Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSIONU. S. Securities and Exchange Commission

Washington, D.C.D. C. 20549

FormFORM 10-Q

(Mark One)

☒       QUARTERLY REPORT PURSUANT TOUNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended April 30, 20222023

Or

☐      TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ___________________ to _______________________

Commission File Number No. 333-184061

TIANCI INTERNATIONAL, INC.

(Exact name of registrant as specified in its charter)

Securities registered pursuant to Section 12(b) of the Act:

Indicate  by check mark  whether the  registrantRegistrant  (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.

Yes ☒    No YES☐ ☐ NO          

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

files.)   Yes ☒   No YES☐ ☐ NO          

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a 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)

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 ☐No ☒YES ☐ NO          

2,450,148 shares of common stock issued and outstanding as of June __, 2022.

APPLICABLE ONLY TO CORPORATE ISSUERS:  Indicate the number of shares outstanding of each of the Registrant's classes of common stock, as of the latest practicable date:

June 13, 2023

Common Voting Stock: 5,903,481

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

Except for historical information, this quarterly report contains forward-looking statements. Such forward-looking statements involve risks and uncertainties, including, among other things, statements regarding our business strategy, future revenues and anticipated costs and expenses. Such forward-looking statements include, among others, those statements including the words “expects,” “anticipates,” “intends,” “believes” and similar language. Our actual results may differ significantly from those projected in the forward-looking statements. Factors that might cause or contribute to such differences include, but are not limited to, those discussed in the section “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” You should carefully review the risks described in this Quarterly Report on FormTIANCI INTERNATIONAL, INC.

QUARTERLY REPORT ON FORM 10-Q and in other documents we file from time to time with the Securities and Exchange Commission. You are cautioned not to place undue reliance on the forward-looking statements, which speak only as of the date of this report. We undertake no obligation to publicly release any revisions to the forward-looking statements or reflect events or circumstances after the date of this document.

FOR THE FISCAL QUARTER ENDED APRIL 30, 2023

Although we believe that the expectations reflected in these forward-looking statements are based on reasonable assumptions, there are a number of risks and uncertainties that could cause actual results to differ materially from such forward-looking statements.

Our unaudited financial statements are prepared in accordance with United States Generally Accepted Accounting Principles. The following discussion should be read in conjunction with our financial statements and the related notes that appear elsewhere in this quarterly report.

All references in this Form 10-Q to “Company”, “Tianci”, “we,” “us” or “our” mean Tianci International, Inc. (formerly known as “Steampunk Wizard, Inc.”), unless otherwise indicated.

TABLE OF CONTENTS

PART I  -–  FINANCIAL INFORMATION

TIANCI INTERNATIONAL, INC. AND SUBSIDIARIES

UNAUDITED INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)(EXPRESSED IN UNITED STATES DOLLARS)

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

TIANCI INTERNATIONAL, INC. AND SUBSIDIARIES

UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(EXPRESSED IN UNITED STATES DOLLARS)

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

TIANCI INTERNATIONAL, INC. AND SUBSIDIARIES

UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

FOR THE THREE AND NINE MONTHS ENDED APRIL 30, 2023 AND 2022

(EXPRESSED IN UNITED STATES DOLLARS)

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

TIANCI INTERNATIONAL, INC. AND SUBSIDIARIES

UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONSCASH FLOWS

(UNAUDITED)(EXPRESSED IN UNITED STATES DOLLARS)

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

statements.

TIANCI INTERNATIONAL, INC.

CONDENSED STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICITNotes To Consolidated Financial Statements

(UNAUDITED)

For the Three and Nine Months Ended April 30, 2023 and 2022

(Unaudited)

For the Three and Nine Months Ended April 30, 2021

The accompanying notes are an integral part of these unaudited condensed financial statements

TIANCI INTERNATIONAL, INC.

CONDENSED STATEMENTS OF CASH FLOWS

(UNAUDITED)

The accompanying notes are an integral part of these unaudited condensed financial statement

TIANCI INTERNATIONAL, INC.

NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

NOTE 1 – DESCRIPTIONNATURE OF BUSINESS AND ORGANIZATION

Tianci International, Inc. (the “Company”, “Tianci”) was incorporated under the laws of the State of Nevada 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. As of the date of this report, theThe Company is a holding company and has not carried out substantive business operationscompany. As of its own.April 30, 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.

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

Effective August 6, 2021, Tianci International, Inc., Chuah Su Mei,Reorganization

On March 3, 2023 the Company’s former Chief Executive Officer, President and Director, and Silver Glory Group Limited,Company entered into a Stock PurchaseShare Exchange Agreement (the “Stock Purchase Agreement”) pursuant to which Chuah Su Mei agreed to sell to Silver Glorywith RQS United Group Limited all 1,793,000 shares(“RQS United”) and RQS Capital Limited (“RQS Capital”), which was the sole shareholder of common stockRQS United (the “Exchange Agreement”). RQS United owns 90% of the Company held by her (the “Shares”equity in Roshing International Co., Ltd. (“Roshing”) for cash consideration, which is engaged in the business of Five Hundred Twenty Five Thousand Dollars ($525,000) (the “Transaction”). The Shares represent approximately 73.18%distributing electronic components and providing software services. Pursuant to the Exchange Agreement, on March 6, 2023 RQS Capital transferred all of the issued and outstanding capital 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 cash price of $350,000 (the “Share Exchange”). Pursuant to the Company. The saleExchange Agreement, the Company also issued a total of the Shares consummated on August 26, 2021. 700,000 shares of our common stock to nine employees or affiliates of Roshing to induce continued services to Roshing.

As a result of the Transaction, Silver Glory Group Limited holdsShare Exchange, RQS United became our wholly-owned subsidiary and the former RQS United Stockholders became our controlling stockholders. The share exchange transaction was treated as a controlling interestreverse 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.

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

UponPrior to the closingShare Exchange, the Company was a shell company as defined in Rule 12b-2 under the Exchange Act. As a result of the Transaction, on August 26, 2021, each of Chuah Su Chen, Chuah Su Mei, and Jerry Ooi, constituting all current directors and officers oftransactions under the Exchange Agreement, the Company resigned from his or her positions with the Company. Each of the foregoing former officers and directors also forgave all amounts dueceased to them from the Company in connection with the closing of the Transaction.

Concurrently with such resignation, Zhigang Pei was appointed as Chief Executive Officer, Chief Financial Officer, Secretary and Director and two directors and three independent directors were also appointed to serve until the next annual meeting of stockholders of the Company.

NOTE 2 – GOING CONCERN MATTERS

As of April 30, 2022, the Company had nil in cash held in trust. The Company had incurredbe a net loss of $180,039 and used $128,461 in cash for operating activities for the nine months ended April 30, 2022.shell company.

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 flows 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 financial statements do not include any adjustments that might result from the outcome of this uncertainty.

NOTE 32 – 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, 2021, filed on October 25, 2021.

The unaudited condensed financial statements and notes are presented in accordance with accounting principles generally accepted in the United States of America (GAAP) and are presented in U.S. dollars. 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, 2022 and 2021 and notes thereto included in the Company’s Form 8-K filed with the SEC on March 6, 2023.

Results of the nine months ended April 30, 2022,2023 are not necessarily indicative of the results that may be expected for the year endedending July 31, 2022, and2023 or any other future periods.

Principles of consolidation

The unaudited interim consolidated financial statements include the financial statements of Tianci and its subsidiaries. All transactions and balances among the Company and its subsidiaries have been 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.

Foreign currency translation and transactions

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

Cash and Cash Equivalents

Cash and cash equivalents include cash on hand, cash in trust, and all highly liquid debt instrumentsconsist primarily of bank deposits with original maturities of three months or less.less, which are unrestricted as to withdrawal and use. The Company hadmaintains 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 the receivables, the economic environment, industry trend analysis, and the credit history and financial condition of the customer. Management reviews its receivables on a regular basis to determine if the allowance for doubtful accounts is adequate, and adjusts the allowance when necessary. Delinquent account balances are written-off against the allowance for doubtful accounts after management has determined that the likelihood of collection is not probable. As of April 30, 2023 and July 31, 2022, no allowance for doubtful accounts was deemed necessary.

