Company also licenses third-parties to operate the Company’s mobile games developed internally through mobile platforms and receives revenue-based royalty payments from all the third-party licensee operators on a monthly basis. The revenue- based royalty payments are recognized when all other revenue recognition criteria are met. The Company records the mobile game royalty revenue on a net basis, as the Company does not have the primary responsibility for fulfillment and acceptability of the game services. Communication service The communication service is mainly divided into three modules: SMS agency service, agency fee from mobile recharge and IDC service. SMS agency service and mobile recharge service provide customer services through the company’s platform; and IDC service which providing broadband, IP and others for customers’ router equipment. The sales revenue will be recognized after the customer confirms the statement generated from the platform. The premise is: the customer has no uncertainty in the acceptance, the sales price is fixed and determinable when contracted, and the retrievability is also reasonably guaranteed. Information service This is a service which provides products and technical services to customers generating from third-party media channels (such as WeChat official accounts, mini programs, APP, Tik Tok, Toutiao, Quick Worker, etc.), as well as commissioned development services for interactive marketing tools, company then charged according to the information services that contracted with the customers. The sales revenue of the information service fee is recognized after the customer confirms the service provided is correct. The premise is: the customer has no uncertainty in the acceptance, the sales price is fixed and determinable when contracted, and the retrievability is also reasonably guaranteed. Commodity Trading For the sale of third-party products where the Company obtains control of the product before transferring it to the customer, the Company recognizes revenue based on the gross amount billed to customers. The Company considers multiple factors when determining whether it obtains control of third-party products, including evaluating if it can establish the price of the product, retains inventory risk for tangible products or has the responsibility for ensuring acceptability of the product. The company recognize net revenue from sale of Glycol when no control obtained throughout the transactions. Shipping and handling Shipping and handling costs amounted to $ 2,927 25,892 38,025 Advertising costs Advertising costs amounted to $ 977,631 3,494,507 2,763 Operating leases A lease for which substantially all the benefits and risks incidental to ownership remain with the lessor is classified by the lessee as an operating lease. All leases of the Company are currently classified as operating leases. The Company records the total expenses on a straight-line basis over the lease term, and the accounting of operating lease in this report has been updated to reflect the adoption of FASB’s new guidance on the recognition and measurement of leases. Government subsidies Government subsidies mainly represent amounts granted by local government authorities as an incentive for companies to promote development of the local technology industry. The Company receives government subsidies related to government sponsored projects, and records such government subsidies as a liability when it is received. The Company records government subsidies as other income when there is no further performance obligation. Total government subsidies amounted to $ 19,969 99,948 28,623 Value added taxes Revenue represents the invoiced value of service, net of VAT. The VAT is based on gross sales price and VAT rates range up to 13%, depending on the type of service provided. Entities that are VAT general taxpayers are allowed to offset qualified input VAT paid to suppliers against their output VAT liabilities. Net VAT balance between input VAT and output VAT is recorded in tax payable. All of the VAT returns filed by the Company’s subsidiaries in China have been and remain subject to examination by the tax authorities for five years from the date of filing. Income taxes The Company accounts for current income taxes in accordance with the laws of the relevant tax authorities. The charge for taxation is based on the results for the fiscal year as adjusted for items, which are non-assessable or disallowed. It is calculated using tax rates that have been enacted or substantively enacted by the balance sheet date. Deferred taxes are accounted for using the asset and liability method in respect of temporary differences arising from differences between the carrying amount of assets and liabilities in the consolidated financial statements and the corresponding tax basis used in the computation of assessable tax profit. In principle, deferred tax liabilities are recognized for all taxable temporary differences. Deferred tax assets are recognized to the extent that it is probable that taxable profit will be available against which deductible temporary differences can be utilized. Deferred tax is calculated using tax rates that are expected to apply to the period when the asset is realized or the liability is settled. Deferred tax is charged or credited in the income statement, except when it is related to items credited or charged directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Current income taxes are provided for in accordance with the laws of the relevant taxing authorities. Comprehensive income Comprehensive income consists of two components, net income and other comprehensive (loss) income. Other comprehensive (loss) income refers to revenue, expenses, gains and losses that under U.S. GAAP are recorded as an element of shareholders’ equity but are excluded from net income. Other comprehensive (loss) income consists of a foreign currency translation adjustment resulting from the Company not using the U.S. dollar as its functional currencies. Earnings per share The Company computes earnings per share (“EPS”) in accordance with ASC 260, “Earnings per Share”. ASC 260 requires companies to present basic and diluted EPS. Basic EPS is measured as net income divided by the weighted average ordinary share outstanding for the period. Diluted EPS presents the dilutive effect on a per share basis of the potential ordinary shares (e.g., convertible securities, options and warrants) as if they had been converted at the beginning of the periods presented, or issuance date, if later. Potential ordinary shares that have an anti-dilutive effect (i.e., those that increase income per share or decrease loss per share) are excluded from the calculation of diluted EPS. The dilutive shares were 925,681 746,321 Employee benefits The full-time employees of the Company are entitled to staff welfare benefits including medical care, housing fund, pension benefits, unemployment insurance and other welfare, which are government mandated defined contribution plans by law. The Company is required to accrue for these benefits based on certain percentages of the employees’ respective salaries, subject to certain ceilings, in accordance with the relevant PRC regulations, and make cash contributions to the state-sponsored plans out of the amounts accrued. Total expenses for the plans were $ 111,987 104,287 23,235 Statutory reserves Pursuant to the laws applicable to the PRC, PRC entities must make appropriations from after-tax profit to the non-distributable “statutory surplus reserve fund”. Subject to certain cumulative limits, the “statutory surplus reserve fund” requires annual appropriations of 10% of after-tax profit until the aggregated appropriations reach 50% of the registered capital (as determined under accounting principles generally accepted in the PRC (“PRC GAAP”) at each year-end). For foreign invested enterprises and joint ventures in the PRC, annual appropriations should be made to the “reserve fund”. For foreign invested enterprises, the annual appropriation for the “reserve fund” cannot be less than 10% of after-tax profits until the aggregated appropriations reach 50% of the registered capital (as determined under PRC GAAP at each year-end). If the Company has accumulated loss from prior periods, the Company is able to use the current period net income after tax to offset against the accumulate loss. Recently issued accounting pronouncements In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, which provides guidance on the acquirer’s accounting for acquired revenue contracts with customers in a business combination. The amendments require an acquirer to recognize and measures contract assets and contract liabilities acquired in a business combination at the acquisition date in accordance with ASC 606 as if it had originated the contracts. This guidance also provides certain practical expedients for acquirers when recognizing and measuring acquired contract assets and contract liabilities from revenue contracts in a business combination. The new guidance is required to be applied prospectively to business combinations occurring on or after the date of adoption. This guidance is effective for the Group for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. Early adoption is permitted. The Group does not expect that the adoption of this guidance will have a material impact on its financial position, results of operations and cash flows. In June 2022, the FASB issued ASU 2022-03, Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions, which clarifies that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security and, therefore, is not considered in measuring fair value. The amendments also clarify that an entity cannot, as a separate unit of account, recognize and measure a contractual sale restriction. This guidance also requires certain disclosures for equity securities subject to contractual sale restrictions. The new guidance is required to be applied prospectively with any adjustments from the adoption of the amendments recognized in earnings and disclosed on the date of adoption. This guidance is effective for the Group for fiscal years beginning after December 15, 2023, and interim periods within those fiscal years. Early adoption is permitted. The Group does not expect that the adoption of this guidance will have a material impact on its financial position, results of operations and cash flows. |
VARIABLE INTEREST ENTITY (_VIE_
VARIABLE INTEREST ENTITY (“VIE”) | 12 Months Ended |
Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
VARIABLE INTEREST ENTITY (“VIE”) | 3. VARIABLE INTEREST ENTITY (“VIE”) On November 13, 2018, Blue Hat WFOE entered into Contractual Arrangements with Blue Hat Fujian, and December 2020, Xinyou Technology entered into Contractual Arrangements with Fujian Roar. The significant terms of these Contractual Arrangements are summarized in “Note 1 - Nature of business and organization” above. As a result, the Company classifies Blue Hat Fujian and Fujian Roar Game as VIEs which should be consolidated based on the structure as described in Note 1. A VIE is an entity that has either a total equity investment that is insufficient to permit the entity to finance its activities without additional subordinated financial support, or whose equity investors lack the characteristics of a controlling financial interest, such as through voting rights, right to receive the expected residual returns of the entity or obligation to absorb the expected losses of the entity. The variable interest holder, if any, that has a controlling financial interest in a VIE is deemed to be the primary beneficiary and must consolidate the VIE. The variable interest entity equity holders are deemed to have a controlling financial interest and be the primary beneficiary of our wholly owned entity because they have both of the following characteristics: The power to direct activities at wholly owned entity that most significantly impact such entity’s economic performance, and The right to receive benefits from wholly owned entity that could potentially be significant to such entity. Pursuant to the Contractual Arrangements, our wholly owned entity pays service fees equal to all of its net income to variable interest entity equity holders. The Contractual Arrangements are designed so that our wholly owned entity operates for the benefit of the variable interest entity equity holders and ultimately, the Company. Accordingly, the account of our wholly owned entity is consolidated in the accompanying financial statements. In addition, its financial positions and results of operations are included in the Company’s consolidated financial statements. The carrying amount of the VIEs’ consolidated assets and liabilities are as follows: Schedule of Variable Interest Entities December 31, December 31, 2022 2021 Current assets $ 18,522,735 $ 6,702,528 Property and equipment, net 102,688 211,924 Other non-current assets 8,910,138 10,672,824 Total assets 27,535,561 17,587,276 Total liabilities 10,027,011 10,825,262 Net assets $ 17,508,550 $ 6,762,014 December 31, December 31, 2022 2021 Current liabilities: Short-term loans - banks $ 1,261,944 $ 860,915 Current maturities of long-term loans third party — — Accounts payable 910,686 959,198 Other payables and accrued liabilities 3,305,351 3,328,862 Other payables related party 193,407 211,271 Operating lease liability - current 11,257 97,052 Customer deposits 1,566,443 1,500,677 Taxes payable 2,746,882 3,287,640 Total current liabilities 9,995,970 10,245,615 Operating lease liabilities 31,041 62,057 Long-term loans - third party — 517,590 Total liabilities $ 10,027,011 $ 10,825,262 The summarized operating results of the VIEs are as follows: Year ended Year ended Year ended December 31, December 31, December 31, 2022 2021 2020 Revenues $ 6,206,647 $ 15,155,074 $ 24,599,923 Gross profit $ (3,057,854 ) $ (6,482,924 ) $ 13,420,020 (Loss) Income from operations $ (3,891,685 ) $ (55,966,045 ) $ 11,511,579 Net (Loss) income from continuing operation $ (5,191,833 ) $ (55,453,545 ) $ 9,548,866 Net income from discontinued operation $ — $ 833,876 233,153 Non-controlling interest from continuing operation $ (40,025 ) (2,918,680 ) — Non-controlling interest from discontinued operation — $ — 111,404 Net income attributable to VIE’s $ (5,151,808 ) $ (51,700,989 ) $ 9,670,615 |
ACQUISITIONS
ACQUISITIONS | 12 Months Ended |
Dec. 31, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
ACQUISITIONS | 4. ACQUISITIONS During 2022, the Company completes acquisitions of Xiamen Shengruihao Technology Co., Ltd (“Shengruihao”). The transaction was accounted for in accordance with the provisions of ASC 805-10, Business Combinations Acquisition of Shengruihao On September 2022, Blue Hat Group entered into an acquisition pursuant to which it acquired 100% entity interest of Xiamen Shengruihao Technology Co., Ltd for an aggregated purchase price of $0.15. The following table summarizes the combined acquisition date fair value of the assets, including intangible assets, liabilities, assumed and related goodwill acquired from Xiamen Shengruihao: Schedule of acquisition date fair value of the assets liabilities Prepayments $ 1,436 Total assets acquired $ 1,436 Other payables (4,814 ) Tax payables (238 ) Total Liabilities (5,052 ) Net identifiable liabilities assumed (3,616 ) Less: Foreign currency translation (70 ) Add: Goodwill 3,681 Total purchase price for acquisition net of $5 of cash $ (5 ) The Company has included the operating results of Shengruihao in our consolidated financial statements since the Acquisition Date. Acquisition of Fresh Joy On January 25, 2021, Blue Hat Cayman entered into an acquisition pursuant to which it acquired 100% entity interest of Fresh Joy for an aggregated purchase price of $7.7736 million (the “Purchase Price”), of which 50% paid in cash and the other half paid in the Company’s restricted ordinary shares (the “Ordinary Shares”) at a per share price of the higher of the weighted average volume price of the 20 trading days prior to the issuance of such Ordinary Shares, or $4, the IPO price of the Company’s Ordinary Shares, subject to certain performance targets. Performance target for Fuzhou CSFC net profit is $2.2 million, $3.59 million and $5.74 million to be achieved for each year ending December 31, 2020, 2021 and 2022 respectively. As of the date of this annual report, Fuzhou CSFC did not achieve such performance goal. Fresh Joy, through its affiliated Xinyou Entertainment and Xinyou Technology, signed a series of VIE agreements with Fujian Roar Game, which holds 51% equity of Fuzhou Csfctech Co., Ltd and 100% equity of Fuzhou UC71 Co., Ltd (the “Fresh Joy Group”). Up to reporting date, the Company has paid $0 to Fresh Joy . The following table summarizes the combined acquisition date fair value of the assets, including intangible assets, liabilities, assumed and related goodwill acquired from Fresh Joy Group: Schedule of acquisition date fair value of the assets liabilities Accounts receivables $ 6,432,414 Other receivables 49,704 Prepayments, net 1,797,617 Right-of-use assets 91,513 Property, plant and equipment, net 148,095 Intangible assets 6,876,455 Deferred tax assets 136,546 Total assets acquired $ 15,532,344 Accrued expenses and other payables 2,462,953 Taxes payable 2,185,779 Customer deposits 597,380 Short term loans, bank 849,959 Operating lease liability 96,131 Total Liabilities $ 6,192,202 Net identifiable assets acquired 9,340,142 Less: Non-controlling interest 5,379,104 Add: Goodwill 3,792,056 Total purchase price for acquisition net of $20,506 of cash $ 7,753,094 The Company has included the operating results of Fresh Joy Group in our consolidated financial statements since the Acquisition Date. Acquisition of Fujian Youth Hand in Hand Educational Technology Co., Ltd On September 18, 2017, Blue Hat Fujian formed a joint venture, contributing a 48.5% equity interest in Fujian Youth. Subsequently in January, 2021, the Company entered into a contract with a third party to acquire the rest of 51.5% equity of Fujian Youth with purchase consideration in aggregate was $163,270. The following table summarizes the combined acquisition date fair value of the assets, including intangible assets, liabilities, assumed and related goodwill acquired from Fujian Youth: Schedule of acquisition date fair value of the assets liabilities Accounts receivables $ 78,772 Other receivables 10,321 Inventories 2,955 Prepayments 1,215,130 Property, plant and equipment, net 153 Intangible assets, net 910,284 Total assets acquired $ 2,217,615 Accrued expenses and other payables 1,993,335 Total Liabilities 1,993,335 Net identifiable assets acquired 224,280 Less: 48.5% owned by Blue Hat Interactive Entertainment Technology 75,547 Add: Goodwill 14,537 Total purchase price for acquisition net of $944 of cash $ 163,270 The Company has included the operating results of Fujian Youth in our consolidated financial statements since the Acquisition Date. |
ACCOUNTS RECEIVABLE, NET
ACCOUNTS RECEIVABLE, NET | 12 Months Ended |
Dec. 31, 2022 | |
Credit Loss [Abstract] | |
ACCOUNTS RECEIVABLE, NET | 5. ACCOUNTS RECEIVABLE, NET Accounts receivable, net consist of the following: Schedule of accounts receivable December 31, December 31, 2022 2021 Accounts receivable $ 18,574,739 $ 23,074,123 Allowance for doubtful accounts (5,083,245 ) (6,394,429 ) Total accounts receivable, net $ 13,491,494 $ 16,679,694 Movements of allowance for doubtful accounts are as follows: Schedule of movements of allowance for doubtful accounts Beginning balance $ 6,394,429 $ 565,793 (Write-off)/Addition (798,446 ) 5,747,069 Exchange rate effect (512,738 ) 81,567 Ending balance $ 5,083,245 $ 6,394,429 |
OTHER RECEIVABLES, NET
OTHER RECEIVABLES, NET | 12 Months Ended |
Dec. 31, 2022 | |
Other Receivables Net | |
