Group 1 - The core viewpoint of the article highlights Tianruixiang's (TIRX) stock performance, which opened with a 5.95% increase, reaching $0.89 per share, with a total market capitalization of $99.3761 million as of 21:30 [1] - Financial data indicates that Tianruixiang's total revenue for the period ending October 31, 2024, is $3.2193 million, representing a year-on-year growth of 158.74% [1] - The company's net profit attributable to shareholders is reported at -$3.9869 million, showing a year-on-year decrease of 62.47% [1] Group 2 - Tianruixiang Holdings Limited is registered in the Cayman Islands and operates primarily through its domestic subsidiary, Zhejiang Tianruixiang Insurance Brokerage Co., Ltd. [1] - The company has established itself as a comprehensive national insurance intermediary, offering a wide range of insurance products categorized into two main types: property and casualty insurance, and life insurance [1] - The property and casualty insurance includes products such as auto insurance, commercial property insurance, and liability insurance, while life insurance encompasses both individual and group life insurance [1]

Group 1 - The core viewpoint of the article highlights Tianruixiang's (TIRX) stock performance, which opened up by 4.7% and reached $0.88 per share, with a total market capitalization of approximately $98.2 million as of 21:30 on August 12 [1] - Financial data indicates that as of October 31, 2024, Tianruixiang's total revenue amounted to $3.2193 million, reflecting a year-on-year growth of 158.74% [1] - The company's net profit attributable to shareholders was reported at -$3.9869 million, showing a year-on-year decrease of 62.47% [1] Group 2 - Tianruixiang Holdings Limited is registered in the Cayman Islands and primarily operates through its domestic subsidiary, Zhejiang Tianruixiang Insurance Brokerage Co., Ltd [1] - The company has established itself as a comprehensive national insurance intermediary, offering a wide range of insurance products categorized into two main types: property and casualty insurance, and life insurance [1] - The property and casualty insurance includes products such as auto insurance, commercial property insurance, and liability insurance, while life insurance encompasses both individual and group life insurance [1]

ST. PETERSBURG, FL, Aug. 07, 2025 (GLOBE NEWSWIRE) -- Water Tower Research (www.watertowerresearch.com) has published an Initiation of Coverage Report on Tian Ruixiang Holdings Limited (NASDAQ: TIRX) titled, “From Traditional Insurance Broker to Tech- Based Health Insurance Innovator”. The report can be accessed here. Access to China’s growing health insurance market. On June 30, 2025, Chinese insurance broker Tian Ruixiang Holdings Limited completed the acquisition of Ucare, which describes itself as the o ...

Core Viewpoint - TIAN RUIXIANG Holdings Ltd has completed the acquisition of Ucare Inc, enhancing its position in the health insurance sector through a cloud-based AI-driven platform valued at US$150 million [1][2]. Company Overview - TIAN RUIXIANG Holdings Ltd is an insurance broker based in Beijing, China, offering a variety of insurance products, including property and casualty insurance, health insurance, and life insurance [5]. - Ucare Inc. specializes in innovative healthcare solutions aimed at reducing fraud, waste, and administrative costs in the healthcare system [6]. Acquisition Details - The acquisition involved the issuance of 101,486,575 Class A ordinary shares at a par value of US$0.025, marking a significant step in TRX's strategy to expand its distribution channels [2]. - The transaction is valued at US$150 million, indicating a strong commitment to growth in the health insurance market [1]. Strategic Implications - The integration of Ucare's generative AI platform into TRX's operations is expected to enhance underwriting and claims processing, thereby improving pricing precision and operational efficiency [3]. - TRX aims to leverage Ucare's existing relationships with over 4,000 hospitals to create unique health insurance service offerings [3]. Leadership Insights - The CEO of TRX expressed enthusiasm about the acquisition, highlighting its potential to transform health insurance design and service delivery [4]. - Ucare's CEO noted that joining TRX will accelerate their mission to innovate in hospital and health insurance risk management [4].

Core Viewpoint - TIAN RUIXIANG Holdings Ltd plans to acquire Ucare Inc., a cloud-based AI-driven health insurance risk management platform, in an all-share deal valued at US$150 million, aiming to enhance growth opportunities in the health insurance sector [1][4]. Company Summary - TIAN RUIXIANG Holdings Ltd is an insurance broker based in China, distributing a variety of insurance products, including property and casualty insurance, health insurance, and life insurance [7]. - Ucare Inc. operates the only cloud-based AI-driven hospital and health insurance risk management platform in China, serving over 4,000 hospitals and contributing to a reduction of US$6.82 billion in avoidable healthcare expenditures as of December 2024 [3][8]. Acquisition Details - The acquisition involves a share exchange agreement where Ucare's shareholders will receive 101,486,575 newly-issued class A ordinary shares of TRX, representing approximately 91.75% of TRX's total issued Class A shares and about 13.70% of its total voting power upon closing [2][5]. - The transaction is expected to close around July 2025, with shares held in escrow until Ucare achieves a cumulative revenue target of at least RMB150 million over three years post-closing [5]. Strategic Implications - The acquisition is positioned to leverage Ucare's AI-driven data analytics to create differentiated health insurance products and strengthen distribution within hospital systems, aligning with the rapid expansion of China's health insurance market [4]. - Ucare's integration into TRX is expected to enhance the company's ability to design tailored insurance products, streamline claims, and diversify revenues, marking a significant step towards a data-powered insurance service model [6].

