Bat Group, Inc. Reports Third Quarter 2019 Financial Results

BEIJING,Nov. 15,2019 -- 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 $1,267,931from $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 carswhich 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,the Company had eleven used luxurious cars,as compared with six cars as of September 30,2018.

Selling,general,and administrative expenses

Selling,and administrative expenses decreased by $0.18 million,or 25%,to $0.56 million for the three months ended September 30,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,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 leaseIncome 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,and diversified lease income generated from both owned cars and leased cars.Operating lease expensesThe 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 assetsThe depreciation expenses on operating lease assets increased by $0.14 million,or 289% to $0.19 million for the nine months ended September 30,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 30,2018.Selling,and administrative expensesSelling,and administrative expenses increased by $1.99 million,or 123% to $3.60 million for the nine months ended September 30,from $1.61 million for the nine months ended September 30,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 operationsDuring 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 shareNet loss was $3.26 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,as compared with basic and diluted earnings per share of $1.90 for the nine months ended September 30,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 FlowsAs of September 30,the Company had cash and cash equivalents of $1.50 million,as compared with $1.48 million as of December31,2018.Net cash used in operating activities was $1.98 million for the nine months ended September 30,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,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,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 StatementThis 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

September30,

December31,

2019

2018

(Unaudited)

ASSETS

Cash

$1,496,797

$1,484,116Loans receivable from third parties

1,451,608

-Due from related parties

476,975

-Other current assets

177,345

87,922Total 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

5,524Right-of-use lease assets,net

55,283

-Operating lease assets,net

2,529,976

1,634,018Total noncurrent assets

4,679,146

1,639,542

Total Assets

$8,281,871

$3,211,580

LIABILITIES AND EQUITY

Advances from customers

$101,640

$6,208Third parties loans

2,136,363

218,100Due to related parties

16,345

-Advance of subscription from shareholders

588,000

-Other current liabilities

288,407

185,049Total 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 shares authorized at

September 30,2019 and December 31,respectively; nil shares issued and

outstanding at September 30,respectively)

-

-Series B Preferred Stock (par value $0.001 per share,5,respectively)

-

-Common stock (par value $0.001 per share,100,000 shares authorized; 8,646,297

and 5,023,906 shares issued and outstanding at September 30,

2018,respectively)*

8,646

5,024Additional paid-in capital

34,299,372

28,765,346Accumulated 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

2,223Total Liabilities and Equity

$8,580BAT GROUP,INC.UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS ANDCOMPREHENSIVE INCOME

For theThree MonthsEndedSeptember 30,

For theNine Months EndedSeptember 30,

2019

2018

2019

2018

Income from operating lease

$564,614

$140,856

$1,508

$237,577

Operating expenses

Operating lease expenses

344,310

-

877,320

-Depreciation expenses on operating lease assets

83,806

35,336

185,985

47,794Total lease expenses

428,116

35,336

1,063,305

47,794

Selling,and administrative expenses

556,430

741,762

3,596,706

1,615,039Changes in fair value of noncurrent liabilities

-

-

-

166,540Impairment 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)

2,531Total 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)

(3,590,276)

Net income from discontinued operations

-

-

-

10,072,629

Net (loss) income

(392,994)

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)

$(3,508)

$8,353

Comprehensive (loss) income

Net (loss) income

$(392,843)

$(635,994)

$8,353Foreign currency translation adjustment

(57,232)

211,638

(74,256)

94,553Reclassified to net income from discontinued operations

-

-

-

(125,220)Total comprehensive (loss) income

(450,075)

(423,379)

(3,337,250)

8,686Less: 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)

$8,686(Loss) income per share - basic and diluted

$(0.05)

$(0.13)

$(0.46)

$1.90Net 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

8,297

4,919,122

7,122,560

4,458,093BAT GROUP,INC.UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

For theNine Months EndedSeptember 30,

2019

2018

Cash Flows from Operating Activities:

Net (loss) income

$(3,994)

$8,353Adjustments to reconcile net loss to net cash used in operating activities:

Depreciation of operating lease assets

185,985

58,854Depreciation of property and equipment

1,741

572Impairment on an operating lease asset

96,318

12,202Gain 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

-

943,860Changes in fair value of noncurrent liabilities

-

166,540Changes 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

92,668Other noncurrent liabilities

-

(1,311,000)Net cash provided by operating activities from discontinued operations

-

1,769,566Net 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

122,481Investment in one investment security

(200,000)

-Investments in equity investees

(884,225)

-Investments in financial products

(1,000)

-Due from a related party

(18,299)

Loans to third parties

(1,540,758)

(1,473,458)Proceeds from disposal of discontinued operations

-

500,000Cash 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

1,458Repayments of borrowings to third parties

(291,401)

-Borrowings from a related party

154,482

153,485Advance 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

-

3,265,370Net 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

1,116

1,359,630Cash at End of Period

$1,797

$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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