Fair Value Measurements

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

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

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

Revenue recognition

The Company follows the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 606. This standard requires the use of a five-step model to recognize revenue from customer contracts. The five-step model requires that the Company (i) identifies the contract with the customer, (ii) identifies the performance obligations in the contract, (iii) determines the transaction price, including variable consideration to the extent that it is probable that a significant future reversal will not occur, (iv) allocates the transaction price to the respective performance obligations in the contract, and (v) recognizes revenue when (or as) the Company satisfies the performance obligations.

The Company records revenue net of sales taxes which are subsequently remitted to governmental authorities and are excluded from the transaction price.

The Company’s revenue recognition policies are as follows:

a. Electronic Device Hardware Components Products Sales

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

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

b. Software and Website Development Services

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

c. Technical Consulting and Training Services

The Company 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 generally carried out on a per-time fixed rate basis. Revenue is recognized at a point in time when service is rendered and the customer confirms the completion of consulting or training.

d. 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 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.

Cost of revenues

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

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

Advertising costs

Advertising costs amounted to $0 and $3,951192 in cash and cash equivalents as offor the three months ended April 30, 2023 and 2022, respectively, and July 31, 2021, respectively.

Fair Value Measurements

The carrying amounts of the Company’s financial instruments, including cash$192 and accounts payable, approximate fair value because of their short maturities.

Recent Accounting Pronouncements

$Management has considered all recent accounting pronouncements issued and their potential effect on the financial statements. The Company's management believes that these recent pronouncements will not have a material effect on the Company's condensed financial statements.192

NOTE 4 – DUE TO RELATED PARTIES

During for the nine months ended April 30, 2023 and 2022 respectively. Advertising costs are expensed as incurred and 2021,included in selling and marketing expenses.

Operating leases

Effective August 1, 2022, the formerCompany adopted FASB ASU 2016-02, “Leases” (Topic 842), and current shareholderselected the practical expedients that does not require the Company to reassess: (1) whether any expired or existing contracts are, or contain, leases, (2) lease classification for any expired or existing leases and (3) initial direct costs for any expired or existing leases. For lease terms of twelve months or less, a lessee is permitted to make an accounting policy election not to recognize lease assets and liabilities. The Company also adopted the practical expedient that allows lessees to treat the lease and non-lease components of a lease as a single lease component. Upon adoption of ASU 2016-02 effective August 1, 2022, the Company recognized a $8,704 right of use (“ROU”) asset and operating lease liabilities in January 2023 based on the present value of the Company advanced $future minimum rental payments of leases, using an incremental borrowing rate of 125,7125 and $49,240 for working capital purpose, respectively.%.

DuringThe Company determines if a contract contains a lease at inception. US GAAP requires that the nine months ended April 30, 2022,Company’s leases be evaluated and 2021,classified as operating or finance leases for financial reporting purposes. The classification evaluation begins at the commencement date and the lease term used in the evaluation includes the non-cancellable period for which the Company repaid $1,202 and $0 duehas the right to a former shareholderuse the underlying asset, together with renewal option periods when the exercise of the Company, respectively.renewal option is reasonably certain and failure to exercise such option would result in an economic penalty. All of the Company’s real estate leases are classified as operating leases.

Lease payments for an operating lease transitioning to ASC 842 using the effective date are based on future payments at the transition date and on the present value of lease payments over the remaining lease term. Since the implicit rate for the Company’s leases is not readily determinable, the Company use 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 the Company does not have reasonable certainty at lease inception that these options will be exercised. The Company generally considers the economic life of its operating lease ROU assets to be comparable to the useful life of similar owned assets. The Company has elected the short-term lease exception; therefore, operating lease ROU assets and liabilities do not include leases with a lease term of twelve months or less. Lease expense is recognized on a straight-line basis over the lease term.

