Document and Entity Information
Document and Entity Information | 12 Months Ended |
Oct. 31, 2021shares | |
Document Information [Line Items] | |
Document Type | 20-F |
Document Registration Statement | false |
Document Annual Report | true |
Document Transition Report | false |
Document Shell Company Report | false |
Document Period End Date | Oct. 31, 2021 |
Entity File Number | 001-39925 |
Entity Registrant Name | TIAN RUIXIANG HOLDINGS LTD |
Entity Incorporation, State or Country Code | E9 |
Entity Address, Address Line One | Room 1106 |
Entity Address, Address Line Two | 10 / F, No. 19, North East Third Ring Road |
Entity Address, Address Line Three | Chaoyang District |
Entity Address, City or Town | Beijing |
Entity Address, Country | CN |
Title of 12(b) Security | Class A Ordinary Shares |
Trading Symbol | TIRX |
Security Exchange Name | NASDAQ |
Entity Well-known Seasoned Issuer | No |
Entity Voluntary Filers | No |
Entity Current Reporting Status | Yes |
Entity Interactive Data Current | Yes |
Entity Filer Category | Non-accelerated Filer |
Entity Emerging Growth Company | true |
Entity Ex Transition Period | false |
Entity Shell Company | false |
Document Accounting Standard | U.S. GAAP |
Entity Central Index Key | 0001782941 |
Current Fiscal Year End Date | --10-31 |
Document Fiscal Year Focus | 2021 |
Document Fiscal Period Focus | FY |
Amendment Flag | false |
Auditor Name | RBSM LLP |
Auditor Location | New York, New York |
Common Class A [Member] | |
Document Information [Line Items] | |
Entity Common Stock, Shares Outstanding | 10,100,000 |
Common Class B [Member] | |
Document Information [Line Items] | |
Entity Common Stock, Shares Outstanding | 1,250,000 |
Business contact member | |
Document Information [Line Items] | |
Entity Address, Address Line One | Room 1106 |
Entity Address, Address Line Two | 10 / F, No. 19, North East Third Ring Road |
Entity Address, Address Line Three | Chaoyang District |
Entity Address, City or Town | Beijing |
Entity Address, Country | CN |
City Area Code | 010 |
Local Phone Number | 87529554 |
Contact Personnel Name | Zhe Wang |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Oct. 31, 2021 | Oct. 31, 2020 |
CURRENT ASSETS: | ||
Cash and cash equivalents | $ 30,024,372 | $ 6,137,689 |
Restricted cash | 819,269 | 785,806 |
Accounts receivable | 320,848 | 1,247,059 |
Deferred offering costs | 0 | 895,567 |
Prepaid expenses and other current assets | 465,650 | 494,476 |
Total Current Assets | 31,630,139 | 9,560,597 |
NON-CURRENT ASSETS: | ||
Note receivable | 7,500,000 | 0 |
Interest receivable | 113,014 | 0 |
Property and equipment, net | 11,265 | 15,097 |
Intangible assets, net | 147,538 | 160,219 |
Right-of-use assets, operating leases, net | 760,229 | 317,141 |
Other non-current assets | 188,281 | 7,419 |
Total Non-current Assets | 8,720,327 | 499,876 |
Total Assets | 40,350,466 | 10,060,473 |
CURRENT LIABILITIES: | ||
Taxes payable | 493,196 | 548,630 |
Salary payable | 103,168 | 129,711 |
Accrued liabilities and other payables | 95,664 | 180,394 |
Due to related parties | 2,564 | 241,097 |
Operating lease liabilities | 423,124 | 170,082 |
Operating lease liabilities - related party | 0 | 18,737 |
Total Current Liabilities | 1,117,716 | 1,288,651 |
NON-CURRENT LIABILITIES: | ||
Operating lease liabilities - noncurrent portion | 237,848 | 123,404 |
Operating lease liabilities - related party - noncurrent portion | 0 | 9,705 |
Total Non-current Liabilities | 237,848 | 133,109 |
Total Liabilities | 1,355,564 | 1,421,760 |
Commitments and Contingencies - (Note 17) | ||
TIAN RUIXIANG Holdings Ltd Shareholders' Equity: | ||
Additional paid-in capital | 39,776,761 | 7,696,468 |
(Accumulated deficit) retained earnings | (1,090,060) | 884,076 |
Statutory reserve | 199,653 | 170,066 |
Accumulated other comprehensive income (loss) | 96,709 | (117,392) |
Total TIAN RUIXIANG Holdings Ltd shareholders' equity | 38,994,413 | 8,638,218 |
Non-controlling interest | 489 | 495 |
Total Equity | 38,994,902 | 8,638,713 |
Total Liabilities and Equity | 40,350,466 | 10,060,473 |
Common Class A [Member] | ||
TIAN RUIXIANG Holdings Ltd Shareholders' Equity: | ||
Ordinary shares | 10,100 | 3,750 |
Common Class B [Member] | ||
TIAN RUIXIANG Holdings Ltd Shareholders' Equity: | ||
Ordinary shares | $ 1,250 | $ 1,250 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Oct. 31, 2021 | Oct. 31, 2020 |
Ordinary shares, par value | $ 0.001 | $ 0.001 |
Ordinary shares, shares authorized | 50,000,000 | 50,000,000 |
Common Class A [Member] | ||
Ordinary shares, par value | $ 0.001 | $ 0.001 |
Ordinary shares, shares authorized | 47,500,000 | |
Ordinary shares, shares issued | 10,100,000 | 3,750,000 |
Ordinary shares, shares outstanding | 10,100,000 | 3,750,000 |
Common Class B [Member] | ||
Ordinary shares, par value | $ 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 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME - USD ($) | 12 Months Ended | ||
Oct. 31, 2021 | Oct. 31, 2020 | Oct. 31, 2019 | |
REVENUES | |||
Total Revenues | $ 2,790,617 | $ 3,249,344 | $ 2,002,217 |
OPERATING EXPENSES | |||
Selling and marketing | 2,516,368 | 1,519,783 | 773,650 |
Selling and marketing - related parties | 1,129 | 38,426 | 23,922 |
General and administrative - professional fees | 1,011,053 | 94,363 | 123,512 |
General and administrative - compensation and related benefits | 948,900 | 743,062 | 651,490 |
General and administrative - related parties | 20,391 | 14,215 | 19,180 |
General and administrative - other | 546,580 | 279,353 | 307,793 |
Total Operating Expenses | 5,044,421 | 2,689,202 | 1,899,547 |
(LOSS) INCOME FROM OPERATIONS | (2,253,804) | 560,142 | 102,670 |
OTHER INCOME (EXPENSE) | |||
Interest income | 315,070 | 88,948 | 275,168 |
Interest income - related party | 0 | 102,074 | 0 |
Interest expense | (725) | 0 | (18,218) |
Interest expense - related parties | 0 | 0 | (613) |
Other income | 19,411 | 8,991 | 54,988 |
Total Other Income, net | 333,756 | 200,013 | 311,325 |
(LOSS) INCOME BEFORE INCOME TAXES | (1,920,048) | 760,155 | 413,995 |
INCOME TAXES | 24,529 | 126,055 | 238,208 |
NET (LOSS) INCOME | (1,944,577) | 634,100 | 175,787 |
LESS: NET LOSS ATTRIBUTABLE TO NON-CONTROLLING INTEREST | (28) | (3) | 0 |
NET (LOSS) INCOME ATTRIBUTABLE TO TIAN RUIXIANG HOLDINGS LTD ORDINARY SHAREHOLDERS | (1,944,549) | 634,103 | 175,787 |
COMPREHENSIVE (LOSS) INCOME: | |||
NET (LOSS) INCOME | (1,944,577) | 634,100 | 175,787 |
OTHER COMPREHENSIVE INCOME (LOSS) | |||
Unrealized foreign currency translation gain (loss) | 214,123 | 420,719 | (70,429) |
COMPREHENSIVE (LOSS) INCOME | (1,730,454) | 1,054,819 | 105,358 |
LESS: COMPREHENSIVE (LOSS) INCOME ATTRIBUTABLE TO NON-CONTROLLING INTEREST | (6) | 21 | (4) |
COMPREHENSIVE (LOSS) INCOME ATTRIBUTABLE TO TIAN RUIXIANG HOLDINGS LTD ORDINARY SHAREHOLDERS | $ (1,730,448) | $ 1,054,798 | $ 105,362 |
NET (LOSS) INCOME PER ORDINARY SHARE ATTRIBUTABLE TO TIAN RUIXIANG HOLDINGS LTD ORDINARY SHAREHOLDERS: | |||
NET (LOSS) INCOME PER ORDINARY SHARE - Basic | $ (0.23) | $ 0.13 | $ 0.04 |
NET (LOSS) INCOME PER ORDINARY SHARE - Diluted | $ (0.23) | $ 0.13 | $ 0.04 |
WEIGHTED AVERAGE ORDINARY SHARES OUTSTANDING: | |||
WEIGHTED AVERAGE ORDINARY SHARES OUTSTANDING - Basic | 8,610,615 | 5,000,000 | 5,000,000 |
WEIGHTED AVERAGE ORDINARY SHARES OUTSTANDING - Diluted | 8,610,615 | 5,000,000 | 5,000,000 |
Commissions | |||
REVENUES | |||
Total Revenues | $ 2,675,611 | $ 2,954,798 | $ 2,002,217 |
Risk management services | |||
REVENUES | |||
Total Revenues | $ 115,006 | $ 294,546 | $ 0 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY - USD ($) | Ordinary SharesCommon Class A [Member] | Ordinary SharesCommon Class B [Member] | Additional Paid-in Capital | Retained Earnings (Accumulated Deficit). | Statutory Reserves. | Accumulated Other Comprehensive Income (Loss) Income | Non-controlling Interest | Common Class A [Member] | Common Class B [Member] | Total |
Balance at the beginning at Oct. 31, 2018 | $ 3,750 | $ 1,250 | $ 7,691,468 | $ 215,053 | $ 29,199 | $ (467,662) | $ 478 | $ 7,473,536 | ||
Balance at the beginning (in shares) at Oct. 31, 2018 | 3,750,000 | 1,250,000 | ||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Appropriation to statutory reserve | $ 0 | $ 0 | 0 | (89,590) | 89,590 | 0 | 0 | 0 | ||
Net income (loss) for the year | 0 | 0 | 0 | 175,787 | 0 | 0 | 0 | 175,787 | ||
Foreign currency translation adjustment | 0 | 0 | 0 | 0 | 0 | (70,425) | (4) | (70,429) | ||
Balance at the end at Oct. 31, 2019 | $ 3,750 | $ 1,250 | 7,691,468 | 301,250 | 118,789 | (538,087) | 474 | 7,578,894 | ||
Balance at the end (in shares) at Oct. 31, 2019 | 3,750,000 | 1,250,000 | ||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Capital contribution from shareholders | 5,000 | 5,000 | ||||||||
Appropriation to statutory reserve | $ 0 | $ 0 | 0 | (51,277) | 51,277 | 0 | 0 | 0 | ||
Net income (loss) for the year | 0 | 0 | 0 | 634,103 | 0 | 0 | (3) | 634,100 | ||
Foreign currency translation adjustment | 0 | 0 | 0 | 0 | 0 | 420,695 | 24 | 420,719 | ||
Balance at the end at Oct. 31, 2020 | $ 3,750 | $ 1,250 | 7,696,468 | 884,076 | 170,066 | (117,392) | 495 | 8,638,713 | ||
Balance at the end (in shares) at Oct. 31, 2020 | 3,750,000 | 1,250,000 | 3,750,000 | 1,250,000 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Capital contribution from shareholders | 5,000 | |||||||||
Sales of ordinary shares from the initial public offering, net of offering costs, Value | $ 3,075 | $ 0 | 9,883,224 | 0 | 0 | 0 | 0 | 9,886,299 | ||
Sales of ordinary shares from the initial public offering, net of offering costs, Shares | 3,075,000 | |||||||||
Sales of securities from the June 2021 public offering, net of offering costs, Value | $ 3,275 | 22,197,069 | 22,200,344 | |||||||
Sales of securities from the June 2021 public offering, net of offering costs, Shares | 3,275,000 | |||||||||
Appropriation to statutory reserve | $ 0 | 0 | 0 | (29,587) | 29,587 | 0 | 0 | 0 | ||
Net income (loss) for the year | 0 | 0 | 0 | (1,944,549) | 0 | 0 | (28) | (1,944,577) | ||
Foreign currency translation adjustment | 0 | 0 | 0 | 0 | 0 | 214,101 | 22 | 214,123 | ||
Balance at the end at Oct. 31, 2021 | $ 10,100 | $ 1,250 | $ 39,776,761 | $ (1,090,060) | $ 199,653 | $ 96,709 | $ 489 | $ 38,994,902 | ||
Balance at the end (in shares) at Oct. 31, 2021 | 10,100,000 | 1,250,000 | 10,100,000 | 1,250,000 |
CONSOLIDATED STATEMENTS OF CH_2
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (Parenthetical) | Oct. 31, 2021USD ($) |
Initial Public Offering | |
Sales of ordinary shares/securities net of offering costs | $ 2,413,701 |
2021 Public Offering | |
Sales of ordinary shares/securities net of offering costs | $ 2,362,156 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 12 Months Ended | ||
Oct. 31, 2021 | Oct. 31, 2020 | Oct. 31, 2019 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | |||
Net (loss) income | $ (1,944,577) | $ 634,100 | $ 175,787 |
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities: | |||
Depreciation expense and amortization of intangible assets | 27,447 | 27,829 | 34,713 |
Amortization of right-of-use assets | 227,661 | 199,709 | 0 |
Impairment loss | 696 | 0 | 0 |
Changes in operating assets and liabilities: | |||
Accounts receivable | 969,374 | (1,021,727) | 91,432 |
Security deposit | (43,750) | 2,837 | (3,963) |
Prepaid expenses and other current assets | (74,120) | (8,582) | (356,117) |
Interest receivable | (113,014) | 0 | 16,745 |
Due from related parties | 0 | 0 | 447,778 |
Insurance premiums payable | 0 | 0 | (198,717) |
Taxes payable | (78,932) | 204,532 | (56,272) |
Accrued liabilities and other payables | (123,052) | 108,765 | 40,826 |
Due to related parties | 12,025 | (6,970) | 36,841 |
Operating lease liabilities - related party | (29,355) | (25,834) | 0 |
Operating lease liabilities | (194,341) | (162,828) | 0 |
NET CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES | (1,363,938) | (48,169) | 229,053 |
CASH FLOWS FROM INVESTING ACTIVITIES: | |||
Purchase of property and equipment | (3,411) | (3,457) | (12,012) |
Purchase of intangible asset | 0 | 0 | (183,115) |
Investment in note receivable | (7,500,000) | 0 | 0 |
Payments of notes receivable - related party | 0 | (17,158,967) | 0 |
Proceeds received from repayments of notes receivable - related party | 0 | 17,158,967 | 232,133 |
NET CASH (USED IN) PROVIDED BY INVESTING ACTIVITIES | (7,503,411) | (3,457) | 37,006 |
CASH FLOWS FROM FINANCING ACTIVITIES | |||
Proceeds received from note payable | 75,581 | 0 | 0 |
Repayment of note payable | (75,581) | 0 | 0 |
Repayments made for borrowings | 0 | 0 | (369,483) |
Proceeds received from related parties' borrowings | 1,893,932 | 1,987,256 | 0 |
Repayments made for related parties' borrowings | (2,272,145) | (2,099,420) | (8,400) |
Proceeds received from initial public offering | 12,300,000 | 0 | 0 |
Disbursements for initial public offering costs | (1,489,388) | 0 | 0 |
Proceeds received from the June 2021 public offering | 24,562,500 | 0 | 0 |
Disbursements for the June 2021 public offering costs | (2,352,418) | (371,081) | (493,899) |
Capital contribution from shareholders | 0 | 5,000 | 464 |
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES | 32,642,481 | (478,245) | (871,318) |
EFFECT OF EXCHANGE RATE ON CASH, CASH EQUIVALENTS AND RESTRICTED CASH | 145,014 | 486,780 | (55,593) |
NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH | 23,920,146 | (43,091) | (660,852) |
CASH, CASH EQUIVALENTS AND RESTRICTED CASH - beginning of year | 6,923,495 | 6,966,586 | 7,627,438 |
CASH, CASH EQUIVALENTS AND RESTRICTED CASH - end of year | 30,843,641 | 6,923,495 | 6,966,586 |
Cash paid for: | |||
Interest | 725 | 0 | 33,675 |
Income taxes | 2,251 | 0 | 283,267 |
NON-CASH INVESTING AND FINANCING ACTIVITIES | |||
Payments made by related parties on the Company's behalf | 119,886 | 141,449 | 0 |
RECONCILIATION OF CASH, CASH EQUIVALENTS AND RESTRICTED CASH | |||
Cash and cash equivalents at beginning of year | 6,137,689 | 6,243,029 | 6,712,880 |
Restricted cash at beginning of year | 785,806 | 723,557 | 914,558 |
Total cash, cash equivalents and restricted cash at beginning of year | 30,843,641 | 6,923,495 | 6,966,586 |
Cash and cash equivalents at end of year | 30,024,372 | 6,137,689 | 6,243,029 |
Restricted cash at end of year | 819,269 | 785,806 | 723,557 |
Total cash, cash equivalents and restricted cash at end of year | $ 30,843,641 | $ 6,923,495 | $ 6,966,586 |
ORGANIZATION AND NATURE OF OPER
ORGANIZATION AND NATURE OF OPERATIONS | 12 Months Ended |
Oct. 31, 2021 | |
