UNITED STATESU. S. Securities and Exchange Commission
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DCWashington, D. C. 20549
FORM 10-Q
☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED JANUARY 31, 2018
☐ TRANSITION REPORT PURSUANT TOUNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number 333-184061For the quarterly period ended October 31, 2023
TIANCI INTERNATIONAL, INC.☐ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
(Exact Name of Registrant as Specified in Its Charter)
For the transition period from _____ to _____
Commission File No. 333-184061
| TIANCI INTERNATIONAL, INC. | |||
| (Exact Name of Registrant in its Charter) | |||
| Nevada | 45-5440446 | ||
| (State or Other Jurisdiction of incorporation or organization) | (I.R.S. Employer I.D. No.) | ||
Unit B,10/F., Ritz Plaza, No.122 Austin Road, Tsim Sha Tsui, Kowloon, Hong Kong | |||
(Address of Principal Executive Offices) 00000 | |||
| Issuer’s Telephone Number: 852-22510781 | |||
| (Registrant's telephone number, including area code) | |||
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
| None |
No. 45-2, Jalan USJ 21/10
Subang Jaya 47640
Selangor Darul Ehsan, Malaysia
+6012 503 7322(Address of Principal Executive Offices and Issuer’sTelephone Number, including Area Code)
Indicate by check mark whether the registrant:Registrant (1) has filed all reports required to be filed by SectionSections 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrantRegistrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YesS☒ No ☐
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 229.405232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). files.) YesS☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging"emerging growth company”company" in Rule 12b-2 of the Exchange Act. (Check one):One)
Large accelerated filer ☐ Accelerated filer ☐Non-accelerated filer☒ Smaller reporting company ☒ Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes S☐No ☐ ☒
AsAPPLICABLE ONLY TO CORPORATE ISSUERS: Indicate the number of March 15, 2018,shares outstanding of each of the issuer had outstanding 5,054,985 sharesRegistrant's classes of common stock.stock, as of the latest practicable date:
December 14, 2023
Common Voting Stock:
TIANCI INTERNATIONAL, INC.
QUARTERLY REPORT ON FORM 10-Q
FOR THE FISCAL QUARTER ENDED OCTOBER 31, 2023
PART I – FINANCIAL INFORMATION
| ITEM 1 |
TIANCI INTERNATIONAL, INC. AND SUBSIDIARIES
Balance SheetsUNAUDITED INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS
(EXPRESSED IN UNITED STATES DOLLARS)
| January 31, | July 31, | |||||||
| 2018 | 2017 | |||||||
| ASSETS | (Unaudited) | |||||||
| Current Assets | ||||||||
| Cash and cash equivalents | $ | 6,900 | $ | 2,360 | ||||
| Prepaid expenses and other deposits | 5,000 | – | ||||||
| Total Current Assets | 11,900 | 2,360 | ||||||
| TOTAL ASSETS | $ | 11,900 | $ | 2,360 | ||||
| LIABILITIES AND STOCKHOLDERS' DEFICIT | ||||||||
| Current Liabilities | ||||||||
| Accounts payable | 8,139 | 11,498 | ||||||
| Due to related parties | 56,698 | – | ||||||
| Total Current Liabilities | 64,837 | 11,498 | ||||||
| STOCKHOLDERS' DEFICIT | ||||||||
| Preferred stock, $0.0001 par value; 20,000,000 shares authorized, no shares issued and outstanding | – | – | ||||||
| Common stock, $0.0001 par value, 100,000,000 shares authorized; 5,054,985 shares issued and outstanding, respectively | 505 | 505 | ||||||
| Additional paid-in capital | 1,127,046 | 1,110,016 | ||||||
| Accumulated deficit | (1,180,488 | ) | (1,119,659 | ) | ||||
| TOTAL STOCKHOLDERS' DEFICIT | (52,937 | ) | (9,138 | ) | ||||
| TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT | $ | 11,900 | $ | 2,360 | ||||
| October 31, | July 31, | |||||||
| 2023 | 2023 | |||||||
| (Unaudited) | ||||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash | $ | 380,833 | $ | 256,342 | ||||
| Accounts receivable | 195,629 | – | ||||||
| Prepaid expense | 1,000 | 1,750 | ||||||
| Due from related party | 54,167 | 54,134 | ||||||
| Total current assets | 631,629 | 312,226 | ||||||
| Other assets: | ||||||||
| Lease security deposit | 1,656 | 1,542 | ||||||
| Right-of-use asset | – | 6,436 | ||||||
| Total non-current assets | 1,656 | 7,978 | ||||||
| TOTAL ASSETS | $ | 633,285 | $ | 320,204 | ||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 196,011 | $ | 779 | ||||
| Income taxes payable | 45,411 | 26,298 | ||||||
| Due to related parties | 276,077 | 276,077 | ||||||
| Lease liability - current | – | 4,368 | ||||||
| Advances from customers | – | 29,070 | ||||||
| Accrued liabilities and other payables | 400,530 | 260,176 | ||||||
| Total current liabilities | 918,029 | 596,768 | ||||||
| Lease liability - noncurrent | – | 2,068 | ||||||
| Total liabilities | 918,029 | 598,836 | ||||||
| Commitments and contingencies | – | – | ||||||
| Stockholders’ equity (deficit): | ||||||||
| Series A Preferred stock, $ par value; shares authorized; shares issued and outstanding as of October 31, 2023 and July 31, 2023 | 8 | 8 | ||||||
| Undesignated preferred stock, $ par value; shares authorized; shares issued and outstanding | – | – | ||||||
| Common stock, $par value, shares authorized; shares issued and outstanding as of October 31, 2023 and July 31, 2023, respectively* | 590 | 590 | ||||||
| Additional paid-in capital | 4,982 | 4,982 | ||||||
| Accumulated deficit | (292,305 | ) | (276,521 | ) | ||||
| Total stockholders' deficit attributable to TIANCI INTERNATIONAL, INC. | (286,725 | ) | (270,941 | ) | ||||
| Non-controlling interest | 1,981 | (7,691 | ) | |||||
| Total stockholders’ (deficit) | (284,744 | ) | (278,632 | ) | ||||
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | 633,285 | $ | 320,204 | ||||
| * | Shares are presented on a retroactive basis to reflect the reorganization on March 3, 2023 |
The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.
| 1 |
TIANCI INTERNATIONAL, INC. AND SUBSIDIARIES
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(EXPRESSED IN UNITED STATES DOLLARS)
| For the three months ended October 31, | ||||||||
| 2023 | 2022 | |||||||
| (Unaudited) | (Unaudited) | |||||||
| OPERATING REVENUES | ||||||||
| Global logistics services | $ | 1,181,720 | $ | – | ||||
| Other revenue | 144,928 | 124,370 | ||||||
| Total Operating Revenues | 1,326,648 | 124,370 | ||||||
| COST OF REVENUES | ||||||||
| Global logistics services | 1,029,970 | – | ||||||
| Other revenue | 62,901 | 108,555 | ||||||
| Total Cost of Revenues | 1,092,871 | 108,555 | ||||||
| Gross profit | 233,777 | 15,815 | ||||||
| Operating expenses: | ||||||||
| Selling and marketing | 102,071 | 2,159 | ||||||
| General and administrative | 118,705 | 15,012 | ||||||
| Total operating expenses | 220,776 | 17,171 | ||||||
| (Loss) income from operations | 13,001 | (1,356 | ) | |||||
| Other income (expense) | – | – | ||||||
| Income(loss) before provision for (benefit from) income taxes | 13,001 | (1,356 | ) | |||||
| Provision for (benefit from) income taxes | 19,113 | (224 | ) | |||||
| Net (loss) | (6,112 | ) | (1,132 | ) | ||||
| Less: net (loss) income attributable to non-controlling interest | 9,672 | (113 | ) | |||||
| Net loss attributable to TIANCI INTERNATIONAL, INC. | $ | (15,784 | ) | $ | (1,019 | ) | ||
| Weighted average number of common shares* | ||||||||
| Basic and diluted | ||||||||
| Loss per common share attributable to TIANCI INTERNATIONAL, INC.* | ||||||||
| Basic and diluted | $ | ) | $ | ) | ||||
| * | Shares are presented on a retroactive basis to reflect the reorganization on March 3, 2023 |
The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.
| 2 |
TIANCI INTERNATIONAL, INC. AND SUBSIDIARIES
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
FOR THE THREE MONTHS ENDED OCTOBER 31, 2023 AND 2022
(EXPRESSED IN UNITED STATES DOLLARS)
| Preferred Stock | Preferred Stock amount* | Common stock* | Common stock amount* | Subscription receivable* | Additional Paid-in Capital | (Accumulated Deficit) Retained Earnings | Noncontrolling interest | Total | ||||||||||||||||||||||||||||
| Balance at July 31, 2022 | – | $ | – | 1,500,000 | $ | 150 | $ | (50,000 | ) | $ | 82,732 | $ | 64,689 | $ | 7,188 | $ | 104,759 | |||||||||||||||||||
| Payments of Shenzhen China rent by related parties (Note 3) | – | – | – | – | – | 3,519 | – | – | 3,519 | |||||||||||||||||||||||||||
| Net loss | – | – | – | – | – | – | (1,019 | ) | (113 | ) | (1,132 | ) | ||||||||||||||||||||||||
| Balance at October 31, 2022 (unaudited) | – | $ | – | 1,500,000 | $ | 150 | $ | (50,000 | ) | $ | 86,251 | $ | 63,670 | $ | 7,075 | $ | 107,146 | |||||||||||||||||||
| Preferred Stock | Preferred Stock amount* | Common stock* | Common stock amount* | Subscription receivable* | Additional Paid-in Capital | (Accumulated Deficit) | Noncontrolling interest | Total | ||||||||||||||||||||||||||||
| Balance at July 31, 2023 | 80,000 | $ | 8 | 5,903,481 | $ | 590 | $ | – | $ | 4,982 | $ | (276,521 | ) | $ | (7,691 | ) | $ | (278,632 | ) | |||||||||||||||||
| Net loss | – | – | – | – | – | – | (15,784 | ) | 9,672 | (6,112 | ) | |||||||||||||||||||||||||
| Balance at October 31, 2023 (unaudited) | 80,000 | $ | 8 | 5,903,481 | $ | 590 | $ | – | $ | 4,982 | $ | (292,305 | ) | $ | 1,981 | $ | (284,744 | ) | ||||||||||||||||||
| * | Shares are presented on a retroactive basis to reflect the reorganization on March 3, 2023 |
The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.
