On October ____, 2017,The Company's common stock is thinly traded. The quoted bid and asked prices for the closing bid priceCommon Stock vary significantly from week to week. An investor holding shares of the common stock was $0.30Company's Common Stock may find it difficult to sell the shares and may find it impossible to sell more than a small number of shares at the quoted bid price.

Holders(b) Shareholders

AsOur shareholders list contains the names of October 9, 2017 there were 89111 stockholders of record and an aggregate of5,054,985shares of our common stock were issued and outstanding. Our common shares are issued in registered form. The transfer agent of our company's common stock is Action Stock Transfer Corporation at 2469 E Fort Union Blvd, Suite 214, Salt Lake City, UT 84121.the Company’s Common Stock.

Description of Securities(c) Dividends

The authorized capital stock of our company consists of 100,000,000 of common stock, at $0.0001 par value, and 20,000,000 shares of preferred stock, at $0.0001 par value.

Dividend Policy

We have not paid any cashAny future decisions regarding dividends on our common stock and have no present intention of paying any dividends on the shares of our common stock. Our current policy is to retain earnings, if any, for use in our operations and in the development of our business. Our future dividend policy will be determined from time to timemade by our board of directors. We currently intend to retain and use any future earnings for the development and expansion of our business and do not anticipate paying any cash dividends in the foreseeable future. Our board of directors has complete discretion on whether to pay dividends, subject to the approval of our stockholders. Even if our board of directors decides to pay dividends, the form, frequency and amount will depend upon our future operations and earnings, capital requirements and surplus, general financial condition, contractual restrictions and other factors that the board of directors may deem relevant.

(d) Securities Authorized for Issuance Under Equity Compensation Plan InformationPlans

We do not have in effect any compensation plans under which our equityThe Company had no securities are authorized for issuance and we do not have any outstanding stock options.under equity compensation plans as of July 31, 2023.

Recent Sales(e) Sale of Unregistered Securities

None.The Company did not make any sale of unregistered securities during the 4^th quarter of fiscal year 2023.

(f) Repurchase of Equity Securities

The Company did not repurchase any shares of its common stock during the 4^th quarter of fiscal year 2023.

Purchase of Equity Securities by the Issuer and Affiliated Purchasers

We did not purchase any of our shares of common stock or other securities during our fourth quarter of our fiscal year ended July 31, 2017.

Item 6. Selected Financial Data

As a “smaller reporting company,” we are not required to provide the information required by this Item.

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsOverview

The following discussion should be read in conjunction with our audited financial statements and the related notes that appear elsewhere in this annual report. The following discussion contains forward-looking statements based upon current expectations that involve risks and uncertainties, such as our plans, objectives, expectations and intentions. Actual results and the timing of events could differ materially from those anticipated in these forward-looking statements as a result of a number of factors, including those set forth under the Item 1A. Risk Factors, Cautionary Notice Regarding Forward-Looking Statements and Business sections in this Form 10-K.  We use words such as “anticipate,” “estimate,” “plan,” “project,” “continuing,” “ongoing,” “expect,” “believe,” “intend,” “may,” “will,” “should,” “could,” and similar expressions to identify forward-looking statements.

Our audited financial statements are stated in United States Dollars and are prepared in accordance with United States Generally Accepted Accounting Principles.

Overview

We are currently a “shell company” with no meaningful assets or operations other than our efforts to identify and merge with an operating company.

We were incorporated in the State of Nevada on June 13, 2012. Our current business office is located at No. 45-2, Jalan USJ 21/10, Subang Jaya 47640, Selangor Darul Ehsan, Malaysia. Our telephone number is +6012 503 7322.

We were initially an exploration stage company under the name of Freedom Petroleum Inc. (changed to Steampunk Wizards, Inc., effective on July 2, 2015) that originally intended to engage in the exploration and development of oil and gas properties. In April 2015, after reviewing the markets with investor appetite and management's duties to its shareholders, the Company determined to discontinue its oil and gas operation. We then began exploring opportunities in the computer gaming and application industry.

We engaged in computer game development until October 13, 2016, when control of our company changed pursuant to a share purchase agreement and a spin-off agreement. On October 26, 2016, our corporate name was changed from “Steampunk Wizards, Inc.” to "Tianci International, Inc." The name change was effected on November 27, 2016, pursuant to Nevada Revised Statutes Section 92A.180 in connection with the merger of us into our then subsidiary, Tianci International Inc.

On AugustMarch 3, 2017,2023, Tianci acquired ownership of RQS United Group Limited, a company organized under the laws of the Republic of Seychelles (“RQS United”), pursuant to the Share Exchange Agreement dated March 3, 2023 among the Company, RQS United and RQS Capital Limited, the prior owner of RQS Limited.

RQS United is a holding company incorporated in the Republic of Seychelles. RQS United has no operations other than holding 90% of the outstanding share capital of its subsidiary, Roshing International Co., Ltd., a company organized under the laws of Hong Kong (“Roshing”). Roshing was incorporated on June 22, 2011 and is engaged in the sale of components of electronic devices, development of software and websites, technical consulting, and providing maintenance support on customized software. Roshing started also providing immigration-related consulting services in the most recent quarter. Moving forward, by leveraging the professional experience and market resources of the senior management team, Roshing is expected to provide a wide variety of freight forward services, including sea freight forwarding, air freight forwarding, trucking, warehousing, and custom clearance services. Roshing’s business is primarily carried out in Hong Kong, although we entered intorealize a Stock Purchase Agreement (the “SPA”) with Shifang Wan (the “Seller”),substantial portion of our software development revenue in Singapore.

Results of Operations

Comparison of the record holder of 4,397,837 common shares,year ended July 31, 2023 and 2022

Revenues

During the year ended July 31, 2023, our revenue decreased by $300,430, or approximately 87.00% of40%, to $452,409 for the issuedyear ended July 31, 2023 from $752,839 for the year ended July 31, 2022. We experienced decline in both product and outstanding of Common Stock of the Company, and Chuah Su Chen and Chuah Su Mei (collectively, the “Purchasers”, and together with the Company and the Seller, the “Parties”). Pursuant to the SPA, the Seller sold to the Purchasers and the Purchasers acquired from the Sellers the Shares for a total gross purchase price of Three Hundred Fifty Thousand Dollars ($350,000). The acquisition was consummated on August 15, 2017. The Purchasers used personal funds to acquire the Shares.