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 operates as a broker to sell insurance products in the People’s Republic of China (“PRC” or “China”), through a variable interest entity (“VIE”), Zhejiang Tianruixiang Insurance Broker Co., Ltd. (“TRX ZJ”), which was established on January 18, 2010, and the subsidiaries of the VIE. 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, hereinafter referred to as the Reorganization. As a result, TRX ZJ became the Company’s VIE. TRX ZJ formed five subsidiaries in PRC at the following dates: ● Needbao (Beijing) Network Technology Co., Ltd. (“NDB Technology”), incorporated on December 1, 2016 in Beijing and wholly-owned by TRX ZJ ● Tianyi Duowen (Beijing) Network Technology Co., Ltd. (“TYDW Technology”), incorporated on December 12, 2016 in Beijing and wholly-owned by TRX ZJ ● Horgos Hechentongguang Consulting Service Co., Ltd. (“HH Consulting”), incorporated on November 22, 2017 in Horgos Economic District, Xinjiang province and wholly-owned by TRX ZJ and dissolved on July 10, 2020 ● Hebei Hengbang Insurance Assessment Co., Ltd. (“Hengbang Insurance”), incorporated on October 27, 2015 in Shijiazhuang and owned 99.8% by TRX ZJ ● Horgos Arxo Management Consulting Co., Ltd. (“AKS Consulting”), incorporated on June 28, 2021 in Horgos Economic District, Xinjiang province and wholly-owned by TRX ZJ TYDW Technology, HH Consulting, Hengbang Insurance, and AKS Consulting had not generated any revenues since the dates of their incorporation or acquisition through October 31, 2021 or dissolution. 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, and all of these entities are under common control of the Company’s ultimate controlling shareholders before and after the Reorganization, which results in the consolidation of the Company and has been accounted for as a reorganization of entities under common control at carrying value and for accounting purpose, the reorganization was accounted for as a recapitalization. The consolidated financial statements are prepared on the basis as if the Reorganization became effective as of the beginning of the first period presented in the accompanying consolidated financial statements of the Company. NOTE 1 – ORGANIZATION AND NATURE OF OPERATIONS (continued) The following chart illustrates the Company’s corporate structure, including its subsidiaries, consolidated variable interest entity and the VIE’s subsidiaries as of October 31, 2021: VIE Agreements with TRX ZJ Upon the completion of the reorganization, the Company, through the WFOE, entered into the following contractual arrangements with the VIE and the VIE’s sole shareholder that enabled the Company to (1) have power to direct the activities that most significantly affects the economic performance of the VIE, and (2) receive the economic benefits of the VIE that could be significant to the VIE. Accordingly, the WFOE was considered the primary beneficiary of the VIE and had consolidated the VIE and the VIE’s subsidiaries’ financial results of operations, assets and liabilities in the Company’s consolidated financial statements. NOTE 1 – ORGANIZATION AND NATURE OF OPERATIONS (continued) VIE Agreements with TRX ZJ (continued) Contracts that give the Company effective control of the VIE Equity Interest Pledge Agreement Under the Equity Interest Pledge Agreement between WFOE, TRX ZJ and the TRX ZJ Shareholder, the TRX ZJ Shareholder pledged all of its equity interests in TRX ZJ to WFOE to guarantee the performance of TRX ZJ’s obligations under the Exclusive Business Cooperation and Service Agreement. Under the terms of the Equity Pledge Agreement, in the event that TRX ZJ or the TRX ZJ Shareholder breaches their respective contractual obligations under the Exclusive Business Cooperation and Service Agreement, WFOE, as pledgee, will be entitled to certain rights, including, but not limited to, the right to collect dividends generated by the pledged equity interests. The TRX ZJ Shareholder also agreed that upon occurrence of any event of default, as set forth in the Equity Pledge Agreement, WFOE is entitled to dispose of the pledged equity interest in accordance with applicable PRC laws. The TRX ZJ Shareholder further agreed not to dispose of the pledged equity interests or take any actions that would prejudice WFOE’s interest. The Equity Interest Pledge Agreement is effective until all payments due under the Exclusive Business Cooperation and Service Agreement have been paid by TRX ZJ. WFOE shall cancel or terminate the Equity Interest Pledge Agreement upon TRX ZJ’s full payment of fees payable under the Exclusive Business Cooperation and Service Agreement. The purposes of the Equity Interest Pledge Agreement are to (1) guarantee the performance of TRX ZJ’s obligations under the Exclusive Business Cooperation and Service Agreement, (2) ensure that the TRX ZJ Shareholder does not transfer or assign the pledged equity interests, or create or allow any encumbrance that would prejudice WFOE’s interests without WFOE’s prior written consent, and (3) provide WFOE control over TRX ZJ. In the event TRX ZJ breaches its contractual obligations under the Exclusive Business Cooperation and Service Agreement, WFOE will be entitled to foreclose on the TRX ZJ Shareholder’ equity interests in TRX ZJ and may (1) exercise its option to purchase or designate third parties to purchase part or all of its equity interests in TRX ZJ and WFOE may terminate the VIE Agreements after acquisition of all equity interests in TRX ZJ or form a new VIE structure with the third parties designated by WFOE; or (2) dispose of the pledged equity interests and be paid in priority out of proceed from the disposal in which case the VIE structure will be terminated. Share Disposal and Exclusive Option to Purchase Agreement Under the Share Disposal and Exclusive Option to Purchase Agreement, the TRX ZJ Shareholder irrevocably granted WFOE (or its designee) an exclusive option to purchase, to the extent permitted under PRC law, once or at multiple times, at any time, part or all of their equity interests in TRX ZJ. The option price is equal to the capital paid in by the TRX ZJ Shareholder subject to any appraisal or restrictions required by applicable PRC laws and regulations. As of the date of this report, if WFOE exercised such option, the total option price that would be paid to all of the TRX ZJ Shareholder would be RMB 1, or the lowest amount allowed by law. The option purchase price shall increase in case the TRX ZJ Shareholder makes additional capital contributions to TRX ZJ, including when the registered capital is increased upon TRX ZJ receiving the proceeds from our initial public offering. Under the Share Disposal and Exclusive Option to Purchase Agreement, WFOE may at any time under any circumstances, purchase, or have its designee purchase, at its discretion, to the extent permitted under PRC law, all or part of the TRX ZJ Shareholder’ equity interests in TRX ZJ. The Share Disposal and Exclusive Option to Purchase Agreement, together with the Equity Pledge Agreement, Exclusive Business Cooperation and Service Agreement, and the Proxy Agreement, enable WFOE to exercise effective control over TRX ZJ. The Share Disposal and Exclusive Option to Purchase Agreement remains effective for a term of 20 years and may be renewed at WFOE’s election. NOTE 1 – ORGANIZATION AND NATURE OF OPERATIONS (continued) VIE Agreements with TRX ZJ (continued) Proxy Agreement Under the Proxy Agreement, the TRX ZJ Shareholder authorized WFOE to act on its behalf as its exclusive agent and attorney with respect to all rights as shareholder, including but not limited to: (a) attending shareholders’ meetings; (b) exercising all the shareholder’s rights, including voting, that a shareholder is entitled to under PRC laws and the Articles of Association, including but not limited to the sale or transfer or pledge or disposition of shares in part or in whole; and (c) designating and appointing on behalf of the shareholder the legal representative, the executive director, supervisor, the chief executive officer and other senior management members of TRX ZJ. The term of the Proxy Agreement is the same as the term of the Share Disposal and Exclusive Option to Purchase Agreement. The Proxy Agreement is irrevocable and continuously valid from the date of execution of the Proxy Agreement, so long as the TRX ZJ Shareholder is the shareholder of Company. Contracts that enable the Company to receive substantially all of the economic benefits from the VIE Exclusive Business Cooperation and Service Agreement Pursuant to the Exclusive Business Cooperation and Service Agreement between TRX ZJ and WFOE, WFOE provides TRX ZJ with technical support, consulting services, intellectual services and other management services relating to its day-to-day business operations and management, on an exclusive basis, utilizing its advantages in technology, human resources, and information. Additionally, TRX ZJ granted an irrevocable and exclusive option to WFOE to purchase from TRX ZJ, any or all of its assets at the lowest purchase price permitted under PRC laws. Should WFOE exercise such option, the parties shall enter into a separate asset transfer or similar agreement. For services rendered to TRX ZJ by WFOE under this agreement, WFOE is entitled to collect a service fee calculated based on the time of services rendered multiplied by the corresponding rate, and plus amount of the services fees or ratio decided by the board of directors of WFOE based on the value of services rendered by WFOE and the actual income of TRX ZJ from time to time, which is approximately equal to the net income of TRX ZJ after deduction of the required PRC statutory reserve. Based on the foregoing VIE Agreements, TRX BJ has effective control of TRX ZJ which enables TRX BJ to receive all of the expected residual returns and absorb the expected losses of the VIE and its subsidiaries. Management therefore concludes that the Company, through the above contractual arrangements, has the power to direct the activities that most significantly impact the VIE’s economic performance, bears the risks of and enjoys the rewards normally associated with ownership of the VIE, and therefore the Company is the ultimate primary beneficiary of the VIE. Consequently, the Company consolidates the accounts of TRX ZJ and its subsidiaries for the periods presented herein, in accordance with Accounting Standards Codification (“ASC”) 810-10, Consolidation. NOTE 1 – ORGANIZATION AND NATURE OF OPERATIONS (continued) VIE Agreements with TRX ZJ (continued) The accompanying 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 and insurance related risk management 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 HH Consulting A PRC limited liability company 100% owned by TRX ZJ Incorporated on November 22, 2017 and dissolved on July 10, 2020 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 | 12 Months Ended |
Oct. 31, 2021 | |
BASIS OF PRESENTATION | |
BASIS OF PRESENTATION | NOTE 2 – BASIS OF PRESENTATION The accompanying consolidated financial statements and related notes have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and with the rules and regulations of the U.S. Securities and Exchange Commission. The 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. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Oct. 31, 2021 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Use of Estimates The preparation of the 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. NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Use of Estimates (continued) 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 years ended October 31, 2021, 2020 and 2019 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, and the determination of the fair value of the warrants. 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. 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 consolidated financial statements, primarily due to their short-term nature. Cash and Cash Equivalents At October 31, 2021 and 2020, the Company’s cash balances by geographic area were as follows: Country: October 31, 2021 October 31, 2020 China $ 29,967,246 99.8 % $ 6,137,469 99.996 % United States 57,126 0.2 % 220 0.004 % Total cash $ 30,024,372 100.0 % $ 6,137,689 100.0 % Cash in China may not be freely transferable out of the PRC because of exchange control regulations or other reasons. For purposes of the 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 October 31, 2021 and 2020. 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 October 31, 2021 and 2020, restricted cash, amounted to $819,269 and $785,806, respectively. NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) 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 $78,000) per bank. Any balance over RMB 500,000 per bank in PRC will not be covered. At October 31, 2021, cash balances held in the PRC are RMB 197,205,116 (approximately $30,786,000), of which, RMB 194,799,555 (approximately $30,410,000) 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 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 October 31, 2021, 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. 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 which is to the customer whose ability to pay is dependent upon the industry economics prevailing in these areas; however, concentrations 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 allowances 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 October 31, 2021 and 2020. 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. NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) 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 10 years Impairment of Long-lived Assets In accordance with ASC Topic 360, the Company reviews long-lived assets for impairment annually, or whenever events or changes in circumstances indicate that the carrying amount of the assets may not be fully recoverable. The Company recognizes an impairment loss when the sum of expected undiscounted future cash flows is less than the carrying amount of the asset. The amount of impairment is measured as the difference between the asset’s estimated fair value (generally, the discounted cash flows) and its book value. The Company did not record any impairment charges for the years ended October 31, 2021, 2020 and 2019. Insurance Premiums Payable Insurance premiums payable represent premium payments that have been received from insureds on the insurance carriers’ behalf, but not yet been remitted to the insurance carriers as of the balance sheet dates. As of October 31, 2021 and 2020, insurance premiums payable amounted to $1,656 and $5,876, respectively, which have been included in accrued liabilities and other payables on the accompanying consolidated balance sheets. Value Added Tax TRX ZJ is subject to a VAT of 6% for providing insurance broker services and insurance related risk management services. The amount of VAT liability is determined by applying the applicable tax rate to the invoiced amount of services provided. The Company reports revenue net of PRC’s VAT for all the years presented on the consolidated statements of operations and comprehensive (loss) income. Warrants For issued warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of equity at the time of issuance. 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 transaction price is allocated to each performance obligation on a relative standalone selling price basis. The transaction price allocated to each performance obligation is recognized when that performance obligation is satisfied, at a point in time or over time as appropriate. Types of revenue: ● Insurance brokerage services fees under contracts with customers related to providing insurance brokerage services. The Company does not provide any insurance agent services. ● Risk management services fees under risk management agreements to provide insurance related risk management services to its clients. The Company is paid for its services by its clients pursuant to the terms of the written risk management agreements. Each contract calls for a fixed payment. NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Revenue Recognition (continued) Revenue recognition criteria: ● For insurance brokerage services fees, t he 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 commissions 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. ● The Company recognizes revenue by providing insurance related risk management services under written service contracts with its customers. Revenue related to its service offerings is recognized at a point in time when service is rendered. 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 2.3%, 1.1% and 1.7% of the total commission revenue for the years ended October 31, 2021, 2020 and 2019, 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 12, 12 and 15 hours in connection with the claim process services provided to the insureds for the years ended October 31, 2021, 2020 and 2019, respectively. 