| 3 |
TIANCI INTERNATIONAL, INC. AND SUBSIDIARIES
Statements of Operations and Comprehensive Income (Loss)UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)(EXPRESSED IN UNITED STATES DOLLARS)
| Three Months Ended | Six months ended | |||||||||||||||
| January 31, | January 31, | |||||||||||||||
| 2018 | 2017 | 2018 | 2017 | |||||||||||||
| REVENUES | $ | – | $ | – | $ | – | $ | – | ||||||||
| OPERATING EXPENSES | ||||||||||||||||
| Office and miscellaneous | 2,500 | 138 | 5,940 | 648 | ||||||||||||
| Professional fees | 34,009 | 57,645 | 54,889 | 102,235 | ||||||||||||
| Total Operating Expenses | 36,509 | 57,783 | 60,829 | 102,883 | ||||||||||||
| LOSS FROM OPERATIONS | (36,509 | ) | (57,783 | ) | (60,829 | ) | (102,883 | ) | ||||||||
| LOSS BEFORE INCOME TAXES | (36,509 | ) | (57,783 | ) | (60,829 | ) | (102,883 | ) | ||||||||
| Provision for income taxes | – | – | – | – | ||||||||||||
| Loss from Continued Operations | (36,509 | ) | (57,783 | ) | (60,829 | ) | (102,883 | ) | ||||||||
| Discontinued operations | ||||||||||||||||
| Loss from discontinued operations | – | – | – | (498 | ) | |||||||||||
| Gain on sale of investment | – | – | – | 200,528 | ||||||||||||
| Gain from Discontinued Operations, Net of Tax Benefits | – | – | – | 200,030 | ||||||||||||
| NET INCOME (LOSS) | $ | (36,509 | ) | $ | (57,783 | ) | $ | (60,829 | ) | $ | 97,147 | |||||
| STATEMENTS OF COMPREHENSIVE INCOME (LOSS) | ||||||||||||||||
| Net Income (loss) | $ | (36,509 | ) | $ | (57,783 | ) | $ | (60,829 | ) | $ | 97,147 | |||||
| Other Comprehensive income (loss) Foreign currency translation adjustments | – | – | – | 2,601 | ||||||||||||
| TOTAL COMPREHENSIVE INCOME (LOSS) | $ | (36,509 | ) | $ | (57,783 | ) | $ | (60,829 | ) | $ | 99,748 | |||||
| Basic and diluted loss per common share from continued operations | $ | (0.01 | ) | $ | (0.07 | ) | $ | (0.01 | ) | $ | (0.13 | ) | ||||
| Basic and diluted income per common share from discontinued operations | $ | – | $ | – | $ | – | $ | 0.25 | ||||||||
| Basic and Diluted Weighted Average Common Shares Outstanding | 5,054,985 | 880,098 | 5,054,985 | 799,282 | ||||||||||||
| For the three months ended October 31, | ||||||||
| 2023 | 2022 | |||||||
| (Unaudited) | (Unaudited) | |||||||
| Cash flows from operating activities: | ||||||||
| Net (loss) | $ | (6,112 | ) | $ | (1,132 | ) | ||
| Adjustments to reconcile net loss to net cash (used in) provided by operating activities: | ||||||||
| Deferred income tax benefit | – | (224 | ) | |||||
| Amortization of operating lease right-of-use asset | 356 | 956 | ||||||
| Change in operating assets and liabilities: | ||||||||
| Accounts receivable | (195,629 | ) | (111,749 | ) | ||||
| Prepaid expense | 750 | – | ||||||
| Lease security deposit | (114 | ) | – | |||||
| Due from related party | (33 | ) | (52,550 | ) | ||||
| Advances from customers | (29,070 | ) | – | |||||
| Accounts payable | 195,232 | 98,202 | ||||||
| Income taxes payable | 19,113 | – | ||||||
| Operating lease liabilities | (356 | ) | (956 | ) | ||||
| Accrued liabilities and other payables | 140,354 | – | ||||||
| Net cash (used in) provided by operating activities | 124,491 | (67,453 | ) | |||||
| Cash flows from financing activities: | ||||||||
| Working capital advances from related party | – | 62,775 | ||||||
| Repayment of working capital advances from related party | – | (1,285 | ) | |||||
| Operating expenses directly paid by shareholders | – | 23,977 | ||||||
| Payments of Shenzhen China rent by related parties | – | 3,519 | ||||||
| Net cash (used in) provided by financing activities | – | 88,986 | ||||||
| Net increase in cash | 124,491 | 21,533 | ||||||
| Cash, beginning | 256,342 | 21,237 | ||||||
| Cash, ending | $ | 380,833 | $ | 42,770 | ||||
| Supplemental disclosure of cash flow information: | ||||||||
| Cash paid during the period for: | ||||||||
| Interest | $ | – | $ | – | ||||
| Income taxes | $ | – | $ | – | ||||
| Non-Cash Activities: | ||||||||
| Initial recognition of right-of-use assets and lease liabilities | $ | – | $ | 10,400 | ||||
| Early termination of right-of-use assets and lease liabilities | $ | 6,080 | $ | – | ||||
The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.
| 4 |
TIANCI INTERNATIONAL, INC.
Notes To Interim Condensed Consolidated Financial Statements of Cash Flows
Three Months Ended October 31, 2023 and 2022
(Unaudited)
| Six months ended | ||||||||
| January 31, | ||||||||
| 2018 | 2017 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||
| Net income (loss) | $ | (60,829 | ) | $ | 97,147 | |||
| Adjustments to reconcile net income (loss) to net cash used in operating activities: | ||||||||
| Gain on sale of investment | – | (200,528 | ) | |||||
| Changes in operating assets and liabilities: | ||||||||
| Increase in prepaid expenses | (5,000 | ) | – | |||||
| Decrease in accounts payable and accrued liabilities | (3,359 | ) | (68,540 | ) | ||||
| Net cash used in operating activities | (69,188 | ) | (171,921 | ) | ||||
| CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||
| Proceeds from sale of investment | – | 2,000 | ||||||
| Net cash provided by investing activities | – | 2,000 | ||||||
| CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||
| Issuance of common stock for cash | – | 70,104 | ||||||
| Proceeds from related parties | 73,728 | 118,640 | ||||||
| Net cash provided by financing activities | 73,728 | 188,744 | ||||||
| Effects on changes in foreign exchange rate | – | 498 | ||||||
| Net increase in cash and cash equivalents | 4,540 | 19,321 | ||||||
| Cash and cash equivalents - beginning of period | 2,360 | – | ||||||
| Cash and cash equivalents - end of period | $ | 6,900 | $ | 19,321 | ||||
| Supplemental Cash Flow Disclosures | ||||||||
| Cash paid for interest | $ | – | $ | – | ||||
| Cash paid for income taxes | $ | – | $ | – | ||||
| Non-cash financing and investing activities | ||||||||
| Common shares issued in exchange for related party debt | $ | – | $ | 120,000 | ||||
| Related party debt forgiven | $ | 17,030 | $ | 118,640 | ||||
| Common stock subscription receivable | $ | – | $ | 27,560 | ||||
The accompanying notes are an integral part of these unaudited condensed financial statements.
TIANCI INTERNATIONAL, INC.
Notes to the Unaudited Condensed Financial StatementsNOTE 1 – NATURE OF BUSINESS AND ORGANIZATION
January 31, 2018
NOTE 1 - ORGANIZATION AND DESCRIPTION OF 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 October 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.
Reorganization
On October 26, 2016,March 3, 2023 the Company entered into ana Share Exchange Agreement with RQS United Group Limited (“RQS United”) and Plan of Merger with its wholly-owned subsidiary, Tianci International, Inc., a newly formed Nevada Corporation ("Merger Sub"RQS Capital Limited (“RQS Capital”), formed on November 09, 2016, with Merger Sub beingwhich was the surviving entity. The transaction contemplatedsole shareholder of RQS United (the “Exchange Agreement”). RQS United owns 90% of the equity in Roshing International Co., Ltd. (“Roshing”), which is engaged in the Mergerbusiness of providing global logistics services including ocean freight forwarding and related logistics solutions, distributing electronic components and providing software services. Pursuant to the Exchange Agreement, (“Merger”) which became effective on November 9, 2016.
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 aggregateMarch 6, 2023 RQS Capital transferred all of 4,397,837 shares of Common Stock, or approximately 87% of the issued and outstanding Common Stock, atcapital stock of RQS United to the Company, and the Company issued to RQS Capital 1,500,000 shares of our common stock and paid a purchasecash price of $350,000. The acquisition consummated on August 15, 2017, and 2,000,000$350,000 (the “Share Exchange”). Pursuant to the Exchange Agreement, the Company also issued a total of 700,000 shares of the Company’sour common stock were purchased by Chuah Su Chen using her own personal funds. Upon consummation, the sole executive officer and directorto nine employees or affiliates of Tianci resigned from all of her positions with Tianci, and Chuah Su Mei, Chuah Su Chen, and Yeow Yuen Kai were appointedRoshing to serve in as executive officers and directorsinduce continued services to Roshing.
As a result of the Corporation.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 as the acquired 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 reverse acquisition, we are referring to the business and financial information of RQS United and its consolidated subsidiary, Roshing.
Prior to the Share Exchange, the Company was a shell company as defined in Rule 12b-2 under the Exchange Act. As a result of the transactions under the Exchange Agreement, the Company ceased to be a shell company.
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, is principally engaged in global logistics services, sales of electronic device hardware components, development of logistics software and websites, technical consulting, and software maintenance. Roshing’s business is primarily carried out in Hong Kong.
| 5 |
Going Concern Uncertainty
The accompanying consolidated Financial Statements have been prepared in accordance with accounting principles applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. As of October 31, 2023, the Company had cash of $380,833 and negative working capital of $286,400. For the three months ended October 31, 2023 and 2022, the Company had total operating revenues of $1,326,648 and $124,370, respectively, and net losses of $6,112 and $1,132, 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.
NOTE 2 - – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The interim financial information referred to above has been prepared and presented in U.S. dollars in conformity with accounting principles generally accepted in the United States applicable to interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X. The interim financial information has been prepared on a basis consistent with prior interim periods and years and includes all disclosures that are necessary and required by applicable laws and regulations. This report on Form 10-Q should be read in conjunction with the Company’s financial statements and notes thereto included in the Company’s Form 10-K for the fiscal year ended July 31, 2017 filed on October 17, 2017.