OTHER RECEIVABLES, NET | 6. OTHER RECEIVABLES, NET Other receivables consist of the following: Schedule of other receivables December 31, December 31, 2022 2021 Deposit for business acquisitions $ 12,345,111 $ 13,485,383 Deposit for set-up of research center 86,150 94,107 Others 4,762,413 3,062,247 Allowance for doubtful accounts (12,489,219 ) (13,665,255 ) Total other receivables, net $ 4,704,455 $ 2,976,482 Movements of allowance for doubtful accounts are as follows: Schedule of movements of allowance for doubtful accounts Beginning balance $ 13,665,255 $ 32,937 (Write-off)/ Addition (20,554 ) 13,471,554 Exchange rate effect (1,155,482 ) 160,764 Ending balance $ 12,489,219 $ 13,665,255 The Company acquired Fuzhou CSFC subject to customary conditions; it signed a three party agreement that involves Fuzhou CSFC and Quanzhou Yiang Trading Co., Ltd (“Yiang”), of which Yiang is an independent third party. As of December 31, 2022, the Company paid a refundable deposit of $ 5,992,987 The Company signed a non-binding letter of intent to acquire a controlling equity interest of Fuzhou Tornado Network Technology Co., Ltd (“Tornado”), subject to customary conditions. Tornado is a developer and distributor of mobile games in China with an international user base across Mainland China, South Korea, the United Arab Emirates and North America. The acquisition price is expected to be based on the valuation of the acquired entities carried out by a qualified independent third party. The Company signed a three party agreement that involves Tornado and Quanzhou Chengtai Co., Ltd (“Chengtai”), of which Chengtai is an independent third party. As of December 31, 2022 the Company paid a refundable deposit of $ 6,352,124 In addition, the Company is aiming to establish a research center with Beijing Zhongrun Minan Intelligence Technology Co., Ltd (“Zhongrun”). The project will develop a training platform and application for kindergarten. As of December 31, 2022, the Company paid $ 86,150 |
PREPAYMENTS, NET
PREPAYMENTS, NET | 12 Months Ended |
Dec. 31, 2022 | |
Prepayments Net | |
PREPAYMENTS, NET | 7. PREPAYMENTS, NET Prepayments, net consist of the following: Schedule of Prepayments, net December 31, December 31, 2022 2021 Prepayments $ 61,370 $ 628,810 Prepaid research and development expenses 2,495,570 1,704,812 Promotion fee 1,742,606 955,246 Other 25,568 219,727 Total prepayments, net $ 4,325,114 $ 3,508,595 December 31, December 31, 2022 2021 Prepayments - current $ 3,198,079 $ 3,290,993 Prepayments - non-current 10,353,273 10,288,302 Allowance for doubtful accounts - current (1,368,535 ) (1,487,210 ) Allowance for doubtful accounts -non-current (7,857,703 ) (8,583,490 ) Total prepayments, net $ 4,325,114 $ 3,508,595 Movements of allowance for doubtful accounts are as follows: Schedule of Movements of allowance for doubtful accounts Beginning balance $ 10,070,700 $ 147,631 Addition 7,078 9,803,067 Exchange rate effect (851,540 ) 120,002 Ending balance $ 9,226,238 $ 10,070,700 |
LEASES
LEASES | 12 Months Ended |
Dec. 31, 2022 | |
Leases [Abstract] | |
LEASES | 8. LEASES The Company adopted ASU No. 2016-02 and related standards (collectively ASC 842, Leases), which replaced previous lease accounting guidance, on January 1, 2019 using the modified retrospective method of adoption. The Company elected the transition method expedient which allows entities to initially apply the requirements by recognizing a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. As a result of electing this transition method, prior periods have not been restated. In addition, adoption of the new standard resulted in the recording of right of use assets and associated lease liabilities of approximately $1 million each as of January 1, 2019. Operating lease expense for the years ended December 31, 2022, 2021 and 2020 was $ 329,595 402,416 538,427 Supplemental balance sheet information related to leases is as follows: Schedule of Supplemental balance sheet information related to leases Location on Face of December 31, Balance Sheet 2022 Operating leases: Operating lease right of use assets Operating lease, right-of-use assets $ 40,596 Current operating lease liabilities Operating lease liabilities - current $ 11,261 Noncurrent operating lease liabilities Operating lease liabilities 31,041 Total operating lease liabilities $ 42,302 Weighted average remaining lease term (in years): Operating leases 3.33 Weighted discount rate: Operating leases 4.75 % Maturities of lease liabilities were as follows: Schedule of Maturities of lease liabilities For the year ended December 31, Operating lease 2023 $ 13,015 2024 13,666 2025 14,349 2026 4,864 2027 — Total $ 45,894 Less: amount representing interest 3,592 Present value of future minimum lease payments 42,302 Less: Current obligations 11,261 Long-term obligations $ 31,041 As of December 31, 2022 and 2021, the Company has additional operating lease commitments that have not yet commenced of approximately $ 0 0 |
PROPERTY AND EQUIPMENT, NET
PROPERTY AND EQUIPMENT, NET | 12 Months Ended |
Dec. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT, NET | 9. PROPERTY AND EQUIPMENT, NET Property and equipment consist of the following: Schedule of property and equipment December 31, December 31, 2022 2021 Building $ 4,322,359 $ 4,322,359 Electronic devices 658,691 674,497 Office equipment, fixtures and furniture 63,322 71,865 Vehicle 30,788 237,705 Subtotal 5,075,160 5,306,426 Less: accumulated depreciation and amortization (1,211,833 ) (1,157,281 ) Less: impairment (28,676 ) — Total $ 3,834,651 $ 4,149,145 The depreciation expenses for the years ended December 31, 2022, 2021 and 2020 was $ 278,562 411,020 268,233 |
INTANGIBLE ASSETS, NET
INTANGIBLE ASSETS, NET | 12 Months Ended |
Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTANGIBLE ASSETS, NET | 10. INTANGIBLE ASSETS, NET The Company’s intangible assets with definite useful lives primarily consist of patents and licensed software. The following table summarizes the components of acquired intangible asset balances as of: Schedule of Acquired Intangible assets December 31, December 31, 2022 2021 Patents $ 1,668,614 $ 1,378,836 Licensed software 25,473,373 28,270,157 Software development costs 118,139 129,051 Less: accumulated amortization (8,602,749 ) (8,229,006 ) Less: impairment (14,006,405 ) (14,632,931 ) Intangible assets, net $ 4,650,972 $ 6,916,107 Amortization expenses for the years ended December 31, 2022, 2021 and 2020 amounted to $ 1,680,334 3,451,000 740,641 The estimated amortization is as follows: Schedule of estimated amortization For the year ended December 31 Estimated amortization expense 2023 $ 1,935,939 2024 1,225,042 2025 710,660 2026 69,249 2027 63,670 Thereafter 646,412 Total $ 4,650,972 |
LONG-TERM INVESTMENTS
LONG-TERM INVESTMENTS | 12 Months Ended |
Dec. 31, 2022 | |
Equity Method Investments and Joint Ventures [Abstract] | |
LONG-TERM INVESTMENTS | 11. LONG-TERM INVESTMENTS The Company’s long-term investments consist of cost method investment and equity method investments. Cost method investment On September 20, 2018, Blue Hat Fujian formed a joint venture with Fujian Jin Ge Tie Ma Information Technology Co., Ltd., contributing a 20.0 15.0 1,722,999 1,882,146 1,839,109 Equity method investments On October 16, 2018, Blue Hat Fujian formed a joint venture with Renchao Huyu (Shanghai) Culture Development Co. Ltd., contributing a 49 51 As the Company has significant influence over the investee through its representation on the board, the Company accounted for the investment in Renchao Huyu as equity method investment. As of December 31, 2022 and 2021, no investment has been contributed in Renchao Huyu. Long-term investments are evaluated for impairment when facts or circumstances indicate that the fair value of the long-term investments is less than its carrying value. Impairment is recognized when a decline in fair value is determined to be other-than- temporary. The Company reviews several factors to determine whether a loss is other-than-temporary. These factors include, but are not limited to, the: (i) nature of the investment; (ii) cause and duration of the impairment; (iii) extent to which fair value is less than cost;(iv) financial condition and near term prospects of the investments. No |
CREDIT FACILITIES
CREDIT FACILITIES | 12 Months Ended |
Dec. 31, 2022 | |
Credit Facilities | |
CREDIT FACILITIES | 12. CREDIT FACILITIES Short term loans - banks Outstanding balances on short-term bank loans consisted of the following: Schedule of outstanding balances on short-term bank loans Institute Interest Collateral/ December 31, December 31, name Maturities rate Guarantee 2022 2021 China Merchants Bank October 2014 7.50 % Guarantee by 26 property rights $ 788,119 $ 860,915 Xiamen Rural Commercial Bank February 2023 6.58 % Guarantee by 14 property rights 473,825 — Total $ 1,261,944 $ 860,915 * The short term loan with Industrial bank which should be repaid in 2014 was overdue result in an increase in interest from 7.50% to 11.25% per annual. The case is now under litigation and the guaranteed property is in auction which proceeds from will repay the loan and interests overdue. Long term loans - banks Outstanding balances on long-term third party loans consisted of the following: Schedule of outstanding balances on long-term third party loans Interest Collateral/ December 31, December 31, Institute name Maturities rate Guarantee 2022 2021 Xiamen Rural Commercial Bank February 2023 6.58 % Guarantee by — 517,590 14 property rights Total $ — $ 517,590 Interest expense pertaining to the above short-term and long-term loans for the years ended December 31, 2022, 2021 and 2020 amounted to $ 331,277 398,963 248,103 |
OTHER PAYABLES AND ACCRUED LIAB
OTHER PAYABLES AND ACCRUED LIABILITIES | 12 Months Ended |
Dec. 31, 2022 | |
Payables and Accruals [Abstract] | |
OTHER PAYABLES AND ACCRUED LIABILITIES | 13. OTHER PAYABLES AND ACCRUED LIABILITIES Other payables and accrued liabilities consist of the following: Schedule of other Payable and Accrued Liabilities December 31, December 31, 2022 2021 Payables to non-trade vendors and service providers $ 10,064,937 $ 9,915,900 Salary payables 231,333 404,493 Interest payable 1,094,265 987,231 Other miscellaneous payables 56,517 82,113 Total other payables and accrued liabilities $ 11,447,052 $ 11,389,737 |
CONVERTIBLE NOTES PAYABLE
CONVERTIBLE NOTES PAYABLE | 12 Months Ended |
Dec. 31, 2022 | |
Debt Disclosure [Abstract] | |
CONVERTIBLE NOTES PAYABLE | 14. CONVERTIBLE NOTES PAYABLE As of December 31, 2022 and 2021, convertible debt consisted of the following: Schedule of convertible debt December 31, December 31, 2022 2021 Beginning $ — $ 739,189 Addition 1,550,000 — Interest expenses (100,314 ) Conversion 256,815 (739,189 ) Convertible debt, net $ 1,393,499 $ — Pursuant to this note, the Company, from time to time, offering the Ordinary Shares, par value 0.01 1,550,000 1,705,000 6 On October 14,2022, the Company entered into an agreement with Streeterville Capital, LLC (the “Purchaser”). The Purchaser bought the Note which has a principal amount of $ 1,705,000 6 The Note has a conversion price equal to eighty percent ( 80 0.70 0.70 The principal and the interest payable under the Note will become due and payable within 15 months after the Maturity Date, unless earlier converted or prepaid by us. At any time from the Maturity Date until the Outstanding Balance has been paid in full, the Purchaser may convert the Note at their option into our Ordinary Shares at the Conversion Price. The Company have the right, but not the obligation, to prepay a portion or all amounts outstanding under the Note prior to the Maturity Date at a cash price equal to 115% of the outstanding Principal balance to be prepaid and plus accrued and unpaid interest, and we provide the holder of the Note not less than ten 10 business days’ prior written notice of our desire to exercise an Optional Prepayment. |
RELATED PARTY BALANCES AND TRAN
RELATED PARTY BALANCES AND TRANSACTIONS | 12 Months Ended |
Dec. 31, 2022 | |
Related Party Transactions [Abstract] | |
RELATED PARTY BALANCES AND TRANSACTIONS | 15. RELATED PARTY BALANCES AND TRANSACTIONS Other receivables - related party Schedule of account receviables - related party December 31, December 31, Name of Related Party Relationship - Nature 2022 2021 Xiaodong Chen CEO 2 — Xiamen Jiuqiao Tech. CEO holding company Disposal consideration $ 1,430,086 $ — Huaqiang Yang Holds 15.5% of Fuzhou CSFC transfer receivable 31,085 — Total $ 1,428,913 $ — Other payables - related party Schedule of other payables - related party December 31, December 31, Name of Related Party Relationship - Nature 2022 2021 Xiaodong Chen CEO Lease and other payable $ 21,107 $ 32,244 Huaqiang Yang Holds 15.5% of Fuzhou CSFC transfer payable 140,041 154,259 Bequtiful Jade Ltd Shareholders’ investment company Attorney fee 3,795 — Total $ 164,943 $ 186,503 Long term loans - related party Schedule of long term loans related party December 31, December 31, Name of Related Party Relationship - Nature 2022 2021 Xiaodong Chen CEO Borrowing $ 914,771 $ — Total $ 914,771 $ — Long term loans from related parties are unsecured and interest free, the payment was due on January 31, 2026. |
Taxes
Taxes | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Taxes | 16. Taxes Income tax Cayman Islands Under the current laws of the Cayman Islands, the Company is not subject to tax on income or capital gain. Additionally, upon payments of dividends to the shareholders, no Cayman Islands withholding tax will be imposed. British Virgin Islands Blue Hat BVI and Fresh Joy are incorporated in the British Virgin Islands and is not subject to tax on income or capital gains under current British Virgin Islands law. In addition, upon payments of dividends by these entities to their shareholders, no British Virgin Islands withholding tax will be imposed. Hong Kong Blue Hat HK and Xinyou Entertainment are incorporated in Hong Kong and is subject to Hong Kong Profits Tax on the taxable income as reported in its statutory financial statements adjusted in accordance with relevant Hong Kong tax laws. The applicable tax rate is 16.5 PRC PRC companies are governed by the income tax laws of the PRC and the income tax provision in respect to operations in the PRC is calculated at the applicable tax rates on the taxable income for the periods based on existing legislation, interpretations and practices in respect thereof. Under the Enterprise Income Tax Laws of the PRC (the “EIT Laws”), domestic enterprises and Foreign Investment Enterprises (the “FIE”) are usually subject to a unified 25% enterprise income tax rate while preferential tax rates, tax holidays and even tax exemption may be granted on case- by-case basis. EIT grants preferential tax treatment to certain High and New Technology Enterprises (“HNTEs”). Under this preferential tax treatment, HNTEs are entitled to an income tax rate of 15 Blue Hat Fujian obtained the “high-tech enterprise” tax status in October 2015 and renewed it in December 2018, which reduced its statutory income tax rate to 15% from 2018 to 2020. The preferential tax rate was not granted in fiscal year 2020, hence the applicable tax rate is 25% in 2021. Tax savings for the years ended December 31, 2022, 2021 and 2020 amounted to $ 0 0 1,115,176 0 0 0.03 Significant components of the provision for income taxes are as follows: Schedule of significant components of provision for income taxes December 31, December 31, 2022 2021 Current $ 1,097,888 $ 138,061 The provision for income taxes $ 1,097,888 $ 138,061 The following table reconciles China statutory rates to the Company’s effective tax rate: Schedule of Effective Income Tax Rate Reconciliation Year ended Year ended Year ended December 31, December 31, December 31, 2022 2021 2020 China statutory income tax rate 25.0 % 25.0 % 25.0 % Preferential tax rate reduction (10.0 )% (10.0 )% (10.0 )% Preferential Blue Hat Pingxiang tax rate reduction — — — Permanent difference (15.2 )% (15.2 )% 2.1 % Effective tax rate (0.2 )% (0.2 )% 17.1 % As of December 31, 2022, 2021 and 2020, the Company had approximately $ 27 30 0.70 0 0 119,000 no Uncertain tax positions The Company evaluates each uncertain tax position (including the potential application of interest and penalties) based on the technical merits and measures the unrecognized benefits associated with the tax positions. As of December 31, 2022, 2021 and 2020, the Company did no The Company did no Value added tax All of the Company’s service revenues that are earned and received in the PRC are subject to a Chinese VAT. The rate of Chinese VAT is 16 13 6 Taxes payable consisted of the following: Schedule of Taxes payable December 31, December 31, 2022 2021 VAT taxes payable $ 471,604 $ 843,257 Income taxes payable 2,074,321 2,265,919 Other taxes payable 191,574 178,464 Totals $ 2,737,499 $ 3,287,640 |
CONCENTRATION OF RISK
CONCENTRATION OF RISK | 12 Months Ended |
Dec. 31, 2022 | |
Risks and Uncertainties [Abstract] | |
CONCENTRATION OF RISK | 17. CONCENTRATION OF RISK Credit risk Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash (including restricted cash and certificate deposits). As of December 31, 2022, 2021 and 2020, $ 76,535 134,605 15,752,639 The Company is also exposed to risk from its accounts receivable and other receivables. These assets are subjected to credit evaluations. An allowance has been made for estimated unrecoverable amounts which have been determined by reference to past default experience and the current economic environment. A majority of the Company’s expense transactions are denominated in RMB and a significant portion of the Company and its subsidiaries’ assets and liabilities are denominated in RMB. RMB is not freely convertible into foreign currencies. In the PRC, certain foreign exchange transactions are required by law to be transacted only by authorized financial institutions at exchange rates set by the People’s Bank of China (“PBOC”). Remittances in currencies other than RMB by the Company in China must be processed through the PBOC or other China foreign exchange regulatory bodies which require certain supporting documentation in order to affect the remittance. Our functional currency is the RMB, and our financial statements are presented in U.S. dollars. It is difficult to predict how market forces or PRC or U.S. government policy may impact the exchange rate between the RMB and the U.S. dollar in the future. The change in the value of the RMB relative to the U.S. dollar may affect our financial results reported in the U.S. dollar terms without giving effect to any underlying changes in our business or results of operations. Currently, our assets, liabilities, revenues and costs are denominated in RMB. To the extent that the Company needs to convert U.S. dollars into RMB for capital expenditures and working capital and other business purposes, appreciation of RMB against U.S. dollar would have an adverse effect on the RMB amount the Company would receive from the conversion. Conversely, if the Company decides to convert RMB into U.S. dollar for the purpose of making payments for dividends, strategic acquisition or investments or other business purposes, appreciation of U.S. dollar against RMB would have a negative effect on the U.S. dollar amount available to the Company. Customer concentration risk For the year ended December 31, 2022, two customers accounted for 30.1 16.98 14.6 10.9 10.4 As of December 31, 2022, four customers accounted for 17.2%, 12.6%, 10.8% and 10.5% of the total balance of accounts receivable. As of December 31, 2021, three customers accounted for 12.9%, 12.4% and 10.9% of the total balance of accounts receivable. As of December 31, 2020, one customer accounted for 7.7% of the total balance of accounts receivable. Vendor concentration risk For the year ended December 31, 2022, three vendors accounted for 22.67 13.82 13.09 39.72 29.96 28.40 38.24 36.57 As of December 31, 2022, two vendors accounted for 60.60 13.70 10.10 6.5 |
SHAREHOLDERS_ EQUITY
SHAREHOLDERS’ EQUITY | 12 Months Ended |
Dec. 31, 2022 | |
Equity [Abstract] | |