Upon the consummation of the sale, Ms. Cuilian Cai resigned from her positions as director, Chief Executive Officer and Chief Financial Officer of the Company. Her resignation was notservice revenues in 2023 due to any dispute or disagreement with the Company on any matter relatingdiminishing market demand and our reduction in marketing expenses. We expect our revenue to the Company's operations, policies or practices. The following individuals were also appointedgrow after we add freight forward services to serve in the positions set forth next to their names below:our lines of business.

Our revenues from our revenue categories are summarized as follows:

Jerry Ooi was appointed

Cost of Revenues

Total cost of revenues decreased by $22,027, or approximately 5%, to serve$456,494 for the year ended July 31, 2023 as compared to $478,521 for the year ended July 31, 2022. Our cost of revenues from our revenue categories are summarized as follows:

The year-to-year decrease in our cost of revenues is primarily attributable to the decrease in our revenue. Thus, our cost of revenues from hardware product sales decreased to $227,660 for the year ended July 31, 2023, from $336,644 for the year ended July 31, 2022, as we experienced a 41% decrease in hardware product sales.

Nevertheless, overall cost of revenue fell only 5%, while overall revenue fell by 40%. The disparity occurred because our cost of revenues from software related services increased by $86,957 to $228,834 for the year ended July 31, 2023, from $141,877 for the year ended July 31, 2022. The increase in cost of revenues from software related services resulted from our grant of common stock as an incentive to our internal software developers. We recorded the $144,000 fair value of the shares as a director effective August 30, 2017.cost of services.

Gross Profit

We arehad a gross loss of $4,085 for the year ended July 31, 2023 compared to a gross profit of $274,318 for the year July 31, 2022, which was primarily due to the reduction in active discussions with an operating business affiliated with our executive officers regarding potential acquisition. There is no assurance that we will be able to successfully acquire such company or any company in the near future.

Limited Operating History; Need for Additional Capital

We have had limited operations and have been issuedrevenue without a "going concern" opinion by our auditor, based upon our reliance on the sale of our common stock and loans from a related party, as the sole source of funds for our future operations.

There is no historical financial information about us upon which to base an evaluation of our performance. We have not generated any revenues from operations. We cannot guarantee we will be successfulcorresponding reduction in our business operations. Our business is subject to risks inherent in the establishmentoverall cost of a new business enterprise, including limited capital resources, possible delays in the launching of our games and market or wider economic downturns. We do not believe we have sufficient funds to operate our business for the next 12 months.

We have no assurance that future financing will be available to us on acceptable terms, or at all. If financing is not available on satisfactory terms, we may be unable to continue, develop or expand our operations. Equity financing could result in additional dilution to existing shareholders.

If we are unable to raise additional capital to maintain our operations in the future, we may be unable to carry out our full business plan or we may be forced to cease operations.

Results of Operations

Our financial statements have been prepared assuming that we will continuerevenues, as a going concern and, accordingly, do not include adjustments relating to the recoverability and realization of assets and classification of liabilities that might be necessary should we be unable to continue in operation. We expect we will require additional capital to meet our long term operating requirements. We expect to raise additional capital through, among other things, the sale of equity or debt securities, but we cannot guarantee that we will be able to achieve same.

We have not yet generated significant revenues and have accumulated deficit of $1,119,659 as of July 31, 2017.discussed above.

The following table provides selected financial data about our company asgross profit margin of hardware products decrease by 9.9% to 22.8% for the year ended July 31, 20172023, from 32.7% for the year ended July 31, 2022, which was primarily due to rising raw material cost and 2016.increasing market competition, which put downward pressure on our pricing. Our software related services resulted in a 45.3 % gross loss for the year ended July 31, 2023, again primarily due to the stock-based compensation issued to our developers.

Balance Sheet Data

Revenue. During the fiscal years ended July 31, 2017, and 2016, we did not generate any revenues.

Operating Expenses. Operating

There was significant change in our total operating expenses, which were $162,151$339,909 and $82,502 for the year ended July 31, 2017, consisting of2023, and 2022, respectively. Our operating expenses primarily include payroll expenses, advertising and rent. The increase was partially due to the stock compensation valued at $66,000 that we issued to the selling and general administrative personnel for their continued service after the reverse merger. The professional fees of $161,443 and officeother costs incurred in connection with the Share Exchange in March 2023 also increased our operating expenses for fiscal year 2023.

Income tax expense

Our income tax expense amounted to $ 12,095 and miscellaneous expenses of $708. Operating expenses were $315,576$ 31,650 for the year ended July 31, 2016, including professional fees of $191,0622023, and office and miscellaneous expenses of $124,514.2022, respectively. The decrease in operating expenseschange was primarily attributablemainly due to the decrease in office and miscellaneous expenses.

Discontinued Operations. Pursuantprofits subject to the Spin-Off Agreement, the Company recorded all expenses from the subsidiarytaxation in Malta as discontinued expenses. Gain (Loss) from discontinued operations for the years ended July 31, 2017 and 2016 was $200,030 and $(367,925), respectively. As a result of this agreement, the Company recognized the gain on sale of investment of $200,528 during the year ended July 31, 2017.Hong Kong.

Liquidity and Capital Resources

Working Capital

In assessing our liquidity, we monitor and analyze our cash on-hand and our operating expenditure commitments. Our liquidity needs are to meet our working capital requirements and operating expenses obligations. As of July 31, 2017, we had2023, our working capital deficit of $9,138 as comparedwas $(284,543), our cash amounted to working$256,342, our current assets were $312,226 and our current liabilities were $596,768. To date, we have financed our operations primarily through capital deficit of $426,981 as ofcontributions and advances from shareholders. At July 31, 2016. The decrease in working capital deficiency was mainly due to the spin-off of the subsidiary, a decrease in accounts payable of $62,542, and a decrease in due2023 we owed $276,077 to related parties (See Note 3 of $131,824 during the year ended July 31, 2017.interim financial statement) and $240,800 to officers for compensation under their employment agreements.