PART I [ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS](index=8&type=section&id=ITEM%201.%20IDENTITY%20OF%20DIRECTORS%2C%20SENIOR%20MANAGEMENT%20AND%20ADVISERS) This section is not applicable as stated in the report - The report states that this item is not applicable[22](index=22&type=chunk) [ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE](index=8&type=section&id=ITEM%202.%20OFFER%20STATISTICS%20AND%20EXPECTED%20TIMETABLE) This section is not applicable as stated in the report - The report states that this item is not applicable[23](index=23&type=chunk) [ITEM 3. KEY INFORMATION](index=8&type=section&id=ITEM%203.%20KEY%20INFORMATION) This section introduces the company's Cayman Islands holding structure, its operations via a Variable Interest Entity (VIE) in China, and key risks including PRC regulations and HFCAA, alongside selected condensed consolidating financial data for fiscal years 2022-2024 - The company is a Cayman Islands holding company, not a Chinese operating company, conducting all operations in China through a VIE, Zhejiang Tianruixiang Insurance Broker Co. LTD. (TRX ZJ), controlled via contractual agreements[10](index=10&type=chunk)[24](index=24&type=chunk)[25](index=25&type=chunk) - The VIE structure poses unique risks, as the contractual agreements have not been tested in a Chinese court, and the PRC government could disallow this structure, materially harming the company's operations and share value[25](index=25&type=chunk) - The company is subject to risks from PRC regulatory actions, including those related to cybersecurity and overseas listings, which as of the report date have not materially impacted the business, but future interpretations remain uncertain[26](index=26&type=chunk)[30](index=30&type=chunk) - The company's auditor, RBSM LLP, is a U.S.-based firm regularly inspected by the PCAOB, making it currently compliant with the Holding Foreign Companies Accountable Act (HFCAA), though future inability to inspect the auditor could lead to delisting[27](index=27&type=chunk) Selected Condensed Consolidating Balance Sheet as of October 31, 2024 (in USD) | Account | TRX (Cayman Islands) | Subsidiary (Hong Kong) | WFOE (PRC) | VIE and its Subsidiaries (PRC) | Consolidated Total | | :--- | :--- | :--- | :--- | :--- | :--- | | **Total Assets** | $36,585,985 | $16,202,577 | $875,274 | $31,895,377 | $39,979,194 | | **Total Liabilities** | $2,695,855 | $9,385,097 | $524,893 | $4,221,235 | $6,089,064 | | **Total Equity** | $33,890,130 | $6,817,480 | $350,381 | $27,674,142 | $33,890,130 | Selected Condensed Consolidating Statement of Operations for the Year Ended October 31, 2024 (in USD) | Account | TRX (Cayman Islands) | Subsidiary (Hong Kong) | WFOE (PRC) | VIE and its Subsidiaries (PRC) | Consolidated Total | | :--- | :--- | :--- | :--- | :--- | :--- | | **Revenues** | $0 | $0 | $0 | $3,219,336 | $3,219,336 | | **Net (Loss) Income** | $(3,986,928) | $49,841 | $1,698,626 | $0 | $(3,986,928) | | **Comprehensive (Loss) Income** | $(3,986,928) | $50,366 | $1,685,144 | $2,495,068 | $(3,220,343) | [Risk Factors](index=19&type=section&id=D.%20Risk%20Factors) This subsection details significant business, corporate structure, China-specific, and share-related risks, including intense competition, regulatory changes, VIE instability, and the dilutive dual-class share structure - **Business & Industry Risks:** The company faces risks from its limited operating history, intense competition, reliance on commission rates set by insurance companies, and a highly regulated environment in China, with the failure of its online platform, Needbao, also posing a risk to future growth[47](index=47&type=chunk)[57](index=57&type=chunk)[62](index=62&type=chunk) - **Corporate Structure Risks:** The VIE agreements that provide control over PRC operations have not been tested in court and may be unenforceable, with a critical risk being the judicial freezing of the VIE (TRX ZJ) equity shares due to debts of its sole shareholder, potentially leading to a loss of control and rendering the company's securities worthless[48](index=48&type=chunk)[77](index=77&type=chunk)[87](index=87&type=chunk) - **Risks of Doing Business in China:** The company is subject to substantial PRC government influence, potential regulatory crackdowns on overseas-listed companies, currency conversion controls, and uncertainties regarding the application of PRC laws, where the legal system's opaqueness could impede the enforcement of its rights[50](index=50&type=chunk)[117](index=117&type=chunk)[128](index=128&type=chunk) - **Share & Market Risks:** The dual-class share structure gives Mufang Gao, through Unitrust Holdings Limited, control of **98.66%** of the voting power, significantly limiting the influence of Class A shareholders, with other risks including market volatility, the lack of a dividend policy, and potential delisting under the HFCAA if the auditor becomes un-inspectable[52](index=52&type=chunk)[97](index=97&type=chunk)[174](index=174&type=chunk) [ITEM 4. INFORMATION ON THE COMPANY](index=54&type=section&id=ITEM%204.%20INFORMATION%20ON%20THE%20COMPANY) This section provides a comprehensive overview of the company's history, insurance brokerage business model in China via its VIE, organizational structure, and property, detailing the contractual VIE agreements [History and Development of the Company](index=54&type=section&id=A.%20History%20and%20Development%20of%20the%20Company) This subsection outlines the company's corporate history, from the VIE's formation in 2010 and its acquisition, to the establishment of the current holding structure and its Nasdaq IPO in January 2021 - The VIE entity, TRX ZJ, was formed in 2010, and the current holding company, TIAN RUIXIANG Holdings Ltd (TRX), was established in the Cayman Islands in 2019[198](index=198&type=chunk)[201](index=201&type=chunk) - The company's Class A Ordinary Shares began trading on the Nasdaq Capital Market under the symbol "TIRX" on January 27, 2021[201](index=201&type=chunk) [Business Overview](index=55&type=section&id=B.