SHAREHOLDERS’ EQUITY | 18. SHAREHOLDERS’ EQUITY Ordinary shares Blue Hat Cayman was established under the laws of Cayman Islands on June 13, 2018. The authorized number of ordinary shares is 500,000,000 0.01 On May 10, 2022, the Company has authorized and approved a 1-for-10 reverse stock split of the Company’s authorized (issued and unissued) shares of ordinary shares, effective May 27, 2022. The reverse stock split would be reflected in December 31, 2022, and December 31, 2021 statements of changes in stockholders’ equity, and in per share data for all period presented. On June 6, 2022, DTCC is presenting 35,641,462 3,572,818 8,762 Securities Purchase Agreement In June 2022, the Company entered into an Agreement with Aegis Capital Corp., to engages Aegis act as the Company’s exclusive underwriter and investment banker to consist of a sale of up to $ 10 500,000 0.01 3.60 94,429 60,845 2.65 300,000 100,933 108,714 2.51 2.24 Consulting Service Agreement On July 29, 2020, the Company entered into a Consulting Service Agreement (the “Agreement”) with First Trust China Ltd (the “Consultant”), a company incorporated in PRC, pursuant to which Consultant will: (i) assisting the Company in planning and implementing new business plans with the objective of improve Company’s long-term growth potential and delivering values to shareholders; (ii) advising the Company’s board of directors and management on all matters as positioning the Company for its next stage of growth; (iii) identifying prospective joint venture and strategic alliance opportunities for the Company, helping the Company to negotiate agreements and advising the Company on mergers and acquisitions; and (iv) identifying potential merger and acquisition targets for the Company, and provide necessary business analysis, evaluation and due diligence of the targeted companies as requested by the Company, as well as advising the Company on specific merger/acquisition issues. The term of the Agreement is one year. In consideration of the services to be provided by the Consultant to the Company, the Company agrees to pay the Consultant consulting fee totally $360,000 or 500,000 common shares. The Company shall issue a total of 500,000 of the Company Ordinary shares (the “Consultant Shares”) as the payment for the above mentioned consultant fee to the Consultant. For the year ended December 31, 2020, the Company recorded stock related compensation of $287,500, based on the stock closing price of $1.15 within ten days of the Agreement date, for the 250,000 shares which were released to the Consultant immediately upon issuance. On September 14, 2021, the Company released the second batch of 250,000 shares to the Consultant and the Company will recognize stock related compensation of $155,825 for the 250,000 shares. On March 30, 2022, the BOD of company announced to issue an aggregate of 5,000,000 3,000,000 0.001 8,000,000 0.001 2,800,000 0.001 2,600,000 0.001 Restricted assets The Company’s ability to pay dividends is primarily dependent on the Company receiving distributions of funds from its subsidiary. Relevant PRC statutory laws and regulations permit payments of dividends by Blue Hat WFOE, Blue Hat Fujian, Blue Hat Hunan and Xinyou Technology and Fujian Roar Game (collectively “Blue Hat PRC entities”) only out of its retained earnings, if any, as determined in accordance with PRC accounting standards and regulations. The results of operations reflected in the accompanying consolidated financial statements prepared in accordance with U.S. GAAP differ from those reflected in the statutory financial statements of Blue Hat PRC entities. Blue Hat PRC entities are required to set aside at least 10% of their after-tax profits each year, if any, to fund certain statutory reserve funds until such reserve funds reach 50% of their registered capital. In addition, Blue Hat PRC entities may allocate a portion of its after- tax profits based on PRC accounting standards to enterprise expansion fund and staff bonus and welfare fund at its discretion. Blue Hat PRC entities may allocate a portion of its after-tax profits based on PRC accounting standards to a discretionary surplus fund at its discretion. The statutory reserve funds and the discretionary funds are not distributable as cash dividends. Remittance of dividends by a wholly foreign-owned company out of China is subject to examination by the banks designated by State Administration of Foreign Exchange. As a result of the foregoing restrictions, Blue Hat PRC entities are restricted in their ability to transfer their assets to the Company. Foreign exchange and other regulation in the PRC may further restrict Blue Hat PRC entities from transferring funds to the Company in the form of dividends, loans and advances. As of December 31, 2022, 2021 and 2020, amounts restricted are the paid-in-capital and statutory reserve of Blue Hat PRC entities, which amounted to $ 46,388,025 38,479,068 25,709,210 Payments-omnibus equity plan The 2020 Equity Incentive Plan was adopted by the shareholders of the Company on December 9, 2020, the maximum number of ordinary shares in respect of which any awards may be granted or paid out thereunder is 6,000,000 0.001 10 0.001 1 0.01 600,000 0.01 Statutory reserve During the years ended December 31, 2022, 2021 and 2020, Blue Hat PRC entities collectively attributed 0 60,922 914,409 Capital contributions During the year ended December 31, 2022, 2021 and 2020, the Company’s shareholders contributed $ 7,908,957 12,830,780 2,698,046 |
IMPAIRMENT LOSS
IMPAIRMENT LOSS | 12 Months Ended |
Dec. 31, 2022 | |
Impairment Loss | |
IMPAIRMENT LOSS | 19. IMPAIRMENT LOSS The Company recorded $ 33,397 18.44 On January 25, 2021, Blue Hat Cayman acquired 100% entity interest of Fresh Joy and in January 2021 acquire the 51.5% equity of Fujian Youth that Fujian Youth become the 100% wholly owned subsidiary under the Company. Both transactions formed Goodwill while acquisition. The Company tests goodwill for impairment for its reporting units on an annual basis, or when events occur or circumstances indicate the fair value of a reporting unit is below its carrying value. If the fair value of a reporting unit is less than its carrying value, an impairment loss is recorded to the extent that implied fair value of the goodwill within the reporting unit is less than its carrying value. The Company uses the discounted cash flow model to estimate fair value, which requires management to make significant estimates and assumptions related to forecasts of future revenue and operating margin. In addition, the discounted cash flow model requires the Company to select an appropriate weighted average cost of capital based on current market conditions as of December 31, 2022. The Company has concluded that goodwill impairment loss is $ 3,681 3.81 Acquired intangible assets are recognized based on their cost to the Company, which generally includes the transaction costs of the asset acquisition, and no gain or loss is recognized unless the fair value of noncash assets given as consideration differs from the assets’ carrying amounts on the Company’s book. These assets are amortized over their useful lives if the assets are deemed to have a finite life and they are reviewed for impairment by testing for recoverability whenever events or changes in circumstances indicate that its carrying amount may not be recoverable. The fair value of an intangible asset is the amount that would be determined if the entity used the assumptions that market participants would use if they were pricing the intangible asset. The useful life of the Company’s intangible assets is ten years, which is determined by using the time period that an intangible is estimated to contribute directly or indirectly to a Company’s future cash flows. The Company assessed some of the licensed software is unlikely to generate cash flow, as of year ended December 2022 and 2021, it recorded $nil 0 14.63 Property plant and equipment are recognized based on their cost to the Company, which generally includes the transaction costs of the asset acquisition. These assets are amortized over their useful lives if the assets are deemed to have a finite life. The useful life of the impaired asset is three years, which is determined by using the time period that an property plant and equipment is estimated to contribute directly or indirectly to a Company’s future cash flows. The Company assessed some of the asset is unlikely to generate cash flow, as of year ended December 2022 and 2021, it recorded $ 29,716 0 |
DISCONTINUED OPERATIONS
DISCONTINUED OPERATIONS | 12 Months Ended |
Dec. 31, 2022 | |
Discontinued Operations | |
DISCONTINUED OPERATIONS | 20. DISCONTINUED OPERATIONS On September 30, 2021, the Company entered into a share transfer agreement with a third party to sell Xunpusen (Xiamen) Technology Co., Ltd., pursuant to the terms of the Agreement, the buyer purchased 100% of the Company’s ownership of Xunpusen and 100% owned subsidiary Xingjuyun (Xiamen) Technology Co., Ltd. for a total price of $1,333,023, resulting in a gain on disposal of $ 683,688 On December 20, 2021, the Company sold 100% of the ownership of Xiamen Jiuqiao Technology Co., Ltd., and 100% owned subsidiaries to a third party for a total price of $8,368,930, resulting in a gain on disposal of $ 811,269 On November 15, 2021, Shenyang Qimengxing Trading Co., Ltd. (“Blue Hat Shenyang”) was deregistered, resulting in a loss on disposal of $ 1,012 Loss from discontinued operations for the ended December 31, 2022 and 2021 was as follows: Schedule of Loss from discontinued operations December 31 December 31, 2022 2021 Revenues $ — $ 16,464,160 Cost of sales — (13,741,705 ) Gross profit — 2,722,455 Operating expenses: General and Administrative — (281,460 ) Selling expenses — (881,654 ) Research and development — (6,959 ) Total — $ 1,552,382 Other income (expense) Interest income $ — $ 378 Other (expense) income, net — 66,871 Other finance expenses — (14,939 ) Total — 52,310 Loss from discontinued operations before income tax — 1,604,692 Income tax provision — (593,389 ) Income from discontinued operations before non-controlling interest $ — $ 1,011,303 Less: Net loss attributable to non-controlling interest — — Income from discontinued operation $ — $ 1,011,303 The major components of assets and liabilities related to discontinued operations are summarized below: Schedule of components of assets and liabilities December 31, December 31, 2022 2021 Cash $ — $ 866,075 Accounts receivable — 2,990,419 Other current assets — 7,041,322 Prepayments, net — 2,644,553 Inventories — 130,532 Property, plant and equipment, net — 17,044 Other non-current assets — 70,454 Total assets related to discontinued operations — 13,760,399 Accounts payable — 813,038 Other payables and accrued expenses — 794,599 Operating lease liabilities-current — 20,621 Customer deposits — 865,717 Tax payables — 2,334,922 Other non-current liabilities — 29,051 Total liabilities related to discontinued operations $ — $ 4,857,948 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | 21. COMMITMENTS AND CONTINGENCIES Purchase commitments The Company has entered into three agreements for game software development and four agreements for community software development. As of December 31, 2022 and 2021, the Company’s commitment under these agreements amounted to $17,115,699 and $16,917,985, respectively. Variable interest entity structure In the opinion of management, (i) the corporate structure of the Company is in compliance with existing PRC laws and regulations; (ii) the Contractual Arrangements are valid and binding, and do not result in any violation of PRC laws or regulations currently in effect; and (iii) the business operations of the variable interest entity equity holders and the wholly owned entity are in compliance with existing PRC laws and regulations in all material respects. However, there are substantial uncertainties regarding the interpretation and application of current and future PRC laws and regulations. Accordingly, the Company cannot be assured that PRC regulatory authorities will not ultimately take a contrary view to the foregoing opinion of its management. If the current corporate structure of the Company or the Contractual Arrangements is found to be in violation of any existing or future PRC laws and regulations, the Company may be required to restructure its corporate structure and operations in the PRC to comply with changing and new PRC laws and regulations. In the opinion of management, the likelihood of loss in respect of the Company’s current corporate structure or the Contractual Arrangements is remote based on current facts and circumstances. |
SUBSEQUENT EVENT
SUBSEQUENT EVENT | 12 Months Ended |
Dec. 31, 2022 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENT | 22. SUBSEQUENT EVENT On March 28, 2023, the Company entered into a Securities Purchase Agreement with F&P Capital Management Company Limited, pursuant to which the Company agreed to sell an aggregate of 4,000,000 0.01 0.70 |
SEGMENT INFORMATION AND REVENUE
SEGMENT INFORMATION AND REVENUE ANALYSIS | 12 Months Ended |
Dec. 31, 2022 | |
Segment Reporting [Abstract] | |
SEGMENT INFORMATION AND REVENUE ANALYSIS | 23. SEGMENT INFORMATION AND REVENUE ANALYSIS The Company follows ASC 280, Segment Reporting, which requires that companies to disclose segment data based on how management makes decision about allocating resources to each segment and evaluating their performances. The Company has three reporting segments. The Company’s chief operating decision maker has been identified as the Chief Executive Officer, who reviews consolidated results when making decisions about allocating resources and assessing performance of the Company. The Company considers itself to be operating within one reportable segment. The Company’s revenue and net income are substantially derived from interactive toys, and mobile games. Disaggregated information of revenues by business lines are as follows: Schedule of disaggregated information of revenues by business lines Year ended Year ended Year ended December 31, December 31, December 31, 2022 2021 2020 Interactive toys - animation series $ 9,061 $ 657,619 $ 1,575,903 Interactive toys - game series 155,559 8,723,480 16,131,115 Mobile game 5,181,410 4,165,456 2,506,285 Information service 884,329 1,608,519 4,386,620 Commodity Trading 1,145,650 — — Total revenues $ 7,376,009 $ 15,155,074 $ 24,599,923 Disaggregated information by business lines are as follows: Year ended December 31, 2022 Schedule of disaggregated information by business lines Interactive to Interactive toys animation series Game series Mobile game Information service Glycol Revenue $ 9,061 $ 155,559 $ 5,181,410 $ 884,329 $ 1,145,650 Costs of revenue (34,192 ) (78,118 ) (2,419,222 ) (826,096 ) (20,032 ) Gross Profit (25,131 ) 77,441 2,762,188 58,233 1,125,618 Year ended December 31, 2021 Interactive toys Interactive toys Mobile game Information Revenue $ 657,619 $ 8,723,480 $ 4,165,456 $ 1,608,519 Costs of revenue (140,450 ) (4,340,776 ) (2,889,486 ) (1,301,438 ) Gross Profit $ 517,169 $ 4,382,704 $ 1,275,970 $ 307,081 Year ended December 31, 2020 Interactive toys Interactive toys Mobile game Information Revenue $ 1,575,903 $ 16,131,115 $ 2,506,285 $ 4,386,620 Costs of revenue (1,331,731 ) (5,503,184 ) (10,577 ) (4,334,411 ) Gross Profit $ 244,172 $ 10,627,931 $ 2,495,708 $ 52,209 The Company’s operations are primarily based in the PRC, where the Company derives a substantial portion of their revenues. Management also reviews consolidated financial results by business locations. Disaggregated information of revenues by geographic locations are as follows Schedule of disaggregated information of revenues by geographic locations Year ended Year ended Year ended Domestic PRC revenues $ 7,376,009 $ 15,155,074 $ 24,599,923 Export revenues — — — Total revenues $ 7,376,009 $ 15,155,074 $ 24,599,923 |
CONDENSED FINANCIAL INFORMATION
CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY | 12 Months Ended |
Dec. 31, 2022 | |
Condensed Financial Information Of Parent Company | |
CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY | 24. CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY The Company performed a test on the restricted net assets of consolidated subsidiary in accordance with Securities and Exchange Commission Regulation S-X Rule 4-08(e)(3), “General Notes to Financial Statements” and concluded that it was applicable for the Company to disclose the financial statements for the parent company. The subsidiary did not pay any dividend to the Company for the years presented. For the purpose of presenting parent only financial information, the Company records its investment in its subsidiary under the equity method of accounting. Such investment is presented on the separate condensed balance sheets of the Company as “Investment in subsidiary” and the income of the subsidiary is presented as “share of income of subsidiary”. Certain information and footnote disclosures generally included in financial statements prepared in accordance with U.S. GAAP have been condensed and omitted. The Company did not have significant capital and other commitments, long-term obligations, or guarantees as of December 31, 2022 and 2021. PARENT COMPANY BALANCE SHEETS Schedule of condensed financial information of the parent company December 31, December 31, ASSETS Current assets: Cash and cash equivalents $ 6,791 $ 8,758 Other receivables, net 3,524,253 204,400 Total current assets 3,531,044 213,158 Non-current assets: Property, plant and equipment, net 3,731,963 3,937,222 Investment in subsidiaries 17,619,903 21,873,789 Total non-current assets 21,351,866 25,811,011 Total assets $ 24,882,910 $ 26,024,169 LIABILITIES AND SHAREHOLDERS’ EQUITY LIABILITIES Other payables and accrued liabilities $ 8,041,502 $ 8,364,775 Other payables - related party 3,799 9,188 Short-term loans — — Convertible notes payable — — Total current liabilities 8,045,301 8,373,963 Non-current liabilities 2,308,270 — Total liabilities 10,353,571 8,373,963 COMMITMENTS AND CONTINGENCIES SHAREHOLDERS’ EQUITY Ordinary shares, $0.01 par value, 100,000,000 shares authorized, 9,894,734, 5,382,383 shares issued and outstanding as of December 31, 2022 and 2021 respectively 98,947 53,824 Additional paid-in capital 44,145,826 36,281,992 Statutory reserves 2,143,252 2,143,252 Retained earnings (35,113,598 ) (25,748,542 ) Accumulated other comprehensive losses 834,513 2,459,256 Total Blue Hat Interactive Entertainment Technology shareholders’ equity 12,108,940 15,189,782 Non-controlling interest 2,420,399 2,460,424 Total equity 14,529,339 17,650,206 Total liabilities and shareholders’ equity $ 24,882,910 $ 26,024,169 PARENT COMPANY STATEMENTS OF INCOME AND COMPREHENSIVE INCOME Year ended Year ended Year ended 2022 2021 2020 Operating expenses: General and administrative expenses $ (2,621,808 ) $ (1,169,384 ) $ (1,307,167 ) Research and development (2,278,990 ) — — Other income (expenses): (Interest expense)/interest income (100,314 ) (169,366 ) (175,386 ) Other finance expenses (6,998 ) (10,442 ) (18,442 ) Equity income of subsidiaries and VIEs from continue operation (4,396,971 ) (60,199,373 ) 9,548,859 Equity income of subsidiaries and VIEs from discontinued operation — 1,493,945 233,153 NET (LOSS) INCOME (9,405,081 ) (60,054,620 ) 8,281,017 FOREIGN CURRENCY TRANSLATION ADJUSTMENT (1,624,743 ) 717,560 3,220,363 COMPREHENSIVE (LOSS) INCOME $ (11,029,824 ) $ (59,337,060 ) $ 11,501,380 Less: Comprehensive income attributable to non-controlling interest (40,025 ) (2,918,680 ) 111,404 Comprehensive income attributable to Blue Hat Interactive Entertainment Technology shareholders $ (10,989,799 ) $ 56,418,380 $ 11,389,976 PARENT COMPANY STATEMENTS OF CASH FLOWS Year ended Year ended Year ended December 31, December 31, December 31, 2022 2021 2020 CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ (9,405,081 ) $ (60,054,620 ) $ 8,281,017 Net income from discontinued operation — 1,493,945 233,153 Net income from continuing operation (9,405,081 ) (61,548,565 ) 8,047,864 Adjustments to reconcile net income to cash used in operating activities: Equity income of subsidiaries and VIEs 4,396,971 60,199,373 (9,548,859 ) Changes in operating assets and liabilities: Depreciation of property and equipment 205,259 205,398 179,740 Other receivables (3,319,855 ) 395,600 — Other payables and accrued liabilities (323,274 ) 5,869,181 925,409 Net cash used in operating activities (8,445,980 ) 5,120,987 (395,846 ) CASH FLOWS FROM INVESTING ACTIVITIES: Purchases of property and equipment — — (2,159,910 ) Investment in subsidiary (1,767,824 ) (14,923,600 ) (7,660,000 ) Net cash used in investing activities (1,767,824 ) (14,923,600 ) (9,819,910 ) CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from issue of new shares — — 2,110,845 Proceeds from secured convertible promissory note Bonds — — 739,189 Underwriter’s partial exercise of over-allotment option, net of issuance costs 7,908,956 12,830,780 — Proceeds from initial public offering, net of issuance costs — — — Other payables related party (5,389 ) 5,880 3,039 Proceeds from short-term loans — 2,998,994 Repayment of short-term loans — (2,998,994 ) — Proceeds from long-term loans - related party 914,771 — — Repayment of convertible payables — (739,189 ) — Proceeds from convertible payables 1,393,499 — — Net cash used in investing activities 10,211,837 9,098,477 5,852,067 EFFECT OF EXCHANGE RATE ON CASH — — — NET CHANGES IN CASH AND CASH EQUIVALENTS (1,967 ) (704,136 ) (4,363,689 ) CASH AND CASH EQUIVALENTS, Beginning of year 8,758 712,894 5,076,583 CASH AND CASH EQUIVALENTS, end of year $ 6,791 $ 8,758 $ 712,894 SUPPLEMENTAL CASH FLOW INFORMATION: Cash and cash equivalents $ 6,791 $ 8,758 $ 712,894 Restricted cash — — — CASH AND CASH EQUIVALENTS, end of year $ 6,791 $ 8,758 $ 712,894 |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND PRACTICES (Policies) | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Basis of presentation | Basis of presentation The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for information pursuant to the rules and regulations of the SEC. Discontinued operations On September 30, 2021, the Company entered into a share transfer agreement with a third party to sell Xunpusen (Xiamen) Technology Co., Ltd., pursuant to the terms of the Agreement, the buyer purchased 100% of the Company’s ownership of Xunpusen and 100% owned subsidiary Xingjuyun (Xiamen) Technology Co., Ltd. for a total price of $1,333,023, resulting in a gain on disposal of $ 683,688 On December 20, 2021, the Company sold 100% of the ownership of Xiamen Jiuqiao Technology Co., Ltd., and 100% owned subsidiaries to a third party for a total price of $8,368,930, resulting in a gain on disposal of $ 811,269 On November 15, 2021, Shenyang Qimengxing Trading Co., Ltd. (“Blue Hat Shenyang”) was deregistered, resulting in a loss on disposal of $ 1,012 |
