TIAN RUIXIANG Holdings Ltd Reports Financial Results for the Half Year Ended April 30, 2024
BEIJING, Aug. 16, 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 half year ended April 30, 2024.
Ms. Sheng Xu, the Chief Executive Officer of the Company, commented, “The Company reported a net loss of approximately $2.6 million for the six months ended April 30, 2024, primarily due to a significant decline in revenue caused by the loss of a few key insurance company partners. However, we are encouraged by the increase in the commissions from liability insurance of approximately $24,000 compared to the same period in 2023, indicating our success in expanding our liability insurance business.”
“We are actively pursuing strategies, such as expanding into the Hong Kong insurance brokerage market and diversifying our client base, to mitigate the impact of the lost partnerships and improve the Company’s financial performance in the future.”
Selected Half Year 2024 Financial Metrics
| Six Months Ended April 30, | Changes in | |||||||||||||||||||
| ($ in millions, except per share data, differences due to rounding.) | 2024 | 2023 | Percentage | |||||||||||||||||
| Revenues | $ | 0.2 | $ | 0.7 | (75.4) | % | ||||||||||||||
| Total operating expenses | 3.1 | 2.7 | 18.4 | % | ||||||||||||||||
| Loss from operations | (3.0) | (1.9) | 53.7 | % | ||||||||||||||||
| Net loss | (2.6) | (1.5) | 75.3 | % | ||||||||||||||||
Revenue
Revenue for the six months ended April 30, 2024 totaled $0.2 million, a decrease of $0.5 million, or 75.4%, compared with $0.7 million for the six months ended April 30, 2023. This significant decrease was primarily attributable to the loss of certain insurance company partners.
Operating Expenses
During the six months ended April 30, 2024 and 2023, operating expenses included selling and marketing expenses and general and administrative expenses.
- Selling and marketing expenses amounted to $1.2 million for the six months ended April 30, 2024, as compared to $1.6 million for the six months ended April 30, 2023, a decrease of $0.4 million, or 26.5%. The decrease was mainly attributable to a decrease in advertising costs and other miscellaneous items.
- General and administrative expenses amounted to $2.0 million for the six months ended April 30, 2024, as compared to $1.1 million for the six months ended April 30, 2023, an increase of $0.9 million, or 83.0%.
Loss from Operations
As a result of the foregoing, for the six months ended April 30, 2024, loss from operations amounted to $3.0 million, as compared to $1.9 million for the six months ended April 30, 2023.
Net Loss
As a result of the factors described above, net loss was $2.6 million for the six months ended April 30, 2024, as compared to $1.5 million for the six months ended April 30, 2023, a change of $1.1 million, or 75.3%.
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: ir@tianrx.com
Wealth Financial Services LLC
Connie Kang
Partner
Email: ckang@wealthfsllc.com
Tel: +86 1381 185 7742 (CN)
| TIAN RUIXIANG HOLDINGS LTD AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (IN U.S. DOLLARS) | |||||||||
| As of | |||||||||
| April 30, 2024 | October 31, 2023 | ||||||||
| (Unaudited) | |||||||||
| ASSETS | |||||||||
| CURRENT ASSETS: | |||||||||
| Cash | $ | 27,456,502 | $ | 2,383 | |||||
| Restricted cash | 700,530 | 692,692 | |||||||
| Short-term investments | — | 26,797,081 | |||||||
| Accounts receivable | 7,844 | 18,960 | |||||||
| Other current assets | 90,333 | 107,508 | |||||||
| Total Current Assets | 28,255,209 | 27,618,624 | |||||||
| NON-CURRENT ASSETS: | |||||||||