%20Business%20Overview) The company operates as an insurance broker in China via its VIE, earning commissions from property & casualty and other insurance products, with high revenue concentration from top partners and the discontinuation of its Needbao platform - The company distributes property and casualty insurance (commercial property, liability, accidental, auto) and other insurance (health, life), does not assume underwriting risks, and earns revenue from commissions[208](index=208&type=chunk)[209](index=209&type=chunk) Revenue Trend (in USD) | Fiscal Year Ended | Revenue | YoY Change | | :--- | :--- | :--- | | Oct 31, 2024 | $3,219,336 | +158.7% | | Oct 31, 2023 | $1,244,247 | -8.0% | | Oct 31, 2022 | $1,351,909 | -51.6% | Commission Revenue Breakdown by Product (FY 2024) | Insurance Product | Commissions (USD) | % of Total | | :--- | :--- | :--- | | Liability Insurance | $2,197,113 | 68.2% | | Commercial Property Insurance | $536,071 | 16.6% | | Accidental Insurance | $437,308 | 13.6% | | Automobile Insurance | $42,788 | 1.4% | | Other Insurance | $6,056 | 0.2% | | **Total** | **$3,219,336** | **100.0%** | - The company has a high concentration of revenue from its top insurance partners, with the top five partners accounting for **90.7%** of total revenues in fiscal year 2024, and China Pacific Property Insurance Co., Ltd. alone contributing **51.9%**[210](index=210&type=chunk)[236](index=236&type=chunk) - The company's online insurance platform, Needbao, was discontinued due to the negative impact of the COVID-19 pandemic, resulting in an impairment loss of **$0.12 million** in fiscal year 2022[62](index=62&type=chunk)[228](index=228&type=chunk) [Organizational Structure](index=77&type=section&id=C.%20Organizational%20Structure) This subsection details the company's corporate structure, comprising its Cayman holding company, Hong Kong subsidiary, PRC WFOE, and VIE, explaining the four key contractual arrangements that enable WFOE control and financial consolidation - The company controls its PRC operating entity, TRX ZJ, through a series of VIE agreements between its WFOE and TRX ZJ's sole shareholder, WDZG Consulting[304](index=304&type=chunk)[305](index=305&type=chunk) - The VIE Agreements consist of four key contracts designed to provide effective control and transfer economic benefits: - **Exclusive Business Cooperation and Service Agreement:** WFOE provides exclusive services to TRX ZJ in exchange for service fees equal to TRX ZJ's net income - **Equity Interest Pledge Agreement:** TRX ZJ's shareholder pledges all its equity to WFOE to guarantee performance - **Share Disposal and Exclusive Option to Purchase Agreement:** WFOE has the exclusive right to purchase all equity in TRX ZJ - **Proxy Agreement:** TRX ZJ's shareholder grants WFOE its voting rights[307](index=307&type=chunk)[310](index=310&type=chunk)[313](index=313&type=chunk)[316](index=316&type=chunk) [Property, Plants and Equipment](index=80&type=section&id=D.%20Property%2C%20Plants%20and%20Equipment) The company operates from leased office spaces, reporting total rental expenses of approximately $0.04 million, $0.08 million, and $0.32 million for fiscal years 2024, 2023, and 2022 respectively - The company leases all its office spaces, with total rental expenses amounting to approximately **$0.04 million** in fiscal year 2024, a significant decrease from **$0.32 million** in fiscal year 2022[318](index=318&type=chunk) [ITEM 4A. UNRESOLVED STAFF COMMENTS](index=80&type=section&id=ITEM%204A.%20UNRESOLVED%20STAFF%20COMMENTS) The company reports no unresolved staff comments from the SEC - There are no unresolved staff comments[319](index=319&type=chunk) [ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS](index=80&type=section&id=ITEM%205.%20OPERATING%20AND%20FINANCIAL%20REVIEW%20AND%20PROSPECTS) This section analyzes the company's financial condition and operations for fiscal years 2022-2024, noting FY2024 revenue growth to $3.22 million, a widened net loss of $3.99 million due to increased expenses and impairment, and liquidity supported by cash and investments despite currency risks Consolidated Results of Operations (FY2024 vs. FY2023) | Account | FY 2024 (USD) | FY 2023 (USD) | Change (%) | | :--- | :--- | :--- | :--- | | **Revenues** | $3,219,336 | $1,244,247 | 158.7% | | **Loss from Operations** | $(4,645,247) | $(3,016,326) | 54.0% | | **Net Loss** | $(3,986,928) | $(2,453,982) | 62.5% | - The **158.7%** revenue increase in FY2024 was driven by significant growth in commissions from liability insurance (approx. **+$1.22 million**), accidental insurance (approx. **+$0.42 million**), and commercial property insurance (approx. **+$0.39 million**)[362](index=362&type=chunk) - General and administrative expenses increased by **146.5%** in FY2024, primarily due to a **$1.68 million** impairment loss on intangible assets related to the Peak acquisition and a **$1.24 million** increase in compensation and benefits, largely from stock-based compensation[368](index=368&type=chunk)[369](index=369&type=chunk)[370](index=370&type=chunk) Summary of Cash Flows (FY2024 vs. FY2023) | Cash Flow Activity | FY 2024 (USD) | FY 2023 (USD) | | :--- | :--- | :--- | | Net cash provided by operating activities | $897,894 | $994,304 | | Net cash used in investing activities | $(1,821,085) | $(992,717) | | Net cash provided by (used in) financing activities | $1,188,823 | $(283) | - The company acquired Peak Consulting Services Limited in February 2024, treating the acquisition as an asset purchase, with the **$1.8 million** excess purchase price allocated to intangible assets (regulatory licenses) which were subsequently fully impaired in October 2024[429](index=429&type=chunk)[430](index=430&type=chunk)[720](index=720&type=chunk) [ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES](index=102&type=section&id=ITEM%206.