Principles of consolidation | Principles of consolidation The consolidated financial statements include the financial statements of the Company and its subsidiaries, which include the wholly- foreign owned enterprise (“WFOE”) and variable interest entities (“VIEs”) over which the Company exercises control and, when applicable, entities for which the Company has a controlling financial interest or is the primary beneficiary. All transactions and balances among the Company and its subsidiaries have been eliminated upon consolidation. |
Discontinued Operations | Discontinued Operations On September 30, 2021, the Company entered into a share transfer agreement with a third party to sell Xunpusen (Xiamen) Technology Co., Ltd., pursuant to the terms of the Agreement, the buyer purchased 100% of the Company’s ownership of Xunpusen and 100% owned subsidiary Xingjuyun (Xiamen) Technology Co., Ltd. for a total price of $1,333,023. On December 20, 2021, the Company sold 100% of the ownership of Xiamen Jiuqiao Technology Co., Ltd., and 100% owned subsidiaries to a third party for a total price of $8,368,930, and on November 15, 2021, Shenyang Qimengxing Trading Co., Ltd. (“Blue Hat Shenyang”) was deregistered. |
Use of estimates and assumptions | Use of estimates and assumptions The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities as of the date of the consolidated financial statements and the reported amounts of revenues and expenses during the periods presented. Significant accounting estimates reflected in the Company’s consolidated financial statements include the useful lives of plant and equipment and intangible assets, capitalized development costs, impairment of long-lived assets, allowance for doubtful accounts, revenue recognition, allowance for deferred tax assets and uncertain tax position, and inventory allowance. Actual results could differ from these estimates. |
Going Concern | Going Concern The Company’s financial statements are prepared assuming that the Company will continue as a going concern. The Company incurred operating loss of $ 9.41 1.60 The ability of the Company to continue as a going concern is dependent upon its ability to successfully execute its new business strategy and eventually attain profitable operations. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. |
Foreign currency translation and transaction | Foreign currency translation and transaction The reporting currency of the Company is the U.S. dollar. The Company in China conducts its businesses in the local currency, Renminbi (RMB), as its functional currency. Assets and liabilities are translated at the unified exchange rate as quoted by the People’s Bank of China at the end of the period. The statement of income accounts is translated at the average translation rates and the equity accounts are translated at historical rates. Translation adjustments resulting from this process are included in accumulated other comprehensive income. Transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in the results of operations as incurred. Translation adjustments included in accumulated other comprehensive income (loss) amounted to $ 834,513 2,459,256 1,741,696 6.96 6.38 6.52 6.70 6.45 6.90 |
Cash and restricted cash | Cash and restricted cash Cash and cash equivalents consist of cash on hand; demand deposits and time deposits placed with banks or other financial institutions and have original maturities of less than three months. Deposits in banks in the PRC are only insured by the government up to RMB500,000, and are consequently exposed to risk of loss. The Company believes the probability of a bank failure, causing loss to the Company, is remote. Cash that is restricted as to withdrawal for use or pledged as security is reported separately on the face of the consolidated balance sheets, and is not included in the total cash and cash equivalents in the consolidated statements of cash flows. |
Accounts receivable, net | Accounts receivable, net Accounts receivable include trade accounts due from customers. Accounts are considered overdue after 30 days. In establishing the required allowance for doubtful accounts, management considers historical collection experience, aging of the receivables, the economic environment, industry trend analysis, and the credit history and financial conditions of the customers. Management reviews its receivables on a regular basis to determine if the bad debt allowance is adequate, and adjusts the allowance when necessary. Delinquent account balances are written-off against allowance for doubtful accounts after management has determined that the likelihood of collection is not probable. As of December 31, 2022 and 2021, allowance for the doubtful accounts was $ 5,083,245 6,394,429 |
Other receivables, net | Other receivables, net Other receivables primarily include deposits for business acquisitions, setup of research center, advances to employees, and others. Management regularly reviews the aging of receivables and changes in payment trends and records allowances when management believes collection of amounts due are at risk. Accounts considered uncollectable are written off against allowances after exhaustive efforts at collection are made. As of December 31, 2022 and 2021, allowance for the doubtful accounts was $ 12,489,219 13,665,255 |
Inventories | Inventories Inventories are comprised of finished goods and are stated at the lower of cost or net realizable value using the weighted average method. Management reviews inventories for obsolescence and cost in excess of net realizable value quarterly and records a reserve against the inventory when the carrying value exceeds net realizable value. |
Prepayments, net | Prepayments, net Current Prepayments are cash deposited or advanced to suppliers for future inventory purchases. This amount is refundable and bears no interest. For any advances to suppliers determined by management that such advances will not be in receipts of inventories or refundable, the Company will recognize an allowance account to reserve such balances. Management reviews its advances to suppliers on a regular basis to determine if the allowance is adequate, and adjusts the allowance when necessary. Delinquent account balances are written-off against allowance for doubtful accounts after management has determined that the likelihood of collection is not probable. The Company’s management continues to evaluate the reasonableness of the valuation allowance policy and update it if necessary. As of December 31, 2022 and 2021, allowance for the doubtful accounts was $ 1,368,535 1,487,210 Non-current Non-current prepayment represents cash deposited or advanced for software development expenditure. This amount is refundable and bears no interest. |
Property and equipment, net | Property and equipment, net Property and equipment are stated at cost less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the assets. The estimated useful lives are as follows: Schedule of estimated useful lives Category Depreciation method Estimated useful lives Building Straight-line 20 Electronic devices Straight-line 3 Office equipment, fixtures and furniture Straight-line 3 Automobile Straight-line 3 The cost and related accumulated depreciation of assets sold or otherwise retired are eliminated from the accounts and any gain or loss is included in the consolidated statements of income and comprehensive income. Expenditures for maintenance and repairs are charged to earnings as incurred, while additions, renewals which are expected to extend the useful life of assets, are capitalized. The Company also re-evaluates the periods of depreciation to determine whether subsequent events and circumstances warrant revised estimates of useful lives. |
Intangible assets | Intangible assets The Company’s intangible assets with definite useful lives primarily consist of software development costs, patents and licensed software. The Company amortizes its intangible assets with definite useful lives over their estimated useful lives and reviews these assets for impairment. The Company typically amortizes its intangible assets with definite useful lives on a straight-line basis over the shorter of the contractual terms or the estimated useful lives of five to ten years. |
Software development costs | Software development costs The Company follows the provisions of ASC 350-40, “Internal Use Software”, to capitalize certain direct development costs associated with internal- used software. ASC 350-40 provides guidance on capitalization of the costs incurred for computer software developed or obtained for internal use. The Company expenses all costs incurred during the preliminary project stage of its development, and capitalizes costs incurred during the application development stage. Costs incurred relating to upgrades and enhancements to the application are capitalized if it is determined that these upgrades or enhancements add additional functionality to the application. The capitalized development cost is amortized on a straight-line basis over the estimated useful life, which is generally five years. Management evaluates the useful lives of these assets on an annual basis and tests for impairment whenever events or changes in circumstances occur that could impact the recoverability of these assets. |
Research and development | Research and development Research and development expenses include salaries and other compensation-related expenses to the Company’s research and product development personnel, as well as office rental, depreciation and related expenses for the Company’s research and product development team. The Company expenses all costs that are incurred in connection with the planning and implementation phases of development, and costs that are associated with maintenance of the existing websites or software for internal use. |
Business Combinations | Business Combinations The Company applies the provisions of ASC 805, Business Combination |
Goodwill | Goodwill Goodwill represents the excess of the purchase consideration over the acquisition date amounts of the identifiable tangible assets acquired and liabilities assumed from the acquired entity as a result of the Company’s acquisitions of interests in its subsidiaries. Goodwill is not amortized but is tested for impairment if events or changes in circumstances indicate that it might be impaired. The company assessed qualitative factors to determine if it is necessary to perform quantitative assessment. In the qualitative assessment, the company considers factors such as macroeconomic conditions, industry and market considerations, overall financial performance, and other specific information related to the operations, business plans and strategies. |
Impairment for long-lived assets other | Impairment for long-lived assets other Long-lived assets, including property and equipment and intangible assets with finite lives are reviewed for impairment whenever events or changes in circumstances (such as a significant adverse change to market conditions that will impact the future use of the assets) indicate that the carrying value of an asset may not be recoverable. The Company assesses the recoverability of the assets based on the undiscounted future cash flows the assets are expected to generate and recognize an impairment loss when estimated undiscounted future cash flows expected to result from the use of the asset plus net proceeds expected from disposition of the asset, if any, are less than the carrying value of the asset. If an impairment is identified, the Company would reduce the carrying amount of the asset to its estimated fair value based on a discounted cash flows approach or, when available and appropriate, to comparable market values. As of December 31, 2022, 2021 and 2020, impairment for long-lived assets was $ 29,716 14,632,931 0 |
Long-term investments | Long-term investments Long-term investments include cost method investment and equity method investments. Entities in which the Company has the ability to exercise significant influence, but does not have a controlling interest, are accounted for using the equity method. Significant influence is generally considered to exist when the Company has voting shares between 20% and 50%, and other factors, such as representation on the Board of Directors, voting rights and the impact of commercial arrangements, are considered in determining whether the equity method of accounting is appropriate. Under this method of accounting, the Company records its proportionate share of the net earnings or losses of equity method investees and a corresponding increase or decrease to the investment balances. Dividends received from the equity method investments are recorded as reductions in the cost of such investments. The Company accounts for investments with less than 20% of the voting shares and does not have the ability to exercise significant influence over operating and financial policies of the investee using the cost method. The Company records cost method investments at the historical cost in its consolidated financial statements and subsequently records any dividends received from the net accumulated earrings of the investee as income. Dividends received in excess of earnings are considered a return of investment and are recorded as reduction in the cost of the investments. Long-term investments are evaluated for impairment when facts or circumstances indicate that the fair value of the long-term investments is less than its carrying value. Impairment is recognized when a decline in fair value is determined to be other-than- temporary. The Company reviews several factors to determine whether a loss is other-than-temporary. These factors include, but are not limited to, the: (i) nature of the investment; (ii) cause and duration of the impairment; (iii) extent to which fair value is less than cost; financial condition and near term prospects of the investments; and (v) ability to hold the security for a period of time sufficient to allow for any anticipated recovery in fair value. No event had occurred and indicated that other-than-temporary impairment existed and therefore the Company did no |
Fair value measurement | Fair value measurement The accounting standard regarding fair value of financial instruments and related fair value measurements defines financial instruments and requires disclosure of the fair value of financial instruments held by the Company. The accounting standards define fair value, establish a three-level valuation hierarchy for disclosures of fair value measurement and enhance disclosure requirements for fair value measures. The three levels are defined as follow: Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the assets or liability, either directly or indirectly, for substantially the full term of the financial instruments. Level 3 inputs to the valuation methodology are unobservable and significant to the fair value. Our cash and cash equivalents and restricted cash are classified within level 1 of the fair value hierarchy because they are value using quoted market price. |
Revenue recognition | Revenue recognition The Company adopted Accounting Standards Update (“ASU”) 2014-09 Revenue from Contracts with Customers (ASC 606). The ASU requires the use of a new five-step model to recognize revenue from customer contracts. The five-step model requires that the Company (i) identify the contract with the customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, including variable consideration to the extent that it is probable that a significant future reversal will not occur, (iv) allocate the transaction price to the respective performance obligations in the contract, and (v) recognize revenue when (or as) the Company satisfies the performance obligation. Sales of interactive toys The Company recognizes sales of interactive toys revenues upon shipment or upon receipt of products by the customer, depending on the terms, provided that: there are no uncertainties regarding customer acceptance; persuasive evidence of an agreement exists documenting the specific terms of the transaction; the sales price is fixed or determinable; and collectability is reasonably assured. Management assesses the business environment, the customer’s financial condition, historical collection experience, accounts receivable aging, and customer disputes to determine whether collectability is reasonably assured. The Company routinely enters into arrangements with its customers to provide sales incentives, support customer promotions, and provide allowances for returns and defective merchandise. Such programs are based primarily on customer purchases, customer performance of specified promotional activities, and other specified factors such as sales to consumers. The costs of these programs are recorded as sales adjustments that reduce gross sales in the period the related sale is recognized. The products sold in the PRC are subject to a Chinese value-added tax (“VAT”). VAT taxes are presented as a reduction of revenue. Mobile games Internal developed platform The Company operates the mobile games as live services that allow players to play for free. Within these games, players can purchase virtual currency to obtain virtual goods to enhance the game-playing experience. On the platform, players purchase virtual currency and/or virtual goods through various widely accepted payment methods offered in the games, including Alipay or WeChat and online bank transfer service providers. Advance payments from customers for virtual goods that are non-refundable that specify our obligations are recorded to deferred revenue. All other advance payments that do not meet these criteria are recorded as advances from customers. For virtual goods purchases upon immediately use with no future game-playing benefits, the Company recognizes such virtual goods purchase upon receipts of payment from the paying players. For virtual goods purchases for the conversion of future game-playing benefits or throughout the players’ playing life, the Company recognizes such virtual goods purchases ratably over the estimated average playing period of paying players for the applicable game, starting from the point in time when virtual items are delivered to the players’ accounts and all other revenue recognition criteria are met. The Company records revenue generated from mobile games on a gross basis as the Company is acting as the principal to fulfill all obligations related to the game operation. Fees paid to distribution channels and payment channels are recorded as cost of revenues. The Company considers the average period that players typically play the games and other game player behavior patterns, as well as various other factors to arrive at the best estimates for the estimated playing period of the paying players for each game. On a quarterly basis, the Company determined the estimated average playing period for paying players by analyzing paying players for that game who made their first virtual goods purchase during that period and counting their cumulative login days for each game. The Company then averages the time periods to determine the estimated paying playing period for that game. If a new game is launched and only a limited period of paying player data is available, then the Company considers other qualitative factors, such as the playing patterns for paying players for other games with similar characteristics and playing patterns of paying players, such as targeted players and purchasing frequency. While the Company believes its estimates to be reasonable based on available game player information, the Company may revise such estimates based on new information indicating a change in the game player behavior patterns and any adjustments are applied prospectively. Based on the Company’s analysis, the estimated average playing period of paying players is approximately one to three months, and this estimate has been consistent since the Company’s initial analysis. No change has been made in such estimate during any of the periods presented. Future usage patterns may differ from historical usage patterns and therefore the estimated average playing periods may change in the future. Third-party platform The Company also licenses third-parties to operate the Company’s mobile games developed internally through mobile platforms and receives revenue-based royalty payments from all the third-party licensee operators on a monthly basis. The revenue- based royalty payments are recognized when all other revenue recognition criteria are met. The Company records the mobile game royalty revenue on a net basis, as the Company does not have the primary responsibility for fulfillment and acceptability of the game services. Communication service The communication service is mainly divided into three modules: SMS agency service, agency fee from mobile recharge and IDC service. SMS agency service and mobile recharge service provide customer services through the company’s platform; and IDC service which providing broadband, IP and others for customers’ router equipment. The sales revenue will be recognized after the customer confirms the statement generated from the platform. The premise is: the customer has no uncertainty in the acceptance, the sales price is fixed and determinable when contracted, and the retrievability is also reasonably guaranteed. Information service This is a service which provides products and technical services to customers generating from third-party media channels (such as WeChat official accounts, mini programs, APP, Tik Tok, Toutiao, Quick Worker, etc.), as well as commissioned development services for interactive marketing tools, company then charged according to the information services that contracted with the customers. The sales revenue of the information service fee is recognized after the customer confirms the service provided is correct. The premise is: the customer has no uncertainty in the acceptance, the sales price is fixed and determinable when contracted, and the retrievability is also reasonably guaranteed. Commodity Trading For the sale of third-party products where the Company obtains control of the product before transferring it to the customer, the Company recognizes revenue based on the gross amount billed to customers. The Company considers multiple factors when determining whether it obtains control of third-party products, including evaluating if it can establish the price of the product, retains inventory risk for tangible products or has the responsibility for ensuring acceptability of the product. The company recognize net revenue from sale of Glycol when no control obtained throughout the transactions. |
