Document and Entity Information
Document and Entity Information | 6 Months Ended |
Apr. 30, 2022 | |
Document Information [Line Items] | |
Document Type | 6-K |
Document Period End Date | Apr. 30, 2022 |
Entity Registrant Name | TIAN RUIXIANG HOLDINGS LTD |
Entity Central Index Key | 0001782941 |
Current Fiscal Year End Date | --10-31 |
Document Fiscal Year Focus | 2022 |
Document Fiscal Period Focus | Q2 |
Amendment Flag | false |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) | Apr. 30, 2022 | Oct. 31, 2021 |
CURRENT ASSETS: | ||
Cash and cash equivalents | $ 29,015,368 | $ 30,024,372 |
Restricted cash | 795,044 | 819,269 |
Accounts receivable | 97,404 | 320,848 |
Note receivable | 7,500,000 | 0 |
Interest receivable | 186,986 | 0 |
Due from related party | 2,485 | 0 |
Other current assets | 245,007 | 465,650 |
Total Current Assets | 37,842,294 | 31,630,139 |
NON-CURRENT ASSETS: | ||
Note receivable | 0 | 7,500,000 |
Interest receivable | 0 | 113,014 |
Property and equipment, net | 10,825 | 11,265 |
Intangible assets, net | 133,404 | 147,538 |
Right-of-use assets, operating leases, net | 486,854 | 760,229 |
Other non-current assets | 90,807 | 188,281 |
Total Non-current Assets | 721,890 | 8,720,327 |
Total Assets | 38,564,184 | 40,350,466 |
CURRENT LIABILITIES: | ||
Taxes payable | 499,094 | 493,196 |
Salary payable | 207,301 | 103,168 |
Accrued liabilities and other payables | 275,600 | 95,664 |
Due to related party | 0 | 2,564 |
Operating lease liabilities | 343,547 | 423,124 |
Total Current Liabilities | 1,325,542 | 1,117,716 |
NON-CURRENT LIABILITIES: | ||
Operating lease liabilities - noncurrent portion | 106,551 | 237,848 |
Total Non-current Liabilities | 106,551 | 237,848 |
Total Liabilities | 1,432,093 | 1,355,564 |
TIAN RUIXIANG Holdings Ltd Shareholders' Equity: | ||
Additional paid-in capital | 42,363,453 | 39,776,761 |
Less: ordinary stock held in treasury, at cost; 450,000 and 0 shares at April 30, 2022 and October 31, 2021 respectively | 0 | 0 |
Accumulated deficit | (4,593,767) | (1,090,060) |
Statutory reserve | 199,653 | 199,653 |
Accumulated other comprehensive (loss) income | (851,189) | 96,709 |
Total TIAN RUIXIANG Holdings Ltd shareholders'equity | 37,131,636 | 38,994,413 |
Non-controlling interest | 455 | 489 |
Total Equity | 37,132,091 | 38,994,902 |
Total Liabilities and Equity | 38,564,184 | 40,350,466 |
Class A ordinary shares | ||
TIAN RUIXIANG Holdings Ltd Shareholders' Equity: | ||
Ordinary shares | 12,236 | 10,100 |
Class B ordinary shares | ||
TIAN RUIXIANG Holdings Ltd Shareholders' Equity: | ||
Ordinary shares | $ 1,250 | $ 1,250 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Apr. 30, 2022 | Oct. 31, 2021 |
Ordinary shares, par value, (per share) | $ 0.001 | $ 0.001 |
Ordinary shares, shares authorized | 50,000,000 | 50,000,000 |
Treasury shares | 450,000 | 0 |
Class A ordinary shares | ||
Ordinary shares, par value, (per share) | $ 0.001 | $ 0.001 |
Ordinary shares, shares authorized | 47,500,000 | 47,500,000 |
Ordinary shares, shares issued | 12,236,000 | 10,100,000 |
Ordinary shares, shares outstanding | 12,236,000 | 10,100,000 |
Class B ordinary shares | ||
Ordinary shares, par value, (per share) | $ 0.001 | $ 0.001 |
Ordinary shares, shares authorized | 2,500,000 | 2,500,000 |
Ordinary shares, shares issued | 1,250,000 | 1,250,000 |
Ordinary shares, shares outstanding | 1,250,000 | 1,250,000 |
UNAUDITED CONDENSED CONSOLIDATE
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($) | 6 Months Ended | 12 Months Ended | |
Apr. 30, 2022 | Apr. 30, 2021 | Oct. 31, 2021 | |
REVENUE | $ 945,645 | $ 1,636,835 | |
OPERATING EXPENSES | |||
Selling and marketing | 1,113,896 | 859,388 | |
General and administrative - professional fees | 930,873 | 656,534 | |
General and administrative - compensation and related benefits | 2,346,067 | 424,225 | |
General and administrative - other | 435,233 | 162,183 | |
Total Operating Expenses | 4,826,069 | 2,102,330 | |
LOSS FROM OPERATIONS | (3,880,424) | (465,495) | |
OTHER INCOME | |||
Interest income | 75,326 | 1,038 | |
Other income | 322,781 | 67,438 | |
Total Other Income | 398,107 | 68,476 | |
LOSS BEFORE INCOME TAXES | (3,482,317) | (397,019) | |
INCOME TAXES | 21,410 | 6,917 | |
NET LOSS | (3,503,727) | (403,936) | |
LESS: NET LOSS ATTRIBUTABLE TO NON-CONTROLLING INTEREST | (20) | (1) | |
NET LOSS ATTRIBUTABLE TO TIAN RUIXIANG HOLDINGS LTD ORDINARY SHAREHOLDERS | (3,503,707) | (403,935) | |
COMPREHENSIVE LOSS: | |||
NET LOSS | (3,503,727) | (403,936) | |
OTHER COMPREHENSIVE (LOSS) INCOME | |||
Unrealized foreign currency translation (loss) gain | (947,912) | 297,237 | |
COMPREHENSIVE LOSS | (4,451,639) | (106,699) | |
LESS: COMPREHENSIVE (LOSS) INCOME ATTRIBUTABLE TO NON-CONTROLLING INTEREST | (34) | 16 | |
COMPREHENSIVE LOSS ATTRIBUTABLE TO TIAN RUIXIANG HOLDINGS LTD ORDINARY SHAREHOLDERS | $ (4,451,605) | $ (106,715) | |
NET LOSS PER ORDINARY SHARE ATTRIBUTABLE TO TIAN RUIXIANG HOLDINGS LTD ORDINARY SHAREHOLDERS: | |||
Basic | $ (0.28) | $ (0.06) | |
Diluted | $ (0.28) | $ (0.06) | |
WEIGHTED AVERAGE ORDINARY SHARES OUTSTANDING: | |||
Basic | 12,298,929 | 6,560,497 | |
Diluted | 12,298,929 | 6,560,497 |
UNAUDITED CONDENSED CONSOLIDA_2
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY - USD ($) | Ordinary Shares Class A ordinary shares | Ordinary Shares Class B ordinary shares | Additional Paid-in Capital | Treasury Stock | Accumulated Deficit / Retained Earnings | Statutory Reserve. | Accumulated Other Comprehensive Income (Loss) | Non-controlling Interest | Class A ordinary shares | Class B ordinary shares | Total |
Balance at the beginning at Oct. 31, 2020 | $ 3,750 | $ 1,250 | $ 7,696,468 | $ 884,076 | $ 170,066 | $ (117,392) | $ 495 | $ 8,638,713 | |||
Balance at the beginning (in shares) at Oct. 31, 2020 | 3,750,000 | 1,250,000 | |||||||||
Increase (Decrease) in Stockholders' Equity | |||||||||||
Sale of ordinary shares, net | $ 3,075 | $ 0 | 9,912,918 | 0 | 0 | 0 | 0 | 9,915,993 | |||
Sale of ordinary shares, net (in shares) | 3,075,000 | 0 | |||||||||
Net loss | $ 0 | $ 0 | 0 | (403,935) | 0 | 0 | (1) | (403,936) | |||
Foreign currency translation adjustment | 0 | 0 | 0 | 0 | 0 | 297,220 | 17 | 297,237 | |||
Balance at the end at Apr. 30, 2021 | $ 6,825 | $ 1,250 | 17,609,386 | 480,141 | 170,066 | 179,828 | 511 | 18,448,007 | |||
Balance at the end (in shares) at Apr. 30, 2021 | 6,825,000 | 1,250,000 | |||||||||
Balance at the beginning at Oct. 31, 2021 | $ 10,100 | $ 1,250 | 39,776,761 | $ 0 | (1,090,060) | 199,653 | 96,709 | 489 | 38,994,902 | ||
Balance at the beginning (in shares) at Oct. 31, 2021 | 10,100,000 | 1,250,000 | 10,100,000 | 1,250,000 | |||||||
Increase (Decrease) in Stockholders' Equity | |||||||||||
Issuance of ordinary share for services | $ 2,136 | $ 0 | 2,586,692 | 0 | 0 | 0 | 0 | 0 | 2,588,828 | ||
Issuance of ordinary share for services (in shares) | 2,136,000 | 0 | |||||||||
Treasury stock purchase | $ 0 | $ 0 | 0 | $ 0 | 0 | 0 | 0 | 0 | 0 | ||
Treasury stock purchase (in shares) | 0 | 0 | 450,000 | ||||||||
Net loss | $ 0 | $ 0 | 0 | $ 0 | (3,503,707) | 0 | 0 | (20) | (3,503,727) | ||
Foreign currency translation adjustment | 0 | 0 | 0 | 0 | 0 | 0 | (947,898) | (14) | (947,912) | ||
Balance at the end at Apr. 30, 2022 | $ 12,236 | $ 1,250 | $ 42,363,453 | $ 0 | $ (4,593,767) | $ 199,653 | $ (851,189) | $ 455 | $ 37,132,091 | ||
Balance at the end (in shares) at Apr. 30, 2022 | 12,236,000 | 1,250,000 | 450,000 | 12,236,000 | 1,250,000 |
UNAUDITED CONDENSED CONSOLIDA_3
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 6 Months Ended | |
Apr. 30, 2022 | Apr. 30, 2021 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (3,503,727) | $ (403,936) |
Adjustments to reconcile net loss to net cash (used in) provided by operating activities: | ||
Depreciation expense and amortization of intangible assets | 12,497 | 13,492 |
Amortization of right-of-use assets | 168,618 | 132,622 |
Stock-based compensation and service expense | 2,588,828 | 0 |
Changes in operating assets and liabilities: | ||
Accounts receivable | 221,522 | 923,218 |
Security deposit | 16,880 | 4,495 |
Interest receivable | (73,972) | 0 |
Due from related party | (2,578) | 0 |
Other assets | 292,661 | 134,880 |
Taxes payable | 21,814 | (41,633) |
Salary payable | 109,129 | 218,031 |
Accrued liabilities and other payables | 182,255 | 250,097 |
Due to related parties | (2,578) | 10,071 |
Operating lease liabilities - related party | 0 | (6,141) |
Operating lease liabilities | (106,957) | (141,073) |
NET CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES | (75,608) | 1,094,123 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchase of property and equipment | (2,436) | 0 |
NET CASH USED IN INVESTING ACTIVITIES | (2,436) | 0 |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Proceeds from note payable | 0 | 75,165 |
Proceeds from related parties' borrowings | 233,811 | 1,652,137 |
Repayments for related parties' borrowings | (233,811) | (1,863,143) |
Proceeds from initial public offering | 0 | 12,300,000 |
Disbursements for initial public offering costs | 0 | (1,449,770) |
NET CASH PROVIDED BY FINANCING ACTIVITIES | 0 | 10,714,389 |
EFFECT OF EXCHANGE RATE ON CASH, CASH EQUIVALENTS AND RESTRICTED CASH | (955,185) | 238,374 |
NET (DECREASE) INCREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH | (1,033,229) | 12,046,886 |
CASH, CASH EQUIVALENTS AND RESTRICTED CASH - beginning of period | 30,843,641 | 6,923,495 |
CASH, CASH EQUIVALENTS AND RESTRICTED CASH - end of period | 29,810,412 | 18,970,381 |
Cash paid for: | ||
Interest | 22 | 0 |
Income taxes | 0 | 597 |
NON-CASH INVESTING AND FINANCING ACTIVITIES | ||
Payments made by related parties on the Company's behalf | 0 | 267,610 |
RECONCILIATION OF CASH, CASH EQUIVALENTS AND RESTRICTED CASH | ||
Cash and cash equivalents at beginning of period | 30,024,372 | 6,137,689 |
Restricted cash at beginning of period | 819,269 | 785,806 |
Total cash, cash equivalents and restricted cash at beginning of period | 29,810,412 | 18,970,381 |
Cash and cash equivalents at end of period | 29,015,368 | 18,160,102 |
Restricted cash at end of period | 795,044 | 810,279 |
Total cash, cash equivalents and restricted cash at end of period | $ 29,810,412 | $ 18,970,381 |
ORGANIZATION AND NATURE OF OPER
ORGANIZATION AND NATURE OF OPERATIONS | 6 Months Ended |
Apr. 30, 2022 | |
ORGANIZATION AND NATURE OF OPERATIONS | |