%20DIRECTORS%2C%20SENIOR%20MANAGEMENT%20AND%20EMPLOYEES) This section provides information on the company's directors, executive officers, and employees, including compensation, share incentive plans, board structure, and a significant decrease in employee count to 8 as of October 31, 2024 - As of the report date, the board consists of five directors: Sheng Xu (Chairman & CEO), Qin'er Zhou, Ning Xue (Independent), Yu He (Independent), and Jingyu Li (Independent)[438](index=438&type=chunk)[470](index=470&type=chunk) Executive Compensation Summary (FY 2024) | Name and Principal Position | Salary (USD) | Total (USD) | | :--- | :--- | :--- | | Sheng Xu (CEO, Chairman) | $87,050 | $87,050 | | Yue Wang (CFO) | $20,071 | $20,988 | | Zhe Wang (former CEO) | $64,799 | $64,799 | | Mingxiu Luan (former CFO) | $69,167 | $69,167 | - The company has two active share incentive plans: the 2021 Plan (**0.20 million** Class A shares authorized) and the 2023 Plan (**1.00 million** Class A shares authorized), with nearly all authorized shares under both plans granted as of the report date[452](index=452&type=chunk)[461](index=461&type=chunk)[453](index=453&type=chunk)[462](index=462&type=chunk) - Employee count has decreased significantly, from **22** as of October 31, 2022, to **8** as of October 31, 2024, attributed to the negative impact of the COVID-19 pandemic[483](index=483&type=chunk) - Unitrust Holdings Limited, controlled by Mufang Gao, holds **100%** of Class B Ordinary Shares and **6.25%** of Class A Ordinary Shares, giving it **98.66%** of the total voting power[487](index=487&type=chunk) [ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS](index=110&type=section&id=ITEM%207.%20MAJOR%20SHAREHOLDERS%20AND%20RELATED%20PARTY%20TRANSACTIONS) This section details major shareholders and related party transactions, primarily the VIE contractual arrangements, alongside borrowings, a significant note receivable, and amounts due to/from executive team family members - The contractual VIE arrangements with TRX ZJ and its shareholder, WDZG Consulting, constitute the most significant related party transactions[490](index=490&type=chunk) - On September 19, 2024, the company entered into a promissory note receivable with Xian Xu, TRX ZJ's manager, with an outstanding balance of **$1.37 million** as of October 31, 2024[494](index=494&type=chunk)[793](index=793&type=chunk) Due to Related Parties (as of Oct 31, 2024) | Name of Related Party | Amount (USD) | | :--- | :--- | | Mufang Gao (Mother of former CEO) | $768,506 | | Baohai Xu (Manager) | $503,713 | | Feng'e Feng (Mother of CEO) | $186,571 | | Mingxiu Luan (Former CFO) | $123,436 | | Zhe Wang (Former CEO) | $121,195 | | **Total** | **$1,703,421** | [ITEM 8. FINANCIAL INFORMATION](index=113&type=section&id=ITEM%208.%20FINANCIAL%20INFORMATION) This section confirms the appended consolidated financial statements, states no material legal proceedings, and outlines the company's policy of retaining earnings for expansion, with future dividends dependent on PRC subsidiary distributions and regulations - The company has no present plan to pay any cash dividends and intends to retain future earnings for business operations and expansion[504](index=504&type=chunk) - As a holding company, its ability to pay dividends relies on distributions from its PRC subsidiary, which are subject to PRC regulations and profit availability[505](index=505&type=chunk) - The company is not currently involved in any material legal or administrative proceedings[503](index=503&type=chunk) [ITEM 9. THE OFFER AND LISTING](index=114&type=section&id=ITEM%209.%20THE%20OFFER%20AND%20LISTING) This section details the trading market for the company's Class A Ordinary Shares, which have been listed on the Nasdaq Capital Market under the symbol "TIRX" since January 27, 2021 - The company's Class A Ordinary Shares are listed on the Nasdaq Capital Market under the symbol "TIRX"[508](index=508&type=chunk)[509](index=509&type=chunk) [ITEM 10. ADDITIONAL INFORMATION](index=114&type=section&id=ITEM%2010.%20ADDITIONAL%20INFORMATION) This section provides additional information on corporate governance, including the dual-class share structure, recent material contracts like the Peak Consulting acquisition and financing agreements, and tax implications in the Cayman Islands, PRC, and U.S - The company has a dual-class share structure, where each Class A Ordinary Share has one vote, while each Class B Ordinary Share has **600** votes[520](index=520&type=chunk) - Class B Ordinary Shares are convertible into Class A Ordinary Shares on a one-to-one basis at the holder's option, while Class A shares are not convertible[522](index=522&type=chunk) - Material contracts include the February 2024 acquisition of Peak Consulting, November 2024 subscription agreements for a **$10 million** private placement, and January 2025 debt conversion agreements to settle **$2.2 million** in debt[552](index=552&type=chunk)[554](index=554&type=chunk)[556](index=556&type=chunk) - The company is an exempted company in the Cayman Islands and is not subject to income, gains, or withholding taxes there, but in the PRC, its entities are subject to a **25%** Enterprise Income Tax, with a risk that the holding company could be classified as a PRC "resident enterprise," leading to unfavorable tax consequences for non-PRC shareholders[567](index=567&type=chunk)[569](index=569&type=chunk)[570](index=570&type=chunk) [ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK](index=129&type=section&id=ITEM%2011.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) This section discusses the company's exposure to market risks, including credit risk from receivables, liquidity risk, and foreign exchange risk due to RMB operations reported in USD, noting no hedging activities are currently employed - The company is exposed to foreign exchange risk as its revenues and expenses are denominated in RMB, while its reporting currency is the U.S. dollar, meaning RMB depreciation against the USD would negatively impact reported financial results[600](index=600&type=chunk) - Credit risk is managed through credit approvals and monitoring of customers, with concentration risk in trade accounts receivable being limited due to short-term payment terms[598](index=598&type=chunk)[420](index=420&type=chunk) - The company faces liquidity risk, which it manages through financial position analysis and may seek short-term funding from financial institutions or related parties if necessary[599](index=599&type=chunk) [ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES](index=129&type=section&id=ITEM%2012.%20DESCRIPTION%20OF%20SECURITIES%20OTHER%20THAN%20EQUITY%20SECURITIES) This section is not applicable as the company has not issued securities other than equity securities - The report states that this item is not applicable[601](index=601&type=chunk) PART II [ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES](index=130&type=section&id=ITEM%2013.