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. Disaggregation of Revenue The following table sets forth the Company’s revenue based on services for the periods indicated: Years Ended October 31, 2021 2020 2019 Insurance brokerage services $ 2,675,611 $ 2,954,798 $ 2,002,217 Insurance related risk management services 115,006 294,546 — Total revenues $ 2,790,617 $ 3,249,344 $ 2,002,217 NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Employee Benefits The Company makes mandatory contributions to the PRC government’s health, retirement benefit and unemployment funds in accordance with the relevant Chinese social security laws. The costs of these payments are charged to the same accounts as the related salary costs in the same period as the related salary costs are incurred. Employee benefit costs totaled $166,242, $104,750 and $123,369 for the years ended October 31, 2021, 2020 and 2019, respectively. Selling and Marketing Expenses All costs related to selling and marketing are expensed as incurred. For the years ended October 31, 2021, 2020 and 2019, selling and marketing costs amounted to $2,517,497, $1,558,209 and $797,572, respectively. Advertising Costs Advertising costs are expensed as incurred and included in the selling and marketing expenses. Advertising costs were $2,466,239, $1,117,918 and $525,528 for the years ended October 31, 2021, 2020 and 2019, respectively. Deferred Offering Costs Deferred offering costs consisted of legal, accounting and other costs incurred through the balance sheet date that were directly related to the Initial Public Offering and were charged to stockholders’ equity upon the completion of the Initial Public Offering. As of October 31, 2021 and 2020, deferred offering costs amounted to $0 and $895,567, respectively. Income Taxes The Company accounts for income taxes using the asset/liability method prescribed by ASC 740, “Income Taxes.” Under this method, deferred tax assets and liabilities are determined based on the difference between the financial reporting and tax bases of assets and liabilities using enacted tax rates that will be in effect in the period in which the differences are expected to reverse. The Company records a valuation allowance to offset deferred tax assets if, based on the weight of available evidence, it is more-likely-than-not that some portion, or all, of the deferred tax assets will not be realized. The effect on deferred taxes of a change in tax rates is recognized as income or loss in the period that includes the enactment date. The Company follows the accounting guidance for uncertainty in income taxes using the provisions of ASC 740 “Income Taxes”. Using that guidance, tax positions initially need to be recognized in the financial statements when it is more likely than not the position will be sustained upon examination by the tax authorities. As of October 31, 2021 and 2020, the Company had no significant uncertain tax positions that qualify for either recognition or disclosure in the financial statements. As of October 31, 2021, income tax returns for the tax years ended October 31, 2016 through October 31, 2020 remain open for statutory examination by PRC tax authorities. The Company recognizes interest and penalties related to significant uncertain income tax positions in other expense if any. There were no such interest and penalties as of October 31, 2021 and 2020. 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 subsidiaries 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. NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Foreign Currency Translation (continued) 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 subsidiaries. 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. The consolidated balance sheet amounts, with the exception of equity, at October 31, 2021 and 2020 were translated at RMB 6.4057 to $1.00 and at RMB 6.6912 to $1.00, respectively. Equity accounts were stated at their historical rates. The average translation rates applied to consolidated statements of operations and cash flows for the years ended October 31, 2021, 2020 and 2019 were RMB 6.4831, RMB 6.9747 and RMB 6.8926 to $1.00, respectively. Comprehensive (Loss) Income Comprehensive (loss) income is comprised of net (loss) income and all changes to the statements of equity, except those due to investments by stockholders, changes in paid-in capital and distributions to stockholders. For the Company, comprehensive (loss) income for the years ended October 31, 2021, 2020 and 2019 consisted of net (loss) income and unrealized gain (loss) from foreign currency translation adjustment. Commitment 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. 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 net (loss) income per ordinary share is computed by dividing net (loss) income available to ordinary shareholders by the weighted average number of shares of ordinary stock outstanding during the period. Diluted net (loss) income per ordinary share is computed by dividing net (loss) income by the weighted average number of shares of ordinary stock, ordinary stock equivalents and potentially dilutive securities outstanding during each period. For the year ended October 31, 2021, potentially dilutive ordinary shares consist of ordinary shares issuable upon the exercise of ordinary stock warrants (using the treasury stock method). The Company did not have any ordinary stock equivalents and potentially dilutive ordinary stock outstanding during the years ended October 31, 2020 and 2019. Ordinary stock equivalents are not included in the calculation of diluted (loss) income 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. NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Per Share Data (continued) 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: Years Ended October 31, 2021 2020 2019 Stock warrants 3,545,000 — — Potentially dilutive securities 3,545,000 — — Non-controlling Interest On November 7, 2017, TRX ZJ sold a 0.2% equity interest in Hengbang Insurance to two third party individuals. As of October 31, 2021, these two individuals aggregately owned 0.2% of the equity interests of Hengbang Insurance, which is not under the Company’s control. 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. All of the Company’s customers are in the PRC and all revenue is derived from the provision of insurance brokerage services and insurance related risk management services. Related Parties Parties are considered to be related to the Company if the parties, directly or indirectly, through one or more intermediaries, control, are controlled by, or are under common control with the Company. Related parties also include principal owners of the Company, its management, members of the immediate families of principal owners of the Company and its management and other parties with which the Company may deal with if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests. The Company discloses all significant related party transactions. Fiscal Year End The Company has adopted a fiscal year end of October 31st. 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. Reverse Stock Split The Company effected a one NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Recent Accounting Pronouncements In January 2017, the FASB issued ASU No. 2017-04, “Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment” (“ASU 2017-04”), which removes Step 2 from the goodwill impairment test. An entity will apply a one-step quantitative test and record the amount of goodwill impairment as the excess of a reporting unit’s carrying amount over its fair value, not to exceed the total amount of goodwill allocated to the reporting unit. The new guidance does not amend the optional qualitative assessment of goodwill impairment. A public business entity that is a U.S. Securities and Exchange Commission filer should adopt the amendments in this ASU for its annual or any interim goodwill impairment test in fiscal years beginning after December 15, 2019. ASU 2017-4 had no impact on the Company’s consolidated financial statements. In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement (“ASU 2018-13”). The objective of ASU 2018-13 is to improve the effectiveness of disclosures in the notes to the financial statements by removing, modifying, and adding certain fair value disclosure requirements to facilitate clear communication of the information required by generally accepted accounting principles. The amendments are effective for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019 with early adoption permitted upon issuance of this ASU. The adoption of ASU 2018-13 had no impact on the Company’s consolidated financial statements. 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 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 consolidated financial condition, results of operations, cash flows or disclosures. |
VARIABLE INTEREST ENTITY AND OT
VARIABLE INTEREST ENTITY AND OTHER CONSOLIDATION MATTERS | 12 Months Ended |
Oct. 31, 2021 | |
VARIABLE INTEREST ENTITY AND OTHER CONSOLIDATION MATTERS | |
VARIABLE INTEREST ENTITY AND OTHER CONSOLIDATION MATTERS | NOTE 4 – VARIABLE INTEREST ENTITY AND OTHER CONSOLIDATION MATTERS On May 20, 2019, TRX BJ entered into VIE Agreements with TRX ZJ and the sole shareholder of TRX ZJ. The key terms of these VIE Agreements are summarized in “NOTE 1 – ORGANIZATION AND NATURE OF OPERATIONS” above. As a result of the VIE Agreements, the Company classifies TRX ZJ as a VIE. A VIE is an entity that has either a total equity investment that is insufficient to permit the entity to finance its activities without additional subordinated financial support, or whose equity investors lack the characteristics of a controlling financial interest, such as through voting rights, right to receive the expected residual returns of the entity or obligation to absorb the expected losses of the entity. The variable interest holder, if any, that has a controlling financial interest in a VIE is deemed to be the primary beneficiary and must consolidate the VIE. TRX BJ is deemed to have a controlling financial interest and be the primary beneficiary of TRX ZJ, because it has both of the following characteristics: 1. Power to direct activities of a VIE that most significantly impact the entity’s economic performance, and 2. Obligation to absorb losses of the entity that could potentially be significant to the VIE or right to receive benefits from the entity that could potentially be significant to the VIE. Pursuant to the VIE Agreements, TRX ZJ pays service fees equal to all of its net income to TRX BJ. At the same time, TRX BJ is entitled to receive all of TRX ZJ’s expected residual returns. The VIE Agreements are designed so that TRX ZJ operates for the benefit of the Company. Accordingly, the accounts of TRX ZJ are consolidated in the accompanying financial statements pursuant to ASC 810-10, Consolidation. In addition, its financial positions and results of operations are included in the Company’s consolidated financial statements. NOTE 4 – VARIABLE INTEREST ENTITY AND OTHER CONSOLIDATION MATTERS (continued) In addition, as all of these VIE Agreements are governed by PRC law and provide for the resolution of disputes through arbitration in the PRC, they would be interpreted in accordance with PRC law and any disputes would be resolved in accordance with PRC legal procedures. The legal environment in the PRC is not as developed as in other jurisdictions, such as the United States. As a result, uncertainties in the PRC legal system could further limit the Company’s ability to enforce these VIE Agreements. Furthermore, these contracts may not be enforceable in China if PRC government authorities or courts take a view that such contracts contravene PRC laws and regulations or are otherwise not enforceable for public policy reasons. In the event the Company is unable to enforce these VIE Agreements, it may not be able to exert effective control over TRX ZJ and its ability to conduct its business may be materially and adversely affected. All of the Company’s main current operations are conducted through TRX ZJ and its subsidiaries. Current regulations in China permit TRX ZJ to pay dividends to the Company only out of its accumulated distributable profits, if any, determined in accordance with its article of association and PRC accounting standards and regulations. The ability of TRX ZJ to make dividends and other payments to the Company may be restricted by factors including changes in applicable foreign exchange and other laws and regulations. The following consolidated financial information of the VIE and its subsidiaries as a whole as of October 31, 2021 and 2020 and for the years ended October 31, 2021, 2020 and 2019 was included in the accompanying consolidated financial statements of the Company. Intercompany transactions between the VIE and VIE’s subsidiaries are eliminated in the financial information presented below: As of October 31, 2021 2020 Cash and cash equivalents $ 29,776,178 $ 6,137,444 Restricted cash 819,269 785,806 Accounts receivable 320,848 1,247,059 Other current assets 216,470 1,390,023 Right-of-use assets, operating lease 760,229 317,141 Other non-current assets 347,084 182,735 Total Assets 32,240,078 10,060,208 Taxes payable 493,196 548,630 Other current liabilities 582,187 738,633 Non-current liabilities 237,848 133,109 Total Liabilities 1,313,231 1,420,372 Net assets $ 30,926,847 $ 8,639,836 Years Ended October 31, 2021 2020 2019 Revenues $ 2,776,065 $ 3,249,344 $ 2,002,217 (Loss) income from operations (1,232,723) 566,336 102,670 Net (loss) income $ (1,052,348) $ 640,294 $ 175,787 |
PREPAID EXPENSES AND OTHER CURR
PREPAID EXPENSES AND OTHER CURRENT ASSETS | 12 Months Ended |
Oct. 31, 2021 | |
PREPAID EXPENSES AND OTHER CURRENT ASSETS | |
PREPAID EXPENSES AND OTHER CURRENT ASSETS | NOTE 5 – PREPAID EXPENSES AND OTHER CURRENT ASSETS At October 31, 2021 and 2020, prepaid expenses and other current assets consisted of the following: October 31, 2021 October 31, 2020 Prepaid professional fees (1) $ 133,683 $ 457,123 Prepaid directors and officers' liability insurance premium 214,188 — Recoverable VAT 67,105 — Other 50,674 37,353 $ 465,650 $ 494,476 (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 | 12 Months Ended |
Oct. 31, 2021 | |
NOTE RECEIVABLE | |
NOTE RECEIVABLE | NOTE 6 – 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 October 31, 2021, the outstanding principal balance of the note was $7,500,000 and was recorded as “Note receivable” on the accompanying consolidated balance sheets. The interest income related to this note was $113,014 for the year ended October 31, 2021 and was included in “Interest income” on the consolidated statements of operations and comprehensive (loss) income. As of October 31, 2021, the outstanding interest balance related to the note was $113,014 and was included in “Interest receivable” on the accompanying consolidated balance sheets. |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 12 Months Ended |
Oct. 31, 2021 | |
PROPERTY AND EQUIPMENT | |
PROPERTY AND EQUIPMENT | NOTE 7 – PROPERTY AND EQUIPMENT At October 31, 2021 and 2020, property and equipment consisted of the following: Useful Life October 31, 2021 October 31, 2020 Office equipment and furniture 3 $ 58,965 $ 53,144 Less: accumulated depreciation (47,700) (38,047) $ 11,265 $ 15,097 For the years ended October 31, 2021, 2020 and 2019, depreciation expense amounted to $7,862, $9,625 and $8,677, respectively, which was included in operating expenses. |
INTANGIBLE ASSETS
INTANGIBLE ASSETS | 12 Months Ended |
Oct. 31, 2021 | |
INTANGIBLE ASSETS | |
INTANGIBLE ASSETS | NOTE 8 – INTANGIBLE ASSETS At October 31, 2021 and 2020, intangible assets consisted of the following: Useful Life October 31, 2021 October 31, 2020 Software and platform 2 10 Years $ 197,033 $ 188,626 Less: accumulated amortization (49,495) (28,407) $ 147,538 $ 160,219 For the years ended October 31, 2021, 2020 and 2019, amortization expense amounted to $19,585, $18,204 and $26,036, respectively, which was included in operating expenses. Amortization of intangible assets attributable to future periods is as follows: For the Year Ending October 31: Amortization Amount 2022 $ 19,703 2023 19,703 2024 19,703 2025 19,703 2026 19,703 Thereafter 49,023 $ 147,538 |
OTHER NON-CURRENT ASSETS
OTHER NON-CURRENT ASSETS | 12 Months Ended |
Oct. 31, 2021 | |
OTHER NON-CURRENT ASSETS | |
OTHER NON-CURRENT ASSETS | NOTE 9 – OTHER NON-CURRENT ASSETS At October 31, 2021 and 2020, other non- current assets consisted of the following: October 31, 2021 October 31, 2020 Prepaid professional fees (1) $ 129,347 $ — Security deposit 58,934 7,419 $ 188,281 $ 7,419 (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 PAYABLE
NOTE PAYABLE | 12 Months Ended |
Oct. 31, 2021 | |
NOTE PAYABLE | |
NOTE PAYABLE | NOTE 10 – NOTE PAYABLE On February 10, 2021, the Company signed a note payable with a third party in the principal amount of RMB 490,000 (approximately $76,000). The term of this note was 365 days. The annual interest rate for this note was 2.0%. The principal and related interest were fully paid in August 2021. During the year ended October 31, 2021, interest expense related to this note was $725, which was included in other income (expense) on the accompanying consolidated statements of operations and comprehensive (loss) income. |
TAXES PAYABLE
TAXES PAYABLE | 12 Months Ended |
Oct. 31, 2021 | |
TAXES PAYABLE | |
TAXES PAYABLE | NOTE 11 – TAXES PAYABLE At October 31, 2021 and 2020, taxes payable consisted of the following: October 31, 2021 October 31, 2020 Income taxes payable $ 493,196 $ 459,714 VAT payable — 86,715 Other — 2,201 $ 493,196 $ 548,630 |
ACCRUED LIABILITIES AND OTHER P
ACCRUED LIABILITIES AND OTHER PAYABLES | 12 Months Ended |
Oct. 31, 2021 | |
ACCRUED LIABILITIES AND OTHER PAYABLES | |
