TIAN RUIXIANG Holdings Ltd Reports Financial Results for Fiscal Year Ended October 31, 2023

BEIJING, July 17, 2024 (GLOBE NEWSWIRE) — TIAN RUIXIANG Holdings Ltd (Nasdaq: TIRX) (the “Company”), a China-based insurance broker conducting business through its variable interest entity in China, today announced its financial results for the fiscal year ended October 31, 2023.

Ms. Sheng Xu, the Chief Executive Officer of the Company, commented, “For the year ended October 31, 2023, the Company generated revenue of about $1.2 million, representing an 8.0% decrease compared to the prior year’s revenue. This decline was primarily attributable to the lower commissions from several insurance products and loss of certain insurance company partners amid an increasingly competitive market and challenging macroeconomic environment in China.”

“However, we achieved a significant increase of approximately $612,000 in the commissions from our liability insurance products, driven by our efforts to expand our liability insurance business.”

“Despite the revenue decline, we were able to reduce the net loss by 47.6% to $2.5 million, down from $4.7 million in the prior year. Overall, while we faced headwinds in certain insurance products, we were able to drive substantial growth in the liability insurance commissions, which is a positive indicator for the Company’s strategic focus. Additionally, the reduction in the net loss demonstrates improved financial performance and operational efficiency compared to the prior year.”

Selected Fiscal Year 2023 Financial Metrics

    Years Ended October 31,
  Changes in  
($ in millions, except per share data, differences due to rounding.)   2023
  2022
  Percentage  
Revenues   $ 1.2   $ 1.4   (8.0) %
Total operating expenses     4.3     6.4   (33.6) %
Loss from operations     (3.0)     (5.1)   (40.5) %
Net loss     (2.5)     (4.7)   (47.6) %
Loss per share     (3.87)     (9.03)   (55.4) %
  • Revenue decreased by 8.0% to $1.2 million for the year ended October 31, 2023, compared with $1.4 million for the same period in 2022.
  • Total operating expenses were $4.3 million for the year ended October 31, 2023, decreased from $6.4 million for the same period in 2022.
  • Loss from operations narrowed by 40.5% to $3.0 million for the year ended October 31, 2023, from $5.1 million for the same period in 2022.
  • Net loss also decreased by 47.6% to $2.5 million for the year ended October 31, 2023, from $4.7 million for the same period in 2022.

About TIAN RUIXIANG Holdings Ltd

TIAN RUIXIANG Holdings Ltd, headquartered in Beijing, China, is an insurance broker operating in China through its China-based variable interest entity. It distributes a wide range of insurance products, which are categorized into two major groups: (1) property and casualty insurance, such as commercial property insurance, liability insurance, accidental insurance, and automobile insurance; and (2) other types of insurance, such as health insurance, life insurance, and other miscellaneous insurance. For more information, visit the company’s website at http://ir.tianrx.com/.

Forward-Looking Statements

Certain statements in this announcement are forward-looking statements. These forward-looking statements involve known and unknown risks and uncertainties and are based on current expectations and projections about future events and financial trends that the Company believes may affect its financial condition, results of operations, business strategy and financial needs. Investors can identify these forward-looking statements by words or phrases such as “may,” “will,” “expect,” “anticipate,” “aim,” “estimate,” “intend,” “plan,” “believe,” “potential,” “continue,” “is/are likely to” or other similar expressions. The Company undertakes no obligation to update forward-looking statements to reflect subsequent occurring events or circumstances, or changes in its expectations, except as may be required by law. Although the Company believes that the expectations expressed in these forward-looking statements are reasonable, it cannot assure you that such expectations will turn out to be correct, and the Company cautions investors that actual results may differ materially from the anticipated results and encourages investors to review risk factors that may affect its future results in the Company’s registration statement and in its other filings with the U.S. Securities and Exchange Commission.

For investor and media enquiries, please contact:

TIAN RUIXIANG Holdings Ltd
Investor Relations Department
Email: [email protected]

Wealth Financial Services LLC
Connie Kang
Partner
Email: [email protected]
Tel: +86 1381 185 7742 (CN)

TIAN RUIXIANG HOLDINGS LTD AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(IN U.S. DOLLARS)

 
             
    As of October 31,
    2023     2022  
ASSETS            
             
CURRENT ASSETS:            
Cash   $ 2,383     $ 2,508  
Restricted cash     692,692       692,734  
Short-term investments     26,797,081       26,179,662  
Accounts receivable     18,960       51,202  
Note receivable           7,500,000  
Interest receivable           262,192  
Due from related party           1,369  
Other current assets     107,508       168,957  
             