%20DEFAULTS%2C%20DIVIDEND%20ARREARAGES%20AND%20DELINQUENCIES) The company reports no defaults, dividend arrearages, or delinquencies - The company has no defaults, dividend arrearages, or delinquencies to report[606](index=606&type=chunk) [ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS](index=130&type=section&id=ITEM%2014.%20MATERIAL%20MODIFICATIONS%20TO%20THE%20RIGHTS%20OF%20SECURITY%20HOLDERS%20AND%20USE%20OF%20PROCEEDS) This section confirms no material modifications to security holder rights and details the use of proceeds from the January 2021 IPO and unspent proceeds from the June 2021 follow-on offerings - There have been no material modifications to the rights of security holders[607](index=607&type=chunk) - From its January 2021 IPO, the company received net proceeds of approximately **$10.01 million** and has used **$2.33 million** for general operating purposes as of the report date[608](index=608&type=chunk) - From its June 2021 follow-on offerings, the company received net proceeds of approximately **$22.2 million**, which have not yet been spent as of the report date[609](index=609&type=chunk) [ITEM 15. CONTROLS AND PROCEDURES](index=131&type=section&id=ITEM%2015.%20CONTROLS%20AND%20PROCEDURES) Management concluded that disclosure controls were effective as of October 31, 2024, but internal control over financial reporting was not effective due to material weaknesses, including a lack of U.S. GAAP expertise and inadequate accounting manual, with remedial measures outlined - Management concluded that disclosure controls and procedures were effective as of October 31, 2024[611](index=611&type=chunk) - Management concluded that internal control over financial reporting was **not effective** as of October 31, 2024[617](index=617&type=chunk) - Identified material weaknesses include: - Lack of qualified accounting personnel with U.S. GAAP and SEC reporting expertise - Absence of a comprehensive accounting policies and procedures manual - Deficiencies in formal disclosure controls and procedures[615](index=615&type=chunk) - The company has taken several remedial measures, including developing an accounting manual, implementing formal controls, establishing a risk assessment process, and enhancing its governance framework[616](index=616&type=chunk) [ITEM 16. CORPORATE GOVERNANCE AND OTHER ITEMS](index=132&type=section&id=ITEM%2016.%20CORPORATE%20GOVERNANCE%20AND%20OTHER%20ITEMS) This section covers corporate governance, identifying the audit committee financial expert, detailing principal accountant fees, explaining differences in governance practices as a foreign private issuer, and outlining cybersecurity risk management processes - The board has determined that Jingyu Li, chairman of the audit committee, is an audit committee financial expert[621](index=621&type=chunk) Principal Accountant Fees (RBSM LLP) | Service | FY 2024 (USD) | FY 2023 (USD) | | :--- | :--- | :--- | | Audit Fees | $365,000 | $365,000 | | Other Fees | $10,000 | $10,000 | | **Total** | **$375,000** | **$375,000** | - As a foreign private issuer, the company follows Cayman Islands corporate governance practices, which do not require shareholder approval for certain security issuances that would typically require it under Nasdaq rules for U.S. domestic companies[630](index=630&type=chunk) - The company has established a cybersecurity risk management process and reports that no incidents have materially affected its business, operations, or financial condition to date[635](index=635&type=chunk) PART III [ITEM 17. FINANCIAL STATEMENTS](index=134&type=section&id=ITEM%2017.%20FINANCIAL%20STATEMENTS) The company has elected to provide financial statements pursuant to Item 18 - The company has elected to provide financial statements as required under Item 18[637](index=637&type=chunk) [ITEM 18. FINANCIAL STATEMENTS](index=134&type=section&id=ITEM%2018.%20FINANCIAL%20STATEMENTS) This section presents the company's audited consolidated financial statements for fiscal years ended October 31, 2024, 2023, and 2022, prepared in accordance with U.S. GAAP, including balance sheets, statements of operations, equity changes, and cash flows Consolidated Balance Sheet Highlights (as of Oct 31) | Account (USD) | 2024 | 2023 | | :--- | :--- | :--- | | **Total Assets** | $39,979,194 | $35,479,774 | | Cash & Restricted Cash | $996,237 | $695,075 | | Short-term Investments | $28,090,382 | $26,797,081 | | **Total Liabilities** | $6,089,064 | $3,062,868 | | **Total Equity** | $33,890,130 | $32,416,906 | Consolidated Statement of Operations Highlights (Year Ended Oct 31) | Account (USD) | 2024 | 2023 | 2022 | | :--- | :--- | :--- | :--- | | **Total Revenues** | $3,219,336 | $1,244,247 | $1,351,909 | | **Total Operating Expenses** | $7,864,583 | $4,260,573 | $6,420,823 | | **Net Loss** | $(3,986,928) | $(2,453,982) | $(4,684,189) | | **Net Loss Per Share (Basic & Diluted)** | $(2.42) | $(3.87) | $(9.03) | - Subsequent to the fiscal year-end, the company raised **$10 million** in cash through a private placement in November 2024, issued shares to settle **$2.2 million** in debt in January 2025, and sold **1.00 million** Class B shares to a related party for **$2.31 million** in January 2025[850](index=850&type=chunk)[853](index=853&type=chunk)[854](index=854&type=chunk) [ITEM 19. EXHIBITS](index=135&type=section&id=ITEM%2019.%20EXHIBITS) This section lists all exhibits filed with the annual report, including articles of association, securities descriptions, material contracts like VIE and financing agreements, and CEO/CFO certifications - Key exhibits filed include the Amended and Restated Memorandum and Articles of Association, the VIE Agreements (Exclusive Service, Equity Pledge, Option to Purchase, Proxy), and recent material contracts like the Peak acquisition SPA and various subscription and debt conversion agreements[640](index=640&type=chunk)[641](index=641&type=chunk)