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

Income taxes

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

On August 26, 2021,Deferred taxes are accounted for using the asset and pursuantliability method in respect of temporary differences arising from differences between the carrying amount of assets and liabilities in the unaudited interim consolidated financial statements and the corresponding tax bases used in the computation of taxable income (loss). In principle, deferred tax liabilities are recognized for all taxable temporary differences. Deferred tax assets are recognized to the Stock Purchase Agreement datedextent that it 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 apply to the period when the asset is realized or the 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 that some portion or all of the net deferred tax asset will not be realized.

An 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 August 6, 2021 (see Note 1 - Changeexamination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. Penalties and interest incurred related to underpayment of control)income tax for uncertain tax positions are classified as income tax expense in the period incurred.

The Hong Kong tax returns filed for 2016 and subsequent years are subject to examination by the applicable tax authorities.

The US tax returns filed for 2020 and subsequent years are subject to examination by the applicable tax authorities.

Earnings (loss) per share

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., Chuah Su Mei,convertible securities, options and warrants) as if they had been converted at the Company’s former Chief Executive Officer, President and Director and all other former officers forgave all amounts due to thembeginning 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 Company. In regard to this forgiveness,calculation of diluted EPS. For the Company recognized debt forgiveness by related parties of $349,716 as additional paid-in-capital.

During thethree and nine months ended April 30, 2023 and 2022, there were no dilutive shares outstanding.

Noncontrolling Interests

The Company’s noncontrolling interest represents the Company accrued $minority shareholder’s 122,40010% ownership interest inRoshing. The noncontrolling interest is presented in the unaudited consolidated balance sheets separately from stockholders’ equity attributable to RQS United. Noncontrolling interest in the results of Roshing are presented on the unaudited consolidated statements of operations as allocations of the total income or loss of Roshing for the compensation of its CEOthree and five directors. During the nine months ended April 30, 2023 and 2022 between the Company paid salarynoncontrolling interest holder and the shareholders of $69,000 to the five directors. As of April 30, 2022, the Company owed $53,400 unpaid compensation to the CEO and five directors, which was included in accounts payable and accrued liabilities.

As of April 30, 2022, and July 31, 2021, the Company owed $107,959 and $333,165 to related parties, respectively. These loans were unsecured, non-interest bearing, and due on demand.

NOTE 5 – EQUITYRQS United.

Preferred StockRelated parties

Parties, which can be a corporation, other business entity, or 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 has 20,000,000 authorized preferred shares with a par value of $0.0001 per share. The Board of Directors are authorized to divideconsiders 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 sharesapplicability and impact of all other seriesaccounting 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 classes.

There were 0 shareshas elected the extended transition period for complying with new or revised accounting standards, which delays the adoption of preferred stock issued and outstanding as of April 30, 2022, and July 31, 2021.

Common Stock

The Company has 100,000,000 authorized common shares with a par value of $0.0001 per share.

As of April 30, 2022, and July 31, 2021, there were 2,450,148 shares of common stock issued and outstanding.

NOTE 6 – SUBSEQUENT EVENTS

The Company has evaluated subsequent events through the date which the financial statements were availablethese accounting standards until they would apply to be issued. All subsequent events requiring recognition as of April 30, 2022, have been incorporated into these financial statements and there are no subsequent events that require disclosure in accordance with FASB ASC Topic 855, “Subsequent Events.”

private companies.

In 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 Company is currently evaluating the impact ASU 2019-05 may have on its unaudited consolidated financial statements.

In December 2019, the FASB issued ASU 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes”. The amendments in this Update simplify the accounting for income taxes by removing certain exceptions to the general principles in Topic 740. The amendments also improve consistent application of and simplify 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 have a material impact on the Company’s unaudited consolidated financial statements.