ACCRUED LIABILITIES AND OTHER PAYABLES | NOTE 12 – ACCRUED LIABILITIES AND OTHER PAYABLES At October 31, 2021 and 2020, accrued liabilities and other payables consisted of the following: October 31, 2021 October 31, 2020 Accrued professional service fees $ 81,388 $ 155,356 Other 14,276 25,038 $ 95,664 $ 180,394 |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Oct. 31, 2021 | |
RELATED PARTY TRANSACTIONS | |
RELATED PARTY TRANSACTIONS | NOTE 13 – RELATED PARTY TRANSACTIONS Services Provided by Related Parties From time to time, the Company’s related parties provide services to the Company. The Company recognized related party expenses of $1,129, $38,426 and $23,922 for the years ended October 31, 2021, 2020 and 2019, which have been included in selling and marketing – related parties, respectively, on the accompanying consolidated statements of operations and comprehensive (loss) income. Office Space from Related Party The Company leases office space from WDZG Consulting, which owns 100% of TRX ZJ. For the years ended October 31, 2021, 2020 and 2019, rent expense related to office leases from WDZG Consulting amounted approximately $20,000, $14,000 and $19,000, respectively, which have been included in general and administrative – related parties on the accompanying consolidated statements of operations and comprehensive (loss) income. NOTE 13 – RELATED PARTY TRANSACTIONS (continued) Office Space from Related Party (continued) As of October 31, 2021 and 2020, operating lease liabilities related to the related party office lease was $0 and $28,442, respectively, which have been included in operating lease liabilities – related party (current and noncurrent) on the accompanying consolidated balance sheets. Loan to Related Party and Interest Income On March 19, 2020, the Company originated a note receivable to a related party in the principal amount of RMB 38,914,847 (approximately $5.6 million). This note had a maturity date of April 30, 2020. The annual interest rate for this note was 1.00%. The principal and related interest were fully collected in April 2020. On May 1, 2020, the Company originated a note receivable to a related party in the principal amount of RMB 40,260,000 (approximately $5.8 million). This note had a maturity date of August 31, 2020. The annual interest rate for the note was 4.35%. As of October 31, 2020, the outstanding principal and related interest were fully collected. On August 14, 2020, the Company originated a note receivable to a related party in the principal amount of RMB 40,503,802 (approximately $5.8 million). This note had a maturity date of November 11, 2020. The annual interest rate for the note was 1.90%. As of October 31, 2020, the outstanding principal and related interest were fully collected. The Company did not make any loans to any related party in fiscal 2021 and 2019. The interest income related to related party notes was $102,074 for the year ended October 31, 2020 which have been included in interest income – related party on the accompanying consolidated statements of operations and comprehensive (loss) income. Borrowings from Related Parties and Interest Expense In fiscal 2021, the Company borrowed $2,013,818 from related parties for working capital needs and repaid $2,272,145 to related parties. The related parties’ borrowings are short-term in nature, non-interest bearing, unsecured and repayable on demand. In fiscal 2020, the Company borrowed $2,128,705 from related parties for working capital needs and repaid $2,099,420 to related parties. The related parties’ borrowings are short-term in nature, non-interest bearing, unsecured and repayable on demand. In fiscal 2019, from time to time, the Company acquired loans from various related parties to fund its operations. These loans were due within one year and were unsecured and uncollateralized, and cannot be renewed upon maturities. The annual interest rates for these loans ranged from 6.5% to 10.0%. As of October 31, 2019, all of outstanding principal of related parties’ borrowings and related interest due were fully repaid. For the years ended October 31, 2021, 2020 and 2019, interest expense related to related parties’ loans amounted to $0, $0 and $613, respectively, which have been included in interest expense – related parties in the accompanying consolidated statements of operations and comprehensive (loss) income. NOTE 13 – RELATED PARTY TRANSACTIONS (continued) Due to Related Parties At October 31, 2021 and 2020, due to related parties consisted of the following: Name of related party October 31, 2021 October 31, 2020 Beijing Ruibozhongying Technology Development Co., Ltd. (1) $ — $ 238,642 WDZG Consulting 2,564 2,455 $ 2,564 $ 241,097 (1) An entity controlled by WDZG Consulting. The balances of due to related parties represent expenses paid by these related parties on behalf of the Company. The related parties’ payables are short-term in nature, non-interest bearing, unsecured and repayable on demand. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Oct. 31, 2021 | |
INCOME TAXES | |
INCOME TAXES | NOTE 14 – INCOME TAXES Cayman Islands Under the current laws of the Cayman Islands, the Company is not subject to tax on income or capital gain. Additionally, upon payments of dividends to the shareholders, no Cayman Islands withholding tax will be imposed. Hong Kong TRX HK is incorporated in Hong Kong and is subject to Hong Kong Profits Tax on the taxable income as reported in its statutory financial statements adjusted in accordance with relevant Hong Kong tax laws. The applicable tax rate is 16.5% on its taxable income generated from operations in Hong Kong. The Company did not make any provisions for Hong Kong profit tax as there were no assessable profits derived from or earned in Hong Kong since inception. Additionally, payments of dividends by the subsidiary incorporated in Hong Kong to the Company are not subject to any Hong Kong withholding tax. United States The Company and its Subsidiaries have no presence in the United States and does not conduct business in the United States, so therefore no United States Income Tax should be imposed upon the Company and its Subsidiaries. PRC TRX BJ, TRX ZJ, NDB Technology, TYDW Technology, HH Consulting, Hengbang Insurance, and AKS Consulting are subject to PRC Enterprise Income Tax (“EIT”) on the taxable income in accordance with the relevant PRC income tax laws. The EIT rate for companies operating in the PRC is 25%. In the years ended October 31, 2021, 2020 and 2019, NDB Technology, TYDW Technology and Hengbang Insurance were each recognized as small low-profit enterprise and received preferential income tax rate. AKS Consulting was subject to a preferential income tax rate of 0% for a period of five years since generating revenues, as it was incorporated in the Horgos Economic District, Xinjiang province. HH Consulting is subject to a preferential income tax rate of 0% from June 2018 through dissolution. NOTE 14 – INCOME TAXES Reconciliation of the Differences Between Statutory Tax Rate and the Effective Tax Rate The Company operates in serval tax jurisdictions. Therefore, its income is subject to various rates of taxation. The income tax expense differs from the amount that would have resulted from applying the Cayman statutory income tax rate to the Company’s pre-tax income as follows: For the Years Ended October 31, 2021 2020 2019 (Loss) income before income tax expenses $ (1,920,048) $ 760,155 $ 413,995 Cayman statutory income tax rate 0 % 0 % 0 % Income tax calculated at statutory rate — — — Increase in income tax expense resulting from: Rate differences in various jurisdictions 24,529 126,055 238,208 Income tax expense / effective tax rate $ 24,529 $ 126,055 $ 238,208 The Company’s approximate net deferred tax assets as of October 31, 2021 and 2020 were as follows: Deferred tax assets: October 31, 2021 October 31, 2020 Net operating loss carryforward $ 64,139 $ — Accrued payroll liability 3,825 12,952 Valuation allowance (64,139) — Net deferred tax assets $ 3,825 $ 12,952 The Company provided a valuation allowance equal to the deferred income tax assets related to net operating loss carryforward for the year ended October 31, 2021 because it was not known whether future taxable income will be sufficient to utilize the loss carryforward. The potential tax benefit arising from the loss carryforward will begin to expire in 2026. As of October 31, 2021 and 2020, the Company had no significant uncertain tax positions that qualify for either recognition or disclosure in the financial statements. As of October 31, 2021, income tax returns for the tax years ended October 31, 2016 through October 31, 2020 remain open for statutory examination by PRC tax authorities. The uncertain tax positions are related to tax years that remain subject to examination by the relevant tax authorities. Based on the outcome of any future examinations, or as a result of the expiration of statute of limitations for specific jurisdictions, it is reasonably possible that the related unrecognized tax benefits for tax positions taken regarding previously filed tax returns, might materially change from those recorded as liabilities for uncertain tax positions in the Company’s consolidated financial statements as of October 31, 2021 and 2020. In addition, the outcome of these examinations may impact the valuation of certain deferred tax assets (such as net operating losses) in future periods. The Company’s policy is to recognize interest and penalties accrued on any unrecognized tax benefits, if any, as a component of other expense. The Company does not anticipate any significant increases or decreases to its liability for unrecognized tax benefits within the next twelve months. According to the PRC Tax Administration and Collection Law, the statute of limitations is three years if the underpayment of income taxes is due to computational errors made by the taxpayer. The statute of limitations will be extended to five years under special circumstances, which are not clearly defined, but an underpayment of income tax liability exceeding RMB100,000 (approximately $16,000) is specifically listed as a special circumstance. In the case of a transfer pricing related adjustment, the statute of limitations is ten years. There is no statute of limitations in the case of tax evasion. Accounting for Uncertainty in Income Taxes The tax authority of the PRC government conducts periodic and ad hoc tax filing reviews on business enterprises operating in the PRC after those enterprises complete their relevant tax filings. Therefore, the Company’s PRC entities’ tax filings results are subject to change. It is therefore uncertain as to whether the PRC tax authority may take different views about the Company’s PRC entities’ tax filings, which may lead to additional tax liabilities. NOTE 14 – INCOME TAXES Accounting for Uncertainty in Income Taxes (continued) ASC 740 requires recognition and measurement of uncertain income tax positions using a “more-likely-than-not” approach. The management evaluated the Company’s tax positions and concluded that no provision for uncertainty in income taxes was necessary as of October 31, 2021 and 2020. |
EQUITY
EQUITY | 12 Months Ended |
Oct. 31, 2021 | |
EQUITY | |
EQUITY | NOTE 15 – EQUITY The equity structure was presented after giving retroactive effect to the reorganization of the Company that was completed in the fiscal year 2019. Immediately before and after the reorganization, the shareholders of TRX ZJ controlled TRX. Therefore, for accounting purposes, the reorganization is accounted for as a transaction of entities under common control. Ordinary Shares 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. In January 2022, the Company issued 1,551,000 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. Shareholders’ Contribution During the year ended October 31, 2020, the Company’s shareholders contributed $5,000 to the Company for working capital needs and the Company recorded an increase in additional paid-in capital. Class A Ordinary Shares Sold for Cash from the Initial Public Offering and Underwriter’s Warrants On January 29, 2021, the Company closed its initial public offering (“IPO”) of 3,000,000 Class A ordinary shares, par value $0.001 per ordinary share, at a public offering price of $4 per share. On February 2, 2021, the representative of the underwriters in the IPO, exercised its option to purchase an additional 75,000 Class A ordinary shares at a price of $4.00 per share. The closing for the sale of the over-allotment shares took place on February 4, 2021. The net proceeds of the Company's IPO, including the proceeds from the sale of the over-allotment shares, totaled $9,886,299, net of cash fees of $2,413,701. In connection with the IPO, on January 29, 2021, the Company issued 270,000 stock warrants at a fixed exercise price of $5.00 per share to its underwriter for the transaction. These warrants were not exercisable prior to July 29, 2021 and expire on January 29, 2024. The fair value of warrants granted to the underwriters were estimated at the date of grant using the Black-Scholes warrant-pricing model with the following assumptions: stock price of $12.69, volatility of 55.91%, risk-free rate of 0.19%, annual dividend yield of 0% and expected life of 3.00 years. The underwriter’s warrants were classified as equity. The fair value of these warrants was $2,254,920, which was debited to the account of additional paid-in capital - underwriter cost account and was fully offset by the corresponding credit to the additional paid-in capital - underwriter cost account, resulting in no change in net equity of the balance sheet. NOTE 15 – EQUITY (continued) Units Sold for Cash from the June 2021 Public Offering In June 2021, the Company entered into Securities Purchase Agreement with several third-party institutional investors for the purchase of 3,275,000 units in a registered direct offering, for gross proceeds of $24,562,500 before placement agent fees and other offering expenses payable by the Company. Each unit was sold at a public offering price of $7.50 and consists of one share of Class A ordinary stock and a warrant to purchase one share of Class A ordinary stock. The Company received net cash proceeds of $22,200,344, net of cash paid for placement agent fees and other offering expenses of $2,362,156. The warrants are exercisable immediately as of the date of issuance (the “Initial Exercise Date”), at an exercise price of $8.00 per share, subject to adjustment as provided in the warrants, and expire on the fifth (5 th The fair value of the warrants was $14,819,266 and was based on the Black-Scholes pricing model. Input assumptions used were as follows: stock price per share of $6.31 – $7.50, a risk-free interest rate of 0.73% - 0.90%; expected volatility of 81.45% - 83.06%; expected life of 5 years; and expected dividend yield of 0%. $9,479,610 of the total gross proceeds was allocated to the warrants based on the relative fair value allocation method, which has been reflected in shareholders’ equity. The warrants were classified in shareholders’ equity as the number of shares were fixed and determinable, and no other provisions precluded equity treatment. $15,082,890 of the total gross proceeds was allocated as the value of ordinary shares. The direct costs related to the issuance of the ordinary shares and warrants were $2,362,156. These direct costs were recorded as an offset against gross proceeds with $911,647 being recorded in additional paid-in capital and $1,450,509 being recorded in ordinary shares on a relative fair value basis. Warrants There was no stock warrant activity during the years ended October 31, 2020 and 2019. Stock warrants activities during the year ended October 31, 2021 were as follows: Number of Warrants Weighted Average Exercise Price Outstanding at October 31, 2020 — $ — Granted 3,545,000 7.77 Exercised — — Outstanding at October 31, 2021 3,545,000 $ 7.77 Warrants exercisable at October 31, 2021 3,545,000 $ 7.77 The stock warrants outstanding and stock warrants exercisable at October 31, 2021 had no intrinsic value. The following table summarizes the shares of the Company’s ordinary stock issuable upon exercise of warrants outstanding at October 31, 2021: Warrants Outstanding Warrants Exercisable Exercise Number Outstanding Weighted Average Remaining Number Exercisable at Exercise Price at October 31, 2021 Contractual Life (Years) October 31, 2021 Price $ 5.00 270,000 2.25 270,000 $ 5.00 8.00 3,275,000 4.61 3,275,000 8.00 $ 7.77 3,545,000 4.43 3,545,000 $ 7.77 |
