TIANCI INTERNATIONAL, INC. 10-Q

Table of Contents

U. S. Securities and Exchange Commission

Washington, D. C. 20549

FORM 10-Q

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

For the quarterly period ended April 30, 2025

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

For the transition period from _____ to _____

Commission File No. 001-42591

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 999077
	(Address of Principal Executive Offices)

	Issuer’s Telephone Number: 852-225-10781
	(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
Common Stock, par value $0.0001	CIIT	Nasdaq Capital Market

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Sections 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. 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.) Yes ☒ 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 growth 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 ☒

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 6, 2025

Common Stock: 16,531,803

TIANCI INTERNATIONAL, INC.

QUARTERLY REPORT ON FORM 10-Q

FOR THE FISCAL QUARTER ENDED APRIL 30, 2025

TABLE OF CONTENTS

		Page No.

Part I. Financial Information

Item 1.	Financial Statements (unaudited):	3

	Condensed Balance Sheets – April 30, 2025 (Unaudited) and July 31, 2024	3

	Consolidated Statements of Operations (Unaudited) - for the Three and Nine Months Ended April 30, 2025 and 2024	4

	Condensed Statement of Changes in Stockholders’ Equity (Unaudited) for the Three and Nine Months Ended April 30, 2025 and 2024	5

	Statements of Cash Flows (Unaudited) – for the Nine Months Ended April 30, 2025 and 2024	6

	Notes to Consolidated Financial Statements (Unaudited)	7

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	22

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	28

Item 4.	Controls and Procedures	28

Part II. Other Information

Item 1.	Legal Proceedings	29

Item 1A.	Risk Factors	29

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	29

Item 3.	Defaults Upon Senior Securities	29

Item 4.	Mine Safety Disclosures	29

Item 5.	Other Information	29

Item 6.	Exhibits	29

	Signatures	30

PART I – FINANCIAL INFORMATION

Item 1.

Financial Statements

TIANCI INTERNATIONAL, INC. AND SUBSIDIARIES

UNAUDITED INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS

(EXPRESSED IN UNITED STATES DOLLARS)


	April 30			July 31,
	2025			2024
	(Unaudited)
ASSETS
Current assets:
Cash	$	3,630,884		$	413,129
Accounts receivable		166,752			–
Prepaid expense		725,553			1,820
Deferred offering costs		–			495,356
Total current assets		4,523,189			910,305

Other assets:
Lease security deposit		1,656			1,656
Total non-current assets		1,656			1,656

TOTAL ASSETS	$	4,524,845		$	911,961

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Income taxes payable	$	10,284		$	62,204
Due to related parties		–			2,271
Accrued liabilities and other payables		3,615			57,476
Total current liabilities		13,899			121,951

Total liabilities		13,899			121,951

Commitments and contingencies		–			–

Stockholders’ equity:
Series A Preferred stock, $0.0001 par value; 80,000 shares authorized; no shares issued and outstanding as of April 30, 2025 and July 31, 2024		–			–
Series B Preferred stock, $0.0001 par value; 80,000 shares authorized; 80,000 shares issued and outstanding as of April 30, 2025 and July 31, 2024		8			8
Undesignated preferred stock, $0.0001 par value; 19,920,000 shares authorized; no shares issued and outstanding		–			–
Common stock, $0.0001 par value, 100,000,000 shares authorized; 16,531,803 and 14,781,803 shares issued and outstanding as of April 30, 2025 and July 31, 2024, respectively		1,653			1,478
Additional paid-in capital		5,845,505			962,416
Accumulated deficit		(1,376,465	)		(222,071	)
Total stockholders' equity attributable to TIANCI INTERNATIONAL, INC.		4,470,701			741,831
Non-controlling interest		40,245			48,179

Total stockholders’ equity		4,510,946			790,010

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	4,524,845		$	911,961

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)


	For the three months ended April 30,						For the nine months ended April 30,
	2025			2024			2025			2024
	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)
OPERATING REVENUES
Global logistics services	$	1,901,992		$	1,921,874		$	6,731,768		$	5,922,650
Other revenue		46,223			18,472			276,590			238,472
Total Operating Revenues		1,948,215			1,940,346			7,008,358			6,161,122

