GLG - China Bat Group Inc. Reports Fiscal Year 2018 Financial Results
BEIJING, April 05, 2019 (GLOBE NEWSWIRE) -- China 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 fiscal year ended December 31, 2018.
The Company began to operate its current used luxurious car leasing business in China, after it disposed its direct loans, loan guarantees and financial leasing services in July 2018. Our mission is to fill the significant void in the market place by serving business professionals, luxury car enthusiasts and other customers with high-quality, professional and personalized luxury car rental services, which has been significantly under-served due to the growing demand from the country’s rapid expansion of the middle class. Our current operations consist of renting out our luxurious pre-owned automobiles in the municipalities of Beijing, Shanghai, Tianjin, as well as in Hebei province.
Mr. Jiaxi Gao, the Chief Executive Officer of the Company, stated, “We are pleased to report our financial results for fiscal year 2018. Over the past year we have worked hard to lay the groundwork to capitalize on the luxury car rental market in China as we improved our internal processes and focused on our operations.”
Mr. Gao continued, “In 2018, the company, as the first luxurious car rental company listed on Nasdaq as far as we know, quickly gained brand awareness. Through the combination of online promotion search channels and our peer companies’ resources, we maintained rapid growth in quarterly revenue. In 2019, we plan to continue to increase our inventory and variety of luxurious cars and to expand our operations into other cities such as Chengdu, Shenzhen, Sanya, and Xiamen. We look forward to exploring the high growth opportunities in the car rental market and becoming the market leader of high-end car rental in China."
Fiscal Year 2018 Financial Highlights
- Income from operating lease reached $0.49 million, compared with nil for the fiscal year 2017. Income from operating lease for the fourth quarter of fiscal year 2018 was $0.25 million, representing an increase of 77.83% from the third quarter of fiscal year 2018.
- Net income was $7.65 million, compared with net loss of $10.70 million for the fiscal year 2017, the first reported profit in the past 5 years.
- Net income from discontinued operations was $9.97 million, compared with net loss from discontinued operations of $6.24 million for the fiscal year 2017.
- Basic and diluted earnings per share was $0.332, compared with basic and diluted loss per share of $0.598 for the fiscal year 2017.
- Shareholders’ equity was $2.80 million as of December 31, 2018, compared with shareholders’ deficit of $4.57 million as of December 31, 2017.
Fiscal Year 2018 Financial Results
Income from operating lease
Income from operating lease was $0.49 million for the fiscal year ended December 31, 2018. The operating lease income is recognized on a straight-line basis over the scheduled lease term. Because the Company just launched its new business of lease services of used luxury cars in May 2018 and it did not have any operations in this business, the Company did not generate any revenue from the car leasing business for the fiscal year ended December 31, 2017.
Cost of operating lease assets
The cost of operating lease assets represents the depreciation expenses of used luxurious cars which were under operating lease. The Company charged depreciation expenses of idle used luxurious cars into other operating expenses. For the fiscal year ended December 31, 2018, the Company charged depreciation expenses of $71,252 and $38,968 to “cost of operating lease assets” and “other operating expenses,” respectively. The net depreciation expense on operating lease assets was nil for the fiscal year ended December 31, 2017.
Operating Expenses
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. Operating expenses decreased by $1.68 million, or 37%, to $2.82 million for the fiscal year ended December 31, 2018 from $4.50 million for the same period of last year. The decrease was mainly attributable to net effects of the increase of car expenses of $0.33 million, car maintenance expenses of $0.03 million and impairment losses of $0.18 million, all relating to the used luxurious car business, netting off against the decrease of legal and consulting expenses of $2.19 million, $2.84 million of which was in relation to shares issued to executive officers and consultants.
Net income (loss) from discontinued operations
For the fiscal year ended December 31, 2018, the net income from discontinued operations was $9.97million, compared with net loss from discontinued operations of $6.24 million for the same period of last year. The net income from discontinued operation was comprised of a net income of $0.28 million from the discontinued operations of microcredit service against a gain of $9.69 million from disposal of the discontinued operations of microcredit service, and a net loss of $0.13 million from discontinued operations of Beijing Youjiao against a gain of $0.13 million from termination VIE agreements with Beijing Youjiao.
Net income (loss)
Net income was $7.65 million for the fiscal year ended December 31, 3018, compared with net loss of $10.70 million for the same period of last year. Basic and diluted earnings per share was $0.332 for the fiscal year ended December 31, 2018, compared with basic and diluted loss per share of $0.598 for the same period of last year.