Shipping and handling | Shipping and handling Shipping and handling costs amounted to $ 2,927 25,892 38,025 |
Advertising costs | Advertising costs Advertising costs amounted to $ 977,631 3,494,507 2,763 |
Operating leases | Operating leases A lease for which substantially all the benefits and risks incidental to ownership remain with the lessor is classified by the lessee as an operating lease. All leases of the Company are currently classified as operating leases. The Company records the total expenses on a straight-line basis over the lease term, and the accounting of operating lease in this report has been updated to reflect the adoption of FASB’s new guidance on the recognition and measurement of leases. |
Government subsidies | Government subsidies Government subsidies mainly represent amounts granted by local government authorities as an incentive for companies to promote development of the local technology industry. The Company receives government subsidies related to government sponsored projects, and records such government subsidies as a liability when it is received. The Company records government subsidies as other income when there is no further performance obligation. Total government subsidies amounted to $ 19,969 99,948 28,623 |
Value added taxes | Value added taxes Revenue represents the invoiced value of service, net of VAT. The VAT is based on gross sales price and VAT rates range up to 13%, depending on the type of service provided. Entities that are VAT general taxpayers are allowed to offset qualified input VAT paid to suppliers against their output VAT liabilities. Net VAT balance between input VAT and output VAT is recorded in tax payable. All of the VAT returns filed by the Company’s subsidiaries in China have been and remain subject to examination by the tax authorities for five years from the date of filing. |
Income taxes | Income taxes The Company accounts for current income taxes in accordance with the laws of the relevant tax authorities. The charge for taxation is based on the results for the fiscal year as adjusted for items, which are non-assessable or disallowed. It is calculated using tax rates that have been enacted or substantively enacted by the balance sheet date. Deferred taxes are accounted for using the asset and liability method in respect of temporary differences arising from differences between the carrying amount of assets and liabilities in the consolidated financial statements and the corresponding tax basis used in the computation of assessable tax profit. In principle, deferred tax liabilities are recognized for all taxable temporary differences. Deferred tax assets are recognized to the extent that it is probable that taxable profit will be available against which deductible temporary differences can be utilized. Deferred tax is calculated using tax rates that are expected to apply to the period when the asset is realized or the liability is settled. Deferred tax is charged or credited in the income statement, except when it is related to items credited or charged directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Current income taxes are provided for in accordance with the laws of the relevant taxing authorities. |
Comprehensive income | Comprehensive income Comprehensive income consists of two components, net income and other comprehensive (loss) income. Other comprehensive (loss) income refers to revenue, expenses, gains and losses that under U.S. GAAP are recorded as an element of shareholders’ equity but are excluded from net income. Other comprehensive (loss) income consists of a foreign currency translation adjustment resulting from the Company not using the U.S. dollar as its functional currencies. |
Earnings per share | Earnings per share The Company computes earnings per share (“EPS”) in accordance with ASC 260, “Earnings per Share”. ASC 260 requires companies to present basic and diluted EPS. Basic EPS is measured as net income divided by the weighted average ordinary share outstanding for the period. Diluted EPS presents the dilutive effect on a per share basis of the potential ordinary shares (e.g., convertible securities, options and warrants) as if they had been converted at the beginning of the periods presented, or issuance date, if later. Potential ordinary shares that have an anti-dilutive effect (i.e., those that increase income per share or decrease loss per share) are excluded from the calculation of diluted EPS. The dilutive shares were 925,681 746,321 |
Employee benefits | Employee benefits The full-time employees of the Company are entitled to staff welfare benefits including medical care, housing fund, pension benefits, unemployment insurance and other welfare, which are government mandated defined contribution plans by law. The Company is required to accrue for these benefits based on certain percentages of the employees’ respective salaries, subject to certain ceilings, in accordance with the relevant PRC regulations, and make cash contributions to the state-sponsored plans out of the amounts accrued. Total expenses for the plans were $ 111,987 104,287 23,235 |
Statutory reserves | Statutory reserves Pursuant to the laws applicable to the PRC, PRC entities must make appropriations from after-tax profit to the non-distributable “statutory surplus reserve fund”. Subject to certain cumulative limits, the “statutory surplus reserve fund” requires annual appropriations of 10% of after-tax profit until the aggregated appropriations reach 50% of the registered capital (as determined under accounting principles generally accepted in the PRC (“PRC GAAP”) at each year-end). For foreign invested enterprises and joint ventures in the PRC, annual appropriations should be made to the “reserve fund”. For foreign invested enterprises, the annual appropriation for the “reserve fund” cannot be less than 10% of after-tax profits until the aggregated appropriations reach 50% of the registered capital (as determined under PRC GAAP at each year-end). If the Company has accumulated loss from prior periods, the Company is able to use the current period net income after tax to offset against the accumulate loss. |
Recently issued accounting pronouncements | Recently issued accounting pronouncements In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, which provides guidance on the acquirer’s accounting for acquired revenue contracts with customers in a business combination. The amendments require an acquirer to recognize and measures contract assets and contract liabilities acquired in a business combination at the acquisition date in accordance with ASC 606 as if it had originated the contracts. This guidance also provides certain practical expedients for acquirers when recognizing and measuring acquired contract assets and contract liabilities from revenue contracts in a business combination. The new guidance is required to be applied prospectively to business combinations occurring on or after the date of adoption. This guidance is effective for the Group for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. Early adoption is permitted. The Group does not expect that the adoption of this guidance will have a material impact on its financial position, results of operations and cash flows. In June 2022, the FASB issued ASU 2022-03, Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions, which clarifies that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security and, therefore, is not considered in measuring fair value. The amendments also clarify that an entity cannot, as a separate unit of account, recognize and measure a contractual sale restriction. This guidance also requires certain disclosures for equity securities subject to contractual sale restrictions. The new guidance is required to be applied prospectively with any adjustments from the adoption of the amendments recognized in earnings and disclosed on the date of adoption. This guidance is effective for the Group for fiscal years beginning after December 15, 2023, and interim periods within those fiscal years. Early adoption is permitted. The Group does not expect that the adoption of this guidance will have a material impact on its financial position, results of operations and cash flows. |
ORGANIZATION AND PRINCIPAL AC_2
ORGANIZATION AND PRINCIPAL ACTIVITIES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of business activities | Schedule of business activities Name Background Ownership Brilliant Hat Limited ● A British Virgin Islands company ● Incorporated on June 26, 2018 ● A holding company 100% owned by Blue Hat Interactive Entertainment Technology Blue Hat Interactive Entertainment Technology Limited ● A Hong Kong company ● Incorporated on June 26, 2018 ● A holding company 100% owned by Brilliant Hat Limited Xiamen Duwei Consulting Management Co., Ltd. ● A PRC limited liability company and deemed a wholly foreign owned enterprise (“WFOE”). ● Incorporated on July 26, 2018 ● Registered capital of $20,000,000 ● A holding company. 100% owned by Blue Hat Interactive Entertainment Technology Limited. Fujian Blue Hat Group Co. Ltd. ● A PRC limited liability company ● Incorporated on August 23, 2021. ● A holding company 100% owned by Blue Hat Interactive Entertainment Technology Limited. Fujian Blue Hat Interactive Entertainment Technology Ltd. ● A PRC limited liability company ● Incorporated on January 7, 2010 ● Registered capital of $4,697,526 (RMB 31,054,000). ● Designing, producing, promoting and selling animated toys with mobile VIE of Xiamen Duwei Consulting Management Co., Ltd Fujian Youth Hand in Hand Educational Technology Co., Ltd. ● A PRC limited liability company, acquired on February 2021. ● Incorporated on September 18, 2017 ● Registered capital of $3,106,214 (RMB 20,100,000) ● Educational consulting service and sports related. 51.5% owned by Xiamen Duwei Consulting Management Co., Ltd. 48.5% owned by Fujian Blue Hat Interactive Technology Co., Ltd. Hunan Engaomei Animation Culture Development Co., Ltd. ● A PRC limited liability company ● Incorporated on October 19, 2017 ● Registered capital of $302,540 (RMB 2,000,000) ● Designing, producing, promoting and selling animated toys with mobile games features, original intellectual property and peripheral derivatives features. 100% owned by Fujian Blue Hat Interactive Technology Co., Ltd. Pingxiang Blue Hat Technology Co. Ltd. ● A PRC limited liability company ● Incorporated on September 10, 2018 ● Registered capital of $302,540 (RMB 2,000,000) ● Designing, producing, promoting and selling animated toys with mobile 100% owned by Fujian Blue Hat Interactive Technology Ltd. Xiamen Bluehat Research Institution of Education Co., Ltd ● A PRC limited liability company ● Incorporated on February 20, 2021 ● Information Technology consulting service 100% owned by Xiamen Duwei Consulting Management Co., Ltd. Fujian Lanyun Canghai Technology Co., Ltd. ● A PRC limited liability company ● Incorporated on June 29, 2021 ● Software development, promoting and selling of toys and stationery 100% owned by Fujian Blue Hat Interactive Entertainment Technology Ltd Fuzhou Qiande Educational Technology Co., Ltd. ● A PRC limited liability company ● Incorporated on March 24, 2021 ● Information Technology consulting service 100% owned by Fujian Youth Hand in Hand Educational Technology Co., Ltd. Fresh Joy Entertainment Ltd ● A British Virgin Islands company, acquired on January 25, 2021 ● Incorporated on January 7, 2020 ● A holding company 100% owned by Fujian Lanyun Canghai Technology Co., Ltd. Hong Kong Xinyou Entertainment Company ● A Hong Kong company, acquired on January 25, 2021 ● Incorporated on August 18, 2020 ● A holding company 100% owned by Fresh Joy Entertainment Ltd Fujian Xinyou Technology Co., Ltd. ● A PRC limited liability company and deemed a wholly foreign owned enterprise (“WFOE”), acquired on January 25, 2021 ● Incorporated on September 29, 2020 ● A holding company 100% owned by Hong Kong Xinyou Entertainment Limited. Fujian Roar Game Technology Co. Ltd. ● A PRC limited liability company, acquired on January 25, 2021 ● Incorporated on December 6, 2019 ● Designing, producing, promoting and selling animated toys with mobile VIE of Fujian Xinyou Technology Co., Ltd. Fuzhou UC71 Co., Ltd. ● A PRC limited liability company ● Incorporated on October 25, 2016 ● Registered capital of $1,854,456 (RMB 12,000,000) ● Software development, Information technology consulting service 100% owned by Fujian Roar Game Technology Co., Ltd Fuzhou CSFCTECH Co. Ltd. ● A PRC limited liability company, acquired on January 25, 2021 ● Incorporated on August 5, 2011 ● Registered capital of $3,001,159 (RMB 20,000,000) ● Software development, animation design and web design 51% owned by Fujian Roar Game Technology Co., Ltd . Xiamen Shengruihao Technology Co., Ltd ● A PRC limited liability company, acquired on September 30, 2022 ● Incorporated on June 30, 2021 ● Registered capital of $ 4,463,754 (RMB 30,000,000) ● Software development, animation design and web design 100% owned by Fujian Blue Hat Group Co. Ltd. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND PRACTICES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Schedule of estimated useful lives | Schedule of estimated useful lives Category Depreciation method Estimated useful lives Building Straight-line 20 Electronic devices Straight-line 3 Office equipment, fixtures and furniture Straight-line 3 Automobile Straight-line 3 |
VARIABLE INTEREST ENTITY (_VI_2
VARIABLE INTEREST ENTITY (“VIE”) (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Variable Interest Entities | Schedule of Variable Interest Entities December 31, December 31, 2022 2021 Current assets $ 18,522,735 $ 6,702,528 Property and equipment, net 102,688 211,924 Other non-current assets 8,910,138 10,672,824 Total assets 27,535,561 17,587,276 Total liabilities 10,027,011 10,825,262 Net assets $ 17,508,550 $ 6,762,014 December 31, December 31, 2022 2021 Current liabilities: Short-term loans - banks $ 1,261,944 $ 860,915 Current maturities of long-term loans third party — — Accounts payable 910,686 959,198 Other payables and accrued liabilities 3,305,351 3,328,862 Other payables related party 193,407 211,271 Operating lease liability - current 11,257 97,052 Customer deposits 1,566,443 1,500,677 Taxes payable 2,746,882 3,287,640 Total current liabilities 9,995,970 10,245,615 Operating lease liabilities 31,041 62,057 Long-term loans - third party — 517,590 Total liabilities $ 10,027,011 $ 10,825,262 The summarized operating results of the VIEs are as follows: Year ended Year ended Year ended December 31, December 31, December 31, 2022 2021 2020 Revenues $ 6,206,647 $ 15,155,074 $ 24,599,923 Gross profit $ (3,057,854 ) $ (6,482,924 ) $ 13,420,020 (Loss) Income from operations $ (3,891,685 ) $ (55,966,045 ) $ 11,511,579 Net (Loss) income from continuing operation $ (5,191,833 ) $ (55,453,545 ) $ 9,548,866 Net income from discontinued operation $ — $ 833,876 233,153 Non-controlling interest from continuing operation $ (40,025 ) (2,918,680 ) — Non-controlling interest from discontinued operation — $ — 111,404 Net income attributable to VIE’s $ (5,151,808 ) $ (51,700,989 ) $ 9,670,615 |
ACQUISITIONS (Tables)
ACQUISITIONS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Business Acquisition [Line Items] | |
Schedule of acquisition date fair value of the assets liabilities | Schedule of acquisition date fair value of the assets liabilities Prepayments $ 1,436 Total assets acquired $ 1,436 Other payables (4,814 ) Tax payables (238 ) Total Liabilities (5,052 ) Net identifiable liabilities assumed (3,616 ) Less: Foreign currency translation (70 ) Add: Goodwill 3,681 Total purchase price for acquisition net of $5 of cash $ (5 ) |
Fresh Joy [Member] | |
Business Acquisition [Line Items] | |
Schedule of acquisition date fair value of the assets liabilities | Schedule of acquisition date fair value of the assets liabilities Accounts receivables $ 6,432,414 Other receivables 49,704 Prepayments, net 1,797,617 Right-of-use assets 91,513 Property, plant and equipment, net 148,095 Intangible assets 6,876,455 Deferred tax assets 136,546 Total assets acquired $ 15,532,344 Accrued expenses and other payables 2,462,953 Taxes payable 2,185,779 Customer deposits 597,380 Short term loans, bank 849,959 Operating lease liability 96,131 Total Liabilities $ 6,192,202 Net identifiable assets acquired 9,340,142 Less: Non-controlling interest 5,379,104 Add: Goodwill 3,792,056 Total purchase price for acquisition net of $20,506 of cash $ 7,753,094 |
Fujian Youth Hand [Member] | |
Business Acquisition [Line Items] | |
Schedule of acquisition date fair value of the assets liabilities | Schedule of acquisition date fair value of the assets liabilities Accounts receivables $ 78,772 Other receivables 10,321 Inventories 2,955 Prepayments 1,215,130 Property, plant and equipment, net 153 Intangible assets, net 910,284 Total assets acquired $ 2,217,615 Accrued expenses and other payables 1,993,335 Total Liabilities 1,993,335 Net identifiable assets acquired 224,280 Less: 48.5% owned by Blue Hat Interactive Entertainment Technology 75,547 Add: Goodwill 14,537 Total purchase price for acquisition net of $944 of cash $ 163,270 |
ACCOUNTS RECEIVABLE, NET (Table
ACCOUNTS RECEIVABLE, NET (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Credit Loss [Abstract] | |
Schedule of accounts receivable | Schedule of accounts receivable December 31, December 31, 2022 2021 Accounts receivable $ 18,574,739 $ 23,074,123 Allowance for doubtful accounts (5,083,245 ) (6,394,429 ) Total accounts receivable, net $ 13,491,494 $ 16,679,694 |
Schedule of movements of allowance for doubtful accounts | Schedule of movements of allowance for doubtful accounts Beginning balance $ 6,394,429 $ 565,793 (Write-off)/Addition (798,446 ) 5,747,069 Exchange rate effect (512,738 ) 81,567 Ending balance $ 5,083,245 $ 6,394,429 |
OTHER RECEIVABLES, NET (Tables)
OTHER RECEIVABLES, NET (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Other Receivables Net | |
Schedule of other receivables | Schedule of other receivables December 31, December 31, 2022 2021 Deposit for business acquisitions $ 12,345,111 $ 13,485,383 Deposit for set-up of research center 86,150 94,107 Others 4,762,413 3,062,247 Allowance for doubtful accounts (12,489,219 ) (13,665,255 ) Total other receivables, net $ 4,704,455 $ 2,976,482 |