The unaudited condensed financial statements and notes are presented in accordance with accounting principles generally accepted in the United States of America (GAAP). These interim financial statements include all adjustments that, in the opinion of management, are necessary in order to make the financial statements not misleading. This report on Form 10-Q should be read in conjunction with the Company’s financial statements for the years ended July 31, 2023 and 2022 and notes thereto included in the Company’s Form 10-K filed with the SEC on October 23, 2023.
Results of the three and six months ended JanuaryOctober 31, 20182023 are not necessarily indicative of the results that may be expected for the year endedending July 31, 2018 and2024 or any other future periods.
BasisPrinciples of Consolidationconsolidation
TheseThe consolidated financial statements include the accountsfinancial statements of Tianci and its subsidiaries. All transactions and balances among the Company and its subsidiary. All material intercompany balances and transactionssubsidiaries have been eliminated.eliminated upon consolidation.
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in 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 statements. The estimates and judgments will also affect the reported amounts for certain revenues and expenses during the reporting period.periods. Actual results could differ from these good faith estimates and judgments.
Going Concern MattersForeign currency translation and transactions
At January 31, 2018, the Company had $6,900 in cash held in trust. The Company had incurred a net loss from continued operationsuses the U.S. dollar as its reporting currency and functional currency. Transaction gains and losses are recognized in the consolidated statement of $60,829 and used $69,188 in cash for continued operating activities for the six months ended January 31, 2018.operations.
| 6 |
The Company’s cash balance and revenues generated are not currently sufficient and cannot be projected to cover operating expenses for the next twelve months from the date of this report. These matters raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans include attempting to improve its business profitability, its ability to generate sufficient cash flow from its operations to meet its operating needs on a timely basis, obtain additional working capital funds through equity and debt financing arrangements, and restructure on-going operations to eliminate inefficiencies to raise cash balance in order to meet its anticipated cash requirements for the next twelve months from the date of this report. However, there can be no assurance that these plans and arrangements will be sufficient to fund the Company’s ongoing capital expenditures, working capital, and other requirements. Management intends to make every effort to identify and develop sources of funds. The outcome of these matters cannot be predicted at this time. There can be no assurance that any additional financings will be available to the Company on satisfactory terms and conditions, if at all.
The ability of the Company to continue as a going concern is dependent upon its ability to raise additional capital and continue profitable operations. The accompanying unaudited condensed consolidated financial statements do not include any adjustments related to the recoverability or classification of asset-carrying amounts or the amounts and classification of liabilities that may result should the Company be unable to continue as a going concern.
Cash and Cash Equivalents
Cash and cash equivalents include cash in banks, money market funds, and certificatesconsist primarily of termbank deposits with original maturities of less than three months from inception,or less, which are readily convertibleunrestricted as to known amountswithdrawal and use. The Company maintains its bank accounts in United States and Hong 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 cashthe receivables, the economic environment, industry trend analysis, and which, in the opinioncredit 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 are subject to an insignificant riskhas determined that the likelihood of loss in value.collection is not probable. As of JanuaryOctober 31, 20182023 and July 31, 2017, the Company has $6,900 and $2,360 in cash and cash equivalents, respectively.2023, no allowance for doubtful accounts was deemed necessary.
Fair Value Measurements
The Company follows ASC 820, "Fair Value Measurementsaccounting standard regarding fair value of financial instruments and Disclosures", whichrelated 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 the exchange price that would be receiveda three-level valuation hierarchy for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes adisclosures of fair value hierarchy that distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources (observable inputs)measurement and (2) an entity's own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs). Theenhances disclosure requirements for fair value hierarchy consists ofmeasures. The three broad levels which gives 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).The hierarchy prioritizes the inputs into three broad levels based on the reliability of the inputsare defined as follows:follow:
| · | Level 1 |
| · | Level 2 |
| · | Level 3 |
The fair value for suchFinancial instruments included in current assets and current liabilities is generally determined using pricing models, discounted(such as cash, flow methodologies, or similar techniques that incorporate the assumptions a market participant would use in pricing the asset or liability.
The Company's financial instruments consist of cash, prepaid expense,accounts receivable, due from related party, accounts payable, and due to related parties. The carrying amounts of these financial instruments approximateparties) are reported in the consolidated balance sheets at cost, which approximates fair value due to either lengthbecause of maturity or interest rates that approximate prevailing rates unless otherwise disclosed in these financial statements.the short period of time between the origination of such instruments and their expected realization.
Income TaxesRevenue recognition
Income taxes are accounted for underThe Company follows the asset and liability method. Deferred tax assets and liabilities are recognized forFinancial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 606. This standard requires the future tax consequences attributableuse of a five-step model to differences betweenrecognize revenue from customer contracts. The five-step model requires that the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable incomeCompany (i) identifies the contract with the customer, (ii) identifies the performance obligations in the years in which those temporary differences are expectedcontract, (iii) determines the transaction price, including variable consideration to be recovered or settled. The effect on deferred tax assets and liabilities ofthe extent that it is probable that a change in tax rates is recognized in incomesignificant future reversal will not occur, (iv) allocates the transaction price to the respective performance obligations in the period that includescontract, and (v) recognizes revenue when (or as) the enactment date. A valuation allowance is recognized if it is more likely than not that some portion, or all,Company satisfies the performance obligations.
The Company records revenue net of a deferred tax asset will not be realized. There were no significant deferred tax items as of January 31, 2018sales taxes which are subsequently remitted to governmental authorities and July 31, 2017.are excluded from the transaction price.
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The Company applied the provisions of ASC 740-10-50, “Accounting For Uncertainty In Income Taxes”, which provides clarification related to the process associated with accounting for uncertain tax position recognized in our financial statements. Audit periods remain open for review until the statute of limitations has passed. The completion of review or the expiration of the statute of limitations for a given audit period could result in an adjustment to the Company’s liability for income taxes. Any such adjustment could be material to the Company’s results of operations for any given quarterly or annual period based, in part, upon the results of operations for the given period. At January 31, 2018 and July 31, 2017, management considered that the Company had no uncertain tax positions, and will continue to evaluate for uncertain positions in the future.revenue recognition policies are as follows:
Basic and Diluted Earnings (Loss) Per Sharea. Global Logistics Services
Basic income (loss) per shareThe Company provides global logistics services, including ocean freight forwarding and related logistics solutions. As a non-asset-based carrier, the Company does not own transportation assets.
The Company derives its revenues by entering into agreements that are generally comprised of a single performance obligation, which is calculated by dividing the Company’s net loss applicable to common shareholdersthat freight is shipped for and received by the weighted average numbercustomer via either container ships or general cargo vessels. The most significant drivers of common shares duringchanges in gross revenues and related transportation expenses are volume and weight.
In general, each shipment transaction or service order constitutes a separate contract with the period. Diluted earnings per sharecustomer. A performance obligation is calculatedcreated once a customer agreement with an agreed upon transaction price exists. The transaction price, which is based on volume, weight, and shipping time, is fixed and not contingent upon the occurrence or non-occurrence of any other event.
The Company typically satisfies its performance obligations at a point in time when freight is shipped to destination port and accepted by dividing the Company’s net income available to common shareholdersits customers. The Company does not have significant variable consideration in its contracts. Taxes assessed concurrently with a specific revenue-producing transaction that are collected by the diluted weighted average numberCompany from a customer are excluded from revenues.
The Company evaluates whether amounts billed to customers should be reported as gross or net revenue. Revenue is recorded on a gross basis when the Company is primarily responsible for fulfilling the promise to provide the services, when it assumes risk of shares outstanding duringloss, when it has discretion in setting the year. prices for the services to the customers, and when the Company has the ability to direct the use of the services provided by the third party. In most cases we act as an indirect carrier. When acting as an indirect carrier, we issue a Fixture Note to customers as the contract of carriage. In turn, when the freight is physically tendered to a direct carrier, we receive a Master Ocean Bill of Lading.
The diluted weighted average numberCompany’s evaluation determined that it is in control of shares outstanding isestablishing the basic weighted numbertransaction price, managing all aspects of shares adjustedthe shipment process and assumes the risk of loss for any potentially dilutive debt or equity. Theredelivery, collection, and returns. Based on its evaluation of the control of services and risk involved, the Company determined that it acts as a principal rather than an agent in global logistics service arrangements and such revenues are no such common stock equivalents outstanding as of January 31, 2018 and July 31, 2017.reported on a gross basis.
Reclassificationb. Electronic Device Hardware Components Products Sales
Certain classifications have been made to the prior year financial statements to conform to the current year presentation. The reclassification had no impact on previously reported net income (loss) or accumulated deficit.
Recent Accounting Pronouncements
Management has considered all recent accounting pronouncements issuedThe Company is a distributor of electronic device hardware components and their potential effectgenerates 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; and 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 our financial statements. The Company's management believes that these recent pronouncements will not have a material effect on the Company's condensed financial statements.gross basis.
NOTE 3 – DISCONTINUED OPERATIONS
On October 13, 2016, the Company entered intoHardware sales contracts are on a spin-off agreement (the “Spin-Off Agreement”)fixed price basis with Steampunk Wizards Ltd., the Company’s wholly owned subsidiary andno separate sales rebate, discount, or other incentive. Revenue is recognized at 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 Steampunk and the Company shall receive $2,000 as purchase price. The Buyer shall become the sole equity owner of Steampunk and the Company shall have no further interestpoint in Steampunk.
During the six months ended January 31, 2017, the Company recorded a gain on the sale of $200,528. The Company has no continuing involvement in the operations of Steampunk. The sale of Steampunk qualified as a discontinued operation of the Company and accordingly,time when the Company has excluded resultsdelivered products that have been accepted by its customer with no future obligations. The Company generally permits returns of Steampunk’ operations from its Statements of Operations and Comprehensive Income (Loss)products due to present this business in discontinued operations.
The following table shows the results of operations of Steampunk for six months ended January 31, 2018 and 2017 whichproduct failure; however, returns are included in the gain (loss) from discontinued operations:
| Six Months Ended | ||||||||
| January 31, | ||||||||
| 2018 | 2017 | |||||||
| Office and miscellaneous | $ | – | $ | (498 | ) | |||
| Gain on sale of investment | – | 200,528 | ||||||
| Total Income | – | 200,030 | ||||||
| Gain from Discontinued Operations, Net of Tax Benefits | $ | – | $ | 200,030 | ||||
historically insignificant.