Total Current Assets     27,618,624       34,858,624  
             
NON-CURRENT ASSETS:            
Note receivable     7,800,000        
Property and equipment, net     6,280       8,688  
Right-of-use assets, operating leases, net     54,870       143,438  
Other non-current assets           20,078  
             
Total Non-current Assets     7,861,150       172,204  
             
Total Assets   $ 35,479,774     $ 35,030,828  
             
LIABILITIES AND EQUITY            
             
CURRENT LIABILITIES:            
Taxes payable   $ 623,825     $ 466,878  
Salary payable     726,330       424,987  
Accrued liabilities and other payables     481,801       384,893  
Due to related parties     1,173,510       126,530  
Operating lease liabilities     57,402       90,800  
             
Total Current Liabilities     3,062,868       1,494,088  
             
NON-CURRENT LIABILITIES:            
Operating lease liabilities – noncurrent portion           54,718  
             
Total Non-current Liabilities           54,718  
             
Total Liabilities     3,062,868       1,548,806  
             
             
EQUITY:            
TIAN RUIXIANG Holdings Ltd Shareholders’ Equity:            
Ordinary shares: $0.025 par value; 40,000,000 shares authorized;            
Class A ordinary shares: $0.025 par value; 36,000,000 shares authorized; 674,949 shares issued and outstanding at October 31, 2023; 507,440 shares issued and 505,440 shares outstanding at October 31, 2022     16,874       12,636  
Class B ordinary shares: $0.025 par value; 4,000,000 shares authorized; 50,000 shares issued and outstanding at October 31, 2023 and 2022     1,250       1,250  
Additional paid-in capital     44,108,774       42,663,012  
Less: ordinary stock held in treasury, at cost; 0 share at October 31, 2023 and 2,000 shares at October 31, 2022            
Accumulated deficit     (8,303,691 )     (5,800,817 )
Statutory reserve     275,150       226,253  
Accumulated other comprehensive loss     (3,681,845 )     (3,620,712 )
Total TIAN RUIXIANG Holdings Ltd shareholders’ equity     32,416,512       33,481,622  
Non-controlling interest     394       400  
             
Total Equity     32,416,906       33,482,022  
             
Total Liabilities and Equity   $ 35,479,774     $ 35,030,828  
                 
TIAN RUIXIANG HOLDINGS LTD AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(IN U.S. DOLLARS)

 
    For the Years Ended October 31,
    2023     2022     2021  
                   
REVENUES                  
Commissions   $ 1,244,247     $ 1,324,655     $ 2,675,611  
Risk management services           27,254       115,006  
                   
Total Revenues     1,244,247       1,351,909       2,790,617  
                   
OPERATING EXPENSES                  
Selling and marketing     2,438,248       1,764,909       2,517,497  
General and administrative – professional fees     1,220,367       1,185,930       1,011,053  
General and administrative – compensation and related benefits     460,791       2,691,751       948,900  
General and administrative – other     141,167       654,587       566,971  
Impairment loss           123,646        
                   
Total Operating Expenses     4,260,573       6,420,823       5,044,421  
                   
LOSS FROM OPERATIONS     (3,016,326 )     (5,068,914 )     (2,253,804 )
                   
OTHER INCOME (EXPENSE)                  
Interest income     731,961       434,406       315,070  
Other (expense) income     (8,278 )     (26,042 )     18,686  
                   
Total Other Income, net     723,683       408,364       333,756  
                   
LOSS BEFORE INCOME TAXES     (2,292,643 )     (4,660,550 )     (1,920,048 )
                   
INCOME TAXES     161,339       23,639       24,529  
                   
NET LOSS   $ (2,453,982 )   $ (4,684,189 )   $ (1,944,577 )
                   
LESS: NET LOSS ATTRIBUTABLE TO NON-CONTROLLING INTEREST     (5 )     (32 )     (28 )
                   
NET LOSS ATTRIBUTABLE TO TIAN RUIXIANG HOLDINGS LTD ORDINARY SHAREHOLDERS   $ (2,453,977 )   $ (4,684,157 )   $ (1,944,549 )
                   
NET LOSS PER ORDINARY SHARE ATTRIBUTABLE TO TIAN RUIXIANG HOLDINGS LTD ORDINARY SHAREHOLDERS:                  
Basic and diluted   $ (3.87 )   $ (9.03 )   $ (5.65 )
                   
WEIGHTED AVERAGE ORDINARY SHARES OUTSTANDING:                  
Basic and diluted     633,336       518,655       344,425  
                   
