Blue Hat Interactive Entertainment Technology File: E1438 424(B)(4).Htm Type: 424(B)(4) Pg: a of 155
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Date: July 29, 2019 6:59 PM Project: e1438 Form Type: 424(b)(4) Client: Blue Hat Interactive Entertainment Technology File: e1438_424(b)(4).htm Type: 424(b)(4) Pg: a of 155 Filed Pursuant to Rule 424(b)(4) Registration Nos. 333-230051 and 333-232840 PROSPECTUS 2, 000,000 Ordinary Shares Blue Hat Interactive Entertainment Technology We are offering 2, 000,000 ordinary shares. This is the initial public offering of ordinary shares of Blue Hat Interactive Entertainment Technology. The offering price of our ordinary shares in this offering is $4.00 per share. Prior to this offering, there has been no public market for our ordinary shares. Our ordinary shares have been approved for listing on the Nasdaq Capital Market under the symbol “BHAT.” Investing in our ordinary shares involves a high degree of risk. Before buying any shares, you should carefully read the discussion of material risks of investing in our ordinary shares in “Risk Factors” beginning on page 13 of this prospectus. We are an “emerging growth company” as defi ned under the federal securities laws and, as such, will be subject to reduced public company reporting requirements. See “Prospectus Summary — Implications of Being an Emerging Growth Company and a Foreign Private Issuer” for additional information. Neither the Securities and Exchange Commission nor any other regulatory body has approved or disapproved of these securities or passed upon the accuracy or adequacy of this prospectus. Any representation to the contrary is a criminal offense. PER SHARE TOTAL Initial public offering price $ 4.00 $ 8,000,000 Underwriting discounts and commissions(1) $ 0.28 $ 560,000 Proceeds, before expenses, to us $ 3.72 $ 7,440,000 (1) We have agreed to issue, on the closing date of this offering, underwriters’ warrants to the representative of the underwriters, ViewTrade Securities, Inc., in an amount equal to 10% of the aggregate number of ordinary shares sold by us in this offering. For a description of other terms of the underwriters’ warrants and a description of the other compensation to be received by the underwriters, see “Underwriting” beginning on page 112. We expect our total cash expenses for this offering (including cash expenses payable to our underwriters for their out-of-pocket expenses) to be approximately $ 614,255, exclusive of the above commissions. In addition, we will pay additional items of value in connection with this offering that are viewed by the Financial Industry Regulatory Authority, or FINRA, as underwriting compensation. These payments will further reduce proceeds available to us before expenses. See “Underwriting.” This offering is being conducted on a fi rm commitment basis. The underwriter, ViewTrade Securities Inc., is obligated to take and pay for all of the shares if any such shares are taken. We have granted the underwriters an option for a period of 45 days after the closing of this offering to purchase up to 15% of the total number of our ordinary shares to be offered by us pursuant to this offering (excluding shares subject to this option), solely for the purpose of covering over-allotments, at the initial public offering price less the underwriting discount. If the underwriter exercises the option in full, the total underwriting discounts and commissions payable will be $ 644,000 based on the initial public offering price of $4.00 per ordinary share, and the total gross proceeds to us, before underwriting discounts and commissions and expenses, will be $ 9,200,000. If we complete this offering, net proceeds will be delivered to us on the closing date. We will not be able to use such proceeds in China, however, until we complete capital contribution procedures which require prior approval from each of the respective local counterparts of China’s Ministry of Commerce, the State Administration for Industry and Commerce, and the State Administration of Foreign Exchange. See remittance procedures in the section titled “Use of Proceeds” beginning on page 37. The underwriters expect to deliver the ordinary shares against payment as set forth under “Underwriting”, on or about July 30 , 2019. VIEWTRADE SECURITIES, INC. The date of this prospectus is July 2 6, 2019. Date: July 29, 2019 6:59 PM Project: e1438 Form Type: 424(b)(4) Client: Blue Hat Interactive Entertainment Technology File: e1438_424(b)(4).htm Type: 424(b)(4) Pg: i of 155 TABLE OF CONTENTS Page Prospectus Summary 1 Risk Factors 13 Special Note Regarding Forward-Looking Statements 35 Industry and Market Data 36 Use of Proceeds 37 Dividend Policy 38 Capitalization 39 Dilution 40 Exchange Rate Information 41 Corporate History and Structure 42 Selected Consolidated Financial Data 47 Management’s Discussion and Analysis of Financial Condition and Results of Operations 48 Business 61 Management 85 Related Party Transactions 91 Principal Shareholders 92 Description of Share Capital and Governing Documents 94 Shares Eligible for Future Sale 105 Material Income Tax Considerations 107 Underwriting 112 Expenses Related to this Offering 117 Legal Matters 118 Experts 119 Enforcement of Liabilities 120 Where You Can Find Additional Information 122 Index to Consolidated Financial Statements F-1 We are responsible for the information contained in this prospectus and any free writing prospectus we prepare or authorize. We have not, and the underwriters have not, authorized anyone to provide you with different information, and we and the underwriters take no responsibility for any other information others may give you. We are not, and the underwriters are not, making an offer to sell our ordinary shares in any jurisdiction where the offer or sale is not permitted. You should not assume that the information contained in this prospectus is accurate as of any date other than the date on the front cover of this prospectus, regardless of the time of delivery of this prospectus or the sale of any ordinary shares. For investors outside the United States: Neither we nor the underwriters have done anything that would permit this offering or possession or distribution of this prospectus in any jurisdiction, other than the United States, where action for that purpose is required. Persons outside the United States who come into possession of this prospectus must inform themselves about, and observe any restrictions relating to, the offering of the ordinary shares and the distribution of this prospectus outside the United States. We are incorporated under the laws of the Cayman Islands as an exempted company with limited liability and a majority of our outstanding securities are owned by non-U.S. residents. Under the rules of the U.S. Securities and Exchange Commission, or the SEC, we currently qualify for treatment as a “foreign private issuer.” As a foreign private issuer, we will not be required to fi le periodic reports and fi nancial statements with the Securities and Exchange Commission, or the SEC, as frequently or as promptly as domestic registrants whose securities are registered under the Securities Exchange Act of 1934, as amended, or the Exchange Act. Until and including August 20 , 2019 (25 days after the date of this prospectus), all dealers that buy, sell or trade our ordinary shares, whether or not participating in this offering, may be required to deliver a prospectus. This delivery requirement is in addition to the obligation of dealers to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions. i Date: July 29, 2019 6:59 PM Project: e1438 Form Type: 424(b)(4) Client: Blue Hat Interactive Entertainment Technology File: e1438_424(b)(4).htm Type: 424(b)(4) Pg: ii of 155 CONVENTIONS THAT APPLY TO THIS PROSPECTUS Unless otherwise indicated or the context otherwise requires, all references in this prospectus to the terms “Blue Hat,” the “Company,” “we,” “us” and “our” refer to Blue Hat Interactive Entertainment Technology and its subsidiaries, its variable interest entity and the subsidiaries of its variable interest entity. “PRC” or “China” refers to the People’s Republic of China, excluding, for the purpose of this prospectus, Taiwan, Hong Kong and Macau. “RMB” or “Renminbi” refers to the legal currency of China and “$” or “U.S. Dollars” refers to the legal currency of the United States. We have made rounding adjustments to some of the fi gures included in this prospectus. Accordingly, numerical fi gures shown as totals in some tables may not be an arithmetic aggregation of the fi gures that preceded them. Unless the context indicates otherwise, all information in this prospectus assumes no exercise by the underwriters of their over-allotment option. Our functional currency is Renminbi, or RMB. Our consolidated fi nancial statements are presented in U.S. dollars. We use U.S.¦ dollars as the reporting currency in our consolidated fi nancial statements and in this prospectus. Assets and liabilities denominated in Renminbi are translated into U.S. dollars at the rates of exchange as of the balance sheet date, equity accounts are translated at historical exchange rates, and revenues and expenses are translated using the average rate of exchange in effect during the reporting period, as set forth in Note 2 of the notes to the consolidated fi nancial statements included elsewhere in this prospectus. With respect to amounts not recorded in our consolidated fi nancial statements included elsewhere in this prospectus, unless otherwise stated, all translations from Renminbi to U.S. dollars were made at RMB 6.8755 to $1.00, the noon buying rate on December 31, 2018, as set forth in the H.10 statistical release of the Board of Governors of the Federal Reserve System. We make no representation that the Renminbi or U.S. dollar amounts referred to in this prospectus could have been or could be converted into U.S.