COST OF REVENUES
Global logistics services		1,886,564			1,683,283			6,472,998			5,218,017
Other revenue		3,668			12,356			168,968			125,517
Total Cost of Revenues		1,890,232			1,695,639			6,641,966			5,343,534

Gross profit		57,983			244,707			366,392			817,588

Operating expenses:
Selling and marketing		63,700			91,950			163,924			327,784
General and administrative		960,583			134,473			1,392,187			389,899

Total operating expenses		1,024,283			226,423			1,556,111			717,683

Income (loss) from operations		(966,300	)		18,284			(1,189,719	)		99,905

Other income net		–			(47,030	)		27,391			(22,077	)

Income (loss) before provision for income taxes		(966,300	)		(28,746	)		(1,162,328	)		77,828
Provision for (benefit from) income taxes		(6,891	)		10,051			–			22,023

Net (loss)		(959,409	)		(38,797	)		(1,162,328	)		55,805
Less: net income attributable to non-controlling interest		(11,422	)		11,177			(7,934	)		40,430

Net (loss) attributable to TIANCI INTERNATIONAL, INC.	$	(947,987	)	$	(49,974	)	$	(1,154,394	)	$	15,375

Weighted average number of common shares*
Basic and diluted		14,971,783			14,781,803			14,843,267			9,138,539

(Loss) per common share attributable to TIANCI INTERNATIONAL, INC.*
Basic and diluted	$	(0.06	)	$	(0.00	)	$	(0.08	)	$	0.01

Weighted average number of preferred shares A*
Basic and diluted		–			–			–			49,817

(Loss) per preferred share A attributable to TIANCI INTERNATIONAL, INC.*
Basic and diluted	$	–		$	–		$	–		$	0.01

Weighted average number of preferred shares B*
Basic and diluted		80,000			4,494			80,000			1,465

(Loss) per preferred share B attributable to TIANCI INTERNATIONAL, INC.*
Basic and diluted	$	(0.06	)	$	(0.00	)	$	(0.08	)	$	0.01

*	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.

TIANCI INTERNATIONAL, INC. AND SUBSIDIARIES

UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

FOR THE THREE AND NINE MONTHS ENDED APRIL 30, 2025 AND 2024

(EXPRESSED IN UNITED STATES DOLLARS)


	Series A Preferred Stock	Series A Preferred Stock amount*		Series B Preferred Stock	Series B Preferred Stock amount*		Common stock*	Common stock amount*		Subscription receivable*		Additional Paid-in Capital		(Accumulated Deficit)			Noncontrolling interest			Total

Balance at July 31, 2024	–	$	–	80,000	$	8	14,781,803	$	1,478	$	–	$	962,416	$	(222,071	)	$	48,179		$	790,010
Net loss	–		–	–		–	–		–		–		–		(93,056	)		1,108			(91,948	)
Balance at October 31, 2024 (unaudited)	–	$	–	80,000	$	8	14,781,803	$	1,478	$	–	$	962,416	$	(315,127	)	$	49,287		$	698,062
Net loss	–		–	–		–	–		–		–		–		(113,351	)		2,380			(110,971	)
Balance at January 31, 2025 (unaudited)	–	$	–	80,000	$	8	14,781,803	$	1,478	$	–	$	962,416	$	(428,478	)	$	51,667		$	587,091
Proceeds from public offering	–		–	–		–	1,750,000		175		–		4,724,677		–			–			4,724,852
Warrants issuance to consultant	–		–	–		–	–		–		–		158,412		–			–			158,412
Net loss	–		–	–		–	–		–		–		–		(947,987	)		(11,422	)		(959,409	)
Balance at April 30, 2025 (unaudited)	–	$	–	80,000	$	8	16,531,803	$	1,653	$	–	$	5,845,505	$	(1,376,465	)	$	40,245		$	4,510,946


	Series A Preferred Stock		Series A Preferred Stock amount*			Series B Preferred Stock	Series B 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	)
Conversion of liabilities to common stock	–			–		–		–	445,109		44		–		445,065			–			–			445,109
Conversion of preferred stock to common stock	(80,000	)		(8	)	–		–	8,000,000		800		–		(792	)		–			–			–
Private offering	–			–		–		–	433,213		44		–		433,169			–			–			433,213
Net loss	–			–		–		–	–		–		–		–			81,133			19,581			100,714
Balance at January 31, 2024 (unaudited)	–		$	–		–		–	14,781,803	$	1,478	$	–	$	882,424		$	(211,172	)	$	21,562		$	694,292
Private offering	–			–		80,000	$	8	–		–		–		79,992			–			–			80,000
Net loss	–			–		–		–	–		–		–		–			(49,974	)		11,177			(38,797	)
Balance at April 30, 2024 (unaudited)	–		$	–		80,000	$	8	14,781,803	$	1,478	$	–	$	962,416		$	(261,146	)	$	32,739		$	735,495

*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.