In October 2020, the FASB issued ASU 2020-08, “Codification Improvements to Subtopic 310-20, Receivables — Nonrefundable Fees and Other Costs”. The amendments in this Update represent changes to clarify the Codification. The amendments make the Codification easier to understand and easier to apply by eliminating inconsistencies and providing clarifications. ASU 2020-08 is effective for the Company for annual and interim reporting periods beginning August 1, 2021. All entities should apply the amendments in this Update on a prospective basis as of the beginning of the period of adoption for existing or newly purchased callable debt securities. These amendments do not change the effective dates for Update 2017-08. The adoption of this standard on August 1, 2021 did not have a material impact on the Company’s unaudited consolidated financial statements.

Except as mentioned above, the Company does not believe other recently issued but not yet effective accounting standards, if currently adopted, would have a material effect on the Company’s unaudited consolidated Financial Statements.

NOTE 3 – RELATED PARTIES BALANCES AND TRANSACTIONS

Due from related party consists of:

Due from related party represents a receivable of $54,134 from RQS Capital, which was subsequently collected.

Due to related parties consist of:

These liabilities are unsecured, non-interest bearing, and due on demand.

Employment agreements with officers and director retainer agreements

Tianci currently maintains four employment agreements and three director retainer agreements with its officers and directors. The agreements have terms of 3 years and each provide for monthly compensation in amounts ranging from $1,300 per month to $3,800 per month.

For the three and nine months ended April 30, 2023, we accrued management compensation expenses of $60,000. These amounts are included in “general and administrative expenses” in the accompanying consolidated statement of operations.

Office space sharing agreement with related parties

On 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 provides for Gao and Deng, sub lessees under a separate office space sharing agreement relating to the use of the premises from August 28, 2021 to August 31, 2024, to pay monthly rent to the lessee ranging from RMB 12,320 (approximately $1,827) to RMB 13,583 (approximately $2,014) on behalf of Roshing. The agreement is continuous until amended in writing by either party at their sole discretion. The rent expenses paid by Gao and Deng are billed directly to Gao 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 April 30, 2023 and 2022, the Company has accounted for this agreement by charging general and administrative expenses for $5,648 and $5,832, respectively, and crediting additional paid-in capital for $5,648 and $5,832, respectively. For the nine months ended April 30, 2023 and 2022, the Company has accounted for this agreement by charging general and administrative expenses for $14,727 and $14,496, respectively, and crediting additional paid-in capital for $14,727 and $14,496, respectively.

NOTE 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 Amendment amended Article 3 of the Company’s Articles of Incorporation to provide that the authorized capital stock of the Company will be 120,080,000 shares of capital stock consisting of 100,000,000 shares of common stock, $0.0001 par value, 80,000 shares of Series A Preferred Stock, $0.0001 par value, and 20,000,000 shares of undesignated preferred stock, $0.0001 par value.

The following table sets forth information, as of April 30, 2023, regarding the classes of capital stock that are authorized by the Articles of Incorporation of Tianci International, Inc.

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 equitable 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 of the Company, $0.01 per share, then to share in the distribution on an as-converted basis.

Undesignated Preferred Stock

The Board 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 80,000 shares of its Series A Preferred Stock to RQS Capital for $24,000 cash.

On March 1, 2023, Tianci sold a total of 1,253,333 shares of its common stock to 13 non-US persons at a price of $0.30 per share or $376,000 total.

On March 6, 2023, Tianci issued 1,500,000 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 700,000 shares of its common stock to nine employees or affiliates of Roshing to induce continued services to Roshing. For the three and nine months ended April 30, 2023, the Company accounted for this issuance by expensing the $210,000 estimated fair value of the 700,000 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

The Company computes its tax provision for interim periods by applying the estimated annual effective tax rate to year-to-date pre-tax income(loss) from recurring operations and adjusting for discrete tax items arising in that quarter.

The Company had an effective tax rate of (0.41%) and 16.5% for the three months ended April 30, 2023 and 2022, and (0.69%) and 16.5% for the nine months ended April 30, 2023 and 2022, respectively. The Company has incurred U.S. operating losses and has minimal taxable profits in foreign jurisdictions.