Cash Flows

Cash Flow from Operating ActivitiesWe believe our liquidity and working capital will be sufficient to sustain our business operation for the next twelve months. We may, however, need additional cash resources in the future if there are changes in business conditions or other developments or if the company finds and wishes to pursue opportunities for investment, acquisition, capital expenditure, or similar actions.

DuringWe are planning to enter the year ended July 31, 2017, netshipping & freight forwarding services in 2023, which may require significant capital expenditure for developing the business. If we determined that our cash usedrequirements exceed the amount of cash and cash equivalents we have on hand at the time, we may seek to issue equity or debt securities or obtain credit facilities. The issuance and sale of additional equity may result in continueddilution to our shareholders. The incurrence of indebtedness would result in increased fixed obligations and could result in operating activities was $224,693, comparedcovenants that would restrict our operations. Our obligation to $190,230bear credit risk for certain financing transactions we facilitate may also strain our operating cash flow. We cannot assure you that financing will be available in amounts or on terms acceptable to us, if at all.

The following summarizes the key components of our cash flows for the year ended July 31, 2016. The increase in cash used in continued operating activities was mainly due to the decrease in accounts payable2023 and the decrease in net loss during the year ended July 31, 2017.2022.

During the period ended July 31, 2017, cash used in discontinued operating activities was $0 compared to cash used in discontinued operating activities of $350,017 during the period ended July 31, 2016.

Cash Flow from Investing Activities

During the year ended July 31, 2017, net cash provided by investing activities was $2,000, all of which was attributable to continued investing activities. For the same period ended July 31, 2016, net cash used in investing activities was $10,151, all of which was used to purchase equipment and was related to discontinued investing activities.

Cash Flow from Financing ActivitiesOperating activities

DuringDespite our net loss of $356,089, net cash was provided by operating activities for the year ended July 31, 2017, continued financing activities provided net cash2023 primarily because our accounts receivable decreased by $737,663 during the period, as we made efforts on the collection process. The decrease was offset by a decrease of $225,053, consisting$447,292 in our accounts payable balance attributable to payment to our vendors. In addition, our operating loss of the proceeds of $118,640 from related parties and $106,413 from the issuance of common stock for cash.$356,089 included $210,000 in various noncash items.

DuringNet cash was used in operating activities for the year ended July 31, 2016,2022 primarily because our accounts receivable increased by $737,620 during the year, as we offer long payment terms to our customers, typically 6 months after delivery of service or products. Nevertheless, cash used in operations during the fiscal year was only $84,161, as we increased our accounts payable balance by $444,944 attributable to long payment terms from our vendors, recorded net income of $160,166, and increased deferred income tax expense, inventory, and income taxes payable for a total amount of $ 48,349.

Investing activities

The company has no investing activities for the years ended July 31, 2023 and 2022.

Financing activities

Net cash used in financing activities for the year ended July 31, 2023 was $89,476, which was primarily attributable to our repayment of a working capital advance by a related party in the amount of $341,885. Cash outflow was offset by the $31,490 in working capital advance from related parties, $84,503 in operating expenses that were paid directly by shareholders, the payments of Shenzhen China rent by related parties amounting to $16,580, the receipt of a subscription receivable of $50,000, and a capital contribution of $65,650.

Net cash provided net cash of $553,494, of which $398,695 was from continuedby financing activities for the year ended July 31, 2022, was primarily attributable to a working capital advance from a related party amounting to $2,007, the operating expenses that are paid directly by shareholders amounting to $77,375, and $154,799 from discontinued financing operations. Net cash from continued financing activities consistedthe payments of $440,579 from the issuance of 613,593 shares of common stock, a loan from the former CEO of $16,822, and aShenzhen China rent by related parities amounting to $20,046. Cash inflow was offset by repayment of $57,917a working capital advance to related party in the amount of $14,280.  

Impact of the COVID-19 Pandemic

The global outbreak of COVID-19 and resulting health crisis has caused, and continues to cause, significant and widespread disruptions to the former CEO.Hong Kong and global economies, financial and consumer markets. We believe, however, that the COVID-19 outbreak has had very limited impact on our business.

During the course of the COVID-19 pandemic, public health officials and other governmental authorities have imposed and may impose new mitigation measures, regulations and requirements to address the spread of COVID-19. Public health officials and other governmental authorities also have imposed directives and may impose additional directives that could require changes in our business practices. The scope and duration of these mitigation measures and directives continue to evolve throughout the course of the COVID-19 pandemic. Depending on the future course of COVID-19 and further outbreaks, we may experience restrictions and temporary closures of our offices.

Off-Balance Sheet Arrangements

Although we have continued to serve our clients and operate our business throughout the COVID-19 pandemic, there can be no assurance that future events will not have an effect on our business, results of operations or financial condition because the extent and duration of the health crisis remains uncertain. Future adverse developments in connection with the COVID-19 crisis, including further outbreaks and new strains or variants of COVID-19, evolving international, federal, state and local restrictions and safety regulations in response to COVID-19, changes in consumer behavior and health concerns, the pace of economic activity in the wake of COVID-19, or other similar issues could adversely affect our business, results of operations or financial condition in the future, or our financial results and business performance in future periods.

We do notcontinue to actively manage the impact of the COVID-19 crisis as we face continued uncertainty regarding the impact COVID-19 will have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changesoperations in financial condition, revenuesthe near and long term. The need for, or expenses, resultstiming of, operations, liquidity, capital expenditures, or capital resources thatany future actions in response to COVID-19 is material to investors.largely dependent on the mitigation of the spread of the virus along with the adoption and continued effectiveness of vaccines, status of government orders, directives and guidelines, recovery of the business environment, global supply chain conditions, economic conditions, and consumer demand for our products and services, all of which are highly uncertain.