| Right-of-use assets, operating leases, net | 61,518 | 54,870 | |||||||
| Note receivable | 7,800,000 | 7,800,000 | |||||||
| Interest receivable | 78,000 | — | |||||||
| Property and equipment, net | 5,605 | 6,280 | |||||||
| Intangible assets, net | 1,766,961 | — | |||||||
| Total Non-current Assets | 9,712,084 | 7,861,150 | |||||||
| Total Assets | $ | 37,967,293 | $ | 35,479,774 | |||||
| LIABILITIES AND EQUITY | |||||||||
| CURRENT LIABILITIES: | |||||||||
| Acquisition payable | $ | 1,875,002 | $ | — | |||||
| Operating lease liabilities | 24,892 | 57,402 | |||||||
| Taxes payable | 626,150 | 623,825 | |||||||
| Salary payable | 815,449 | 726,330 | |||||||
| Accrued liabilities and other payables | 932,295 | 481,801 | |||||||
| Due to related parties | 1,310,545 | 1,173,510 | |||||||
| Total Current Liabilities | 5,584,333 | 3,062,868 | |||||||
| NON-CURRENT LIABILITIES: | |||||||||
| Operating lease liabilities – noncurrent portion | 39,872 | — | |||||||
| Total Non-current Liabilities | 39,872 | — | |||||||
| Total Liabilities | 5,624,205 | 3,062,868 | |||||||
| 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; 1,372,949 and 674,949 shares issued and outstanding at April 30, 2024 and October 31, 2023, respectively | 34,324 | 16,874 | |||||||
| Class B ordinary shares: $0.025 par value; 4,000,000 shares authorized; 50,000 shares issued and outstanding at April 30, 2024 and October 31, 2023 | 1,250 | 1,250 | |||||||
| Additional paid-in capital | 46,361,339 | 44,108,774 | |||||||
| Accumulated deficit | (10,909,039 | ) | (8,303,691 | ) | |||||
| Statutory reserve | 275,150 | 275,150 | |||||||
| Accumulated other comprehensive loss | (3,420,333 | ) | (3,681,845 | ) | |||||
| Total TIAN RUIXIANG Holdings Ltd shareholders’ equity | 32,342,691 | 32,416,512 | |||||||
| Non-controlling interest | 397 | 394 | |||||||
| Total Equity | 32,343,088 | 32,416,906 | |||||||
| Total Liabilities and Equity | $ | 37,967,293 | $ | 35,479,774 | |||||
| TIAN RUIXIANG HOLDINGS LTD AND SUBSIDIARIES UNAUDITED CONDESNSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (IN U.S. DOLLARS) | ||||||||
| (IN U.S. DOLLARS) | ||||||||
| For the Six Months Ended April 30, | ||||||||
| 2024 | 2023 | |||||||
| REVENUES | $ | 178,345 | $ | 724,859 | ||||
| OPERATING EXPENSES | ||||||||
| Selling and marketing | 1,149,083 | 1,564,353 | ||||||
| General and administrative – professional fees | 390,503 | 735,314 | ||||||
| General and administrative – compensation and related benefits | 1,521,846 | 290,810 | ||||||
| General and administrative – other | 79,743 | 62,368 | ||||||
| Total Operating Expenses | 3,141,175 | 2,652,845 | ||||||
| LOSS FROM OPERATIONS | (2,962,830 | ) | (1,927,986 | ) | ||||
| OTHER INCOME (EXPENSE) | ||||||||
| Interest income | 348,639 | 468,200 | ||||||
| Other income (expense) | 22,940 | (6,464 | ) | |||||
| Total Other Income, net | 371,579 | 461,736 | ||||||
| LOSS BEFORE INCOME TAXES | (2,591,251 | ) | (1,466,250 | ) | ||||
| INCOME TAXES | 14,098 | 20,003 | ||||||
| NET LOSS | $ | (2,605,349 | ) | $ | (1,486,253 | ) | ||
| LESS: NET LOSS ATTRIBUTABLE TO NON-CONTROLLING INTEREST | (1 | ) | — | |||||
| NET LOSS ATTRIBUTABLE TO TIAN RUIXIANG HOLDINGS LTD ORDINARY SHAREHOLDERS | $ | (2,605,348 | ) | $ | (1,486,253 | ) | ||
| NET LOSS PER ORDINARY SHARE ATTRIBUTABLE TO TIAN RUIXIANG HOLDINGS LTD ORDINARY SHAREHOLDERS: | ||||||||
| Basic and diluted | $ | (2.68 | ) | $ | (2.50 | ) | ||
| WEIGHTED AVERAGE ORDINARY SHARES OUTSTANDING: | ||||||||
| Basic and diluted | 970,721 | 594,901 | ||||||
| COMPREHENSIVE LOSS: | ||||||||
| NET LOSS | $ | (2,605,349 | ) | $ | (1,486,253 | ) | ||
