CIIT Tianci International Inc (PK)

Table of Contents

 

As filed with the Securities and Exchange Commission on December 10, 2024.

 

Registration No. 333-280089

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

AMENDMENT NO. 5

FORM S-1/A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

 

TIANCI INTERNATIONAL, INC.

(Exact name of registrant as specified in its charter)

 

Nevada		4731		45-5540446
(State or jurisdiction of		(Primary Standard Industrial		(I.R.S. Employer
incorporation or organization)		Classification Code Number)		Identification No.)

 

Unit B,10/F., Ritz Plaza, No.122 Austin Road, Tsim Sha Tsui,

Kowloon, Hong Kong 999077

Tel: 852-22510781

(Address, including zip code, and telephone number, including area code of registrant’s principal executive offices)

 

Northwest Registered Agent, LLC.

401 Ryland Street, Suite 200-A

Reno, NV, 89502, USA

Tel: 509-768-2249

(Name, address, including zip code, and telephone number, including area code, of agent for service)

 

Copies to:

 

Anthony W. Basch, Esq. Alexander W. Powell Jr., Esq. Chunyan Shuai, Esq. Kaufman & Canoles P.C. Two James Center, 14th Floor 1021 East Cary Street Richmond, Virginia 23219 Tel: +1 (804) 771-5700

Michael A. Hedge, Esq. Hillary O’Rourke, Esq. K&L Gates LLP 1 Park Plaza, Twelfth Floor Irvine, California 92614 Telephone: (949) 253-090

 

Approximate date of commencement of proposed sale to the public: As soon as practicable and from time to time after this Registration Statement is declared effective.

 

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933 check the following box. ☒

 

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

 

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

 

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

 

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 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. ☐

 

The registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, or until this Registration Statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to Section 8(a), may determine.

 

 

 

 

EXPLANATORY NOTE

 

This registration statement contains two prospectuses, as set forth below.

 

	·	Public Offering Prospectus. A prospectus to be used for the public offering (the “Public Offering Prospectus”) of up to 2,170,000 shares of common stock, par value $0.0001 per share, of Tianci International, Inc. (the “Company”), with such shares to be sold in a firm commitment underwritten offering through the lead underwriter named on the cover page of the Public Offering Prospectus.
	·	Resale Prospectus. A prospectus to be used for the resale by the selling stockholders (the “Selling Stockholders” set forth in the section of the resale prospectus (the “Resale Prospectus”) entitled “Selling Stockholders” of an aggregate of 3,260,000 shares of common stock.

 

The Resale Prospectus is substantively identical to the Public Offering Prospectus, except for the following principal points:

 

	·	they contain different outside and inside front covers and back covers;
	·	they contain different “Offering” sections in the “Prospectus Summary” section beginning on page 1;
	·	they contain different “Use of Proceeds” sections on page 45;
	·	the “Capitalization” and “Dilution” sections from the Public Offering Prospectus are deleted from the Resale Prospectus;
	·	a “Selling Stockholders” section is included in the Resale Prospectus;
	·	the “Underwriting” section from the Public Offering Prospectus is deleted from the Resale Prospectus and a “Selling Stockholder Plan of Distribution” is inserted in its place in the Resale Prospectus; and
	·	the “Legal Matters” section in the Resale Prospectus on page R-18 deletes the reference to counsel for the lead underwriter.

 

The Company has included in this registration statement a set of alternate pages after the back cover page of the Public Offering Prospectus (the “Alternate Pages”) to reflect the foregoing differences in the Resale Prospectus as compared to the Public Offering Prospectus. The Public Offering Prospectus will exclude the Alternate Pages and will be used for public offering by the Company. The Resale Prospectus will be substantively identical to the Public Offering Prospectus except for the addition or substitution of the Alternate Pages, and such other changes as may be necessary to clarify references to the public offering or the resale offering and will be used for the resale offering by the Selling Stockholders.

 

 

 

 

THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES AND IS NOT SOLICITING AN OFFER TO BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.

 

SUBJECT TO COMPLETION, DATED [●], 2024

 

PRELIMINARY PROSPECTUS

 

 

TIANCI INTERNATIONAL, INC.

 

2,170,000 shares of common stock

 

We are offering to sell 2,170,000 shares of our common stock, $0.0001 par value per share, in a firm commitment underwritten offering (the “Underwritten Offering”). We currently estimate that the public offering price will be between $4 and $5 per share.

 

Our common stock is currently traded on the OTC Pink Market under the symbol “CIIT.” On December 9, 2024, the last reported sale price for our common stock was $3.99 per share.

 

We have applied to list our common stock on the Nasdaq Capital Market under the symbol “CIIT”. No assurance can be given that our application will be approved or that the trading prices of our common stock on the OTC Pink Market will be indicative of the prices of our common stock if our common stock were traded on the Nasdaq Capital Market. If our application is not approved, the offering will not be completed. The offering (including both “Underwritten Offering” and “Resale Offering” as defined below) is contingent upon final approval of the listing of our common stock on the Nasdaq Capital Market.

 

The offering price of our shares of common stock in the Underwritten Offering will be determined between the lead underwriter and us at the time of pricing, considering our historical performance and capital structure, prevailing market conditions, and overall assessment of our business, and may be at a discount to the current market price. Therefore, the recent market price of our common stock and the public offering price of the common stock used throughout this prospectus may not be indicative of the actual public offering price for the shares of common stock.

 

 

 

 

INVESTING IN OUR COMMON STOCK IS SPECULATIVE AND INVOLVES A HIGH DEGREE OF RISK. BEFORE MAKING ANY INVESTMENT DECISION, YOU SHOULD CAREFULLY REVIEW AND CONSIDER ALL THE INFORMATION IN THIS PROSPECTUS, INCLUDING THE RISKS AND UNCERTAINTIES DESCRIBED UNDER “RISK FACTORS” BEGINNING ON PAGE 17.

 

Tianci International, Inc. is a holding company incorporated under the laws of the State of Nevada with operations conducted by our subsidiary based in Hong Kong. This is an offering of the common stock of the Nevada holding company, which does not conduct operations. You are not investing in Roshing International Co., Limited, the Hong Kong operating company, and may never hold equity in our Hong Kong operating subsidiary. Our structure involves unique risks to investors. See “Risk Factors — Risks Related to Doing Business in Hong Kong.” Unless the context provides otherwise, references in this registration statement to “we,” “us,” “our company,” “our,” “the Company” and “Tianci” refers to Tianci International, Inc., “Tianci Seychelles” refers to Tianci Group Holding Limited, a limited company organized under the laws of Seychelles and a wholly owned subsidiary of Tianci, “RQS United” refers RQS United Group Limited, a company organized under the laws of the Republic of Seychelles and a wholly owned subsidiary of Tianci, “Roshing” refers to Roshing International Co., Limited, a company organized under the laws of Hong Kong. See “Commonly Used Defined Terms” on page viii herein. Investors would be purchasing interests in Tianci International, Inc., a Nevada company.

 

We have established controls and procedures for cash flows within our organization. Our management team manages and supervises the transfers of funds among Tianci and its subsidiaries under the Cash Flow Management Policy, an internal policy adopted by Tianci. Under this policy, Tianci focuses on revenue management, cost control, working capital management, implementing financial strategies, and fulfilling compliance reporting duties. Our management team closely monitors cash transfers within our organization and prepares monthly reports and annual budget plans. Each transfer of cash between Tianci and its subsidiaries is also subject to internal reporting and approval processes by reference to such policy. In addition, cash transfers between Tianci, its subsidiaries, or investors shall follow the applicable Hong Kong laws and regulations. See also “Prospectus Summary—Cash Flows through Our Organization.”

 

We and our subsidiaries face various legal and operational risks and uncertainties associated with being based, or having all our operations, in Hong Kong. The Directors confirm that, as of the date of this prospectus, we and our subsidiaries have received all requisite permissions or approvals from the Hong Kong authorities to operate its business in Hong Kong, including but not limited to obtaining a business registration certificate. However, we have been advised by our Hong Kong counsel that laws, regulations, or policies in Hong Kong could change in the future. If (i) we or our subsidiaries do not receive or maintain such permissions or approvals, (ii) we or our subsidiaries inadvertently conclude that any other permissions or approvals are not required, or (iii) applicable laws, regulations, or interpretations change and we are required to obtain such permissions or approvals in the future, our operations and financial condition could be materially adversely affected, and our ability to offer securities to investors could be significantly limited or completely hindered and the securities currently being offered may substantially decline in value and become worthless.

 

We and our subsidiaries are not based in Mainland China and do not have operations in Mainland China. Pursuant to the Basic Law, which is a national law of the PRC and the constitutional document for Hong Kong, national laws of the PRC shall not be applied in Hong Kong except for those listed in Annex III of the Basic Law and applied locally by promulgation or local legislation. The Basic Law expressly provides that the national laws of the PRC which may be listed in Annex III of the Basic Law shall be confined to those relating to defense and foreign affairs as well as other matters outside the autonomy of Hong Kong. The basic policies of the PRC regarding Hong Kong as a special administrative region of the PRC are reflected in the Basic Law, providing Hong Kong with a high degree of autonomy and executive, legislative and independent judicial powers, including that of final adjudication under the principle of “one country, two systems”.

 

 

 

 

We are aware that recently, the PRC government initiated a series of regulatory actions and statements to regulate business operations in certain areas in Mainland China with little advance notice, including cracking down on illegal activities in the securities market, enhancing supervision over Mainland Chinese companies listed overseas using a VIE structure, adopting new measures to extend the scope of cybersecurity reviews, and expanding the efforts in anti-monopoly enforcement. The laws and regulations of Mainland China do not currently have any material impact on our business, financial condition or results of operations and we are currently not subject to the PRC government’s direct influence or discretion over the manner in which we conduct our business activities outside of Mainland China. In the opinion of our PRC counsel, Jiangsu Junjin Law Firm, as of the date of this prospectus, on the basis that (i) we are a Nevada company and our only operating subsidiary, Roshing, is a Hong Kong company and is headquartered in Hong Kong; neither entity has operations in Mainland China; (ii) we do not, directly or indirectly, own or control any entity or subsidiary in Mainland China, nor are we controlled by any Mainland Chinese company or individual directly or indirectly; (iii) we currently do not have or intend to set up any subsidiary or enter into any contractual arrangements to establish a variable interest entity (“VIE”) with any entity in Mainland China; (iv) only few of Roshing’s customers are Mainland China residents, which contributed 5.2% and 0.4% of our revenue for the year ended July 31, 2023 and the year ended July 31, 2024, respectively and there are no customers from Mainland China for the three months ended October 31, 2024; (v) the majority of our senior managers in charge of the Company’s business operation and management are Hong Kong nationals and domiciled in Hong Kong; and (vi) all of Roshing’s employees are Hong Kong residents, we and our subsidiaries are not required to obtain any permissions or approvals from the Mainland China authorities for consummating this offering, including but not limited to the China Securities Regulatory Commission (“CSRC”), to operate Roshing’s business or to list our securities on the U.S. exchanges and offer securities, including but not limited to issuing our common stock to foreign investors. We and our subsidiaries have not applied for or been denied of any such permissions or approvals from the Mainland China authorities. In addition, in the opinion of our PRC counsel, Jiangsu Junjin Law Firm, as of the date of this prospectus, we are not subject to the cybersecurity review by the Cyberspace Administration of China (“CAC”) over data security and our offering because we are a Nevada company and our only operating subsidiary is a Hong Kong company, neither entity has operations in Mainland China. In addition, we expect that we and our subsidiaries’ operations will continue to be conducted in Hong Kong, as is the case as of the date of this prospectus. Therefore, we believe that the likelihood that we and our subsidiaries will be required to obtain any permissions or approvals from the governmental authorities of Mainland China for our operations, or the listing of our securities on the U.S. exchanges and the offering of our securities in the future is very remote. Furthermore, due to long arm provisions under the current PRC laws and regulations, there remains regulatory uncertainty with respect to whether in the future we will be required to obtain approvals from the PRC authorities to operate our business or list on the U.S. exchanges and offer securities. If (i) we and our subsidiaries do not receive or maintain such permissions or approvals, should such approvals be required in the future by the PRC government, (ii) we and our subsidiaries inadvertently conclude that such permissions or approvals are not required, or (iii) applicable laws, regulations, or interpretations change and we are required to obtain such permissions or approvals in the future, our operations and financial condition could be materially adversely affected, and our ability to offer securities to investors could be significantly limited or completely hindered and the securities currently being offered may substantially decline in value and become worthless. In addition, (1) we do not have VIE structure and are not in an industry that is subject to foreign ownership limitations by China; and (2) neither us nor our only operating subsidiary, Roshing, has operations in Mainland China, see “Risk Factors - While we believe that we and our subsidiaries are currently not required to obtain permissions or approvals from Mainland China authorities for our business operations and/or the listing and offering of our securities, and it is very unlikely that we or our subsidiaries will be required to do so in the future, we cannot assure you that we or our subsidiaries will be able to obtain all such permissions or approvals if they are nevertheless required.”

 

Notwithstanding the above, we are aware that Mainland China government may intervene or influence the Hong Kong operations of an offshore holding company, such as those of our Hong Kong operating subsidiary, Roshing, at any time. These risks, together with uncertainties in the legal system of Mainland China and the interpretation and enforcement of Mainland China laws, regulations, and policies, could hinder our ability to offer or continue to offer the common stock, result in a material adverse change to Roshing’s business operations, and damage our reputation, which could cause the common stock to significantly decline in value or become worthless. For a detailed description of risks relating to the potential impact of Mainland China laws and regulations on Roshing’s business operations, see “Risk Factors — All our operations are in Hong Kong. However, due to the long arm provisions under the current Mainland China laws and regulations, the Chinese government may exercise significant oversight and discretion over the conduct of our business and may intervene in or influence our operations at any time, which could result in a material change in our operations and/or the value of our common stock.”

 

 

 

 

 

If we decide to pay dividends on any of our common stock in the future, as a holding company, we will be dependent on receipt of funds from our subsidiaries. Under the current practice of the Inland Revenue Department of Hong Kong, no tax is payable in Hong Kong in respect of dividends paid by our Hong Kong subsidiary. There are no restrictions or limitation under the laws of Hong Kong imposed on the conversion of HKD into foreign currencies and the remittance of currencies out of Hong Kong. See “Risk Factors - Risks Related to Doing Business in Hong Kong - We will rely on dividends and other distributions on equity paid by our Hong Kong subsidiary to fund any cash and financing requirements we may have. In the future, the PRC government may impose restrictions on our ability to transfer funds out of Hong Kong to fund operations or for other use outside of Hong Kong. Any limitation on the ability of our Hong Kong subsidiary to make payments to us could have a material adverse effect on our ability to conduct our business and might materially decrease the value of our common stock.” on page 30 of this prospectus for more information.