Critical Accounting PoliciesEstimates

Our financial statements and accompanying notes have been prepared in accordance with U.S. GAAP. The preparation of these financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”)and accompanying notes requires us to make estimates and assumptionsjudgments that affect the reported amounts of assets, and liabilities, revenues and expenses, and related disclosuresdisclosure of contingent assets and liabilities. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis of making judgments about the carrying values of assets and liabilities inthat are not readily apparent from other sources.

In connection with the consolidatedpreparation of our financial statements for the year ended July 31, 2023, there was no accounting estimate we made that was subject to a high degree of uncertainty and accompanying notes. was critical to our results.

Recently Issued Accounting Pronouncements

The SEC has defined a company’s criticalCompany considers the applicability and impact of all accounting policies as the onesstandards updates (“ASUs”). Management periodically reviews new accounting standards that are most important toissued. The Company does not believe that any recently issued but not yet effective accounting standards, if currently adopted, would have a material effect on the portrayal of the company’s financial condition and resultsCompany’s consolidated balance sheets, statements of operations and which require the company to make its most difficultcomprehensive income and subjective judgments, often as a resultstatements of the need to make estimates of matters that are inherently uncertain. Based on this definition, we have not identified any additional critical accounting policies and judgments. We also have other key accounting policies, which involve the use of estimates, judgments and assumptions that are significant to understanding our results, which are described in note 2 to our financial statements. Although we believe that our estimates, assumptions and judgments are reasonable, they are based upon information presently available. Actual results may differ significantly from these estimates under different assumptions, judgments or conditions.cash flows.

Going Concern

The financial statements have been prepared on a going concern basis which assumes the Company will be able to realize its assets and discharge its liabilities in the normal course of business for the foreseeable future. As at July 31, 2017, the Company has working capital deficiency of $9,138 and has incurred losses since inception resulting in an accumulated deficit of $1,119,659. Further losses are anticipated in the development of the business, raising substantial doubt about the Company’s ability to continue as a going concern. The consolidated financial statements do not include any adjustment that might result from the outcome of this uncertainty.

The ability to continue as a going concern is dependent upon the Company generating profitable operations in the future and/or to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due. Management intends to finance operating costs over the next twelve months with loans from directors and/or private placements of common stock.

Item 7A.7a Quantitative andAnd Qualitative Disclosures About Market RiskRisk.

As a “smaller reporting company”, we are not required to provide the information required by this Item.Not Applicable.

Item 8. Financial Statements

INDEX TO FINANCIAL STATEMENTS

Item 8. Financial Statements and Supplementary Data

TIANCI INTERNATIONAL, INC.

AUDITED FINANCIAL STATEMENTS

TABLE OF CONTENTS

Audit • Tax • Consulting •  Financial Advisory Registered with Public Company Accounting Oversight Board (PCAOB)

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To Shareholdersthe Board of Directors and BoardsStockholders of Directors

Tianci International, Inc.

Selangor Darul Ehsan, Malaysia

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheetsheets of Tianci International, Inc., (the “Company”) as of July 31, 2017,2023 and July 31, 2022 and the related consolidated statements of operations, and comprehensive (income) loss,changes in stockholders’ equity, (deficit), and cash flows for the yearyears then ended. ended, and the related notes (collectively referred to as the “financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of Tianci International, Inc. as of July 31, 2023 and July 31, 2022, and the results of its operations and cash flows for the years then ended in conformity with accounting principles generally accepted in the United States.

Explanatory Paragraph Regarding Going Concern

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the consolidated financial statements, the Company’s management is responsiblepresent financial situation raises substantial doubt about its ability to continue as a going concern. Management’s plans in regard do this matter are also described in 1. These financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Basis for theseOpinion

These financial statements.statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on thesethe Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our auditaudits in accordance with the standards of the Public Company Accounting Oversight Board (United States).PCAOB. Those standards require that we plan and perform the auditaudits to obtain reasonable assurance about whether the financial statements are free of material misstatement.misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included considerationAs part of our audits we are required to obtain an understanding of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence supportingregarding the amounts and disclosures in the financial statements, assessing accounting principles used and significant estimates made by management, as well asstatements. Our audits also included evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Tianci International, Inc. as of July 31, 2017, and the results of its operations and other comprehensive (income) loss, and cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming that Tianci International, Inc. will continue as a going concern. As discussed in Note 3 to the financial statements, the Company has incurred losses from operations, has a working capital deficit and is in need of additional capital to grow its operations so that it can become profitable. These factors raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans with regard to these matters are described in Note 3. The accompanying financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/ KCCW Accountancy Corp.

KCCW Accountancy Corp.

Diamond Bar, California

October 5, 2017

KCCW Accountancy Corp.

3333 S Brea Canyon Rd. #206, Diamond Bar, CA 91765, USA

Tel: +1 909 348 7228 • Fax: +1 909 895 4155 • info@kccwcpa.com

Report of Independent Registered Public Accounting Firm

Board of Directors and Stockholders of

Tianci International, Inc.

(formerly known as Steampunk Wizards, Inc.).

We have audited, before the effects of the adjustments to retroactively apply the impact of the reverse stock split described in Note 6, the accompanying consolidated balance sheet of Tianci International, Inc. (formerly known as Steampunk Wizards, Inc.), (the “Company”), as of July 31, 2016 and the related consolidated statements of operations and comprehensive loss, statement of stockholders’ deficit and statement of cash flows for the year ended July 31, 2016 (the 2016 financial statements before the effects of the adjustments in Note 6 are not presented herein). These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statement presentation.statements. We believe that our audit providesaudits provide a reasonable basis for our opinion.

In our opinion,Critical Audit Matters

Critical audit matters are matters arising from the consolidatedcurrent period audit of the financial statements referredthat were communicated or required to above, beforebe communicated to the effects ofaudit committee and that (1) relate to accounts or disclosures that are material to the adjustments to retroactively apply the impact of the reverse stock split described in Note 6, present fairly, in all material respects, the consolidated financial position of Tianci International, Inc. (formerly known as Steampunk Wizards, Inc.) as of July 31, 2016 and the results of operations and comprehensive loss and cash flows for the year ended July 31, 2016, in conformity with accounting principles generally accepted in the United States of America.