ORGANIZATION AND NATURE OF OPERATIONS | NOTE 1 – ORGANIZATION AND NATURE OF OPERATIONS TIAN RUIXIANG Holdings Ltd (“TRX” or the “Company”) is a holding company incorporated in the Cayman Islands on March 5, 2019. The Company, through a variable interest entity (“VIE”), Zhejiang Tianruixiang Insurance Broker Co., Ltd. (“TRX ZJ”), operates as a broker to sell insurance products in the People’s Republic of China (“PRC” or “China”). TRX ZJ was established on January 18, 2010 and has four subsidiaries. On March 20, 2019, TRX established a wholly owned subsidiary in Hong Kong, TRX Hong Kong Investment Limited (“TRX HK”), which is a holding company. On April 30, 2019, TRX HK established a Wholly Foreign-Owned Enterprise in China, Beijing Tianruixiang Management Consulting Co., Ltd. (“TRX BJ” or “WFOE”). On May 20, 2019, TRX BJ entered into a series of contractual arrangements, or VIE agreements with TRX ZJ and the sole equity holder of TRX ZJ, through which the Company obtained control and became the primary beneficiary of TRX ZJ for accounting purpose only under the U.S. GAAP, hereinafter referred to as the Reorganization. As a result, TRX ZJ became the Company’s VIE. On May 20, 2019, the Company completed its reorganization of the entities under the common control of two majority shareholders, Mr. Zhe Wang and Mrs. Sheng Xu, who is Mr. Zhe Wang’s wife, through their 100% controlled entities incorporated in the British Virgin Islands (“BVI”), and indirectly owned a majority of the equity interests of the Company, its subsidiaries, its VIE and the VIE’s subsidiaries prior to and after the Reorganization. The Company was established as a holding company of TRX BJ. TRX BJ is the primary beneficiary of TRX ZJ for accounting purposes only, and all of these entities are under the common control of the Company’s ultimate controlling shareholders before and after the Reorganization, which resulted in the consolidation of the Company and was accounted for as a reorganization of entities under common control at carrying value and for accounting purposes, the reorganization was accounted for as a recapitalization. The accompanying unaudited condensed consolidated financial statements reflect the activities of TRX and each of the following entities: Name Background Ownership Subsidiaries: TRX HK A Hong Kong company 100% owned by TRX Incorporated on March 20, 2019 TRX BJ A PRC limited liability company and a wholly foreign owned enterprise 100% owned by TRX HK Incorporated on April 30, 2019 VIE: TRX ZJ A PRC limited liability company VIE Incorporated on January 18, 2010 Insurance products brokerage service provider VIE’s subsidiaries: NDB Technology A PRC limited liability company 100% owned by TRX ZJ Incorporated on December 1, 2016 TYDW Technology A PRC limited liability company 100% owned by TRX ZJ Incorporated on December 12, 2016 Hengbang Insurance A PRC limited liability company 99.8% owned by TRX ZJ Incorporated on October 27, 2015 AKS Consulting A PRC limited liability company 100% owned by TRX ZJ Incorporated on June 28, 2021 |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 6 Months Ended |
Apr. 30, 2022 | |
BASIS OF PRESENTATION | |
BASIS OF PRESENTATION | NOTE 2 – BASIS OF PRESENTATION These interim condensed consolidated financial statements are unaudited. In the opinion of management, all adjustments (consisting of normal recurring accruals) and disclosures necessary for a fair presentation of these interim condensed consolidated financial statements have been included. The results reported in the unaudited condensed consolidated financial statements for any interim periods are not necessarily indicative of the results that may be reported for the entire year. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission and do not include all information and footnotes necessary for a complete presentation of financial statements in conformity with accounting principles generally accepted in the United States (“U.S. GAAP”). The unaudited condensed consolidated financial statements include the accounts of the Company and include the assets, liabilities, revenues and expenses of wholly owned subsidiaries, VIE and subsidiaries of the VIE over which the Company exercises control and, when applicable, entity for which the Company has a controlling financial interest or is the primary beneficiary. All inter-company accounts and transactions have been eliminated in consolidation. Certain information and footnote disclosures normally included in the annual consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. These unaudited condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto included in the Company’s annual report. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended |
Apr. 30, 2022 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Use of Estimates The preparation of the unaudited condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from those estimates. Significant estimates during the six months ended April 30, 2022 and 2021 include the allowance for doubtful accounts, the useful life of property and equipment and intangible assets, assumptions used in assessing impairment of long-term assets, valuation of deferred tax assets and the associated valuation allowances, the determination of the fair value of the warrants, and valuation of stock-based compensation. Fair Value of Financial Instruments and Fair Value Measurements The Company adopted the guidance of ASC 820 for fair value measurements which clarifies the definition of fair value, prescribes methods for measuring fair value, and establishes a fair value hierarchy to classify the inputs used in measuring fair value as follows: ● Level 1-Inputs are unadjusted quoted prices in active markets for identical assets or liabilities available at the measurement date. ● Level 2-Inputs are unadjusted quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, inputs other than quoted prices that are observable, and inputs derived from or corroborated by observable market data. ● Level 3-Inputs are unobservable inputs which reflect the reporting entity’s own assumptions on what assumptions the market participants would use in pricing the asset or liability based on the best available information. NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Fair Value of Financial Instruments and Fair Value Measurements (continued) The fair value of the Company’s assets and liabilities, which qualify as financial instruments under ASC Topic 820, “Fair Value Measurement,” approximates the carrying amounts represented in the accompanying condensed consolidated financial statements, primarily due to their short-term nature. Cash and Cash Equivalents At April 30, 2022 and October 31, 2021, the Company’s cash balances by geographic area were as follows: Country: April 30, 2022 October 31, 2021 China $ 29,014,776 100.0 % $ 29,966,611 99.8 % Hong Kong 592 0.0 % 635 0.0 % United States — — 57,126 0.2 % Total cash $ 29,015,368 100.0 % $ 30,024,372 100.0 % Cash in China may not be freely transferable out of the PRC because of exchange control regulations or other reasons. For purposes of the unaudited condensed consolidated statements of cash flows, the Company considers all highly liquid instruments with a maturity of three months or less when purchased and money market accounts to be cash equivalents. The Company had no cash equivalents at April 30, 2022 and October 31, 2021. Restricted Cash In its capacity as an insurance broker, occasionally, the Company collects premiums from certain insureds and remits the premiums to the appropriate insurance carriers. Unremitted insurance premiums are held in a fiduciary capacity bank account until disbursed by the Company to the respective insurance carriers. The unremitted funds are held in a bank for a short period of time. In addition, the Company as an insurance broker is required to reserve 10% of its registered capital in cash held in an escrow bank account pursuant to the China Insurance Regulatory Commission (“CIRC”) rules and regulations. As of April 30, 2022 and October 31, 2021, restricted cash, amounted to $795,044 and $819,269, respectively. Concentration of Credit Risk and Uncertainties A portion of the Company’s cash is maintained with state-owned banks within the PRC. Balances at state-owned banks within the PRC are covered by insurance up to RMB 500,000 (approximately $76,000) per bank. Any balance over RMB 500,000 per bank in PRC will not be covered. At April 30, 2022, cash balances held in the PRC were RMB 196,998,199 (approximately $29,810,000), of which, RMB 195,767,927 (approximately $29,624,000) was not covered by such limited insurance. The Company has not experienced any losses in such accounts and believes it is not exposed to any significant risks on its cash in bank accounts. The Company maintains a portion of its cash in bank and financial institution deposits within the U.S. that at times may exceed federally-insured limits of $250,000. The Company manages this credit risk by concentrating its cash balances in high quality financial institutions and by periodically evaluating the credit quality of the primary financial institutions holding such deposits. The Company has not experienced any losses in such bank accounts and believes it is not exposed to any significant risks on its cash in bank accounts. At April 30, 2022, the Company’s cash balances in United States bank accounts did not exceed the federally-insured limits. Currently, the Company’s operations are carried out in China. Accordingly, the Company’s business, financial condition and results of operations may be influenced by the political, economic and legal environment in China, and by the general state of China’s economy. The Company’s operations in China are subject to specific considerations and significant risks not typically associated with companies in North America. The Company’s results may be adversely affected by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion and remittance abroad, and rates and methods of taxation, among other things. NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Concentration of Credit Risk and Uncertainties (continued) Financial instruments which potentially subject the Company to concentrations of credit risk consist principally of trade accounts receivable. A portion of the Company’s sales are credit sales to customers whose ability to pay are dependent upon the prevailing industry economics; however, concentration of credit risk with respect to trade accounts receivable is limited due to short-term payment terms. The Company also performs ongoing credit evaluations of its customers to help further reduce credit risk. Accounts Receivable and Allowance for Doubtful Accounts Accounts receivable are presented net of an allowance for doubtful accounts. The Company maintains allowance for doubtful accounts for estimated losses. The Company reviews its accounts receivable on a periodic basis and makes general and specific allowances when there is doubt as to the collectability of individual balances. In evaluating the collectability of individual receivable balances, the Company considers many factors, including the age of the balance, customer’s historical payment history, its current credit-worthiness and current economic trends. Accounts are written off after exhaustive efforts at collection. Management believes that its accounts receivable is fully collectable. Therefore, no allowance for doubtful accounts is deemed to be required on its accounts receivable at April 30, 2022 and October 31, 2021. Reserve for Policy Cancellations Managements establishes the policy cancellation reserve based on historical and current data on cancellations. No allowance for cancellation has been recognized for our brokerage business as the Company estimates, based on its past experience that the cancellation of policies rarely occurs. Any subsequent commission adjustments in connection with policy cancellations which have been minimal to date, are recognized upon notification from the insurance carriers. Property and Equipment Property and equipment are stated at cost less accumulated depreciation, and depreciated on a straight-line basis over the estimated useful lives of the assets. Cost represents the purchase price of the asset and other costs incurred to bring the asset into its existing use. The cost of repairs and maintenance is expensed as incurred; major replacements and improvements are capitalized. When assets are retired or disposed of, the cost and accumulated depreciation are removed from the accounts, and any resulting gains or losses are included in income/loss in the year of disposition. Estimated useful lives are as follows: Estimated Useful Life Office equipment and furniture 3 Intangible Assets Intangible assets consist of software and platform and are being amortized on a straight-line method over the estimated useful life of 2 NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Revenue Recognition The Company recognizes revenue under Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers (“ASC 606”). The core principle of the revenue standard is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. The following five steps are applied to achieve that core principle: ● Step 1: Identify the contract with the customer ● Step 2: Identify the performance obligations in the contract ● Step 3: Determine the transaction price ● Step 4: Allocate the transaction