Schedule of movements of allowance for doubtful accounts | Schedule of movements of allowance for doubtful accounts Beginning balance $ 13,665,255 $ 32,937 (Write-off)/ Addition (20,554 ) 13,471,554 Exchange rate effect (1,155,482 ) 160,764 Ending balance $ 12,489,219 $ 13,665,255 |
PREPAYMENTS, NET (Tables)
PREPAYMENTS, NET (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Prepayments Net | |
Schedule of Prepayments, net | Schedule of Prepayments, net December 31, December 31, 2022 2021 Prepayments $ 61,370 $ 628,810 Prepaid research and development expenses 2,495,570 1,704,812 Promotion fee 1,742,606 955,246 Other 25,568 219,727 Total prepayments, net $ 4,325,114 $ 3,508,595 December 31, December 31, 2022 2021 Prepayments - current $ 3,198,079 $ 3,290,993 Prepayments - non-current 10,353,273 10,288,302 Allowance for doubtful accounts - current (1,368,535 ) (1,487,210 ) Allowance for doubtful accounts -non-current (7,857,703 ) (8,583,490 ) Total prepayments, net $ 4,325,114 $ 3,508,595 |
Schedule of Movements of allowance for doubtful accounts | Schedule of Movements of allowance for doubtful accounts Beginning balance $ 10,070,700 $ 147,631 Addition 7,078 9,803,067 Exchange rate effect (851,540 ) 120,002 Ending balance $ 9,226,238 $ 10,070,700 |
LEASES (Tables)
LEASES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Leases [Abstract] | |
Schedule of Supplemental balance sheet information related to leases | Schedule of Supplemental balance sheet information related to leases Location on Face of December 31, Balance Sheet 2022 Operating leases: Operating lease right of use assets Operating lease, right-of-use assets $ 40,596 Current operating lease liabilities Operating lease liabilities - current $ 11,261 Noncurrent operating lease liabilities Operating lease liabilities 31,041 Total operating lease liabilities $ 42,302 Weighted average remaining lease term (in years): Operating leases 3.33 Weighted discount rate: Operating leases 4.75 % |
Schedule of Maturities of lease liabilities | Schedule of Maturities of lease liabilities For the year ended December 31, Operating lease 2023 $ 13,015 2024 13,666 2025 14,349 2026 4,864 2027 — Total $ 45,894 Less: amount representing interest 3,592 Present value of future minimum lease payments 42,302 Less: Current obligations 11,261 Long-term obligations $ 31,041 |
PROPERTY AND EQUIPMENT, NET (Ta
PROPERTY AND EQUIPMENT, NET (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property and equipment | Schedule of property and equipment December 31, December 31, 2022 2021 Building $ 4,322,359 $ 4,322,359 Electronic devices 658,691 674,497 Office equipment, fixtures and furniture 63,322 71,865 Vehicle 30,788 237,705 Subtotal 5,075,160 5,306,426 Less: accumulated depreciation and amortization (1,211,833 ) (1,157,281 ) Less: impairment (28,676 ) — Total $ 3,834,651 $ 4,149,145 |
INTANGIBLE ASSETS, NET (Tables)
INTANGIBLE ASSETS, NET (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Acquired Intangible assets | Schedule of Acquired Intangible assets December 31, December 31, 2022 2021 Patents $ 1,668,614 $ 1,378,836 Licensed software 25,473,373 28,270,157 Software development costs 118,139 129,051 Less: accumulated amortization (8,602,749 ) (8,229,006 ) Less: impairment (14,006,405 ) (14,632,931 ) Intangible assets, net $ 4,650,972 $ 6,916,107 |
Schedule of estimated amortization | Schedule of estimated amortization For the year ended December 31 Estimated amortization expense 2023 $ 1,935,939 2024 1,225,042 2025 710,660 2026 69,249 2027 63,670 Thereafter 646,412 Total $ 4,650,972 |
CREDIT FACILITIES (Tables)
CREDIT FACILITIES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Credit Facilities | |
Schedule of outstanding balances on short-term bank loans | Schedule of outstanding balances on short-term bank loans Institute Interest Collateral/ December 31, December 31, name Maturities rate Guarantee 2022 2021 China Merchants Bank October 2014 7.50 % Guarantee by 26 property rights $ 788,119 $ 860,915 Xiamen Rural Commercial Bank February 2023 6.58 % Guarantee by 14 property rights 473,825 — Total $ 1,261,944 $ 860,915 * The short term loan with Industrial bank which should be repaid in 2014 was overdue result in an increase in interest from 7.50% to 11.25% per annual. The case is now under litigation and the guaranteed property is in auction which proceeds from will repay the loan and interests overdue. |
Schedule of outstanding balances on long-term third party loans | Schedule of outstanding balances on long-term third party loans Interest Collateral/ December 31, December 31, Institute name Maturities rate Guarantee 2022 2021 Xiamen Rural Commercial Bank February 2023 6.58 % Guarantee by — 517,590 14 property rights Total $ — $ 517,590 |
OTHER PAYABLES AND ACCRUED LI_2
OTHER PAYABLES AND ACCRUED LIABILITIES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Payables and Accruals [Abstract] | |
Schedule of other Payable and Accrued Liabilities | Schedule of other Payable and Accrued Liabilities December 31, December 31, 2022 2021 Payables to non-trade vendors and service providers $ 10,064,937 $ 9,915,900 Salary payables 231,333 404,493 Interest payable 1,094,265 987,231 Other miscellaneous payables 56,517 82,113 Total other payables and accrued liabilities $ 11,447,052 $ 11,389,737 |
CONVERTIBLE NOTES PAYABLE (Tabl
CONVERTIBLE NOTES PAYABLE (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of convertible debt | Schedule of convertible debt December 31, December 31, 2022 2021 Beginning $ — $ 739,189 Addition 1,550,000 — Interest expenses (100,314 ) Conversion 256,815 (739,189 ) Convertible debt, net $ 1,393,499 $ — |
RELATED PARTY BALANCES AND TR_2
RELATED PARTY BALANCES AND TRANSACTIONS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Related Party Transactions [Abstract] | |
Schedule of account receviables - related party | Schedule of account receviables - related party December 31, December 31, Name of Related Party Relationship - Nature 2022 2021 Xiaodong Chen CEO 2 — Xiamen Jiuqiao Tech. CEO holding company Disposal consideration $ 1,430,086 $ — Huaqiang Yang Holds 15.5% of Fuzhou CSFC transfer receivable 31,085 — Total $ 1,428,913 $ — |
Schedule of other payables - related party | Schedule of other payables - related party December 31, December 31, Name of Related Party Relationship - Nature 2022 2021 Xiaodong Chen CEO Lease and other payable $ 21,107 $ 32,244 Huaqiang Yang Holds 15.5% of Fuzhou CSFC transfer payable 140,041 154,259 Bequtiful Jade Ltd Shareholders’ investment company Attorney fee 3,795 — Total $ 164,943 $ 186,503 |
Schedule of long term loans related party | Schedule of long term loans related party December 31, December 31, Name of Related Party Relationship - Nature 2022 2021 Xiaodong Chen CEO Borrowing $ 914,771 $ — Total $ 914,771 $ — |
Taxes (Tables)
Taxes (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Schedule of significant components of provision for income taxes | Schedule of significant components of provision for income taxes December 31, December 31, 2022 2021 Current $ 1,097,888 $ 138,061 The provision for income taxes $ 1,097,888 $ 138,061 |
Schedule of Effective Income Tax Rate Reconciliation | Schedule of Effective Income Tax Rate Reconciliation Year ended Year ended Year ended December 31, December 31, December 31, 2022 2021 2020 China statutory income tax rate 25.0 % 25.0 % 25.0 % Preferential tax rate reduction (10.0 )% (10.0 )% (10.0 )% Preferential Blue Hat Pingxiang tax rate reduction — — — Permanent difference (15.2 )% (15.2 )% 2.1 % Effective tax rate (0.2 )% (0.2 )% 17.1 % |
Schedule of Taxes payable | Schedule of Taxes payable December 31, December 31, 2022 2021 VAT taxes payable $ 471,604 $ 843,257 Income taxes payable 2,074,321 2,265,919 Other taxes payable 191,574 178,464 Totals $ 2,737,499 $ 3,287,640 |
DISCONTINUED OPERATIONS (Tables
DISCONTINUED OPERATIONS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Discontinued Operations | |
Schedule of Loss from discontinued operations | Schedule of Loss from discontinued operations December 31 December 31, 2022 2021 Revenues $ — $ 16,464,160 Cost of sales — (13,741,705 ) Gross profit — 2,722,455 Operating expenses: General and Administrative — (281,460 ) Selling expenses — (881,654 ) Research and development — (6,959 ) Total — $ 1,552,382 Other income (expense) Interest income $ — $ 378 Other (expense) income, net — 66,871 Other finance expenses — (14,939 ) Total — 52,310 Loss from discontinued operations before income tax — 1,604,692 Income tax provision — (593,389 ) Income from discontinued operations before non-controlling interest $ — $ 1,011,303 Less: Net loss attributable to non-controlling interest — — Income from discontinued operation $ — $ 1,011,303 |
Schedule of components of assets and liabilities | Schedule of components of assets and liabilities December 31, December 31, 2022 2021 Cash $ — $ 866,075 Accounts receivable — 2,990,419 Other current assets — 7,041,322 Prepayments, net — 2,644,553 Inventories — 130,532 Property, plant and equipment, net — 17,044 Other non-current assets — 70,454 Total assets related to discontinued operations — 13,760,399 Accounts payable — 813,038 Other payables and accrued expenses — 794,599 Operating lease liabilities-current — 20,621 Customer deposits — 865,717 Tax payables — 2,334,922 Other non-current liabilities — 29,051 Total liabilities related to discontinued operations $ — $ 4,857,948 |
SEGMENT INFORMATION AND REVEN_2
SEGMENT INFORMATION AND REVENUE ANALYSIS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Segment Reporting [Abstract] | |
Schedule of disaggregated information of revenues by business lines | Schedule of disaggregated information of revenues by business lines Year ended Year ended Year ended December 31, December 31, December 31, 2022 2021 2020 Interactive toys - animation series $ 9,061 $ 657,619 $ 1,575,903 Interactive toys - game series 155,559 8,723,480 16,131,115 Mobile game 5,181,410 4,165,456 2,506,285 Information service 884,329 1,608,519 4,386,620 Commodity Trading 1,145,650 — — Total revenues $ 7,376,009 $ 15,155,074 $ 24,599,923 |
Schedule of disaggregated information by business lines | Schedule of disaggregated information by business lines Interactive to Interactive toys animation series Game series Mobile game Information service Glycol Revenue $ 9,061 $ 155,559 $ 5,181,410 $ 884,329 $ 1,145,650 Costs of revenue (34,192 ) (78,118 ) (2,419,222 ) (826,096 ) (20,032 ) Gross Profit (25,131 ) 77,441 2,762,188 58,233 1,125,618 Year ended December 31, 2021 Interactive toys Interactive toys Mobile game Information Revenue $ 657,619 $ 8,723,480 $ 4,165,456 $ 1,608,519 Costs of revenue (140,450 ) (4,340,776 ) (2,889,486 ) (1,301,438 ) Gross Profit $ 517,169 $ 4,382,704 $ 1,275,970 $ 307,081 Year ended December 31, 2020 Interactive toys Interactive toys Mobile game Information Revenue $ 1,575,903 $ 16,131,115 $ 2,506,285 $ 4,386,620 Costs of revenue (1,331,731 ) (5,503,184 ) (10,577 ) (4,334,411 ) Gross Profit $ 244,172 $ 10,627,931 $ 2,495,708 $ 52,209 |
Schedule of disaggregated information of revenues by geographic locations | Schedule of disaggregated information of revenues by geographic locations Year ended Year ended Year ended Domestic PRC revenues $ 7,376,009 $ 15,155,074 $ 24,599,923 Export revenues — — — Total revenues $ 7,376,009 $ 15,155,074 $ 24,599,923 |
CONDENSED FINANCIAL INFORMATI_2
CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Condensed Financial Information Of Parent Company | |
Schedule of condensed financial information of the parent company | Schedule of condensed financial information of the parent company December 31, December 31, ASSETS Current assets: Cash and cash equivalents $ 6,791 $ 8,758 Other receivables, net 3,524,253 204,400 Total current assets 3,531,044 213,158 Non-current assets: Property, plant and equipment, net 3,731,963 3,937,222 Investment in subsidiaries 17,619,903 21,873,789 Total non-current assets 21,351,866 25,811,011 Total assets $ 24,882,910 $ 26,024,169 LIABILITIES AND SHAREHOLDERS’ EQUITY LIABILITIES Other payables and accrued liabilities $ 8,041,502 $ 8,364,775 Other payables - related party 3,799 9,188 Short-term loans — — Convertible notes payable — — Total current liabilities 8,045,301 8,373,963 Non-current liabilities 2,308,270 — Total liabilities 10,353,571 8,373,963 COMMITMENTS AND CONTINGENCIES SHAREHOLDERS’ EQUITY Ordinary shares, $0.01 par value, 100,000,000 shares authorized, 9,894,734, 5,382,383 shares issued and outstanding as of December 31, 2022 and 2021 respectively 98,947 53,824 Additional paid-in capital 44,145,826 36,281,992 Statutory reserves 2,143,252 2,143,252 Retained earnings (35,113,598 ) (25,748,542 ) Accumulated other comprehensive losses 834,513 2,459,256 Total Blue Hat Interactive Entertainment Technology shareholders’ equity 12,108,940 15,189,782 Non-controlling interest 2,420,399 2,460,424 Total equity 14,529,339 17,650,206 Total liabilities and shareholders’ equity $ 24,882,910 $ 26,024,169 PARENT COMPANY STATEMENTS OF INCOME AND COMPREHENSIVE INCOME Year ended Year ended Year ended 2022 2021 2020 Operating expenses: General and administrative expenses $ (2,621,808 ) $ (1,169,384 ) $ (1,307,167 ) Research and development (2,278,990 ) — — Other income (expenses): (Interest expense)/interest income (100,314 ) (169,366 ) (175,386 ) Other finance expenses (6,998 ) (10,442 ) (18,442 ) Equity income of subsidiaries and VIEs from continue operation (4,396,971 ) (60,199,373 ) 9,548,859 Equity income of subsidiaries and VIEs from discontinued operation — 1,493,945 233,153 NET (LOSS) INCOME (9,405,081 ) (60,054,620 ) 8,281,017 FOREIGN CURRENCY TRANSLATION ADJUSTMENT (1,624,743 ) 717,560 3,220,363 COMPREHENSIVE (LOSS) INCOME $ (11,029,824 ) $ (59,337,060 ) $ 11,501,380 Less: Comprehensive income attributable to non-controlling interest (40,025 ) (2,918,680 ) 111,404 Comprehensive income attributable to Blue Hat Interactive Entertainment Technology shareholders $ (10,989,799 ) $ 56,418,380 $ 11,389,976 PARENT COMPANY STATEMENTS OF CASH FLOWS Year ended Year ended Year ended December 31, December 31, December 31, 2022 2021 2020 CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ (9,405,081 ) $ (60,054,620 ) $ 8,281,017 Net income from discontinued operation — 1,493,945 233,153 Net income from continuing operation (9,405,081 ) (61,548,565 ) 8,047,864 Adjustments to reconcile net income to cash used in operating activities: Equity income of subsidiaries and VIEs 4,396,971 60,199,373 (9,548,859 ) Changes in operating assets and liabilities: Depreciation of property and equipment 205,259 205,398 179,740 Other receivables (3,319,855 ) 395,600 — Other payables and accrued liabilities (323,274 ) 5,869,181 925,409 Net cash used in operating activities (8,445,980 ) 5,120,987 (395,846 ) CASH FLOWS FROM INVESTING ACTIVITIES: Purchases of property and equipment — — (2,159,910 ) Investment in subsidiary (1,767,824 ) (14,923,600 ) (7,660,000 ) Net cash used in investing activities (1,767,824 ) (14,923,600 ) (9,819,910 ) CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from issue of new shares — — 2,110,845 Proceeds from secured convertible promissory note Bonds — — 739,189 Underwriter’s partial exercise of over-allotment option, net of issuance costs 7,908,956 12,830,780 — Proceeds from initial public offering, net of issuance costs — — — Other payables related party (5,389 ) 5,880 3,039 Proceeds from short-term loans — 2,998,994 Repayment of short-term loans — (2,998,994 ) — Proceeds from long-term loans - related party 914,771 — — Repayment of convertible payables — (739,189 ) — Proceeds from convertible payables 1,393,499 — — Net cash used in investing activities 10,211,837 9,098,477 5,852,067 EFFECT OF EXCHANGE RATE ON CASH — — — NET CHANGES IN CASH AND CASH EQUIVALENTS (1,967 ) (704,136 ) (4,363,689 ) CASH AND CASH EQUIVALENTS, Beginning of year 8,758 712,894 5,076,583 CASH AND CASH EQUIVALENTS, end of year $ 6,791 $ 8,758 $ 712,894 SUPPLEMENTAL CASH FLOW INFORMATION: Cash and cash equivalents $ 6,791 $ 8,758 $ 712,894 Restricted cash — — — CASH AND CASH EQUIVALENTS, end of year $ 6,791 $ 8,758 $ 712,894 |
ORGANIZATION AND PRINCIPAL AC_3
ORGANIZATION AND PRINCIPAL ACTIVITIES (Details) | 12 Months Ended |
Dec. 31, 2022 | |
Brilliant Hat Limited [Member] | |
Business Acquisition, Description of Acquired Entity | ● A British Virgin Islands company ● Incorporated on June 26, 2018 ● A holding company |
Noncontrolling Interest, Description | 100% owned by Blue Hat Interactive Entertainment Technology |
Name | Brilliant Hat Limited |
Blue Hat Interactive Entertainment Technology Limited [Member] | |
Business Acquisition, Description of Acquired Entity | ● A Hong Kong company ● Incorporated on June 26, 2018 ● A holding company |
Noncontrolling Interest, Description | 100% owned by Brilliant Hat Limited |
Name | Blue Hat Interactive Entertainment Technology Limited |
Xiamen Duwei Consulting Management Co. Ltd. [Member] | |
Business Acquisition, Description of Acquired Entity | ● A PRC limited liability company and deemed a wholly foreign owned enterprise (“WFOE”). ● Incorporated on July 26, 2018 ● Registered capital of $20,000,000 ● A holding company. |
Noncontrolling Interest, Description | 100% owned by Blue Hat Interactive Entertainment Technology Limited. |
Name | Xiamen Duwei Consulting Management Co., Ltd. |
Fujian Blue Hat Group Co. Ltd. [Member] | |
Business Acquisition, Description of Acquired Entity | ● A PRC limited liability company ● Incorporated on August 23, 2021. ● A holding company |
Noncontrolling Interest, Description | 100% owned by Blue Hat Interactive Entertainment Technology Limited. |
Name | Fujian Blue Hat Group Co. Ltd. |
Fujian Blue Hat Interactive Entertainment Technology Ltd. [Member] | |
Business Acquisition, Description of Acquired Entity | ● A PRC limited liability company ● Incorporated on January 7, 2010 ● Registered capital of $4,697,526 (RMB 31,054,000). ● Designing, producing, promoting and selling animated toys with mobile |
Noncontrolling Interest, Description | VIE of Xiamen Duwei Consulting Management Co., Ltd |
Name | Fujian Blue Hat Interactive Entertainment Technology Ltd. |
Fujian Youth Hand In Hand Educational Technology Co. Ltd. [Member] | |
Business Acquisition, Description of Acquired Entity | ● A PRC limited liability company, acquired on February 2021. ● Incorporated on September 18, 2017 ● Registered capital of $3,106,214 (RMB 20,100,000) ● Educational consulting service and sports related. |
Noncontrolling Interest, Description | 51.5% owned by Xiamen Duwei Consulting Management Co., Ltd. 48.5% owned by Fujian Blue Hat Interactive Technology Co., Ltd. |
Name | Fujian Youth Hand in Hand Educational Technology Co., Ltd. |
Engaomei Animation Culture Development Co. Ltd [Member] | |
Business Acquisition, Description of Acquired Entity | ● A PRC limited liability company ● Incorporated on October 19, 2017 ● Registered capital of $302,540 (RMB 2,000,000) ● Designing, producing, promoting and selling animated toys with mobile games features, original intellectual property and peripheral derivatives features. |
Noncontrolling Interest, Description | 100% owned by Fujian Blue Hat Interactive Technology Co., Ltd. |
Hunan Engaomei Animation Culture Development Co. Ltd [Member] | |
Name | Hunan Engaomei Animation Culture Development Co., Ltd. |
Pingxiang Blue Hat Technology Co Ltd [Member] | |
Business Acquisition, Description of Acquired Entity | ● A PRC limited liability company ● Incorporated on September 10, 2018 ● Registered capital of $302,540 (RMB 2,000,000) ● Designing, producing, promoting and selling animated toys with mobile |
Noncontrolling Interest, Description | 100% owned by Fujian Blue Hat Interactive Technology Ltd. |
Name | Pingxiang Blue Hat Technology Co. Ltd. |
Xiamen Bluehat Research Institution Of Education [Member] | |
Business Acquisition, Description of Acquired Entity | ● A PRC limited liability company ● Incorporated on February 20, 2021 ● Information Technology consulting service |
Noncontrolling Interest, Description | 100% owned by Xiamen Duwei Consulting Management Co., Ltd. |
Name | Xiamen Bluehat Research Institution of Education Co., Ltd |
Fujian Lanyuncanghai Technology [Member] | |
Business Acquisition, Description of Acquired Entity | ● A PRC limited liability company ● Incorporated on June 29, 2021 ● Software development, promoting and selling of toys and stationery |
Noncontrolling Interest, Description | 100% owned by Fujian Blue Hat Interactive Entertainment Technology Ltd |
Name | Fujian Lanyun Canghai Technology Co., Ltd. |
Fuzhou Qiande Educational Technology [Member] | |
