Apparently this ugly character is a concept for series 3. I'm not sure what it is... a bug of some sort, but wow, hideous. This looks like it stepped right out of a 1980s fantasy toy line package illustration. Read more about it here on the Rise of the Beasts Kickstarter page, which, at press time, has about 10 hours to go.
For those of you waiting for more on Diamond's Battle Beasts, like I am, sit tight-- we should know more in about a month. But for now, enjoy whatever the heck that nightmare is to the left. I look forward to owning one.