price to the performance obligations in the contract ● Step 5: Recognize revenue when the company satisfies a performance obligation In order to identify the performance obligations in a contract with a customer, a company must assess the promised goods or services in the contract and identify each promised goods or service that is distinct. A performance obligation meets ASC 606’s definition of a “distinct” goods or service (or bundle of goods or services) if both of the following criteria are met: ● The customer can benefit from the goods or service either on its own or together with other resources that are readily available to the customer (i.e., the goods or service is capable of being distinct). ● The entity’s promise to transfer the goods or service to the customer is separately identifiable from other promises in the contract (i.e., the promise to transfer the goods or service is distinct within the context of the contract). If a goods or service is not distinct, the goods or service is combined with other promised goods or services until a bundle of goods or services is identified that is distinct. The transaction price is the amount of consideration to which an entity expects to be entitled in exchange for transferring promised goods or services to a customer, excluding amounts collected on behalf of third parties (for example, some sales taxes). The consideration promised in a contract with a customer may include fixed amounts, variable amounts, or both. Variable consideration is included in the transaction price only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. The Company’s revenue is derived from contracts with customers of provisions of insurance brokerage services. The Company does not provide any insurance agent services. The distinct performance obligation is policy placement services. Billing is controlled by the insurance carriers, therefore, the data necessary to reasonably determine the revenue amounts is made available to the Company by the insurance carriers on a monthly basis. Insurance brokerage services are considered to be rendered and completed, and revenue is recognized, at the time an insurance policy becomes effective, that is, when the signed insurance policy is in place and the premium is collected from the insured, which is confirmed by the insurance carriers with their monthly commissions statements submitted to the Company. The Company has met all the criteria of revenue recognition when the premiums are collected by it or the respective insurance carriers and not before, because collectability is not ensured until receipt of the premium. Accordingly, the Company does not accrue any commission prior to the receipt of the related premiums. Generally, at the time when the insurance policy is signed, it is difficult for us to assess the insured’s ability and intention to pay the premium due on the policy. Therefore, it is not possible for us to estimate if we will collect substantially all of the commission to which we will be entitled in exchange for our insurance brokerage services. For this reason we recognize revenue when the premiums are either collected by us or by the respective insurance carriers and not before, due to the specific practice in the industry. NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Revenue Recognition (continued) No allowance for cancellation has been recognized for brokerage business as the Company estimates, based on its past experience that the cancellation of policies rarely occurs. Any subsequent commission adjustments in connection with policy cancellations which have been minimal to date, are recognized upon notification from the insurance carriers. Actual commission adjustments in connection with the cancellation of policies were 0.8% and 1.6% of the total commission revenue for the six months ended April 30, 2022 and 2021, respectively. Occasionally, certain policyholders or insureds might request the Company to assist them for claim process on their behalf with the insurance carriers. The Company generally will spend approximately an hour on the phone with the insurance carriers if such assistance is requested by the insured. Based on historical experience, claim service calls and related labor costs have been minimal. The Company spent approximately 9 hours in connection with the claim process services provided to the insureds for each of the six months ended April 30, 2022 and 2021. Based on historical data, the transaction price does not include any element of consideration that is variable or contingent on the outcome of future events, such as policy cancellations, lapses, and volume of business or claims experience. The Company does not offer promotional payments, customer coupons, rebates or other cash redemption offers to its customers. Stock-based Compensation The Company follows the provisions of FASB ASC 718, “Compensation — Stock Compensation,” which establishes accounting standards for non-employee and employee stock-based awards. Under the provisions of FASB ASC 718, the fair value of stock issued is used to measure the fair value of services received by the Company. For non-employee stock-based awards, fair value is measured based on the value of the Company’s stock on the date that the commitment for performance by the counterparty has been established. The fair value of the equity instrument is calculated and then recognized as compensation expense over the requisite performance period. For employee stock-based awards, share-based compensation cost is measured at the grant date based on the fair value of the award and is recognized as expense with graded vesting or on a straight–line basis, as specified in the stock grant, over the requisite service period for the award. Commitments and Contingencies In the normal course of business, the Company is subject to contingencies, such as legal proceedings and claims arising out of its business, that cover a wide range of matters. Liabilities for such contingencies are recorded when it is probable that a liability has been incurred and the amount of the assessment can be reasonably estimated. Foreign Currency Translation The reporting currency of the Company is the U.S. dollar (“USD”). The functional currency of the parent company, TRX, and TRX HK, is the U.S. dollar and the functional currency of TRX BJ, TRX ZJ, and TRX ZJ’s subsidiaries is the Chinese Renminbi (“RMB”). For the entities whose functional currency is the RMB, result of operations and cash flows are translated at average exchange rates during the period, assets and liabilities are translated at the unified exchange rate at the end of the period, and equity is translated at historical exchange rates. As a result, amounts relating to assets and liabilities reported on the statements of cash flows may not necessarily agree with the changes in the corresponding balances on the balance sheets. Translation adjustments resulting from the process of translating the local currency financial statements into U.S. dollars are included in determining comprehensive loss/income. Transactions denominated in foreign currencies are translated into the functional currency at the exchange rates prevailing on the transaction dates. Assets and liabilities denominated in foreign currencies are translated into the functional currency at the exchange rates prevailing at the balance sheet date with any transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in the results of operations as incurred. All of the Company’s revenue and expense transactions are transacted in the functional currency of the operating entities. The Company does not enter into any material transactions in foreign currencies. Transaction gains or losses have not had, and are not expected to have, a material effect on the results of operations of the Company. NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Foreign Currency Translation (continued) The condensed consolidated balance sheet amounts, with the exception of equity, at April 30, 2022 and October 31, 2021 were translated at RMB 6.6085 to $1.00 and at RMB 6.4057 to $1.00, respectively. Equity accounts were stated at their historical rates. The average translation rates applied to unaudited condensed consolidated statements of operations and cash flows for the six months ended April 30, 2022 and 2021 were RMB 6.3721 and RMB 6.5190 to $1.00, respectively. Per Share Data ASC Topic 260 “Earnings per Share,” requires presentation of both basic and diluted earnings per share (“EPS”) with a reconciliation of the numerator and denominator of the basic EPS computation to the numerator and denominator of the diluted EPS computation. Basic EPS excludes dilution. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue ordinary stock were exercised or converted into ordinary stock or resulted in the issuance of ordinary stock that then shared in the earnings of the entity. Basic loss per ordinary share is computed by dividing net loss available to ordinary shareholders by the weighted average number of shares of ordinary stock outstanding during the period. Diluted net loss per ordinary share is computed by dividing net loss by the weighted average number of shares of ordinary stock, ordinary stock equivalents and potentially dilutive securities outstanding during each period. For the six months ended April 30, 2022 and 2021, potentially dilutive ordinary shares consisted of ordinary shares issuable upon the exercise of ordinary stock warrants (using the treasury stock method). Ordinary stock equivalents are not included in the calculation of diluted loss per ordinary share if their effect would be anti-dilutive. In a period in which the Company has a net loss, all potentially dilutive securities are excluded from the computation of diluted shares outstanding as they would have had an anti-dilutive impact. The following table summarizes the securities that were excluded from the diluted per share calculation because the effect of including these potential shares was antidilutive: Six Months Ended April 30, 2022 2021 Stock warrants 3,545,000 270,000 Potentially dilutive securities 3,545,000 270,000 Segment Reporting ASC 280 “Segment reporting” establishes standards for reporting information on operating segments in interim and annual financial statements. The Company uses “the management approach” in determining reportable operating segments. The management approach considers the internal organization and reporting used by the Company’s chief operating decision maker for making operating decisions and assessing performance as the source for determining the Company’s reportable segments. The Company’s chief operating decision maker is the Chief Executive Officer (“CEO”) and chairman of the Company, who reviews operating results to make decisions about allocating resources and assessing performance for the entire Company. The Company has determined that it has one reportable business segments. During the six months ended April 30, 2022 and 2021, all of the Company’s customers are in the PRC and all revenue is derived from the provision of insurance brokerage services. Treasury Stock Treasury stock purchases are accounted for under the cost method where the entire cost of the acquired stock is recorded as treasury stock. Gains and losses on the subsequent reissuance of shares are credited or charged to paid-in-capital in excess of par value using the average-cost method. NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Reclassification Certain prior period amounts have been reclassified to conform to the current period presentation. These reclassifications have no effect on the previously reported financial position, results of operations and cash flows. Recent Accounting Pronouncements In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (“Topic 326”). The ASU introduces a new accounting model, the Current Expected Credit Losses model (“CECL”), which requires Other accounting standards that have been issued or proposed by FASB that do not require adoption until a future date are not expected to have a material impact on the unaudited condensed consolidated financial statements upon adoption. The Company does not discuss recent pronouncements that are not anticipated to have an impact on or are unrelated to its unaudited condensed consolidated financial condition, results of operations, cash flows or disclosures. |