Financial Conditions
As of December 31, 2018, the Company had cash and cash equivalents of $1.48 million, compared with $1.36 million as of December 31, 2017.
Net cash used in operating activities was $0.09 million for the fiscal year ended December 31, 2018, compared to $1.18 million for the same period of last year.
Net cash used in investing activities was $3.27 million for the fiscal year ended December 31, 2018, compared to $0.46 million for the same period of last year.
Net cash provided by financing activities was $3.81 million for the fiscal year ended December 31, 2018, compared to $2.26 million for the same period of last year.
About China Bat Group, Inc.
China 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 China Commercial Credit, 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.
CHINA BAT GROUP, INC.
CONSOLIDATED BALANCE SHEETS
| December 31, |
| December 31, |
| 2018 |
| 2017 |
| ASSETS |
| Cash |
| $ |
| 1,484,116 |
| $ |
| 1,359,630 |
| Other current assets |
| 87,922 |
| - |
| Assets of disposal group classified as held for sale |
| - |
| 5,805,654 |
| Total current assets |
| 1,572,038 |
| 7,165,284 |
| Operating lease assets, net |
| 1,634,018 |
| - |
| Property and equipment, net |
| 5,524 |
| - |
| Total Assets |
| $ |
| 3,211,580 |
| $ |
| 7,165,284 |
| LIABILITIES AND SHAREHOLDERS’ EQUITY (DEFICIT) |
| Unearned income |
| $ |
| 6,208 |
| $ |
| - |
| Other current liabilities |
| 403,149 |
| - |
| Liabilities directly associated with the assets classified as held for sale |
| - |
| 10,426,771 |
| Total current liabilities |
| 409,357 |
| 10,426,771 |
| Other noncurrent liabilities |
| - |
| 1,311,000 |
| Total Liabilities |
| 409,357 |
| 11,737,771 |
| Shareholders’ Equity (Deficit) |
| Series A Preferred Stock (par value $0.001 per share, 1,000,000 shares authorized at December 31, 2018 and 2017, respectively; nil shares issued and outstanding at December 31, 2018 and 2017, respectively) |
| $ |
| - |
| $ |
| - |
| Series B Preferred Stock (par value $0.001 per share, 5,000,000 shares authorized at December 31, 2018 and 2017, respectively; nil shares issued and outstanding at December 31, 2018 and 2017, respectively) |
| - |
| - |
| Common stock (par value $0.001 per share, 100,000,000 shares authorized; 25,119,532 and 19,250,915 shares issued and outstanding at December 31, 2018 and 2017, respectively) |
| 25,120 |
| 19,251 |
| Subscription fee advanced from a shareholder |
| - |
| 699,974 |
| Additional paid-in capital |
| 28,745,250 |
| 71,424,031 |
| Accumulated deficit |
| (25,457,090 |
| ) |
| (81,534,396 |
| ) |
| Accumulated other comprehensive (loss) income |
| (511,057 |
| ) |
| 4,818,653 |
| Total Shareholders’ Equity (Deficit) |
| 2,802,223 |
| (4,572,487 |
| ) |
| Total Liabilities and Shareholders’ Equity (Deficit) |
| $ |
| 3,211,580 |
| $ |
| 7,165,284 |
CHINA BAT GROUP, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
| For the years ended December 31, 2018 |
| 2018 |
| 2017 |
| Income from operating lease |
| $ |
| 488,062 |
| $ |
| - |
| Cost of operating lease |
| (71,252 |
| ) |
| - |
| Gross profit |
| 416,810 |
| - |
| Operating expenses |
| Salaries and employee surcharge |
| (576,409 |
| ) |
| (791,140 |
| ) |
| Rental expenses |
| (65,297 |
| ) |
| (30,406 |
| ) |
| Business taxes and surcharge |
| (1,741 |
| ) |
| - |
| Changes in fair value of noncurrent liabilities |
| (166,540 |
| ) |
| (266,000 |
| ) |
| Other operating expenses |
| (2,011,162 |
| ) |
| (3,409,045 |
| ) |
| Total operating expenses |
| (2,821,149 |
| ) |
| (4,496,591 |
| ) |
| Interest (expenses)/income |
| (20,157 |
| ) |
| 35,000 |