STATUTORY RESERVE AND RESTRICTE
STATUTORY RESERVE AND RESTRICTED NET ASSETS | 12 Months Ended |
Oct. 31, 2021 | |
Statutory Reserves And Restricted Net Assets | |
STATUTORY RESERVE AND RESTRICTED NET ASSETS | NOTE 16 - 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. 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. For the years ended October 31 2021, 2020 and 2019, statutory reserve activities were as follows: TRX ZJ NDB Technology TYDW Technology Total Balance – October 31, 2018 $ 29,199 $ — $ — $ 29,199 Addition to statutory reserve 66,026 — 23,564 89,590 Balance – October 31, 2019 95,225 — 23,564 118,789 Addition to statutory reserve 30,979 2,680 17,618 51,277 Balance – October 31, 2020 126,204 2,680 41,182 170,066 Addition to statutory reserve — — 29,587 29,587 Balance – October 31, 2021 $ 126,204 $ 2,680 $ 70,769 $ 199,653 As of October 31, 2021 and 2020, the restricted amounts as determined pursuant to PRC statutory laws totaled $199,653 and $170,066, respectively, and total restricted net assets amounted to $6,656,576 and $7,867,009, respectively. |
NON-CONTROLLING INTEREST
NON-CONTROLLING INTEREST | 12 Months Ended |
Oct. 31, 2021 | |
NON-CONTROLLING INTEREST. | |
NON-CONTROLLING INTEREST | NOTE 17 – NON-CONTROLLING INTEREST As of October 31, 2021, two third party individuals owned 0.2% of the equity interests of Hengbang Insurance, which is not under the Company’s control. The following was a summary of non-controlling interest activities in the years ended October 31, 2021, 2020 and 2019. Amount Non-controlling interest at October 31, 2018 $ 478 Net income attributable to non-controlling interest — Foreign currency translation adjustment attributable to non-controlling interest (4) Non-controlling interest at October 31, 2019 474 Net loss attributable to non-controlling interest (3) Foreign currency translation adjustment attributable to non-controlling interest 24 Non-controlling interest at October 31, 2020 495 Net loss attributable to non-controlling interest (28) Foreign currency translation adjustment attributable to non-controlling interest 22 Non-controlling interest at October 31, 2021 $ 489 |
COMMITMENTS AND CONTINCENGIES
COMMITMENTS AND CONTINCENGIES | 12 Months Ended |
Oct. 31, 2021 | |
COMMITMENTS AND CONTINCENGIES | |
COMMITMENTS AND CONTINCENGIES | NOTE 18 – 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 consolidated statements of operations and comprehensive (loss) income, amounted to approximately $242,000, $186,000 and $190,000 for the years ended October 31, 2021, 2020 and 2019, respectively. Supplemental cash flow information related to leases for the years ended October 31, 2021, 2020 and 2019 is as follows: Years Ended October 31, 2021 2020 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows paid for operating lease $ 293,078 $ 141,445 $ 76,971 Right-of-use assets obtained in exchange for lease obligation: Operating lease $ 544,515 $ 378,719 $ 192,723 The following table summarizes the lease term and discount rate for the Company’s operating lease as of October 31, 2021: Operating Lease Weighted average remaining lease term (in years) 1.73 Weighted average discount rate 4.75 % The following table summarizes the maturity of lease liabilities under operating lease as of October 31, 2021: For the Year Ending October 31: Operating Lease 2022 $ 445,882 2023 220,094 2024 23,013 Thereafter — Total lease payments 688,989 Amount of lease payments representing interest (28,017) Total present value of operating lease liabilities $ 660,972 Current portion $ 423,124 Long-term portion 237,848 Total $ 660,972 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. NOTE 18 – COMMITMENTS AND CONTINCENGIES (continued) Variable Interest Entity Structure (continued) 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 | 12 Months Ended |
Oct. 31, 2021 | |
CONCENTRATIONS. | |
CONCENTRATIONS | NOTE 19 – 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 $78,000) per bank. Any balance over RMB 500,000 per bank in PRC will not be covered. At October 31, 2021 and 2020, cash, cash equivalents and restricted cash balances held in the PRC are $30,785,880 and $6,680,162, of which, $30,410,346 and $6,593,426 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 years ended October 31, 2021, 2020 and 2019. For the Years Ended October 31, Carrier 2021 2020 2019 A 15 % * * B 15 % * * C 13 % 17 % * D 10 % 16 % 12 % E * 11 % 24 % F * * 22 % G * * 19 % *Less than 10% 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 79.1% of the Company's total outstanding accounts receivable at October 31, 2021. Two insurance carriers, whose outstanding receivable accounted for 10% or more of the Company's total outstanding accounts receivable at October 31, 2020, accounted for 57.3% of the Company’s total outstanding accounts receivable at October 31, 2020. Suppliers No supplier accounted for 10% or more of the Company’s purchase during the years ended October 31, 2021, 2020 and 2019. |
CONDENSED FINANCIAL INFORMATION
CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY | 12 Months Ended |
Oct. 31, 2021 | |
CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY | |
CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY | NOTE 20 – CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY Pursuant to the requirements of Rule 12-04(a), 5-04(c) and 4-08(e)(3) of Regulation S-X, the condensed financial information of the parent company shall be filed when the restricted net assets of consolidated subsidiary exceed 25 percent of consolidated net assets as of the end of the most recently completed fiscal year. For purposes of this test, restricted net assets of consolidated subsidiary, VIE and VIE’s subsidiaries shall mean that amount of the Company’s proportionate share of net assets of consolidated subsidiary (after intercompany eliminations) which as of the end of the most recent fiscal year may not be transferred to the parent company by subsidiary in the form of loans, advances or cash dividends without the consent of a third party. The Company performed a test on the restricted net assets of consolidated subsidiary in accordance with such requirement and concluded that it was not applicable to the Company as the restricted net assets of the Company’s PRC subsidiary, VIE and VIE’s subsidiaries did not exceeded 25% of the consolidated net assets of the Company, therefore, the condensed financial statements for the parent company have not been required. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Oct. 31, 2021 | |
SUBSEQUENT EVENTS | |
SUBSEQUENT EVENTS | NOTE 21 – SUBSEQUENT EVENTS 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. In January 2022, the Company issued 1,551,000 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. Short-term Investments For the period from November 2021 through January 2022, the Company purchased wealth management financial products from a third party company in the amount of RMB 191,954,070 (approximately $30 million) with annual interest rate of 2%, which can be redeemed anytime at the Company’s discretion. The third party company invests the Company’s funds in certain financial instruments including money market funds, bonds or mutual funds to generate investment income. Other The Company formed Yunnan branch in November 2021. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Oct. 31, 2021 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Use of Estimates | Use of Estimates The preparation of the 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. NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Use of Estimates (continued) 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 years ended October 31, 2021, 2020 and 2019 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, and the determination of the fair value of the warrants. |
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. 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 consolidated financial statements, primarily due to their short-term nature. |
Cash and Cash Equivalents | Cash and Cash Equivalents At October 31, 2021 and 2020, the Company’s cash balances by geographic area were as follows: Country: October 31, 2021 October 31, 2020 China $ 29,967,246 99.8 % $ 6,137,469 99.996 % United States 57,126 0.2 % 220 0.004 % Total cash $ 30,024,372 100.0 % $ 6,137,689 100.0 % Cash in China may not be freely transferable out of the PRC because of exchange control regulations or other reasons. For purposes of the 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 October 31, 2021 and 2020. |
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 October 31, 2021 and 2020, restricted cash, amounted to $819,269 and $785,806, 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 $78,000) per bank. Any balance over RMB 500,000 per bank in PRC will not be covered. At October 31, 2021, cash balances held in the PRC are RMB 197,205,116 (approximately $30,786,000), of which, RMB 194,799,555 (approximately $30,410,000) 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 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 October 31, 2021, 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. 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 which is to the customer whose ability to pay is dependent upon the industry economics prevailing in these areas; however, concentrations 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 allowances 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 October 31, 2021 and 2020. |
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 10 years |
Impairment of Long-lived Assets | Impairment of Long-lived Assets In accordance with ASC Topic 360, the Company reviews long-lived assets for impairment annually, or whenever events or changes in circumstances indicate that the carrying amount of the assets may not be fully recoverable. The Company recognizes an impairment loss when the sum of expected undiscounted future cash flows is less than the carrying amount of the asset. The amount of impairment is measured as the difference between the asset’s estimated fair value (generally, the discounted cash flows) and its book value. The Company did not record any impairment charges for the years ended October 31, 2021, 2020 and 2019. |
Insurance Premiums Payable | Insurance Premiums Payable Insurance premiums payable represent premium payments that have been received from insureds on the insurance carriers’ behalf, but not yet been remitted to the insurance carriers as of the balance sheet dates. As of October 31, 2021 and 2020, insurance premiums payable amounted to $1,656 and $5,876, respectively, which have been included in accrued liabilities and other payables on the accompanying consolidated balance sheets. |
Value Added Tax | Value Added Tax TRX ZJ is subject to a VAT of 6% for providing insurance broker services and insurance related risk management services. The amount of VAT liability is determined by applying the applicable tax rate to the invoiced amount of services provided. The Company reports revenue net of PRC’s VAT for all the years presented on the consolidated statements of operations and comprehensive (loss) income. |
Warrants | Warrants For issued warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of equity at the time of issuance. |
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 transaction price is allocated to each performance obligation on a relative standalone selling price basis. The transaction price allocated to each performance obligation is recognized when that performance obligation is satisfied, at a point in time or over time as appropriate. Types of revenue: ● Insurance brokerage services fees under contracts with customers related to providing insurance brokerage services. The Company does not provide any insurance agent services. ● Risk management services fees under risk management agreements to provide insurance related risk management services to its clients. The Company is paid for its services by its clients pursuant to the terms of the written risk management agreements. Each contract calls for a fixed payment. NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Revenue Recognition (continued) Revenue recognition criteria: ● For insurance brokerage services fees, t he 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 commissions 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. ● The Company recognizes revenue by providing insurance related risk management services under written service contracts with its customers. Revenue related to its service offerings is recognized at a point in time when service is rendered. 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 2.3%, 1.1% and 1.7% of the total commission revenue for the years ended October 31, 2021, 2020 and 2019, 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 12, 12 and 15 hours in connection with the claim process services provided to the insureds for the years ended October 31, 2021, 2020 and 2019, respectively. 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. Disaggregation of Revenue The following table sets forth the Company’s revenue based on services for the periods indicated: Years Ended October 31, 2021 2020 2019 Insurance brokerage services $ 2,675,611 $ 2,954,798 $ 2,002,217 Insurance related risk management services 115,006 294,546 — Total revenues $ 2,790,617 $ 3,249,344 $ 2,002,217 |
Employee Benefits | NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Employee Benefits The Company makes mandatory contributions to the PRC government’s health, retirement benefit and unemployment funds in accordance with the relevant Chinese social security laws. The costs of these payments are charged to the same accounts as the related salary costs in the same period as the related salary costs are incurred. Employee benefit costs totaled $166,242, $104,750 and $123,369 for the years ended October 31, 2021, 2020 and 2019, respectively. |
Selling and Marketing Expenses | Selling and Marketing Expenses All costs related to selling and marketing are expensed as incurred. For the years ended October 31, 2021, 2020 and 2019, selling and marketing costs amounted to $2,517,497, $1,558,209 and $797,572, respectively. |
Advertising Costs | Advertising Costs Advertising costs are expensed as incurred and included in the selling and marketing expenses. Advertising costs were $2,466,239, $1,117,918 and $525,528 for the years ended October 31, 2021, 2020 and 2019, respectively. |
Deferred Offering Costs | Deferred Offering Costs Deferred offering costs consisted of legal, accounting and other costs incurred through the balance sheet date that were directly related to the Initial Public Offering and were charged to stockholders’ equity upon the completion of the Initial Public Offering. As of October 31, 2021 and 2020, deferred offering costs amounted to $0 and $895,567, respectively. |
Income Taxes | Income Taxes The Company accounts for income taxes using the asset/liability method prescribed by ASC 740, “Income Taxes.” Under this method, deferred tax assets and liabilities are determined based on the difference between the financial reporting and tax bases of assets and liabilities using enacted tax rates that will be in effect in the period in which the differences are expected to reverse. The Company records a valuation allowance to offset deferred tax assets if, based on the weight of available evidence, it is more-likely-than-not that some portion, or all, of the deferred tax assets will not be realized. The effect on deferred taxes of a change in tax rates is recognized as income or loss in the period that includes the enactment date. The Company follows the accounting guidance for uncertainty in income taxes using the provisions of ASC 740 “Income Taxes”. Using that guidance, tax positions initially need to be recognized in the financial statements when it is more likely than not the position will be sustained upon examination by the tax authorities. As of October 31, 2021 and 2020, the Company had no significant uncertain tax positions that qualify for either recognition or disclosure in the financial statements. As of October 31, 2021, income tax returns for the tax years ended October 31, 2016 through October 31, 2020 remain open for statutory examination by PRC tax authorities. The Company recognizes interest and penalties related to significant uncertain income tax positions in other expense if any. There were no such interest and penalties as of October 31, 2021 and 2020. |