 

On December 16, 2021, the Public Company Accounting Oversight Board (United States) (the “PCAOB”) issued a report on its determinations that it is unable to inspect or investigate completely PCAOB-registered public accounting firms headquartered in Mainland China and in Hong Kong because of positions taken by Mainland China and Hong Kong authorities in those jurisdictions. The PCAOB has made such designations as mandated under the Holding Foreign Companies Accountable Act, or the HFCA Act. Michael T. Studer CPA P.C. issued the audit report for our company for the year ended July 31, 2023. Michael T. Studer CPA P.C. serves as an auditor of companies that are traded publicly in the United States and is a firm registered with the PCAOB, is subject to laws in the United States, pursuant to which the PCAOB conducts regular inspections to assess its compliance with the applicable professional standards. Michael T. Studer CPA P.C. is headquartered in Freeport, New York and has been inspected by the PCAOB on a regular basis. On September 11, we dismissed Michael T. Studer CPA P.C. and engaged Bush & Associates CPA LLC as the Company’s independent public accounting firm for the year ended July 31, 2024. Bush & Associates CPA LLC, an independent registered public accounting firm, has its principal office in Henderson, Nevada and is subject to PCAOB inspections. If the PCAOB determines in the future that it cannot inspect or fully investigate our auditor at such future time, trading in our common stock would be prohibited under the HFCA Act. On August 26, 2022, the SEC issued a statement announcing that the PCAOB signed a Statement of Protocol (“SOP”) with the CSRC and the Ministry of Finance of the People’s Republic of China governing inspections and investigations of audit firms based in Mainland China and Hong Kong, jointly agreeing on the need for a framework. On December 15, 2022, the PCAOB announced that it has secured complete access to inspect and investigate registered public accounting firms headquartered in Mainland China and Hong Kong and voted to vacate the previous Determination Report to the contrary. On December 29, 2022, the Accelerating Holding Foreign Companies Accountable Act was enacted, which amended the HFCA Act by requiring the SEC to prohibit an issuer’s securities from trading on any U.S. stock exchanges if its auditor is not subject to PCAOB inspections for two consecutive years instead of three, thus reducing the time before our securities may be prohibited from trading or delisted. The PCAOB is continuing to demand complete access in Mainland China and Hong Kong moving forward and is already making plans to resume regular inspections in early 2023 and beyond, as well as to continue pursuing ongoing investigations and initiate new investigations as needed. The PCAOB has indicated that it will act immediately to consider the need to issue new determinations with the HFCA Act if needed. If the PCAOB in the future again determines that it is unable to inspect and investigate completely auditors in Mainland China and Hong Kong, then the companies audited by those auditors would be subject to a trading prohibition on U.S. markets pursuant to the HFCA Act and/or the AHFCAA. These recent developments could also add uncertainties to this Underwritten Offering and we cannot assure you that the NASDAQ Capital Market or regulatory authorities would not apply additional or more stringent criteria to us after considering the effectiveness of our auditor’s audit procedures and quality control procedures, adequacy of personnel and training, or sufficiency of resources, geographic reach or experience as it relates to the audit of our financial statements. See “Risk Factors—Risks Related to Doing Business in Hong Kong—Recent joint statement by the SEC and the PCAOB, proposed rule changes submitted by Nasdaq, and the newly enacted Holding Foreign Companies Accountable Act all call for additional and more stringent criteria to be applied to emerging market companies upon assessing the qualification of their auditors, especially the non-U.S. auditors who are not inspected by the PCAOB. These developments could add uncertainties to the trading of our common stock on U.S. stock exchanges, including the possibility that our securities can be delisted if the PCAOB cannot inspect or fully investigate our auditor.”

 

For a detailed description of risks related to doing business in Hong Kong, see “Risk Factors — Risks Related to Doing Business in Hong Kong.”

 

Following the completion of this Underwritten Offering, our largest stockholder will beneficially own approximately 56.71% of the aggregate voting power of our outstanding common stock. As such, we will be deemed a “controlled company” within the meaning of the Nasdaq listing standards. However, we do not intend to avail ourselves of the corporate governance exemptions afforded to a “controlled company” under the Nasdaq listing standards.

 

			Per Share				Total
Public offering price		$	–			$	–
Underwriting discounts and commissions(1)		$	–			$	–
Proceeds to us before expenses		$	–			$	–

 

(1)

We have agreed to pay the lead underwriter a discount equal to 7.0% of the gross proceeds of the Underwritten Offering, which does not include a non-accountable expense allowance equal to 1.0% of the gross proceeds of the Underwritten Offering payable to Benjamin Securities, Inc., (“Benjamin”) or the lead underwriter. For a description of the compensation to be received by the lead underwriter, see “Underwriting” on page 107.

 

 

 

 

This Underwritten Offering is being conducted on a firm commitment basis. The lead underwriter is obligated to take and pay for all of the shares of common stock if any such shares of common stock are taken. We have granted the lead underwriter an option for a period of 45 days after the closing of the Underwritten Offering to purchase up to 325,500 shares of common stock, or 15% of the total shares of common stock to be offered by us pursuant to the Underwritten Offering (excluding common stock subject to this option), solely for the purpose of covering over-allotments, at the public offering price less the underwriting discounts. If the lead underwriter exercises the option in full, and assuming an offering price of $4.50 per share of common stock, which is the midpoint of the range set forth on the cover page of this prospectus, the total gross proceeds to us, before underwriting discounts, commissions and expenses, will be approximately $11.2 million.

 

The lead underwriter expects to deliver the common stock against payment as set forth under “Underwriting,” on or about [●], 2024 through the book-entry facilities of The Depository Trust Company.

 

Neither the U.S. Securities and Exchange Commission nor any state securities commission nor any other regulatory body has approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.

 

 

 

 

 

 

 

 

Prospectus dated___________, 2024

 

 

 

 

TABLE OF CONTENTS

 

 

	Page
PROSPECTUS SUMMARY	1
CORPORATE HISTORY AND STRUCTURE	3
THE OFFERING	14
SUMMARY CONSOLIDATED FINANCIAL DATA	15
RISK FACTORS	17
A CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS	44
USE OF PROCEEDS	45
DIVIDEND POLICY	46
MARKET PRICE	46
CAPITALIZATION	46
DILUTION	48
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	49
DESCRIPTION OF BUSINESS	59
INDUSTRY AND MARKET OPPORTUNITIES	68
REGULATIONS	79
MANAGEMENT	85
EXECUTIVE COMPENSATION	89
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS	92
DESCRIPTION OF CAPITAL STOCK	94
PRINCIPAL STOCKHOLDERS	100
MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES TO NON-U.S. HOLDERS	102
SHARES ELIGIBLE FOR FUTURE SALE	106
UNDERWRITING	107
LEGAL MATTERS	117
EXPERTS	117
CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT	117
WHERE YOU CAN FIND MORE INFORMATION	118
INDEX TO FINANCIAL STATEMENTS	F-1
PRELIMINARY RESALE PROSPECTUS	R-1

 

You should rely only on the information contained in this prospectus. We have not, and the lead underwriter has not, authorized anyone to provide you with information different from what is contained in this prospectus or in any related free writing prospectus. If anyone provides you with different or inconsistent information, you should not rely on it. We are not, and the lead underwriter is not, making an offer to sell securities in any jurisdiction where the offer or sale is not permitted. The information contained in this prospectus is accurate only as of the date on the front of this prospectus, regardless of the time of delivery of this prospectus or any sale of the securities. Our subsidiaries’ business, and our financial condition, results of operations and prospects may have changed since that date.

 

For investors outside of the United States of America (the “United States” or the “U.S.”): Neither we nor the lead underwriter have done anything that would permit the Underwritten Offering or possession or distribution of this prospectus or any filed free-writing prospectus in any jurisdiction, other than the United States, where action for that purpose is required. Persons outside of the United States who come into possession of this prospectus or any filed free writing prospectus must inform themselves about, and observe any restrictions relating to, the offering of our common stock and the distribution of this prospectus or any filed free writing prospectus outside of the United States.

 

 

 

 

Commonly Used Defined Terms

 

Unless otherwise indicated or the context requires otherwise, references in this registration statement to:

 

	·	“China,” “Chinese,” or the “PRC” are to the People’s Republic of China, including the special administrative regions of Hong Kong and Macau, and, for the purposes of this prospectus only, excluding Taiwan;
	·	“Mainland China” is to the mainland of the People’s Republic of China; excluding Taiwan and the special administrative regions of Hong Kong and Macau for the purposes of this prospectus only;
	·	Unless the context provides otherwise, “registrant,” “we,” “us,” “our company,” “our,” “the Company” and “Tianci” is to Tianci International, Inc., a Nevada company; and when describing the financial results of Tianci International, Inc., also includes its subsidiaries;
	·	“Seychelles” refers to the Republic of Seychelles;
	·	“Tianci Seychelles” refers to Tianci Group Holding Limited, a limited company organized under the laws of Seychelles and a wholly owned subsidiary of Tianci;
	·	“RQS United” refers to RQS United Group Limited, a company organized under the laws of the Republic of Seychelles and a wholly owned subsidiary of Tianci;
	·	“RQS Capital” refers to RQS Capital Limited, a company incorporated in British Virgin Islands.
	·	“Roshing” refers to Roshing International Co., Limited, a company organized under the laws of Hong Kong and a subsidiary of RQS United. RQS United holds 90% of the share capital of its subsidiary, Roshing;
	·	“Shares,” “shares” or “shares of common stock” are to the shares of common stock of Tianci International, Inc., with par value of $0.0001 per share;
	·	All references to “RMB” are to the legal currency of Mainland China;
	·	All references to “HKD” “HK$” and “Hong Kong dollars” are to the legal currency of Hong Kong;
	·	All references to “U.S. dollars,” “dollars,” “USD” or “$” are to the legal currency of the United States; and
	·	“Website” is to our website at www.tianci-ciit.com.

 

We do not have any material operations of our own and we are a holding company with operations conducted in Hong Kong through our subsidiary, Roshing International Co., Limited, primarily using Hong Kong dollars, the currency of Hong Kong, or U.S. dollars. Our consolidated financial statements are presented in U.S. dollars. In this prospectus, we refer to assets, obligations, commitments and liabilities in our consolidated financial statements in U.S. dollars. These dollar references are based on the exchange rate of Hong Kong dollars to U.S. dollars, determined as of a specific date or for a specific period. Changes in the exchange rate will affect the amount of our obligations and the value of our assets in terms of U.S. dollars which may result in an increase or decrease in the amount of our obligations (expressed in U.S. dollars) and the value of our assets, including accounts receivable (expressed in U.S. dollars).

 

 

 

 

Numerical figures included in this registration statement have been subject to rounding adjustments. Accordingly, numerical figures shown as totals in various tables may not be arithmetic aggregations of the figures that precede them.

 

For the sake of clarity, this registration statement follows the English naming convention of first name followed by last name, regardless of whether an individual’s name is Chinese or English.

 

We have relied on statistics provided by a variety of publicly available sources regarding expectations of growth of global logistics industry. We did not, directly or indirectly, sponsor or participate in the publication of such materials, and these materials are not incorporated in this registration statement other than to the extent specifically cited herein. We have sought to provide current information in this registration statement and believe that the statistics provided in this registration statement remain up-to-date and reliable, and these materials are not incorporated in this registration statement other than to the extent specifically cited in this registration statement.

 

TRADEMARKS

 

All trademarks, service marks and trade names included in this prospectus are the property of their respective owners.

 

MARKET DATA

 

We are responsible for the disclosure in this prospectus. This prospectus incorporates industry data sourced from market research, publicly accessible information and industry publications. While we have not directly commissioned or funded these sources, we believe the information obtained from them to be reliable. Nonetheless, we assume responsibility for the accuracy and completeness of all information presented in this prospectus, including data derived from third-party sources. This includes the information provided through active hyperlinks to external reports and publications. We obtained the industry, market and competitive position data used throughout this prospectus from our own internal estimates and research, as well as from independent market research, industry and general publications and surveys, governmental agencies and publicly available information in addition to research, surveys and studies conducted by third parties. Internal estimates are derived from publicly available information released by industry analysts and third-party sources, our internal research and our industry experience, and are based on assumptions made by us based on such data and our knowledge of our industry and market, which we believe to be reasonable. In some cases, we do not expressly refer to the sources from which this data is derived. In that regard, when we refer to one or more sources of this type of data in any paragraph, you should assume that other data of this type appearing in the same paragraph is derived from the same sources, unless otherwise expressly stated or the context otherwise requires. In addition, while we believe the industry, market and competitive position data included in this prospectus is reliable and based on reasonable assumptions, such data involve risks and uncertainties and are subject to change based on various factors, including those discussed in “Risk Factors.” These and other factors could cause results to differ materially from those expressed in the estimates made by third parties or by us.

 

 

 

 

PROSPECTUS SUMMARY

 

This summary highlights certain information contained elsewhere in this prospectus. You should read the entire prospectus carefully, including our financial statements and related notes, and especially the “Risk Factors” beginning on page 17. All references to “we,” “us,” “our,” “Company” or similar terms used in this prospectus refer to Tianci International, Inc. a Nevada corporation. Unless otherwise indicated, the term “fiscal year” refers to our fiscal year ending July 31. Unless otherwise indicated, the term “common stock” refers to shares of CIIT’s common stock.

 

Overview

 

The Company’s primary line of business is global logistics. The Company through its subsidiary, Roshing, provides global logistics services, encompassing booking and the transportation arrangement and related logistics solutions. Roshing’s customized logistics solutions are tailored to meet the diverse needs of its customers.

 

As a logistics shipping operator, Roshing focuses on ocean freight forwarding services, including container shipping and bulk goods shipping service.

 

For the container shipping service, Roshing charters cargo space from shipping suppliers (such as shipowners, ship carrier or non-vessel operating common carriers) and then sub-charters that cargo space to its customers (cargo owners or cargo agents). For the bulk goods shipping service, Roshing issues fixture notes to customers, and then arranges the booking of ships, and signs chartering contracts with suppliers (such as shipowners). Roshing also tailors the selection of transport options, and arranges to transport the goods from the port of loading to the port of destination, so as to complete the performance of the contract.

 

Roshing currently does not own or operate any transportation assets. By leveraging our senior management’s expertise in the global logistics industry and adopting an asset-light strategy at the early stage, Roshing has seen a significant growth in logistics revenue since 2023. Shufang Gao, our Chief Executive Officer previously worked for a globally renowned shipping conglomerate, with over 20 years of management experience. His expertise spans shipping operation management, and logistics transportation. Leveraging this experience, he has provided the Company with the managerial framework to expand its global logistics business, as well as access to relevant customer and supplier resources in the shipping industry. Roshing’s business is primarily carried out in Hong Kong and other locations in the Asia-Pacific region, mainly in Japan, South Korea, Vietnam. Roshing’s logistics services also include the shipment of goods to African countries.

 

Roshing also generates revenue from the sale of electronic parts, and certain business and technical consulting services, independent from its global logistics business.

 

Our Services

 

Our operations conducted through Roshing include providing the following services to our customers.

 

Global Logistics Services

 

Our global logistics services provided through Roshing accounted for 96.6% of our revenue for the year ended July 31, 2024 and 92.6% for the three months ended October 31, 2024. These services encompass ocean shipping operations and related logistics solutions. Roshing focuses on ocean freight forwarding services, including container shipping and bulk goods shipping. Roshing customizes its logistics solutions to meet the diverse needs of our customers, including the optimization of shipping routes and the utilization of vessels with different tonnages.

 

Roshing derives revenues by entering into agreements that are generally comprised of a single performance obligation to ship freight either by container ships or by bulk cargo vessels. The most significant drivers of changes in Roshing’s global logistics service revenue and related transportation expenses are cargo volume, weight and sea route.

 

 

 

 

 

Our Service Process

 

Roshing has long-term and close relationships with ocean shipping suppliers. When a customer makes an inquiry to Roshing, it is usually able to offer competitive quotes and customize shipping solutions quickly.

 

Roshing begins by thoroughly evaluating the customer’s logistics needs, including the type of goods being shipped, the destination, and the required transportation time. Based on this information, Roshing designs an optimal transportation plan tailored to the customer’s specific requirements. This plan includes selecting the most efficient shipping routes, determining the appropriate container or vessel size and type, and considering any special handling or regulatory compliance requirements. Roshing then enters into a written contract with the customer for ocean shipping that can best meet the customer’s needs and aligns with the customer’s timeline and cargo specifications.

 

Roshing works with each customer to develop a cost-effective plan and service terms to meet the client’s needs. This involves detailed discussions to ensure that both parties have a clear understanding of expectations, costs, and responsibilities. Roshing will assign cargo space from an appropriate container ship or bulk cargo vessel based on the volume and weight of the shipment, minimize shipping costs, select the shortest route to save on freight, and choose the port closest to the customer’s destination.

 

Throughout the entire shipping process, Roshing maintains close oversight to ensure the safety and timely arrival of goods at the destination port. This involves real-time tracking and monitoring of the shipment, handling any unforeseen issues that may arise, and providing regular updates to the customer. By doing so, Roshing ensures that the goods are transported safely and arrive within the agreed timeframe, meeting all customer expectations.