[Condensed Consolidated Financial Statements](index=1&type=section&id=Condensed%20Consolidated%20Financial%20Statements) This section presents the company's financial position, operational performance, equity changes, and cash flows for the period ended April 30, 2024 [Condensed Consolidated Balance Sheets](index=1&type=section&id=CONDENSED%20CONSOLIDATED%20BALANCE%20SHEETS) As of April 30, 2024, total assets increased to $38.0 million from $35.5 million at October 31, 2023, primarily driven by a significant rise in cash to $27.5 million and the addition of $1.8 million in intangible assets from an acquisition; total liabilities grew to $5.6 million from $3.1 million, mainly due to a new $1.9 million acquisition payable, while total equity remained relatively stable at $32.3 million Condensed Consolidated Balance Sheet Highlights (in U.S. Dollars) | Account | April 30, 2024 (Unaudited) | October 31, 2023 | | :--- | :--- | :--- | | **Total Current Assets** | $28,255,209 | $27,618,624 | | Cash | $27,456,502 | $2,383 | | Short-term investments | $0 | $26,797,081 | | **Total Non-current Assets** | $9,712,084 | $7,861,150 | | Intangible assets, net | $1,766,961 | $0 | | **Total Assets** | **$37,967,293** | **$35,479,774** | | **Total Current Liabilities** | $5,584,333 | $3,062,868 | | Acquisition payable | $1,875,002 | $0 | | **Total Liabilities** | **$5,624,205** | **$3,062,868** | | **Total Equity** | **$32,343,088** | **$32,416,906** | [Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss](index=2&type=section&id=UNAUDITED%20CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20OPERATIONS%20AND%20COMPREHENSIVE%20LOSS) For the six months ended April 30, 2024, the company reported a significant revenue decline to $178,345 from $724,859 in the prior-year period, with operating expenses increasing to $3.1 million due to higher compensation costs, resulting in a wider loss from operations of $3.0 million and a net loss attributable to shareholders of $2.6 million, or ($2.68) per share, compared to a net loss of $1.5 million, or ($2.50) per share, in the same period last year Statement of Operations Summary (For the Six Months Ended April 30) | Metric | 2024 | 2023 | | :--- | :--- | :--- | | **Revenues** | **$178,345** | **$724,859** | | Total Operating Expenses | $3,141,175 | $2,652,845 | | Loss from Operations | ($2,962,830) | ($1,927,986) | | **Net Loss** | **($2,605,349)** | **($1,486,253)** | | Net Loss Per Share (Basic and Diluted) | ($2.68) | ($2.50) | | Weighted Average Shares Outstanding | 970,721 | 594,901 | [Unaudited Condensed Consolidated Statements of Changes in Equity](index=3&type=section&id=UNAUDITED%20CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20CHANGES%20IN%20EQUITY) For the six months ended April 30, 2024, total equity decreased slightly from $32.42 million to $32.34 million, primarily due to a net loss of $2.61 million, partially offset by the issuance of ordinary shares for services valued at $2.27 million and a positive foreign currency translation adjustment of $0.26 million - Equity was impacted by the issuance of **698,000** ordinary shares for services, valued at **$2,270,015**[7](index=7&type=chunk) - The net loss for the six-month period reduced equity by **$2,605,348**[7](index=7&type=chunk) - A foreign currency translation adjustment added **$261,512** to equity[7](index=7&type=chunk) [Unaudited Condensed Consolidated Statements of Cash Flows](index=5&type=section&id=UNAUDITED%20CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20CASH%20FLOWS) For the six months ended April 30, 2024, the company generated $0.26 million in cash from operating activities, a decrease from $0.76 million in the prior-year period, with a significant cash inflow of $27.4 million from investing activities driven by the sale of short-term investments, while financing activities provided $58 thousand, leading to an overall increase in cash and restricted cash of $27.5 million, ending the period at $28.2 million Cash Flow Summary (For the Six Months Ended April 30) | Cash Flow Activity | 2024 | 2023 | | :--- | :--- | :--- | | Net Cash Provided by Operating Activities | $258,210 | $761,583 | | Net Cash Provided by Investing Activities | $27,414,831 | $35,115,075 | | Net Cash Provided by Financing Activities | $57,987 | $0 | | **Net Increase in Cash and Restricted Cash** | **$27,461,957** | **$35,960,965** | | **Cash and Restricted Cash - End of Period** | **$28,157,032** | **$36,656,207** | - The primary source of cash from investing activities was **$27.3 million** in proceeds from the sale of short-term investments[11](index=11&type=chunk) - A significant non-cash adjustment to reconcile net loss was **$2.27 million** in stock-based compensation[11](index=11&type=chunk) [Notes to Unaudited Condensed Consolidated Financial Statements](index=6&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed explanations of the company's accounting policies, significant transactions, and financial statement line items [Note 1 – Organization and Nature of Operations](index=6&type=section&id=NOTE%201%20%E2%80%93%20ORGANIZATION%20AND%20NATURE%20OF%20OPERATIONS) TIAN RUIXIANG Holdings Ltd is a Cayman Islands holding company that operates as an insurance broker in the PRC through a Variable Interest Entity (VIE), Zhejiang Tianruixiang Insurance Broker Co., Ltd. (TRX ZJ), with a structure including a Hong Kong subsidiary (TRX HK) and a Wholly Foreign-Owned Enterprise (WFOE) in China, and expanded its operations on February 29, 2024, by acquiring Peak Consulting Services Limited, a licensed insurance brokerage in Hong Kong - The company operates in the PRC insurance brokerage market through a VIE structure with TRX ZJ[13](index=13&type=chunk)[14](index=14&type=chunk) - On February 29, 2024, the company acquired **100%** of Peak Consulting Services Limited, a Hong Kong-based insurance brokerage, in exchange for **694,445** shares of the company's ordinary stock[14](index=14&type=chunk) [Note 3 – Summary of Significant Accounting Policies](index=8&type=section&id=NOTE%203%20%E2%80%93%20SUMMARY%20OF%20SIGNIFICANT%20ACCOUNTING%20POLICIES) The financial statements are prepared under U.S. GAAP, requiring management estimates for asset valuations and impairments, with revenue from insurance brokerage recognized when a policy becomes effective and the premium is collected, and the company uses a dual-class share structure and accounts for stock-based compensation at fair value, with a one-for-five reverse stock split effected on May 