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NOTE 4 – DUE TO RELATED PARTIES
During the six months ended January 31, 2018, a former officer of the Company advanced $17,030 for working capital purpose. This amount was forgivenc. Software and recorded to additional paid in capital, as part of the change of control (see Note 1).
During the six months ended January 31, 2018, a shareholder of the Company advanced $56,698 for working capital purpose.
As of January 31, 2018 and July 31, 2017, the Company owed $56,698 and $0, respectively, to a shareholder of the Company. This loan is non-interest bearing and due on demand.
NOTE 5 - EQUITY
Preferred StockWebsite Development Services
The Company has 20,000,000 authorized preferred shares with a par value of $0.0001 per share. The Board of Directors are authorized to divide the authorized shares of Preferred Stock into one or more series, each of which shall be so designated as to distinguish the shares thereof from the shares of all other series and classes.
There were no shares of preferred stock issued and outstanding as of January 31, 2018 and July 31, 2017.
Common Stock
The Company has 100,000,000 authorized common shares with a par value of $0.0001 per share.
Reverse Stock Split transaction
On March 15, 2017, the Company filed a Certificate of Correction with the Nevada Secretary of State, which was effective April 6, 2017 upon its receipt of the written notice from Financial Industry Regulatory Authority ("FINRA"). Pursuant to the Certificate of Correction, the Company effectuated a 1-for-40 reverse stock split of its issued and outstanding shares of common stock, $0.0001 par value, whereby 49,854,280 outstanding shares of the Company’s common stock were exchanged for 1,246,357 shares of the Company's common stock. Common share amounts and per share amounts in these financial statements have been retroactively adjusted to reflect this reverse split.
There were 5,054,985 shares of common stock issued and outstanding as of January 31, 2018 and July 31, 2017, respectively.
NOTE 6 - SUBSEQUENT EVENTS
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 evaluated subsequent events throughno 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 date which the financial statements were available to be issued. All subsequent events requiring recognition as of January 31, 2018customer. As a result, revenues from software development contracts are recognized at a point in time when services are fully rendered, and written acceptances have been incorporated into these financial statementsreceived from customers.
d. Technical Consulting and thereTraining Services
The Company provides 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 no subsequent events that require disclosuregenerally carried out on a per-time fixed rate basis. Revenue is recognized at a point in accordancetime when service is rendered and the customer confirms the completion of consulting or training.
e. Software Maintenance and Business Promotion Services
The Company provides software maintenance service to keep customer’s software up to date and assists customers in promoting business with FASB ASC Topic 855, “Subsequent Events.”ongoing marketing support. The Company charges a flat rate for a fixed duration on a subscription basis, generally 12 months. Revenue is recognized ratably each month over the contract period.
f. 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 global logistics services, cost of revenue consists primarily of cargo space charged by direct ocean carriers, freight forwarders and ancillary logistics services fees.
For hardware products sales, the cost of revenue consists primarily of the costs of hardware products sold.
For software, consulting, services-based revenue, the cost of revenue consists primarily of costs paid to outsourced service providers and compensation expenses paid the Company’s service vendor.
Advertising costs
Advertising costs amounted to $0 and $192 for the three months ended October 31, 2023 and 2022, respectively. Advertising costs are expensed as incurred and included in selling and marketing expenses.
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Forward-looking statementsOperating 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 following discussionCompany also adopted the practical expedient that allows lessees to treat the lease and non-lease components of oura 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 condition and results of operations should be read in conjunction withreporting purposes. The classification evaluation begins at the financial statementscommencement date and the related notes thereto included elsewherelease term used in this quarterly report on Form 10-Q. This quarterly report on Form 10-Q contains certain forward-looking statements and our future operating results could differ materially from those discussed herein. Certain statements contained in this discussion, including, without limitation, statements containing the words "believes," "anticipates," "expects" andevaluation includes the like, constitute "forward-looking statements" withinnon-cancellable period for which the meaning of Section 27ACompany has the right to use the underlying asset, together with renewal option periods when the exercise of the Securities Act of 1933, as amended,renewal option is reasonably certain and Section 21Efailure to exercise such option would result in an economic penalty. All of the Securities Exchange ActCompany’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 1934,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.
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 amended (the “Exchange Act”). However, as we issue “penny stock,” as such term is defined in Rule 3a51-1 promulgated under the Exchange Act, we are ineligible to rely onCompany does not have reasonable certainty at lease inception that these safe harbor provisions. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievementsoptions will be exercised. The Company generally considers the economic life of its operating lease ROU assets to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Given these uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements. We disclaim any obligation to update any such factors or to announce publicly the results of any revisions of the forward-looking statements contained herein to reflect future events or developments.
Currency and exchange rate
Unless otherwise noted, all currency figures quoted as “U.S. dollars”, “dollars” or “$” refercomparable to the legal currencyuseful life of similar owned assets. The Company has elected the United States. Throughout this report,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.
The lease for the Company’s subsidiariesHong Kong office facility was early terminated in September 2023, which resulted in a derecognition of $6,080 right of use (“ROU”) asset and operating lease liabilities in August 2023.
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 translated into U.S. dollarsnon-taxable or non-deductible. It is calculated using the exchange rate ontax rates that have been enacted or substantively enacted by the balance sheet date. Revenue and expenses are translated at average rates prevailing during the period. The gains and losses resulting from translation of financial statements of foreign subsidiaries are recorded as a separate component of accumulated other comprehensive income within the statement of stockholders’ equity.
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 August 3, 2017, we entered into a Stock Purchase Agreement (the “SPA”) with Shifang Wan (the “Seller”), the record holder of 4,397,837 common shares, or approximately 87.00% of the issued 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 not due to any dispute or disagreement with the Company on any matter relating to the Company's operations, policies or practices. The following individuals were also appointed to serve in the positions set forth next to their names below:
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Jerry Ooi was appointed to serve as a director effective August 30, 2017.
WeDeferred taxes are accounted for using the asset and liability method 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 companyrespect of temporary differences arising from differences between the carrying amount of assets and liabilities in the near future.
Limited Operating History; Need for Additional Capital
We have had limited operationsunaudited interim consolidated financial statements and have been issued 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 successful in our business operations. Our business is subject to risks inherentcorresponding tax bases used in the establishmentcomputation of a new business enterprise, including limited capital resources, possible delays intaxable income (loss). In principle, deferred tax liabilities are recognized for all taxable temporary differences. Deferred tax assets are recognized to 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 assuranceextent that future financingit is probable that taxable profit will be available against which deductible temporary differences can be utilized. Deferred tax is calculated using tax rates that are expected to us on acceptable terms,apply to the period when the asset is realized or at all. If financingthe liability is settled. Deferred tax is charged or credited in the statements of operations, except when it is related to items credited or charged directly to equity, in which case the deferred tax is dealt with in equity. Net deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not available on satisfactory terms, we maythat some portion or all of the net deferred tax asset will not be unable to continue, develop or expand our operations. Equity financing could result in additional dilution to existing shareholders.realized.
If weAn uncertain tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that has a greater than 50% likely of being realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. Penalties and interest incurred related to underpayment of income tax for uncertain tax positions are unable to raise additional capital to maintain our operationsclassified as income tax expense 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 continue 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 $1,180,488 as of January 31, 2018.period incurred.
The following table provides selected financial data about our company as of January 31, 2018Hong Kong tax returns filed for 2016 and July 31, 2017.subsequent years are subject to examination by the applicable tax authorities.
Balance Sheet DataThe US tax returns filed for 2019 and subsequent years are subject to examination by the applicable tax authorities.
| January 31, | July 31, | |||||||||||||||
| 2018 | 2017 | Change | % | |||||||||||||
| Cash | $ | 6,900 | $ | 2,360 | $ | 4,540 | 192% | |||||||||
| Total assets | $ | 11,900 | $ | 2,360 | $ | 9,540 | 404% | |||||||||
| Total liabilities | $ | 64,837 | $ | 11,498 | $ | 53,339 | 464% | |||||||||
| Stockholders’ deficit | $ | (52,937 | ) | $ | (9,138 | ) | $ | (43,799 | ) | 479% | ||||||
Three Months Ended January
The Company computes earnings (loss) per share (“EPS”) in accordance with FASB ASC 260, “Earnings per Share”. ASC 260 requires companies to present basic and diluted EPS. Basic EPS is measured as net income (loss) divided by the weighted average ordinary shares outstanding for the period. Diluted EPS presents the diluted effect on a per share basis of the potential ordinary shares (e.g., convertible securities, options and warrants) as if they had been converted at the beginning of the periods presented, or issuance date, if later. Potential ordinary shares that have an anti-dilutive effect (i.e., those that increase income per share or decrease loss per share) are excluded from the calculation of diluted EPS. For the three months ended October 31, 2018, Compared2023, there were dilutive shares outstanding related to Three Months Ended Januarythe convertible Series A Preferred Stock (see Note 4). For the three months ended October 31, 20172022, there were dilutive shares outstanding.
| Three Months Ended | ||||||||||||||||
| January 31, | ||||||||||||||||
| 2018 | 2017 | Change | % | |||||||||||||
| Revenue | $ | – | $ | – | $ | – | $ | – | ||||||||
| Operating expenses | 36,509 | 57,783 | (21,274 | ) | (37)% | |||||||||||
| Loss from Continued Operation | (36,509 | ) | (57,783 | ) | 21,274 | (37)% | ||||||||||
| Gain from Discontinued Operation | – | – | – | 0% | ||||||||||||
| Net Income (Loss) | $ | (36,509 | ) | (57,783 | ) | 21,274 | (37)% | |||||||||
Noncontrolling Interests
The Company’s noncontrolling interest represents the minority shareholder’s 10% ownership interest in Roshing. The noncontrolling interest is presented in the consolidated balance sheets separately from stockholders’ equity attributable to Tianci. Noncontrolling interest in the results of Roshing are presented on the consolidated statements of operations as allocations of the total income or loss of Roshing for the three months ended October 31, 2023 and 2022 between the noncontrolling interest holder and the shareholders of RQS United.
Related parties
Parties, which can be a corporation, other business entity, or an individual, are considered to be related if one party has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operating decisions. Parties are also considered to be related if they are subject to common control or common significant influence.