 

We believe that Roshing stands out in the global logistics landscape because of its core strengths. Firstly, Roshing’s management’s extensive network and industry relationships empower us with access to a wide customer base, enabling tailored solutions for an array of logistics requirements. Additionally, Roshing’s collaboration with direct shipping suppliers ensures transparent service delivery. Moreover, Roshing’s expertise in route optimization enables us to efficiently manage logistics routes and secure favorable terms for its clients. These strengths collectively position Roshing as a competitive player in the industry.

 

Other Products & Services

 

	·	Electronic Device Hardware: Roshing is a distributor of hardware components for electronic devices and generates revenue from reselling these components. It is not engaged in product development or direct manufacturing of hardware. The main products include Wi-Fi modules, Bluetooth modules, 4G network modules, LED screens and touch screens. Roshing’s main customers are non-Hong Kong traders, direct traders of hardware components, companies engaged in the assembly and sale of finished products and private label entities seeking electronic component procurement and light customization.
	·	Software Technical Services: Roshing 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. Roshing also provides software maintenance services to keep customers’ software up to date and assists customers in promoting their businesses with ongoing marketing support.
	·	Business Consulting Services: Roshing provides business consulting services to help customers apply for immigration and non-immigration visas. Roshing is responsible for performing background checks, assessment, and preparing related application paperwork.

 

Our Market Opportunities

 

The shipping industry holds significant potential, as indicated by BIMCO’s projections of substantial growth in ship supply and deliveries through 2025. With an expected increase of 9.1% in 2024 and 4.1% in 2025, and a fleet growth of 14.9% by 2025, we believe that the industry is poised for expansion. Cargo volumes are anticipated to grow steadily at a rate of 3-4% annually during this period. Moreover, the global economy is forecasted to experience moderate growth, with the IMF estimating rates of 3.1% in 2024 and 3.2% in 2025.

 

In the bulk cargo market, strong demand is being driven by factors such as heightened demand from China and export restrictions from Indonesia. We believe that the container shipping sector will also see opportunities. Disruptions like the 40-day blockade in the Red Sea in January 2024 have led to notable increases in freight rates. Additionally, ongoing container capacity shortages in China, which is expected to persist from the onset of the Chinese Spring Festival in 2024, could further elevate freight rates, offering potential benefits to shipowners.

 

 

 

 

Our Mission

 

Creating Value

 

As a global logistics enterprise, our primary mission is to provide customers with efficient, reliable, and safe shipping services that create value.

 

Promoting Global Trade & Connectivity

 

As an important component of global trade, we believe that global logistics enterprises have a mission to promote the development and connectivity of global trade and promote the prosperity and development of the global economy by facilitating cross-border operations for businesses. We are committed to cultivating a robust global network, both online and offline. The online part involves connecting with customers and suppliers through social media platforms. The offline part includes acquiring potential customers through exhibitions, recommendations, and other direct interactions.

 

Undertaking Social Responsibility

 

We believe that shipping companies also need to be socially responsible, pay attention to environmental protection, social welfare, promote sustainable development, and contribute to the prosperity and development of society.

 

We strive to optimize shipping routes and transportation plans to reduce energy consumption and emissions. Moreover, we intend to encourage our supply chain partners to adopt greener transportation and packaging methods, contributing to the sustainability of the entire industry. We also seek to actively participate in environmental projects and initiatives and collaborate with government and non-governmental organizations to focus on environmental protection.

 

CORPORATE HISTORY AND STRUCTURE

 

The following diagram illustrates our corporate structure as of the date of the prospectus. Tianci, as the ultimate holding company, owns 100% of the equity interests in RQS United and Tianci Seychelles, and indirectly, holds 90% of the equity interests in Roshing.

 

 

 

 

 

 

For details of our principal stockholders’ ownership, please refer to the beneficial ownership table in the section captioned “Principal Stockholders.”

 

Roshing International Co., Limited History Before Share Exchange

 

On June 22, 2011, Roshing International Co., Limited (“Roshing”) was incorporated in Hong Kong with a share capital of HKD 100,000 divided into 100,000 shares. Ying Deng was the registered shareholder of the said 100,000 shares.

 

RQS United Group Limited History

 

On November 4, 2022, RQS United Group Limited (“RQS United”) was incorporated in the Republic of Seychelles as an international business company 100% owned by RQS Capital Limited with 50,000 shares.

 

On January 16, 2023, RQS United was allotted 900,000 shares of Roshing.

 

RQS United holds 90% of the share capital of Roshing, while Ying Deng holds 10% of the share capital of Roshing.

 

RQS Capital Limited History

 

On July 05, 2022, RQS Capital Limited was incorporated in British Virgin Islands authorized with 50,000 shares 100% owned by Ying Deng (“RQS Capital”).

 

On September 29, 2022, Ying Deng transferred 30,000 shares to Shufang Gao, 2,500 shares to Zhu Weiyu and 2,500 shares to Bo Ye respectively.

 

On January 06, 2023, Zhu Weiyu transferred 2,500 shares to Bo Ye. By this time, RQS Capital was owned by Ying Deng (30%), Shufang Gao (60%) and Bo Ye (10%) respectively.

 

Tianci History before Share Exchange

 

On June 13, 2012, Freedom Petroleum Inc. was incorporated under the laws of the State of Nevada.

 

On July 02, 2015, Freedom Petroleum, Inc. changed its name from Freedom Petroleum to Steampunk Wizards, Inc.(“Steampunk”).

 

On October 26, 2016, Steampunk completed a reverse merger, with Steampunk as the public shell company. Tianci merged with and into Steampunk. This transaction was carried out in accordance with the terms set forth in the Merger Agreement which took effective On November 9, 2016, and on the same day, Steampunk changed its name to Tianci International, Inc.

 

On August 3, 2017, Tianci entered into a Stock Purchase Agreement (the “SPA”) with Shifang Wan (the “Seller”), the record holder of 4,397,837 shares of common stock, or approximately 87.00% of the issued and outstanding of Common Stock of Tianci, and Chuah Su Chen and Chuah Su Mei (collectively, the “Purchasers”, and together with Tianci and the Seller, the “Parties”). Pursuant to the SPA, the Seller sold to the Purchasers and the Purchasers acquired from the Sellers the Shares for a total gross purchase price of Three Hundred Fifty Thousand Dollars ($350,000). The acquisition was consummated on August 15, 2017.

 

Effective August 6, 2021, Tianci, Chuah Su Mei, Tianci’s 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 Tianci held by her (the “Sale Shares”) for cash consideration of Five Hundred Twenty Five Thousand Dollars ($525,000) (the “Transaction”). The Sale Shares represent approximately 73.18% of the issued and outstanding common stock of Tianci. The sale of the Sale Shares consummated on August 26, 2021.

 

 

 

 

Upon the closing of the Transaction, on August 26, 2021, each of Chuah Su Chen, Chuah Su Mei, and Jerry Ooi, constituting all current directors and officers of Tianci at that time, resigned from his or her positions with Tianci. Each of the foregoing former officers and directors also forgave all amounts due to them from Tianci in connection with the closing of the Transaction.

 

On January 26, 2023, Tianci filed with the Nevada Secretary of State a Certificate of Amendment of Articles of Incorporation (the “Amendment”). The Amendment amended Article 3 of the Articles of Incorporation to provide that the authorized capital stock of the Tianci 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.

 

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. The 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 Tianci, each holder of Series A Preferred Stock will be entitled to receive, out of the net assets of Tianci, $0.01 per share, then to share in the distribution on an as-converted basis.

 

On January 27, 2023, Tianci sold 80,000 shares of Series A Preferred Stock to RQS Capital. The shares were sold for a cash payment of $24,000, which was contributed to Tianci International, Inc.’s capital on behalf of RQS Capital by members of its management.

 

On February 13, 2023, Tianci Group Holding Limited (“Tianci Seychelles”) was incorporated in the Republic of Seychelles as an international business company 100% owned by Tianci, with 100,000 shares, with no operation.

 

On March 1, 2023, Tianci entered into agreements to sell a total of 1,253,333 shares of its common stock to 13 investors for a price of $0.30 per share (i.e. an aggregate price of $376,000). The shares were issued in a private offering to investors that were acquiring the shares each for his or her own account. The offering, therefore, was exempt from registration under the Securities Act of 1933 pursuant to Section 4(a)(2) of the Securities Act. The sale was also exempt from registration pursuant to Rule 902(1)(i) of Regulation S, as the purchasers were non-U.S. persons and Rule 903 was complied with.

 

Share Exchange

 

On March 3, 2023, Tianci acquired RQS United, pursuant to the Share Exchange Agreement dated March 3, 2023, entered into among Tianci, RQS United and RQS Capital, the prior owner of RQS United.

 

Prior to the Share Exchange, Tianci was a shell company as defined in Rule 12b-2 under the Exchange Act. As a result of the transactions under the Exchange Agreement, Tianci ceased to be a shell company.

 

RQS United is a holding company incorporated in the Republic of Seychelles. RQS United has no operation other than holding 90% of the share capital of its subsidiary, Roshing.

 

Tianci History after Share Exchange

 

On January 19, 2024, Tianci issued 8,000,000 shares of its common stock to RQS Capital. The shares were issued upon RQS Capital’s exercise of its right to convert 80,000 shares of Tianci’s Series A Preferred Stock into 8,000,000 shares of common stock. As of the date of the prospectus, there are no Series A Preferred Stock outstanding. Upon completion of the conversion, RQS Capital owned 9,500,000 shares of Tianci’s common stock, representing 66.2% of the 14,348,590 shares outstanding. Shufang Gao, the Chief Executive Officer, is also the Chairman of RQS Capital.

 

On January 22, 2024, Tianci 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 who were acquiring the shares each for his own account. The offering, therefore, was exempt from registration under the Securities Act of 1933 pursuant to Section 4(a)(2) of the Securities Act. The sale was also exempt from registration pursuant to Rule 902(1)(i) of Regulation S, as the purchasers were non-U.S. persons and Rule 903 was complied with. There was no underwriter for the offering.

 

 

 

 

 

On February 28, 2024, RQS Capital transferred 2,540,000 shares of Tianci to Carson (BVI) Limited (730,000 shares), Cobalt Capital Holding Limited (650,000 shares), Elysium Capital Holding Limited (610,000 shares), and Global View Capital Limited (550,000 shares) respectively.

 

On April 24, 2024, Tianci sold 80,000 shares of Series B Preferred Stock to RQS Capital. The shares were sold for a cash payment of $80,000. The shares were issued in a private offering to an investor that was acquiring the shares for its own account. Shufang Gao, Tianci’s Chief Executive Officer, is the majority shareholder and Chairman of RQS Capital. On April 24, 2024, Tianci filed with the Nevada Secretary of State a Certificate of Designation of 80,000 shares of 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 (an aggregate of 8,000,000 shares of common stock), subject to equitable adjustment of the conversion rate. The holder of Series B Preferred Stock has voting rights equal to the number of shares of common stock into which the Series B Preferred Stock is convertible. Upon liquidation of Tianci, each holder of Series B Preferred Stock will be entitled to receive, out of the net assets of Tianci, $0.01 per share, then to share in the distribution on an as-converted basis.

 

As of the date of this prospectus, RQS Capital does not intend to convert its shares of Series B Preferred Stock into shares of common stock before the closing of this offering, and such shares of Series B Preferred Stock will not automatically convert into shares of common stock in connection with this offering. However, the shares of Series B Preferred Stock may be converted into shares of common stock at any time at the option of RQS Capital.

 

On May 2, 2024, RQS Capital transferred 720,000 shares of Tianci to Broadness (BVI) Limited and transferred 69,638 shares of Tianci to one individual.

 

On May 31, 2024, RQS Capital transferred 70,000 shares of Tianci to one individual.

 

As of the date of this prospectus, RQS Capital held 61.89% of the aggregate voting power of Tianci.

 

Listing on OTC Pink Market

 

The Company’s common stock is quoted on the OTC Pink Market under the symbol “CIIT”. The quotations reported on the OTC Pink Market reflect inter-dealer prices without retail markup, markdown or commissions, and may not necessarily represent actual transactions.

 

The Company’s common stock is thinly traded. The quoted bid and asked prices for the common stock vary significantly from week to week. An investor holding shares of the Company’s common stock may find it difficult to sell the shares and may find it impossible to sell more than a small number of shares at the quoted bid price.

 

Listing on the Nasdaq Capital Market

 

Our common stock is currently quoted on the OTC Pink Market under the symbol “CIIT.” In connection with this Underwritten Offering, we have applied to list our common stock on the Nasdaq Capital Market (“Nasdaq”) under the symbol “CIIT.” If our listing application is approved, we expect to list our common stock on Nasdaq in connection with the Underwritten Offering, at which point our common stock will cease to be traded on the OTC Pink Market. No assurance can be given that our listing application will be approved. Nasdaq listing requirements include, among other things, a stock price threshold. As a result, prior to effectiveness, we will need to take the necessary steps to meet Nasdaq listing requirements, which may include, but not be limited to, effectuating a reverse split of our common stock. If our application is not approved, the offering will not be completed. The offering is contingent upon final approval of the listing of our common stock on the Nasdaq Capital Market.

 

 

 

Corporate Information

 

We are incorporated under the laws of the State of Nevada. Our principal executive offices are located at Unit B,10/F., Ritz Plaza, No.122 Austin Road, Tsim Sha Tsui, Kowloon, Hong Kong. Our telephone number is 852-22510781. Our website is www.tianci-ciit.com. Information contained in, or that can be accessed through, our website is not incorporated by reference into this registration statement, and you should not consider information on our website to be part of this registration statement. Our agent for service of process in the United States is Northwest Registered Agent, LLC.

 

Information Regarding our Capitalization

 

As of October 31, 2024 and the date of this prospectus, we had 14,781,803 shares of common stock issued and outstanding. Additional information regarding our issued and outstanding securities may be found under “Description of Capital Stock.”

 

Unless otherwise specifically stated, information throughout this prospectus does not assume the exercise of outstanding options or warrants to purchase shares of our common stock.

 

Implications of Being a Smaller Reporting Company

 

We are a “smaller reporting company” as defined in Rule 12b-2 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and have elected to take advantage of certain of the scaled disclosure available for smaller reporting companies. We will remain a smaller reporting company until the end of the fiscal year in which (1) we have a public common equity float of more than $250 million, or (2) we have annual revenues for the most recently completed fiscal year of more than $100 million and a public common equity float or public float of more than $700 million. We also would not be eligible for status as a smaller reporting company if we become an investment company, an asset-backed issuer or a majority-owned subsidiary of a parent company that is not a smaller reporting company.

 

We have elected to take advantage of certain of the reduced disclosure obligations in the registration statement of which this prospectus is a part and may elect to take advantage of other reduced reporting requirements in future filings. As a result, the information that we provide to our stockholders may be different from what you might receive from other public reporting companies in which you hold equity interests.

 

Implications of Being a Controlled Company

 

Shufang Gao, our Chief Executive Officer, has voting control over approximately 62.11% of the aggregate voting power of the Company. Therefore, we currently meet the definition of a “controlled company” under the corporate governance standards for Nasdaq listed companies and for so long as we remain a controlled company under this definition, we are eligible to utilize certain exemptions from the corporate governance requirements of Nasdaq. Upon the closing of this Underwritten Offering, Shufang Gao will own approximately 56.71% of the voting power of our outstanding voting stock.

 

As long as Shufang Gao owns at least 50% of the voting power of our company, we will be a “controlled company” as defined under the Nasdaq rules.

 

For so long as we are a controlled company under that definition, we are permitted to rely on certain exemptions from corporate governance rules, including:

 

	·	an exemption from the rule that a majority of our Board must be independent directors;
	·	an exemption from the rule that the compensation of our chief executive officer must be determined or recommended solely by independent directors; and
	·	an exemption from the rule that our director nominees must be selected or recommended solely by independent directors.

 

Although we do not intend to rely on the “controlled company” exemption under Nasdaq listing rules, we could elect to rely on this exemption in the future. If we elect to rely on the “controlled company” exemption, a majority of the members of our Board might not be independent directors and our nominating and corporate governance and compensation committees might not consist entirely of independent directors.

 

As a result, you will not have the same protection afforded to stockholders of companies that are subject to these corporate governance requirements.