COMPREHENSIVE LOSS:                  
NET LOSS   $ (2,453,982 )   $ (4,684,189 )   $ (1,944,577 )
OTHER COMPREHENSIVE (LOSS) INCOME                  
Unrealized foreign currency translation (loss) gain     (61,134 )     (3,717,478 )     214,123  
COMPREHENSIVE LOSS     (2,515,116 )     (8,401,667 )     (1,730,454 )
LESS: COMPREHENSIVE LOSS ATTRIBUTABLE TO NON-CONTROLLING INTEREST     (6 )     (89 )     (6 )
COMPREHENSIVE LOSS ATTRIBUTABLE TO TIAN RUIXIANG HOLDINGS LTD ORDINARY SHAREHOLDERS   $ (2,515,110 )   $ (8,401,578 )   $ (1,730,448 )
                         
TIAN RUIXIANG HOLDINGS LTD AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(IN U.S. DOLLARS)

 
    For the Years Ended October 31,
    2023     2022     2021  
                   
CASH FLOWS FROM OPERATING ACTIVITIES:                  
Net loss   $ (2,453,982 )   $ (4,684,189 )   $ (1,944,577 )
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:                  
Depreciation expense and amortization of intangible assets     1,631       22,853       27,447  
Amortization of right-of-use assets     78,126       185,421       227,661  
Impairment loss           123,646       696  
Stock-based compensation and service expense     1,450,000       2,888,787        
Bad debt provision     7,338              
Loss on disposal of property and equipment     848              
Changes in operating assets and liabilities:                  
Accounts receivable     25,983       254,109       969,374  
Security deposit     6,726       37,853       (43,750 )
Interest receivable     262,192       (149,178 )     (113,014 )
Due from related party     1,417       (1,511 )      
Other assets     91,348       495,668       (74,120 )
Taxes payable     163,500       36,553       (78,932 )
Salary payable     347,567       349,436        
Accrued liabilities and other payables     99,649       304,576       (123,052 )
Due to related parties     992,277       126,228       12,025  
Operating lease liabilities – related party                 (29,355 )
Operating lease liabilities     (80,316 )     (189,012 )     (194,341 )
                   
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES     994,304       (198,760 )     (1,363,938 )
                   
CASH FLOWS FROM INVESTING ACTIVITIES:                  
Purchase of property and equipment           (2,346 )     (3,411 )
Investment in note receivable     (7,800,000 )           (7,500,000 )
Proceeds from note receivable     7,500,000              
Purchase of short-term investments     (27,779,231 )     (29,011,783 )      
Proceeds from sale of short-term investments     27,086,514       116,663        
                   
NET CASH USED IN INVESTING ACTIVITIES     (992,717 )     (28,897,466 )     (7,503,411 )
                   
CASH FLOWS FROM FINANCING ACTIVITIES                  
Proceeds from note payable                 75,581  
Repayment of note payable                 (75,581 )
Proceeds from related parties’ borrowings     9,535       225,171       1,893,932  
Repayments of related parties’ borrowings     (9,818 )     (225,171 )     (2,272,145 )
Proceeds from initial public offering                 12,300,000  
Disbursements for initial public offering costs                 (1,489,388 )
Proceeds from the June 2021 public offering                 24,562,500  
Disbursements for the June 2021 public offering costs                 (2,352,418 )
                   
NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES     (283 )           32,642,481  
                   
EFFECT OF EXCHANGE RATE ON CASH AND RESTRICTED CASH     (1,471 )     (1,052,173 )     145,014  
                   
NET (DECREASE) INCREASE IN CASH AND RESTRICTED CASH     (167 )     (30,148,399 )     23,920,146  
                   
CASH AND RESTRICTED CASH – beginning of year     695,242       30,843,641       6,923,495  
                   
CASH AND RESTRICTED CASH – end of year   $ 695,075     $ 695,242     $ 30,843,641  
                   
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:                  
Cash paid for:                  
Interest   $     $ 22     $ 725  
Income taxes   $ 807     $     $ 2,251  
                   
NON-CASH INVESTING AND FINANCING ACTIVITIES                  
Reissuance of treasury stock   $ 25,000     $     $  
Payments made by related parties on the Company’s behalf   $ 1,068,700     $     $ 119,886  
                   
RECONCILIATION OF CASH AND RESTRICTED CASH                  
Cash at beginning of year   $ 2,508     $ 30,024,372     $ 6,137,689  
Restricted cash at beginning of year     692,734       819,269       785,806  
Total cash and restricted cash at beginning of year   $ 695,242     $ 30,843,641     $ 6,923,495  
                   
Cash at end of year   $ 2,383     $ 2,508     $ 30,024,372  
Restricted cash at end of year     692,692       692,734       819,269  
Total cash and restricted cash at end of year   $ 695,075     $ 695,242     $ 30,843,641  
                         


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