Recently issued accounting pronouncements
The Company considers the applicability and impact of all accounting standards updates (“ASUs”). Management periodically reviews new accounting standards that are issued. Under the Jumpstart Our Business Startups Act of 2012, as amended (the “JOBS Act”), the Company meets the definition of an emerging growth company and has elected the extended transition period for complying with new or revised accounting standards, which delays the adoption of these accounting standards until they would apply to private companies.
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RevenueIn May 2019, the FASB issued ASU 2019-05, which is an update to ASU Update No. 2016-13, Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which introduced the expected credit losses methodology for the measurement of credit losses on financial assets measured at amortized cost basis, replacing the previous incurred loss methodology. The amendments in Update 2016-13 added Topic 326, Financial Instruments — Credit Losses, and made several consequential amendments to the Codification. Update 2016-13 also modified the accounting for available-for-sale debt securities, which must be individually assessed for credit losses when fair value is less than the amortized cost basis, in accordance with Subtopic 326-30, Financial Instruments — Credit Losses — Available-for-Sale Debt Securities. The amendments in this Update provide an option to irrevocably elect the fair value option for certain financial assets previously measured at amortized cost basis. In November 2019, the FASB issued ASU No. 2019-10, which updates the effective date of ASU No. 2016-13 for private companies, not-for-profit organizations and certain smaller reporting companies. The new effective date for these preparers is for fiscal years beginning after December 15, 2022. ASU 2019-05 is effective for the Company for annual and interim reporting periods beginning August 1, 2023 as the Company is qualified as an emerging growth company. The adoption of this standard on August 1, 2023 has not had and is not expected to have a material impact on the Company’s future consolidated financial statements.
In December 2019, the FASB issued ASU 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes”. DuringThe amendments in this Update simplify the three months ended January 31, 2018,accounting for income taxes by removing certain exceptions to the general principles in Topic 740. The amendments also improve consistent application of and 2017, wesimplify GAAP for other areas of Topic 740 by clarifying and amending existing guidance. For public business entities, the amendments in this Update are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2021, and interim periods within fiscal years beginning after December 15, 2022. The adoption of this standard on August 1, 2022 did not generate any revenues.have a material impact on the Company’s consolidated financial statements.
Operating Expenses. Operating expenses were $36,509 forExcept as mentioned above, the three months ended January 31, 2018, consisting of professional fees of $34,009 and office and miscellaneous expenses of $2,500. Operating expenses were $57,783 forCompany does not believe other recently issued but not yet effective accounting standards, if currently adopted, would have a material effect on the three months ended January 31, 2017, including professional fees of $57,645 and office and miscellaneous expenses of $138. The decrease in operating expenses was primarily attributable to the decrease in professional fees.Company’s consolidated Financial Statements.
Net LossNOTE 3 – RELATED PARTIES BALANCES AND TRANSACTIONS. During the three months ended January 31, 2018, and 2017, we incurred a net loss of $36,509 and $57,783, respectively. The decrease in net loss was attributable to the decrease in our general and administrative expenses.
Six Months Ended January 31, 2018, Compared to Six Months Ended January 31, 2017
| Six Months Ended | ||||||||||||||||
| January 31, | ||||||||||||||||
| 2018 | 2017 | Change | % | |||||||||||||
| Revenue | $ | – | $ | – | $ | – | $ | – | ||||||||
| Operating expenses | 60,829 | 102,883 | (42,054 | ) | (41)% | |||||||||||
| Loss from Continued Operation | (60,829 | ) | (102,883 | ) | 42,054 | (41)% | ||||||||||
| Gain from Discontinued Operation | – | 200,030 | (200,030 | ) | (100)% | |||||||||||
| Net Income (Loss) | $ | (60,829 | ) | 97,147 | (157,976 | ) | (163)% | ) | ||||||||
Due from related party consists of:
Revenue. During the six months ended January 31, 2018, and 2017, we did not generate any revenues.
Operating Expenses. Operating expenses were $60,829 for the six months ended JanuaryDue from related party represents a receivable of $54,167 from RQS Capital at October 31, 2018, consisting of professional fees of $54,8892023. The receivable, which was non-interest bearing and office and miscellaneous expenses of $5,940. Operating expenses were $102,883 for the six months ended January 31, 2017, including professional fees of $102,235 and office and miscellaneous expenses of $648. The decrease in operating expensesdue on demand, was primarily attributable to the decrease in professional fees.
Discontinued Operations. On October 13, 2016, we sold all of the issued and outstanding capital stock of Steampunk Wizards Ltd., the Company’s former wholly owned subsidiary and a company incorporated pursuant to the laws of Malta (“Steampunk”), to Praefidi Holdings Limited (the “Buyer”), an entity organized under the laws of Malta and ownedcollected by Brendon Grunewald, former director of the Company in accordance with the terms and conditions of that certain spin-off agreement (the “Spin-Off Agreement”). Pursuant to the Spin-Off Agreement, we recorded all expenses from the subsidiary in Malta as discontinued expenses. Gain (Loss) from discontinued operations was $0 and $(498) for the six months ended January 31, 2018 and 2017, respectively. We also recognized a gain on sale of investment of $200,528 during the six months ended January 31, 2017.December 2023.
Loss from Continued OperationDue to related parties consist of: . During the six months ended January 31, 2018, and 2017, we incurred a net loss from continued operations of $60,829 and $102,883, respectively. The decrease in loss from continued operation was attributable to the decrease in our professional fees and general and administrative expenses.
| Schedule of due to related parties | ||||||||||||
| Transaction | October 31, | July 31, | ||||||||||
| Name | Relationship | Nature | 2023 | 2023 | ||||||||
| Zhigang Pei | Chairman of the Board | Working capital advances and operating expenses paid on behalf of the Company | $ | 220,909 | $ | 220,909 | ||||||
| RQS Capital | 68% shareholder | Company cash collection due to RQS Capital | 2,132 | 2,132 | ||||||||
| Ying Deng | RQS Capital 30% owner and Roshing’s 10% owner | Working capital advances and operating expense paid on behalf of the Company | 53,036 | 53,036 | ||||||||
| TOTAL | $ | 276,077 | $ | 276,077 | ||||||||
Net Loss. During the six months ended January 31, 2018,These liabilities are unsecured, non-interest bearing, and 2017, we incurred a net income (loss) of $(60,829) and $97,147, respectively. The decrease in net income was primarily attributable to the decrease in gain from discontinued operations, partially offset by the decrease in our general and administrative expenses from continued operations.due on demand.
Liquidity and Capital Resources
Working Capital
| January 31, | July 31, | |||||||
| 2018 | 2017 | |||||||
| Current Assets | $ | 11,900 | $ | 2,360 | ||||
| Current Liabilities | 64,837 | 11,498 | ||||||
| Working Capital (Deficiency) | $ | (52,937 | ) | $ | (9,138 | ) | ||
| 12 |
AsEmployment agreements with officers and director retainer agreements
Tianci currently maintains two employment agreements and six director retainer agreements with its officers and directors. The agreements have terms of January 31, 2018, we had working capital deficit of $52,937 as compared to working capital deficit of $9,138 as of July 31, 2017. The increase in working capital deficiency was mainly due to the increase3 years and each provide for monthly compensation in amounts dueranging from $1,300 per month to related parties offset by an increase in cash and cash equivalents and prepaid expenses and other deposits.$3,800 per month.
Cash Flows
| Six Months Ended January 31, 2018 | Six Months Ended January 31, 2017 | |||||||
| Net cash used in operating activities | $ | (69,188 | ) | $ | (171,921 | ) | ||
| Net cash provided by investing activities | $ | – | $ | 2,000 | ||||
| Net cash provided by financing activities | $ | 73,728 | $ | 188,744 | ||||
| Effects on changes in foreign exchange rate | $ | – | $ | 498 | ||||
| Net increase in cash and cash equivalents | $ | 4,540 | $ | 19,321 | ||||
Cash Flow from Operating ActivitiesFor the three months ended October 31, 2023, we accrued management compensation expenses of $. These amounts are included in “general and administrative expenses” in the accompanying consolidated statement of operations.
During the six months ended January 31, 2018, net cash used in continued operating activities was $69,188, compared to $171,921 for the six months ended January 31, 2017. The decrease in cash used in continued operating activities was mainly due to the decrease in net income and decreased accounts payable and accrued liabilities.Office space sharing agreement with related parties
Cash Flow from Investing Activities
During the six months ended January 31, 2018, net cashOn August 28, 2021, Roshing entered into an office space sharing agreement with Shufang Gao, 60% owner of RQS Capital, and Ying Deng, 30% owner of RQS Capital, for office space in Shenzhen, China. The agreement provided by investing activities was $0. For the same period ended January 31, 2017, net cash provided by investing activities was $2,000, consisting of proceeds from the sale of investment pursuantfor Gao and Deng, sub lessees under a separate office space sharing agreement relating to the Spin-Off Agreement.
Cash Flow from Financing Activities
During the six months ended January 31, 2018, financing activities provided net cash of $73,728, consisting of the cash from related parties. During the same period ended January 31, 2017, financing activities provided net cash of $188,744, consisting of cash from related parties of $118,640 and proceeds from the issuance of common stock of $70,104.
Off-Balance Sheet Arrangements
We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures, or capital resources that is material to investors.
Critical Accounting Policies
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) requires estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses, and related disclosures of contingent assets and liabilities in the consolidated financial statements and accompanying notes. The SEC has defined a company’s critical accounting policies as the ones that are most important to the portrayal of the company’s financial condition and results of operations, and which require the company to make its most difficult and subjective judgments, often as a result 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, judgmentsthe premises from August 28, 2021, to August 31, 2024, to pay monthly rent to the lessee ranging from RMB 12,320 (approximately $1,726) to RMB 13,583 (approximately $1,903) on behalf of Roshing. The rent expenses paid by Gao and assumptions that are significantDeng were billed directly to understanding our results, which are describedGao and Deng by the Lessee and the sublease is between Gao and Deng and the Lessee. The Company has no obligation, directly or indirectly, to reimburse or otherwise compensate Gao and Deng for paying these expenses. For the three months ended October 31, 2023 and 2022, the Company has accounted for this agreement by charging general and administrative expenses for $0 and $3,519, respectively, and crediting additional paid-in capital for $0 and $3,519, respectively. The office sharing agreement was terminated on May 31, 2023 when Roshing moved all of its operations to its office 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.Hong Kong.