 

 

 

 

 

Our Resale Offering

 

Certain of our Stockholders will be selling through the Resale Prospectus a total of 3,260,000 shares of common stock. We will not receive any proceeds from the sales by the Selling Stockholders of the securities set forth in the Resale Prospectus.

 

The Resale Prospectus is substantively identical to the Public Offering Prospectus, except for the following principal points:

 

	·	they contain different outside and inside front covers and back covers;
	·	they contain different “Resale Offering” sections in the “Prospectus Summary” section beginning on page R-15;
	·	the “Capitalization” and “Dilution” sections from the Public Offering Prospectus are deleted from the Resale Prospectus;
	·	a “Selling Stockholders” section is included in the Resale Prospectus;
	·	the “Underwriting” section from the Public Offering Prospectus is deleted from the Resale Prospectus and a “Selling Shareholder Plan of Distribution” is inserted in its place in the Resale Prospectus; and
	·	the “Legal Matters” section in the Resale Prospectus on page R-18 deletes the reference to counsel for the lead underwriter.

 

Summary Risk Factors

 

Our business is subject to a number of risks. You should be aware of these risks before making an investment decision. These risks are discussed more fully in the section of this prospectus titled “Risk Factors,” which begins on page 17 of this prospectus. These risks include, among others, that:

 

RISKS RELATED TO OUR BUSINESS

 

Risks Related to the Global Logistics Services

 

	·	Geopolitical conditions, such as political instability or conflict, terrorist attacks and international hostilities can affect the Maritime transportation industry, which could adversely affect our business. See “Risk Factors - Geopolitical conditions, such as political instability or conflict, terrorist attacks and international hostilities can affect the Maritime transportation industry, which could adversely affect our business.” on page 17.
	·	Any reduction in international commerce or disruption in global trade may adversely impact our business and operating results. See “Risk Factors - Any reduction in international commerce or disruption in global trade may adversely impact our business and operating results.” on page 17.
	·	Failure to compete in our highly competitive industry could harm our business. See “Risk Factors - Our industry is highly competitive, and failure to compete or respond to customer requirements could damage our business and results of operations.” on page 18.
	·	Uncertainty in customer shipments or carrier rates could impact on our margins and results. See “Risk Factors - Difficulty in forecasting timing or volumes of customer shipments or rate changes by carriers could adversely impact our margins and operating results.” on page 18.
	·	Climate change and related measures could harm our business and finances. See “Risk Factors - Climate change, including measures to address climate change, could adversely impact our business and financial results.” on page 18.

 

 

 

 

	·	Roshing faces risks from shipment contents, quality or health issues, and inherent logistics dangers like injury, product damage, and transport incidents. See “Risk Factors - Roshing faces risks associated with the contents of shipments and inventories handled through its logistics services, including real or perceived quality or health issues with the products that are handled through Roshing’s logistics services, and risks inherent in the logistics industry, including personal injury, product damage, and transportation-related incidents.” on page 19.
	·	Roshing faces risks from contracts with shipping suppliers. See “Risk Factors - Roshing is subject to potential risks arising from contractual obligations with shipping suppliers.” on page 19.
	·	Roshing faces risks from evolving customer needs and contracts, risking financial losses, legal liabilities, and reputational damage if not managed carefully. See “Risk Factors - Roshing faces risks from changing customer logistics needs, contractual obligations, and failure to meet customer requirements, which could lead to financial losses, legal liabilities, and damage to Roshing’s reputation if not managed proactively.” on page 19.
	·	Our revenues, operating income, and cash flows may fluctuate due to uncertainty and potential volatility in cargo space and container load demand and supply. See “Risk Factors - Our revenues, operating income and cash flows are likely to fluctuate and are subject to uncertainty and potential volatility in demand and supply for cargo space and container loads from time to time.” on page 20.
	·	Seasonality and the impact of weather and other catastrophic events adversely affect Roshing’s operations and profitability. See “Risk Factors - Seasonality and the impact of weather and other catastrophic events adversely affect Roshing’s operations and profitability.” on page 21.

 

Risks Related to Other Products & Services

 

	·	Roshing heavily relies on a few suppliers. See “Risk Factors - Roshing has a great dependence on a limited number of suppliers and the loss of their manufacturing capability could materially impact on its operations.” on page 21.
	·	Defects in Roshing’s hardware products or quality control failures in distribution could hinder sales and lead to product liability claims and costly litigation. See “Risk Factors - Defects in the Hardware Products Roshing sells or failures in quality control related to its distribution of products could impair its ability to sell its products or could result in product liability claims, litigation and other significant events involving substantial costs.” on page 21.
	·	The software and website development market are highly competitive. See “Risk Factors - The software and website development market are highly competitive.” on page 22.
	·	Roshing’s software and website may not perform in line with customer specifications or expectations. See “Risk Factors - Roshing’s software and website may not perform in line with customer specifications or expectations.” on page 22.
	·	If Roshing does not update its products and services, they may become outdated and unable to compete. See “Risk Factors - If Roshing does not continually update its products and/or services, they may become obsolete and Roshing may not be able to compete with other companies.” on page 23.
	·	Roshing may not be able to continue to recruit, train and retain dedicated and qualified consultants. See “Risk Factors - Roshing may not be able to continue to recruit, train and retain dedicated and qualified consultants who are essential to the success of our business and the effective delivery of policy and business advisory services to our individual and corporate clients.” on page 23.
	·	A decline in the market for individual clients could have a material adverse effect on our its business. See “Risk Factors - A decline in the market for individual clients of our Roshing’s business enterprise consulting services and corporate business consulting could have a material adverse effect on our its business, prospects, financial condition and results of operations.” on page 23.

 

General Business Risks

 

	·	We have a limited operating history. See “Risk Factors - We have a limited operating history and face significant challenges and will incur substantial expenses as we build our capabilities.” on page 23.
	·	We are currently dependent on a small group of customers for most of our revenue. See “Risk Factors - We are currently dependent on a small group of customers for most of our revenue. If we cannot expand our customer base many-fold, our business growth will be challenged and affected, resulting in adjustments to our business strategy.” on page 24.

 

 

 

 

	·	COVID-19 may adversely impact our business and operating results. See “Risk Factors - We rely on shipping suppliers, cargo owner and cargo agents and Hardware Products suppliers, if they become financially unstable or have reduced capacity to provide services because of pandemics, such as COVID-19, it may adversely impact our business and operating results.” on page 24.
	·	Our business could be negatively affected by rising inflation and interest rates. See “Risk Factors - Our business could be negatively affected by rising inflation and interest rates.” on page 24.
	·	If we are unable to hire, retain or motivate qualified personnel, consultants, independent contractors, and advisors, we may not be able to grow effectively. See “Risk Factors - If we are unable to hire, retain or motivate qualified personnel, consultants, independent contractors, and advisors, we may not be able to grow effectively.” on page 25.
	·	We do not maintain sufficient insurance for our business. See “Risk Factors - The Company and its subsidiaries do not presently maintain fire, theft, product liability or any other property insurance, which leaves us with exposure in the event of loss or damage to our properties or claims filed against us.” on page 25.
	·	Our operating history may not be indicative of our future growth or financial results. See “Risk Factors - Our operating history may not be indicative of our future growth or financial results and we may not be able to sustain our historical growth rates.” on page 25.
	·	Meeting public company regulations is costly and resource-intensive; lacking proper internal controls could harm financial reporting and disclosure, impacting operations and reputation. See “Risk Factors - We incur significant costs and demands upon management and accounting and finance resources as a result of complying with the laws and regulations affecting public companies; if we fail to maintain proper and effective internal controls, our ability to produce accurate and timely financial statements and otherwise make timely and accurate public disclosure could be impaired, which could harm our operating results, our ability to operate our business and our reputation.” on page 25.
	·	We may fail to make necessary acquisitions or investments or enter desirable strategic alliances. See “Risk Factors - We may fail to make necessary acquisitions or investments or enter desirable strategic alliances, and we may not be able to achieve the anticipated benefits from such acquisitions, investments or strategic alliances.” on page 26.
	·	We may not be able to prevent others from unauthorized use of our intellectual property. See “Risk Factors - We may not be able to prevent others from unauthorized use of our intellectual property, which could harm our business and competitive position.” on page 27.
	·	We are a “smaller reporting company” under the Securities Exchange Act. See “Risk Factors - We are a“smaller reporting company” under Rule 12b-2 of the Securities Exchange Act of 1934, and we cannot be certain if the scaled disclosure requirements applicable to smaller reporting companies will make our common stock less attractive to investors and make it more difficult to raise capital as and when we need it.” on page 27.
	·	Anti-takeover provisions contained in our bylaws and articles of incorporation as well as provisions of Nevada law, could impair a takeover attempt. See “Risk Factors - Anti-takeover provisions contained in our bylaws and articles of incorporation as well as provisions of Nevada law, could impair a takeover attempt.” on page 27.
	·	Any damage to the reputation and recognition of our brand names, may materially and adversely affect our business operations and prospects. See “Risk Factors - Any damage to the reputation and recognition of our brand names, including negative publicity against us, our services, operations and our directors, senior management and business partners may materially and adversely affect our business operations and prospects.” on page 28.
	·	We may from time to time be subject to claims, disputes, lawsuits and other legal and administrative proceedings. See “Risk Factors - We may from time to time be subject to claims, disputes, lawsuits and other legal and administrative proceedings.” on page 28.
	·	We believe no additional permissions from Hong Kong authorities are required, but cannot guarantee we will obtain them if needed. See “While we believe that we and our subsidiaries are currently not required to obtain any other permissions or approvals from Hong Kong authorities for our business operations, we cannot assure you that we or our subsidiaries will be able to obtain all such permissions or approvals if they are nevertheless required.” on page 28.
	·	We may engage in transactions that present conflicts of interest. See “Risk Factors - We may engage in transactions that present conflicts of interest.” on page 28.
	·	We face rising labor costs in Hong Kong and risks from non-compliance with employment and labor protection laws. See “Risk Factors - Increases in labor costs in Hong Kong and non-compliance with laws and regulations relating to employment and labor protection may adversely affect the business of Roshing and our results of operations.” on page 33.
	·	We may adjust our business strategies and models. See “Risk Factors - We may adjust our business strategies and models in response to changing market conditions, competitive pressures, or regulatory changes. However, there is no guarantee that these adjustments will be successful, and they may not achieve the desired results, potentially impacting our performance and financial results.” on page 29.

 

 

 

 

RISKS RELATED TO DOING BUSINESS IN HONG KONG

 

	·	The Chinese government may exercise significant oversight and discretion over the conduct of our business and may intervene in or influence our operations. See “Risk Factors - All our operations are in Hong Kong. However, due to the long arm provisions under the current Mainland China laws and regulations, the Chinese government may exercise significant oversight and discretion over the conduct of our business and may intervene in or influence our operations at any time, which could result in a material change in our operations and/or the value of our common stock.” on page 29.
	·	We will rely on dividends and other distributions on equity paid by our Hong Kong subsidiary to fund any cash and financing requirements we may have. See “Risk Factors - We will rely on dividends and other distributions on equity paid by our Hong Kong subsidiary to fund any cash and financing requirements we may have. In the future, the PRC government may impose restrictions on our ability to transfer funds out of Hong Kong to fund operations or for other use outside of Hong Kong. Any limitation on the ability of our Hong Kong subsidiary to make payments to us could have a material adverse effect on our ability to conduct our business and might materially decrease the value of our common stock.” on page 30.
	·	Changes in international trade policies, trade disputes, barriers to trade, or the emergence of a trade war may dampen growth in Hong Kong, Mainland China and other markets where the majority of our clients reside. See “Risk Factors - Changes in international trade policies, trade disputes, barriers to trade, or the emergence of a trade war may dampen growth in Hong Kong, Mainland China and other markets where the majority of our clients reside.” on page 30.
	·	The “Hong Kong National Security Law” could impact our Hong Kong subsidiary. See “Risk Factors - The enactment of Law of the PRC on Safeguarding National Security in the Hong Kong Special Administrative Region (the “Hong Kong National Security Law”) could impact our Hong Kong subsidiary.” on page 31.
	·	There are political risks associated with conducting business in Hong Kong. See “Risk Factors - There are political risks associated with conducting business in Hong Kong.” on page 31.
	·	New regulatory changes may impact our common stock trading on U.S. exchanges and risk delisting if our auditor remains uninspected by the PCAOB. See “Risk Factors - Recent joint statement by the SEC and the Public Company Accounting Oversight Board (United States), or the PCAOB, proposed rule changes submitted by Nasdaq, and the newly enacted Holding Foreign Companies Accountable Act all call for additional and more stringent criteria to be applied to emerging market companies upon assessing the qualification of their auditors, especially the non-U.S. auditors who are not inspected by the PCAOB. These developments could add uncertainties to the trading of our common stock on U.S. stock exchanges, including the possibility that our securities can be delisted if the PCAOB cannot inspect or fully investigate our auditor.” on page 32.
	·	You may incur additional costs and procedural obstacles in effecting the service of legal process. See “Risk Factors - You may incur additional costs and procedural obstacles in effecting service of legal process, enforcing foreign judgments or bringing actions in Hong Kong against us or its management named in the prospectus based on Hong Kong laws.” on page 34.
	·	While we believe that we and our subsidiaries are currently not required to obtain permissions or approvals from Mainland China authorities for our business operations and/or the listing and offering of our securities, and it is very unlikely that we or our subsidiaries will be required to do so in the future, we and Roshing may not be able to obtain such permissions or approvals if they are nevertheless required. See “Risk Factors - While we believe that we and our subsidiaries are currently not required to obtain permissions or approvals from Mainland China authorities for our business operations and/or the listing and offering of our securities, and it is very unlikely that we or our subsidiaries will be required to do so in the future, we cannot assure you that we and Roshing will be able to obtain all such permissions or approvals if they are nevertheless required.” on page 34.

 

RISKS RELATED TO TAXATION

 

	·	Non-compliance with tax obligations may adversely affect our business and operation results. See “Risk Factors - Non-compliance with tax obligations may adversely affect our business and operation results.” on page 37.
	·	A change in tax laws in any country in which we operate might adversely affect us. See “Risk Factors - A change in tax laws in any country in which we operate or loss of a major tax dispute or a successful tax challenge to our operating structure, intercompany pricing policies or the taxable presence of our subsidiaries in certain countries could adversely affect us.” on page 37.
	·	An investment in this Underwritten Offering may involve adverse U.S. federal income tax consequences. See “Risk Factors - An investment in this Underwritten Offering may involve adverse U.S. federal income tax consequences.” on page 38.