The Company has evaluated all available evidence, both positive and negative, including historical levels of income and expectations and risks associated with estimates of future taxable income, and has determined that it is more likely than not that its net deferred tax assets will not be realized in the United States. Due to uncertainties surrounding the realization of the deferred tax assets, the Company maintains a full valuation allowance against its United States deferred tax assets.

The Company is subject to income taxes in the United States and foreign jurisdictions. As of April 30, 2023, tax years 2020 and forward generally remain open for examination for U.S. federal and state tax purposes, and tax years 2017 and forward generally remain open for examination for foreign tax purposes.

The Company has applied ASC 740 and determined that it does not have uncertain tax positions giving rise to unrecognized tax benefits for each of the three and nine months ended April 30, 2023 and 2022. The Company does not anticipate any significant changes to unrecognized tax benefits over the next 12 months.

On August 16, 2022, President Biden signed the Inflation Reduction Act of 2022 (the Inflation Act) into law. The Inflation Act contains certain tax measures, including a corporate alternative minimum tax of 15% on some large corporations and an excise tax of 1% on stock repurchases. For the three and nine months ended April 30, 2023, the Inflation Act had no material impact to the Company. The Company is continuing to evaluate the various provisions of the Inflation Act and does not anticipate the impact, if any, will be material to the Company.

NOTE 6 — CONCENTRATION OF RISK

Credit risk

Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash. The cash balance in each financial institution in the United States is insured by the FDIC up to $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 April 30, 2023, a cash balance of $140,695 was maintained at a financial institution in Hong Kong of which approximately $76,000 was subject to credit risk. Management believes that the financial institution is of high credit quality and continually monitors its credit worthiness.

Customer concentration risk

For the nine months ended April 30, 2023, two customers accounted for 47.7% and 14.1% of the Company’s total revenues. For the nine months ended April 30, 2022, one customer accounted for 100% of the Company’s total revenues.

As of April 30, 2023, one customer accounted for 100% of the Company’s total accounts receivable. As of July 31, 2022, five customers accounted for 41.1%, 24.4%,10.8%, 10.8%, and 10.5% of the Company’s total accounts receivable.

Vendor concentration risk

For the nine months ended April 30, 2023, two vendors accounted for more than 75.8% and 15.8% of the Company’s total purchases.

As of April 30, 2023, two vendors accounted for 86.9% and 13.1% of the Company’s total accounts payable. As of July 31, 2022, four vendors accounted for 44.5%, 28.1%, 16.6%, and 10.8% of the Company’s total accounts payable.

NOTE 7— COMMITMENTS AND CONTINGENCIES

Lease commitments

The Company has an office space sharing agreement with Shufang Gao and Ying Deng to use office space located in Shenzhen, China. (See Note 3)

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 agreements do not contain any material residual value guarantees or material restrictive covenants. The leases generally do not contain options to extend at the time of expiration.

As of April 30, 2022, the Company’s operating leases had a weighted average remaining lease term of approximately 1.67 years

Rent expenses were $6,794 and $6,909 for the three months ended April 30, 2023 and 2022, respectively, and $17,870 and $17,732 for the nine months ended April 30, 2023 and 2022, respectively.

The total future minimum lease payments under the non-cancellable operating leases as of April 30, 2023 are as follows:

Future amortization of the Company’s ROU asset is presented below:

Contingencies

From time to time, the Company may be a party to legal proceedings, as well as certain asserted and un-asserted claims.

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 her 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:

Disaggregated information of revenues by regions are as follows:

NOTE 9 — SUBSEQUENT EVENTS

In accordance with ASC 855-10, the Company’s management has performed subsequent events procedures through the date these financial statements were issued and determined that there are no reportable subsequent events.   

