Fujian Blue Hat Interactive Entertainment Technology Stock

Fujian Blue Hat Interactive Entertainment Technology Ltd. operates as a producer, developer and operator of augmented reality, or AR, interactive entertainment games and toys in China, including interactive educational materials, mobile games, toys with mobile game features, and Immersive Education Classes and the company expanded into the Internet Data Center (IDC) business.

The company’s mobile-connected entertainment platform enables it to connect physical items to mobile devices through wireless technologies, creating a unique interactive user experience. The core of the company’s business is its proprietary technology. The company’s patents, trademarks, copyrights, and other intellectual property rights serve to distinguish its products, protect its products from infringement, and contribute to its competitive advantages. To secure the value of its technology and developments, the company is aggressive in pursuing a combination of patent, trademark and copyright protection for its proprietary technologies.

The company strives to create an engaging, interactive and immersive community for users of its products. The majority of its users are among the young Chinese generation between the ages of 3 and 23, although many of its products appeal to users outside of this demographic. The company intends to further penetrate the Chinese market with new products that would target users ages 14 and above. Specifically, the company’s strategies include marketing Fidolle, a ball-jointed smart doll, and QI, a gaming and entertainment platform designed for both family home use and amusement arcades. The company’s high-quality content is a magnet for users with common interests to connect, interact and share their passions on its platform, which helps to cultivate a strong sense of belonging, effectively strengthening its user retention. In the meantime, it is licensed to sell products with WUHUANGWANSHUI brand images. The company is also developing its IDC business. It provides its Augmented Reality Immersive Classes (ARIC) to pre-schools and plan to work closely with these schools to integrate its digital solutions with a new STEAM-focused curriculum for young students. The company’s high-quality content attracts users with common interests to connect and share their passion on its platform, which cultivates a strong sense of belonging and effectively strengthens its user retention.

The company’s products resemble traditional children’s toys - including cars, ladybugs, picture books, and dolls - which are enabled with wireless technology to facilitate a broad variety of interactive functions. The interactive functionality of the company’s products broadens the user experience, creates a communicative environment, and facilitates an ongoing relationship between it and its end users and between its end users and its products.

The company’s proprietary technology, product research and development, marketing channels and brand operation are the cornerstones of its business. The company focuses on the combination of online and offline activity and the interaction between entertainment and product to create a high-tech entertainment platform combining mobile games and AR. With the help of computer graphics and visualization technologies, the company is able to accurately place virtual objects into the physical world, thus creating a new and stimulating visual environment for its users.

Products

The company offers the following primary AR interactive product lines: AR Racer, AR Crazy Bug, AR 3D Magic Box, AR Dinosaur, Talking Tom and Friends Bouncing Bubble, AR Shake Bouncing Bubble, WUHUANGWANSHUI authorized products, Immersive Education Classes, IDC business, and Commodity Trading.

AR Racer

AR Racer is a car-racing mobile game played using a physical toy car stuck onto the user’s mobile device screen using non-adhesive materials. Blue Hat’s photosensitive recognition technology allows the toy car to be used as a controller, so that users can virtually race one another via the simulated racing track, as well as engage in individual races. In addition, the company develops a new generation product, the Mini Car series that retains the car model attributes and the original AR interactive function, while upgrading the gameplay, structure and aesthetics of the game.

AR Crazy Bug

AR Crazy Bug is an exciting combat game played using a ladybug-shaped electronic toy. Blue Hat’s infrared induction technology allows the user to control the toy’s movement via their mobile device for game play in battle dynamics, while simultaneously moving the toy in reality. The mobile device shows virtual enemies while also capturing the position of the toy in the real world, allowing the user to approach or escape its combatants.

AR 3D Magic Box

AR 3D Magic Box has the unique ability to transport children’s drawings into diverse backgrounds, giving the user a discovery-based experience. AR 3D Magic Box uses AR recognition technology to allow children to draw shapes or objects onto a physical card while the mobile game captures the drawings and animates them onto a set background, for example, under the sea.

AR Dinosaur

AR Dinosaur is an educational toy that comes in a variety of five different types of dinosaur, each of which has their own personality and emotions. Through interacting with the toy and its accompanying mobile app, children can learn a wealth of information about dinosaurs. The product comes with five physical AR cards, which when placed under the toy activates its AR features.

Talking Tom and Friends Bouncing Bubble

Bouncing Bubble is a product designed using environmentally-friendly and toxic-free liquid, allowing for larger, stronger bubbles that won’t easily pop. The new Talking Tom and Friends Bouncing Bubble product range features images of characters from the universe of the globally renowned Talking Tom and Friends media franchise.

AR Shake Bouncing Bubble

AR Shake Bouncing Bubble is a product developed in 2020. The product is known for its soothing interface and magical background music. It contains an exclusive structural design of Blue Hat. The AR interactive software has been shown to help to improve children’s concentration and reaction.