| Net loss from continuing operations before income taxes |
| (2,424,496 |
| ) |
| (4,461,591 |
| ) |
| Income tax benefit |
| 104,024 |
| - |
| Net loss from continuing operations |
| $ |
| (2,320,472 |
| ) |
| $ |
| (4,461,591 |
| ) |
| Net income (loss) from discontinued operations |
| 9,967,629 |
| (6,238,149 |
| ) |
| Net income (loss) |
| $ |
| 7,647,157 |
| $ |
| (10,699,740 |
| ) |
| Other comprehensive loss |
| Foreign currency translation adjustment |
| (5,329,710 |
| ) |
| (55,121 |
| ) |
| Reclassified to net income from discontinued operations |
| 4,912,715 |
| - |
| (416,995 |
| ) |
| (55,121 |
| ) |
| Comprehensive income (loss) |
| $ |
| 7,230,162 |
| $ |
| (10,754,861 |
| ) |
| Weighted Average Shares Outstanding-Basic and Diluted |
| 22,980,578 |
| 17,893,595 |
| Income (loss) per share- basic and diluted |
| 0.332 |
| (0.598 |
| ) |
| Net loss per share from continuing operations – basic and diluted |
| (0.101 |
| ) |
| (0.249 |
| ) |
| Net income (loss) per share from discontinued operations – basic and diluted |
| 0.433 |
| (0.349 |
| ) |
CHINA BAT GROUP, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
| For The Years Ended December 31, |
| 2018 |
| 2017 |
| Cash Flows from Operating Activities: |
| Net income (loss) |
| $ |
| 7,647,157 |
| $ |
| (10,699,740 |
| ) |
| Adjustments to reconcile net income (loss) to net cash used in operating activities: |
| Depreciation of operating lease assets |
| 101,654 |
| - |
| Depreciation of property and equipment |
| 1,001 |
| - |
| Impairment loss on one operating lease asset |
| 184,645 |
| Loss on disposal of one operating lease asset |
| 10,875 |
| Gain (loss) on disposal of discontinued operations |
| (9,967,629 |
| ) |
| 6,238,149 |
| Income tax benefits from intraperiod tax allocation |
| (105,000 |
| ) |
| Shares issued to executive officers and professional services |
| - |
| 2,842,380 |
| Changes in fair value of noncurrent liabilities |
| 166,540 |
| 266,000 |
| Changes in operating assets and liabilities: |
| Other assets |
| (91,395 |
| ) |
| - |
| Unearned income |
| 6,454 |
| Other current liabilities |
| 189,100 |
| - |
| Net cash provided by operating activities from discontinued operations |
| 1,769,566 |
| 168,581 |
| Net Cash Used in Operating Activities |
| (87,032 |
| ) |
| (1,184,630 |
| ) |
| Cash Flows from Investing Activities: |
| Proceeds from disposal of one operating asset |
| 121,752 |
| - |
| Proceeds from disposal of discontinued operations |
| 500,000 |
| - |
| Cash in connection with discontinued operations |
| (499,496 |
| ) |
| (1,067,930 |
| ) |
| Purchases of operating lease assets |
| (2,117,477 |
| ) |
| - |
| Purchases of property and equipment |
| (6,743 |
| ) |
| - |
| Net cash (used in) provided by investing activities from discontinued operations |
| (1,270,070 |
| ) |
| 610,160 |
| Net Cash (Used in) Provided by Investing Activities |
| (3,272,034 |
| ) |
| (457,770 |
| ) |
| Cash Flows From Financing Activities: |
| Borrowings from a third party |
| 226,713 |
| - |
| Cash raised in private placement of common stocks |
| 3,265,370 |
| 1,560,000 |
| Cash raised in private placements of convertible promissory notes |
| 314,352 |
| - |
| Subscription advanced from management |
| - |
| 699,974 |
| Net Cash Provided by Financing Activities |
| 3,806,435 |
| 2,259,974 |
| Effect of Exchange Rate Changes on Cash |
| (322,883 |
| ) |
| 44,189 |
| Net Increase In Cash |
| 124,486 |
| 661,763 |
| Cash at Beginning of Year |
| 1,359,630 |
| 697,867 |
| Cash at End of Year |
| $ |
| 1,484,116 |
| $ |
| 1,359,630 |
For more information, please contact:
Ms. Tina Xiao
Ascent Investor Relations LLC
Email: tina.xiao@ascent-ir.com