Overview

We are currentlyOn March 3, 2023, Tianci acquired ownership of RQS United Group Limited, a “shell company” withcompany 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 meaningful assets or operations other than our efforts to identifyholding 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 merge with an operating company. We were incorporatedis engaged in the Statesale of Nevadacomponents of electronic devices, development of software and websites, technical consulting, and providing maintenance support on June 13, 2012. Our currentcustomized software. Roshing’s business office is located at 20 Holbeche Road Arndell Park, NSW, Australia, 2148. Our telephone number is +61 02 9672 1899.primarily carried out in Hong Kong, although we realize a substantial portion of our software development revenue in Singapore.

Results of Operations

Comparison of Three Months Ended April 30, 2023 and 2022

Revenues

During the three months ended April 30, 2023, our revenue increased to $144,013 for the three months ended April 30, 2023 from $0 for the three months ended April 30, 2022. The increase was mainly attributed to a significant increase in hardware product sales, and the rendering of software maintenance services. We were initially an exploration stage company underhave one new hardware customer for total sales of $115,000 for the namethree months ended April 30, 2023, as compared to no hardware sales for the three months ended April 30, 2022. Software maintenance and business promotion services, a new line of Freedom Petroleum Inc. (changedservice we provide to Steampunk Wizards, Inc., effective on July 2, 2015) that originally intendedcustomers, contributed $29,013 to engageour revenue for the three months ended April 30, 2023 as compared to $0 in the exploration and developmentsame period of oil and gas properties. In2022.

Our revenues from our revenue categories are summarized as follows:

Cost of Revenues

Total cost of revenues increased by $251,674, or approximately 2788%, to $260,700 for the three months ended April 2015, after reviewing30, 2023 as compared to $9,026 for the markets with investor appetite and management's dutiesthree months ended April 30, 2022. The increase in the cost of revenues is a direct result of our increase in revenue.

Our cost of revenues from our revenue categories are summarized as follows:

Our cost of revenues from hardware product sales increased to its shareholders,$88,550 for the three months ended April 30, 2023, from $0 for the three months ended April 30, 2022, as we had no hardware product sales during the earlier quarter.

Our cost of revenues from software related services increased by $163,124 to $172,150 for the three months ended April 30, 2023, from $9,026 for the three months ended April 30, 2022. The increase in cost of revenues from software related services resulted from the increase of revenues from software related service for the quarter ended April 30, 2023, as we incurred the cost of internal software developers’ compensation, including stock-based compensation of $144,000.

Gross Profit

Our gross loss increased by $107,661 to $116,687 for the three months ended April 30, 2023 from $9,026 for the three months April 30, 2022. The increase in gross loss was primarily due to the increase in our overall cost of revenues, as discussed above. For the three months ended April 30, 2023, our overall gross loss margin was 81%. There was a dramatic change in our gross loss margin as we added more business lines to the Company determined to discontinue its oil and gas operation. We then began exploring opportunities in 2022, having had no hardware sales for the computer gaming and application industry.

three months ended April 30, 2022.

We engaged in computer game development until October 13, 2016, when controlThe gross profit margin of hardware products for the three months ended April 30, 2023 was 23.0%. The gross loss margin of our company changed pursuantsoftware related services increased to a share purchase agreement493.4% for the three months ended April 30, 2023 as we increased total salary and a spin-off agreement. On October 26, 2016,stock compensation to our corporate nameinternal software developers.

Operating Expenses

There was changed from “Steampunk Wizards, Inc.”significant change in our total operating expenses, which were $197,441 and $15,393 for the three months ended April 30, 2023, and 2022 respectively. Our operating expenses primarily include payroll expenses, advertisements and rents. The increase was mainly due to "Tianci International, Inc."the stock compensation we issued to the selling and general administrative personnel for their continued service after the reverse merger, including $36,000 stock-based compensation which was included in selling and marketing expense for the three and nine months ended April 30, 2023, and another $30,000 stock-based compensation which was included in general and administrative expenses for the three and nine months ended April 30, 2023.

Income tax expense

Our income tax expense and (benefit) amounted to $ 1,280 and $ (4,029) for the three months ended April 30, 2023, and 2022, respectively. The name change was effected on November 27, 2016, in connection with the merger of us into our then subsidiary, Tianci International Inc. 