Business Acquisition, Description of Acquired Entity | ● A PRC limited liability company ● Incorporated on March 24, 2021 ● Information Technology consulting service |
Noncontrolling Interest, Description | 100% owned by Fujian Youth Hand in Hand Educational Technology Co., Ltd. |
Name | Fuzhou Qiande Educational Technology Co., Ltd. |
Fresh Joy Entertainment Ltd [Member] | |
Business Acquisition, Description of Acquired Entity | ● A British Virgin Islands company, acquired on January 25, 2021 ● Incorporated on January 7, 2020 ● A holding company |
Noncontrolling Interest, Description | 100% owned by Fujian Lanyun Canghai Technology Co., Ltd. |
Name | Fresh Joy Entertainment Ltd |
Hong Kong Xinyou Entertainment Company [Member] | |
Business Acquisition, Description of Acquired Entity | ● A Hong Kong company, acquired on January 25, 2021 ● Incorporated on August 18, 2020 ● A holding company |
Noncontrolling Interest, Description | 100% owned by Fresh Joy Entertainment Ltd |
Name | Hong Kong Xinyou Entertainment Company |
Fujian Xinyou Technoloby Co Ltd [Member] | |
Business Acquisition, Description of Acquired Entity | ● A PRC limited liability company and deemed a wholly foreign owned enterprise (“WFOE”), acquired on January 25, 2021 ● Incorporated on September 29, 2020 ● A holding company |
Noncontrolling Interest, Description | 100% owned by Hong Kong Xinyou Entertainment Limited. |
Name | Fujian Xinyou Technology Co., Ltd. |
Fujian Roar Game Technology Co. [Member] | |
Business Acquisition, Description of Acquired Entity | ● A PRC limited liability company, acquired on January 25, 2021 ● Incorporated on December 6, 2019 ● Designing, producing, promoting and selling animated toys with mobile |
Noncontrolling Interest, Description | VIE of Fujian Xinyou Technology Co., Ltd. |
Name | Fujian Roar Game Technology Co. Ltd. |
Fuzhou U C 71 [Member] | |
Business Acquisition, Description of Acquired Entity | ● A PRC limited liability company ● Incorporated on October 25, 2016 ● Registered capital of $1,854,456 (RMB 12,000,000) ● Software development, Information technology consulting service |
Noncontrolling Interest, Description | 100% owned by Fujian Roar Game Technology Co., Ltd |
Name | Fuzhou UC71 Co., Ltd. |
Fuzhou C S F C T E C H [Member] | |
Business Acquisition, Description of Acquired Entity | ● A PRC limited liability company, acquired on January 25, 2021 ● Incorporated on August 5, 2011 ● Registered capital of $3,001,159 (RMB 20,000,000) ● Software development, animation design and web design |
Noncontrolling Interest, Description | 51% owned by Fujian Roar Game Technology Co., Ltd . |
Name | Fuzhou CSFCTECH Co. Ltd. |
Xiamen Shengruihao Technology Co. Ltd [Member] | |
Business Acquisition, Description of Acquired Entity | ● A PRC limited liability company, acquired on September 30, 2022 ● Incorporated on June 30, 2021 ● Registered capital of $ 4,463,754 (RMB 30,000,000) ● Software development, animation design and web design |
Noncontrolling Interest, Description | 100% owned by Fujian Blue Hat Group Co. Ltd. |
Name | Xiamen Shengruihao Technology Co., Ltd |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND PRACTICES (Details) | 12 Months Ended |
Dec. 31, 2022 | |
Building [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 20 years |
Electronic Devices [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 3 years |
Furniture and Fixtures [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 3 years |
Automobiles [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 3 years |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND PRACTICES (Details Narrative) | 12 Months Ended | ||||||||
Dec. 20, 2021 USD ($) | Nov. 15, 2021 USD ($) | Sep. 30, 2021 USD ($) | Dec. 31, 2022 USD ($) shares | Dec. 31, 2022 USD ($) ¥ / shares | Dec. 31, 2021 USD ($) shares | Dec. 31, 2021 USD ($) ¥ / shares | Dec. 31, 2020 USD ($) | Dec. 31, 2020 USD ($) ¥ / shares | |
Operating loss | $ 9,410,000 | ||||||||
Operating cash flows | 1,600,000 | ||||||||
Translation adjustments | 834,513 | $ 2,459,256 | $ 1,741,696 | ||||||
Historical rate | ¥ / shares | ¥ 6.96 | ¥ 6.38 | ¥ 6.52 | ||||||
Average translation rates | ¥ / shares | ¥ 6.70 | ¥ 6.45 | ¥ 6.90 | ||||||
Allowance for the doubtful accounts | 5,083,245 | ¥ 5,083,245 | 6,394,429 | ¥ 6,394,429 | 565,793 | ¥ 565,793 | |||
Allowance for the doubtful accounts, Other receivables | 12,489,219 | 12,489,219 | 13,665,255 | 13,665,255 | |||||
Allowance for doubtful accounts prepayments | 1,368,535 | ¥ 1,368,535 | 1,487,210 | ¥ 1,487,210 | |||||
Impairment for long-lived assets | 29,716 | 14,632,931 | 0 | ||||||
Impairment charges on investments | 0 | 0 | 0 | ||||||
Shipping and handling costs | 2,927 | 25,892 | 38,025 | ||||||
Advertising costs | 977,631 | 3,494,507 | 2,763 | ||||||
Government subsidies | $ 19,969 | $ 99,948 | 28,623 | ||||||
Dilutive shares | shares | 925,681 | 746,321 | |||||||
Employee benefits | $ 111,987 | $ 104,287 | $ 23,235 | ||||||
Xunpusen (Xiamen) Technology Co. Ltd. [Member] | |||||||||
Gain on disposal | $ 683,688 | ||||||||
Xiamen Jiuqiao Technology [Member] | |||||||||
Gain on disposal | $ 811,269 | ||||||||
Shenyang Qimengxing Trading Co., Ltd. [Member] | |||||||||
Gain on disposal | $ 1,012 |
VARIABLE INTEREST ENTITY (Detai
VARIABLE INTEREST ENTITY (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Current assets | $ 21,532,070 | $ 21,704,144 | |
Property and equipment, net | 3,834,651 | 4,149,145 | |
Total assets | 34,276,858 | 36,511,577 | |
Total liabilities | (19,747,519) | (18,861,371) | |
Current liabilities: | |||
Short-term loans - banks | 1,261,944 | 860,915 | |
Accounts payable | 885,530 | 959,198 | |
Other payables and accrued liabilities | 11,447,052 | 11,389,737 | |
Operating lease liability - current | 11,261 | 97,054 | |
Customer deposits | 899,979 | 1,500,677 | |
Taxes payable | 2,074,321 | 2,265,919 | |
Total current liabilities | 17,408,208 | 18,281,724 | |
Operating lease liabilities | 31,041 | 62,057 | |
Gross profit | 3,998,349 | 6,482,924 | $ 13,420,020 |
Net (Loss) income from continuing operation | (9,405,081) | (61,548,565) | 8,047,864 |
Net income from discontinued operation | 233,153 | ||
Net income attributable to VIE’s | (9,405,081) | (60,054,620) | 8,281,017 |
Variable Interest Entity [Member] | |||
Current assets | 18,522,735 | 6,702,528 | |
Property and equipment, net | 102,688 | 211,924 | |
Other non-current assets | 8,910,138 | 10,672,824 | |
Total assets | 27,535,561 | 17,587,276 | |
Total liabilities | (10,027,011) | (10,825,262) | |
Net assets | 17,508,550 | 6,762,014 | |
Current liabilities: | |||
Short-term loans - banks | 1,261,944 | 860,915 | |
Current maturities of long-term loans third party | |||
Accounts payable | 910,686 | 959,198 | |
Other payables and accrued liabilities | 3,305,351 | 3,328,862 | |
Other payables related party | 193,407 | 211,271 | |
Operating lease liability - current | 11,257 | 97,052 | |
Customer deposits | 1,566,443 | 1,500,677 | |
Taxes payable | 2,746,882 | 3,287,640 | |
Total current liabilities | 9,995,970 | 10,245,615 | |
Operating lease liabilities | 31,041 | 62,057 | |
Long-term loans - third party | 517,590 | ||
Total liabilities | 10,027,011 | 10,825,262 | |
Revenues | 6,206,647 | 15,155,074 | 24,599,923 |
Gross profit | (3,057,854) | (6,482,924) | 13,420,020 |
(Loss) Income from operations | (3,891,685) | (55,966,045) | 11,511,579 |
Net (Loss) income from continuing operation | (5,191,833) | (55,453,545) | 9,548,866 |
Net income from discontinued operation | 833,876 | 233,153 | |
Non-controlling interest from continuing operation | (40,025) | (2,918,680) | |
Non-controlling interest from discontinued operation | 111,404 | ||
Net income attributable to VIE’s | $ (5,151,808) | $ (51,700,989) | $ 9,670,615 |
ACQUISITIONS (Details)
ACQUISITIONS (Details) - Xiamen Shengruihao [Member] | Dec. 31, 2022 USD ($) |
Business Acquisition [Line Items] | |
Prepayments | $ 1,436 |
Total assets acquired | 1,436 |
Other payables | (4,814) |
Tax payables | (238) |
Total Liabilities | (5,052) |
Net identifiable liabilities assumed | (3,616) |
Less: Foreign currency translation | (70) |
Add: Goodwill | 3,681 |
Total purchase price for acquisition net of $5 of cash | $ (5) |
ACQUISITIONS (Details 1)
ACQUISITIONS (Details 1) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Business Acquisition [Line Items] | ||
Operating lease liability | $ 42,302 | |
Less: Non-controlling interest | 2,420,399 | $ 2,460,424 |
Fresh Joy [Member] | ||
Business Acquisition [Line Items] | ||
Accounts receivables | 6,432,414 | |
Other receivables | 49,704 | |
Prepayments, net | 1,797,617 | |
Right-of-use assets | 91,513 | |
Property, plant and equipment, net | 148,095 | |
Intangible assets | 6,876,455 | |
Deferred tax assets | 136,546 | |
Total assets acquired | 15,532,344 | |
Accrued expenses and other payables | 2,462,953 | |
Taxes payable | 2,185,779 | |
Customer deposits | 597,380 | |
Short term loans, bank | 849,959 | |
Operating lease liability | 96,131 | |
Total Liabilities | 6,192,202 | |
Net identifiable assets acquired | 9,340,142 | |
Less: Non-controlling interest | 5,379,104 | |
Add: Goodwill | 3,792,056 | |
Total purchase price for acquisition net of $20,506 of cash | $ 7,753,094 |
ACQUISITIONS (Details 2)
ACQUISITIONS (Details 2) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Business Acquisition [Line Items] | ||
Less: 48.5% owned by Blue Hat Interactive Entertainment Technology | $ 2,420,399 | $ 2,460,424 |
Fujian Youth Hand In Hand Educational Technology [Member] | ||
Business Acquisition [Line Items] | ||
Accounts receivables | 78,772 | |
Other receivables | 10,321 | |
Inventories | 2,955 | |
Prepayments | 1,215,130 | |
Property, plant and equipment, net | 153 | |
Intangible assets, net | 910,284 | |
Total assets acquired | 2,217,615 | |
Accrued expenses and other payables | 1,993,335 | |
Total Liabilities | 1,993,335 | |
Net identifiable assets acquired | 224,280 | |
Less: 48.5% owned by Blue Hat Interactive Entertainment Technology | 75,547 | |
Add: Goodwill | 14,537 | |
Total purchase price for acquisition net of $944 of cash | $ 163,270 |
ACCOUNTS RECEIVABLE, NET (Detai
ACCOUNTS RECEIVABLE, NET (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Credit Loss [Abstract] | |||
Accounts receivable | $ 18,574,739 | $ 23,074,123 | |
Allowance for doubtful accounts | (5,083,245) | (6,394,429) | $ (565,793) |
Total accounts receivable, net | $ 13,491,494 | $ 16,679,694 |
ACCOUNTS RECEIVABLE, NET (Det_2
ACCOUNTS RECEIVABLE, NET (Details 1) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Credit Loss [Abstract] | ||
Beginning balance | $ 6,394,429 | $ 565,793 |
(Write-off)/Addition | (798,446) | 5,747,069 |
Exchange rate effect | (512,738) | 81,567 |
Ending balance | $ 5,083,245 | $ 6,394,429 |
OTHER RECEIVABLES, NET (Details
OTHER RECEIVABLES, NET (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Other Receivables Net | ||
Deposit for business acquisitions | $ 12,345,111 | $ 13,485,383 |
Deposit for set-up of research center | 86,150 | 94,107 |
Others | 4,762,413 | 3,062,247 |
Allowance for doubtful accounts | (12,489,219) | (13,665,255) |
Total other receivables, net | $ 4,704,455 | $ 2,976,482 |
OTHER RECEIVABLES, NET (Detai_2
OTHER RECEIVABLES, NET (Details 1) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Other Receivables Net | ||
Beginning balance | $ 13,665,255 | $ 32,937 |
(Write-off)/Addition | (20,554) | 13,471,554 |
Exchange rate effect | (1,155,482) | 160,764 |
Ending balance | $ 12,489,219 | $ 13,665,255 |
OTHER RECEIVABLES, NET (Detai_3
OTHER RECEIVABLES, NET (Details Narrative) | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
Yiang [Member] | |
Defined Benefit Plan Disclosure [Line Items] | |
Payment of refundable deposit | $ 5,992,987 |
Chengtai [Member] | |
Defined Benefit Plan Disclosure [Line Items] | |
Payment of refundable deposit | 6,352,124 |
Zhongrun [Member] | |
Defined Benefit Plan Disclosure [Line Items] | |
Payment of refundable deposit | $ 86,150 |
PREPAYMENTS, NET (Details)
PREPAYMENTS, NET (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Prepayments Net | ||
Prepayments | $ 61,370 | $ 628,810 |
Prepaid research and development expenses | 2,495,570 | 1,704,812 |
Promotion fee | 1,742,606 | 955,246 |
Other | 25,568 | 219,727 |
Total prepayments, net | 4,325,114 | 3,508,595 |
Prepayments - current | 3,198,079 | 3,290,993 |
Prepayments - non-current | 10,353,273 | 10,288,302 |
Allowance for doubtful accounts - current | 1,368,535 | 1,487,210 |
Allowance for doubtful accounts -non-current | $ (7,857,703) | $ (8,583,490) |
PREPAYMENTS, NET (Details 1)
PREPAYMENTS, NET (Details 1) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Prepayments Net | ||
Beginning balance | $ 10,070,700 | $ 147,631 |
Addition | 7,078 | 9,803,067 |
Exchange rate effect | (851,540) | 120,002 |
Ending balance | $ 9,226,238 | $ 10,070,700 |
LEASES (Details)
LEASES (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Leases [Abstract] | ||
Operating lease right of use assets | $ 40,596 | $ 155,223 |
Current operating lease liabilities | 11,261 | 97,054 |
Noncurrent operating lease liabilities | 31,041 | $ 62,057 |
Total operating lease liabilities | $ 42,302 | |
Weighted average remaining lease term (years) operating leases | 3 years 3 months 29 days | |
Weighted discount rate operating leases | 4.75% |
LEASES (Details 1)
LEASES (Details 1) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Leases [Abstract] | ||
2023 | $ 13,015 | |
2024 | 13,666 | |
2025 | 14,349 | |
2026 | 4,864 | |
2027 | ||
Total | 45,894 | |
Less: amount representing interest | 3,592 | |
Present value of future minimum lease payments | 42,302 | |
Operating lease liabilities - current | 11,261 | $ 97,054 |
Noncurrent operating lease liabilities | $ 31,041 | $ 62,057 |
LEASES (Details Narrative)
LEASES (Details Narrative) - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Leases [Abstract] | |||
Operating lease expense | $ 329,595 | $ 402,416 | $ 538,427 |
Operating lease commitments | $ 0 | $ 0 |
PROPERTY AND EQUIPMENT, NET (De
PROPERTY AND EQUIPMENT, NET (Details ) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Property, Plant and Equipment [Line Items] | ||
Subtotal | $ 5,075,160 | $ 5,306,426 |
Less: accumulated depreciation and amortization | (1,211,833) | (1,157,281) |
Less impairment | (28,676) | |
Total | 3,834,651 | 4,149,145 |
Building [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Subtotal | 4,322,359 | 4,322,359 |
Electronic Devices [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Subtotal | 658,691 | 674,497 |
Furniture and Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Subtotal | 63,322 | 71,865 |
Vehicles [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Subtotal | $ 30,788 | $ 237,705 |
PROPERTY AND EQUIPMENT, NET (_2
PROPERTY AND EQUIPMENT, NET (Details Narrative) - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |||
Depreciation expenses | $ 278,562 | $ 411,020 | $ 268,233 |
INTANGIBLE ASSETS, NET (Details
INTANGIBLE ASSETS, NET (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Finite-Lived Intangible Assets [Line Items] | ||
Less: accumulated amortization | $ (8,602,749) | $ (8,229,006) |
Less: impairment | (14,006,405) | (14,632,931) |
Intangible assets, net | 4,650,972 | 6,916,107 |
Patents [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, gross | 1,668,614 | 1,378,836 |
License [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, gross | 25,473,373 | 28,270,157 |
Software Development [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, gross | $ 118,139 | $ 129,051 |
INTANGIBLE ASSETS, NET (Detai_2
INTANGIBLE ASSETS, NET (Details 1) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2023 | $ 1,935,939 | |
2024 | 1,225,042 | |
2025 | 710,660 | |
2026 | 69,249 | |
2027 | 63,670 | |
Thereafter | 646,412 | |
Total | $ 4,650,972 | $ 6,916,107 |
INTANGIBLE ASSETS, NET (Detai_3
INTANGIBLE ASSETS, NET (Details Narrative) - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Amortization | $ 1,680,334 | $ 3,451,000 | $ 740,641 |
LONG-TERM INVESTMENTS (Details
LONG-TERM INVESTMENTS (Details Narrative) - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Impairment loss on investments | $ 0 | $ 0 | $ 0 |
Xiamen Blue Wave [Member] | |||
Equity interest | 20% | ||
Ownership percentage diluted | 15% | ||
Carrying value of cost method investment | $ 1,722,999 | $ 1,882,146 | $ 1,839,109 |
Renchao Huyu [Member] | |||
Equity interest | 49% | ||
Shanghai [Member] | |||
Equity interest | 51% |
CREDIT FACILITIES (Details)
CREDIT FACILITIES (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Short-Term Debt [Line Items] | ||
Short-term bank loans | $ 1,261,944 | $ 860,915 |
China Merchants Bank [Member] | ||
Short-Term Debt [Line Items] | ||
Bank Name | China Merchants Bank | |
Maturities | October 2014 | |
Interest rate | 7.50% | |
Collateral/ Guarantee | Guarantee by 26 property rights | |
Short-term bank loans | $ 788,119 | 860,915 |
Xiamen Rural Commercial Bank [Member] | ||
Short-Term Debt [Line Items] | ||
Bank Name | Xiamen Rural Commercial Bank | |
Maturities | February 2023 | |
Interest rate | 6.58% | |
Collateral/ Guarantee | Guarantee by 14 property rights | |
Short-term bank loans | $ 473,825 |
CREDIT FACILITIES (Details 1)
CREDIT FACILITIES (Details 1) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Short-Term Debt [Line Items] | ||
Total | $ 517,590 | |
Xiamen Rural Commercial Bank One [Member] | ||
Short-Term Debt [Line Items] | ||
Total | 517,590 | |
Xiamen Rural Commercial Bank One [Member] | ||
Short-Term Debt [Line Items] | ||
Bank Name | Xiamen Rural Commercial Bank | |
Maturities | February 2023 | |
Interest rate | 6.58% | |
Long term loans - banks | $ 517,590 |
CREDIT FACILITIES (Details Narr
CREDIT FACILITIES (Details Narrative) - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Credit Facilities | |||
Interest expense | $ 331,277 | $ 398,963 | $ 248,103 |
OTHER PAYABLES AND ACCRUED LI_3
OTHER PAYABLES AND ACCRUED LIABILITIES (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Payables and Accruals [Abstract] | ||
Payables to non-trade vendors and service providers | $ 10,064,937 | $ 9,915,900 |
Salary payables | 231,333 | 404,493 |
Interest payable | 1,094,265 | 987,231 |
Other miscellaneous payables | 56,517 | 82,113 |
Total other payables and accrued liabilities | $ 11,447,052 | $ 11,389,737 |
CONVERTIBLE BONDS PAYABLE (Deta
CONVERTIBLE BONDS PAYABLE (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Debt Disclosure [Abstract] | ||
Beginning Balance | $ 739,189 | |
Addition | 1,550,000 | |
Interest expenses | (100,314) | |
Conversion | 256,815 | 739,189 |
Conversion | (256,815) | (739,189) |
Convertible debt, net | $ 1,393,499 |
CONVERTIBLE NOTES PAYABLE (Deta
CONVERTIBLE NOTES PAYABLE (Details Narrative) - USD ($) | 12 Months Ended | ||||
Oct. 14, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Oct. 31, 2022 | |
Debt Instrument [Line Items] | |||||
Gross proceeds from issuance of convertible note | $ (1,550,000) | $ (739,189) | |||
Conversion price | 80% | ||||
Convertible Debt [Member] | |||||
Debt Instrument [Line Items] | |||||
Share price | $ 0.01 | ||||
Gross proceeds from issuance of convertible note | $ 1,550,000 | ||||
Conversion principal amount | $ 1,705,000 | ||||
Conversion price | 6% | ||||
Share price | $ 0.70 | ||||
Floor Price | $ 0.70 | ||||
Convertible Debt [Member] | Streeterville Capital L L C [Member] | |||||
Debt Instrument [Line Items] | |||||
Conversion principal amount | $ 1,705,000 | ||||
Conversion price | 6% |
RELATED PARTY BALANCES AND TR_3
RELATED PARTY BALANCES AND TRANSACTIONS (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Related Party Transaction [Line Items] | ||
Account receivables - related party | $ 1,428,913 | |
Xiaodong Chen [Member] | ||
Related Party Transaction [Line Items] | ||
Account receivables - related party | 2 | |
Xiamen Jiuqiao Tech [Member] | ||
Related Party Transaction [Line Items] | ||
Account receivables - related party | 1,430,086 | |
Huaqiang Yang [Member] | ||
Related Party Transaction [Line Items] | ||
Account receivables - related party | $ 31,085 |
RELATED PARTY BALANCES AND TR_4
RELATED PARTY BALANCES AND TRANSACTIONS (Details 1) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Related Party Transaction [Line Items] | ||
Other payables - related party | $ 164,943 | $ 186,503 |
Xiaodong Chen [Member] | ||
Related Party Transaction [Line Items] | ||
Other payables - related party | 21,107 | 32,244 |
Huaqiang Yang [Member] | ||
Related Party Transaction [Line Items] | ||
Other payables - related party | 140,041 | 154,259 |
Bequtiful Jade Ltd [Member] | ||
Related Party Transaction [Line Items] | ||
Other payables - related party | $ 3,795 |
RELATED PARTY BALANCES AND TR_5
RELATED PARTY BALANCES AND TRANSACTIONS (Details 2) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Related Party Transaction [Line Items] | ||