TIANCI INTERNATIONAL, INC. AND SUBSIDIARIES

UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(EXPRESSED IN UNITED STATES DOLLARS)


	For the nine months ended April 30,
	2025			2024
	(Unaudited)			(Unaudited)
Cash flows from operating activities:
Net income (loss)	$	(1,162,328	)	$	55,805
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Amortization of operating lease right-of-use asset		–			356
Warrants issuance to consultant		158,412			–
Debt forgiven by related party		–			(24,814	)
Change in operating assets and liabilities:
Accounts receivable		(166,752	)		(82,021	)
Prepaid expense		(723,733	)		(850	)
Lease security deposit		–			(114	)
Due from related party		–			54,134
Advances from customers		–			(29,070	)
Accounts payable		–			35,919
Income taxes payable		(51,920	)		22,023
Operating lease liabilities		–			(356	)
Accrued liabilities and other payables		(53,861	)		90,464
Net cash (used in) provided by operating activities		(2,000,182	)		121,476

Cash flows from financing activities:
Repayment of working capital advance to related party		(10,771	)		–
Working capital advance from related party		8,500			–
Proceeds received from public or private offerings		5,439,333			513,213
Deferred offering costs incurred		(219,125	)		(245,000	)
Net cash (used in) provided by financing activities		5,217,937			268,213

Net (decrease) increase in cash		3,217,755			389,689
Cash, beginning		413,129			256,342
Cash, ending	$	3,630,884		$	646,031

Supplemental disclosure of cash flow information:
Cash paid during the period for:
Interest	$	–		$	–
Income taxes	$	51,920		$	–

Non-Cash Activities:
Early termination of right-of-use assets and lease liabilities	$	–		$	6,080
Conversion of liabilities to common stock		–			445,109
Conversion of preferred stock to common stock		–			800
Deferred offering costs net against proceeds from public offering		714,481			–

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

TIANCI INTERNATIONAL, INC.

Notes to Consolidated Financial Statements

Three and Nine Months Ended April 30, 2025

(Unaudited)

NOTE 1 – NATURE OF BUSINESS AND ORGANIZATION

On June 13, 2012, Freedom Petroleum Inc. was incorporated under the laws of the State of Nevada. In May 2015, Freedom Petroleum changed its name to Steampunk Wizards, Inc.; and on November 9, 2016, Steampunk Wizards changed its name to Tianci International, Inc. (the “Company”). The Company is a holding company. As of July 31, 2024, the Company had one operating subsidiary, Roshing International Co., Limited (“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. To date, Tianci Group Holding Limited has not carried on any business operations.

Reorganization

On March 3, 2023 the Company entered into a Share Exchange Agreement with RQS United Group Limited (“RQS United”) and RQS Capital Limited (“RQS Capital”), which was the sole shareholder of RQS United (the “Exchange Agreement”). RQS United owns 90% of the equity in Roshing International Co., Limited (“Roshing”), which is engaged in the business 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, 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 Exchange Agreement, the Company also issued a total of 700,000 shares of our common stock to nine employees or affiliates of Roshing to induce continued services to Roshing.

As a result of the Share Exchange, RQS United became our wholly-owned subsidiary and the former RQS United stockholder became our controlling stockholder. The share exchange transaction was treated as a reverse acquisition, with RQS United as the acquirer and the Company 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. Less than 5% of its revenue for the nine months ended April 30, 2025 was derived from other business lines: 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.

TIANCI INTERNATIONAL, INC.

Notes to Consolidated Financial Statements

Three and Nine Months Ended April 30, 2025

(Unaudited)

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. 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, 2024 and 2023 and notes thereto included in the Company’s Form 10-K filed with the SEC on October 22, 2024.

Results of the nine months ended April 30, 2025 are not necessarily indicative of the results that may be expected for the year ending July 31, 2025 or any other future periods.