The accompanying consolidated financial statements have been prepared assumingand (2) involved our especially challenging, subjective, or complex judgments. We determined that the Company will continue as a going concern. As discussed in Note 3 to the accompanying consolidated financial statements, the Company has an accumulated deficit and working capital deficiency as of July 31, 2016. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 3. The consolidated financial statements do not include any adjustments relating to the recoverability and classification of asset carrying amounts or the amount and classification of liabilities that might result should the Company be unable to continue as a going concern.

Wethere were not engaged tono critical audit review or apply any procedures to the adjustments to retroactively apply the change in accounting described in Note 6, and accordingly, we do not express an opinion or any other form of assurance about whether such adjustments are appropriate and have been properly applied. Those adjustments were audited by KCCW Certified Public Accountants.matters.

/s/ RBSM LLPMichael T. Studer CPA P.C.

RBSM LLP

Henderson Nevada

January 12, 2017Michael T. Studer CPA P.C.

Freeport, New York

October 20, 2023

PCAOB ID #822

We have served as the Company’s auditor since 2023.

TIANCI INTERNATIONAL, INC.

CONSOLIDATED BALANCE SHEETS

The accompanying notes are an integral part of these consolidated financial statements

TIANCI INTERNATIONAL, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)BALANCE SHEETS

(EXPRESSED IN UNITED STATES DOLLARS)

The accompanying notes are an integral part of these consolidated financial statements

TIANCI INTERNATIONAL, INC.

CONSOLIDATED STATEMENT OF STOCKHOLDERS’ DEFICIT

FOR THE YEARS ENDED JULY 31, 2017 AND 2016

The accompanying notes are an integral part of these consolidated financial statements.

TIANCI INTERNATIONAL, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWSOPERATIONS

(EXPRESSED IN UNITED STATES DOLLARS)

The accompanying notes are an integral part of these consolidated financial statements.

TIANCI INTERNATIONAL, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

FOR THE YEARS ENDED JULY 31, 2023 AND 2022

(EXPRESSED IN UNITED STATES DOLLARS)

The accompanying notes are an integral part of these consolidated financial statements.

TIANCI INTERNATIONAL, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(EXPRESSED IN UNITED STATES DOLLARS)

The accompanying notes are an integral part of these consolidated financial statements.

TIANCI INTERNATIONAL, INC.

NOTES TO AUDITED FINANCIAL STATEMENTSNotes To Consolidated Financial Statements

JULYFor the years ended July 31, 2017 AND 20162023 and 2022

NOTE 1 – GENERALNATURE OF BUSINESS AND ORGANIZATION AND BUSINESS

Tianci International, Inc. (“the Company”(the “Company”, “Tianci”) was incorporated under the laws of the State of Nevada U.S. as Freedom Petroleum, Inc. on June 13, 2012. In May 2015, the Company changed its name to Steampunk Wizards, Inc. and on November 9, 2016, the Company changed its name to Tianci International, Inc. The Company is a holding company. As of July 31, 2023, the Company had one operating subsidiary, Roshing International Co., Ltd. (“Roshing”). The Company owns 90% of the capital stock of Roshing through RQS United, a wholly-owned subsidiary. The Company’s fiscal year end is July 31.

On February 13, 2023, the Company incorporated a wholly owned subsidiary Tianci Group Holding Limited in the Republic of Seychelles.

Share Exchange and RecapitalizationReorganization

2015 Share Exchange

On July 16, 2015,March 3, 2023 the Company entered into a share exchange agreementShare Exchange Agreement with RQS United Group Limited (“RQS United”) and RQS Capital Limited (“RQS Capital”), which was the sole shareholder of RQS United (the “Exchange Agreement”). RQS United owns 90% of the equity in Roshing International Co., Ltd. (“Roshing”), which was consummated on August 21, 2015, with Steampunk Wizards Ltd., a company incorporated pursuant tois engaged in the lawsbusiness of Malta (“Malta Co.”), the Company’s sole officerdistributing electronic components and director (the “Officer”), being the owner of record of 11,451,541 common shares (before Reverse Stock Split transaction, See Note 6) of the Company and the persons (the “Shareholders”), being the owners of record of all of the issued share capital of Malta Co. (the “Steampunk Stock”) as of July 15, 2015.providing software services. Pursuant to the Exchange Agreement, upon surrender by the Shareholders and the cancellation by Malta Co. of the certificates evidencing the Steampunk Stock as registered in the name of each Shareholder, and pursuant to the registration of the Company in the register of members maintained by Malta Co. as the new holder of the Steampunk Stock and the issuance of the certificates evidencing the aforementioned registration of the Steampunk Stock in the name of the Company, the Company would issue 4,812,209 shares (before Reverse Stock Split transaction, See Note 6) , (the “New Shares”), of the Company’s common stock to the Shareholders (or their designees), and the Officer would cause 10,096,229 shares (before Reverse Stock Split transaction, See Note 6) of the Company’s common stock that he owns (the “Officer Stock,” together with the New Shares, the “Acquisition Stock”) to beon March 6, 2023 RQS Capital transferred to the Shareholders (or their designees), which collectively should represent 55% of the issued and outstanding common stock of the Company immediately after the closing, in exchange for the Steampunk Stock, representing 100% of the issued share capital of Malta Co. As a result of the exchange of the Steampunk Stock for the Acquisition Stock (the “Share Exchange”), Malta Co. would become a wholly owned subsidiary (the “Subsidiary”) of the Company and there would be a change of control of the Company following the closing. There were no warrants, options or other equity instruments issued in connection with the Exchange Agreement.

For financial accounting purposes, the Share Exchange is accounted for as a reverse acquisition by the Malta Co., and resulted in a recapitalization, with Malta Co. being the accounting acquirer and the Company as the acquired entity. The closing of Share Exchange resulted in a change of control. Accordingly, the historical financial statements prior to the acquisition are those of the accounting acquirer, Malta Co., and have been prepared to give retroactive effect to the reverse acquisition completed on August 21, 2015, and represent the operations of Malta Co. The consolidated financial statements after the acquisition date include the balance sheets of both companies at historical cost, the historical results of Malta Co. and the results of the Company from the acquisition date. All share and per share information in the accompanying consolidated financial statements and footnotes has been retroactively restated to reflect the recapitalization.