 

 

 

 

RISKS RELATED TO OUR COMMON STOCK AND THIS UNDERWRITTEN OFFERING

 

	·	Our common stock is currently quoted on the OTC Pink Market. See “Risk Factors - Our common stock is currently quoted on the OTC Pink Market, which may have an unfavorable impact on our stock price and liquidity.” on page 38.
	·	There can be no assurances that an active trading market may develop for our common stock, or if developed, be maintained. See “Risk Factors - There can be no assurances that an active trading market may develop for our common stock, or if developed, be maintained.” on page 38.
	·	An active, liquid, and orderly market for our common stock may not develop. See “Risk Factors - An active, liquid, and orderly market for our common stock may not develop.” on page 38.
	·	Our common stock is subject to the “penny stock” rules of the SEC. See “Risk Factors - Our common stock is subject to the “penny stock” rules of the SEC and the trading market in the securities is limited, which makes transactions in the stock cumbersome and may reduce the value of an investment in the stock.” on page 39.
	·	The FINRA sales practice requirements may also limit a stockholder’s ability to buy and sell our common stock. See “Risk Factors - The Financial Industry Regulatory Authority (“FINRA”) sales practice requirements may also limit a stockholder’s ability to buy and sell our common stock.” on page 39.
	·	Our articles of incorporation allow for our board to create a new series of preferred stock without further approval by our Stockholders. See “Risk Factors - Our articles of incorporation allow for our board to create a new series of preferred stock without further approval by our Stockholders, which could adversely affect the rights of the holders of our common stock.” on page 40.
	·	The trading price of our common stock is likely to be volatile. See “Risk Factors - The trading price of our common stock is likely to be volatile, which could result in substantial losses to investors.” on page 40.
	·	Short sellers of our stock may be manipulative and may drive down the market price of our common stock. See “Risk Factors - Short sellers of our stock may be manipulative and may drive down the market price of our common stock.” on page 41.
	·	We have considerable discretion as to the use of the net proceeds from this Underwritten Offering and we may use these proceeds in ways with which you may not agree. See “Risk Factors - We have considerable discretion as to the use of the net proceeds from this Underwritten Offering and we may use these proceeds in ways with which you may not agree.” on page 41.
	·	The sale or availability for sale of substantial amounts of our common stock could adversely affect their market price. See “Risk Factors - The sale or availability for sale of substantial amounts of our common stock could adversely affect their market price.” on page 41.
	·	As we do not expect to pay dividends in the foreseeable future, you must rely on a price appreciation of our common stock for return on your investment. See “Risk Factors - As we do not expect to pay dividends in the foreseeable future, you must rely on a price appreciation of our common stock for return on your investment.” on page 41.
	·	Our CEO beneficially owns the majority of our outstanding stock. See “Risk Factors - Our CEO beneficially owns the majority of our outstanding stock and, accordingly, will have control over stockholder matters, the Company’s business and management.” on page 42.
	·	The sale of securities by us in any equity or debt financing could result in dilution to our existing Stockholders. See “Risk Factors - The sale of securities by us in any equity or debt financing could result in dilution to our existing Stockholders.” on page 42.
	·	If you purchase our common stock in the offering, you will incur immediate and substantial dilution. See “Risk Factors - If you purchase our common stock in the offering, you will incur immediate and substantial dilution in the book value of your shares.” on page 43.
	·	A significant portion of our shares of common stock are restricted from immediate resale but may be sold into the market in the near future. See “Risk Factors - A significant portion of our shares of common stock are restricted from immediate resale but may be sold into the market in the near future. This could cause the market price of our common stock to drop significantly, even if our business is doing well.” on page 43.
	·	If our common stock is listed on Nasdaq, we may not be able to satisfy the continued listing requirements of Nasdaq to maintain a listing of our common stock. See “Risk Factors - If our common stock is listed on Nasdaq, we may not be able to satisfy the continued listing requirements of Nasdaq to maintain a listing of our common stock.” on page 43.
	·	We may require additional capital to support growth. See “Risk Factors - We may require additional capital to support growth, and such capital might not be available on terms acceptable to us, if at all. This could hamper our growth and adversely affect our business.” on page 43.

 

 

 

 

Cash Flows through Our Organization

 

We are a holding company without operations of its own. We conduct our all operations through our Hong Kong subsidiary, Roshing. As a result, our ability to pay dividends depends upon dividends paid by Roshing. If our existing subsidiaries or any newly formed ones incur debt on their own behalf in the future, the instruments governing their debt may restrict their ability to pay dividends to Tianci. Under the current practice of the Inland Revenue Department of Hong Kong, no tax is payable in Hong Kong in respect of dividends paid by Roshing. The Mainland China laws and regulations do not currently have any material impact on transfers of cash from Roshing to Tianci or from Tianci to Roshing. The statutory reserve funds and the discretionary funds are not distributable as cash dividends. See “Regulations related to Hong Kong Taxation -Tax on dividends” on page 84.

 

We have established controls and procedures for cash flows within our organizations. Our management team is the special task force that manages and supervises the transfers of funds among Tianci and its subsidiaries under the Cash Flow Management Policy, an internal policy adopted by Tianci. Under this policy, Tianci focuses on revenue management, cost control, working capital management, implementing financial strategies, and fulfilling compliance reporting duties. Our management team closely monitors and manages cash transfers within our organization by preparing monthly reports and annual budget plans. Each transfer of cash between Tianci, and a subsidiary is also subject to internal report and approval process by reference to such policy. Each transfer of cash between Tianci, RQS Capital, and a subsidiary or branch is also subject to an internal report and approval process by reference to such policy. In addition, cash transfers between Tianci, its subsidiaries, or investors shall follow the applicable Hong Kong laws and regulations.

 

We believe that we and our subsidiaries are currently not required to obtain permissions or approvals from Mainland China authorities for our business operations and/or the listing and offering of our securities.

 

In the opinion of our PRC counsel, Jiangsu Junjin Law Firm, as of the date of this prospectus, on the basis that (i) we are a Nevada company and our only operating subsidiary, Roshing, is a Hong Kong company and is headquartered in Hong Kong, neither entity has operations in Mainland China; (ii) we do not, directly or indirectly, own or control any entity or subsidiary in Mainland China, nor are us controlled by any Mainland Chinese company or individual directly or indirectly; (iii) we currently do not have or intend to set up any subsidiary or enter into any contractual arrangements to establish a VIE structure with any entity in Mainland China; (iv) only few of Roshing’s customers are Mainland China residents, which contributed 5.2% and 0.4% of our revenue for the year ended July 31, 2023 and the year ended July 31, 2024, respectively and there are no customers from Mainland China for the three months ended October 31, 2024, (v) the majority of our senior managers in charge of the Company’s business operation and management are Hong Kong nationals and domiciled in Hong Kong; and (vi) all of Roshing’s employees are Hong Kong residents, we believe that we and our subsidiaries are not required to obtain any permissions or approvals from the Mainland China authorities for consummating this offering, including but not limited to the CSRC, to operate Roshing’s business or to list our securities on the U.S. exchanges and offer securities, including but not limited to issuing our common stock to foreign investors. We and our subsidiaries have not applied for, or been denied of any such permissions or approvals from the authorities of Mainland China. In addition, in the opinion of our PRC counsel, Jiangsu Junjin Law Firm, we are not subject to the cybersecurity review by the CAC over data security and our offering because we are a Nevada company and our only operating subsidiary is a Hong Kong company, neither entity has operations in Mainland China. In addition, we expect that we and our subsidiaries’ operations will continue to be conducted in Hong Kong as is the case as of the date of this prospectus. Therefore, we believe that the likelihood that we and our subsidiaries be required to obtain any permissions or approvals from the governmental authorities of Mainland China for our operations, or the listing of our securities on the U.S. exchanges and the offering of our securities in the future is very remote.

 

In addition, (1) we do not have a VIE structure and are not in an industry that is subject to foreign ownership limitations by China; and (2) neither us nor our only operating subsidiary, Roshing, has operations in Mainland China. For a detailed description of risks relating to the obtaining of necessary permissions or approvals from Mainland China authorities, see “Risk Factors - While we believe that we and our subsidiaries, are currently not required to obtain permissions or approvals from Mainland China authorities for our business operations and/or the listing and offering of our securities, and it is very unlikely that we or our subsidiaries will be required to do so in the future, we cannot assure you that we or our subsidiaries will be able to obtain all such permissions or approvals if they are nevertheless required.”

 

 

 

 

 

 

 

 

 

 

SUMMARY CONSOLIDATED FINANCIAL DATA

 

The following summary consolidated financial statements for the three months ended October 31, 2024 and 2023, are derived from our unaudited consolidated financial statements included elsewhere in this prospectus. The summary consolidated financial statements for the years ended July 31, 2024 and 2023, are derived from our audited consolidated financial statements included elsewhere in this prospectus. Our consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and have been consistently applied. The consolidated financial statements include the accounts of the Company, and its subsidiaries. All intercompany transactions and balances between the Company, and its subsidiaries are eliminated upon consolidation.

 

Our historical results for any period are not necessarily indicative of results to be expected for any future period. You should read the following summary financial information in conjunction with the consolidated financial statements and related notes and the information under “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included elsewhere in this prospectus.

 

For the three months ended October 31, 2024 and 2023

 

The following table presents our summary consolidated statements of operations for the three months ended October 31, 2024 and 2023.

 

		For the three months ended October 31,
		2024				2023
Revenues		$	2,980,940			$	1,326,648
Cost of Revenues			2,752,509				1,092,871
Gross profit (loss)			228,431				233,777
Selling and marketing			85,188				102,071
General and administrative			260,393				118,705
Income (loss) from operations			(117,150	)			13,001
Provision for income taxes			2,189				19,113
Net income (loss)			(91,948	)			(6,112	)
Less: net income (loss) attributable to non-controlling interest			1,108				9,672
Net income (loss) attributable to Tianci			(93,056	)			(15,784	)

 

The following is a summary of consolidated financial data as of October 31, 2024.

 

		October 31,
		2024
Total Current assets		$	894,314
Total non-current assets			1,656
Total assets		$	895,970
Total liabilities		$	197,908

 

		For the three months ended October 31,
		2024				2023
Net cash provided by (used in) operating activities		$	(15,211	)		$	124,491
Net cash used in investing activities			–				–
Net cash provided by (used in) financing activities			(74,125	)			–
Net change in cash and restricted cash		$	(89,336	)		$	124,491

 

 

 

For the years ended July 31, 2024 and 2023

 

The following table presents our summary consolidated statements of operations for the years ended July 31, 2024 and 2023.

 

		For the year ended July 31,
		2024				2023
Revenues		$	8,617,265			$	452,409
Cost of Revenues			7,562,086				456,494
Gross profit (loss)			1,055,179				(4,085	)
Selling and marketing			365,992				54,169
General and administrative			520,884				285,740
Income (loss) from operations			168,303				(343,994	)
Provision for income taxes			35,906				12,095
Net income (loss)			110,320				(356,089	)
Less: net income (loss) attributable to non-controlling interest			55,870				(14,879	)
Net income (loss) attributable to Tianci			54,450				(341,210	)

 

The following is a summary of consolidated financial data as of July 31, 2024 and 2023 and for the years ended July 31, 2024 and 2023.

 

		July 31,				July 31,
		2024				2023
Total Current assets		$	910,305			$	312,226
Total non-current assets			1,656				7,978
Total assets		$	911,961			$	320,204
Total liabilities		$	121,951			$	598,836

 

		For the year ended
		July 31,
		2024				2023
Net cash provided by (used in) operating activities		$	112,740			$	324,581
Net cash used in investing activities			–				–
Net cash provided by (used in) financing activities			44,047				(89,476	)
Net change in cash and restricted cash		$	156,787			$	235,105

 

Our historical results for any period are not necessarily indicative of results to be expected for any future period. You should read the following summary financial information in conjunction with the consolidated financial statements and related notes and the information under “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included elsewhere in this prospectus.

 

 

 

 

RISK FACTORS

 

Investing in our common stock involves a high degree of risk. Before investing in our common stock, you should carefully consider the risks described below, as well as the other information in this prospectus, including our consolidated financial statements and the related notes. In addition, we may face additional risks and uncertainties not currently known to us, or which as of the date of this registration statement we might not consider significant, which may adversely affect our business. If any of the following risks occur, our business, financial condition and results of operations could be materially adversely affected. In such case the trading price of our common stock could decline due to any of these risks or uncertainties, and you may lose part or all of your investment.

 

RISKS RELATED TO OUR BUSINESS

 

Risks Related to the Global Logistics Services

 

Geopolitical conditions, such as political instability or conflict, terrorist attacks and international hostilities can affect the Maritime transportation industry, which could adversely affect our business.

 

We conduct most of our operations outside of the United States and our business, results of operations, cash flows, financial condition and ability to pay dividends, if any, in the future may be adversely affected by changing economic, political and government conditions in the countries and regions where we operate. Moreover, we operate in a sector of the economy that has been and is likely to continue to be adversely impacted by the effects of geopolitical developments, including political instability or conflict, terrorist attacks or international hostilities.

 

Currently, the world economy faces a number of challenges, including tensions between the United States and China, new and continuing turmoil and hostilities in Russia, Ukraine, the Middle and other geographic areas and countries, continuing economic weakness in the European Union and slowing growth in China and the continuing threat of terrorist attacks around the world.

 

Trade barriers to protect domestic industries against foreign imports depress shipping demand. Protectionist developments, such as the imposition of trade tariffs or the perception they may occur, may have a material adverse effect on global economic conditions, and may significantly reduce global trade. Moreover, increasing trade protectionism may cause an increase in (a) the cost of goods exported from regions globally, (b) the length of time required to transport goods and (c) the risks associated with exporting goods. Such increases may significantly affect the quantity of goods to be shipped, shipping time schedules, voyage costs and other associated costs, which could have an adverse impact on our charterers’ business, operating results and financial condition and could thereby affect their ability to make timely charter hire payments to us and to renew and increase the number of their time charters with us. This could have a material adverse effect on our business, financial condition and operating results. Further, protectionist policies in any country could impact global markets, including foreign exchange and securities markets. Any resulting changes in currency exchange rates, tariffs, treaties and other regulatory matters could in turn adversely impact our business, results of operations, financial condition and cash flows.

 

Any reduction in international commerce or disruption in global trade may adversely impact our business and operating results.

 

The Company primarily provides services to customers engaged in international commerce. Everything that affects international trade has the potential to expand or contract our primary markets and adversely impact our operating results. For example, international trade is influenced by:

 

	·	currency exchange rates and currency control regulations;
	·	interest rate fluctuations;
	·	changes and uncertainties in governmental policies and inter-governmental disputes, which could result in increased tariff rates, quota restrictions, trade barriers and other types of restrictions;

 

 

 

 

	·	changes in and application of international and domestic customs, trade and security regulations;
	·	wars, strikes, civil unrest, acts of terrorism, and other conflicts;
	·	changes in labor and other costs, including the impacts of inflation;
	·	increased global concerns regarding working conditions and environmental sustainability;
	·	changes in consumer attitudes regarding goods made in countries other than their own;
	·	changes in availability of credit; and
	·	changes in the price and readily available quantities of oil and other petroleum-related products.

 

Our industry is highly competitive, and failure to compete or respond to customer requirements could damage our business and the results of operations.

 

The global logistics services industry is intensely competitive and is expected to remain so for the foreseeable future. There are a large number of companies competing in one or more segments of the industry, but the number of firms with a global network that offer a full complement of logistics services is more limited. Nevertheless, many of these competitors have significantly more resources than the Company and may pursue acquisition opportunities and are developing new technologies to gain competitive advantages. Depending on the location of the shipper and the importer, we must compete against niche players, larger entities including carriers, and emerging technology companies. The primary competitive factors are price and quality of service. Many larger customers utilize the services of multiple logistics providers. Customers regularly solicit bids from competitors in order to improve service and to secure favorable pricing and contractual terms such as: longer payment terms; flexible-price arrangements; and performance penalties. Increased competition and competitors’ acceptance of expanded contractual terms coupled with customers’ dissatisfaction with elevated rates, scarce capacity, and extended transit times could result in loss of business, reduced revenues, reduced margins, higher operating costs or loss of market share, any of which would damage our results of operations, cash flows and financial condition.

 

Difficulty in forecasting timing or volumes of customer shipments or rate changes by carriers could adversely impact our margins and operating results.

 

We are not aware of any accurate means of forecasting short-term customer requirements. However, long-term customer satisfaction depends upon our ability to meet these unpredictable short-term customer requirements. Personnel costs, one of our larger costs, are always less flexible in the very near term as we must staff to meet uncertain demand. As a result, short-term operating results could be disproportionately affected.

 

The timing of our revenues is, to a large degree, impacted by factors out of our control, such as a sudden change in consumer demand for goods, changes in trade tariffs, product launches and/or manufacturing production delays. Additionally, many customers ship a significant portion of their goods at or near the end of a quarter, and therefore, we may not learn of a shortfall in revenues until late in a quarter. To the extent that a shortfall in revenues or earnings was not expected by securities analysts or investors, any such shortfall from levels predicted by securities analysts or investors could have an immediate and adverse effect on the trading price of our stock.

 

Volatile market conditions can create situations where rate increases charged by carriers and other service providers are implemented with little or no advance notice. We often cannot pass these rate increases on to our customers in the same time frame, if at all. As a result, our yields and margins can be negatively impacted.

 

Climate change, including measures to address climate change, could adversely impact our business and financial results.