Principles of consolidation

The 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 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 consist primarily of bank deposits with original maturities of three months or less, which are unrestricted as to withdrawal and use. The Company maintains its bank accounts in the United States and Hong Kong.

TIANCI INTERNATIONAL, INC.

Notes to Consolidated Financial Statements

Three and Nine Months Ended April 30, 2025

(Unaudited)

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, 2025 and July 31, 2024, no allowance for doubtful accounts was deemed necessary.

Prepaid Expenses

Prepaid expenses include cash deposited or advanced to vendors for purchasing goods or services that have not been received or provided. This amount is refundable and bears no interest. Prepaid expenses are classified as either current or non-current based on the terms of the respective agreements. Prepaid expenses are generally unsecured and reviewed periodically for impairment. As of April 30, 2025 and 2024, the Company made no allowance for impairment.

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 follows:

	·	Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.

	·	Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, quoted prices for identical assets and liabilities in inactive markets and inputs that are observable for the assets or liabilities, either directly or indirectly, for substantially the full term of the financial instruments.

	·	Level 3 inputs to the valuation methodology are unobservable and significant to the fair value measurement.

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 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.

TIANCI INTERNATIONAL, INC.

Notes to Consolidated Financial Statements

Three and Nine Months Ended April 30, 2025

(Unaudited)

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. Global Logistics Services

The 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 that freight is shipped for and received by the customer via either container ships or general cargo vessels. The most significant drivers of changes 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 customer. A performance obligation is created 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 a destination port and accepted by its customer. 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 Company 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 loss, when it has discretion in setting the 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 Company’s evaluation determined that it is in control of establishing the transaction price, managing all aspects of the shipment process and assumes the risk of loss for delivery, 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 reported on a gross basis.

TIANCI INTERNATIONAL, INC.

Notes to Consolidated Financial Statements

Three and Nine Months Ended April 30, 2025

(Unaudited)

b. 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; 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 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.

c. 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.

d. 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.

e. Software Maintenance and Business Promotion Services

The Company provides software maintenance services to keep customers’ 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.

TIANCI INTERNATIONAL, INC.

Notes to Consolidated Financial Statements

Three and Nine Months Ended April 30, 2025

(Unaudited)

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 for the three and nine months ended April 30, 2025 and 2024, respectively. Advertising costs are expensed as incurred and included in selling and marketing expenses.

Operating leases

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

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

TIANCI INTERNATIONAL, INC.

Notes to Consolidated Financial Statements

Three and Nine Months Ended April 30, 2025

(Unaudited)

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

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.

The lease for the Company’s Hong 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 non-taxable or non-deductible. It is calculated using tax rates that have been enacted or substantively enacted by the balance sheet date.

Deferred taxes are accounted for using the asset and liability 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 extent 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% likelihood 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 classified as income tax expenses in the period incurred.

TIANCI INTERNATIONAL, INC.

Notes to Consolidated Financial Statements

Three and Nine Months Ended April 30, 2025

(Unaudited)

During the three months ended April 30, 2024, the Company incurred an IRS penalty of $47,030 for failure to update certain foreign-owned information schedules in a timely manner. The penalty is included in other expense in the statements of operations for the three months ended April 30, 2024. During the nine months ended April 30, 2025, the Company received a refund $27,391 from the IRS for the penalty previously charged. The refund is included in other income in the statements of operations for the nine months ended April 30, 2025.

The Hong Kong tax returns filed for 2019/2020 tax year and subsequent years are subject to examination by the applicable tax authorities.

The US tax returns filed for 2022 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 common stock outstanding for the period. Diluted EPS presents the diluted effect on a per share basis of the potential common stock (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 common stock that has 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. As of April 30, 2025 and July 31, 2024, there were 8,000,000 dilutive shares outstanding related to the convertible Series B Preferred Stock. Each share of Series B and Series A Preferred Stock is and was convertible by the holder of the share into 100 shares of common stock, subject to equitable adjustment of the conversion rate.

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 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.

The Company does not believe any recently issued but not yet effective accounting standards, if currently adopted, would have a material effect on the Company’s consolidated Financial Statements.

TIANCI INTERNATIONAL, INC.