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 subsidiaries 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. NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Foreign Currency Translation (continued) 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 subsidiaries. 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. The consolidated balance sheet amounts, with the exception of equity, at October 31, 2021 and 2020 were translated at RMB 6.4057 to $1.00 and at RMB 6.6912 to $1.00, respectively. Equity accounts were stated at their historical rates. The average translation rates applied to consolidated statements of operations and cash flows for the years ended October 31, 2021, 2020 and 2019 were RMB 6.4831, RMB 6.9747 and RMB 6.8926 to $1.00, respectively. |
Comprehensive (Loss) Income | Comprehensive (Loss) Income Comprehensive (loss) income is comprised of net (loss) income and all changes to the statements of equity, except those due to investments by stockholders, changes in paid-in capital and distributions to stockholders. For the Company, comprehensive (loss) income for the years ended October 31, 2021, 2020 and 2019 consisted of net (loss) income and unrealized gain (loss) from foreign currency translation adjustment. |
Commitment and Contingencies | Commitment 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. |
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 net (loss) income per ordinary share is computed by dividing net (loss) income available to ordinary shareholders by the weighted average number of shares of ordinary stock outstanding during the period. Diluted net (loss) income per ordinary share is computed by dividing net (loss) income by the weighted average number of shares of ordinary stock, ordinary stock equivalents and potentially dilutive securities outstanding during each period. For the year ended October 31, 2021, potentially dilutive ordinary shares consist of ordinary shares issuable upon the exercise of ordinary stock warrants (using the treasury stock method). The Company did not have any ordinary stock equivalents and potentially dilutive ordinary stock outstanding during the years ended October 31, 2020 and 2019. Ordinary stock equivalents are not included in the calculation of diluted (loss) income 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. NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Per Share Data (continued) 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: Years Ended October 31, 2021 2020 2019 Stock warrants 3,545,000 — — Potentially dilutive securities 3,545,000 — — |
Non-controlling Interest | Non-controlling Interest On November 7, 2017, TRX ZJ sold a 0.2% equity interest in Hengbang Insurance to two third party individuals. As of October 31, 2021, these two individuals aggregately owned 0.2% of the equity interests of Hengbang Insurance, which is not under the Company’s control. |
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. All of the Company’s customers are in the PRC and all revenue is derived from the provision of insurance brokerage services and insurance related risk management services. |
Related Parties | Related Parties Parties are considered to be related to the Company if the parties, directly or indirectly, through one or more intermediaries, control, are controlled by, or are under common control with the Company. Related parties also include principal owners of the Company, its management, members of the immediate families of principal owners of the Company and its management and other parties with which the Company may deal with if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests. The Company discloses all significant related party transactions. |
Fiscal Year End | Fiscal Year End The Company has adopted a fiscal year end of October 31st. |
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. |
Reverse Stock Split | Reverse Stock Split The Company effected a one |
Recent Accounting Pronouncements | NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Recent Accounting Pronouncements In January 2017, the FASB issued ASU No. 2017-04, “Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment” (“ASU 2017-04”), which removes Step 2 from the goodwill impairment test. An entity will apply a one-step quantitative test and record the amount of goodwill impairment as the excess of a reporting unit’s carrying amount over its fair value, not to exceed the total amount of goodwill allocated to the reporting unit. The new guidance does not amend the optional qualitative assessment of goodwill impairment. A public business entity that is a U.S. Securities and Exchange Commission filer should adopt the amendments in this ASU for its annual or any interim goodwill impairment test in fiscal years beginning after December 15, 2019. ASU 2017-4 had no impact on the Company’s consolidated financial statements. In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement (“ASU 2018-13”). The objective of ASU 2018-13 is to improve the effectiveness of disclosures in the notes to the financial statements by removing, modifying, and adding certain fair value disclosure requirements to facilitate clear communication of the information required by generally accepted accounting principles. The amendments are effective for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019 with early adoption permitted upon issuance of this ASU. The adoption of ASU 2018-13 had no impact on the Company’s consolidated financial statements. 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 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 consolidated financial condition, results of operations, cash flows or disclosures. |
ORGANIZATION AND NATURE OF OP_2
ORGANIZATION AND NATURE OF OPERATIONS (Tables) | 12 Months Ended |
Oct. 31, 2021 | |
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 and insurance related risk management 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 HH Consulting A PRC limited liability company 100% owned by TRX ZJ Incorporated on November 22, 2017 and dissolved on July 10, 2020 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) | 12 Months Ended |
Oct. 31, 2021 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Schedule of cash balances by geographic area | At October 31, 2021 and 2020, the Company’s cash balances by geographic area were as follows: Country: October 31, 2021 October 31, 2020 China $ 29,967,246 99.8 % $ 6,137,469 99.996 % United States 57,126 0.2 % 220 0.004 % Total cash $ 30,024,372 100.0 % $ 6,137,689 100.0 % |
Summary of estimated useful life of property and equipment | Estimated Useful Life Office equipment and furniture 3 |
Summary of revenue based on services | The following table sets forth the Company’s revenue based on services for the periods indicated: Years Ended October 31, 2021 2020 2019 Insurance brokerage services $ 2,675,611 $ 2,954,798 $ 2,002,217 Insurance related risk management services 115,006 294,546 — Total revenues $ 2,790,617 $ 3,249,344 $ 2,002,217 |
Summary of securities excluded from diluted per share | Years Ended October 31, 2021 2020 2019 Stock warrants 3,545,000 — — Potentially dilutive securities 3,545,000 — — |
VARIABLE INTEREST ENTITY AND _2
VARIABLE INTEREST ENTITY AND OTHER CONSOLIDATION MATTERS (Tables) | 12 Months Ended |
Oct. 31, 2021 | |
VARIABLE INTEREST ENTITY AND OTHER CONSOLIDATION MATTERS | |
Summary of consolidated financial information of the VIE and its subsidiaries | The following consolidated financial information of the VIE and its subsidiaries as a whole as of October 31, 2021 and 2020 and for the years ended October 31, 2021, 2020 and 2019 was included in the accompanying consolidated financial statements of the Company. Intercompany transactions between the VIE and VIE’s subsidiaries are eliminated in the financial information presented below: As of October 31, 2021 2020 Cash and cash equivalents $ 29,776,178 $ 6,137,444 Restricted cash 819,269 785,806 Accounts receivable 320,848 1,247,059 Other current assets 216,470 1,390,023 Right-of-use assets, operating lease 760,229 317,141 Other non-current assets 347,084 182,735 Total Assets 32,240,078 10,060,208 Taxes payable 493,196 548,630 Other current liabilities 582,187 738,633 Non-current liabilities 237,848 133,109 Total Liabilities 1,313,231 1,420,372 Net assets $ 30,926,847 $ 8,639,836 Years Ended October 31, 2021 2020 2019 Revenues $ 2,776,065 $ 3,249,344 $ 2,002,217 (Loss) income from operations (1,232,723) 566,336 102,670 Net (loss) income $ (1,052,348) $ 640,294 $ 175,787 |
PREPAID EXPENSES AND OTHER CU_2
PREPAID EXPENSES AND OTHER CURRENT ASSETS (Tables) | 12 Months Ended |
Oct. 31, 2021 | |
PREPAID EXPENSES AND OTHER CURRENT ASSETS | |
Summary of prepaid expenses and other current assets | At October 31, 2021 and 2020, prepaid expenses and other current assets consisted of the following: October 31, 2021 October 31, 2020 Prepaid professional fees (1) $ 133,683 $ 457,123 Prepaid directors and officers' liability insurance premium 214,188 — Recoverable VAT 67,105 — Other 50,674 37,353 $ 465,650 $ 494,476 (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. |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 12 Months Ended |
Oct. 31, 2021 | |
PROPERTY AND EQUIPMENT | |
Summary of property and equipment | At October 31, 2021 and 2020, property and equipment consisted of the following: Useful Life October 31, 2021 October 31, 2020 Office equipment and furniture 3 $ 58,965 $ 53,144 Less: accumulated depreciation (47,700) (38,047) $ 11,265 $ 15,097 For the years ended October 31, 2021, 2020 and 2019, depreciation expense amounted to $7,862, $9,625 and $8,677, respectively, which was included in operating expenses. |
INTANGIBLE ASSETS (Tables)
INTANGIBLE ASSETS (Tables) | 12 Months Ended |
Oct. 31, 2021 | |
INTANGIBLE ASSETS | |
Summary of intangible assets | At October 31, 2021 and 2020, intangible assets consisted of the following: Useful Life October 31, 2021 October 31, 2020 Software and platform 2 10 Years $ 197,033 $ 188,626 Less: accumulated amortization (49,495) (28,407) $ 147,538 $ 160,219 For the years ended October 31, 2021, 2020 and 2019, amortization expense amounted to $19,585, $18,204 and $26,036, respectively, which was included in operating expenses. |
Summary of amortization of intangible assets attributable to future periods | Amortization of intangible assets attributable to future periods is as follows: For the Year Ending October 31: Amortization Amount 2022 $ 19,703 2023 19,703 2024 19,703 2025 19,703 2026 19,703 Thereafter 49,023 $ 147,538 |
OTHER NON-CURRENT ASSETS (Table
OTHER NON-CURRENT ASSETS (Tables) | 12 Months Ended |
Oct. 31, 2021 | |
OTHER NON-CURRENT ASSETS | |
Schedule of other non-current assets consisted | At October 31, 2021 and 2020, other non- current assets consisted of the following: October 31, 2021 October 31, 2020 Prepaid professional fees (1) $ 129,347 $ — Security deposit 58,934 7,419 $ 188,281 $ 7,419 (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) | 12 Months Ended |
Oct. 31, 2021 | |
TAXES PAYABLE | |
Summary of VAT and other taxes payable | At October 31, 2021 and 2020, taxes payable consisted of the following: October 31, 2021 October 31, 2020 Income taxes payable $ 493,196 $ 459,714 VAT payable — 86,715 Other — 2,201 $ 493,196 $ 548,630 |
ACCRUED LIABILITIES AND OTHER_2
ACCRUED LIABILITIES AND OTHER PAYABLES (Tables) | 12 Months Ended |
Oct. 31, 2021 | |
ACCRUED LIABILITIES AND OTHER PAYABLES | |
Summary of accrued liabilities and other payables | At October 31, 2021 and 2020, accrued liabilities and other payables consisted of the following: October 31, 2021 October 31, 2020 Accrued professional service fees $ 81,388 $ 155,356 Other 14,276 25,038 $ 95,664 $ 180,394 |
RELATED PARTY TRANSACTIONS (Tab
RELATED PARTY TRANSACTIONS (Tables) | 12 Months Ended |
Oct. 31, 2021 | |
RELATED PARTY TRANSACTIONS | |
Summary of due to related parties | Name of related party October 31, 2021 October 31, 2020 Beijing Ruibozhongying Technology Development Co., Ltd. (1) $ — $ 238,642 WDZG Consulting 2,564 2,455 $ 2,564 $ 241,097 (1) An entity controlled by WDZG Consulting. |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Oct. 31, 2021 | |
INCOME TAXES | |
Schedule of reconciliation of differences between statutory tax rate and effective tax rate | For the Years Ended October 31, 2021 2020 2019 (Loss) income before income tax expenses $ (1,920,048) $ 760,155 $ 413,995 Cayman statutory income tax rate 0 % 0 % 0 % Income tax calculated at statutory rate — — — Increase in income tax expense resulting from: Rate differences in various jurisdictions 24,529 126,055 238,208 Income tax expense / effective tax rate $ 24,529 $ 126,055 $ 238,208 |
Schedule of net deferred tax assets | Deferred tax assets: October 31, 2021 October 31, 2020 Net operating loss carryforward $ 64,139 $ — Accrued payroll liability 3,825 12,952 Valuation allowance (64,139) — Net deferred tax assets $ 3,825 $ 12,952 |
EQUITY (Tables)
EQUITY (Tables) | 12 Months Ended |
Oct. 31, 2021 | |
EQUITY | |
Schedule of Stock warrants activities | Number of Warrants Weighted Average Exercise Price Outstanding at October 31, 2020 — $ — Granted 3,545,000 7.77 Exercised — — Outstanding at October 31, 2021 3,545,000 $ 7.77 Warrants exercisable at October 31, 2021 3,545,000 $ 7.77 |
Summary of shares of the Company's ordinary stock issuable upon exercise of warrants outstanding | Warrants Outstanding Warrants Exercisable Exercise Number Outstanding Weighted Average Remaining Number Exercisable at Exercise Price at October 31, 2021 Contractual Life (Years) October 31, 2021 Price $ 5.00 270,000 2.25 270,000 $ 5.00 8.00 3,275,000 4.61 3,275,000 8.00 $ 7.77 3,545,000 4.43 3,545,000 $ 7.77 |
STATUTORY RESERVE AND RESTRIC_2
STATUTORY RESERVE AND RESTRICTED NET ASSETS (Tables) | 12 Months Ended |
Oct. 31, 2021 | |
Statutory Reserves And Restricted Net Assets | |
Statutory Reserves And Restricted Net Assets [Table Text Block] | TRX ZJ NDB Technology TYDW Technology Total Balance – October 31, 2018 $ 29,199 $ — $ — $ 29,199 Addition to statutory reserve 66,026 — 23,564 89,590 Balance – October 31, 2019 95,225 — 23,564 118,789 Addition to statutory reserve 30,979 2,680 17,618 51,277 Balance – October 31, 2020 126,204 2,680 41,182 170,066 Addition to statutory reserve — — 29,587 29,587 Balance – October 31, 2021 $ 126,204 $ 2,680 $ 70,769 $ 199,653 |
NON-CONTROLLING INTEREST (Table
NON-CONTROLLING INTEREST (Tables) | 12 Months Ended |
Oct. 31, 2021 | |
NON-CONTROLLING INTEREST. | |
Summary of non-controlling interest activities | Amount Non-controlling interest at October 31, 2018 $ 478 Net income attributable to non-controlling interest — Foreign currency translation adjustment attributable to non-controlling interest (4) Non-controlling interest at October 31, 2019 474 Net loss attributable to non-controlling interest (3) Foreign currency translation adjustment attributable to non-controlling interest 24 Non-controlling interest at October 31, 2020 495 Net loss attributable to non-controlling interest (28) Foreign currency translation adjustment attributable to non-controlling interest 22 Non-controlling interest at October 31, 2021 $ 489 |
COMMITMENTS AND CONTINCENGIES (
COMMITMENTS AND CONTINCENGIES (Tables) | 12 Months Ended |
Oct. 31, 2021 | |
COMMITMENTS AND CONTINCENGIES | |
Schedule of supplemental cash flow information related to leases | Years Ended October 31, 2021 2020 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows paid for operating lease $ 293,078 $ 141,445 $ 76,971 Right-of-use assets obtained in exchange for lease obligation: Operating lease $ 544,515 $ 378,719 $ 192,723 |
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 October 31, 2021: Operating Lease Weighted average remaining lease term (in years) 1.73 Weighted average discount rate 4.75 % |
Schedule of maturity of lease liabilities | The following table summarizes the maturity of lease liabilities under operating lease as of October 31, 2021: For the Year Ending October 31: Operating Lease 2022 $ 445,882 2023 220,094 2024 23,013 Thereafter — Total lease payments 688,989 Amount of lease payments representing interest (28,017) Total present value of operating lease liabilities $ 660,972 Current portion $ 423,124 Long-term portion 237,848 Total $ 660,972 |
CONCENTRATIONS (Tables)