Incorporated in 2014, Malta Co. was a games development and technology company specialized in developing enchanting games and gaming technology where the real and virtual worlds blur.

2016 Securities Sale and Spin-Off

On October 13, 2016, the Company entered into a spin-off agreement (the “Spin-Off Agreement”) with Steampunk Wizards Ltd., the Company’s wholly owned subsidiary and a company incorporated pursuant to the laws of Malta (“Steampunk”), and Praefidi Holdings Limited (the “Buyer”), an entity organized under the laws of Malta and owned by Brendon Grunewald, former director of the Company. Pursuant to the Spin-Off Agreement, the Buyer shall receive all of the issued and outstanding capital stock of SteampunkRQS United to the Company, and the Company issued to RQS Capital 1,500,000 shares of our common stock and paid a cash price of $350,000 (the “Share Exchange”). Pursuant to the Exchange Agreement, the Company also issued a total of 700,000 shares of our common stock to nine employees or affiliates of Roshing to induce continued services to Roshing.

As a result of the Share Exchange, RQS United became our wholly-owned subsidiary and the former RQS United stockholder became our controlling stockholder. The share exchange transaction was treated as a reverse acquisition, with RQS United as the acquirer and the Company shall receive $2,000 as purchase price. The Buyer shall become the sole equity owneracquired party for accounting purposes. Unless the context suggests otherwise, when we refer in this report to business and financial information for periods prior to the consummation of the Steampunkreverse acquisition, we are referring to the business and financial information of RQS United and its consolidated subsidiary, Roshing.

RQS United is a holding company incorporated on November 4, 2022 in the Republic of Seychelles. RQS United has no substantive operations other than holding 90% of the outstanding share capital of its subsidiary, Roshing, which was incorporated on June 22, 2011 in Hong Kong and is principally engaged in sales of electronic device hardware components, development of software and websites, technical consulting, and maintenance support on customized software. Roshing’s business is primarily carried out in Hong Kong and China.

Prior to the Share Exchange, the Company shall have no further interestwas a shell company as defined in Steampunk.

On October 26, 2016,Rule 12b-2 under the Exchange Act. As a result of the transactions under the Exchange Agreement, the Company entered into an Agreementceased to be a shell company.

Going Concern Uncertainty

The accompanying consolidated Financial Statements have been prepared applicable to a going concern which contemplates the realization of assets and Planliquidation of Merger with its wholly-owned subsidiary, Tianci International, Inc., a newly formed Nevada Corporation ("Merger Sub"), formed on November 09, 2016, with Merger Sub being the surviving entity. The transaction contemplatedliabilities in the Merger Agreement (“Merger”) which became effective on November 9, 2016.normal course of business. As of July 31, 2023, the Company had cash of $256,342 and negative working capital of $284,542. For the years ended July 31, 2023 and 2022, the Company had total operating revenues of $452,409 and $752,839, respectively, and net income (loss) of $(356,089) and $160,166, respectively. These factors among others raise substantial doubt about the ability of the Company to continue as a going concern for a reasonable period of time. Management plans to seek debt and/or equity financing to operate until such time as the Company has established sufficient ongoing revenues to cover its costs. However, there is no assurance that management will be successful in accomplishing its plans. These financial statements do not include any adjustments relating to the recoverability and classification of assets or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

On January 4, 2017,TIANCI INTERNATIONAL, INC.

Notes To Consolidated Financial Statements

For the Company issued 19,532,820 shares (before Reverse Stock Split transaction, See Note 6) of our common stock to certain purchasers in accordance with the termsyears ended July 31, 2023 and conditions of a Securities Purchase Agreement (the “Private Placement SPA”), at price of $0.005 per share for an aggregate purchase price of $98,104. The shares sold in the private placement were issued in reliance on an exemption from registration under the Securities Act of 1933, as amended, pursuant to Section 4(2) thereof. The proceeds were used for working capital purposes.2022

2017 Securities Sale and Change in Control

On August 3, 2017, Tianci, ShiFang Wan (“SFW”), Chuah Su Mei, and the Chuah Su Chen executed a Stock Purchase Agreement (the “Stock Purchase Agreement”), pursuant to which SFW sold to Chuah Su Chen and Chuah Su Mei an aggregate of 4,397,837 shares of Common Stock, or approximately 87% of the issued and outstanding Common Stock, at a purchase price of $350,000. The acquisition consummated on August 15, 2017, and 2,000,000 shares of the Company’s common stock were purchased by Chuah Su Chen using her own personal funds. Upon consummation, the sole executive officer and director of Tianci resigned from all of her positions with Tianci, and Chuah Su Mei, Chuah Su Chen and Yeow Yuen Kai were appointed to serve in as executive officers and directors of the Corporation.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING PRACTICESPOLICIES

Basis of Presentation

The accompanying consolidated financial statements and related disclosures have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). 

Principles of consolidation

The Financial Statementsconsolidated financial statements include the financial statements of Tianci and its subsidiaries. All transactions and balances among the Company and its subsidiaries have been prepared using the accrual basis of accounting in accordance with Generally Accepted Accounting Principles (“GAAP”) of the United States and are presented in U.S. dollars.eliminated upon consolidation.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted accounting principles ofin the United States of America 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 statementsstatements. The estimates and judgments will also affect the reported amounts offor certain revenues and expenses during the year. The more significant areas requiring the use of estimates include asset impairment and future income tax amounts. Management bases its estimates on historical experience and on other assumptions considered to be reasonable under the circumstances. However, actualreporting periods. Actual results maycould differ from the estimates.

Basis of Consolidationthese good faith estimates and judgments.

Through the date of the Spin-off Agreement on October 13, 2016, these financial statements include the accounts of the CompanyForeign currency translation and its subsidiary, Steampunk Wizards Ltd. All material intercompany balances and transactions have been eliminated.