WUHUANGWANSHUI Authorized Products

WUHUANGWANSHUI is a famous brand for Chinese cartoon images that consist of a cat (Wu Huang) and a dog (Ba Zahey). The brand is owned by Cup of Cosmo Studio (Beijing) Culture Co., Ltd., and is easily recognizable in Chinese popular culture. Primarily seen in cartoon images, comics, animations, and emoticon packages, WUHUANGWANSHUI has over 30 million followers online, which brings over RMB 2 billion in licensed product sales. The company is licensed to use WUHUANGWANSHUI images on its products and its e-commerce website. The company expects to launch approximately 20 interactive toys with the licensed images in the near future.

Immersive Education Classes

Immersive Education Classes are Blue Hat’s range of immersive educational products that utilize AR technology to create a dynamic and engaging model for teaching in China’s preschools, including Smart Screen Immersive Education Classes, Smart Immersive Physical Education Classes and Smart Immersive Cognitive Education Classes. The three products are suitable for different teaching scenarios and can be used independently or together with one another to promote children’s overall development.

Smart Screen Immersive Education Classes use a projector to cast education-related content and games onto the classroom wall. Activities featured within the product aim to improve students’ hand-eye coordination and analytical abilities, and students are guided by teachers trained in the product’s use. After students have completed a task, their results are shown on the screen and specific feedback for improvement is provided.

Smart Immersive Physical Education Classes integrate a projector and motion-capture system to project activities and games onto the floor of the teaching area. Students who participate in activities are required to imitate movements and react in time, while competing or coordinating with others for the best score. Data is analyzed simultaneously for each student, with feedback, including scores and suggestions for improvement that can be reviewed by teachers and parents. All activities are carefully guided by teachers trained in the product’s use.

Smart Immersive Cognitive Education Classes offer a wide variety of AR-enabled tasks designed to exercise the cognitive abilities of children between the ages of three and six years old by projecting images and activities onto a classroom tabletop. As the images projected on the tabletop react to children’s movements, they can learn for themselves, with feedback, including scores and suggestions for improvement, projected onto the table after completion. A tabletop can be used by up to six children at one time, supporting both independent learning and group activities or competitions. The product’s content has been designed by the company’s in-house team of educational experts and all activities are carefully guided by teachers trained in the product’s use.

AR Immersive Class (ARIC) offers full collection of its immersive educational products that utilize AR technology to create a dynamic and engaging model to teach preschoolers in China. With the company’s proprietary AR technology, the ARIC greatly enriches children’s learning experience and enables educators to track and analyze students’ progress.

Sales and Marketing

The company’s marketing operations consist of a planning department, a sales department, an e-commerce department and a product department. The company is in the process of expanding its e-commerce sales team. It is transitioning from single, offline promotional activities to diversified, online interactive marketing and digital marketing. The company intends to increase its branding and advertising activities via online communities, social media and television, thus increasing its brand awareness.

The company has an experienced sales team with more than 12 staff members, many of which have several years of sales experience. Its sales are primarily derived from developed eastern regions of China, such as Jiangsu and Zhejiang. The company intends to expand into more diverse regions of China in an effort to increase its market share. The company has four subsidiaries located in Fuzhou, Hunan and Fujian, responsible for sales and marketing.

The company intends to continue building its salesforce and enhancing its sales power. It plans to penetrate the market further through its physical presence in stores and its e-commerce platforms. The company also plans to establish flexible and diversified sales channels. For sales in China, it plans to continue to use distributors and its sales team engages e-commerce channels. The company also intends to continue to partner with provincial Chinese distributors to expand both its online and offline sales channels and to further infiltrate sales regions.

The company’s long-term branding development plan centers around brand recognition and increasing its brand awareness through the use of branding strategies, such as market surveys, series designs and after-sales investigations.

The company is in the process of expanding its brand to physical experience stores in order to engage consumers, create user loyalty and introduce new users to its products. The company is leveraging its experience and insight into traditional toy and gaming industries and its strength in AR technologies to build experience stores that provide customers with a variety of AR interactive activities, as well as a location to purchase AR interactive toys.

Product Quality

All of its products comply with China 3C standards, China’s toy industry safety standards, as revised on January 1, 2016, by GB6675-2003 National Toy’s Safety Technical Specifications, and the American Society for Testing and Materials standards.

Intellectual Property

As of April 27, 2023, the company’s intellectual property portfolio included 224 authorized patents, 14 applications for PCT international patents, 794 artistic copyrights, 94 registered trademarks and 134 software copyrights.

Competition

The company competes with AR interactive toy companies located around the world. The company considers its principal competitors to be those companies that provide educational AR game products to the market, including Shanghai Putao Technology Co., Ltd. and Sphero, Inc. The company also competes with Nintendo of America Inc.’s amiibo product line.

History

Fujian Blue Hat Interactive Entertainment Technology Ltd. was incorporated in 2010.