 

The long-term effects of climate change are difficult to predict and may be widespread. The impacts of climate change may include physical risks (such as rising sea levels, which could affect port operations or frequency and severity of extreme weather conditions, which could disrupt our operations and damage cargo and our facilities), compliance costs and transition risks (such as increased regulation and taxation to support carbon emissions reduction investments), shifts in customer demands (such as customers requiring more fuel efficient transportation modes or transparency to carbon emissions in their supply chains) and customer contractual requirements around environmental initiatives and other adverse effects. Our non-asset model gives us flexibility and an ability to change locations, modes, and carriers based on evolving operating conditions. However, such impacts may disrupt our operations by adversely affecting our ability to procure services that meet regulatory or customer requirements, depending on the availability of sufficient appropriate logistics solutions.

 

 

 

 

In addition, the increasing concern over climate change has resulted and may continue to result in more regulations relating to climate change, including regulating greenhouse gas emissions, restrictions on modes of transportation, alternative energy policies and sustainability initiatives, such as the FuelEU Maritime initiative or the EU Emissions Trading System. If Hong Kong imposes more stringent restrictions and requirements than our current legal or regulatory obligations, we may experience disruptions in, or increases in the costs associated with delivering our services, which may negatively affect our operating our results of operations, cash flows and financial condition.

 

Roshing faces risks associated with the contents of shipments and inventories handled through its logistics services, including real or perceived quality or health issues with the products that are handled through Roshing’s logistics services, and risks inherent in the logistics industry, including personal injury, product damage, and transportation-related incidents.

 

The logistics services Roshing provides are subject to accident risks, including ship collisions, cargo damage, and cargo loss. Such events can result in significant financial costs, legal liability, and reputational damage. In addition, Roshing’s logistics service involve handling a large volume of bulk merchandise and containers, through cargo and freights operated by third-party shipping suppliers across Roshing’s logistics services, and face challenges with respect to the protection and examination of these bulk merchandise and containers. Bulk merchandise and containers in its network may be delayed, stolen, damaged or lost during delivery for various reasons, and we may be perceived or found liable for such incidents. Unsafe items, such as flammables and explosives, toxic or corrosive items and radioactive materials, may damage other bulk merchandise and containers in shipping process, harm the personnel and facilities of the third-party shipping suppliers, or even injure the recipients. Furthermore, if Roshing fails to prevent prohibited or restricted items from entering into its network and if it participates in the facilitate transportation and delivery of such items unknowingly, Roshing may be subject to administrative or even criminal penalties, and if any personal injury or property damage is concurrently caused, it may also be liable for civil compensation.

 

The logistics services for delivery of bulk merchandise and containers also involve inherent risks associated with transportation safety. From time to time, the vessels and personnel of its third-party shipping suppliers may be involved in transportation and cargo accidents, and the bulk merchandise and containers carried by them may be lost or damaged.

 

Roshing is also subject to worker health and safety laws and regulations that may expose us to costs and liabilities, potentially affecting its results of operations, competitive position, and financial condition adversely. These laws and regulations are stringent and comprehensive, governing the health and safety of Roshing’s and workers of third-party shipping suppliers during operations. For further details, please refer to the section titled “Regulations related to employment and labor protection” beginning on page 83.

 

Any of the foregoing could disrupt Roshing’s logistics services, cause us to incur substantial expenses and divert the time and attention of our management. Roshing may face claims and incur significant liabilities if found liable or partially liable for any injuries, damages or losses. Any uninsured or underinsured loss could negatively influence our business and financial condition. Governmental authorities may also impose significant fines on us or require us to adopt costly preventive measures. Furthermore, if Roshing’s logistics services are perceived to be insecure or unsafe by its customers, its business volume may be significantly reduced, and our business, financial condition and results of operations may be materially and adversely affected.

 

Roshing is subject to potential risks arising from contractual obligations with shipping suppliers.

 

Roshing’s contractual obligations with shipping suppliers encompass precise terms and conditions. Should either party fail to uphold these provisions, it may result in legal disputes, financial penalties, and interruptions in service. These breaches, whether initiated by us or the shipping suppliers, pose potential risks to the continuity and efficiency of Roshing’s operations. Adhering to the terms outlined in these agreements is important to maintaining positive relationships with Roshing’s partners and ensuring the operation of Roshing’s shipping activities and logistics services.

 

 

 

 

Roshing faces risks from changing customer logistics needs, contractual obligations, and failure to meet customer requirements, which could lead to financial losses, legal liabilities, and damage to Roshing’s reputation if not managed proactively.

 

Roshing’s customers’ logistics needs are subject to constant change, influenced by market trends, technological advancements, and shifts in consumer behavior. Failure to adapt to these evolving demands could lead to significant business losses. Moreover, Roshing’s contractual obligations entail meeting specific performance standards, and any failure to do so may result in liability claims, financial setbacks, and damage to its reputation. Ensuring the fulfillment of all customer requirements, including adherence to delivery schedules, maintenance of cargo conditions, and compliance with regulatory standards, is paramount. Any lapses in meeting these requirements could not only result in lost business opportunities but also expose us to potential legal liabilities. Therefore, proactive measures to address these customer-related risks are essential for maintaining Roshing’s competitive edge and safeguarding its operations.

 

Our revenues, operating income and cash flows are likely to fluctuate and are subject to uncertainty and potential volatility in demand and supply for cargo space and container loads from time to time.

 

Roshing charters cargo space and container loads from shipping suppliers based on a certain volume and then sub-charters that space to our customers under an order contract. Roshing obtains cargo space and container loads through direct booking and block space arrangements. Pursuant to the block space agreements, it is committed to paying for the agreed cargo space and container loads irrespective of whether it could fully utilize the allotted space. In the event it cannot fully utilize the cargo space and container loads it sourced (i.e. the actual customers’ demand for the cargo space and container loads is less than the amount of cargo space and container loads it sourced), Roshing has to sell excess cargo space and container loads. Roshing however cannot assure that there will not be instances where, for example, due to (a) departure timetable of the vessel; (b) popularity of the route; or (c) seasonality factors, it is unable to fully consolidate/co-load all the excess cargo space and container loads it purchased from our suppliers. In case Roshing cannot fully utilize the cargo space and container loads it obtained from its suppliers, Roshing may have to bear the costs of all the excess cargo space and container loads it purchased and its business and results of operations could be adversely affected.

 

In the event of shortfall of the cargo space and container loads to meet customers’ demand (i.e. the actual customers’ demand for the cargo space and container loads are higher than the amount that Roshing has), Roshing has to source the cargo space and container loads from its suppliers at the prevailing market rates. Since cargo space and container loads offered by Roshing’s suppliers through direct booking is normally on a first-come-first-served basis, with no formal agreement for guaranteed supply of cargo space and container loads, there is no assurance that Roshing will be able to source sufficient cargo space and container loads to meet its customers’ demand within the expected timeframe and at favorable price. As a result of the shortfall of cargo space and container loads, its reputation and therefore its business, sales performance and results of operations will be adversely affected. 

 

In result, we may experience fluctuations in our revenues and cost structure and the resulting operating income and cash flows and expect that this will continue to occur in the future. We may experience fluctuations in our financial results, including revenues, operating income and earnings per share, for reasons that may include: (i) the types and complexity, number, size, timing and duration of client engagements; (ii) the timing of revenue recognition under U.S. GAAP; (iii) the utilization of revenue-generating professionals, including the ability to adjust staffing levels up or down to accommodate the business and prospects of the applicable segment and practice; (iv) the geographic locations of our clients or the locations where services are rendered; (v) the length of billing and collection cycles and changes in amounts that may become uncollectible; (vi) changes in the frequency and complexity of government regulatory and enforcement activities; (vii) business and asset acquisitions; (viii) fluctuations in the exchange rates of various currencies against the U.S. dollar; (ix) fee adjustments upon the renewal of expired service contracts or acceptance of new clients due to the adjusted scope per our refined business strategy; and (x) economic factors beyond our control.

 

 

 

 

The results of different segments and practices may be affected differently by the above factors. The positive effects of certain events or factors on certain segments and practices may not be sufficient to overcome the negative effects of those same events or factors on other parts of our business. In addition, our mix of practice offerings adds complexity to the task of predicting revenues and results of operations and managing our staffing levels and expenditures across changing business cycles and economic environments.

 

Our results are influenced by seasonal and similar factors. Although we evaluate our annual guidance at the end of each quarter and adjust it as necessary, unforeseen future volatility can lead to significant deviations from our guidance. This may occur even if our guidance encompasses a range of potential outcomes and has been updated to consider operating results.

 

Seasonality and the impact of weather and other catastrophic events adversely affect Roshing’s operations and profitability.

 

Roshing’s operation is influenced by seasonal factors, with February to April being off-peak seasons, and June to October being peak seasons. Roshing’s operation is affected by the winter season because inclement weather impedes operations, and some shippers reduce their shipments during winter. In addition, in the lead-up to major holidays such as Christmas and Chinese Spring Festival, increased consumer demand often leads to a short-term surge in cargo transportation volume. Conversely, in the later stages of holidays and traditional off-peak seasons, cargo transportation volume may significantly decrease. At the same time, operating expenses increase due to, among other things, a decline in fuel efficiency because of engine idling and harsh weather that creates higher accident frequency, increased claims and higher equipment repair expenditures. Roshing also may suffers from weather-related or other events, such as tornadoes, hurricanes, blizzards, ice storms, floods, fires, earthquakes and explosions, which may disrupt fuel supplies, increase fuel costs, disrupt freight shipments or routes, affect regional economies, destroy its assets or the assets of its customers or otherwise adversely affect the business or financial condition of Roshing’s customers, any of which developments could adversely affect its results or make its results more volatile.

 

Risk Related to Other Products & Services

 

Roshing has a great dependence on a limited number of suppliers and the loss of their manufacturing capability could materially impact on its operations.

 

Roshing is a distributor of hardware components for electronic devices and generates revenue from reselling these components and is not engaged in innovative product development and direct manufacturing business. Roshing markets off-the-shelf products, which ships directly from the manufacturer to Roshing’s customer. In the event that the supply of components or finished products is interrupted or relations with any of its principal vendors is terminated, there could be increased costs and considerable delay in finding suitable replacement sources to manufacture the electronic device hardware components products (“Hardware Products”). Its Hardware Products mostly are shipped from facilities located in Guangdong, China. The shipment of these products from Mainland China exposes us to the possibility of product supply disruption and increased costs in the event of changes in the economics condition of China.

 

Defects in the Hardware Products Roshing sells or failures in quality control related to its distribution of products could impair its ability to sell its products or could result in product liability claims, litigation and other significant events involving substantial costs.

 

The detection of significant defects in Roshing’s Hardware Products or failures in its quality control procedures, including those of its suppliers, carries several potential consequences. These include delays in bringing products to market, decreased sales, and challenges in gaining market acceptance. Furthermore, such issues may lead to the diversion of its development resources and damage to its reputation, with potential regulatory restrictions. Rectifying product defects can incur substantial costs, and identifying suitable remedies may prove difficult. Moreover, errors or defects could result in financial damage to its customers, potentially leading to litigation. Product liability lawsuits, regardless of the outcome, may entail significant time and expenses for defense. In the absence of product liability insurance and without being named insured on its suppliers’ policies, Roshing faces the risk of being unable to cover claims or seek reimbursement from suppliers, leaving us potentially exposed to financial liabilities.

 

 

 

 

The software and website development markets are highly competitive.

 

The management software and website development industries are highly competitive. There are a number of larger companies, including computer manufacturers, computer service and software companies that have greater operational, personnel and financial resources than we have. These companies currently offer and have the technological ability to develop software products similar to those offered by us. These companies present a significant competitive challenge to Roshing’s business. Because we do not have the same financial resources as these competitors, we may have a difficult time in the future competing with these companies. We compete based on its fright shipping and logistics knowledge, products, service, price, system functionality and performance and technological advances. Customized and special services according to customer needs, there is technical weakness.

 

The industry in which Roshing operates has low barriers to entry and is highly fragmented and very competitive. We anticipate that competition may intensify further as the freight software industry matures and consolidates. Roshing’s key strength lies in providing tailored services to wholesalers, e-commerce retailers and freight forwarders in market segments that share the value of Roshing’s technology. These services facilitate the management of complex workflows and improve efficiency by enabling shipping workflow management, Marine container management, e-commerce inventory and shipping management, and logistics data analytics. However, we cannot guarantee continuous improvement in technology and services.

 

Roshing’s software and website may not perform in line with customer specifications or expectations.

 

Roshing’s freight shipping and related logistic software and websites may not perform in line with customers’ expectations. Future customers may also require customized specifications that Roshing is unable to deliver. Some of these target specifications, such as those dependent on battery technology, are constrained by the pace of general technological advancement and the capabilities of its suppliers, which are largely beyond its control.

 

Roshing’s software and website may contain design or manufacturing defects that result in unsatisfactory performance or require repair. Roshing’s software and website use a substantial amount of algorithms and software to operate. Software products are inherently complex and often contain defects and errors, especially when first introduced. While Roshing have performed extensive internal testing on its software and website, we have a limited frame of reference by which to evaluate the long-term performance of its software and website. There can be no assurance that Roshing will be able to detect and fix any defects in its software and website before we sell products and services to customers.

 

If Roshing’s software and website is defective or otherwise fails to perform as expected or in accordance with prescribed technical specifications and timetable, its customers may experience accidents and suffer adverse publicity, revenue declines, ecommerce inventory disarray, breakdown of shipping workflows, product liability claims, and significant additional expenses. These consequences could have a material adverse impact on its business, financial condition, operating results, and prospects.

 

Additionally, Roshing’s software, along with that of our third-party service provider, containing personal information of software customers, and others, could be breached, exposing us to adverse publicity, costly government enforcement actions or private litigation, and expenses. Cyber criminals constantly devise schemes to bypass IT security safeguards, and other retailers have experienced severe data breaches. Roshing may not anticipate all security threats or implement preventive measures against them effectively. The costs to mitigate network security issues could be significant, and while Roshing implemented security measures, addressing these issues may not always succeed. Unauthorized access to Roshing’s networks or databases could result in theft, publication, deletion, modification, or blocking of sensitive information, adversely affecting our business strategy, financial condition, or operations. While Roshing has not experienced cybersecurity incidents in the past three years, we anticipate threats to persist and cannot assure such events will not occur or have material impacts on Roshing’s operations, results of operations and financial condition in the future.

 

 

 

 

If Roshing does not continually update its products and/or services, they may become obsolete and Roshing may not be able to compete with other companies.

 

Roshing cannot assure that it will be able to keep pace with technological advances, or that its current suppliers will be able to keep pace with technological advances and as such, its products and/or services may become obsolete. Roshing cannot assure you that competitors will not develop related or similar services and offer them before Roshing does, or does so more successfully, or that they will not develop services and products more effective than any that Roshing and/or its suppliers have or are intending to develop. In addition, although Roshing may be able to identify new suppliers that can provide more effective services and products to be more competitive, Roshing may not be able to arrange satisfactory arrangements in a timely manner, if at all. If that happens, its business, prospects, results of operations and financial condition will be materially adversely affected.

 

Roshing may not be able to continue to recruit, train and retain dedicated and qualified consultants who are essential to the success of its business and the effective delivery of policy and business advisory services to its individual and corporate clients.

 

Roshing’s current talent policy advisory and application services rely heavily on Roshing’s visa consultants, and the conduct of Roshing’s visa consultants is critical to maintaining its reputation. Roshing seeks to hire qualified and dedicated consultants who have the necessary experience to provide effective advice and guidance to its clients in accordance with government policies and business management expertise and experience. The number of consultants with these qualities is limited and Roshing needs to implement a highly selective recruitment process.

 

A decline in the market for individual clients of Roshing’s business consulting services and corporate business consulting could have a material adverse effect on its business, prospects, financial condition and results of operations.

 

There is an anticipation of potential Hong Kong talent introduction policy revisions or the cessation of policy benefits after the second half of 2024, which may lead to a reduction or cessation of its consulting services for talent clients. Additionally, fluctuations in Hong Kong’s global business attractiveness or other factors may impact the number of enterprises establishing business activities in Hong Kong, potentially slowing business demand and affecting the growth of consulting enterprises we serve. Consequently, Roshing’s business, prospects, financial condition, and operating results may be significantly and adversely affected.

 

General Business Risks

 

We have a limited operating history and face significant challenges and will incur substantial expenses as we build our capabilities.