Notes to Consolidated Financial Statements

Three and Nine Months Ended April 30, 2025

(Unaudited)

NOTE 3 – PUBLIC OFFERING AND DEFERRED OFFERING COSTS

On April 11, 2025, the Company closed its public offering (the “Uplisting”) of 1,750,000 shares of its common stock at a price of $4.00 per share, for total gross proceeds of $7,000,000.00. The shares began trading on the Nasdaq Capital Market under the ticker symbol “CIIT” on April 10, 2025.

The Company received net proceeds of approximately $5,439,333, after deducting underwriting discounts, commissions, and offering expenses. Upon the closing of the Company’s Uplisting, deferred offering costs of $714,481 were offset against the gross proceeds and recorded as a reduction to additional paid-in capital.

NOTE 4 – PREPAID EXPENSES

On April 14, 2025, the Company entered into an advisory service agreement, which require the service vendor to identify at least three qualified acquisition targets in logistics service industry for the Company and advise on due diligence and closing.

On April 15, 2025, the Company entered into a market research and investor relations advisory service agreement with a service vendor.

As of April 30, 2025 and 2024, the Company has $725,553 and nil prepaid expenses, respectively, representing advances to service vendors. All prepaid services are expected to be received within a year.

NOTE 5 – RELATED PARTIES BALANCES AND TRANSACTIONS

Due to related parties consists of:

Schedule of due to related parties
			April 30,		July 31,
Name	Relationship	Transaction Nature	2025		2024
RQS Capital	61.89% shareholder	Company cash collection due to RQS Capital	$	–	$	2,271
TOTAL			$	–	$	2,271

This liability is unsecured, non-interest bearing, and due on demand.

Employment agreements with officers and director retainer agreements

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

For the three months ended April 30, 2025 and 2024, the Company incurred management compensation expenses of $56,400 and $56,400, respectively. For the nine months ended April 30, 2025 and 2024, the Company incurred management compensation expenses of $169,200 and $176,400, respectively. These amounts are included in “general and administrative expenses” in the accompanying consolidated statements of operations.

TIANCI INTERNATIONAL, INC.

Notes to Consolidated Financial Statements

Three and Nine Months Ended April 30, 2025

(Unaudited)

NOTE 6 – 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. As of July 31, 2024, 80,000 shares of Undesignated Preferred Stock have been designated as Series B Preferred stock.

The following table sets forth information, as of April 30, 2025, regarding the classes of capital stock that are authorized by the Articles of Incorporation of Tianci International, Inc.


	April 30, 2025
Class	Shares Authorized		Shares Outstanding
Common Stock, $.0001 par value		100,000,000		16,531,803
Series A Preferred Stock, $.0001 par value		80,000		–
Series B Preferred Stock, $.0001 par value		80,000		80,000
Undesignated Preferred Stock, $.0001 par value		19,920,000		–

Series A Preferred Stock

Each share of Series A Preferred Stock was convertible 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 had voting rights equal to the holder of the number of shares of common stock into which the Series A Preferred Stock was convertible. Upon liquidation of the Company, each holder of Series A Preferred Stock was 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. On January 19, 2024, all 80,000 shares of the Series A Preferred Stock were converted into 8,000,000 shares of Company common stock.

Series B Preferred Stock

Each share of Series B 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 B Preferred Stock has voting rights equal to the holder of the number of shares of common stock into which the Series B Preferred Stock is convertible. Upon liquidation of the Company, each holder of Series B Preferred Stock is 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.

TIANCI INTERNATIONAL, INC.

Notes to Consolidated Financial Statements

Three and Nine Months Ended April 30, 2025

(Unaudited)

Issuances of Preferred Stock and Common Stock

On January 19, 2024 the Company sold an aggregate of 445,109 shares of its common stock to five present or former members of the Company’s Board of Directors for an aggregate price of $445,109 or $1.00 per share. The purchasers included Zhigang Pei, who received 220,909 shares in settlement of a loan by Mr. Pei to the Company in the amount of $220,909, and five present or former members of the Company’s Board of Directors, who received an aggregate of 224,200 shares (Zhigang Pei – 110,200 shares; David Wei Fang – 64,600 shares; Jack Fan Liu – 22,100 shares, Jimmy Weiyu Zhu – 5,200 shares; and Yee Man Yung - 22,100 shares). All 445,109 shares were issued in satisfaction of the Company’s liability to the shareholders for unpaid compensation.