Long term loans - related party | $ 914,771 | |
Xiaodong Chen [Member] | ||
Related Party Transaction [Line Items] | ||
Long term loans - related party | $ 914,771 |
TAXES (Details)
TAXES (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |||
Current | $ 1,097,888 | $ 138,061 | |
The provision for income taxes | $ 1,097,888 | $ 138,061 | $ 1,672,957 |
TAXES (Details 1)
TAXES (Details 1) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |||
China statutory income tax rate | 25% | 25% | 25% |
Preferential tax rate reduction | (10.00%) | (10.00%) | (10.00%) |
Permanent difference | (15.20%) | (15.20%) | 2.10% |
Effective tax rate | (0.20%) | (0.20%) | 17.10% |
TAXES (Details 2)
TAXES (Details 2) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Income Tax Disclosure [Abstract] | ||
VAT taxes payable | $ 471,604 | $ 843,257 |
Income taxes payable | 2,074,321 | 2,265,919 |
Other taxes payable | 191,574 | 178,464 |
Totals | $ 2,737,499 | $ 3,287,640 |
Taxes (Details Narrative)
Taxes (Details Narrative) - USD ($) | 12 Months Ended | |||
Apr. 30, 2019 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Operating Loss Carryforwards [Line Items] | ||||
Tax savings | $ 0 | $ 0 | $ 1,115,176 | |
Basic and diluted earnings per shares | $ 0 | $ 0 | $ 0.03 | |
Allowance for doubtful accounts | $ 27,000,000 | $ 30,000,000 | $ 700,000 | |
Deferred tax assets | 0 | 0 | 119,000 | |
Valuation allowances | 0 | 0 | ||
Uncertain tax positions | 0 | 0 | 0 | |
Interest and penalties tax | $ 0 | $ 0 | $ 0 | |
Hong Kong [Member] | ||||
Operating Loss Carryforwards [Line Items] | ||||
Tax rate | 16.50% | |||
PRC [Member] | ||||
Operating Loss Carryforwards [Line Items] | ||||
Tax rate | 15% | |||
Chinese V A T [Member] | ||||
Operating Loss Carryforwards [Line Items] | ||||
Value added tax rate | 16% | |||
Chinese VAT [Member] | ||||
Operating Loss Carryforwards [Line Items] | ||||
Value added tax rate | 13% | |||
Chinese V A T 2 [Member] | ||||
Operating Loss Carryforwards [Line Items] | ||||
Value added tax rate | 6% |
CONCENTRATION OF RISK (Details
CONCENTRATION OF RISK (Details Narrative) - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Concentration Risk [Line Items] | |||
Cash | $ 76,535 | $ 134,605 | $ 15,752,639 |
One Customers [Member] | Revenue Benchmark [Member] | |||
Concentration Risk [Line Items] | |||
Concentration Risk, Percentage | 30.10% | 14.60% | 10.40% |
Two Customers [Member] | Revenue Benchmark [Member] | |||
Concentration Risk [Line Items] | |||
Concentration Risk, Percentage | 16.98% | 10.90% | |
First Vendor [Member] | Purchases [Member] | |||
Concentration Risk [Line Items] | |||
Concentration Risk, Percentage | 22.67% | 39.72% | 38.24% |
Second Vendor [Member] | Purchases [Member] | |||
Concentration Risk [Line Items] | |||
Concentration Risk, Percentage | 13.82% | 29.96% | 36.57% |
Third Vendor [Member] | Purchases [Member] | |||
Concentration Risk [Line Items] | |||
Concentration Risk, Percentage | 13.09% | 28.40% | |
One Vendor [Member] | Accounts Payable [Member] | |||
Concentration Risk [Line Items] | |||
Concentration Risk, Percentage | 60.60% | 10.10% | 6.50% |
Two Vendor [Member] | Accounts Payable [Member] | |||
Concentration Risk [Line Items] | |||
Concentration Risk, Percentage | 13.70% |
SHAREHOLDERS_ EQUITY (Details N
SHAREHOLDERS’ EQUITY (Details Narrative) - USD ($) | 12 Months Ended | ||||||||||||||
Aug. 04, 2022 | Aug. 02, 2022 | Jul. 26, 2022 | Jun. 30, 2022 | Jun. 06, 2022 | May 24, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Jul. 11, 2022 | May 10, 2022 | Mar. 30, 2022 | Dec. 09, 2020 | Jul. 15, 2020 | Jun. 13, 2018 | |
Class of Stock [Line Items] | |||||||||||||||
Common stock, shares authorized | 100,000,000 | 100,000,000 | |||||||||||||
Common stock, par value | $ 0.01 | $ 0.01 | |||||||||||||
Statutory reserves | |||||||||||||||
Capital contributions | $ 7,908,957 | 12,830,780 | $ 2,698,046 | ||||||||||||
Equity Incentive Plan 2020 [Member] | |||||||||||||||
Class of Stock [Line Items] | |||||||||||||||
Ordinary shares issued | 600,000 | 10 | 6,000,000 | ||||||||||||
Shares price | $ 0.01 | $ 0.001 | $ 0.001 | ||||||||||||
Share consolidation | 1 | ||||||||||||||
Consolidation shares price | $ 0.01 | ||||||||||||||
Blue Hat PRC [Member] | |||||||||||||||
Class of Stock [Line Items] | |||||||||||||||
Paid-in-capital and statutory reserve | $ 46,388,025 | 38,479,068 | 25,709,210 | ||||||||||||
Statutory reserves | $ 0 | $ 60,922 | $ 914,409 | ||||||||||||
Securities Purchase Agreement [Member] | |||||||||||||||
Class of Stock [Line Items] | |||||||||||||||
Consideration received on sale of securities | $ 10,000,000 | ||||||||||||||
Ordinary shares issued | 500,000 | 94,429 | |||||||||||||
Shares price | $ 0.01 | ||||||||||||||
Shares price | $ 3.60 | ||||||||||||||
Ordinary shares exercised | 108,714 | 100,933 | 60,845 | ||||||||||||
Exercise price | $ 2.24 | $ 2.51 | $ 2.65 | ||||||||||||
Warrants issued | 300,000 | ||||||||||||||
Consulting Service Agreement [Member] | |||||||||||||||
Class of Stock [Line Items] | |||||||||||||||
Ordinary shares issued | 3,000,000 | ||||||||||||||
Shares price | $ 0.001 | ||||||||||||||
Shares price | $ 0.001 | ||||||||||||||
Aggregate shares issued | 5,000,000 | ||||||||||||||
Restricted ordinary shares | 8,000,000 | ||||||||||||||
Ordinary Shares [Member] | |||||||||||||||
Class of Stock [Line Items] | |||||||||||||||
Common stock, shares authorized | 500,000,000 | ||||||||||||||
Common stock, par value | $ 0.01 | ||||||||||||||
Shares for reverse split | 35,641,462 | ||||||||||||||
Requested shares | 3,572,818 | ||||||||||||||
Additional shares issued | 8,762 | ||||||||||||||
Ordinary Shares [Member] | Consulting Service Agreement [Member] | |||||||||||||||
Class of Stock [Line Items] | |||||||||||||||
Shares price | $ 0.001 | ||||||||||||||
Restricted ordinary shares | 2,800,000 | ||||||||||||||
Ordinary Shares 1 [Member] | Consulting Service Agreement [Member] | |||||||||||||||
Class of Stock [Line Items] | |||||||||||||||
Shares price | $ 0.001 | ||||||||||||||
Restricted ordinary shares | 2,600,000 |
IMPAIRMENT LOSS (Details Narrat
IMPAIRMENT LOSS (Details Narrative) - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Impairment Effects on Earnings Per Share [Line Items] | |||
Impairment loss related to goodwill | $ 33,397 | $ 18,440,000 | |
Goodwill impairment loss | 3,681 | 3,810,000 | |
Impairment loss related to licensed software | 0 | 14,630,000 | |
Impairment of property plant and equipment | 29,716 | ||
Property, Plant and Equipment [Member] | |||
Impairment Effects on Earnings Per Share [Line Items] | |||
Impairment of property plant and equipment | $ 29,716 | $ 0 |
DISCONTINUED OPERATIONS (Detail
DISCONTINUED OPERATIONS (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Revenues | $ 7,376,009 | $ 15,155,074 | $ 24,599,923 |
Cost of sales | (3,377,660) | (8,672,150) | (11,179,903) |
Gross profit | 3,998,349 | 6,482,924 | 13,420,020 |
Operating expenses: | |||
General and Administrative | (6,369,245) | (32,032,186) | (2,488,320) |
Selling expenses | (1,133,625) | (3,799,640) | (480,368) |
Research and development | (4,461,888) | (13,169,157) | (246,923) |
Total | (11,998,155) | (67,440,507) | (3,215,611) |
Other income (expense) | |||
Interest income | 374 | 156,038 | 147,820 |
Other finance expenses | (15,564) | (66,233) | (82,311) |
Total | (307,387) | (452,921) | (483,588) |
Loss from discontinued operations before income tax | 233,153 | ||
Income tax provision | (1,097,888) | (138,061) | $ (1,672,957) |
Discontinued Operations [Member] | |||
Revenues | 16,464,160 | ||
Cost of sales | (13,741,705) | ||
Gross profit | 2,722,455 | ||
Operating expenses: | |||
General and Administrative | (281,460) | ||
Selling expenses | (881,654) | ||
Research and development | (6,959) | ||
Total | (1,552,382) | ||
Other income (expense) | |||
Interest income | 378 | ||
Other (expense) income, net | 66,871 | ||
Other finance expenses | (14,939) | ||
Total | 52,310 | ||
Loss from discontinued operations before income tax | 1,604,692 | ||
Income tax provision | (593,389) | ||
Income from discontinued operations before non-controlling interest | 1,011,303 | ||
Less: Net loss attributable to non-controlling interest | |||
Income from discontinued operation | $ 1,011,303 |
DISCONTINUED OPERATIONS (Deta_2
DISCONTINUED OPERATIONS (Details 1) - Discontinued Operations [Member] - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Cash | $ 866,075 | |
Accounts receivable | 2,990,419 | |
Other current assets | 7,041,322 | |
Prepayments, net | 2,644,553 | |
Inventories | 130,532 | |
Property, plant and equipment, net | 17,044 | |
Other non-current assets | 70,454 | |
Total assets related to discontinued operations | 13,760,399 | |
Accounts payable | 813,038 | |
Other payables and accrued expenses | 794,599 | |
Operating lease liabilities-current | 20,621 | |
Customer deposits | 865,717 | |
Tax payables | 2,334,922 | |
Other non-current liabilities | 29,051 | |
Total liabilities related to discontinued operations | $ 4,857,948 |
DISCONTINUED OPERATIONS (Deta_3
DISCONTINUED OPERATIONS (Details Narrative) - USD ($) | Dec. 20, 2021 | Nov. 15, 2021 | Sep. 30, 2021 |
Xunpusen (Xiamen) Technology Co. Ltd. [Member] | |||
Gain on disposal | $ 683,688 | ||
Xiamen Jiuqiao Technology [Member] | |||
Gain on disposal | $ 811,269 | ||
Shenyang Qimengxing Trading Co., Ltd. [Member] | |||
Gain on disposal | $ 1,012 |
SUBSEQUENT EVENT (Details Narra
SUBSEQUENT EVENT (Details Narrative) - Securities Purchase Agreement [Member] - $ / shares | Mar. 28, 2023 | Jul. 11, 2022 |
Subsequent Event [Line Items] | ||
Shares price | $ 0.01 | |
Subsequent Event [Member] | ||
Subsequent Event [Line Items] | ||
Sale of ordinary shares | 4,000,000 | |
Shares price | $ 0.01 | |
Purchase price | $ 0.70 |
SEGMENT INFORMATION AND REVEN_3
SEGMENT INFORMATION AND REVENUE ANALYSIS (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Segment Reporting Information [Line Items] | |||
Total revenues | $ 7,376,009 | $ 15,155,074 | $ 24,599,923 |
Interactive Toy Animation Series [Member] | |||
Segment Reporting Information [Line Items] | |||
Total revenues | 9,061 | 657,619 | 1,575,903 |
Interactive toys - game series [Member] | |||
Segment Reporting Information [Line Items] | |||
Total revenues | 155,559 | 8,723,480 | 16,131,115 |
Mobile game [Member] | |||
Segment Reporting Information [Line Items] | |||
Total revenues | 5,181,410 | 4,165,456 | 2,506,285 |
Information service [Member] | |||
Segment Reporting Information [Line Items] | |||
Total revenues | 884,329 | 1,608,519 | 4,386,620 |
Commodity Trading [Member] | |||
Segment Reporting Information [Line Items] | |||
Total revenues | $ 1,145,650 |
SEGMENT INFORMATION AND REVEN_4
SEGMENT INFORMATION AND REVENUE ANALYSIS (Details 1) - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Segment Reporting Information [Line Items] | |||
Revenue | $ 7,376,009 | $ 15,155,074 | $ 24,599,923 |
Cost of sales | (3,377,660) | (8,672,150) | (11,179,903) |
Gross Profit | 3,998,349 | 6,482,924 | 13,420,020 |
Interactive toys - animation series [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenue | 9,061 | 657,619 | 1,575,903 |
Cost of sales | (34,192) | (140,450) | (1,331,731) |
Gross Profit | (25,131) | 517,169 | 244,172 |
Interactive toys - game series [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenue | 155,559 | 8,723,480 | 16,131,115 |
Cost of sales | (78,118) | (4,340,776) | (5,503,184) |
Gross Profit | 77,441 | 4,382,704 | 10,627,931 |
Mobile game [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenue | 5,181,410 | 4,165,456 | 2,506,285 |
Cost of sales | (2,419,222) | (2,889,486) | (10,577) |
Gross Profit | 2,762,188 | 1,275,970 | 2,495,708 |
Information service [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenue | 884,329 | 1,608,519 | 4,386,620 |
Cost of sales | (826,096) | (1,301,438) | (4,334,411) |
Gross Profit | 58,233 | $ 307,081 | $ 52,209 |
Glycol [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenue | 1,145,650 | ||
Cost of sales | (20,032) | ||
Gross Profit | $ 1,125,618 |
SEGMENT INFORMATION AND REVEN_5
SEGMENT INFORMATION AND REVENUE ANALYSIS (Details 2) - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Total revenues | $ 7,376,009 | $ 15,155,074 | $ 24,599,923 |
Domestic PRC [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Total revenues | 7,376,009 | 15,155,074 | 24,599,923 |
Export [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Total revenues |
CONDENSED FINANCIAL INFORMATI_3
CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Current assets: | |||
Cash and cash equivalents | $ 135,562 | $ 15,752,704 | |
Other receivables, net | $ 4,704,455 | 2,976,482 | |
Total current assets | 21,532,070 | 21,704,144 | |
Non-current assets: | |||
Property, plant and equipment, net | 3,834,651 | 4,149,145 | |
Total non-current assets | 12,744,788 | 14,807,433 | |
Total assets | 34,276,858 | 36,511,577 | |
LIABILITIES | |||
Other payables and accrued liabilities | 11,447,052 | 11,389,737 | |
Other payables - related party | 164,943 | 186,503 | |
Short-term loans | 1,261,944 | 860,915 | |
Convertible notes payable | 1,393,499 | 739,189 | |
Total current liabilities | 17,408,208 | 18,281,724 | |
Non-current liabilities | 2,339,311 | 579,647 | |
Total liabilities | 19,747,519 | 18,861,371 | |
SHAREHOLDERS’ EQUITY | |||
Ordinary shares, $0.01 par value, 100,000,000 shares authorized, 9,894,734, 5,382,383 shares issued and outstanding as of December 31, 2022 and 2021 respectively | 98,947 | 53,824 | |
Additional paid-in capital | 44,145,826 | 36,281,992 | |
Statutory reserves | 2,143,252 | 2,143,252 | |
Retained earnings | 35,113,598 | 25,748,542 | |
Accumulated other comprehensive losses | 834,513 | 2,459,256 | |
Total Blue Hat Interactive Entertainment Technology shareholders’ equity | 12,108,940 | 15,189,782 | |
Non-controlling interests | 2,420,399 | 2,460,424 | |
Total equity | 14,529,339 | 17,650,206 | 58,949,708 |
Total liabilities and shareholders’ equity | 34,276,858 | 36,511,577 | |
Operating expenses: | |||
General and administrative expenses | (6,369,245) | (32,032,186) | (2,488,320) |
Research and development | (4,461,888) | (13,169,157) | (246,923) |
Other income (expenses): | |||
FOREIGN CURRENCY TRANSLATION ADJUSTMENT | 1,624,743 | (717,560) | |
FOREIGN CURRENCY TRANSLATION ADJUSTMENT | (1,624,743) | 717,560 | |
COMPREHENSIVE (LOSS) INCOME | 40,025 | 2,918,680 | (111,404) |
Comprehensive income attributable to Blue Hat Interactive Entertainment Technology shareholders | 11,029,824 | 59,337,060 | (11,501,380) |
Comprehensive income attributable to Blue Hat Interactive Entertainment Technology shareholders | (11,029,824) | (59,337,060) | 11,501,380 |
CASH FLOWS FROM OPERATING ACTIVITIES: | |||
Net income | 9,365,056 | 57,135,940 | (8,169,613) |
Net income from discontinued operation | 233,153 | ||
Net income from continuing operation | 9,405,081 | 61,548,565 | (8,047,864) |
Changes in operating assets and liabilities: | |||
Other receivables | 385,105 | (2,058,397) | (1,159,776) |
Other payables and accrued liabilities | (52,501) | 2,584,323 | 1,882,550 |
Net cash used in operating activities | 1,598,493 | 22,284,750 | (5,052,415) |
CASH FLOWS FROM INVESTING ACTIVITIES: | |||
Purchases of property and equipment | (3,429) | (142,914) | (2,207,894) |
Net cash used in investing activities | (6,336) | 4,498,355 | 10,761,890 |
CASH FLOWS FROM FINANCING ACTIVITIES: | |||
Proceeds from short-term loans | 3,477,422 | ||
Repayment of short-term loans | (4,663,292) | (4,349,339) | |
Net cash used in investing activities | 2,530,674 | 7,574,848 | 2,493,110 |
EFFECT OF EXCHANGE RATE ON CASH | (997,544) | 1,113,717 | 3,547,033 |
NET CHANGES IN CASH AND CASH EQUIVALENTS | 59,027 | 15,617,142 | (321,976) |
CASH AND CASH EQUIVALENTS, beginning of year | 135,562 | 15,752,704 | 15,478,587 |
CASH AND CASH EQUIVALENTS, end of year | 135,562 | 15,752,704 | |
SUPPLEMENTAL CASH FLOW | |||
Cash and cash equivalents | 135,562 | 15,752,704 | |
Restricted cash | 1,129 | ||
Parent Company [Member] | |||
Current assets: | |||
Cash and cash equivalents | 6,791 | 8,758 | 712,894 |
Other receivables, net | 3,524,253 | 204,400 | |
Total current assets | 3,531,044 | 213,158 | |
Non-current assets: | |||
Property, plant and equipment, net | 3,731,963 | 3,937,222 | |
Investment in subsidiaries | 17,619,903 | 21,873,789 | |
Total non-current assets | 21,351,866 | 25,811,011 | |
Total assets | 24,882,910 | 26,024,169 | |
LIABILITIES | |||
Other payables and accrued liabilities | 8,041,502 | 8,364,775 | |
Other payables - related party | 3,799 | 9,188 | |
Short-term loans | |||
Convertible notes payable | |||
Total current liabilities | 8,045,301 | 8,373,963 | |
Non-current liabilities | 2,308,270 | ||
Total liabilities | 10,353,571 | 8,373,963 | |
SHAREHOLDERS’ EQUITY | |||
Ordinary shares, $0.01 par value, 100,000,000 shares authorized, 9,894,734, 5,382,383 shares issued and outstanding as of December 31, 2022 and 2021 respectively | 98,947 | 53,824 | |
Additional paid-in capital | 44,145,826 | 36,281,992 | |
Statutory reserves | 2,143,252 | 2,143,252 | |
Retained earnings | (35,113,598) | (25,748,542) | |
Accumulated other comprehensive losses | 834,513 | 2,459,256 | |
Total Blue Hat Interactive Entertainment Technology shareholders’ equity | 12,108,940 | 15,189,782 | |
Non-controlling interests | 2,420,399 | 2,460,424 | |
Total equity | 14,529,339 | 17,650,206 | |
Total liabilities and shareholders’ equity | 24,882,910 | 26,024,169 | |
Operating expenses: | |||
General and administrative expenses | (2,621,808) | (1,169,384) | (1,307,167) |
Research and development | (2,278,990) | ||
Other income (expenses): | |||
(Interest expense)/interest income | (100,314) | (169,366) | (175,386) |
Other finance expenses | (6,998) | (10,442) | (18,442) |
Equity income of subsidiaries and VIEs from continue operation | (4,396,971) | (60,199,373) | 9,548,859 |
Equity income of subsidiaries and VIEs from discontinued operation | 1,493,945 | 233,153 | |
NET (LOSS) INCOME | (9,405,081) | (60,054,620) | 8,281,017 |
FOREIGN CURRENCY TRANSLATION ADJUSTMENT | (1,624,743) | (717,560) | (3,220,363) |
FOREIGN CURRENCY TRANSLATION ADJUSTMENT | 1,624,743 | 717,560 | 3,220,363 |
COMPREHENSIVE (LOSS) INCOME | (11,029,824) | (59,337,060) | 11,501,380 |
Less: Comprehensive income attributable to non-controlling interest | (40,025) | (2,918,680) | 111,404 |
Comprehensive income attributable to Blue Hat Interactive Entertainment Technology shareholders | (10,989,799) | (56,418,380) | (11,389,976) |
Comprehensive income attributable to Blue Hat Interactive Entertainment Technology shareholders | 10,989,799 | 56,418,380 | 11,389,976 |
CASH FLOWS FROM OPERATING ACTIVITIES: | |||
Net income | (9,405,081) | (60,054,620) | 8,281,017 |
Net income from discontinued operation | 1,493,945 | 233,153 | |
Net income from continuing operation | (9,405,081) | (61,548,565) | 8,047,864 |
Adjustments to reconcile net income to cash used in operating activities: | |||
Equity income of subsidiaries and VIEs | 4,396,971 | 60,199,373 | (9,548,859) |
Changes in operating assets and liabilities: | |||
Depreciation of property and equipment | 205,259 | 205,398 | 179,740 |
Other receivables | (3,319,855) | 395,600 | |
Other payables and accrued liabilities | (323,274) | 5,869,181 | 925,409 |
Net cash used in operating activities | (8,445,980) | 5,120,987 | (395,846) |
CASH FLOWS FROM INVESTING ACTIVITIES: | |||
Purchases of property and equipment | (2,159,910) | ||
Investment in subsidiary | (1,767,824) | (14,923,600) | (7,660,000) |
Net cash used in investing activities | (1,767,824) | (14,923,600) | (9,819,910) |
CASH FLOWS FROM FINANCING ACTIVITIES: | |||
Proceeds from issue of new shares | 2,110,845 | ||
Proceeds from secured convertible promissory note Bonds | 739,189 | ||
Underwriter’s partial exercise of over-allotment option, net of issuance costs | (7,908,956) | (12,830,780) | |
Proceeds from initial public offering, net of issuance costs | |||
Other payables related party | (5,389) | 5,880 | 3,039 |
Proceeds from short-term loans | 2,998,994 | ||
Repayment of short-term loans | (2,998,994) | ||
Proceeds from long-term loans - related party | 914,771 | ||
Repayment of convertible payables | (739,189) | ||
Proceeds from convertible payables | 1,393,499 | ||
Net cash used in investing activities | 10,211,837 | 9,098,477 | 5,852,067 |
EFFECT OF EXCHANGE RATE ON CASH | |||
NET CHANGES IN CASH AND CASH EQUIVALENTS | (1,967) | (704,136) | (4,363,689) |
CASH AND CASH EQUIVALENTS, beginning of year | 8,758 | 712,894 | 5,076,583 |
CASH AND CASH EQUIVALENTS, end of year | 6,791 | 8,758 | 712,894 |
SUPPLEMENTAL CASH FLOW | |||
Cash and cash equivalents | 6,791 | 8,758 | 712,894 |
Restricted cash | |||
CASH AND CASH EQUIVALENTS, end of year | $ 6,791 | $ 8,758 | $ 712,894 |