TIAN RUIXIANG Holdings Ltd Reports Fiscal Year 2021 Financial Results

BEIJING,March 7,2022 -- TIAN RUIXIANG Holdings Ltd (Nasdaq:TIRX) (the "Company"),aChina-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) incomefrom operations

(2.25)

0.56

NM

Operating margin

(80.8)%

17.2%

NM

Net (loss) income

(1.94)

0.63

NM

(Loss) incomeper 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$2.36million,or 87.6%,to$5.04 millionfor fiscal year 2021,from$2.69 millionfor 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 toincome before income tax of $0.76 millionfor fiscal year 2020.

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

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

Net loss was$1.94 millionfor fiscal year 2021,compared tonet income of $0.63 millionfor 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,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 inBeijing,China,is an insurance broker operating inChina 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 athttp://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: ir@tianrx.com

Ascent Investor Relations LLC

Tina Xiao

Phone: +1 917-609-0333

Email: tina.xiao@ascent-ir.com

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; 47,000 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; 2,000 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

38,902

8,713

Total Liabilities and Equity

$

40,473

TIAN RUIXIANG HOLDINGS LTD AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME

(IN U.S. DOLLARS)

FortheYearsEndedOctober31,

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

2,217

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

$

(1,549)

$

634,103

$

175,787

COMPREHENSIVE (LOSS) INCOME:

NET (LOSS) INCOME

(1,577)

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

$

(1,448)

$

1,798

$

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

5,000

* 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)

FortheYearsEndedOctober31,

2021

2020

2019

CASH FLOWS FROM OPERATING ACTIVITIES:

Net (loss) income

$

(1,787

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

(7,000)

—

—

Payments of notes receivable - related party

—

(17,158,967)

—

Proceed received from repayments of notes receivable - related party

—

17,967

232,133

NET CASH (USED IN) PROVIDED BY INVESTING ACTIVITIES

(7,457)

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

23,146

(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

$

6,495

$

6,586

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

$

6,689

$

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

$

6,586

$

7,438

Cash and cash equivalents at end of year

$

30,029

Restricted cash at end of year

819,557

Total cash,cash equivalents and restricted cash at end of year

$

30,586

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