OTHER CURRENT AND NON-CURRENT A
OTHER CURRENT AND NON-CURRENT ASSETS | 6 Months Ended |
Apr. 30, 2022 | |
OTHER CURRENT AND NON-CURRENT ASSETS | |
OTHER CURRENT AND NON-CURRENT ASSETS | NOTE 4 – OTHER CURRENT AND NON-CURRENT ASSETS At April 30, 2022 and October 31, 2021, other current and non-current assets consisted of the following: April 30, 2022 October 31, 2021 Prepaid professional fees (1) $ 177,637 $ 263,030 Prepaid directors and officers’ liability insurance premium — 214,188 Recoverable VAT 47,703 67,105 Security deposit 48,423 66,748 Other 62,051 42,860 Total $ 335,814 $ 653,931 Current portion 245,007 465,650 Non-current portion 90,807 188,281 Total 335,814 653,931 (1) Prepaid professional fees mainly relate to cash paid in advance for consulting and advisory service. These amounts are recognized as expense over the related service periods. |
NOTE RECEIVABLE
NOTE RECEIVABLE | 6 Months Ended |
Apr. 30, 2022 | |
NOTE RECEIVABLE | |
NOTE RECEIVABLE | NOTE 5 – NOTE RECEIVABLE The Company originated a note receivable to a third party in the principal amount of $7.5 million on January 29, 2021. This note has a maturity date of January 29, 2023. The note bears a fixed interest rate of 2.0% per annum. As of both April 30, 2022 and October 31, 2021, the outstanding principal balance of the note was $7,500,000 and was recorded as “Note receivable” on the accompanying condensed consolidated balance sheets. As of April 30, 2022 and October 31, 2021, the outstanding interest balance related to the note was $186,986 and $113,014, respectively, and was included in “Interest receivable” on the accompanying condensed consolidated balance sheets. |
TAXES PAYABLE
TAXES PAYABLE | 6 Months Ended |
Apr. 30, 2022 | |
TAXES PAYABLE | |
TAXES PAYABLE | NOTE 6 – TAXES PAYABLE At April 30, 2022 and October 31, 2021, taxes payable consisted of the following: April 30, 2022 October 31, 2021 Income taxes payable $ 498,705 $ 493,196 VAT payable 371 — Other 18 — $ 499,094 $ 493,196 |
ACCRUED LIABILITIES AND OTHER P
ACCRUED LIABILITIES AND OTHER PAYABLES | 6 Months Ended |
Apr. 30, 2022 | |
ACCRUED LIABILITIES AND OTHER PAYABLES | |
ACCRUED LIABILITIES AND OTHER PAYABLES | NOTE 7 – ACCRUED LIABILITIES AND OTHER PAYABLES At April 30, 2022 and October 31, 2021, accrued liabilities and other payables consisted of the following: April 30, 2022 October 31, 2021 Accrued professional service fees $ 201,751 $ 81,388 Other 73,849 14,276 $ 275,600 $ 95,664 |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 6 Months Ended |
Apr. 30, 2022 | |
RELATED PARTY TRANSACTIONS | |
RELATED PARTY TRANSACTIONS | NOTE 8 – RELATED PARTY TRANSACTIONS Services Provided by Related Parties During the six months ended April 30, 2021, the Company’s related parties provided selling and marketing services to the Company. The Company recognized related party selling and marketing expenses of $940 for the six months ended April 30, 2021, which have been included in selling and marketing on the accompanying unaudited condensed consolidated statements of operations and comprehensive loss. The company did not receive any service from its related party during the six months ended April 30, 2022. Office Space from Related Party In the six months ended April 30, 2022 and 2021, the Company leased office space from WDZG Consulting, which owns 100% of TRX ZJ. For the six months ended April 30, 2022 and 2021, rent expense related to office leases from WDZG Consulting amounted to $4,406 and $10,139, respectively, which have been included in general and administrative – other on the accompanying unaudited condensed consolidated statements of operations and comprehensive loss. Due from Related Party At April 30, 2022 and October 31, 2021, due from related party consisted of the following: Name of related party April 30, 2022 October 31, 2021 WDZG Consulting $ 2,485 $ — $ 2,485 $ — The balance of due from related party was short-term in nature, unsecured, repayable on demand, and bear no interest. Management believes that the related party receivable is fully collectable. Therefore, no allowance for doubtful accounts is deemed to be required on its due from related party at April 30, 2022. The Company historically has not experienced uncollectible receivable from related party. The receivable from related party of $2,485 as of April 30, 2022 has been fully collected subsequently. NOTE 8 – RELATED PARTY TRANSACTIONS (continued) Due to Related Party At April 30, 2022 and October 31, 2021, due to related party consisted of the following: Name of related party April 30, 2022 October 31, 2021 WDZG Consulting $ — $ 2,564 $ — $ 2,564 The balance of due to related party represents expense paid by the related party on behalf of the Company. The related party’s payable is short-term in nature, non-interest bearing, unsecured and repayable on demand. |
EQUITY
EQUITY | 6 Months Ended |
Apr. 30, 2022 | |
EQUITY | |
EQUITY | NOTE 9 – EQUITY Ordinary Shares The Company’s outstanding share capital consists of Class A ordinary shares and Class B ordinary shares. Holders of Class A ordinary shares and Class B ordinary shares shall at all times vote together as one class on all resolutions submitted to a vote by the shareholders. Each Class B ordinary share shall entitle the holder thereof to eighteen (18) votes on all matters subject to vote at general meetings of the Company, and each Class A ordinary share shall entitle the holder thereof to one (1) vote on all matters subject to vote at general meetings of the Company. Each Class B ordinary share is convertible into one (1) Class A ordinary share at any time at the option of the holder thereof. The right to convert shall be exercisable by the holder of the Class B ordinary share delivering a written notice to the Company that such holder elects to convert a specified number of Class B ordinary shares into Class A ordinary shares. In no event shall Class A ordinary shares be convertible into Class B ordinary shares. Ordinary Shares Issued for Services During the six months ended April 30, 2022, the Company issued a total of 2,136,000 shares of its ordinary stock pursuant to its 2021 performance incentive plan for services rendered. These shares were valued at $2,588,828, the fair market values on the grant dates using the reported closing share prices on the dates of grant, and the Company recorded stock-based compensation expense of $2,588,828 for the six months ended April 30, 2022. 2021 Performance Incentive Plan The Company filed a registration statement on Form S-8 on December 3, 2021 and reserved 5,000,000 Class A ordinary shares for issuance thereunder. During the six months ended April 30, 2022, the Company issued 2,136,000 shares of its Class A ordinary stock pursuant to the 2021 performance incentive plan, of which, 1,400,000 shares were issued to its officers and directors. Warrants Stock warrants activities during the six months ended April 30, 2022 were as follows: Number of Warrants Weighted Average Exercise Price Outstanding at October 31, 2021 3,545,000 $ 7.77 Granted — — Exercised — — Outstanding at April 30, 2022 3,545,000 $ 7.77 Warrants exercisable at April 30, 2022 3,545,000 $ 7.77 Both the stock warrants outstanding and stock warrants exercisable at April 30, 2022 had no intrinsic value. NOTE 9 – EQUITY (continued) Warrants (continued) The following table summarizes the shares of the Company’s ordinary shares issuable upon exercise of warrants outstanding at April 30, 2022: Warrants Outstanding Warrants Exercisable Weighted Range of Average Exercise Number Outstanding Weighted Average Remaining Number Exercisable at Exercise Price at April 30, 2022 Contractual Life (Years) April 30, 2022 Price $ 5.00 270,000 1.75 270,000 $ 5.00 8.00 3,275,000 4.12 3,275,000 8.00 $ 5.00 – 8.00 3,545,000 3.94 3,545,000 $ 7.77 |
STATUTORY RESERVE AND RESTRICTE
STATUTORY RESERVE AND RESTRICTED NET ASSETS | 6 Months Ended |
Apr. 30, 2022 | |
STATUTORY RESERVE AND RESTRICTED NET ASSETS | |
STATUTORY RESERVE AND RESTRICTED NET ASSETS | NOTE 10 - STATUTORY RESERVE AND RESTRICTED NET ASSETS The Company’s PRC subsidiary, VIE and VIE’s subsidiaries are restricted in their ability to transfer a portion of their net assets to the Company. The payment of dividends by entities organized in China is subject to limitations, procedures and formalities. Regulations in the PRC currently permit payment of dividends only out of accumulated profits as determined in accordance with accounting standards and regulations in China. The Company is required to make appropriations to certain reserve funds, comprising the statutory surplus reserve and the discretionary surplus reserve, based on after-tax net income determined in accordance with generally accepted accounting principles of the PRC (“PRC GAAP”). Appropriations to the statutory surplus reserve are required to be at least 10% of the after-tax net income determined in accordance with PRC GAAP until the reserve is equal to 50% of the entity’s registered capital. Appropriations to the discretionary surplus reserve are made at the discretion of the Board of Directors. The statutory reserve may be applied against prior year losses, if any, and may be used for general business expansion and production or increase in registered capital, but are not distributable as cash dividends. The Company did not make any appropriation to statutory reserve during the six months ended April 30, 2022. Relevant PRC laws and regulations restrict the Company’s PRC subsidiary, VIE and VIE’s subsidiaries from transferring a portion of their net assets, equivalent to their statutory reserves and their share capital, to the Company’s shareholders in the form of loans, advances or cash dividends. Only PRC entities’ accumulated profits may be distributed as dividends to the Company’s shareholders without the consent of a third party. As of both April 30, 2022 and October 31, 2021, the restricted amounts as determined pursuant to PRC statutory laws totaled $199,653, and total restricted net assets amounted to $6,656,576. |
COMMITMENTS AND CONTINCENGIES
COMMITMENTS AND CONTINCENGIES | 6 Months Ended |
Apr. 30, 2022 | |
COMMITMENTS AND CONTINCENGIES | |
