TIAN RUIXIANG Holdings Ltd Reports Fiscal Year 2021 Financial Results

BEIJING, March 7, 2022 /PRNewswire/ -- TIAN RUIXIANG Holdings Ltd (Nasdaq: TIRX) (the "Company"), a China-based insurance broker conducting business through its variable interest entity in China, announced today its financial results for the fiscal year ended October 31, 2021.

Mr. Zhe Wang, Chairman of the board of the directors and Chief Executive Officer of the Company, commented, "In fiscal year 2021, our revenue was down by 14.1% to $2.79 million, which was primarily caused by a decrease in the commissions generated from individual accidental insurance of approximately $0.36 million and a decrease in the risk management services revenue of approximately $0.18 million. However, we are pleased with the establishment of our Yunnan Branch in November 2021, through which we were able to expand the geographic coverage of our insurance brokerage services. In the past year, we also hired more sales professionals to market and sell insurance products. We plan to focus on growing our property and group insurance business, as well as expanding our sales channels to enhance corporate client services, such as our  risk management services. At the same time, we will continue to explore health insurance business opportunities. Looking forward, we remain confident in our business strategy to achieve growth and create long-term value for our shareholders."

Fiscal Year 2021 Financial Highlights

	For the Fiscal Years Ended October 31,
($ in millions, except per share data)	2021		2020		% Change
Revenue	2.79		3.25		-14.1%
Operating expenses	5.04		2.69		87.6%
(Loss) income from operations	(2.25)		0.56		NM
Operating margin	(80.8)%		17.2%		NM
Net (loss) income	(1.94)		0.63		NM
(Loss) income per share	(0.23)		0.13		NM
Note: NM refers to "Not Meaningful"

• Revenue decreased by 14.1% to $2.79 million for fiscal year 2021, from $3.25 million for fiscal year 2020, primarily attributable to a decrease in commissions from individual accidental insurance of approximately $0.36 million resulting from the loss of an insurance company partner and a decrease in our risk management services revenue from the provision of insurance related risk management services of approximately $0.18 million.
• Operating expenses increased by 87.6% to $5.04 million for fiscal year 2021, from $2.69 million for fiscal year 2020.
• Operating margin was (80.8)% for fiscal year 2021, compared to 17.2% for fiscal year 2020.
• Net loss was $1.94 million for fiscal year 2021, compared to net income of $0.63 million for fiscal year 2020.
• Loss per share was $0.23 for fiscal year 2021, compared to income per share of $0.13 for fiscal year 2020.

Fiscal Year 2021 Financial Results

Revenue

Revenue decreased by $0.46 million, or 14.1%, to $2.79 million for fiscal year 2021, from $3.25 million for fiscal year 2020. This decrease was primarily attributable to a decrease in commissions from individual accidental insurance of approximately $0.36 million resulting from the loss of an insurance company partner and a decrease in our risk management services revenue from the provision of insurance-related risk management services of approximately $0.18 million.

Operating Expenses

Third-party and related-party selling and marketing expenses increased by $0.96 million, or 61.6%, to $2.52 million for fiscal year 2021, from $1.56 million for fiscal year 2020. The increase in selling and marketing expenses was mainly attributable to the increase in our marketing activities, the launch of aggressive advertising campaigns and the increase in the number of sales professionals to sell insurance products.

Third-party and related-party general and administrative expenses increased by $1.40 million, or 123.4%, to $2.53 million for fiscal year 2021, from $1.13 million for fiscal year 2020. The increase in general and administrative expenses was primarily attributable to increased professional fees, compensation and related benefits, rent and related utility expenses, directors' and officers' liability insurance premiums and travel and entertainment expenses.

Total operating expenses increased by $2.36 million, or 87.6%, to $5.04 million for fiscal year 2021, from $2.69 million for fiscal year 2020.

(Loss) Income from Operations

Loss from operations was $2.25 million for fiscal year 2021, compared to income from operations of $0.56 million for fiscal year 2020.

The operating margin was (80.8)% for fiscal year 2021, compared to an operating margin of 17.2% for fiscal year 2020.

Other Income (Expense)

Other income (expense) primarily included interest income from third-party and related-party notes receivable and bank deposits, interest expense incurred from our third-party and related-party borrowings, and miscellaneous income. Other income was $0.33 million for fiscal year 2021, compared to other income of $0.20 million for fiscal year 2020.

(Loss) Income before Income Tax

Loss before income tax was $1.92 million for fiscal year 2021, compared to income before income tax of $0.76 million for fiscal year 2020.

Income tax expense was $24,529 for fiscal year 2021, compared to income tax expense of $126,055 for fiscal year 2020.

Net (Loss) Income and (Loss) Income per Share

Net loss was $1.94 million for fiscal year 2021, compared to net income of $0.63 million for fiscal year 2020. After deduction of net loss attributable to non-controlling interest, net loss attributable to TIRX ordinary shareholders was $1.94 million, or loss per share of $0.23 for fiscal year 2021, compared to net income attributable to TIRX ordinary shareholders of $0.63 million, or income per share of $0.13 for fiscal year 2020.

Financial Conditions

As of October 31, 2021, the Company had cash and cash equivalents of $30.02 million, compared to cash and cash equivalents of $6.14 million as of October 31, 2020. Total working capital was $30.51 million as of October 31, 2021, compared to working capital of $8.27 million as of October 31, 2020.

Net cash used in operating activities was $1.36 million for fiscal year 2021, compared to net cash used in operating activities of $0.05 million for fiscal year 2020.

Net cash used in investing activities was $7,503,411 for fiscal year 2021, compared to net cash used in investing activities of $3,457 for fiscal year 2020.

Net cash provided by financing activities was $32.64 million for fiscal year 2021, compared to net cash used in financing activities of $0.48 million for fiscal year 2020.

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 automobile insurance, commercial property insurance, liability insurance; and (2) life insurance, such as individual and group life insurance. Additionally, the Company also provides risk management services to institutional customers. 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 SEC.

For investor and media enquiries, please contact:

TIAN RUIXIANG Holdings Ltd
Investor Relations Department
Email: [e-mail] 

Ascent Investor Relations LLC
Tina Xiao
Phone: [phone]
Email: [e-mail] 

TIAN RUIXIANG HOLDINGS LTD AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(IN U.S. DOLLARS)
		As of October 31,
		2021			2020
ASSETS
CURRENT ASSETS:
Cash and cash equivalents		$	30,024,372		$	6,137,689
Restricted cash			819,269			785,806
Accounts receivable			320,848			1,247,059
Deferred offering costs			—			895,567
Prepaid expenses and other current assets			465,650			494,476
Total Current Assets			31,630,139			9,560,597
NON-CURRENT ASSETS:
Note receivable			7,500,000			—
Interest receivable			113,014			—
Property and equipment, net			11,265			15,097
Intangible assets, net			147,538			160,219
Right-of-use assets, operating leases, net			760,229			317,141
Other non-current assets			188,281			7,419
Total Non-current Assets			8,720,327			499,876
Total Assets		$	40,350,466		$	10,060,473
LIABILITIES AND EQUITY
CURRENT LIABILITIES:
Taxes payable		$	493,196		$	548,630
Salary payable			103,168			129,711
Accrued liabilities and other payables			95,664			180,394
Due to related parties			2,564			241,097
Operating lease liabilities			423,124			170,082
Operating lease liabilities - related party			—			18,737
Total Current Liabilities			1,117,716			1,288,651
NON-CURRENT LIABILITIES:
Operating lease liabilities - noncurrent portion			237,848			123,404
Operating lease liabilities - related party - noncurrent portion			—			9,705
Total Non-current Liabilities			237,848			133,109
Total Liabilities			1,355,564			1,421,760
Commitments and Contingencies - (Note 17)
EQUITY:
TIAN RUIXIANG Holdings Ltd Shareholders' Equity:
Ordinary shares: $0.001 par value; 50,000,000 shares authorized;
Class A ordinary shares: $0.001 par value; 47,500,000 shares authorized; 10,100,000 and 3,750,000 shares issued    and outstanding at October 31, 2021 and 2020, respectively			10,100			3,750
Class B ordinary shares: $0.001 par value; 2,500,000 shares authorized; 1,250,000 shares issued and outstanding at    October 31, 2021 and 2020			1,250			1,250
Additional paid-in capital			39,776,761			7,696,468
(Accumulated deficit) retained earnings			(1,090,060)			884,076
Statutory reserve			199,653			170,066
Accumulated other comprehensive income (loss)			96,709			(117,392)
Total TIAN RUIXIANG Holdings Ltd shareholders' equity			38,994,413			8,638,218
Non-controlling interest			489			495
Total Equity			38,994,902			8,638,713
Total Liabilities and Equity		$	40,350,466		$	10,060,473

