Bat Group, Inc. Reports Third Quarter 2019 Financial Results
BEIJING, Nov. 14, 2019 /PRNewswire/ -- Bat Group, Inc. (Nasdaq: GLG) (the "Company"), an emerging used luxurious car rental service provider headquartered in Beijing, China, today announced its financial results for the three and nine months ended September 30, 2019.
Mr. Jiaxi Gao, CEO and President of Bat Group, Inc., comments, "We are pleased to report our financial results for the three and nine months ended September 30, 2019. For the nine months ended September 30, 2019, we generated income of $1,505,508 from operating lease, an increase of $1,267,931 from $237,577 for the nine months ended September 30, 2018. The increase was a result of our continuous efforts in growing our luxurious car rental business. We will continue to allocate our resources into our growth as we plan to increase our inventory of high-end cars and expand our operations into other cities in China. We are optimistic that customers will respond positively to our brand and high-quality services as we continue our expansion."
Three Months Ended September 30, 2019 Financial Highlights
-- Income from operating lease increased by 301% to $0.56 million, from
$0.14 million for the three months ended September 30, 2018.
-- Net loss was $0.39 million, as compared with net loss of $0.64 million
for the three months ended September 30, 2018.
-- Basic and diluted loss per share was $0.05, as compared with basic and
diluted loss per share of $0.13 for the three months ended September 30,
2018.
Nine Months Ended September 30, 2019 Financial Highlights
-- Income from operating lease increased by 534% to $1.51 million, from
$0.24 million for the nine months ended September 30, 2018.
-- Net income from discontinued operations was $nil, as compared with
$10.07 million for the nine months ended September 30, 2018.
-- Net loss was $3.26 million, as compared with net income of $8.48 million
for the nine months ended September 30, 2018.
-- Basic and diluted loss per share was $0.46, compared with basic and
diluted earnings per share of $1.90 for the nine months ended September
30, 2018.
Financial Results for the Three Months Ended September 30, 2019
Income from operating lease
Income from operating lease increased by $0.42 million, or 301% to $0.56 for the three months ended September 30, 2019 from $0.14 million for the three months ended September 30, 2018. The increase was mainly attributable to increased number of owned used luxurious cars, and diversified lease income generated from both owned cars and leased cars.
Operating lease expenses
The cost of operating lease was comprised of car related expenses arising from lease of cars. With diversified lease income generated from leased cars which was launched in January 2019, the Company recorded car related expenses of $0.34 million.
Depreciation expenses on operating lease assets
The depreciation expenses on operating lease assets increased by $0.05 million to $0.08 million for the three months ended September 30, 2019. The increase was mainly caused by the Company's continuous investments in used luxurious cars. As of September 30, 2019, the Company had eleven used luxurious cars, as compared with six cars as of September 30, 2018.
Selling, general, and administrative expenses
Selling, general, and administrative expenses decreased by $0.18 million, or 25%, to $0.56 million for the three months ended September 30, 2019, from $0.74 million for the three months ended September 30, 2018. Operating expenses primarily consisted of salary and employee surcharge, office rental expense, business tax and surcharge, changes in fair value of other noncurrent liabilities, professional service fees, and other office supplies. The decrease was mainly attributable to a decrease of legal and consulting expenses of $0.19 million, as the Company incurred less financing and investing transactions during the period.
Net loss and basic and diluted loss per share
Net loss was $0.39 million for the three months ended September 30, 3019, as compared with net loss of $0.64 million for three months ended September 30, 2018. Basic and diluted loss per share was $0.05 for the three months ended September 30, 2019, compared with basic and diluted loss per share of $0.13 for three months ended September 30, 2019.
Financial Results for the Nine Months Ended September 30, 2019
Income from operating lease
Income from operating lease increased by $1.27 million, or 534% to $1.51 for the nine months ended September 30, 2019 from $0.24 million for the nine months ended September 30, 2018. The increase was mainly attributable to increased number of owned used luxurious cars, and diversified lease income generated from both owned cars and leased cars.
Operating lease expenses
The cost of operating lease was comprised of car related expenses arising from lease of cars. With diversified lease income generated from leased cars which was launched in January 2019, the Company recorded car related expenses of $0.88 million for the nine months ended September 30, 2019.
Depreciation expenses on operating lease assets
The depreciation expenses on operating lease assets increased by $0.14 million, or 289% to $0.19 million for the nine months ended September 30, 2019, from $0.05 million for the nine months ended September 30, 2018. The increase was mainly caused by the Company's continuous investments in used luxurious cars. As of September 30, 2019, the Company had eleven used luxurious cars, as compared with six cars as of September 30, 2018.
Selling, general, and administrative expenses
Selling, general, and administrative expenses increased by $1.99 million, or 123% to $3.60 million for the nine months ended September 30, 2019, from $1.61 million for the nine months ended September 30, 2018. Operating expenses primarily consisted of salary and employee surcharge, office rental expense, business tax and surcharge, changes in fair value of other noncurrent liabilities, professional service fees, and other office supplies. The increase was mainly attributable to the combined effects of an increase of promotion expenses of $0.14 million, an increase of car-related expenses of $0.11 million, an increase of legal and consulting expenses of $0.21 million as a result of the issuance of 502,391 restricted shares as compensation to service providers, and expenses incurred for the registered direct offerings in April and May 2019, consisting of an increase of audit related fees of $0.18 million, an increase of commission of $0.1 million to a third party vendor for referral of underwriters, and other expenses of $0.34 million.