 

We have a limited operating history and are subject to the risks inherent in a growing company, including, among other things, risks that we may not be able to hire sufficient qualified personnel and establish operating controls and procedures. The company relies on few trained internal personnel as the company only has 11 full time employees. As we build our own capabilities, we expect to encounter risks and uncertainties frequently experienced by growing companies in new and rapidly evolving fields, including the risks and uncertainties described herein. If we are unable to build our own capabilities, our operating and financial results could differ materially from our expectations, and our business could suffer.

 

 

 

 

 

 

We are currently dependent on a small group of customers for most of our revenue. If we cannot expand our customer base many-fold, our business growth will be challenged and affected, resulting in adjustments to our business strategy.

 

As we have not achieved significant scale, we had and expect to continue to have customer concentration. The revenue generated to date by our business has come from a small number of customers. During the three months ended October 31, 2024, two customers accounted for 56.5% and 19.7% of our revenue. During the three months ended October 31, 2023, two customers accounted for 61.2% and 13.1% of our revenue. During the year ended July 31, 2024, three customers were responsible for over 84% of our revenue. During the year ended July 31, 2023, two customers were responsible for over 52% of our revenue. In order for Tianci to be viable as a public company, we must increase our revenue. To accomplish that, we must expand our customer base. If we fail to multiply our customers, Tianci’s stock may have no significant value. There are inherent risks whenever a large percentage of revenues are concentrated with a limited number of customers. We are unable to predict the future level of demand for our services that will be generated by these customers. In addition, we cannot assure that any of our customers in the future will not cease purchasing logistics services from us, or that our cooperating agents will continue introducing clients to us. Should they favor logistics services from our competitors, significantly reduce orders, or seek price reductions in the future, any such event could have a material adverse effect on our revenue, profitability, and results of operations.

 

We rely on shipping suppliers, cargo owner and cargo agents and Hardware Products suppliers, if they become financially unstable or have reduced capacity to provide services because of pandemics, such as COVID-19, it may adversely impact our business and operating results.

 

We depend on shipping suppliers, cargo owners, cargo agents, and hardware products suppliers. The quality and profitability of our services and business depend on the effective selection and oversight of these partners. Pandemics, such as COVID-19 have ever placed significant stress on our shipping suppliers, cargo owners, cargo agents, and hardware products suppliers, which may continue to result in reduced carrier capacity or availability, pricing volatility or more limited carrier transportation schedules which could adversely impact our operations and financial results. During the pandemic, air carriers have been particularly affected having to cancel freights due to travel restrictions resulting in dramatic drops in revenues, historical losses and liquidity challenges. Uncertainty over recovery of demand for passenger air travel, in particular business travel, to pre-pandemic levels means ship carriers’ operations and financial stability may be adversely affected long term.

 

Our business could be negatively affected by rising inflation and interest rates.

 

Various macroeconomic factors could adversely affect our business, financial condition and results of operations, including changes in inflation, interest rates and overall economic conditions and uncertainties such as those resulting from the current and future conditions in the global financial markets.

 

For instance, recent inflationary environment has negatively impacted us by slightly increasing (i) our labor costs, through higher wages, (ii) our borrowing costs, through higher interest rates which we expect to continue to increase, and (iii) our other operating costs, such as through higher rates charged by our service suppliers. Supply chain constraints have led to higher inflation, which if sustained, could have a negative impact on our operations. To moderate effects of these increasing costs, we instituted proactive initiatives to optimize efficiencies in our daily operations. We also replaced certain service suppliers with alternatives that offered more competitive rates while not compromising service quality. In addition, we expect to modestly increase the rates we charge our customers in response to the inflationary environment should such inflationary pressures further deteriorate in the near future. However, we cannot assure you that these measures we have taken or will take will be effective, if at all, or that we will be able to effectively mitigate any inflationary pressures in the future. If inflation or interest rates were to significantly increase, our business and the results of operations may be negatively affected.

 

Interest rates, liquidity of credit markets and volatility of capital markets could also affect our business and results of operations as well as our ability to raise capital on favorable terms, or at all.

 

 

 

 

If we are unable to hire, retain or motivate qualified personnel, consultants, independent contractors, and advisors, we may not be able to grow effectively.

 

Our performance will be largely dependent on the talents and efforts of highly skilled individuals that we attract to our company. Our future success depends on our continuing ability to identify, hire, develop, motivate and retain highly qualified personnel for all areas of our organization: technological as well as entrepreneurial. Competition for such qualified employees is intense. If we do not succeed in attracting competent personnel or in retaining or motivating them, we may be unable to grow effectively. In addition, our future success depends largely on our ability to retain key consultants and advisors. Our inability to retain their services could negatively impact our business and our ability to execute our business strategy.

 

The Company and its subsidiaries do not presently maintain fire, theft, product liability or any other property insurance, which leaves us with exposure in the event of loss or damage to our properties or claims filed against us.

 

The Company and its subsidiaries do not maintain fire, theft, product liability or property insurance of any kind. The company and its subsidiaries bear the economic risk with respect to loss of or damage or destruction to our property and to the interruption of our business, as well as liability to third parties for damage or destruction to them or their property that may be caused by our personnel or products. Such liability could be substantial and the occurrence of such loss or liability may have a material adverse effect on our business, financial condition and prospects.

 

Our operating history may not be indicative of our future growth or financial results and we may not be able to sustain our historical growth rates.

 

Our operating history may not be indicative of our future growth or financial results. There is no assurance that we will be able to grow in future periods. Our growth rates may decline for any number of possible reasons and some of them are beyond our control, including decreasing customer demand, increasing competition, declining growth of the touchscreen industry in general, emergence of alternative business models, or changes in government policies or general economic conditions. We will continue to expand our sales network and product offerings to bring greater convenience to our customers and to increase our customer base and number of transactions. However, the execution of our expansion plan is subject to uncertainty and the total number of items sold and number of transacting customers may not grow at the rate we expect for the reasons stated above. If our growth rates decline, investors’ perceptions of our business and prospects may be adversely affected and the market price of our common stock could decline.

 

We incur significant costs and demands upon management and accounting and finance resources as a result of complying with the laws and regulations affecting public companies; if we fail to maintain proper and effective internal controls, our ability to produce accurate and timely financial statements and otherwise make timely and accurate public disclosure could be impaired, which could harm our operating results, our ability to operate our business and our reputation.

 

Our management is responsible for establishing and maintaining a system of disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act) that is designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to the issuer’s management, including its principal executive officer or officers and principal financial officer or officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

 

 

 

 

 

An evaluation was conducted under the supervision and with the participation of our management of the effectiveness of the design and operation of our disclosure controls and procedures as of October 31, 2024. Based on that evaluation, our management concluded that our disclosure controls and procedures were not effective as of such date to ensure that information required to be disclosed in the reports that we file or submit under the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms as a result of the following material weaknesses:

 

	·	There is an inadequate segregation of duties consistent with control objectives. The Company’s management is limited in number, resulting in a situation where limitations on segregation of duties exist. In order to remedy this situation, we would need to hire additional staff to provide greater segregation of duties. Currently, it is not feasible to hire additional staff to obtain optimal segregation of duties. Management will reassess this matter in the following year to determine whether improvement in segregation of duty is feasible.
	·	There is a lack of formal policies and procedures necessary to adequately review significant accounting transactions. The Company utilizes a third-party independent contractor for the preparation of its financial statements. Although the financial statements and footnotes are reviewed by our management, we do not have a formal policy to review significant accounting transactions and the accounting treatment of such transactions. The third-party independent contractor is not involved in the day to day operations of the Company and may not be provided information from management on a timely basis to allow for adequate reporting/consideration of certain transactions.

 

Our management will continue to monitor and evaluate the effectiveness of our internal controls and procedures and our internal controls over financial reporting on an ongoing basis and is committed to taking further action and implementing additional enhancements or improvements, as necessary and as funds allow.

 

If our internal control over financial reporting or our disclosure controls are not effective, we may be unable to issue our financial statements in a timely manner, we may be unable to obtain the required audit or review of our financial statements by our independent registered public accounting firm in a timely manner or we may be otherwise unable to comply with the periodic reporting requirements of the SEC, our common stock intended to be listed on Nasdaq could be suspended or terminated and our share price could materially suffer. In addition, we or members of our management could be subject to investigation and sanction by the SEC and other regulatory authorities and to shareholder lawsuits, which could impose significant additional costs on us and divert management attention.

 

We may fail to make necessary acquisitions or investments or enter desirable strategic alliances, and we may not be able to achieve the anticipated benefits from such acquisitions, investments or strategic alliances.

 

Our strategy for long-term growth, productivity and profitability depends in part on our ability to make prudent decisions to make strategic acquisitions or investments or enter desirable alliances and to realize the benefits we expect when we make those investments or acquisitions. We may evaluate and consider strategic acquisitions and investments or enter strategic alliances to develop new services or solutions, with an aim to enhance our competitive position and achieve long-term growth, productivity and profitability. However, we cannot assure you that we will make prudent decisions on such acquisitions, investments, strategic alliances at all times. In addition, investments or acquisitions involve numerous risks, including (i) potential failure to achieve the expected benefits of the integration or acquisition, (ii) difficulties in, and the cost of, integrating operations, technologies, services and personnel, (iii) potential write-offs of acquired assets or investments and (iv) downward effect on our operating results. These transactions will also divert management’s time and resources from our normal course of operations, and we may have to incur unexpected liabilities or expenses. Strategic alliances with third parties could also subject us to a number of risks, including risks associated with potential leakage of proprietary information, non-performance by the counterparty and an increase in expenses incurred in establishing new strategic alliances, any of which may materially and adversely affect our business.

 

If we cannot successfully execute or effectively operate, integrate, leverage and grow the acquired businesses or strategic alliances, our financial results and reputation may be materially and adversely affected. While we expect our future acquisitions, investments or strategic alliances to further enhance our value propositions to customers and improve our long-term profitability, there can be no assurance that we will realize our expectations within the time frame we envisage, if at all, or that we can continue to support the values we allocate to these acquired, invested or alliance businesses, including their goodwill or other intangible assets.

 

 

 

 

We may not be able to prevent others from unauthorized use of our intellectual property, which could harm our business and competitive position.

 

We may become an attractive target for intellectual property attacks in the future with the increasing recognition of our brand. Any of our intellectual property rights could be challenged, invalidated, circumvented or misappropriated, or such intellectual property may not be sufficient to provide us with competitive advantages. In addition, there can be no assurance that (i) all of our intellectual property rights will be adequately protected, or (ii) our intellectual property rights will not be challenged by third parties or found by a judicial authority to be invalid or unenforceable. As of the date of the prospectus, we have only two domain names: roshing.com and tianci-ciit.com. We have not owned or had rights to any other intellectual property, such as patents, copyrights, trademarks, etc.

 

We are a “smaller reporting company” under Rule 12b-2 of the Securities Exchange Act of 1934, and we cannot be certain if the scaled disclosure requirements applicable to smaller reporting companies will make our common stock less attractive to investors and make it more difficult to raise capital as and when we need it.

  

We may continue to be a smaller reporting company. We may take advantage of certain of the scaled disclosures available to smaller reporting companies and will be able to take advantage of these scaled disclosures for so long as (a) the market value of our common stock held by non-affiliates is equal to or less than $250 million as of the last business day of the most recently completed second fiscal quarter, and (b) our annual revenues is equal to or less than $100 million during the most recently completed fiscal year and the market value of our common stock held by non-affiliates is equal to or less than $700 million as of the last business day of the most recently completed second fiscal quarter.

 

We cannot predict if investors will find our common stock less attractive because we may rely on these exemptions. If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock and our stock price may be more volatile. In addition, taking advantage of reduced disclosure obligations may make the comparison of our financial statements with other public companies difficult or impossible. If investors are unable to compare our business with other companies in our industry, we may not be able to raise additional capital as and when we need it, which may materially and adversely affect our financial condition and results of operations.

 

Anti-takeover provisions contained in our bylaws and articles of incorporation as well as provisions of Nevada law, could impair a takeover attempt.

 

Our bylaws, amended articles of incorporation and Nevada law contain provisions which could have the effect of rendering more difficult, delaying or preventing an acquisition deemed undesirable by our board of directors. Our corporate governance documents include provisions:

 

	·	limiting the liability of, and providing indemnification to, our directors and officers;
	·	limiting the ability of our stockholders to call and bring business before special meetings;
	·	controlling the procedures for the conduct and scheduling of board of directors and stockholder meetings;
	·	providing our board of directors with the express power to postpone previously scheduled annual meetings;
	·	permitting the removal of directors only upon vote or written consent of stockholders representing not less than two-thirds (2/3) of the issued and outstanding capital stock entitled to voting power; and
	·	restricting the ability to adopt a new bylaw upon a majority vote of stockholders. The Board shall have the power to amend, alter, change, or repeal any provision contained in the bylaws of incorporation.

 

These provisions, alone or together, could delay or prevent hostile takeovers and changes in control or changes in our management.

 

The Nevada Revised Statutes (“NRS”) Sections 78.411 through 78.444, regulate business combinations with interested stockholders. The NRS defines an interested stockholder as a beneficial owner (directly or indirectly) of 10% or more of the voting power of the outstanding shares of the corporation. Pursuant to NRS Sections 78.411 through 78.444, combinations with an interested stockholder remain prohibited for two years after the person became an interested stockholder unless (i) the transaction is approved by the board of directors or the holders of a majority of the outstanding shares not beneficially owned by the interested party, or (ii) the interested stockholder satisfies certain fair value requirements. NRS 78.434 permits a Nevada corporation to opt out of the statute with appropriate provisions in its articles of incorporation.

 

 

 

 

NRS Sections 78.378 through 78.3793 regulates the acquisition of a controlling interest in an issuing corporation. An issuing corporation is defined as a Nevada corporation with 200 or more stockholders of record, of which at least 100 stockholders have addresses of record in Nevada and does business in Nevada directly or through an affiliated corporation. NRS Section 78.379 provides that an acquiring person and those acting in association with an acquiring person obtain only such voting rights in the control shares as are conferred by a resolution of the stockholders of the corporation, approved at a special or annual meeting of the stockholders. Stockholders who vote against the voting rights have dissenters’ rights in the event that the stockholders approve voting rights. NRS Section 78.378 provides that a Nevada corporation’s articles of incorporation or bylaws may provide that these sections do not apply to the corporation.

 

Any damage to the reputation and recognition of our brand names, including negative publicity against us, our services, operations and our directors, senior management and business partners may materially and adversely affect our business operations and prospects.

 

We believe our brand image and corporate reputation will play an increasingly important role in enhancing our competitiveness and maintaining business growth. Many factors, some of which are beyond our control, may negatively impact our brand image and corporate reputation if not properly managed. These factors include our ability to provide superior solutions and services to our customers, successfully conduct marketing and promotional activities, manage relationship with and among our customers and business partners, and manage complaints and events of negative publicity, maintain positive perception of our Company, our peers and supply chain solution industry in general. Any actual or perceived deterioration of our service quality, which is based on an array of factors including customer satisfaction, rate of complaint or rate of incident, could subject us to damages such as loss of important customers. Any negative publicity against us, our solutions and services, operations, directors, senior management, employees, business partners or our peers could adversely affect customer perception of our brand, cause damages to our corporate reputation and result in decreased demand for our solutions and services. If we are unable to promote our brand image and protect our corporate reputation, we may not be able to maintain and grow our customer base, and our business and growth prospects may be adversely affected.

 

We may from time to time be subject to claims, disputes, lawsuits and other legal and administrative proceedings.

