CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY

12 Months Ended

Dec. 31, 2023

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, 2023 and 2022.

PARENT COMPANY BALANCE SHEETS

	December 31, 2023			December 31, 2022
ASSETS
Current assets:
Cash and cash equivalents	$	23,107		$	6,791
Account receivables, net		15,090,224			—
Other receivables, net		4,299,894			3,524,253
Inventories		17,178,241			—
Total current assets		36,591,466			3,531,044
Non-current assets:
Property, plant and equipment, net		3,526,773			3,731,963
Investment in subsidiaries		1,961,211			17,619,903
Total non-current assets		5,487,984			21,351,866
Total assets	$	42,079,450		$	24,882,910
LIABILITIES AND SHAREHOLDERS’ EQUITY
LIABILITIES
Other payables and accrued liabilities	$	622,425		$	8,041,502
Other payables - related party		—			3,799
Short-term loans		—			—
Convertible notes payable		—			—
Total current liabilities		622,425			8,045,301
Non-current liabilities		834,950			2,308,270
Total liabilities		1,457,375			10,353,571
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS’ EQUITY
Ordinary shares, $0.01 par value, 100,000,000 shares authorized, 58,398,281, 9,894,734, shares issued and outstanding as of December 31, 2023 and 2022 respectively		583,983			98,947
Additional paid-in capital		93,828,090			44,145,826
Statutory reserves		2,143,252			2,143,252
Retained earnings		(56,832,015	)		(35,113,598	)
Accumulated other comprehensive losses		898,766			834,513
Total Blue Hat Interactive Entertainment Technology shareholders’ equity		40,622,075			12,108,940
Non-controlling interest		—			2,420,399
Total equity		40,622,075			14,529,339
Total liabilities and shareholders’ equity	$	42,079,450		$	24,882,910

PARENT COMPANY STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

	Year ended December 31,			Year ended December 31,			Year ended December 31,
	2023			2022			2021
Revenues		15,152,777			—			—
Cost of sales		(13,901,688	)		—			—
Gross profit		1,251,089			—			—
Operating expenses:
General and administrative expenses	$	(2,195,689	)	$	(2,621,808	)	$	(1,169,384	)
Research and development		(2,438,520	)		(2,278,990	)		—
Impairment loss		(12,600,000	)
Other income (expenses):
(Interest expense)/interest income		(146,322	)		(100,314	)		(169,366	)
Other finance expenses		(60,032	)		(6,998	)		(10,442	)
Equity income of subsidiaries and VIEs from continue operation		(12,918,251	)		(4,114,945	)		(50,143,624	)
Equity income of subsidiaries and VIEs from discontinued operation		7,389,310			(282,027	)		(8,561,804	)
NET (LOSS) INCOME		(21,718,417	)		(9,405,081	)		(60,054,620	)
FOREIGN CURRENCY
Translation adjustment from continued operation		(199,032	)		(1,883,571	)		651,272
Translation adjustment from discontinued operation		263,285			258,828			66,288
COMPREHENSIVE (LOSS) INCOME	$	(21,654,164	)	$	(11,029,824	)	$	(59,337,060	)
Less: Comprehensive income attributable to non-controlling interest		(2,420,399	)		(40,025	)		(2,918,680	)
Comprehensive income attributable to
Blue Hat Interactive Entertainment Technology shareholders	$	(19,233,765	)	$	(10,989,799	)	$	56,418,380

PARENT COMPANY STATEMENTS OF CASH FLOWS

	Year ended			Year ended			Year ended
	December 31,			December 31,			December 31,
	2023			2022			2021
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income from continued operation	$	(29,107,727	)	$	(9,123,054	)	$	(51,492,816	)
Adjustments to reconcile net income to cash used in operating activities:
Impairment loss of inventory		12,600,000
Equity income of subsidiaries and VIEs		12,918,251			4,114,945			50,143,624
Changes in operating assets and liabilities:
Depreciation of property and equipment		205,190			205,259			205,398
Other receivables		(15,865,859	)		(3,319,855	)		395,600
Inventories		(17,178,241	)		—			—
Other payables and accrued liabilities		(7,419,077	)		(323,274	)		5,869,181
Net cash used in operating activities		(43,847,463	)		(8,445,980	)		5,120,987
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment		7,773,600			—			—
Investment in subsidiary		—			(1,767,824	)		(14,923,600	)
Net cash used in investing activities		7,773,600			(1,767,824	)		(14,923,600	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Underwriter’s partial exercise of over-allotment option, net of issuance costs		37,567,299			7,908,956			12,830,780
Other payables related party		(3,799	)		(5,389	)		5,880
Repayment of short-term loans		—			—			(2,998,994	)
Proceeds from long-term loans - related party		—			914,771			—
Repayment of long-term loans - related party		(79,821	)		—			—
Repayment of convertible payables		(1,393,499	)		—			(739,189	)
Proceeds from convertible payables		—			1,393,499			—
Net cash used in investing activities		36,090,179			10,211,837			9,098,477
EFFECT OF EXCHANGE RATE ON CASH		—			—			—
NET CHANGES IN CASH AND CASH EQUIVALENTS		16,316			(1,967	)		(704,136	)
CASH AND CASH EQUIVALENTS, Beginning of year		6,791			8,758			712,894
CASH AND CASH EQUIVALENTS, end of year	$	23,107		$	6,791		$	8,758
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash and cash equivalents	$	23,107		$	6,791		$	8,758
Restricted cash		—			—			—
CASH AND CASH EQUIVALENTS, end of year	$	23,107		$	6,791		$	8,758