The Company uses the U.S. dollar as its reporting currency and functional currency. Transaction gains and losses are recognized in the consolidated statement of operations.

Cash and Cash Equivalents

Cash and cash equivalents include cash in hand and cash in timeconsist primarily of bank deposits certificates of deposit and all highly liquid debt instruments with original maturities of three months or less.less, which are unrestricted as to withdrawal and use. The Company had $2,360maintains its bank accounts in United States and $0 in cashHong Kong.

Accounts receivable, net

Accounts receivable include trade accounts due from customers which are generally collected within six months. In establishing the allowance for doubtful accounts, management considers historical collection experience, aging of the receivables, the economic environment, industry trend analysis, and cash equivalents atthe credit history and financial condition of the customer. Management reviews its receivables on a regular basis to determine if the allowance for doubtful accounts is adequate, and adjusts the allowance when necessary. Delinquent account balances are written-off against the allowance for doubtful accounts after management has determined that the likelihood of collection is not probable. As of July 31, 20172023 and 2022, no allowance for doubtful accounts was deemed necessary.

TIANCI INTERNATIONAL, INC.

Notes To Consolidated Financial Statements

For the years ended July 31, 2016, respectively.2023 and 2022

Fair Value Measurements

The accounting standard regarding fair value of financial instruments and related fair value measurements defines financial instruments and requires disclosure of the fair value of financial instruments held by the Company.

The accounting standard defines fair value, establishes as a three-level valuation hierarchy for disclosures of fair value measurement and enhances disclosure requirements for fair value measures. The three levels are defined as follow:

Financial Instrumentsinstruments included in current assets and current liabilities (such as cash, accounts receivable, due from related party accounts payable, and due to related parties) are reported in the consolidated balance sheets at cost, which approximates fair value because of the short period of time between the origination of such instruments and their expected realization.

Revenue recognition

The Company follows ASC 820, "Fair Value Measurements and Disclosures", which defines fair value as the exchange priceFinancial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 606. This standard requires the use of a five-step model to recognize revenue from customer contracts. The five-step model requires that would be received for an asset or paid to transfer a liability (an exit price)the Company (i) identifies the contract with the customer, (ii) identifies the performance obligations in the principal or most advantageous market forcontract, (iii) determines the asset or liability in an orderly transaction between market participants onprice, including variable consideration to the measurement date. ASC 820 also establishesextent that it is probable that a fair value hierarchy that distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) an entity's own assumptions about market participant assumptions developed based onsignificant future reversal will not occur, (iv) allocates the best information availabletransaction price to the respective performance obligations in the circumstances (unobservable inputs). contract, and (v) recognizes revenue when (or as) the Company satisfies the performance obligations.

The fair value hierarchy consistsCompany records revenue net of three broad levels,sales taxes which givesare subsequently remitted to governmental authorities and are excluded from the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3).transaction price.

The Company’s revenue recognition policies are as follows:

TIANCI INTERNATIONAL, INC.

Notes To Consolidated Financial Statements

For the years ended July 31, 2023 and 2022

The three levels of the fair value hierarchy are described below:

Level 1

Level 1 – Inputs are quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date. Valuation of these instruments does not require a high degree of judgment as the valuations are based on quoted prices in active markets that are readily and regularly available.

Level 2

Level 2 applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data.

Level 3

Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities.

The Company's financial instruments consist of cash, and accounts payable and accrued liabilities.  The carrying amounts of these financial instruments approximate fair value due to either length of maturity or interest rates that approximate prevailing rates unless otherwise disclosed in these financial statements.

Revenue Recognitiona. Electronic Device Hardware Components Products Sales

The Company is a distributor of electronic device hardware components and generates revenue through resale of these components. The Company’s products include high performance computer chips, Wi-Fi modules, Bluetooth modules, 4G network modules, LED screens, and touch screens. In accordance with ASC 606, Revenue Recognition: Principal Agent Consideration, an entity is a principal if it controls the specified good or service before that good or service is transferred to a customer. Otherwise, the entity is an agent in the transaction. The Company evaluates three indicators of control in accordance with ASC 606: 1) For hardware sales, the Company is the most visible entity to customers and assumes fulfillment risk and risks related to the acceptability of products, including addressing customer complaints directly and handling of product returns or refunds directly. 2) The Company is exposed to inventory risk before transfer of control to customers 3) The Company determines the resale price of hardware products. After evaluating the above circumstances, the Company considers itself the principal of these arrangements and records hardware sales revenue on a gross basis.

Hardware sales contracts are on a fixed price basis with no separate sales rebate, discount, or other incentive. Revenue is recognized at a point in time when the Company has yetdelivered products that have been accepted by its customer with no future obligations. The Company generally permits returns of products due to realizeproduct failure; however, returns are historically insignificant.

b. Software and Website Development Services

The Company generates revenue by developing customized freight shipping and related logistic software and websites, which are generally on a fixed-priced basis. The software helps wholesalers, ecommerce retailers, and freight shipping providers to manage complex workflows and improve work efficiency. The Company generally has no enforceable right to payment for performance completed to date and is only entitled to payment after software is fully developed, delivered, tested, and accepted by the customer. As a result, revenues from operations. software development contracts are recognized at a point in time when services are fully rendered, and written acceptances have been received from customers.

c. Technical Consulting and Training Services

The Company will recognize revenueprovides technical consulting and training services to help customers, generally its existing customers, to better understand and properly use its customized software and related hardware. Services are generally carried out on a per-time fixed rate basis. Revenue is recognized at a point in time when delivery of goods or completion of services has occurred provided thereservice is persuasive evidence of an agreement, acceptance has been approved by its customers,rendered and the fee is fixed or determinable based oncustomer confirms the completion of stated terms and conditions, and collection of any related receivable is reasonably assured.consulting or training.