COMMITMENTS AND CONTINCENGIES | NOTE 11 – COMMITMENTS AND CONTINCENGIES Contingencies From time to time, the Company may be subject to certain legal proceedings, claims and disputes that arise in the ordinary course of business. Although the outcomes of these legal proceedings cannot be predicted, the Company does not believe these actions, in the aggregate, will have a material adverse impact on its financial position, results of operations or liquidity. Operating Leases Commitment The Company is a party to leases for office space. Rent expense under all operating leases, included in operating expenses in the accompanying unaudited condensed consolidated statements of operations and comprehensive loss, amounted to approximately $212,000 and $90,000 for the six months ended April 30, 2022 and 2021, respectively. NOTE 11 – COMMITMENTS AND CONTINCENGIES (continued) Operating Leases Commitment (continued) Supplemental cash flow information related to leases for the six months ended April 30, 2022 and 2021 is as follows: Six Months Ended April 30, 2022 2021 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows paid for operating lease $ 153,206 $ 60,889 Right-of-use assets obtained in exchange for lease obligation: Operating lease $ 274,531 $ 74,234 The following table summarizes the lease term and discount rate for the Company’s operating lease as of April 30, 2022: Operating Lease Weighted average remaining lease term (in years) 1.36 Weighted average discount rate 4.75 % The following table summarizes the maturity of lease liabilities under operating lease as of April 30, 2022: For the Twelve-month Period Ending April 30: Operating Lease 2023 $ 355,955 2024 107,796 2025 and thereafter — Total lease payments 463,751 Amount of lease payments representing interest (13,653) Total present value of operating lease liabilities $ 450,098 Current portion $ 343,547 Long-term portion 106,551 Total $ 450,098 Variable Interest Entity Structure In the opinion of the management, (i) the corporate structure of the Company is in compliance with existing PRC laws and regulations; (ii) the Contractual Arrangements are valid and binding, and do not result in any violation of PRC laws or regulations currently in effect; and (iii) the business operations of WFOE, VIE and VIE’s subsidiaries are in compliance with existing PRC laws and regulations in all material respects. However, there are substantial uncertainties regarding the interpretation and application of current and future PRC laws and regulations. Accordingly, the Company cannot be assured that PRC regulatory authorities will not ultimately take a contrary view to the foregoing opinion of its management. If the current corporate structure of the Company or the Contractual Arrangements is found to be in violation of any existing or future PRC laws and regulations, the Company may be required to restructure its corporate structure and operations in the PRC to comply with changing and new PRC laws and regulations. In the opinion of management, the likelihood of loss in respect of the Company’s current corporate structure or the VIE Agreements is remote based on current facts and circumstances. |
CONCENTRATIONS
CONCENTRATIONS | 6 Months Ended |
Apr. 30, 2022 | |
CONCENTRATIONS. | |
CONCENTRATIONS | NOTE 12 – CONCENTRATIONS Concentrations of Credit Risk Balances at financial institutions and state-owned banks within the PRC are covered by insurance up to RMB 500,000 (approximately $76,000) per bank. Any balance over RMB 500,000 per bank in PRC will not be covered. At April 30, 2022 and October 31, 2021, cash, cash equivalents and restricted cash balances held in the PRC are $29,809,820 and $30,785,880, of which, $29,623,655 and $30,410,346 were not covered by such limited insurance, respectively. The Company has not experienced any losses in accounts held in PRC’s financial institutions and believes it is not exposed to any risks on its cash, cash equivalents and restricted cash held in the PRC’s financial institutions. Insurance Carriers The following table sets forth information as to each insurance carrier that accounted for 10% or more of the Company’s revenue for the six months ended April 30, 2022 and 2021. Six Months Ended April 30, Carrier 2022 2021 A * 20 % B * 19 % C * 16 % D 15 % * E 12 % * F 11 % * * Less than 10% Three insurance carriers, whose outstanding receivable accounted for 10% or more of the Company’s total outstanding accounts receivable at April 30, 2022, accounted for 80.9% of the Company’s total outstanding accounts receivable at April 30, 2022. Two insurance carriers, whose outstanding receivable accounted for 10% or more of the Company’s total outstanding accounts receivable at October 31, 2021, accounted for 80.5% of the Company’s total outstanding accounts receivable at October 31, 2021. Suppliers No supplier accounted for 10% or more of the Company’s purchase during the six months ended April 30, 2022 and 2021. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 6 Months Ended |
Apr. 30, 2022 | |
SUBSEQUENT EVENTS | |
SUBSEQUENT EVENTS | NOTE 13 – SUBSEQUENT EVENTS The Company evaluated subsequent events and transactions that occurred after the balance sheet date up to the date that the financial statements were issued. Based upon this review, the Company did not identify any subsequent events that would have required adjustment or disclosure in the financial statements. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended |
Apr. 30, 2022 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Use of Estimates | Use of Estimates The preparation of the unaudited condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from those estimates. Significant estimates during the six months ended April 30, 2022 and 2021 include the allowance for doubtful accounts, the useful life of property and equipment and intangible assets, assumptions used in assessing impairment of long-term assets, valuation of deferred tax assets and the associated valuation allowances, the determination of the fair value of the warrants, and valuation of stock-based compensation. |
Fair Value of Financial Instruments and Fair Value Measurements | Fair Value of Financial Instruments and Fair Value Measurements The Company adopted the guidance of ASC 820 for fair value measurements which clarifies the definition of fair value, prescribes methods for measuring fair value, and establishes a fair value hierarchy to classify the inputs used in measuring fair value as follows: ● Level 1-Inputs are unadjusted quoted prices in active markets for identical assets or liabilities available at the measurement date. ● Level 2-Inputs are unadjusted quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, inputs other than quoted prices that are observable, and inputs derived from or corroborated by observable market data. ● Level 3-Inputs are unobservable inputs which reflect the reporting entity’s own assumptions on what assumptions the market participants would use in pricing the asset or liability based on the best available information. NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Fair Value of Financial Instruments and Fair Value Measurements (continued) The fair value of the Company’s assets and liabilities, which qualify as financial instruments under ASC Topic 820, “Fair Value Measurement,” approximates the carrying amounts represented in the accompanying condensed consolidated financial statements, primarily due to their short-term nature. |
Cash and Cash Equivalents | Cash and Cash Equivalents At April 30, 2022 and October 31, 2021, the Company’s cash balances by geographic area were as follows: Country: April 30, 2022 October 31, 2021 China $ 29,014,776 100.0 % $ 29,966,611 99.8 % Hong Kong 592 0.0 % 635 0.0 % United States — — 57,126 0.2 % Total cash $ 29,015,368 100.0 % $ 30,024,372 100.0 % Cash in China may not be freely transferable out of the PRC because of exchange control regulations or other reasons. For purposes of the unaudited condensed consolidated statements of cash flows, the Company considers all highly liquid instruments with a maturity of three months or less when purchased and money market accounts to be cash equivalents. The Company had no cash equivalents at April 30, 2022 and October 31, 2021. |
Restricted Cash | Restricted Cash In its capacity as an insurance broker, occasionally, the Company collects premiums from certain insureds and remits the premiums to the appropriate insurance carriers. Unremitted insurance premiums are held in a fiduciary capacity bank account until disbursed by the Company to the respective insurance carriers. The unremitted funds are held in a bank for a short period of time. In addition, the Company as an insurance broker is required to reserve 10% of its registered capital in cash held in an escrow bank account pursuant to the China Insurance Regulatory Commission (“CIRC”) rules and regulations. As of April 30, 2022 and October 31, 2021, restricted cash, amounted to $795,044 and $819,269, respectively. |
Concentration of Credit Risk and Uncertainties | Concentration of Credit Risk and Uncertainties A portion of the Company’s cash is maintained with state-owned banks within the PRC. Balances at state-owned banks within the PRC are covered by insurance up to RMB 500,000 (approximately $76,000) per bank. Any balance over RMB 500,000 per bank in PRC will not be covered. At April 30, 2022, cash balances held in the PRC were RMB 196,998,199 (approximately $29,810,000), of which, RMB 195,767,927 (approximately $29,624,000) was not covered by such limited insurance. The Company has not experienced any losses in such accounts and believes it is not exposed to any significant risks on its cash in bank accounts. The Company maintains a portion of its cash in bank and financial institution deposits within the U.S. that at times may exceed federally-insured limits of $250,000. The Company manages this credit risk by concentrating its cash balances in high quality financial institutions and by periodically evaluating the credit quality of the primary financial institutions holding such deposits. The Company has not experienced any losses in such bank accounts and believes it is not exposed to any significant risks on its cash in bank accounts. At April 30, 2022, the Company’s cash balances in United States bank accounts did not exceed the federally-insured limits. Currently, the Company’s operations are carried out in China. Accordingly, the Company’s business, financial condition and results of operations may be influenced by the political, economic and legal environment in China, and by the general state of China’s economy. The Company’s operations in China are subject to specific considerations and significant risks not typically associated with companies in North America. The Company’s results may be adversely affected by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion and remittance abroad, and rates and methods of taxation, among other things. NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Concentration of Credit Risk and Uncertainties (continued) Financial instruments which potentially subject the Company to concentrations of credit risk consist principally of trade accounts receivable. A portion of the Company’s sales are credit sales to customers whose ability to pay are dependent upon the prevailing industry economics; however, concentration of credit risk with respect to trade accounts receivable is limited due to short-term payment terms. The Company also performs ongoing credit evaluations of its customers to help further reduce credit risk. |
Accounts Receivable and Allowance for Doubtful Accounts | Accounts Receivable and Allowance for Doubtful Accounts Accounts receivable are presented net of an allowance for doubtful accounts. The Company maintains allowance for doubtful accounts for estimated losses. The Company reviews its accounts receivable on a periodic basis and makes general and specific allowances when there is doubt as to the collectability of individual balances. In evaluating the collectability of individual receivable balances, the Company considers many factors, including the age of the balance, customer’s historical payment history, its current credit-worthiness and current economic trends. Accounts are written off after exhaustive efforts at collection. Management believes that its accounts receivable is fully collectable. Therefore, no allowance for doubtful accounts is deemed to be required on its accounts receivable at April 30, 2022 and October 31, 2021. |
Reserve for Policy Cancellations | Reserve for Policy Cancellations Managements establishes the policy cancellation reserve based on historical and current data on cancellations. No allowance for cancellation has been recognized for our brokerage business as the Company estimates, based on its past experience that the cancellation of policies rarely occurs. Any subsequent commission adjustments in connection with policy cancellations which have been minimal to date, are recognized upon notification from the insurance carriers. |