Going ConcernNOTE 4 – STOCKHOLDERS EQUITY
On January 26, 2023 the Company filed with the Nevada Secretary of State a Certificate of Amendment of Articles of Incorporation (the “Amendment”). The financial statements have been prepared on a going concern basis which assumesAmendment amended Article 3 of the Company’s Articles of Incorporation to provide that the authorized capital stock of the Company will be able120,080,000 shares of capital stock consisting of shares of common stock, $ par value, shares of Series A Preferred Stock, $ par value, and shares of undesignated preferred stock, $ par value.
The following table sets forth information, as of October 31, 2023, regarding the classes of capital stock that are authorized by the Articles of Incorporation of Tianci International, Inc.
| Schedule of capital stock authorized | ||||||||
| Class | Shares Authorized | Shares Outstanding | ||||||
| Common Stock, $.0001 par value | 100,000,000 | 5,903,481 | ||||||
| Series A Preferred Stock, $.0001 par value | 80,000 | 80,000 | ||||||
| Undesignated Preferred Stock, $.0001 par value | 20,000,000 | 0 | ||||||
Series A Preferred Stock
Each share of Series A Preferred Stock may be converted by the holder of the share into 100 shares of common stock, subject to realize itsequitable adjustment of the conversion rate. Each holder of Series A Preferred Stock will have voting rights equal to the holder of the number of shares of common stock into which the Series A Preferred Stock is convertible. Upon liquidation of the Company, each holder of Series A Preferred Stock will be entitled to receive, out of the net assets and discharge its liabilitiesof the Company, $0.01 per share, then to share in the normal course of business for the foreseeable future. As of January 31, 2018, the Company has working capital deficiency of $52,937 and has incurred losses since inception resulting indistribution on an accumulated deficit of $1,180,488. 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.as-converted basis.
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Undesignated Preferred Stock
The abilityBoard of Directors has the authority, without shareholder approval, to amend the Company’s Articles of Incorporation to divide the class of undesignated Preferred Stock into series, and to determine the relative rights and preferences of the shares of each series, including (i) voting power, (ii) the rate of dividend, (iii) the price at which, and the terms and conditions on which, the shares may be redeemed, (iv) the amount payable upon the shares in the event of liquidation, (v) any sinking fund provision for the redemption or purchase of the shares, and (vi) the terms and conditions on which the shares may be converted to shares of another series or class, if the shares of any series are issued with the privilege of conversion.
Issuances of Preferred Stock and Common Stock
On January 27, 2023, Tianci sold shares of its Series A Preferred Stock to RQS Capital for $24,000 cash.
On March 1, 2023, Tianci sold a total of shares of its common stock to 13 non-US persons at a price of $ per share or $376,000 total.
On March 6, 2023, Tianci issued shares of its common stock to RQS Capital pursuant to the Share Exchange Agreement dated March 3, 2023 (see Note 1 above).
Also on March 6, 2023 pursuant to the Share Exchange Agreement dated March 3, 2023, Tianci issued a total of shares of its common stock to nine employees or affiliates of Roshing to induce continued services to Roshing. For the year ended July 31, 2023, the Company accounted for this issuance by expensing the $210,000 estimated fair value of the shares of common stock to (1) cost of revenues-services ($144,000), (2) selling and marketing ($36,000), and (3) general and administrative ($30,000).
NOTE 5 – INCOME TAXES
Income Taxes
Seychelles
RQS United is incorporated in Seychelles and is not subject to tax on income generated outside of Seychelles under the current law. In addition, upon payment of dividends, no withholding tax is imposed under current law.
Hong Kong
Roshing 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% in Hong Kong. Hong Kong income tax expenses (benefit) for the three months ended October 31, 2023 and 2022 amounted to $19,113 and $(224), respectively.
For the three months ended October 31, 2023, the income before provision for income taxes of $13,001 consisted of United States source loss of $(102,833) and Hong Kong source income of $115,834. For the three months ended October 31, 2022, the loss before benefit from income taxes of $(1,356) was all Hong Kong source loss.
| 14 |
Significant components of the provision for income taxes are as follows:
| Schedule of components of income tax expense | ||||||||
| For the three months ended | ||||||||
| October 31, 2023 | October 31, 2022 | |||||||
| (Unaudited) | (Unaudited) | |||||||
| Current Hong Kong | $ | 19,113 | $ | – | ||||
| Deferred Hong Kong | – | (224 | ) | |||||
| Provision (benefit) for income taxes | $ | 19,113 | $ | (224 | ) | |||
The following table reconciles the Hong Kong statutory rates to the Company’s Hong Kong effective tax rate:
| Schedule of effective income tax reconciliation | ||||||||
| For the three months ended October 31, 2023 | For the three months ended October 31, 2022 | |||||||
| (Unaudited) | (Unaudited) | |||||||
| Hong Kong statutory income tax rate | 16.5% | 16.5% | ||||||
| Effective tax rate | 16.5% | 16.5% | ||||||
For United States income tax purposes, Tianci has a net operating loss carry forward of approximately $1,070,000 at October 31, 2023. Management has not determined that it is more likely than not that this carryforward will be realized and thus the Company maintained a 100% valuation allowance for the deferred tax asset relating to the United States net operating loss carryforward. Current United States income tax law limits the amount of loss available to offset against future taxable income when a substantial change in ownership occurs.
Uncertain tax positions
The Company evaluates each uncertain tax position (including the potential application of interest and penalties) based on the technical merits, and measures the unrecognized benefits associated with the tax positions. As of October 31, 2023 and July 31, 2023, the Company did not have any significant unrecognized uncertain tax positions.
As of October 31, 2023, tax years 2020 and forward generally remain open for examination for United States Federal and State tax purposes and tax years 2017 and forward generally remain open for examination for foreign tax purposes.
NOTE 6 — CONCENTRATION OF RISK
Credit risk
Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash held in banks. The cash balance in each financial institution in the United States is insured by the FDIC up to $250,000. As of October 31, 2023, no United States account balance exceeded $250,000. The Hong Kong Deposit Protection Board pays compensation up to a limit of HKD 500,000 (approximately US$64,000) if the bank with which an individual/company holds its eligible deposit fails. As of October 31, 2023, a cash balance of $356,990 was maintained at a financial institution in Hong Kong of which approximately $293,000 was subject to credit risk. Management believes that the financial institution is of high credit quality and continually monitors its credit worthiness.
| 15 |
Customer concentration risk
For the three months ended October 31, 2023, two customers accounted for 61.2% and 13.1% of the Company’s total revenues.
For the three months ended October 31, 2022, two customers accounted for 48.2% and 27.5% of the Company’s total revenues.
As of October 31, 2023, four customers accounted for 44.8%, 23.9%, 15.8% and 12.8% of the Company’s total accounts receivable. As of July 31, 2023, no customer accounted for over 10% of the Company’s total accounts receivable.
Vendor concentration risk
For the three months ended October 31, 2023, two vendors accounted for 65.9% and 13.7% of the Company’s total purchases. For the three months ended October 31, 2022, three vendors accounted for 45.8%, 25.5%, and 19.6% of the Company’s total purchases.
As of October 31, 2023, four vendors accounted for 31.5%, 29.4%, 22.7%, and 16.3% of the Company’s total accounts payable. As of July 31, 2023, no vendor accounted for over 10% of the Company’s total accounts payable.
NOTE 7— COMMITMENTS AND CONTINGENCIES
Lease commitments
On January 1, 2021, Roshing entered into an operating lease agreement for office space in Hong Kong with a third party. The agreement had a term of two years and provided for monthly rent of HKD 2,800 (approximately $360). On January 13, 2023, the Company entered a new operating lease agreement for office space in Hong Kong with a third party for two years with monthly rent of HKD 3,000 (approximately $382). 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’s lease agreement does not contain any material residual value guarantees or material restrictive covenants. The lease does not contain an option to extend at the time of expiration. The lease was early terminated in September 2023 which resulted in a derecognition of $6,080 right of use (“ROU”) asset and operating lease liabilities in August 2023.
In September 2023, the Company entered into a one-year short term lease with a monthly lease payment of approximately $828 (HKD 6500).
Rent expenses were $3,184 and $4,599 for the three months ended October 31, 2023 and 2022, respectively.
Contingencies
From time to time, the Company may be a party to legal proceedings, as well as certain asserted and un-asserted claims. The Company was not involved in any material legal proceedings nor asserted claims as of October 31, 2023.
| 16 |
NOTE 8 — ENTERPRISE-WIDE DISCLOSURE
The Company follows ASC 280, Segment Reporting, which requires companies to disclose segment data based on how management makes decisions about allocating resources to each segment and evaluates their performances. The Company’s chief operating decision-makers (i.e., the Company’s chief executive officer and his direct assistants, including the Company’s chief financial officer) review financial information presented on a consolidated basis, accompanied by disaggregated information about revenues, cost of revenues, and gross profit by business lines and by regions (primarily in Hong Kong and Singapore) for purposes of allocating resources and evaluating financial performance. There are no segment managers who are held accountable for operations, operating results and plans for levels or components below the consolidated unit level. Based on qualitative and quantitative criteria established by ASC 280, the Company considers itself to be operating within one reportable segment.
Disaggregated information of revenues by business lines are as follows:
| Schedule of information of revenues by business | ||||||||
For the three months ended October 31, | ||||||||
| 2023 | 2022 | |||||||
| (Unaudited) | (Unaudited) | |||||||
| Electronic Device Hardware Components Sales | $ | 59,902 | $ | 104,194 | ||||
| Software and Website Development Services | 19,230 | – | ||||||
| Technical Consulting and Training Services | – | 6,426 | ||||||
| Software Maintenance and Business Promotion Services | 15,263 | 13,750 | ||||||
| Business Consulting Services | 50,533 | – | ||||||
| Global Logistics Services | 1,181,720 | – | ||||||
| Total revenues | $ | 1,326,648 | $ | 124,370 | ||||
Disaggregated information of revenues by regions are as follows:
| Schedule of information of revenues by regions | ||||||||
For the three months ended October 31, | ||||||||
| 2023 | 2022 | |||||||
| (Unaudited) | (Unaudited) | |||||||
| Hong Kong | $ | 1,051,017 | $ | 118,120 | ||||
| Vietnam | 173,531 | – | ||||||
| Japan | 100,850 | – | ||||||
| Singapore | 1,250 | 6,250 | ||||||
| Total revenues | $ | 1,326,648 | $ | 124,370 | ||||
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NOTE 9 — CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY (Unaudited)
The Company performed a test on the restricted net assets of its consolidated subsidiaries in accordance with Rule 4-08(e)(3) of Regulation S-X promulgated by the SEC, “General Notes to Financial Statements” and concluded that it was applicable and the Company is required to disclose the required financial statement information for the parent company.