Net income from discontinued operations
During the nine months ended September 30, 2018, the net income was comprised of a net income of $0.28 million from discontinued operations of microcredit service and a gain of $9.79 million from disposal of the discontinued operations of microcredit service.
Net (loss) income and basic and diluted (loss) earnings per share
Net loss was $3.26 million for the nine months ended September 30, 3019, as compared with net income of $8.48 million for the nine months ended September 30, 2018.
Basic and diluted loss per share was $0.46 for the nine months ended September 30, 2019, as compared with basic and diluted earnings per share of $1.90 for the nine months ended September 30, 2018, which was the net effect of basic and diluted loss per share of $0.36 attributable to continuing operations, and basic and diluted earnings per share of $2.26 attributable to discontinued operations.
Cash Flows
As of September 30, 2019, the Company had cash and cash equivalents of $1.50 million, as compared with $1.48 million as of December 31, 2018.
Net cash used in operating activities was $1.98 million for the nine months ended September 30, 2019, as compared to $0.63 million for the nine months ended September 30, 2018.
Net cash used in investing activities was $5.38 million for the nine months ended September 30, 2019, compared to $4.51 million for the nine months ended September 30, 2018.
Net cash provided by financing activities was $7.40 million for the nine months ended September 30, 2019, as compared to $4.89 million for the nine months ended September 30, 2018.
About Bat Group, Inc.
Bat Group, Inc. (Nasdaq: GLG) is an emerging used luxurious car rental service provider in China. The used luxurious car business is conducted under the brand name "BatCar" by the Company's VIE entity, Tianxing Kunlun Technology Co. Ltd, from its headquarters in Beijing. Utilizing a streamlined, digital, transaction process, the Company endeavors to provide the best possible rental experience for its customers. For more information please visit ir.imbatcar.com.
Safe Harbor Statement
This press release may contain certain "forward-looking statements" relating to the business of Bat Group, Inc. and its subsidiary companies. All statements, other than statements of historical fact included herein are "forward-looking statements." These forward-looking statements are often identified by the use of forward-looking terminology such as "believes," "expects" or similar expressions, involve known and unknown risks and uncertainties. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable, they do involve assumptions, risks and uncertainties, and these expectations may prove to be incorrect. Investors should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. The Company's actual results could differ materially from those anticipated in these forward-looking statements as a result of a variety of factors, including those discussed in the Company's periodic reports that are filed with the Securities and Exchange Commission and available on its website at http://www.sec.gov. All forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by these factors. Other than as required under the securities laws, the Company does not assume a duty to update these forward-looking statements.
BAT GROUP, INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
S
eptember
30, December 31,
2019 2018
(Unaudited)
ASSETS
Cash $
1,496,797 $
1,484,116
Loans receivable from third parties 1,451,608
Due from related parties 476,975
Other current assets 177,345 87,922
Total current assets 3,602,725 1,572,038
Investment security 200,000
Investments in equity investees 840,536
Investments in financial products 1,000,000
Loan receivable from a third party, noncurrent 49,031
Property and equipment, net 4,320 5,524
Right-of-use lease assets, net 55,283
Operating lease assets, net 2,529,976 1,634,018
Total noncurrent assets 4,679,146 1,639,542
Total Assets $
8,281,871 $
3,211,580
LIABILITIES AND EQUITY
Advances from customers $
101,640 $
6,208
Third parties loans 2,136,363 218,100
Due to related parties 16,345
Advance of subscription from shareholders 588,000
Other current liabilities 288,407 185,049
Total current liabilities 3,130,755 409,357
Related party loan, noncurrent 148,495
Total noncurrent liabilities 148,495
Total Liabilities 3,279,250 409,357
Commitments and Contingencies
Shareholders' Equity
Series A Preferred Stock (par value $0.001 per share, 1,000,000 shares authorized at
September 30, 2019 and December 31, 2018, respectively; nil shares issued and
outstanding at September 30, 2019 and December 31, 2018, respectively)
Series B Preferred Stock (par value $0.001 per share, 5,000,000 shares authorized at
September 30, 2019 and December 31, 2018, respectively; nil shares issued and
outstanding at September 30, 2019 and December 31, 2018, respectively)
Common stock (par value $0.001 per share, 100,000,000 shares authorized; 8,646,297 8,646 5,024
and 5,023,906 shares issued and outstanding at September 30, 2019 and December 31,
2018, respectively)*
Additional paid-in capital 34,299,372 28,765,346
Accumulated deficit (28,719,598) (25,457,090)