 

 

TIAN RUIXIANG HOLDINGS LTD AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME
(IN U.S. DOLLARS)
		For the Years Ended October 31,
		2021			2020			2019
REVENUES
Commissions		$	2,675,611		$	2,954,798		$	2,002,217
Risk management services			115,006			294,546			—
Total Revenues			2,790,617			3,249,344			2,002,217
OPERATING EXPENSES
Selling and marketing			2,516,368			1,519,783			773,650
Selling and marketing - related parties			1,129			38,426			23,922
General and administrative - professional fees			1,011,053			94,363			123,512
General and administrative - compensation and related benefits			948,900			743,062			651,490
General and administrative - related parties			20,391			14,215			19,180
General and administrative - other			546,580			279,353			307,793
Total Operating Expenses			5,044,421			2,689,202			1,899,547
(LOSS) INCOME FROM OPERATIONS			(2,253,804)			560,142			102,670
OTHER INCOME (EXPENSE)
Interest income			315,070			88,948			275,168
Interest income - related party			—			102,074			—
Interest expense			(725)			—			(18,218)
Interest expense - related parties			—			—			(613)
Other income			19,411			8,991			54,988
Total Other Income, net			333,756			200,013			311,325
(LOSS) INCOME BEFORE INCOME TAXES			(1,920,048)			760,155			413,995
INCOME TAXES			24,529			126,055			238,208
NET (LOSS) INCOME		$	(1,944,577)		$	634,100		$	175,787
LESS: NET LOSS ATTRIBUTABLE TO NON-CONTROLLING INTEREST			(28)			(3)			—
NET (LOSS) INCOME ATTRIBUTABLE TO TIAN RUIXIANG HOLDINGS LTD ORDINARY    SHAREHOLDERS		$	(1,944,549)		$	634,103		$	175,787
COMPREHENSIVE (LOSS) INCOME:
NET (LOSS) INCOME			(1,944,577)			634,100			175,787
OTHER COMPREHENSIVE INCOME (LOSS)
Unrealized foreign currency translation gain (loss)			214,123			420,719			(70,429)
COMPREHENSIVE (LOSS) INCOME		$	(1,730,454)		$	1,054,819		$	105,358
LESS: COMPREHENSIVE (LOSS) INCOME ATTRIBUTABLE TO NON-CONTROLLING    INTEREST			(6)			21			(4)
COMPREHENSIVE (LOSS) INCOME ATTRIBUTABLE TO TIAN RUIXIANG HOLDINGS LTD    ORDINARY SHAREHOLDERS		$	(1,730,448)		$	1,054,798		$	105,362
NET (LOSS) INCOME PER ORDINARY SHARE ATTRIBUTABLE TO TIAN RUIXIANG    HOLDINGS LTD ORDINARY SHAREHOLDERS:
Basic and diluted *		$	(0.23)		$	0.13		$	0.04
WEIGHTED AVERAGE ORDINARY SHARES OUTSTANDING:
Basic and diluted *			8,610,615			5,000,000			5,000,000
* The shares and per share amounts are presented on a retroactive basis.