The subsidiaries did not pay any dividends to the parent during the periods presented. For the purpose of presenting parent only financial information, the Company records its investment in its subsidiaries under the equity method of accounting. Such investments are presented on the separate parent only balance sheets as “investment in subsidiaries” and the income (loss) of the subsidiaries is presented as “share of income (loss) of subsidiaries.” Certain information and footnote disclosures generally included in financial statements prepared in accordance with U.S. GAAP have been condensed or are not required.
PARENT COMPANY BALANCE SHEET
| Schedule of balance sheets | ||||
| October 31, | ||||
| 2023 | ||||
| (Unaudited) | ||||
| ASSETS | ||||
| Cash | $ | 23,822 | ||
| Prepaid expense | 1,000 | |||
| Receivable from subsidiaries | 29,487 | |||
| Investment in subsidiaries | 182,937 | |||
| Total Assets | $ | 237,246 | ||
| LIABILITIES | ||||
| Accounts payable and accrued liabilities | $ | 300,930 | ||
| Due to related parties | 223,041 | |||
| Total Liabilities | 523,971 | |||
| Stockholders’ equity | ||||
| Series A Preferred stock, $ par value; shares authorized; shares issued and outstanding as of October 31, 2023 | 8 | |||
| Undesignated preferred stock, $ par value; shares authorized; shares issued and outstanding | – | |||
| Common stock, $ par value, shares authorized; shares issued and outstanding as of October 31, 2023 | 590 | |||
| Additional paid-in capital | 4,982 | |||
| Accumulated deficit | (292,305 | ) | ||
| Total stockholders’ equity | (286,725 | ) | ||
| Total Liabilities and Stockholders’ Equity | $ | 237,246 | ||
| 18 |
PARENT COMPANY STATEMENT OF OPERATIONS
| Schedule of statements of operations | ||||
For the three months ended October 31, | ||||
| 2023 | ||||
| (Unaudited) | ||||
| EXPENSES: | ||||
| General and administrative | $ | (102,833 | ) | |
| OTHER INCOME: | ||||
| Income from investment in subsidiaries | 87,049 | |||
| Net Loss | $ | (15,784 | ) | |
PARENT COMPANY STATEMENT OF CASH FLOWS
| Schedule of statements of cash flows | ||||
For the three months ended October 31, | ||||
| 2023 | ||||
| (Unaudited) | ||||
| Cash flows from operating activities: | ||||
| Net loss | $ | (15,784 | ) | |
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||
| Share of income from investment in subsidiaries | (87,049 | ) | ||
| Change in operating assets and liabilities: | ||||
| Prepaid expense | 750 | |||
| Accounts payable and accrued liabilities | 59,352 | |||
| Net cash (used in) operating activities | (42,731 | ) | ||
| Net decrease in cash and cash equivalents | (42,731 | ) | ||
| Cash and cash equivalents at July 31, 2023 | 66,553 | |||
| Cash and cash equivalents at October 31, 2023 | $ | 23,822 | ||
| 19 |
| Item2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
Overview
On March 3, 2023, we 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 primarily engaged in logistics solutions, including sea freight forwarding, and logistic software development and maintenance. We also generate revenue from the sale of electronic parts, and certain technical consulting services.
As a non-asset-based freight forwarder, we currently do not own or operate any transportation assets. By acting as an indirect carrier, we issue fixture notes to customers as the contract of carriage. In turn, when the freight is physically tendered to a direct carrier, we receive a contract of carriage known as a Master Ocean Bill of Lading (MOBL). By leveraging our senior management’s expertise on the global logistics industry and adopting an asset-light strategy at the early stage, we’ve seen a significant growth on logistics revenue this quarter. Our business is primarily carried out in Hong Kong and the Asia-Pacific region.
We are optimistic about the future of the logistics service industry and expect that the fundamental supply and demand relationship will enable us to achieve a sustainable business model in the long run. We expect that the global demand for coal, grains and iron ore, electric vehicles, and green energy equipment will continue to increase in response to changes in international trade flows and growing emerging market economies, as well as post pandemic stimulus policies in many countries, boosting demand on global logistics services. Our vision is to continue exploring opportunities in Asia-Pacific, including Vietnam, Singapore, and other emerging markets to increase our customer base and global logistics service revenue.
Results of Operations
Comparison of the three months ended October 31, 2023 and 2022
| For the three months ended October 31, | ||||||||||||||||
| 2023 | 2022 | Change | Change Percentage | |||||||||||||
| Revenues | 1,326,648 | 124,370 | 1,202,278 | 967% | ||||||||||||
| Cost of Revenues | 1,092,871 | 108,555 | 984,316 | 907% | ||||||||||||
| Gross profit | 233,777 | 15,815 | 217,962 | 1378% | ||||||||||||
| Selling and marketing | 102,071 | 2,159 | 99,912 | 4628% | ||||||||||||
| General and administrative | 118,705 | 15,012 | 103,693 | 691% | ||||||||||||
| (Loss) income from operations | 13,001 | (1,356 | ) | 14,357 | – | |||||||||||
| Provision for income taxes | 19,113 | (224 | ) | 19,337 | – | |||||||||||
| Net (loss) income | (6,112 | ) | (1,132 | ) | (4,980 | ) | (440% | ) | ||||||||
| Less: net (loss) income attributable to non-controlling interest | 9,672 | (113 | ) | 9,785 | – | |||||||||||
| Net (loss) income attributable to Tianci | (15,784 | ) | 1,019 | (14,765 | ) | – | ||||||||||
| 20 |
Revenues
During the three months ended October 31, 2023, our revenue increased by $1,202,278, or approximately 9.6 times, to $1,326,648 for the three months ended October 31, 2023 from $124,370 for the three months ended October 31, 2022. The increase was mainly attributed to the launch of our global logistics service, which contributed $1,181,720 to our revenue for the three months ended October 31, 2023, representing approximately 89% of revenue in the quarter ended October 31, 2023.
Our revenues from our revenue streams are categorized as follows:
| For the Three Months Ended October 31, | ||||||||
| 2023 | 2022 | |||||||
| Global Logistics Service Revenue | $ | 1,181,720 | $ | – | ||||
| Product Revenue | 59,902 | 98,000 | ||||||
| Other Service Revenue | 85,026 | 26,370 | ||||||
| $ | 1,326,648 | $ | 124,370 | |||||
Cost of Revenues
Total cost of revenues increased by $984,316, or approximately 9.1 times, to $1,092,871 for the three months ended October 31, 2023 as compared to $108,555 for the three months ended October 31, 2022. The increase was primarily attributable to the launch of global logistics services.
Our cost of revenues from our revenue categories are summarized as follows:
| For the Three Months Ended October 31, | ||||||||
| 2023 | 2022 | |||||||
| Cost of Global Logistics Service | $ | 1,029,970 | $ | – | ||||
| Cost of Product | 50,008 | 73,200 | ||||||
| Cost of Other Service | 12,893 | 35,355 | ||||||
| $ | 1,092,871 | $ | 108,555 | |||||
Our cost of revenues from global logistics services was $1,029,970 for the three months ended October 31, 2023. We did not have any cost of global logistics service in the same period in 2022 as this was a brand new service line. Cost of global logistics services primarily include the cargo space charged by direct ocean carriers, freight forwarders and ancillary logistics services fees.
Our cost of revenues from hardware product sales decreased by $23,192, or approximately 32%, to $50,008 for the three months ended October 31, 2023, from $73,200 for the three months ended October 31, 2022.
Gross Profit
Our gross profits from our major revenue categories are summarized as follows:
| 21 |
Margins
| For the Three Months Ended October 31, | ||||||||
| 2023 | 2022 | |||||||
| Global Logistics Service | ||||||||
| Gross Profit Margin | $ | 151,750 | $ | – | ||||
| Gross Profit Margin | 12.8% | – | ||||||
| Hardware Product Sales | ||||||||
| Gross Profit Margin | $ | 9,894 | $ | 24,800 | ||||
| Gross Profit Percentage | 16.5% | 25.3% | ||||||
| Other Services | ||||||||
| Gross Profit Margin | $ | 72,133 | $ | (8,985 | ) | |||
| Gross Profit Percentage | 84.8% | -34.1% | ||||||
| Total | ||||||||
| Gross Profit Margin | $ | 233,777 | $ | 15,815 | ||||
| Gross Profit Percentage | 17.6% | 12.7% | ||||||
Our gross profit increased by $217,962 to $233,777 for the three months ended October 31, 2023 from $15,815 for the three months October 31, 2022. The increase in gross profit was primarily due to the launch of global logistics service, as discussed above. For the three months ended October 31, 2023 and 2022, our overall gross profit margin was 17.6% and 12.7%, respectively. The gross profit margin of the new global logistics service was 12.8%, which is likely to increase as demand picks up post-pandemic with relatively stable global logistics supply. Our growth profit margin of hardware products for the three months ended October 31, 2023 decreased to 16.5%, from 25.3% for the three months ended October 31, 2022 due to pierce competition and relatively low demand on hardware products. The gross profit margin of our other services revenue increased to 84.8% for the three months ended October 31, 2023, driven and started generating profit for the Company
Operating Expenses
There was significant change in our total operating expenses, which were $220,776 and $17,171 for the three months ended October 31, 2023, and 2022, respectively. Our operating expenses primarily include payroll expenses, commissions, advertising, rent and professional fees for the compliance service as a going concern is dependent uponpublic company. The increase was mainly due to the increased commission expense for referring the global logistics customers, and compliance service professional fees.
Income tax expense
Our income tax expense amounted to $ 19,113 and $ (224) for the three months ended October 31, 2023, and 2022, respectively. The change was due to the increase in revenue realized during the recent quarter.
Net Loss
The Company realized a net loss of $6,112 for the three months ended October 31, 2023. However, because the Company generating profitableowns only 90% of its operating subsidiary, Roshing, 10% of that company’s net income was attributed to the minority interest. Therefore the net loss for the three months ended October 31, 2023 attributable to the shareholders of Tianci International was $15,784. In comparison, during the three months ended October 31st 2023, the Company’s net loss was $1,132 and, after deducting the net loss attributable to the 10% minority interest in Roshing, net loss attributable to shareholders of Tianci International was $1,019. We believe our pivot into the logistics service gives our shareholders an opportunity and exposure at a great sector as the global economy recovers from the pandemic.