Property and Equipment | Property and Equipment Property and equipment are stated at cost less accumulated depreciation, and depreciated on a straight-line basis over the estimated useful lives of the assets. Cost represents the purchase price of the asset and other costs incurred to bring the asset into its existing use. The cost of repairs and maintenance is expensed as incurred; major replacements and improvements are capitalized. When assets are retired or disposed of, the cost and accumulated depreciation are removed from the accounts, and any resulting gains or losses are included in income/loss in the year of disposition. Estimated useful lives are as follows: Estimated Useful Life Office equipment and furniture 3 |
Intangible Assets | Intangible Assets Intangible assets consist of software and platform and are being amortized on a straight-line method over the estimated useful life of 2 |
Revenue Recognition | Revenue Recognition The Company recognizes revenue under Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers (“ASC 606”). The core principle of the revenue standard is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. The following five steps are applied to achieve that core principle: ● Step 1: Identify the contract with the customer ● Step 2: Identify the performance obligations in the contract ● Step 3: Determine the transaction price ● Step 4: Allocate the transaction price to the performance obligations in the contract ● Step 5: Recognize revenue when the company satisfies a performance obligation In order to identify the performance obligations in a contract with a customer, a company must assess the promised goods or services in the contract and identify each promised goods or service that is distinct. A performance obligation meets ASC 606’s definition of a “distinct” goods or service (or bundle of goods or services) if both of the following criteria are met: ● The customer can benefit from the goods or service either on its own or together with other resources that are readily available to the customer (i.e., the goods or service is capable of being distinct). ● The entity’s promise to transfer the goods or service to the customer is separately identifiable from other promises in the contract (i.e., the promise to transfer the goods or service is distinct within the context of the contract). If a goods or service is not distinct, the goods or service is combined with other promised goods or services until a bundle of goods or services is identified that is distinct. The transaction price is the amount of consideration to which an entity expects to be entitled in exchange for transferring promised goods or services to a customer, excluding amounts collected on behalf of third parties (for example, some sales taxes). The consideration promised in a contract with a customer may include fixed amounts, variable amounts, or both. Variable consideration is included in the transaction price only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. The Company’s revenue is derived from contracts with customers of provisions of insurance brokerage services. The Company does not provide any insurance agent services. The distinct performance obligation is policy placement services. Billing is controlled by the insurance carriers, therefore, the data necessary to reasonably determine the revenue amounts is made available to the Company by the insurance carriers on a monthly basis. Insurance brokerage services are considered to be rendered and completed, and revenue is recognized, at the time an insurance policy becomes effective, that is, when the signed insurance policy is in place and the premium is collected from the insured, which is confirmed by the insurance carriers with their monthly commissions statements submitted to the Company. The Company has met all the criteria of revenue recognition when the premiums are collected by it or the respective insurance carriers and not before, because collectability is not ensured until receipt of the premium. Accordingly, the Company does not accrue any commission prior to the receipt of the related premiums. Generally, at the time when the insurance policy is signed, it is difficult for us to assess the insured’s ability and intention to pay the premium due on the policy. Therefore, it is not possible for us to estimate if we will collect substantially all of the commission to which we will be entitled in exchange for our insurance brokerage services. For this reason we recognize revenue when the premiums are either collected by us or by the respective insurance carriers and not before, due to the specific practice in the industry. NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Revenue Recognition (continued) No allowance for cancellation has been recognized for brokerage business as the Company estimates, based on its past experience that the cancellation of policies rarely occurs. Any subsequent commission adjustments in connection with policy cancellations which have been minimal to date, are recognized upon notification from the insurance carriers. Actual commission adjustments in connection with the cancellation of policies were 0.8% and 1.6% of the total commission revenue for the six months ended April 30, 2022 and 2021, respectively. Occasionally, certain policyholders or insureds might request the Company to assist them for claim process on their behalf with the insurance carriers. The Company generally will spend approximately an hour on the phone with the insurance carriers if such assistance is requested by the insured. Based on historical experience, claim service calls and related labor costs have been minimal. The Company spent approximately 9 hours in connection with the claim process services provided to the insureds for each of the six months ended April 30, 2022 and 2021. Based on historical data, the transaction price does not include any element of consideration that is variable or contingent on the outcome of future events, such as policy cancellations, lapses, and volume of business or claims experience. The Company does not offer promotional payments, customer coupons, rebates or other cash redemption offers to its customers. |
Stock-based Compensation | Stock-based Compensation The Company follows the provisions of FASB ASC 718, “Compensation — Stock Compensation,” which establishes accounting standards for non-employee and employee stock-based awards. Under the provisions of FASB ASC 718, the fair value of stock issued is used to measure the fair value of services received by the Company. For non-employee stock-based awards, fair value is measured based on the value of the Company’s stock on the date that the commitment for performance by the counterparty has been established. The fair value of the equity instrument is calculated and then recognized as compensation expense over the requisite performance period. For employee stock-based awards, share-based compensation cost is measured at the grant date based on the fair value of the award and is recognized as expense with graded vesting or on a straight–line basis, as specified in the stock grant, over the requisite service period for the award. |
Commitment and Contingencies | Commitments and Contingencies In the normal course of business, the Company is subject to contingencies, such as legal proceedings and claims arising out of its business, that cover a wide range of matters. Liabilities for such contingencies are recorded when it is probable that a liability has been incurred and the amount of the assessment can be reasonably estimated. |
Foreign Currency Translation | Foreign Currency Translation The reporting currency of the Company is the U.S. dollar (“USD”). The functional currency of the parent company, TRX, and TRX HK, is the U.S. dollar and the functional currency of TRX BJ, TRX ZJ, and TRX ZJ’s subsidiaries is the Chinese Renminbi (“RMB”). For the entities whose functional currency is the RMB, result of operations and cash flows are translated at average exchange rates during the period, assets and liabilities are translated at the unified exchange rate at the end of the period, and equity is translated at historical exchange rates. As a result, amounts relating to assets and liabilities reported on the statements of cash flows may not necessarily agree with the changes in the corresponding balances on the balance sheets. Translation adjustments resulting from the process of translating the local currency financial statements into U.S. dollars are included in determining comprehensive loss/income. Transactions denominated in foreign currencies are translated into the functional currency at the exchange rates prevailing on the transaction dates. Assets and liabilities denominated in foreign currencies are translated into the functional currency at the exchange rates prevailing at the balance sheet date with any transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in the results of operations as incurred. All of the Company’s revenue and expense transactions are transacted in the functional currency of the operating entities. The Company does not enter into any material transactions in foreign currencies. Transaction gains or losses have not had, and are not expected to have, a material effect on the results of operations of the Company. NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Foreign Currency Translation (continued) The condensed consolidated balance sheet amounts, with the exception of equity, at April 30, 2022 and October 31, 2021 were translated at RMB 6.6085 to $1.00 and at RMB 6.4057 to $1.00, respectively. Equity accounts were stated at their historical rates. The average translation rates applied to unaudited condensed consolidated statements of operations and cash flows for the six months ended April 30, 2022 and 2021 were RMB 6.3721 and RMB 6.5190 to $1.00, respectively. |
Per Share Data | Per Share Data ASC Topic 260 “Earnings per Share,” requires presentation of both basic and diluted earnings per share (“EPS”) with a reconciliation of the numerator and denominator of the basic EPS computation to the numerator and denominator of the diluted EPS computation. Basic EPS excludes dilution. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue ordinary stock were exercised or converted into ordinary stock or resulted in the issuance of ordinary stock that then shared in the earnings of the entity. Basic loss per ordinary share is computed by dividing net loss available to ordinary shareholders by the weighted average number of shares of ordinary stock outstanding during the period. Diluted net loss per ordinary share is computed by dividing net loss by the weighted average number of shares of ordinary stock, ordinary stock equivalents and potentially dilutive securities outstanding during each period. For the six months ended April 30, 2022 and 2021, potentially dilutive ordinary shares consisted of ordinary shares issuable upon the exercise of ordinary stock warrants (using the treasury stock method). Ordinary stock equivalents are not included in the calculation of diluted loss per ordinary share if their effect would be anti-dilutive. In a period in which the Company has a net loss, all potentially dilutive securities are excluded from the computation of diluted shares outstanding as they would have had an anti-dilutive impact. The following table summarizes the securities that were excluded from the diluted per share calculation because the effect of including these potential shares was antidilutive: Six Months Ended April 30, 2022 2021 Stock warrants 3,545,000 270,000 Potentially dilutive securities 3,545,000 270,000 |
