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 | ||||||