| OTHER COMPREHENSIVE INCOME | ||||||||
| Unrealized foreign currency translation gain | 261,516 | 1,485,978 | ||||||
| COMPREHENSIVE LOSS | (2,343,833 | ) | (275 | ) | ||||
| LESS: COMPREHENSIVE INCOME ATTRIBUTABLE TO NON-CONTROLLING INTEREST | 3 | 23 | ||||||
| COMPREHENSIVE LOSS ATTRIBUTABLE TO TIAN RUIXIANG HOLDINGS LTD ORDINARY SHAREHOLDERS | $ | (2,343,836 | ) | $ | (298 | ) | ||
| TIAN RUIXIANG HOLDINGS LTD AND SUBSIDIARIES UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (IN U.S. DOLLARS) | ||||||||
| For the Six Months Ended April 30, | ||||||||
| 2024 | 2023 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
| Net loss | $ | (2,605,349 | ) | $ | (1,486,253 | ) | ||
| Adjustments to reconcile net loss to | ||||||||
| net cash provided by operating activities: | ||||||||
| Depreciation expense and amortization of intangible assets | 30,896 | 1,017 | ||||||
| Amortization of right-of-use assets | 36,835 | 55,334 | ||||||
| Stock-based compensation and service expense | 2,270,015 | 1,068,000 | ||||||
| Bad debt provision | 18,073 | 25 | ||||||
| Loss on disposal of property and equipment | — | 735 | ||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | 11,423 | (60,321 | ) | |||||
| Security deposit | — | 4,402 | ||||||
| Interest receivable | (78,000 | ) | 262,192 | |||||
| Due from related party | — | 1,444 | ||||||
| Other assets | 397 | 55,340 | ||||||
| Taxes payable | (4,086 | ) | 24,428 | |||||
| Salary payable | 91,969 | 204,189 | ||||||
| Accrued liabilities and other payables | 518,567 | (8,959 | ) | |||||
| Due to related parties | 3,611 | 683,003 | ||||||
| Operating lease liabilities | (36,141 | ) | (42,993 | ) | ||||
| NET CASH PROVIDED BY OPERATING ACTIVITIES | 258,210 | 761,583 | ||||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
| Proceeds from note receivable | — | 7,500,000 | ||||||
| Cash acquired on acquisition | 77,893 | — | ||||||
| Proceeds from sale of short-term investments | 27,336,938 | 27,615,075 | ||||||
| NET CASH PROVIDED BY INVESTING ACTIVITIES | 27,414,831 | 35,115,075 | ||||||
| CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||
| Proceeds from related parties’ borrowings | 93,794 | — | ||||||
| Repayments of related parties’ borrowings | (35,807 | ) | — | |||||
| NET CASH PROVIDED BY FINANCING ACTIVITIES | 57,987 | — | ||||||
| EFFECT OF EXCHANGE RATE ON CASH AND RESTRICTED CASH | (269,071 | ) | 84,307 | |||||
| NET INCREASE IN CASH AND RESTRICTED CASH | 27,461,957 | 35,960,965 | ||||||
| CASH AND RESTRICTED CASH – beginning of period | 695,075 | 695,242 | ||||||
| CASH AND RESTRICTED CASH – end of period | $ | 28,157,032 | $ | 36,656,207 | ||||
| SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | ||||||||
| Cash paid for: | ||||||||
| Interest | $ | — | $ | — | ||||
| Income taxes | $ | 1,423 | $ | — | ||||
| NON-CASH INVESTING AND FINANCING ACTIVITIES | ||||||||
| Reissuance of treasury stock | $ | — | $ | 25,000 | ||||
| Payments made by related parties on the Company’s behalf | $ | 75,333 | $ | — | ||||
| Accrued purchase price related to acquisition | $ | 1,875,002 | $ | — | ||||
| RECONCILIATION OF CASH AND RESTRICTED CASH | ||||||||
| Cash at beginning of period | $ | 2,383 | $ | 2,508 | ||||
| Restricted cash at beginning of period | 692,692 | 692,734 | ||||||
| Total cash and restricted cash at beginning of period | $ | 695,075 | $ | 695,242 | ||||
| Cash at end of period | $ | 27,456,502 | $ | 35,923,605 | ||||
| Restricted cash at end of period | 700,530 | 732,602 | ||||||
| Total cash and restricted cash at end of period | $ | 28,157,032 | $ | 36,656,207 | ||||