14, 2024, and all share and per-share data retroactively adjusted - Revenue is recognized when an insurance policy is effective and the premium is collected, as collectability is not ensured until receipt of premium[43](index=43&type=chunk) - The company effected a **one-for-five reverse stock split** on May 14, 2024, and all share and per-share data has been retroactively adjusted[55](index=55&type=chunk) - The company's functional currencies are the USD (for parent and TRX HK), HKD (for Peak), and RMB (for PRC entities); assets and liabilities are translated at the period-end exchange rate[47](index=47&type=chunk) [Note 4 – Acquisition](index=21&type=section&id=NOTE%204%20%E2%80%93%20ACQUISITION) On February 29, 2024, the company acquired 100% of Peak Consulting Services Limited for consideration of 694,445 Class A ordinary shares, valued at $2.70 per share for a total purchase price of $1,875,002, with the transaction treated as an asset acquisition as substantially all of the fair value was concentrated in regulatory licenses, and the cost was allocated primarily to $1.8 million in intangible assets (regulatory licenses) and $77,893 in cash - The acquisition of Peak Consulting Services Limited was completed on February 29, 2024, to expand business into Hong Kong[59](index=59&type=chunk) Acquisition of Peak Consulting Services Limited (February 29, 2024) | Item | Value | | :--- | :--- | | **Consideration (694,445 shares @ $2.70)** | **$1,875,002** | | **Assets Acquired:** | | | Cash | $77,893 | | Intangible assets (Regulatory licenses) | $1,797,109 | | **Total Assets Acquired** | **$1,875,002** | - The acquisition was accounted for as an asset acquisition because the fair value was concentrated in a single identifiable asset (regulatory licenses)[60](index=60&type=chunk) [Note 5 – Intangible Assets](index=22&type=section&id=NOTE%205%20%E2%80%93%20INTANGIBLE%20ASSETS) As of April 30, 2024, the company's intangible assets consist solely of regulatory licenses valued at $1.8 million, acquired through the Peak acquisition, which are being amortized on a straight-line basis over an estimated useful life of 10 years, with amortization expense for the period from February 29 to April 30, 2024, totaling $30,148 Intangible Assets as of April 30, 2024 | Item | Useful Life | Amount | | :--- | :--- | :--- | | Regulatory licenses | 10 Years | $1,797,109 | | Less: accumulated amortization | | ($30,148) | | **Net Intangible Assets** | | **$1,766,961** | - Future annual amortization expense is projected to be **$179,711** for each of the next four fiscal years[63](index=63&type=chunk) [Note 7 – Note Receivable](index=22&type=section&id=NOTE%207%20%E2%80%93%20NOTE%20RECEIVABLE) The company holds a note receivable with a principal amount of $7.8 million, originated on October 31, 2023, with a maturity date of October 31, 2025, and bearing a fixed interest rate of 2.0% per annum, resulting in an outstanding principal of $7.8 million and accrued interest receivable of $78,000 as of April 30, 2024 - A note receivable of **$7.8 million** was originated on October 31, 2023, with a **2-year term** and a **2.0% annual interest rate**[65](index=65&type=chunk) - Interest income from the note for the six months ended April 30, 2024, was **$78,000**[65](index=65&type=chunk) [Note 10 – Related Party Transactions](index=23&type=section&id=NOTE%2010%20%E2%80%93%20RELATED%20PARTY%20TRANSACTIONS) As of April 30, 2024, the company had $1.31 million due to related parties, an increase from $1.17 million at October 31, 2023, representing expenses paid on behalf of the company by its managers, CEO, former CEO, and their relatives, with these amounts being non-interest bearing, unsecured, and repayable on demand, and during the period, the company also borrowed $93,794 from and repaid $35,807 to related parties Due to Related Parties (in U.S. Dollars) | Related Party | April 30, 2024 | October 31, 2023 | | :--- | :--- | :--- | | Baohai Xu (Manager) | $398,213 | $321,385 | | Zhe Wang (Former CEO) | $124,584 | $120,985 | | Sheng Xu (CEO) | $100,443 | $110,362 | | Mufang Gao (Zhe Wang's mother) | $377,298 | $310,771 | | Others | $433,443 | $433,443 | | **Total** | **$1,310,545** | **$1,173,510** | - The amounts due to related parties are for expenses they paid on the company's behalf and are short-term, non-interest bearing, and repayable on demand[70](index=70&type=chunk) [Note 11 – Equity](index=24&type=section&id=NOTE%2011%20%E2%80%93%20EQUITY) The company has a dual-class share structure where Class B shares have 18 votes each versus one vote for Class A shares, and during the six months ended April 30, 2024, the company issued 698,000 Class A shares for services, recognizing $2.27 million in stock-based compensation, with 131,000 warrants outstanding at an exercise price of $200.00, and PRC regulations restricting the transfer of net assets from the company's PRC entities, totaling $7.8 million - The company has Class A (**1 vote/share**) and Class B (**18 votes/share**) ordinary shares; Class B shares are convertible to Class A[71](index=71&type=chunk) - Issued **698,000 Class A shares** for services, resulting in a share-based compensation expense of **$2,270,015** for the six months ended April 30, 2024[72](index=72&type=chunk) - As of April 30, 2024, restricted net assets of PRC subsidiaries totaled **$7,809,598**, limiting their ability to transfer funds to the parent company[79](index=79&type=chunk) [Note 12 – Commitments and Contingencies](index=25&type=section&id=NOTE%2012%20%E2%80%93%20COMMITMENTS%20AND%20CONTINGENCIES) The company has operating lease commitments for office space expiring through January 2027, with total future lease payments of $68,866, and while management believes its VIE structure complies with PRC laws, it acknowledges substantial uncertainties regarding the interpretation of these regulations, considering the likelihood of loss related to the VIE structure remote Operating Lease Liabilities as of April 30, 2024 | Description | Amount | | :--- | :--- | | Total lease payments | $68,866 | | Less: Imputed interest | ($4,102) | | **Total present value of lease liabilities** | **$64,764** | | Current portion | $24,892 | | Long-term portion | $39,872 | - Management asserts that the company's