CONCENTRATIONS (Tables) | 12 Months Ended |
Oct. 31, 2021 | |
CONCENTRATIONS. | |
Summary of concentration of risk | For the Years Ended October 31, Carrier 2021 2020 2019 A 15 % * * B 15 % * * C 13 % 17 % * D 10 % 16 % 12 % E * 11 % 24 % F * * 22 % G * * 19 % *Less than 10% |
ORGANIZATION AND NATURE OF OP_3
ORGANIZATION AND NATURE OF OPERATIONS (Details) | May 20, 2019shareholder | Oct. 31, 2021subsidiary |
Organization And Nature of Operations [Line Items] | ||
Number of majority shareholders | shareholder | 2 | |
Controlled entities incorporated (as a percent) | 100.00% | |
Hengbang Insurance | ||
Organization And Nature of Operations [Line Items] | ||
Ownership interest held | 99.80% | |
TRX. ZJ | ||
Organization And Nature of Operations [Line Items] | ||
Number of subsidiaries formed | subsidiary | 5 |
ORGANIZATION AND NATURE OF OP_4
ORGANIZATION AND NATURE OF OPERATIONS - subsidiaries in PRC (Details) | 12 Months Ended |
Oct. 31, 2021 | |
ORGANIZATION AND NATURE OF OPERATIONS | |
Share disposal and exclusive option to purchase agreement term | 20 years |
ORGANIZATION AND NATURE OF OP_5
ORGANIZATION AND NATURE OF OPERATIONS - Activities of TRX (Details) | Oct. 31, 2021 |
TRX HK | |
Organization And Nature of Operations [Line Items] | |
Noncontrolling Interest, Ownership Percentage by Parent | 100.00% |
TRX BJ | |
Organization And Nature of Operations [Line Items] | |
Noncontrolling Interest, Ownership Percentage by Parent | 100.00% |
NDB Technology | |
Organization And Nature of Operations [Line Items] | |
Noncontrolling Interest, Ownership Percentage by Parent | 100.00% |
TYDW Technology | |
Organization And Nature of Operations [Line Items] | |
Noncontrolling Interest, Ownership Percentage by Parent | 100.00% |
HH Consulting | |
Organization And Nature of Operations [Line Items] | |
Noncontrolling Interest, Ownership Percentage by Parent | 100.00% |
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 | 100.00% |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Cash balances by geographic area (Details) - USD ($) | 12 Months Ended | |
Oct. 31, 2021 | Oct. 31, 2020 | |
Country: | ||
Percentage of concentrations of credit risk | 100.00% | 100.00% |
Total cash | $ 30,024,372 | $ 6,137,689 |
China | ||
Country: | ||
Percentage of concentrations of credit risk | 99.80% | 99.996% |
Total cash | $ 29,967,246 | $ 6,137,469 |
United States | ||
Country: | ||
Percentage of concentrations of credit risk | 0.20% | 0.004% |
Total cash | $ 57,126 | $ 220 |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Restricted Cash (Details) - USD ($) | Oct. 31, 2021 | Oct. 31, 2020 | Oct. 31, 2019 | Oct. 31, 2018 |
Restricted Cash and Cash Equivalents Items [Line Items] | ||||
Restricted cash | $ 819,269 | $ 785,806 | $ 723,557 | $ 914,558 |
Funds held in an escrow bank account | ||||
Restricted Cash and Cash Equivalents Items [Line Items] | ||||
Restricted cash | $ 819,269 | $ 785,806 |
SUMMARY OF SIGNIFICANT ACCOUN_6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Allowance for Doubtful Accounts (Details) - USD ($) | 12 Months Ended | |
Oct. 31, 2021 | Oct. 31, 2020 | |
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) | 12 Months Ended | |||
Oct. 31, 2021USD ($) | Oct. 31, 2021CNY (¥) | Oct. 31, 2021CNY (¥) | Oct. 31, 2020USD ($) | |
Effects of Reinsurance [Line Items] | ||||
General Insurance Expense | ¥ | ¥ 500,000 | |||
Cash and Due from Banks | $ 30,024,372 | $ 6,137,689 | ||
Transfer Pricing Related Adjustments | 250,000 | |||
PRC | ||||
Effects of Reinsurance [Line Items] | ||||
General Insurance Expense | 78,000 | ¥ 500,000 | ||
Cash and Due from Banks | 30,786,000 | ¥ 197,205,116 | ||
Limited Insurance | $ 30,410,000 | ¥ 194,799,555 |
SUMMARY OF SIGNIFICANT ACCOUN_8
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Intangible Assets (Details) - Software and platform | 12 Months Ended |
Oct. 31, 2021 | |
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 | 12 Months Ended |
Oct. 31, 2021 | |
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) | 12 Months Ended | ||
Oct. 31, 2021USD ($)item | Oct. 31, 2020USD ($)item | Oct. 31, 2019USD ($)item | |
Disaggregation of Revenue [Line Items] | |||
Total Revenues | $ 2,790,617 | $ 3,249,344 | $ 2,002,217 |
Commissions | |||
Disaggregation of Revenue [Line Items] | |||
Actual commission adjustments in connection with the cancellation of policies | 2.30% | 1.10% | 1.70% |
Total Revenues | $ 2,675,611 | $ 2,954,798 | $ 2,002,217 |
Risk management services | |||
Disaggregation of Revenue [Line Items] | |||
Hours spent in connection with the claim process services provided to the insureds | item | 12 | 12 | 15 |
Total Revenues | $ 115,006 | $ 294,546 | $ 0 |
SUMMARY OF SIGNIFICANT ACCOU_11
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Additional details (Details) | 12 Months Ended | ||
Oct. 31, 2021USD ($) | Oct. 31, 2020USD ($) | Oct. 31, 2019USD ($) | |
Cash and Cash Equivalents | |||
Cash equivalents | $ 0 | $ 0 | |
Employee Benefits | |||
Employee benefit costs | 166,242 | 104,750 | $ 123,369 |
Selling and Marketing Expenses | |||
Selling and marketing costs | 2,517,497 | 1,558,209 | 797,572 |
Advertising Costs | |||
Advertising Costs | 2,466,239 | 1,117,918 | $ 525,528 |
Deferred Offering Costs. | |||
Deferred offering costs | 0 | 895,567 | |
Income Taxes. | |||
Interest and penalties related to significant uncertain tax positions | $ 0 | $ 0 | |
Foreign Currency Translation | |||
Closing translation rates | 6.4057 | 6.6912 | |
Average translation rates | 6.4831 | 6.9747 | 6.8926 |
SUMMARY OF SIGNIFICANT ACCOU_12
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Summary of securities excluded from diluted per share (Details) - shares | 12 Months Ended | ||
Oct. 31, 2021 | Oct. 31, 2020 | Oct. 31, 2019 | |
Earnings Per Share [Abstract] | |||
Potentially dilutive securities | 3,545,000 | 0 | 0 |
Stock warrants | |||
Earnings Per Share [Abstract] | |||
Potentially dilutive securities | 3,545,000 | 0 | 0 |
SUMMARY OF SIGNIFICANT ACCOU_13
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Non-Controlling Interest (Details) - Hengbang Insurance - individual | Nov. 07, 2017 | Oct. 31, 2021 |
Noncontrolling Interest [Line Items] | ||
Ownership interest held | 0.20% | 0.20% |
Number of third party individuals who held equity interest | 2 | 2 |
SUMMARY OF SIGNIFICANT ACCOU_14
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Segment Reporting (Details) | Apr. 14, 2020 | Oct. 31, 2021segment |
Segment Reporting | ||
Reportable business segments | 1 | |
Reverse Stock Split | ||
Reverse stock split ratio | 0.5 |
SUMMARY OF SIGNIFICANT ACCOU_15
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Value Added Tax Rate (Details) - USD ($) | 12 Months Ended | |
Oct. 31, 2021 | Oct. 31, 2020 | |
Insurance premiums payable | ||
Insurance premiums payable | $ 1,656 | $ 5,876 |
Value Added Tax | ||
Value added tax rate | 6.00% |
VARIABLE INTEREST ENTITY AND _3
VARIABLE INTEREST ENTITY AND OTHER CONSOLIDATION MATTERS (Details) - USD ($) | Oct. 31, 2021 | Oct. 31, 2020 | Oct. 31, 2019 | Oct. 31, 2018 |
Variable Interest Entity [Line Items] | ||||
Cash and cash equivalents | $ 30,024,372 | $ 6,137,689 | $ 6,243,029 | $ 6,712,880 |
Restricted cash | 819,269 | 785,806 | $ 723,557 | $ 914,558 |
Accounts receivable | 320,848 | 1,247,059 | ||
Other current assets | 50,674 | 37,353 | ||
Right-of-use assets, operating lease | 760,229 | 317,141 | ||
Other non-current assets | 188,281 | 7,419 | ||
Total Assets | 40,350,466 | 10,060,473 | ||
Taxes payable | 493,196 | 548,630 | ||
Other current liabilities | 14,276 | 25,038 | ||
Total Liabilities | 1,355,564 | 1,421,760 | ||
TRX. ZJ | ||||
Variable Interest Entity [Line Items] | ||||
Cash and cash equivalents | 29,776,178 | 6,137,444 | ||
Restricted cash | 819,269 | 785,806 | ||
Accounts receivable | 320,848 | 1,247,059 | ||
Other current assets | 216,470 | 1,390,023 | ||
Right-of-use assets, operating lease | 760,229 | 317,141 | ||
Other non-current assets | 347,084 | 182,735 | ||
Total Assets | 32,240,078 | 10,060,208 | ||
Taxes payable | 493,196 | 548,630 | ||
Other current liabilities | 582,187 | 738,633 | ||
Non-current liabilities | 237,848 | 133,109 | ||
Total Liabilities | 1,313,231 | 1,420,372 | ||
Net assets | $ 30,926,847 | $ 8,639,836 |
VARIABLE INTEREST ENTITY AND _4
VARIABLE INTEREST ENTITY AND OTHER CONSOLIDATION MATTERS - Net income (Details) - USD ($) | 12 Months Ended | ||
Oct. 31, 2021 | Oct. 31, 2020 | Oct. 31, 2019 | |
Variable Interest Entity [Line Items] | |||
Revenue | $ 2,790,617 | $ 3,249,344 | $ 2,002,217 |
(Loss) income from operations | (2,253,804) | 560,142 | 102,670 |
Net income | (1,944,549) | 634,103 | 175,787 |
TRX. ZJ | |||
Variable Interest Entity [Line Items] | |||
Revenue | 2,776,065 | 3,249,344 | 2,002,217 |
(Loss) income from operations | (1,232,723) | 566,336 | 102,670 |
Net income | $ (1,052,348) | $ 640,294 | $ 175,787 |
PREPAID EXPENSES AND OTHER CU_3
PREPAID EXPENSES AND OTHER CURRENT ASSETS (Details) - USD ($) | Oct. 31, 2021 | Oct. 31, 2020 |
PREPAID EXPENSES AND OTHER CURRENT ASSETS | ||
Prepaid professional fees (1) | $ 133,683 | $ 457,123 |
Prepaid directors and officers' liability insurance premium | 214,188 | 0 |
Recoverable VAT | 67,105 | 0 |
Other | 50,674 | 37,353 |
Prepaid expenses and other current assets | $ 465,650 | $ 494,476 |
NOTE RECEIVABLE (Details)
NOTE RECEIVABLE (Details) - USD ($) | 12 Months Ended | |||
Oct. 31, 2021 | Oct. 31, 2020 | Oct. 31, 2019 | Jan. 29, 2021 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Interest income | $ 315,070 | $ 88,948 | $ 275,168 | |
Notes Receivable [Member] | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Fixed interest rate | 2.00% | |||
Principal amount | $ 7,500,000 | $ 7,500,000 | ||
Interest income | $ 113,014 |
PROPERTY AND EQUIPMENT (Details
PROPERTY AND EQUIPMENT (Details) - USD ($) | 12 Months Ended | ||
Oct. 31, 2021 | Oct. 31, 2020 | Oct. 31, 2019 | |
Property, Plant and Equipment, Net, by Type [Abstract] | |||
Property and equipment, gross | $ 58,965 | $ 53,144 | |
Less: accumulated depreciation | (47,700) | (38,047) | |
Property, Plant and Equipment, Net, Total | 11,265 | 15,097 | |
Depreciation expense | $ 7,862 | $ 9,625 | $ 8,677 |
Office equipment and furniture | Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Estimated useful lives of property and equipment | 3 years | ||
Office equipment and furniture | Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Estimated useful lives of property and equipment | 5 years |
INTANGIBLE ASSETS (Details)
INTANGIBLE ASSETS (Details) - USD ($) | 12 Months Ended | ||
Oct. 31, 2021 | Oct. 31, 2020 | Oct. 31, 2019 | |
Finite-Lived Intangible Assets, Net [Abstract] | |||
Intangible assets, gross | $ 197,033 | $ 188,626 | |
Less: accumulated amortization | (49,495) | (28,407) | |
Intangible assets, net | 147,538 | 160,219 | |
Amortization expense | $ 19,585 | $ 18,204 | $ 26,036 |
Software and platform | Minimum | |||
Finite-Lived Intangible Assets [Line Items] | |||
Estimated useful lives of intangible assets | 2 years | ||
Software and platform | Maximum | |||
Finite-Lived Intangible Assets [Line Items] | |||
Estimated useful lives of intangible assets | 10 years |
INTANGIBLE ASSETS - Future peri
INTANGIBLE ASSETS - Future periods (Details) - USD ($) | Oct. 31, 2021 | Oct. 31, 2020 |
Amortization of intangible assets. | ||
2022 | $ 19,703 | |
2023 | 19,703 | |
2024 | 19,703 | |
2025 | 19,703 | |
2026 | 19,703 | |
Thereafter | 49,023 | |
Total | $ 147,538 | $ 160,219 |
OTHER NON-CURRENT ASSETS (Detai
OTHER NON-CURRENT ASSETS (Details) - USD ($) | Oct. 31, 2021 | Oct. 31, 2020 |
OTHER NON-CURRENT ASSETS | ||
Prepaid professional fees (1) | $ 129,347 | |
Security deposit | 58,934 | $ 7,419 |
Total other noncurrent assets | $ 188,281 | $ 7,419 |
NOTE PAYABLE (Details)
NOTE PAYABLE (Details) - Loans Payable [Member] | Feb. 10, 2021USD ($) | Oct. 31, 2021USD ($) | Feb. 10, 2021CNY (¥) |
Short-term Debt [Line Items] | |||
Principal amount | $ 76,000 | ¥ 490,000 | |
Short term debt term | P365D | ||
Annual interest rate | 2.00% | ||
Interest expense | $ 725 |
TAXES PAYABLE (Details)
TAXES PAYABLE (Details) - USD ($) | Oct. 31, 2021 | Oct. 31, 2020 |
TAXES PAYABLE | ||
Income taxes payable | $ 493,196 | $ 459,714 |
VAT payable | 0 | 86,715 |
Other | 0 | 2,201 |
VAT and other taxes payable | $ 493,196 | $ 548,630 |
ACCRUED LIABILITIES AND OTHER_3
ACCRUED LIABILITIES AND OTHER PAYABLES (Details) - USD ($) | Oct. 31, 2021 | Oct. 31, 2020 |
ACCRUED LIABILITIES AND OTHER PAYABLES | ||
Accrued professional service fees | $ 81,388 | $ 155,356 |
Other | 14,276 | 25,038 |
Accrued liabilities and other payables | $ 95,664 | $ 180,394 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) - USD ($) | 12 Months Ended | ||
Oct. 31, 2021 | Oct. 31, 2020 | Oct. 31, 2019 | |
Services Provided by Related Parties | |||
Accelerated Share Repurchases [Line Items] | |||
Related party expenses | $ 1,129 | $ 38,426 | $ 23,922 |
RELATED PARTY TRANSACTIONS - Of
RELATED PARTY TRANSACTIONS - Office Space from Related Party (Details) - WDZG Consulting - USD ($) | 12 Months Ended | ||
Oct. 31, 2021 | Oct. 31, 2020 | Oct. 31, 2019 | |
Office Space from Related Party | |||
Related Party Transaction [Line Items] | |||
Related party expenses | $ 20,000 | $ 14,000 | $ 19,000 |
Operating lease liabilities - related party | $ 0 | $ 28,442 | |
TRX ZJ | |||
Related Party Transaction [Line Items] | |||
Ownership interest held | 100.00% |
RELATED PARTY TRANSACTIONS - Lo
RELATED PARTY TRANSACTIONS - Loan to Related Party and Interest Income (Details) - Loan to Related Party and Interest Income - Related Party | Aug. 14, 2020CNY (¥) | May 01, 2020CNY (¥) | Mar. 19, 2020CNY (¥) | Oct. 31, 2020USD ($) | Aug. 14, 2020USD ($) | May 01, 2020USD ($) | Mar. 19, 2020USD ($) |
Related Party Transaction [Line Items] | |||||||
Note receivable to a related party | ¥ 40,503,802 | ¥ 40,260,000 | ¥ 38,914,847 | $ 5,800,000 | $ 5,800,000 | $ 5,600,000 | |
Annual interest rate | 1.90% | 4.35% | 1.00% | ||||
Interest income - related party | $ 102,074 |
RELATED PARTY TRANSACTIONS - Bo
RELATED PARTY TRANSACTIONS - Borrowings from Related Parties and Interest Expense (Details) - USD ($) | 12 Months Ended | ||
Oct. 31, 2021 | Oct. 31, 2020 | Oct. 31, 2019 | |
Related Party Transaction [Line Items] | |||
Amount borrowed from related parties | $ 1,893,932 | $ 1,987,256 | $ 0 |
Amount repaid to related parties | $ 2,564 | 241,097 | |
Borrowings from Related Parties and Interest Expense - Related Parties | |||
Related Party Transaction [Line Items] | |||
Term of debt | 1 year | ||
Amount borrowed from related parties | $ 2,013,818 | 2,128,705 | |
Amount repaid to related parties | 2,272,145 | 2,099,420 | |
Interest expense - related parties | $ 0 | $ 0 | $ 613 |
Borrowings from Related Parties and Interest Expense - Related Parties | Minimum | |||
Related Party Transaction [Line Items] | |||
Annual interest rate | 6.50% | ||
Borrowings from Related Parties and Interest Expense - Related Parties | Maximum | |||
Related Party Transaction [Line Items] | |||
Annual interest rate | 10.00% |
RELATED PARTY TRANSACTIONS - Du
RELATED PARTY TRANSACTIONS - Due to Related Parties (Details) - USD ($) | Oct. 31, 2021 | Oct. 31, 2020 | |
Related Party Transaction [Line Items] | |||
Amount due to related parties | $ 2,564 | $ 241,097 | |
Beijing Ruibozhongying Technology Development Co., Ltd | |||
Related Party Transaction [Line Items] | |||
Amount due to related parties | [1] | 238,642 | |
WDZG Consulting | |||
Related Party Transaction [Line Items] | |||
Amount due to related parties | $ 2,564 | $ 2,455 | |
[1] | An entity controlled by WDZG Consulting. |
INCOME TAXES (Details)
INCOME TAXES (Details) | 2 Months Ended | 3 Months Ended | 12 Months Ended | ||
Jul. 31, 2018 | Oct. 31, 2018 | Oct. 31, 2021 | Oct. 31, 2020 | Oct. 31, 2019 | |
HK | |||||
Income Tax Disclosure [Line Items] | |||||
Applicable tax rate | 16.50% | ||||
China | |||||
Income Tax Disclosure [Line Items] | |||||
Applicable tax rate | 25.00% | ||||
Preferential income tax rate | 0.00% | 0.00% | 0.00% | 0.00% |
INCOME TAXES - PRC (Details)
INCOME TAXES - PRC (Details) | 12 Months Ended |
Oct. 31, 2021 | |
HK | |
Reconciliations of the statutory income tax rate and the Company's effective income tax rate | |
Income tax calculated at statutory rate | 16.50% |
China | |
Reconciliations of the statutory income tax rate and the Company's effective income tax rate | |
Income tax calculated at statutory rate | 25.00% |
INCOME TAXES - Additional infor