Segment Reporting | Segment Reporting ASC 280 “Segment reporting” establishes standards for reporting information on operating segments in interim and annual financial statements. The Company uses “the management approach” in determining reportable operating segments. The management approach considers the internal organization and reporting used by the Company’s chief operating decision maker for making operating decisions and assessing performance as the source for determining the Company’s reportable segments. The Company’s chief operating decision maker is the Chief Executive Officer (“CEO”) and chairman of the Company, who reviews operating results to make decisions about allocating resources and assessing performance for the entire Company. The Company has determined that it has one reportable business segments. During the six months ended April 30, 2022 and 2021, all of the Company’s customers are in the PRC and all revenue is derived from the provision of insurance brokerage services. |
Treasury Stock | Treasury Stock Treasury stock purchases are accounted for under the cost method where the entire cost of the acquired stock is recorded as treasury stock. Gains and losses on the subsequent reissuance of shares are credited or charged to paid-in-capital in excess of par value using the average-cost method. |
Reclassification | Reclassification Certain prior period amounts have been reclassified to conform to the current period presentation. These reclassifications have no effect on the previously reported financial position, results of operations and cash flows. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (“Topic 326”). The ASU introduces a new accounting model, the Current Expected Credit Losses model (“CECL”), which requires Other accounting standards that have been issued or proposed by FASB that do not require adoption until a future date are not expected to have a material impact on the unaudited condensed consolidated financial statements upon adoption. The Company does not discuss recent pronouncements that are not anticipated to have an impact on or are unrelated to its unaudited condensed consolidated financial condition, results of operations, cash flows or disclosures. |
ORGANIZATION AND NATURE OF OP_2
ORGANIZATION AND NATURE OF OPERATIONS (Tables) | 6 Months Ended |
Apr. 30, 2022 | |
ORGANIZATION AND NATURE OF OPERATIONS | |
Summary of subsidiaries, VIE and VIE's subsidiaries | Name Background Ownership Subsidiaries: TRX HK A Hong Kong company 100% owned by TRX Incorporated on March 20, 2019 TRX BJ A PRC limited liability company and a wholly foreign owned enterprise 100% owned by TRX HK Incorporated on April 30, 2019 VIE: TRX ZJ A PRC limited liability company VIE Incorporated on January 18, 2010 Insurance products brokerage service provider VIE’s subsidiaries: NDB Technology A PRC limited liability company 100% owned by TRX ZJ Incorporated on December 1, 2016 TYDW Technology A PRC limited liability company 100% owned by TRX ZJ Incorporated on December 12, 2016 Hengbang Insurance A PRC limited liability company 99.8% owned by TRX ZJ Incorporated on October 27, 2015 AKS Consulting A PRC limited liability company 100% owned by TRX ZJ Incorporated on June 28, 2021 |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 6 Months Ended |
Apr. 30, 2022 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Summary of cash balances by geographic area | Country: April 30, 2022 October 31, 2021 China $ 29,014,776 100.0 % $ 29,966,611 99.8 % Hong Kong 592 0.0 % 635 0.0 % United States — — 57,126 0.2 % Total cash $ 29,015,368 100.0 % $ 30,024,372 100.0 % |
Summary of estimated useful life of property and equipment | Estimated Useful Life Office equipment and furniture 3 |
Summary of securities excluded from diluted per share | Six Months Ended April 30, 2022 2021 Stock warrants 3,545,000 270,000 Potentially dilutive securities 3,545,000 270,000 |
OTHER CURRENT AND NON-CURRENT_2
OTHER CURRENT AND NON-CURRENT ASSETS (Tables) | 6 Months Ended |
Apr. 30, 2022 | |
OTHER CURRENT AND NON-CURRENT ASSETS | |
Schedule of other current and non-current assets | April 30, 2022 October 31, 2021 Prepaid professional fees (1) $ 177,637 $ 263,030 Prepaid directors and officers’ liability insurance premium — 214,188 Recoverable VAT 47,703 67,105 Security deposit 48,423 66,748 Other 62,051 42,860 Total $ 335,814 $ 653,931 Current portion 245,007 465,650 Non-current portion 90,807 188,281 Total 335,814 653,931 (1) Prepaid professional fees mainly relate to cash paid in advance for consulting and advisory service. These amounts are recognized as expense over the related service periods. |
TAXES PAYABLE (Tables)
TAXES PAYABLE (Tables) | 6 Months Ended |
Apr. 30, 2022 | |
TAXES PAYABLE | |
Summary of VAT and other taxes payable | April 30, 2022 October 31, 2021 Income taxes payable $ 498,705 $ 493,196 VAT payable 371 — Other 18 — $ 499,094 $ 493,196 |
ACCRUED LIABILITIES AND OTHER_2
ACCRUED LIABILITIES AND OTHER PAYABLES (Tables) | 6 Months Ended |
Apr. 30, 2022 | |
ACCRUED LIABILITIES AND OTHER PAYABLES | |
Summary of accrued liabilities and other payables | April 30, 2022 October 31, 2021 Accrued professional service fees $ 201,751 $ 81,388 Other 73,849 14,276 $ 275,600 $ 95,664 |
RELATED PARTY TRANSACTIONS (Tab
RELATED PARTY TRANSACTIONS (Tables) | 6 Months Ended |
Apr. 30, 2022 | |
RELATED PARTY TRANSACTIONS | |
Summary of related party transactions | At April 30, 2022 and October 31, 2021, due from related party consisted of the following: Name of related party April 30, 2022 October 31, 2021 WDZG Consulting $ 2,485 $ — $ 2,485 $ — At April 30, 2022 and October 31, 2021, due to related party consisted of the following: Name of related party April 30, 2022 October 31, 2021 WDZG Consulting $ — $ 2,564 $ — $ 2,564 |
EQUITY (Tables)
EQUITY (Tables) | 6 Months Ended |
Apr. 30, 2022 | |
EQUITY | |
Schedule of Stock warrants activities | Number of Warrants Weighted Average Exercise Price Outstanding at October 31, 2021 3,545,000 $ 7.77 Granted — — Exercised — — Outstanding at April 30, 2022 3,545,000 $ 7.77 Warrants exercisable at April 30, 2022 3,545,000 $ 7.77 |
Summary of shares of the Company's ordinary stock issuable upon exercise of warrants outstanding | Warrants Outstanding Warrants Exercisable Weighted Range of Average Exercise Number Outstanding Weighted Average Remaining Number Exercisable at Exercise Price at April 30, 2022 Contractual Life (Years) April 30, 2022 Price $ 5.00 270,000 1.75 270,000 $ 5.00 8.00 3,275,000 4.12 3,275,000 8.00 $ 5.00 – 8.00 3,545,000 3.94 3,545,000 $ 7.77 |
COMMITMENTS AND CONTINCENGIES (
COMMITMENTS AND CONTINCENGIES (Tables) | 6 Months Ended |
Apr. 30, 2022 | |
COMMITMENTS AND CONTINCENGIES | |
Schedule of supplemental cash flow information related to leases | Six Months Ended April 30, 2022 2021 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows paid for operating lease $ 153,206 $ 60,889 Right-of-use assets obtained in exchange for lease obligation: Operating lease $ 274,531 $ 74,234 |
Schedule of lease term and discount rate | The following table summarizes the lease term and discount rate for the Company’s operating lease as of April 30, 2022: Operating Lease Weighted average remaining lease term (in years) 1.36 Weighted average discount rate 4.75 % |
Schedule of maturity of lease liabilities | For the Twelve-month Period Ending April 30: Operating Lease 2023 $ 355,955 2024 107,796 2025 and thereafter — Total lease payments 463,751 Amount of lease payments representing interest (13,653) Total present value of operating lease liabilities $ 450,098 Current portion $ 343,547 Long-term portion 106,551 Total $ 450,098 |
CONCENTRATIONS (Tables)
CONCENTRATIONS (Tables) | 6 Months Ended |
Apr. 30, 2022 | |
CONCENTRATIONS. | |
Summary of concentration of risk | Six Months Ended April 30, Carrier 2022 2021 A * 20 % B * 19 % C * 16 % D 15 % * E 12 % * F 11 % * * Less than 10% |
ORGANIZATION AND NATURE OF OP_3
ORGANIZATION AND NATURE OF OPERATIONS (Details) - shareholder | May 20, 2019 | Apr. 30, 2022 |
Organization And Nature of Operations [Line Items] | ||
Number of majority shareholders | 2 | |
Controlled entities incorporated (as a percent) | 100% | |
TRX HK | ||
Organization And Nature of Operations [Line Items] | ||
Ownership interest held | 100% | |
TRX BJ | ||
Organization And Nature of Operations [Line Items] | ||
Ownership interest held | 100% | |
NDB Technology | ||
Organization And Nature of Operations [Line Items] | ||
Ownership interest held | 100% | |
TYDW Technology | ||
Organization And Nature of Operations [Line Items] | ||
Ownership interest held | 100% | |
Hengbang Insurance | ||
Organization And Nature of Operations [Line Items] | ||
Ownership interest held | 99.80% | |
AKS Consulting | ||
Organization And Nature of Operations [Line Items] | ||
Ownership interest held | 100% |
ORGANIZATION AND NATURE OF OP_4
ORGANIZATION AND NATURE OF OPERATIONS - Activities of TRX (Details) | Apr. 30, 2022 |
TRX HK | |
Organization And Nature of Operations [Line Items] | |
Noncontrolling Interest, Ownership Percentage by Parent | 100% |
TRX BJ | |
Organization And Nature of Operations [Line Items] | |
Noncontrolling Interest, Ownership Percentage by Parent | 100% |
NDB Technology | |
Organization And Nature of Operations [Line Items] | |
Noncontrolling Interest, Ownership Percentage by Parent | 100% |
TYDW Technology | |
Organization And Nature of Operations [Line Items] | |
Noncontrolling Interest, Ownership Percentage by Parent | 100% |
Hengbang Insurance | |
Organization And Nature of Operations [Line Items] | |
Noncontrolling Interest, Ownership Percentage by Parent | 99.80% |
AKS Consulting | |
Organization And Nature of Operations [Line Items] | |
Noncontrolling Interest, Ownership Percentage by Parent | 100% |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Cash balances by geographic area (Details) - USD ($) | 6 Months Ended | 12 Months Ended |
Apr. 30, 2022 | Oct. 31, 2021 | |
Country: | ||
Percentage of concentrations of credit risk | 100% | 100% |
Total cash | $ 29,015,368 | $ 30,024,372 |
China | ||
Country: | ||
Percentage of concentrations of credit risk | 100% | 99.80% |
Total cash | $ 29,014,776 | $ 29,966,611 |
Hong Kong | ||
Country: | ||
Percentage of concentrations of credit risk | 0% | 0% |
Total cash | $ 592 | $ 635 |
United States | ||
Country: | ||
Percentage of concentrations of credit risk | 0.20% | |
Total cash | $ 57,126 |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Restricted cash (Details) - USD ($) | Apr. 30, 2022 | Oct. 31, 2021 | Apr. 30, 2021 | Oct. 31, 2020 |
Restricted Cash and Cash Equivalents Items [Line Items] | ||||
Restricted cash | $ 795,044 | $ 819,269 | $ 810,279 | $ 785,806 |
Funds held in an escrow bank account | ||||
Restricted Cash and Cash Equivalents Items [Line Items] | ||||
Restricted cash | $ 795,044 | $ 819,269 |
SUMMARY OF SIGNIFICANT ACCOUN_6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Allowance for doubtful accounts (Details) - USD ($) | 6 Months Ended | 12 Months Ended |
Apr. 30, 2022 | Oct. 31, 2021 | |
Allowance for doubtful accounts | ||
Allowance for doubtful accounts | $ 0 | $ 0 |
Reserve for Policy Cancellations | ||
Allowance for cancellation | $ 0 |
SUMMARY OF SIGNIFICANT ACCOUN_7
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Concentration of credit risk and uncertainties (Details) | 6 Months Ended | |||
Apr. 30, 2022 USD ($) | Apr. 30, 2022 CNY (¥) | Apr. 30, 2022 CNY (¥) | Oct. 31, 2021 USD ($) | |
Effects of Reinsurance [Line Items] | ||||
General insurance expense | ¥ | ¥ 500,000 | |||
Cash and due from banks | $ 29,015,368 | $ 30,024,372 | ||
Transfer pricing related adjustments | 250,000 | |||
PRC | ||||
Effects of Reinsurance [Line Items] | ||||
General insurance expense | 76,000 | ¥ 500,000 | ||
Cash and due from banks | 29,810,000 | ¥ 196,998,199 | ||
Limited insurance | $ 29,624,000 | ¥ 195,767,927 |
SUMMARY OF SIGNIFICANT ACCOUN_8
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Intangible assets (Details) - Software and platform | 6 Months Ended |
Apr. 30, 2022 | |
Minimum | |
Finite-Lived Intangible Assets [Line Items] | |
Estimated useful lives of intangible assets | 2 years |
Maximum | |
Finite-Lived Intangible Assets [Line Items] | |
Estimated useful lives of intangible assets | 10 years |