 

 

TIAN RUIXIANG HOLDINGS LTD AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN U.S. DOLLARS)
		For the Years Ended October 31,
		2021			2020			2019
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) income		$	(1,944,577)		$	634,100		$	175,787
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities:
Depreciation expense and amortization of intangible assets			27,447			27,829			34,713
Amortization of right-of-use assets			227,661			199,709			—
Impair loss			696			—			—
Changes in operating assets and liabilities:
Accounts receivable			969,374			(1,021,727)			91,432
Security deposit			(43,750)			2,837			(3,963)
Prepaid expenses and other current assets			(74,120)			(8,582)			(356,117)
Interest receivable			(113,014)			—			16,745
Due from related parties			—			—			447,778
Insurance premiums payable			—			—			(198,717)
Taxes payable			(78,932)			204,532			(56,272)
Accrued liabilities and other payables			(123,052)			108,765			40,826
Due to related parties			12,025			(6,970)			36,841
Operating lease liabilities - related party			(29,355)			(25,834)			—
Operating lease liabilities			(194,341)			(162,828)			—
NET CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES			(1,363,938)			(48,169)			229,053
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment			(3,411)			(3,457)			(12,012)
Purchase of intangible asset			—			—			(183,115)
Investment in  note receivable			(7,500,000)			—			—
Payments of notes receivable - related party			—			(17,158,967)			—
Proceed received from repayments of notes receivable - related party			—			17,158,967			232,133
NET CASH (USED IN) PROVIDED BY INVESTING ACTIVITIES			(7,503,411)			(3,457)			37,006
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds received from note payable			75,581			—			—
Repayment of note payable			(75,581)			—			—
Repayments made for borrowings			—			—			(369,483)
Proceeds received from related parties' borrowings			1,893,932			1,987,256			—
Repayments made for related parties' borrowings			(2,272,145)			(2,099,420)			(8,400)
Proceeds received from initial public offering			12,300,000			—			—
Disbursements for initial public offering costs			(1,489,388)			—			—
Proceeds received from the June 2021 public offering			24,562,500			—			—
Disbursements for the June 2021 public offering costs			(2,352,418)			(371,081)			(493,899)
Capital contribution from shareholders			—			5,000			464
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES			32,642,481			(478,245)			(871,318)
EFFECT OF EXCHANGE RATE ON CASH, CASH EQUIVALENTS AND RESTRICTED CASH			145,014			486,780			(55,593)
NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH			23,920,146			(43,091)			(660,852)
CASH, CASH EQUIVALENTS AND RESTRICTED CASH - beginning of year			6,923,495			6,966,586			7,627,438
CASH, CASH EQUIVALENTS AND RESTRICTED CASH - end of year		$	30,843,641		$	6,923,495		$	6,966,586
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for:
Interest		$	725		$	—		$	33,675
Income taxes		$	2,251		$	—		$	283,267
NON-CASH INVESTING AND FINANCING ACTIVITIES
Payments made by related parties on the Company's behalf		$	119,886		$	141,449		$	—
RECONCILIATION OF CASH, CASH EQUIVALENTS AND RESTRICTED CASH
Cash and cash equivalents at beginning of year		$	6,137,689		$	6,243,029		$	6,712,880
Restricted cash at beginning of year			785,806			723,557			914,558
Total cash, cash equivalents and restricted cash at beginning of year		$	6,923,495		$	6,966,586		$	7,627,438
Cash and cash equivalents at end of year		$	30,024,372		$	6,137,689		$	6,243,029
Restricted cash at end of year			819,269			785,806			723,557
Total cash, cash equivalents and restricted cash at end of year		$	30,843,641		$	6,923,495		$	6,966,586

 

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