On January 19, 2024 the Company issued 8,000,000 shares of its common stock to RQS Capital Limited. The shares were issued upon RQS Capital’s exercise of its right to convert 80,000 shares of the Company’s Series A Preferred Stock into 8,000,000 shares of common stock.

On January 24, 2024 the Company sold an aggregate of 433,213 shares of its common stock to nine investors for an aggregate price of $433,213 or $1.00 per share. The shares were issued in a private offering to investors.

On April 24, 2024, the Company sold 80,000 shares of its Series B Preferred Stock to RQS Capital Limited for a cash payment of $80,000.

Issuances of warrants

On April 11, 2025, the Company issued 87,500 warrants to a third-party consultant as consideration for strategic advisory and consulting services. Each warrant entitles the holder to purchase one share of the Company’s common stock at an exercise price of $4.8 per share. The warrants vest immediately, are exercisable through October 11, 2025, and are subject to the terms and conditions of the warrant agreement.

The fair value of the warrants was determined using the Black-Scholes option pricing model with the following assumptions:

	·	Expected term: 0.5 years
	·	Risk-free interest rate: 4.2060%
	·	Expected volatility: 1.88%
	·	Dividend yield: 0%

The total grant-date fair value of the warrants was $158,412, which was recorded as a non-cash general and administrative expense for the three and nine months ended April 30. 2025, in accordance with ASC 718, Compensation—Stock Compensation. Because the warrants were issued for services, they were accounted for as equity-classified awards.

TIANCI INTERNATIONAL, INC.

Notes to Consolidated Financial Statements

Three and Nine Months Ended April 30, 2025

(Unaudited)

NOTE 7 – 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. Incorporated companies pay 8.25% tax on the first $2 million of profits and 16.5% on the remainder. Hong Kong income tax expenses for the nine months ended April 30, 2025 and 2024 amounted to $0 and $22,023, respectively.

For the nine months ended April 30, 2025, the loss before provision for income taxes of $1,162,328 consisted of United States source loss of $1,082,984 and Hong Kong source income of $79,344. For the nine months ended April 30, 2024, the income before provision for income taxes of $77,828 consisted of United States source loss of $348,499 and Hong Kong source income of $426,327.

Significant components of the provision for income taxes are as follows:


	For the nine months ended
	April 30, 2025		April 30, 2024

Current Hong Kong	$	–	$	22,023
Deferred Hong Kong		–		–
Provision for income taxes	$	–	$	22,023

The following table reconciles the Hong Kong statutory rates to the Company’s Hong Kong effective tax rate:


	For the nine months ended
	April 30, 2025			April 30, 2024

Hong Kong statutory income tax rate		16.50%			8.25%
Change in allowance for deferred tax assets		(16.50%	)		–%
Prior year over-accrual of provision for income taxes		–%			(3.08%	)
Effective tax rate		–%			5.17%

TIANCI INTERNATIONAL, INC.

Notes to Consolidated Financial Statements

Three and Nine Months Ended April 30, 2025

(Unaudited)

Deferred tax assets are comprised of the following:

Schedule of deferred tax assets
	April 30, 2025			July 31, 2024

Net operating loss carryforwards		13,107			–
Allowance for deferred tax assets		(13,107	)		–
Deferred tax assets, net		–			–

For United States income tax purposes, Tianci had a net operating loss carryforward of approximately $2,498,775 at April 30, 2025. 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 April 30, 2025 and July 31, 2024, the Company did not have any significant unrecognized uncertain tax positions.

As of April 30, 2025, tax years 2022 and forward generally remain open for examination for United States Federal and State tax purposes and tax years 2019 and forward generally remain open for examination for Hong Kong tax purposes.

NOTE 8 — 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 April 30, 2025, a cash balance of $3,074,710 was maintained at a financial institution in United States of which $2,824,710 was subject to credit risk. 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, 2025, a cash balance of $553,287 was maintained at a financial institution in Hong Kong of which approximately $473,796 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, 2025, two customers accounted for 36.3% and 30.2% of the Company’s total revenues.

For the nine months ended April 30, 2024, two customers accounted for 63.7% and 13.9% of the Company’s total revenues.

As of April 30, 2025, two customers accounted for 57% and 43% of the Company’s total accounts receivable, respectively. As of July 31, 2024, no customer accounted for over 10% of the Company’s total accounts receivable.

SEC Form 10-Q filed by Tianci International Inc.