SUMMARY OF SIGNIFICANT ACCOUN_9
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Property and equipment (Details) - Office equipment and furniture | 6 Months Ended |
Apr. 30, 2022 | |
Minimum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives of property and equipment | 3 years |
Maximum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives of property and equipment | 5 years |
SUMMARY OF SIGNIFICANT ACCOU_10
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Revenues (Details) - item | 6 Months Ended | |
Apr. 30, 2022 | Apr. 30, 2021 | |
Commissions | ||
Disaggregation of Revenue [Line Items] | ||
Actual commission adjustments in connection with the cancellation of policies | 0.80% | 1.60% |
Risk management services | ||
Disaggregation of Revenue [Line Items] | ||
Hours spent in connection with the claim process services provided to the insureds | 9 | 9 |
SUMMARY OF SIGNIFICANT ACCOU_11
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Summary of securities excluded from diluted per share (Details) - shares | 6 Months Ended | |
Apr. 30, 2022 | Apr. 30, 2021 | |
NET LOSS PER ORDINARY SHARE ATTRIBUTABLE TO TIAN RUIXIANG HOLDINGS LTD ORDINARY SHAREHOLDERS: | ||
Potentially dilutive securities | 3,545,000 | 270,000 |
Stock warrants | ||
NET LOSS PER ORDINARY SHARE ATTRIBUTABLE TO TIAN RUIXIANG HOLDINGS LTD ORDINARY SHAREHOLDERS: | ||
Potentially dilutive securities | 3,545,000 | 270,000 |
SUMMARY OF SIGNIFICANT ACCOU_12
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Segment reporting (Details) | 6 Months Ended |
Apr. 30, 2022 segment | |
Segment Reporting | |
Reportable business segments | 1 |
SUMMARY OF SIGNIFICANT ACCOU_13
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Additional informations (Details) | 6 Months Ended | ||
Apr. 30, 2022 USD ($) | Apr. 30, 2021 | Oct. 31, 2021 USD ($) | |
Cash and Cash Equivalents | |||
Cash equivalents | $ 0 | $ 0 | |
Foreign Currency Translation | |||
Closing translation rates | 6.6085 | 6.4057 | |
Average translation rates | 6.3721 | 6.5190 |
OTHER CURRENT AND NON-CURRENT_3
OTHER CURRENT AND NON-CURRENT ASSETS (Details) - USD ($) | Apr. 30, 2022 | Oct. 31, 2021 |
OTHER CURRENT AND NON-CURRENT ASSETS | ||
Prepaid professional fees (1) | $ 177,637 | $ 263,030 |
Prepaid directors and officers' liability insurance premium | 214,188 | |
Recoverable VAT | 47,703 | 67,105 |
Security deposit | 48,423 | 66,748 |
Other | 62,051 | 42,860 |
Current portion | 245,007 | 465,650 |
Non-current portion | 90,807 | 188,281 |
Total | $ 335,814 | $ 653,931 |
NOTE RECEIVABLE (Details)
NOTE RECEIVABLE (Details) - USD ($) | Apr. 30, 2022 | Oct. 31, 2021 | Jan. 29, 2021 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Outstanding balance interest | $ 186,986 | $ 0 | |
Notes Receivable | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Fixed interest rate | 2% | ||
Principal amount | $ 7,500,000 | 7,500,000 | $ 7,500,000 |
Outstanding balance interest | $ 186,986 | $ 113,014 |
TAXES PAYABLE (Details)
TAXES PAYABLE (Details) - USD ($) | Apr. 30, 2022 | Oct. 31, 2021 |
TAXES PAYABLE | ||
Income taxes payable | $ 498,705 | $ 493,196 |
VAT payable | 371 | |
Other | 18 | |
Total taxes payable | $ 499,094 | $ 493,196 |
ACCRUED LIABILITIES AND OTHER_3
ACCRUED LIABILITIES AND OTHER PAYABLES (Details) - USD ($) | Apr. 30, 2022 | Oct. 31, 2021 |
ACCRUED LIABILITIES AND OTHER PAYABLES | ||
Accrued professional service fees | $ 201,751 | $ 81,388 |
Other | 73,849 | 14,276 |
Accrued liabilities and other payables | $ 275,600 | $ 95,664 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) | 6 Months Ended |
Apr. 30, 2021 USD ($) | |
Services Provided by Related Parties | |
Accelerated Share Repurchases [Line Items] | |
Related party expenses | $ 940 |
RELATED PARTY TRANSACTIONS - Of
RELATED PARTY TRANSACTIONS - Office space from related party (Details) - WDZG Consulting - USD ($) | 6 Months Ended | |
Apr. 30, 2022 | Apr. 30, 2021 | |
Office Space from Related Party | ||
Related Party Transaction [Line Items] | ||
Related party expenses | $ 4,406 | $ 10,139 |
TRX ZJ | ||
Related Party Transaction [Line Items] | ||
Ownership interest held | 100% | 100% |
RELATED PARTY TRANSACTIONS - Re
RELATED PARTY TRANSACTIONS - Related party transactions (Details) - USD ($) | Apr. 30, 2022 | Oct. 31, 2021 |
Related Party Transaction [Line Items] | ||
Amount due from related party | $ 2,485 | $ 0 |
Amount due to related party | 2,564 | |
WDZG Consulting | ||
Related Party Transaction [Line Items] | ||
Amount due from related party | $ 2,485 | |
Amount due to related party | $ 2,564 |
EQUITY (Details)
EQUITY (Details) - USD ($) | 6 Months Ended | ||
Apr. 30, 2022 | Dec. 03, 2021 | Oct. 31, 2021 | |
2021 Performance Incentive Plan | |||
Organization And Nature of Operations [Line Items] | |||
Shares issued | 2,136,000 | ||
Fair market value of shares issued | $ 2,588,828 | ||
Stock-based compensation expense | $ 2,588,828 | ||
Class A ordinary shares | |||
Organization And Nature of Operations [Line Items] | |||
Common stock, voting rights | one | ||
Common stock, conversion basis | no | ||
Ordinary shares, shares issued | 12,236,000 | 10,100,000 | |
Class A ordinary shares | 2021 Performance Incentive Plan | |||
Organization And Nature of Operations [Line Items] | |||
Common stock, capital shares reserved | 5,000,000 | ||
Ordinary shares, shares issued | 2,136,000 | ||
Class A ordinary shares | 2021 Performance Incentive Plan | Officers and directors | |||
Organization And Nature of Operations [Line Items] | |||
Ordinary shares, shares issued | 1,400,000 | ||
Class B ordinary shares | |||
Organization And Nature of Operations [Line Items] | |||
Common stock, voting rights | eighteen | ||
Common stock, conversion basis | one | ||
Ordinary shares, shares issued | 1,250,000 | 1,250,000 |
EQUITY - Stock warrants activit
EQUITY - Stock warrants activities (Details) - Warrant | 6 Months Ended |
Apr. 30, 2022 USD ($) $ / shares shares | |
Number of Warrants | |
Outstanding at October 31, 2021 | shares | 3,545,000 |
Granted | shares | 0 |
Exercised | shares | 0 |
Outstanding at April 30, 2022 | shares | 3,545,000 |
Warrants exercisable at April 30, 2022 | shares | 3,545,000 |
Weighted Average Exercise Price | |
Outstanding at October 31, 2021 | $ / shares | $ 7.77 |
Granted | $ / shares | 0 |
Exercised | $ / shares | 0 |
Outstanding at April 30, 2022 | $ / shares | 7.77 |
Warrants exercisable at April 30, 2022 | $ / shares | $ 7.77 |
Intrinsic value | $ | $ 0 |
EQUITY - Shares of the Company
EQUITY - Shares of the Company ordinary stock issuable upon exercise of warrants outstanding (Details) - $ / shares | 6 Months Ended | |
Apr. 30, 2022 | Oct. 31, 2021 | |
Warrant | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Warrants Outstanding, Exercise Price | $ 7.77 | $ 7.77 |
Warrants Outstanding | 3,545,000 | 3,545,000 |
Weighted Average Remaining Contractual Life (Years) | 3 years 11 months 8 days | |
Warrants Exercisable | 3,545,000 | |
Warrants Exercisable, Weighted Average Exercise Price | $ 7.77 | |
Warrant | Minimum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Warrants Outstanding, Exercise Price | 5 | |
Warrant | Maximum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Warrants Outstanding, Exercise Price | 8 | |
Warrants, exercise price at 5.00 | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Warrants Outstanding, Exercise Price | $ 5 | |
Warrants Outstanding | 270,000 | |
Weighted Average Remaining Contractual Life (Years) | 1 year 9 months | |
Warrants Exercisable | 270,000 | |
Warrants Exercisable, Weighted Average Exercise Price | $ 5 | |
Warrants, exercise price at 8.00 | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Warrants Outstanding, Exercise Price | $ 8 | |
Warrants Outstanding | 3,275,000 | |
Weighted Average Remaining Contractual Life (Years) | 4 years 1 month 13 days | |
Warrants Exercisable | 3,275,000 | |
Warrants Exercisable, Weighted Average Exercise Price | $ 8 |
STATUTORY RESERVE AND RESTRIC_2
STATUTORY RESERVE AND RESTRICTED NET ASSETS (Details) - China - USD ($) | Apr. 30, 2022 | Oct. 31, 2021 |
Restricted amounts as determined pursuant to PRC statutory laws | $ 199,653 | $ 199,653 |
Total restricted net assets | $ 6,656,576 | $ 6,656,576 |
COMMITMENTS AND CONTINCENGIES_2
COMMITMENTS AND CONTINCENGIES (Details) - USD ($) | 6 Months Ended | |
Apr. 30, 2022 | Apr. 30, 2021 | |
COMMITMENTS AND CONTINCENGIES | ||
Rent expense | $ 212,000 | $ 90,000 |
Cash paid for amounts included in the measurement of lease liabilities: | ||
Operating cash flows paid for operating lease | 153,206 | 60,889 |
Right-of-use assets obtained in exchange for lease obligation: | ||
Operating lease | $ 274,531 | $ 74,234 |
COMMITMENTS AND CONTINCENGIES -
COMMITMENTS AND CONTINCENGIES - Lease term and discount rate (Details) | Apr. 30, 2022 |
COMMITMENTS AND CONTINCENGIES | |
Weighted average remaining lease term (in years) | 1 year 4 months 9 days |
Weighted average discount rate | 4.75% |
COMMITMENTS AND CONTINCENGIES_3
COMMITMENTS AND CONTINCENGIES - Lease liabilities under operating lease (Details) - USD ($) | Apr. 30, 2022 | Oct. 31, 2021 |
Maturity of lease liabilities | ||
2023 | $ 355,955 | |
2024 | 107,796 | |
Total lease payments | 463,751 | |
Amount of lease payments representing interest | (13,653) | |
Total present value of operating lease liabilities | 450,098 | |
Operating lease liabilities | ||
Current portion | 343,547 | $ 423,124 |
Long-term portion | 106,551 | $ 237,848 |
Total present value of operating lease liabilities | $ 450,098 |
CONCENTRATIONS - Concentrations
CONCENTRATIONS - Concentrations of credit risk (Details) | Apr. 30, 2022 USD ($) | Apr. 30, 2022 CNY (¥) | Oct. 31, 2021 USD ($) | Apr. 30, 2021 USD ($) | Oct. 31, 2020 USD ($) |
Concentration Risk [Line Items] | |||||
Cash, cash equivalents and restricted cash balances | $ 29,810,412 | $ 30,843,641 | $ 18,970,381 | $ 6,923,495 | |
China | |||||
Concentration Risk [Line Items] | |||||
Insurance covered for balances at financial institutions and banks | 76,000 | ¥ 500,000 | |||
Maximum limit for balances with banks covered under insurance | ¥ | ¥ 500,000 | ||||
Cash, cash equivalents and restricted cash balances | 29,809,820 | 30,785,880 | |||
Insurance not covered on cash balances | $ 29,623,655 | $ 30,410,346 |
CONCENTRATIONS - Insurance carr
CONCENTRATIONS - Insurance carriers (Details) | 6 Months Ended | 12 Months Ended | |
Apr. 30, 2022 | Apr. 30, 2021 | Oct. 31, 2021 | |
Supplier Concentration Risk | |||
Concentration Risk [Line Items] | |||
Concentration of risk | 0% | 0% | |
Revenue | Customer concentration | A | |||
Concentration Risk [Line Items] | |||
Concentration of risk | 20% | ||
Revenue | Customer concentration | B | |||
Concentration Risk [Line Items] | |||
Concentration of risk | 19% | ||
Revenue | Customer concentration | C | |||
Concentration Risk [Line Items] | |||
Concentration of risk | 16% | ||
Revenue | Customer concentration | D | |||
Concentration Risk [Line Items] | |||
Concentration of risk | 15% | ||
Revenue | Customer concentration | E | |||
Concentration Risk [Line Items] | |||
Concentration of risk | 12% | ||
Revenue | Customer concentration | F | |||
Concentration Risk [Line Items] | |||
Concentration of risk | 11% | ||
Accounts Receivable | Customer concentration | |||
Concentration Risk [Line Items] | |||
Concentration of risk | 80.90% | 80.50% |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - USD ($) | 6 Months Ended | |||
Apr. 30, 2021 | Apr. 30, 2022 | Dec. 03, 2021 | Oct. 31, 2021 | |
Subsequent Event [Line Items] | ||||
Ordinary shares, par value, (per share) | $ 0.001 | $ 0.001 | ||
Gross proceeds | $ 9,915,993 | |||
Class A ordinary shares | ||||
Subsequent Event [Line Items] | ||||
Ordinary shares, par value, (per share) | $ 0.001 | $ 0.001 | ||
Class A ordinary shares | 2021 Performance Incentive Plan | ||||
Subsequent Event [Line Items] | ||||
Common stock, capital shares reserved | 5,000,000 |