INCOME TAXES - Additional information (Details) | 12 Months Ended | ||
Oct. 31, 2021CNY (¥) | Oct. 31, 2021USD ($) | Oct. 31, 2020USD ($) | |
INCOME TAXES | |||
Provision for uncertainty in income taxes | $ 0 | $ 0 | |
Statute limitation period | 3 years | ||
Extended income tax liability | ¥ 100,000 | $ 16,000 |
INCOME TAXES - Schedule of reco
INCOME TAXES - Schedule of reconciliation of differences between statutory tax rate and effective tax rate (Details) - USD ($) | 12 Months Ended | ||
Oct. 31, 2021 | Oct. 31, 2020 | Oct. 31, 2019 | |
Reconciliation of differences between statutory tax rate and effective tax rate | |||
(Loss) income before income tax expenses | $ (1,920,048) | $ 760,155 | $ 413,995 |
Cayman statutory income tax rate | 0.00% | 0.00% | 0.00% |
Increase in income tax expense resulting from: | |||
Rate differences in various jurisdictions | $ 24,529 | $ 126,055 | $ 238,208 |
Income tax expense / effective tax rate | $ 24,529 | $ 126,055 | $ 238,208 |
INCOME TAXES - Net deferred tax
INCOME TAXES - Net deferred tax assets (Details) - USD ($) | Oct. 31, 2021 | Oct. 31, 2020 |
Deferred tax assets: | ||
Net operating loss carryforward | $ 64,139 | |
Accrued payroll liability | 3,825 | $ 12,952 |
Valuation allowance | (64,139) | |
Net deferred tax assets | $ 3,825 | $ 12,952 |
EQUITY (Details)
EQUITY (Details) | 1 Months Ended | 12 Months Ended | ||||||
Jun. 30, 2021USD ($)$ / sharesshares | Oct. 31, 2021USD ($)$ / sharesshares | Oct. 31, 2020USD ($)$ / sharesshares | Oct. 31, 2019USD ($) | Jan. 31, 2022shares | Dec. 03, 2021shares | Feb. 04, 2021$ / sharesshares | Jan. 29, 2021USD ($)$ / sharesshares | |
Organization And Nature of Operations [Line Items] | ||||||||
Capital contribution from shareholders | $ 5,000 | $ 5,000 | ||||||
Ordinary shares, par value | $ / shares | $ 0.001 | $ 0.001 | ||||||
Net proceeds from sale of shares | $ 12,300,000 | $ 0 | $ 0 | |||||
Agent fees and other offering expenses | $ 2,362,156 | |||||||
Adjustment to additional paid in capital-Direct cost | 911,647 | |||||||
Stock issued during period-offset to direct costs | $ 1,450,509 | |||||||
Warrant | ||||||||
Organization And Nature of Operations [Line Items] | ||||||||
Offering price, per share | $ / shares | $ 8 | |||||||
Warrant | Black-Scholes warrant-pricing model | ||||||||
Organization And Nature of Operations [Line Items] | ||||||||
Fair value of warrants | $ 14,819,266 | |||||||
Gross proceeds from sale of shares | $ 9,479,610 | |||||||
Warrant | Stock price | Black-Scholes warrant-pricing model | Maximum | ||||||||
Organization And Nature of Operations [Line Items] | ||||||||
Fair value of warrants, measurement input | $ / shares | 7.50 | |||||||
Warrant | Stock price | Black-Scholes warrant-pricing model | Minimum | ||||||||
Organization And Nature of Operations [Line Items] | ||||||||
Fair value of warrants, measurement input | $ / shares | 6.31 | |||||||
Warrant | Volatility | Black-Scholes warrant-pricing model | Maximum | ||||||||
Organization And Nature of Operations [Line Items] | ||||||||
Fair value of warrants, measurement input | 83.06 | |||||||
Warrant | Volatility | Black-Scholes warrant-pricing model | Minimum | ||||||||
Organization And Nature of Operations [Line Items] | ||||||||
Fair value of warrants, measurement input | 81.45 | |||||||
Warrant | Risk-free rate | Black-Scholes warrant-pricing model | Maximum | ||||||||
Organization And Nature of Operations [Line Items] | ||||||||
Fair value of warrants, measurement input | 0.90 | |||||||
Warrant | Risk-free rate | Black-Scholes warrant-pricing model | Minimum | ||||||||
Organization And Nature of Operations [Line Items] | ||||||||
Fair value of warrants, measurement input | 0.73 | |||||||
Warrant | Dividend yield | Black-Scholes warrant-pricing model | ||||||||
Organization And Nature of Operations [Line Items] | ||||||||
Fair value of warrants, measurement input | 0 | |||||||
Warrant | Expected life | Black-Scholes warrant-pricing model | ||||||||
Organization And Nature of Operations [Line Items] | ||||||||
Expected life | 5 years | |||||||
Initial public offering | ||||||||
Organization And Nature of Operations [Line Items] | ||||||||
Debt Issuance Costs, Net | $ 2,413,701 | |||||||
Initial public offering | Securities Purchase Agreement | ||||||||
Organization And Nature of Operations [Line Items] | ||||||||
Offering price, per share | $ / shares | $ 7.50 | |||||||
Number of units sold | shares | 3,275,000 | |||||||
Gross proceeds from sale of shares | $ 24,562,500 | |||||||
Initial public offering | Warrant | ||||||||
Organization And Nature of Operations [Line Items] | ||||||||
Ordinary shares, shares issued | shares | 270,000 | |||||||
Ordinary shares, par value | $ / shares | $ 5 | |||||||
Fair value of warrants | $ 2,254,920 | |||||||
Initial public offering | Warrant | Securities Purchase Agreement | ||||||||
Organization And Nature of Operations [Line Items] | ||||||||
Net proceeds from sale of shares | 22,200,344 | |||||||
Agent fees and other offering expenses | 2,362,156 | |||||||
Initial public offering | Warrant | Stock price | ||||||||
Organization And Nature of Operations [Line Items] | ||||||||
Fair value of warrants, measurement input | $ / shares | 12.69 | |||||||
Initial public offering | Warrant | Volatility | ||||||||
Organization And Nature of Operations [Line Items] | ||||||||
Fair value of warrants, measurement input | 55.91 | |||||||
Initial public offering | Warrant | Risk-free rate | ||||||||
Organization And Nature of Operations [Line Items] | ||||||||
Fair value of warrants, measurement input | 0.19 | |||||||
Initial public offering | Warrant | Dividend yield | ||||||||
Organization And Nature of Operations [Line Items] | ||||||||
Fair value of warrants, measurement input | 0 | |||||||
Initial public offering | Warrant | Expected life | ||||||||
Organization And Nature of Operations [Line Items] | ||||||||
Expected life | 3 years | |||||||
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 | shares | 10,100,000 | 3,750,000 | ||||||
Ordinary shares, par value | $ / shares | $ 0.001 | $ 0.001 | ||||||
Class A ordinary shares | Black-Scholes warrant-pricing model | ||||||||
Organization And Nature of Operations [Line Items] | ||||||||
Gross proceeds from sale of shares | $ 15,082,890 | |||||||
Class A ordinary shares | Initial public offering | ||||||||
Organization And Nature of Operations [Line Items] | ||||||||
Ordinary shares, shares issued | shares | 75,000 | 3,000,000 | ||||||
Ordinary shares, par value | $ / shares | $ 0.001 | |||||||
Offering price, per share | $ / shares | $ 4 | $ 4 | ||||||
Net proceeds from sale of shares | $ 9,886,299 | |||||||
Net of cash fees | $ 2,413,701 | |||||||
Class A ordinary shares | 2021 Performance Incentive Plan | ||||||||
Organization And Nature of Operations [Line Items] | ||||||||
Common stock, capital shares reserved | shares | 5,000,000 | |||||||
Ordinary shares, shares issued | shares | 1,551,000 | |||||||
Class A ordinary shares | 2021 Performance Incentive Plan | Officers And Directors [Member] | ||||||||
Organization And Nature of Operations [Line Items] | ||||||||
Ordinary shares, shares issued | shares | 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 | shares | 1,250,000 | 1,250,000 | ||||||
Ordinary shares, par value | $ / shares | $ 0.001 | $ 0.001 |
EQUITY - Schedule of Stock warr
EQUITY - Schedule of Stock warrants activities (Details) - USD ($) | 12 Months Ended | ||
Oct. 31, 2021 | Oct. 31, 2020 | Oct. 31, 2019 | |
Weighted Average Exercise Price | |||
Intrinsic value of Stock warrants outstanding and exercisable | $ 0 | $ 0 | |
Warrant | |||
Number of Warrants | |||
Outstanding at October 31, 2020 | 0 | ||
Granted | 3,545,000 | ||
Outstanding at October 31, 2021 | 3,545,000 | ||
Warrants exercisable at October 31, 2021 | 3,545,000 | ||
Weighted Average Exercise Price | |||
Warrants Outstanding, Exercise Price | $ 0 | ||
Weighted Average Exercise Price - Granted | 7.77 | ||
Weighted Average Exercise Price - Outstanding (ending) | 7.77 | ||
Warrants Exercisable, Exercise Price | $ 7.77 | ||
Intrinsic value of Stock warrants outstanding and exercisable | $ 0 |
EQUITY - Summary of shares of t
EQUITY - Summary of shares of the Company ordinary stock issuable upon exercise of warrants outstanding (Details) - $ / shares | 12 Months Ended | |
Oct. 31, 2021 | Oct. 31, 2020 | |
Warrant [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Warrants Outstanding, Exercise Price | $ 7.77 | $ 0 |
Warrants Outstanding | 3,545,000 | 0 |
Weighted Average Remaining Contractual Life (Years) | 4 years 5 months 4 days | |
Warrants exercisable at October 31, 2021 | 3,545,000 | |
Warrants Exercisable, Exercise Price | $ 7.77 | |
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) | 2 years 3 months | |
Warrants exercisable at October 31, 2021 | 270,000 | |
Warrants Exercisable, 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 7 months 9 days | |
Warrants exercisable at October 31, 2021 | 3,275,000 | |
Warrants Exercisable, Exercise Price | $ 8 |
STATUTORY RESERVE AND RESTRIC_3
STATUTORY RESERVE AND RESTRICTED NET ASSETS (Details) - China - USD ($) | Oct. 31, 2021 | Oct. 31, 2020 |
Restricted Investments, at Fair Value | $ 199,653 | $ 170,066 |
Amount of Restricted Net Assets for Consolidated and Unconsolidated Subsidiaries | $ 6,656,576 | $ 7,867,009 |
STATUTORY RESERVE AND RESTRIC_4
STATUTORY RESERVE AND RESTRICTED NET ASSETS - Summary of Statutory reserve activities (Details) - USD ($) | 12 Months Ended | ||
Oct. 31, 2021 | Oct. 31, 2020 | Oct. 31, 2019 | |
Addition to statutory reserve | $ 0 | $ 0 | $ 0 |
Statutory Reserves. | |||
Balance - beginning of the year | 170,066 | 118,789 | 29,199 |
Addition to statutory reserve | 29,587 | 51,277 | 89,590 |
Balance - ending of the year | 199,653 | 170,066 | 118,789 |
TRX ZJ | Statutory Reserves. | |||
Balance - beginning of the year | 126,204 | 95,225 | 29,199 |
Addition to statutory reserve | 30,979 | 66,026 | |
Balance - ending of the year | 126,204 | 126,204 | 95,225 |
NDB Technology | Statutory Reserves. | |||
Balance - beginning of the year | 2,680 | ||
Addition to statutory reserve | 2,680 | ||
Balance - ending of the year | 2,680 | 2,680 | |
TYDW Technology | Statutory Reserves. | |||
Balance - beginning of the year | 41,182 | 23,564 | |
Addition to statutory reserve | 29,587 | 17,618 | 23,564 |
Balance - ending of the year | $ 70,769 | $ 41,182 | $ 23,564 |
NON-CONTROLLING INTEREST (Detai
NON-CONTROLLING INTEREST (Details) - USD ($) | 12 Months Ended | |||
Oct. 31, 2021 | Oct. 31, 2020 | Oct. 31, 2019 | Nov. 07, 2017 | |
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | ||||
Non-controlling interest, Beginning Balance | $ 495 | $ 474 | $ 478 | |
Net income (loss) attributable to non-controlling interest | (28) | (3) | 0 | |
Foreign currency translation adjustment attributable to non-controlling interest | 22 | 24 | (4) | |
Non-controlling interest, Ending balance | $ 489 | $ 495 | $ 474 | |
Hengbang Insurance | ||||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | ||||
Ownership equity interest | 0.20% | 0.20% |
COMMITMENTS AND CONTINCENGIES_2
COMMITMENTS AND CONTINCENGIES (Details) - USD ($) | 12 Months Ended | ||
Oct. 31, 2021 | Oct. 31, 2020 | Oct. 31, 2019 | |
COMMITMENTS AND CONTINCENGIES | |||
Rent expense | $ 242,000 | $ 186,000 | $ 190,000 |
Cash paid for amounts included in the measurement of lease liabilities: | |||
Operating cash flows paid for operating lease | 293,078 | 141,445 | 76,971 |
Right-of-use assets obtained in exchange for lease obligation: | |||
Operating lease | $ 544,515 | $ 378,719 | $ 192,723 |
COMMITMENTS AND CONTINCENGIES -
COMMITMENTS AND CONTINCENGIES - lease term and discount rate (Details) | Oct. 31, 2021 |
COMMITMENTS AND CONTINCENGIES | |
Weighted average remaining lease term (in years) | 1 year 8 months 23 days |
Weighted average discount rate | 4.75% |
COMMITMENTS AND CONTINCENGIES_3
COMMITMENTS AND CONTINCENGIES - lease liabilities under operating lease (Details) - USD ($) | Oct. 31, 2021 | Oct. 31, 2020 |
Maturity of lease liabilities | ||
2022 | $ 445,882 | |
2023 | 220,094 | |
2024 | 23,013 | |
Thereafter | 0 | |
Total lease payments | 688,989 | |
Amount of lease payments representing interest | (28,017) | |
Total | 660,972 | |
Operating Lease, Liability | ||
Current portion | 423,124 | $ 170,082 |
Long-term portion | 237,848 | $ 123,404 |
Total | $ 660,972 |
CONCENTRATIONS - Concentrations
CONCENTRATIONS - Concentrations of Credit Risk (Details) | Oct. 31, 2021USD ($) | Oct. 31, 2021CNY (¥) | Oct. 31, 2020USD ($) | Oct. 31, 2019USD ($) | Oct. 31, 2018USD ($) |
Concentration Risk [Line Items] | |||||
Cash, cash equivalents and restricted cash balances | $ 30,843,641 | $ 6,923,495 | $ 6,966,586 | $ 7,627,438 | |
China | |||||
Concentration Risk [Line Items] | |||||
Insurance covered for balances at financial institutions and banks | 78,000 | ¥ 500,000 | |||
Maximum limit for balances with banks covered under insurance | ¥ | ¥ 500,000 | ||||
Cash, cash equivalents and restricted cash balances | 30,785,880 | 6,680,162 | |||
Insurance not covered on cash balances | $ 30,410,346 | $ 6,593,426 |
CONCENTRATIONS - Insurance Carr
CONCENTRATIONS - Insurance Carriers (Details) | 12 Months Ended | ||
Oct. 31, 2021 | Oct. 31, 2020 | Oct. 31, 2019 | |
Supplier Concentration Risk | |||
Concentration Risk [Line Items] | |||
Concentration of risk | 0.00% | 0.00% | 0.00% |
Revenue | Customer concentration | A | |||
Concentration Risk [Line Items] | |||
Concentration of risk | 15.00% | ||
Concentration of risk | 0.00% | ||
Revenue | Customer concentration | B | |||
Concentration Risk [Line Items] | |||
Concentration of risk | 15.00% | ||
Concentration of risk | 0.00% | 0.00% | |
Revenue | Customer concentration | C | |||
Concentration Risk [Line Items] | |||
Concentration of risk | 13.00% | 17.00% | |
Concentration of risk | 0.00% | ||
Revenue | Customer concentration | D | |||
Concentration Risk [Line Items] | |||
Concentration of risk | 16.00% | 12.00% | |
Concentration of risk | 10.00% | ||
Revenue | Customer concentration | E | |||
Concentration Risk [Line Items] | |||
Concentration of risk | 11.00% | 24.00% | |
Concentration of risk | 0.00% | ||
Revenue | Customer concentration | F | |||
Concentration Risk [Line Items] | |||
Concentration of risk | 22.00% | ||
Concentration of risk | 0.00% | ||
Revenue | Customer concentration | G | |||
Concentration Risk [Line Items] | |||
Concentration of risk | 19.00% | ||
Concentration of risk | 0.00% | ||
Accounts Receivable | Customer concentration | |||
Concentration Risk [Line Items] | |||
Concentration of risk | 79.10% | 57.30% |
CONDENSED FINANCIAL INFORMATI_2
CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY (Details) | Oct. 31, 2021 |
Parent Company | |
Condensed Financial Statements, Captions [Line Items] | |
Restricted Investments, Percent of Net Assets | 25.00% |
PRC subsidiary, VIE and VIE's subsidiaries | |
Condensed Financial Statements, Captions [Line Items] | |
Restricted Investments, Percent of Net Assets | 25.00% |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) | Jan. 25, 2022shares | Oct. 31, 2021USD ($)$ / shares | Jan. 31, 2022USD ($) | Jan. 31, 2022CNY (¥) | Dec. 03, 2021shares | Jan. 29, 2021$ / shares | Oct. 31, 2020$ / shares |
Subsequent Event [Line Items] | |||||||
Ordinary shares, par value | $ / shares | $ 0.001 | $ 0.001 | |||||
Gross proceeds | $ | $ 9,886,299 | ||||||
Common Class A [Member] | |||||||
Subsequent Event [Line Items] | |||||||
Ordinary shares, par value | $ / shares | $ 0.001 | $ 0.001 | |||||
Common Class A [Member] | 2021 Performance Incentive Plan | |||||||
Subsequent Event [Line Items] | |||||||
Common stock, capital shares reserved | 5,000,000 | ||||||
Initial Public Offering | Common Class A [Member] | |||||||
Subsequent Event [Line Items] | |||||||
Ordinary shares, par value | $ / shares | $ 0.001 | ||||||
Subsequent event | |||||||
Subsequent Event [Line Items] | |||||||
Short-term Investments | $ 30,000,000 | ¥ 191,954,070 | |||||
Annual interest rate | 2.00% | 2.00% | |||||
Subsequent event | Common Class A [Member] | 2021 Performance Incentive Plan | |||||||
Subsequent Event [Line Items] | |||||||
Common stock, capital shares reserved | 5,000,000 | ||||||
Shares issued to officers and directors | 1,400,000 | ||||||
Subsequent event | Initial Public Offering | Common Class A [Member] | 2021 Performance Incentive Plan | |||||||
Subsequent Event [Line Items] | |||||||
Shares issued | 1,551,000 |