Effective April 6, 2017, we effectuated a 1-for-40 reverse stock split (the “2017 Reverse Stock Split”) of our issued and outstanding shares of common stock, $0.0001 par value, whereby 49,854,280 outstanding shares were exchanged for 1,246,357 shares of our common stock. Common share amounts and per share amounts in these accompanying financial statements and notes have been retroactively adjusted to reflect this reverse stock split.

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”). Pursuantmainly due 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 consummatedminimum tax on August 15, 2017. The Purchasers used personal funds to acquire the Shares.

Effective August 6, 2021, Tianci International, Inc., a Nevada corporation (“we,” “us,” or the “Company”), Chuah Su Mei, our former Chief Executive Officer, President and Director, and Silver Glory Group Limited, entered into a Stock Purchase Agreement (the “Stock Purchase Agreement”) pursuant to which Chuah Su Mei agreed to sell to Silver Glory Group Limited all 1,793,000 shares of common stock of the Company held by her (the “Shares”) for cash consideration of Five Hundred Twenty Five Thousand Dollars ($525,000) (the “Transaction”). The Shares represent approximately 73.18% of the issued and outstanding common stock of the Company and are being soldprofits imposed in reliance upon an exemption from registration under the Securities Act of 1933, as amended, pursuant to Section 4(2) thereof. The sale of the Shares consummated on August 26, 2021, and was purchased by Silver Glory Group Limited using its working capital. As a result of the Transaction, Silver Glory Group Limited holds a controlling interest in the Company and may unilaterally determine the election of the members of the Board of Directors (the “Board”) and other substantive matters requiring approval of the Company’s stockholders.

Upon the closing of the Transaction, on August 26, 2021, the then current directors and officers of the Company resigned from his or her positions with the Company. The resignations were not due to any dispute or disagreement with the Company on any matter relating to the Company's operations, policies or practices. The then current directors and officers also forgave all debts owed by the Company to them and their affiliates.

Hong Kong.

Concurrently with such resignation,Comparison of Nine Months Ended April 30, 2023 and 2022

Revenues

During the following individuals were appointednine months ended April 30, 2023, our revenue increased by $358,321, or approximately 4076%, to serve$367,113 for the nine months ended April 30, 2023 from $8,792 for the nine months ended April 30, 2022. The increase was mainly attributed to a significant increase in hardware product sales, and the rendering of software maintenance services. We have 5 new hardware customers for total sales of $294,880 for the nine months ended April 30, 2023, as compared to no hardware sales for the nine months ended April 30, 2022. Software maintenance and business promotion services, a new line of service we provide to customers, contributed $72,233 to our revenue for the nine months ended April 30, 2023 as compared to $8,792 in the offices set forth next to his name until the next annual meetingsame period of stockholders of the Company and until such director’s successor is elected and qualified or until such director’s earlier death, resignation or removal.

None of the directors or executive officers has a direct family relationship with any of the Company’s directors or executive officers.

Limited Operating History; Need for Additional Capital

We have had limited operations 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 inherent in the establishment of a new business enterprise, including limited capital resources, possible delays in the launching of our games and market or wider economic downturns. We do not believe we have sufficient funds to operate our business for the next 12 months.

We have no assurance that future financing will be available to us on acceptable terms, or at all. If financing is not available on satisfactory terms, we may be unable to continue, develop or expand our operations. Equity financing could result in additional dilution to existing shareholders. If we are unable to raise additional capital to maintain our operations in the future, we may be unable to carry out our full business plan or we may be forced to cease operations.

Going Concern2022.

Our financial statements have been prepared onrevenues from our revenue categories are summarized as follows:

Cost of Revenues

Total cost of revenues increased by $424,810, or approximately 1828%, to $448,055 for the nine months ended April 30, 2023 as compared to $23,245 for the nine months ended April 30, 2022. The increase in the cost of revenues is a going concern basis which assumesdirect result of our increase in revenue.

Our cost of revenues from our revenue categories are summarized as follows: