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VARIABLE INTEREST ENTITY ('VIE') | 12 Months Ended
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Dec. 31, 2020
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. 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 as a VIE 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. Blue Hat WFOE is deemed to have a controlling financial interest and be the primary beneficiary of Blue Hat Fujian because it has both of the following characteristics: The power to direct activities at Blue Hat Fujian that most significantly impact such entity’s economic performance, and The right to receive benefits from Blue Hat Fujian that could potentially be significant to such entity. Pursuant to the Contractual Arrangements, Blue Hat Fujian pays service fees equal to all of its net income to Blue Hat WFOE. The Contractual Arrangements are designed so that Blue Hat Fujian operates for the benefit of Blue Hat WFOE and ultimately, the Company. Accordingly, the account of Blue Hat Fujian 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 VIE’s consolidated assets and liabilities are as follows:
|  | December 31, |  |  | December 31, |
|  | 2020 |  |  | 2019 |
Current assets |  | $ | 48,484,286 |  |  | $ | 37,040,733 |
Property and equipment, net |  |  | 115,500 |  |  |  | 162,374 |
Other non-current assets |  |  | 20,621,925 |  |  |  | 13,773,550 |
Total assets |  |  | 69,221,711 |  |  |  | 50,976,657 |
Total liabilities |  |  | (12,728,123 | ) |  |  | (12,494,955 | )
Net assets |  | $ | 56,493,588 |  |  | $ | 38,481,702 |
|  | December 31, |  |  | December 31, |
|  | 2020 |  |  | 2019 |
Current liabilities: |  |  |  |  |  |  |  |
Short-term loans - banks |  | $ | 2,130,301 |  |  | $ | 5,819,787 |
Current maturities of long-term loans – third party |  |  | 14,117 |  |  |  | 77,493 |
Accounts payable |  |  | 935,588 |  |  |  | 293,985 |
Other payables and accrued liabilities |  |  | 1,580,787 |  |  |  | 2,058,626 |
Other payables – related party |  |  | 22,529 |  |  |  | 21,072 |
Operating lease liability - current |  |  | 300,468 |  |  |  | 313,460 |
Customer deposits |  |  | 941,877 |  |  |  | - |
Taxes payable |  |  | 6,802,454 |  |  |  | 3,525,153 |
Total current liabilities |  |  | 12,728,123 |  |  |  | 12,109,576 |
Operating lease liabilities |  |  | - |  |  |  | 372,051 |
Long-term loans – third party |  |  | - |  |  |  | 13,328 |
Total liabilities |  | $ | 12,728,123 |  |  | $ | 12,494,955 |
The summarized operating results of the VIE’s are as follows:
|  | Year ended |  |  | Year ended |  |  | Year ended |
|  | December 31, |  |  | December 31, |  |  | December 31, |
|  | 2020 |  |  | 2019 |  |  | 2018 |
Revenues |  | $ | 30,191,069 |  |  | $ | 23,834,129 |  |  | $ | 18,531,178 |
Gross profit |  | $ | 13,984,246 |  |  | $ | 16,302,329 |  |  | $ | 12,422,502 |
Income from operations |  | $ | 10,874,269 |  |  | $ | 11,153,956 |  |  | $ | 8,317,465 |
Net income |  | $ | 9,831,118 |  |  | $ | 10,747,395 |  |  | $ | 7,919,408 |
Non-controlling interest |  | $ | 1,242,324 |  |  |  | - |  |  |  | - |
Net income attributable to VIE’s |  | $ | 8,588,794 |  |  | $ | 10,747,395 |  |  | $ | 7,919,408 |

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- References No definition available. + Details
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- Definition The entire disclosure for a variable interest entity (VIE), including but not limited to, judgments and assumptions in determining whether to consolidate and in identifying the primary beneficiary, gain (loss) recognized on the initial consolidation of the VIE, terms of arrangements, amounts and classification of the VIE's assets and liabilities, and the entity's maximum exposure to loss. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 810 -URI http://asc.fasb.org/topic&trid=2197479 + Details
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