VIE structure is compliant with current PRC laws, but notes that there are substantial uncertainties in the interpretation and application of these laws[83](index=83&type=chunk)[84](index=84&type=chunk) [Note 13 – Concentrations](index=27&type=section&id=NOTE%2013%20%E2%80%93%20CONCENTRATIONS) The company faces significant concentration risks, with a substantial portion of its cash ($27.9 million out of $28.1 million) held in PRC and Hong Kong banks being uninsured, and revenue highly concentrated, with three insurance carriers (A, B, and C) accounting for 49%, 15%, and 15% of total revenue, respectively, for the six months ended April 30, 2024, and one insurance carrier accounting for 85.9% of total accounts receivable as of the same date - As of April 30, 2024, approximately **$27.9 million** of the company's cash held in PRC banks was not covered by deposit insurance[85](index=85&type=chunk) Revenue Concentration by Insurance Carrier (Six Months Ended April 30) | Carrier | 2024 | 2023 | | :--- | :--- | :--- | | Carrier A | 49% | <10% | | Carrier B | 15% | <10% | | Carrier C | 15% | <10% | | Carrier D | <10% | 36% | | Carrier E | <10% | 24% | | Carrier F | <10% | 12% | - One insurance carrier represented **85.9%** of total accounts receivable at April 30, 2024[89](index=89&type=chunk) [Note 14 – Subsequent Events](index=29&type=section&id=NOTE%2014%20%E2%80%93%20SUBSEQUENT%20EVENTS) After the balance sheet date, the company executed several key transactions, including a one-for-five reverse stock split on May 14, 2024, the issuance of 694,445 Class A shares on May 7, 2024, to complete the Peak Consulting acquisition, and the issuance of an additional 200,000 Class A shares for services in May and June 2024, valued at $548,550 - A **one-for-five reverse stock split** of outstanding ordinary shares was effected on May 14, 2024[92](index=92&type=chunk) - On May 7, 2024, **694,445 Class A ordinary shares** were issued to the former shareholder of Peak Consulting Services Limited as part of the acquisition agreement[94](index=94&type=chunk) - In May and June 2024, an additional **200,000 Class A shares** were issued for services, valued at **$548,550**[93](index=93&type=chunk)

Core Viewpoint - TIAN RUIXIANG Holdings Ltd reported a significant decline in revenue and an increase in net loss for the first half of 2024, primarily due to the loss of key insurance company partners, but showed growth in liability insurance commissions, indicating potential for future recovery through market expansion and client diversification strategies [1][2][5]. Financial Performance - Revenue for the six months ended April 30, 2024, was $0.2 million, a decrease of $0.5 million or 75.4% compared to $0.7 million for the same period in 2023, mainly due to the loss of certain insurance company partners [2]. - The loss from operations for the same period was $3.0 million, compared to $1.9 million for the six months ended April 30, 2023, reflecting an increase of 53.7% [4]. - The net loss was $2.6 million for the six months ended April 30, 2024, compared to $1.5 million for the same period in 2023, representing a change of $1.1 million or 75.3% [5]. Operating Expenses - Total operating expenses for the six months ended April 30, 2024, were $3.1 million, an increase of 18.4% from $2.7 million in the same period in 2023 [7]. - Selling and marketing expenses decreased to $1.2 million from $1.6 million, a reduction of $0.4 million or 26.5% [7]. - General and administrative expenses rose to $2.0 million from $1.1 million, an increase of $0.9 million or 83.0% [7]. Cash Flow and Assets - As of April 30, 2024, total assets were $37.97 million, an increase from $35.48 million as of October 31, 2023 [11][13]. - Cash and restricted cash at the end of the period totaled $28.16 million, down from $36.66 million at the end of the previous period [19][20]. Strategic Outlook - The company is pursuing strategies to expand into the Hong Kong insurance brokerage market and diversify its client base to mitigate the impact of lost partnerships and improve financial performance [1].

Group 1 - TIAN RUIXIANG Holdings Ltd has regained compliance with Nasdaq's periodic filing requirements after filing its annual report on Form 20-F for the period ended October 31, 2023 on July 17, 2024 [1] - The company operates as an insurance broker in China through a variable interest entity, offering a wide range of insurance products [2] - The insurance products are categorized into two major groups: property and casualty insurance, and other types of insurance including health and life insurance [2]

Core Viewpoint - TIAN RUIXIANG Holdings Ltd reported a revenue decline of 8.0% for the fiscal year ended October 31, 2023, primarily due to lower commissions from insurance products and loss of partners, but achieved a significant reduction in net loss by 47.6% compared to the previous year, indicating improved operational efficiency and a strategic focus on liability insurance products [1][3]. Financial Performance - Revenue for the fiscal year 2023 was approximately $1.2 million, down from $1.4 million in 2022, reflecting an 8.0% decrease [2][3]. - Total operating expenses decreased by 33.6% to $4.3 million in 2023 from $6.4 million in 2022 [2][3]. - Loss from operations narrowed by 40.5% to $3.0 million in 2023, compared to $5.1 million in 2022 [2][3]. - Net loss decreased by 47.6% to $2.5 million in 2023, down from $4.7 million in 2022 [2][3]. Business Segments - The company experienced a notable increase of approximately $612,000 in commissions from liability insurance products, highlighting growth in this segment despite overall revenue decline [1]. Shareholder Information - Loss per share improved to $3.87 in 2023 from $9.03 in 2022, indicating better financial performance for shareholders [2][3]. Assets and Liabilities - As of October 31, 2023, total current assets were $27.6 million, a decrease from $34.9 million in 2022 [7]. - Total current liabilities increased to $3.1 million in 2023 from $1.5 million in 2022, indicating a rise in financial obligations [8]. Cash Flow - The company reported net cash provided by operating activities of $994,304 in 2023, a significant improvement compared to a cash outflow of $198,760 in 2022 [12].