Accumulated other comprehensive loss (585,313) (511,057)
Total BAT Group, Inc.'s Shareholders' Equity 5,003,107 2,802,223
Non-controlling loss (486)
Total Equity 5,002,621 2,802,223
Total Liabilities and Equity $
8,281,871 $
3,211,580
BAT GROUP, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND
COMPREHENSIVE INCOME
For the
For the
Three Months Ended Nine Months Ended
September 30,
September 30,
2019 2018 2019 2018
Income from operating lease $
564,614 $
140,856 $
1,505,508 $
237,577
Operating expenses
Operating lease expenses 344,310 877,320
Depreciation expenses on operating lease assets 83,806 35,336 185,985 47,794
Total lease expenses 428,116 35,336 1,063,305 47,794
Selling, general, and administrative expenses 556,430 741,762 3,596,706 1,615,039
Changes in fair value of noncurrent liabilities 166,540
Impairment on operating lease assets 96,318
Total operating expenses 984,546 777,098 4,756,329 1,829,373
Other income (expenses), net
Interest income (expenses) 27,089 2,216 (12,173) 2,531
Total other income (expenses), net 27,089 2,216 (12,173) 2,531
Net loss from continuing operations before income taxes (392,843) (634,026) (3,262,994) (1,589,265)
Income tax expenses (991) (1,011)
Net loss from continuing operations (392,843) (635,017) (3,262,994) (1,590,276)
Net income from discontinued operations 10,072,629
Net (loss) income (392,843) (635,017) (3,262,994) 8,482,353
Less: Net income (loss) attributable to non-controlling interests 5 (486)
Net (loss) income attributable to BAT Group, Inc.'s Shareholders $
(392,848) $
(635,017) $
(3,262,508) $
8,482,353
Comprehensive (loss) income
Net (loss) income $
(392,843) $
(635,017) $
(3,262,994) $
8,482,353
Foreign currency translation adjustment (57,232) 211,638 (74,256) 94,553
Reclassified to net income from discontinued operations (125,220)
Total comprehensive (loss) income (450,075) (423,379) (3,337,250) 8,451,686
Less: Total comprehensive loss attributable to non-controlling interests 5 (486)
Comprehensive (loss) income attributable to BAT Group, Inc. $
(450,080) $
9,386,183 $
(3,336,764) $
8,451,686
(Loss) income per share - basic and diluted $
(0.05) $
(0.13) $
(0.46) $
1.90
Net loss per share from continuing operations - basic and diluted $
(0.05) $
(0.13) $
(0.46) $
(0.36)
Net income per share from discontinued operations - basic and diluted
$
$
$ $
2.26
Weighted Average Shares Outstanding-Basic and Diluted 8,646,297 4,919,122 7,122,560 4,458,093
BAT GROUP, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
For the
Nine Months Ended
September 30,
2019 2018
Cash Flows from Operating Activities:
Net (loss) income $
(3,262,994) $
8,482,353
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation of operating lease assets 185,985 58,854
Depreciation of property and equipment 1,741 572
Impairment on an operating lease asset 96,318 12,202
Gain on disposal of operating lease asset (7,851)
Restricted shares issued to service providers 884,209
Gain on disposal of discontinued operations (9,794,873)
Shares issued for settlement against legal proceedings 943,860
Changes in fair value of noncurrent liabilities 166,540
Changes in operating assets and liabilities:
Other current assets (95,824) (1,047,300)
Right-of-use lease assets, net (57,497)
Advances from customers 99,490
Due to related parties 17,000
Other current liabilities 155,561 92,668
Other noncurrent liabilities (1,311,000)
Net cash provided by operating activities from discontinued operations 1,769,566
Net Cash Used in Operating Activities (1,983,862) (626,558)
Cash Flows from Investing Activities:
Purchases of property and equipment (707) (5,945)
Purchases of operating lease assets (2,079,115) (1,882,476)
Proceeds from disposal of operating lease assets 335,111 122,481
Investment in one investment security (200,000)
Investments in equity investees (884,225)
Investments in financial products (1,000,000)
Due from a related party (18,299)
Loans to third parties (1,540,758) (1,473,458)
Proceeds from disposal of discontinued operations 500,000
Cash in connection with discontinued operations (499,496)
Net cash used in investing activities from discontinued operations (1,270,070)
Net Cash Used in by Investing Activities (5,387,993) (4,508,964)
Cash Flows from Financing Activities:
Borrowings from third parties 2,294,781 1,473,458
Repayments of borrowings to third parties (291,401)
Borrowings from a related party 154,482 153,485
Advance of subscription fees from shareholders 588,000
Cash raised in registered direct offering, net of transaction costs 4,653,440
Cash raised in private placement of common stocks 3,265,370
Net Cash Provided by Financing Activities 7,399,262 4,892,313
Effect of Exchange Rate Changes on Cash (14,726) (277,787)
Net (Decrease) Increase in Cash 12,681 (520,996)
Cash at Beginning of Period 1,484,116 1,359,630
Cash at End of Period $
1,496,797 $
838,634
Supplemental disclosure of cash flow information
Cash paid for interest expense $
20,621
$
Supplemental disclosure of Non-cash financing activities
Right-of-use assets obtained in exchange for operating lease obligations $
64,241
$
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SOURCE China Bat Group, Inc.