Property, Plantd. Software Maintenance and EquipmentBusiness Promotion Services

Property, plantThe Company provides software maintenance service to keep customer’s software up to date and equipment are carried at cost less accumulated depreciation and accumulated impairment. Cost includes all direct costs necessary to acquire and prepare assetsassists customers in promoting business with ongoing marketing support. The Company charges a flat rate for use, including internal labor and overhead in some cases. Depreciationa fixed duration on a subscription basis, generally 12 months. Revenue is calculated onrecognized ratably each month over the straight-line basis so as to write off the cost of each asset to its residual value over its estimated useful economic life. Costs of repairs and maintenance are expensed when incurred, while expenditures for refurbishments and improvements that significantly add to the productive capacity or extend the useful life of an asset are capitalized. When assets are retired or sold, the asset cost and related accumulated depreciation are eliminated with any remaining gain or loss recognized in net earnings.contract period.

Impairment of Long-lived Assets

Long-lived assets such as property, equipment and identifiable intangibles are reviewed for impairment whenever facts and circumstances indicate that the carrying value may not be recoverable. When required impairment losses on assets to be held and used are recognized based on the fair value of the asset. The fair value is determined based on estimates of future cash flows, market value of similar assets, if available, or independent appraisals, if required.  If the carrying amount of the long-lived asset is not recoverable from its undiscounted cash flows, an impairment loss is recognized for the difference between the carrying amount and fair value of the asset.  When fair values are not available, the Company estimates fair value using the expected future cash flows discounted at a rate commensurate with the risk associated with the recovery of the assets.

Income Taxes

TIANCI INTERNATIONAL, INC.

Notes To Consolidated Financial Statements

For the years ended July 31, 2023 and 2022

e. Business Consulting Services

The Company provides business consulting services to help customers apply for immigration and non-immigration visas. The Company is responsible for performing background checks, case analysis, and preparing related application paper works. The Company charges a flat fee for the visa application services. Revenue is recognized at a point in time when an application is submitted with proper authorities.

Cost of revenues

For hardware products sales, the cost of revenue consists primarily of the costs of hardware products sold.

For software related services, the cost of revenue consists primarily of costs paid to outsourced service providers and compensation expenses paid the Company’s software engineers.

Advertising costs

Advertising costs amounted to $192 and $192 for the year ended July 31, 2023 and 2022, respectively. Advertising costs are expensed as incurred and included in selling and marketing expenses.

Operating leases

Effective August 1, 2022, the Company adopted FASB ASU 2016-02, “Leases” (Topic 842), and elected the practical expedients that does not require the Company to reassess: (1) whether any expired or existing contracts are, or contain, leases, (2) lease classification for any expired or existing leases and (3) initial direct costs for any expired or existing leases. For lease terms of twelve months or less, a lessee is permitted to make an accounting policy election not to recognize lease assets and liabilities. The Company also adopted the practical expedient that allows lessees to treat the lease and non-lease components of a lease as a single lease component. Upon adoption of ASU 2016-02 effective August 1, 2022, the Company recognized a $8,704 right of use (“ROU”) asset and operating lease liabilities in January 2023 based on the present value of the future minimum rental payments of leases, using an incremental borrowing rate of 5%.

The Company determines if a contract contains a lease at inception. US GAAP requires that the Company’s leases be evaluated and classified as operating or finance leases for financial reporting purposes. The classification evaluation begins at the commencement date and the lease term used in the evaluation includes the non-cancellable period for which the Company has the right to use the underlying asset, together with renewal option periods when the exercise of the renewal option is reasonably certain and failure to exercise such option would result in an economic penalty. All of the Company’s real estate leases are classified as operating leases.

Lease payments for an operating lease transitioning to ASC 842 using the effective date are based on future payments at the transition date and on the present value of lease payments over the remaining lease term. Since the implicit rate for the Company’s leases is not readily determinable, the Company uses its incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments. The incremental borrowing rate is the rate of interest that the Company would have to pay to borrow, on a collateralized basis, an amount equal to the lease payments, in a similar economic environment and over a similar term.

TIANCI INTERNATIONAL, INC.

Notes To Consolidated Financial Statements

For the years ended July 31, 2023 and 2022

Lease terms used to calculate the present value of lease payments generally do not include any options to extend, renew, or terminate the lease, as the Company does not have reasonable certainty at lease inception that these options will be exercised. The Company generally considers the economic life of its operating lease ROU assets to be comparable to the useful life of similar owned assets. The Company has elected the short-term lease exception; therefore, operating lease ROU assets and liabilities do not include leases with a lease term of twelve months or less. Lease expense is recognized on a straight-line basis over the lease term.

The Company reviews the impairment of its ROU assets consistent with the approach applied for its other long-lived assets. The Company reviews the recoverability of its long-lived assets when events or changes in circumstances occur that indicate that the carrying value of the asset may not be recoverable. The assessment of possible impairment is based on its ability to recover the carrying value of the asset from the expected undiscounted future pre-tax cash flows of the related operations.

Income taxes

The Company accounts for current income taxes in accordance with the laws of the relevant tax authorities. The charge for taxation is based on the results for the fiscal year as adjusted for items which are non-taxable or non-deductible. It is calculated using tax rates that have been enacted or substantively enacted by the balance sheet date.

Deferred taxes are accounted for underusing the asset and liability method. Deferredmethod in respect of temporary differences arising from differences between the carrying amount of assets and liabilities in the unaudited interim consolidated financial statements and the corresponding tax assets andbases used in the computation of taxable income (loss). In principle, deferred tax liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry forwards.all taxable temporary differences. Deferred tax assets and liabilities are measuredrecognized to the extent that it is probable that taxable profit will be available against which deductible temporary differences can be utilized. Deferred tax is calculated using enacted tax rates that are expected to apply to taxable incomethe period when the asset is realized or the liability is settled. Deferred tax is charged or credited in the yearsstatements of operations, except when it is related to items credited or charged directly to equity, in which those temporary differences are expected to be recovered or settled. The effect oncase the deferred tax is dealt with in equity. Net deferred tax assets and liabilities ofare reduced by a change in tax rates is recognized in incomevaluation allowance when, in the period that includes the enactment date. A valuation allowance is recognized ifopinion of management, it is more likely than not that some portion or all of athe net deferred tax asset will not be realized. There were