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Liquidity and Capital Resources
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 October 31, 2023, we have a working capital deficit of $(286,400), our cash amounted to $380,833, our current assets were $631,629 and our current liabilities were $918,029. To date, we have financed our operations primarily through capital contributions and advances from shareholders and private investors. At October 31, 2023 we owed $276,077 to related parties (See Note 3 of the interim financial statement). We also owed $300,800 to officers for compensation accrued under their employment agreements that they have agreed to defer. The deferred compensation is classified with accrued liabilities and other payables.
Because 63% of our liabilities are owed to related parties, we believe that 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.
We started providing shipping & freight forwarding services during the quarter ended October 31, 2023, which may require significant capital expenditure for developing the business. If we determined that our cash requirements 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 dilution to our shareholders. The incurrence of indebtedness would result in increased fixed obligations and could result in operating covenants that would restrict our operations. Our obligation to bear 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 table summarizes the key components of our cash flows for the three months ended October 31, 2023 and 2022.
| For the three months ended | ||||||||
| October 31, | ||||||||
| 2023 | 2022 | |||||||
| Net cash provided by (used in) operating activities | $ | 124,524 | $ | (14,903 | ) | |||
| Net cash used in investing activities | – | – | ||||||
| Net cash provided by (used in) financing activities | (33 | ) | 36,436 | |||||
| Net change in cash and restricted cash | $ | 124,491 | $ | 21,533 | ||||
Operating activities
Net cash of $124,524 provided by operating activities for the three months ended October 31, 2023 was primarily the result of an increase in accounts payable of $195,232, an increase in accrued liabilities and other payables of $140,354 which was partially offset by the increase of $ 195,629 in accounts receivable.
Net cash of $14,903 used in operating activities for the three months ended October 31, 2022 was primarily the result of an increase in accounts receivable of $111,749, which was partially offset by the increase of $98,202 in accounts payable.
Investing activities
The company has no investing activities for the three months ended October 31, 2023 and 2022.
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Financing activities
Net cash used in financing activities for the three months ended October 31, 2023 was $33. This was attributable to our repayment of a working capital advance by a related party in the amount of $90,000, which was offset by the $89,967 in working capital advance from related parties.
Net cash of $36,436 provided by financing activities for the three months ended October 31, 2022 was primarily attributable to a working capital advance from a related party amounting to $62,775, the direct payment of operating expenses by shareholders amounting to $23,977, and the payments of Shenzhen China rent by related parities amounting to $3,519. Cash inflow was partially offset by repayment of a working capital advance to related party in the amount of $53,835.
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 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.
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 continue to actively manage the impact of the COVID-19 crisis as we face continued uncertainty regarding the impact COVID-19 will have on our financial operations in the near and long term. The need for, or timing of, any future and/oractions in response to obtainCOVID-19 is largely dependent on the necessary financing to meet its obligationsmitigation of the spread of the virus along with the adoption and repay its liabilities arising from normalcontinued effectiveness of vaccines, status of government orders, directives and guidelines, recovery of the business operations when they come due. Management intends to finance operating costs over the next twelve months with loans from directors and/or private placementsenvironment, global supply chain conditions, economic conditions, and consumer demand for our products and services, all of common stock.which are highly uncertain.
RecentCritical Accounting Estimates
Our financial statements and accompanying notes have been prepared in accordance with U.S. GAAP. The preparation of these financial statements and accompanying notes requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure 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 that are not readily apparent from other sources.
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In connection with the preparation of our financial statements for the three months ended October 31, 2023, there was no accounting estimate we made that was subject to a high degree of uncertainty and was critical to our results.
Recently Issued Accounting Pronouncements
The Company has reviewedconsiders the applicability and impact of all accounting standards updates (“ASUs”). Management periodically reviews new accounting standards that are issued. The Company does not believe that any recently issued but not yet effective accounting pronouncements and do not believe the future adoption of any such pronouncements may be expected to causestandards, if currently adopted, would have a material impacteffect on its financial condition or the resultsCompany’s consolidated balance sheets, statements of its operations.operations and comprehensive income and statements of cash flows.
| ITEM 3 |
We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information required under this item.Not applicable.
| ITEM 4 |
Conclusion Regarding the EffectivenessEvaluation of Disclosure Controls and Procedures.
We conducted an evaluationOur management is responsible for establishing and maintaining a system of the effectiveness of the design and operation of our disclosure controls and procedures as such term is(as defined underin Rule 13a-15(e) promulgatedand 15d-15(e) under the Securities Exchange Act of 1934, as amended (Exchange Act), under the supervision of and with the participation of our management, including the Chief Executive Officer and Chief Financial Officer. Based on that evaluation, our management, including the Chief Executive Officer and Chief Financial Officer, concluded that our disclosure controls and procedures, subject to limitations as noted below, as of January 31, 2018, and during the period prior to and including the date of this report, were not effectiveis designed to ensure that all information required to be disclosed by us in the reports that we file or submit under the Exchange Act is: (i)is recorded, processed, summarized and reported, within the time periods specified in the Commission’s rulerules and forms;forms. Disclosure controls and (ii)procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to ourthe issuer’s management, including our Chief Executive Officerits principal executive officer or officers and Chief Financial Officer,principal financial officer or officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.
Inherent Limitations
BecauseAn evaluation was conducted under the supervision and with the participation of its inherent limitations,our management of the effectiveness of the design and operation of our disclosure controls and procedures may not prevent or detect misstatements. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assuranceas of October 31, 2023. Based on that the objectives of the control system are met. Because of the inherent limitations in all control systems, no evaluation, ofour management concluded that our disclosure controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies and procedures may deteriorate.
Changes in Internal Control over Financial Reporting
Our annual report on Form 10-K reported that our internal control over financial reporting waswere not effective as of July 31, 2017, duesuch date to certainensure that information required to be disclosed in the reports that we file or submit under the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms as a result of the following material weaknesses more fully discussedweaknesses:
| · | Because of the company’s limited resources, there are limited controls over information processing. |
| · | There is an inadequate segregation of duties consistent with control objectives. Our Company’s management is limited in number, resulting in a situation where limitations on segregation of duties exist. In order to remedy this situation, we would need to hire additional staff to provide greater segregation of duties. Currently, it is not feasible to hire additional staff to obtain optimal segregation of duties. Management will reassess this matter in the following year to determine whether improvement in segregation of duty is feasible. |
| · | The Company does not have a sitting audit committee financial expert, and thus the Company lacks the board oversight role within the financial reporting process. |
| · | There is a lack of formal policies and procedures necessary to adequately review significant accounting transactions. The Company utilizes a third-party independent contractor for the preparation of its financial statements. Although the financial statements and footnotes are reviewed by our management, we do not have a formal policy to review significant accounting transactions and the accounting treatment of such transactions. The third-party independent contractor is not involved in the day to day operations of the Company and may not be provided information from management on a timely basis to allow for adequate reporting/consideration of certain transactions. |
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Our management will continue to monitor and evaluate the effectiveness of our internal controls and procedures and our internal controls over financial reporting on an ongoing basis and is committed to taking further action and implementing additional enhancements or improvements, as necessary and as funds allow.
Changes in our annual report. Subject to the foregoing disclosures in this Item 4, there wereInternal Controls
There have been no changes in our internal controlcontrols over financial reporting identified in connection with the evaluation required by paragraph (d) of Securities Exchange Act Rule 13a-15 or Rule 15d-15 that occurred during our fiscalin the quarter ended JanuaryOctober 31, 2018,2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
We are not a party to any legal or administrative proceedings that we believe, individually or in the aggregate, would be likely to have a material adverse effect on our financial condition or results of operations.
None.
None.
None.
Not applicable.
None.
* Filed herewith
(1) Incorporated by reference to our Registration Statement on Form S-1 filed with the Securities and Exchange Commission on September 24, 2012.
(2) Incorporated by reference to Appendix A to the Definitive Information Statement on Schedule 14C filed with the Securities and Exchange Commission on June 11, 2015.
(3) Incorporated by reference to Exhibit 14.1 of our Annual Report on Form 10-K filed with the Securities and Exchange on November 13, 2013.
(4) Incorporated by reference to Exhibit 14.2 of our Annual Report on Form 10-K filed with the Securities and Exchange Commission on November 13, 2015.
(5) Incorporated by reference to Exhibit 14.3 of our Annual Report on Form 10-K filed with the Securities and Exchange Commission on November 13, 2015.
(6) Incorporated by reference to Exhibit 99.2 of our Current Report on Form 8-K filed with the Securities and Exchange Commission on August 30, 2017.
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
PART II - OTHER INFORMATION
| Item 1. | Legal Proceedings |
| None. | |
| Item 1A | Risk Factors |
| There have been no material changes in our risk factors from those previously disclosed in our annual report on Form 10-K for the year ended July 31, 2023. | |
| Item 2 | Unregistered Sale of Securities and Use of Proceeds |
| (a) Unregistered sales of equity securities | |
| There were no unregistered sales of equity securities by the Company during the first quarter of fiscal year 2024, other than those reported in Current Reports on Form 8-K. | |
| (c) Purchases of equity securities | |
| The Company did not repurchase any of its equity securities that were registered under Section 12 of the Securities Exchange Act during the first quarter of fiscal year 2024. | |
| Item 3. | Defaults Upon Senior Securities. |
| None. | |
| Item 4. | Mine Safety Disclosures. |
| Not Applicable. | |
| Item 5. | Other Information. |
| None. | |
| Item 6. | Exhibits |
| 31-a(1) | Rule 13a-14(a) Certification of CEO and CFO | |
| 32-a(1) | Rule 13a-14(b) Certification of CEO and CFO | |
| 101.INS | Inline XBRL Instance Document—the instance document does not appear in the Interactive Data File as its XBRL tags are embedded within the Inline XBRL document | |
| 101.SCH | Inline XBRL Schema | |
| 101.CAL | Inline XBRL Calculation | |
| 101.DEF | Inline XBRL Definition | |
| 101.LAB | Inline XBRL Label | |
| 101.PRE | Inline XBRL Presentation | |
| 104 | Cover page formatted as Inline XBRL and contained in Exhibit 101 |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned thereunto duly authorized.
| TIANCI INTERNATIONAL, INC. | |
| Date: December 14, 2023 | By: /s/ Shufang Gao Shufang Gao, Chief Executive, Financial and Accounting Officer |
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