 

We and our management may be subject to claims, disputes, lawsuits, investigations and other legal and administrative proceedings incidental to the conduct of our business from time to time. We are currently not party to any legal or arbitration proceedings, including those relating to bankruptcy, receivership or similar proceedings and those involving any third party, which may have, or have had in the recent past, material adverse effects on our financial position or profitability. Any claims against us or our management, with or without merit, could be time-consuming and costly to defend or litigate, divert our management’s attention and resources or harm our brand equity. Claims arising out of actual or alleged violations of law, breach of contract or torts could be asserted against us by customers, business partners, suppliers, competitors, employees or governmental entities in investigations and legal proceedings. These claims could be asserted under a variety of laws, including but not limited to intellectual property laws, labor and employment laws, securities laws, tort laws, contract laws, property laws, and employee benefit laws. If a lawsuit or governmental proceeding against us is successful, we may be required to pay substantial damages or fines. We may also lose, or be limited in, the rights to offer some of our services. As a result, the scope of our services could be reduced, which could adversely affect our ability to attract new customers, harm our reputation and have a material adverse effect on our business, financial condition and results of operations. Even if we are successful in our attempt to defend ourselves in legal and administrative actions or to assert our rights under various laws, enforcing our rights against the various parties involved may be expensive, time-consuming, and ultimately futile.

 

While we believe that we and our subsidiaries are currently not required to obtain any other permissions or approvals from Hong Kong authorities for our business operations, we cannot assure you that we or our subsidiaries will be able to obtain all such permissions or approvals if they are nevertheless required.

 

The Directors confirm that, as of the date of this prospectus, we and our subsidiaries have received all requisite permissions or approvals from the Hong Kong authorities to operate its business in Hong Kong, including but not limited to obtaining a business registration certificate. However, we have been advised by our Hong Kong counsel that laws, regulations, or policies in Hong Kong could change in the future. If (i) we or our subsidiaries do not receive or maintain such permissions or approvals, (ii) we or our subsidiaries inadvertently conclude that any other permissions or approvals are not required, or (iii) applicable laws, regulations, or interpretations change and we are required to obtain such permissions or approvals in the future, our operations and financial condition could be materially adversely affected, and our ability to offer securities to investors could be significantly limited or completely hindered and the securities currently being offered may substantially decline in value and become worthless.

 

We may engage in transactions that present conflicts of interest.

 

The Company’s officers and directors may enter into agreements with the Company from time to time which may not be equivalent to similar transactions entered into with an independent third party. A conflict of interest arises whenever a person has an interest on both sides of a transaction. While we believe that it will take prudent steps to ensure that all transactions between the Company and any officer or director is fair, reasonable, and no more than the amount it would otherwise pay to a third party in an “arms-length” transaction, there can be no assurance that any transaction will meet these requirements in every instance.

 

 

 

 

We may adjust our business strategies and models in response to changing market conditions, competitive pressures, or regulatory changes. However, there is no guarantee that these adjustments will be successful, and they may not achieve the desired results, potentially impacting our performance and financial results.

 

As changes in our business environment occur, we may adjust our business strategies to meet these changes, or we may otherwise decide to restructure our operations or businesses or assets. In addition, external events such as shifts in demographics, alterations in consumer behavior, fluctuations in macroeconomic conditions, and amendments to laws, regulations, and government policies governing international trade and commerce may impair the value of our assets and increase our costs. When these changes or events occur, we may incur costs to modify our business strategy to respond to those market dynamics and satisfactorily meet customers’ demands. To meet customer demand and implement our strategies and expansion plan, we may shift to a Vessel-Operating Common Carrier. This shift aims to achieve cost efficiency by reducing transportation costs, as owning and operating vessels can decrease dependency on third-party shipping companies, potentially lowering transportation costs over time. Additionally, operating our own vessels can also provide a competitive advantage over companies that rely on third-party carriers. However, this transition may result in significant expenses for the purchase of vessels and related infrastructure necessary for our business growth. Such initiatives and enhancements may require substantial capital expenditures. If we are unable to successfully implement our business strategies and effectively respond to changes in market dynamics, our future financial results will suffer. Furthermore, we have incurred, and may continue to incur, increased operating expenses in connection with certain changes to our business strategies.

 

Risks Related to Doing Business in Hong Kong

 

Most of our operations are in Hong Kong. However, due to the long arm provisions under the current Mainland China laws and regulations, the Chinese government may exercise significant oversight and discretion over the conduct of our business and may intervene in or influence our operations at any time, or may exert more control over offerings conducted overseas and/or foreign investment in issuers like us, which could result in a material change in our operations and/or the value of our common stock.

 

Tianci is a holding company and we conduct our operation through our operating subsidiary Roshing in Hong Kong. Our operations are primarily located in Hong Kong and few of our clients are Mainland China residents. At the present time, we are not materially affected by recent statements by the Mainland China Government indicating an intent to exert more oversight and control over offerings that are conducted overseas and/or foreign investment in China-based issuers. However, due to long arm provisions under the current Mainland China laws and regulations, there remains regulatory uncertainty with respect to the implementation of Chinese law in Hong Kong. The PRC government may choose to exercise significant oversight and discretion, and the policies, regulations, rules, and the enforcement of laws of the PRC government to which we are subject may change rapidly and with little advance notice to us or our stockholders. These laws and regulations may be interpreted and applied inconsistently by different agencies or authorities, and inconsistently with our current policies and practices. New laws, regulations, and other government directives in the PRC may also be costly to comply with.

 

We are aware that recently the PRC government initiated a series of regulatory actions and statements to regulate business operations in certain areas in Mainland China with little advance notice, including cracking down on illegal activities in the securities market, enhancing supervision over China-based companies listed overseas using VIE structure, adopting new measures to extend the scope of cybersecurity reviews, and expanding the efforts in anti-monopoly enforcement. Since these statements and regulatory actions are new, it is highly uncertain how soon legislative or administrative regulation making bodies will respond and what existing or new laws or regulations or detailed implementations and interpretations will be modified or promulgated, if any, and the potential impact such modified or new laws and regulations will have on our daily business operation, the ability to accept foreign investments and list on a U.S. or other foreign exchange.

 

China’s government may intervene or influence our operations at any time or may exert more control over offerings conducted overseas and foreign investment in Hong Kong-based issuers, which may result in a material change in our operations and/or the value of our common stock. The promulgation of new laws or regulations, or the new interpretation of existing laws and regulations, in each case that restrict or otherwise unfavorably impact the ability or way we conduct our business and could require us to change certain aspects of our business to ensure compliance, which could decrease demand for our services, reduce revenues, increase costs, require us to obtain more licenses, permits, approvals or certificates, or subject us to additional liabilities. To the extent any new or more stringent measures are required to be implemented, our business, financial condition and results of operations could be adversely affected as well as materially decrease the value of our common stock.

 

 

 

 

We will rely on dividends and other distributions on equity paid by our Hong Kong subsidiary to fund any cash and financing requirements we may have. In the future, the PRC government may impose restrictions on our ability to transfer funds out of Hong Kong to fund operations or for other use outside of Hong Kong. Any limitation on the ability of our Hong Kong subsidiary to make payments to us could have a material adverse effect on our ability to conduct our business and might materially decrease the value of our common stock.

 

We are a holding company incorporated in the United States, and we rely on dividends and other distributions on equity paid by our subsidiary in Hong Kong for our cash and financing requirements, including the funds necessary to pay dividends and other cash distributions to our stockholders and service any debt we may incur. If our Hong Kong subsidiary incurs debt on its own behalf in the future, the instruments governing the debt may restrict its ability to pay dividends or make other distributions to us.

 

Under the current practice of the Inland Revenue Department of Hong Kong, no tax is payable in Hong Kong in respect of dividends paid by Roshing. The Mainland China laws and regulations do not currently have any material impact on transfers of cash from Roshing to Tianci or from Tianci to Roshing. However, the Chinese government may, in the future, impose restrictions or limitations on our ability to transfer money out of Hong Kong, to distribute earnings and pay dividends to and from the other entities within our organization, or to reinvest in our business outside of Hong Kong. Such restrictions and limitations, if imposed in the future, may delay or hinder the expansion of our business to outside of Hong Kong and may affect our ability to receive funds from our operating subsidiary in Hong Kong. The promulgation of new laws or regulations, or the new interpretation of existing laws and regulations, in each case, that restrict or otherwise unfavorably impact the ability or way we conduct our business, could require us to change certain aspects of our business to ensure compliance, which could decrease demand for our services, reduce revenues, increase costs, require us to obtain more licenses, permits, approvals or certificates, or subject us to additional liabilities. To the extent any new or more stringent measures are implemented, our business, financial condition and results of operations could be adversely affected and such measures could materially decrease the value of our common stock.

 

Changes in international trade policies, trade disputes, barriers to trade, or the emergence of a trade war may dampen growth in Hong Kong, China and other markets where the majority of our clients reside.

 

Political events, international trade disputes, and other business interruptions could harm or disrupt international commerce and the global economy, and could have a material adverse effect on us and our customers, service providers, and other partners. International trade disputes could result in tariffs and other protectionist measures which may materially and adversely affect our business.

 

Tariffs could increase the cost of the goods and products which could affect customers’ investment decisions. In addition, political uncertainty surrounding international trade disputes and the potential of the escalation to a trade war could have a negative effect on customer confidence, which could materially and adversely affect our business. We may also have access to fewer business opportunities, and our operations may be negatively impacted as a result. In addition, the current and future actions or escalations by either the United States or China that affect trade relations may cause global economic turmoil and potentially have a negative impact on our markets, our business, or our results of operations, as well as the financial condition of our customers, and we cannot provide any assurances as to whether such actions will occur or the form that they may take.

 

Under the Basic Law of the Hong Kong Special Administrative Region of the People’s Republic of China, Hong Kong has a high degree of autonomy and executive, legislative and independent judicial powers, including that of final adjudication under the principle of “one country, two systems”, while the government of the PRC is responsible for its foreign affairs and defense. As a separate customs territory, Hong Kong maintains and develops relations with foreign states and regions. However, based on recent political development, the U.S. State Department has indicated that the United States no longer considers Hong Kong to have significant autonomy from China. Hong Kong’s preferential trade status was removed by the United States government and the United States may impose the same tariffs and other trade restrictions on exports from Hong Kong that it places on goods from Mainland China. These and other recent actions may represent an escalation in political and trade tensions involving the U.S., China and Hong Kong, which could potentially harm our business.

 

 

 

 

The enactment of Law of the PRC on Safeguarding National Security in the Hong Kong Special Administrative Region (the “Hong Kong National Security Law”) could impact our Hong Kong subsidiary.

 

On June 30, 2020, the Standing Committee of the PRC National People’s Congress adopted the Hong Kong National Security Law. This law defines the duties and government bodies of the Hong Kong National Security Law for safeguarding national security and four categories of offences — secession, subversion, terrorist activities, and collusion with a foreign or overseas force to endanger national security — and their corresponding penalties. On July 14, 2020, the former U.S. President Donald Trump signed the Hong Kong Autonomy Act (the “HKAA”) into law, authorizing the U.S. administration to impose blocking sanctions against individuals and entities who are determined to have materially contributed to the erosion of Hong Kong’s autonomy. On August 7, 2020, the U.S. government imposed HKAA-authorized sanctions on eleven individuals, including former and current Hong Kong chief executives Carrie Lam and John Lee. On October 14, 2020, the U.S. State Department submitted to relevant committees of Congress the report required under HKAA, identifying persons materially contributing to “the failure of the Government of China to meet its obligations under the Joint Declaration or the Basic Law.” The HKAA further authorizes secondary sanctions, including the imposition of blocking sanctions, against foreign financial institutions that knowingly conduct a significant transaction with foreign persons sanctioned under this authority. The imposition of sanctions may directly affect the foreign financial institutions as well as any third parties or customers dealing with any foreign financial institution that is targeted. It is difficult to predict the full impact of the Hong Kong National Security Law and HKAA on Hong Kong and companies located in Hong Kong. If our Hong Kong subsidiary is determined to be in violation of the Hong Kong National Security Law or the HKAA by competent authorities, our business operations, financial position and results of operations could be materially and adversely affected.

 

There are political risks associated with conducting business in Hong Kong.

 

Substantially all our operations are based in Hong Kong. Accordingly, our business operations and financial condition will be affected by the political and legal developments in Hong Kong. During the period covered by the financial information included in this prospectus, we derive substantially all of our revenue from operations in Hong Kong. Any adverse economic, social and/or political conditions, material social unrest, strike, riot, civil disturbance or disobedience, as well as significant natural disasters, may adversely affect our business operations. Hong Kong is a special administrative region of the PRC and the basic policies of the PRC regarding Hong Kong are reflected in the Basic Law, namely, Hong Kong’s constitutional document, which provides Hong Kong with a high degree of autonomy and executive, legislative and independent judicial powers, including that of final adjudication under the principle of “one country, two systems”. However, there is no assurance that there will not be any changes in the economic, political and legal environment in Hong Kong in the future. Since a substantial part of our operations is based in Hong Kong, any change of such political arrangements may pose an immediate threat to the stability of the economy in Hong Kong, thereby directly and adversely affecting our results of operations and financial position.

 

If the PRC attempts to alter its agreement to allow Hong Kong to function autonomously, this could potentially impact Hong Kong’s common law legal system and may in turn bring about uncertainty in, for example, the enforcement of our contractual rights. This could, in turn, materially and adversely affect our business and operations. Additionally, intellectual property rights and confidentiality protections in Hong Kong may not be as effective as in the United States or other countries. Accordingly, we cannot predict the effect of future developments in the Hong Kong legal system, including the promulgation of new laws, changes to existing laws or the interpretation or enforcement thereof, or the preemption of local regulations by national laws. These uncertainties could limit the legal protections available to us, including our ability to enforce our agreements with our customers.

 

Our revenue is susceptible to the ongoing incidents or factors which affect the stability of the social, economic and political conditions in Hong Kong. Any drastic events may adversely affect our business operations. Such adverse events may include changes in economic conditions and regulatory environment, social and/or political conditions, civil disturbance or disobedience, as well as significant natural disasters. Given the relatively small geographical size of Hong Kong, any of such incidents may have a widespread effect on our business operations, which could in turn adversely and materially affect our business, results of operations and financial condition. It is difficult to predict the full impact of the HKAA on Hong Kong and companies with operations in Hong Kong like us. Furthermore, legislative or administrative actions in respect of China-U.S. relations could cause investor uncertainty for affected issuers, including us, and the market price of our shares could be adversely affected.

 

 

 

 

Recent joint statement by the SEC and the PCAOB, proposed rule changes submitted by Nasdaq, and the newly enacted Holding Foreign Companies Accountable Act all call for additional and more stringent criteria to be applied to emerging market companies upon assessing the qualification of their auditors, especially the non-U.S. auditors who are not inspected by the PCAOB. These developments could add uncertainties to the trading of our common stock on U.S. stock exchanges, including the possibility that our securities can be delisted if the PCAOB cannot inspect or fully investigate our auditor.

 

On April 21, 2020, the SEC Chairman and PCAOB Chairman, along with other senior SEC staff, released a joint statement highlighting the risks associated with investing in companies based in or have substantial operations in emerging markets including China. The joint statement emphasized the risks associated with lack of access for the PCAOB to inspect auditors and audit work papers in China and higher risks of fraud in emerging markets.

 

On May 18, 2020, Nasdaq filed three proposals with the SEC to (1) apply minimum offering size requirement for companies primarily operating in “Restrictive Market,” (2) adopt a new requirement relating to the qualification of management or board of director for Restrictive Market companies, and (3) apply additional and more stringent criteria to an applicant or listed company based on the qualifications of the Company’s auditor.

 

On June 4, 2020, the U.S. President issued a memorandum ordering the President’s working group on financial markets to submit a report to the President within 60 days of the date of the memorandum that should include recommendations for actions that can be taken by the executive branch and by the SEC or PCAOB to enforce U.S. regulatory requirements on Chinese companies listed on U.S. stock exchanges and their audit firms. However, it remains unclear what further actions, if any, the U.S. executive branch, the SEC, and PCAOB will take to address the problem.

 

On August 6, 2020, the President’s working group released a report recommending that the SEC take steps to implement the five recommendations outlined in the report. In particular, to address companies from jurisdictions that do not provide the PCAOB with sufficient access to fulfill its statutory mandate, the President’s working group recommended enhanced listing standards on U.S. stock exchanges. This would require, as a condition to initial and continued exchange listing, PCAOB access to the work papers of the principal audit firm for the audit of the listed company. Companies unable to satisfy this standard as a result of governmental restrictions on access to audit work papers and practices in their jurisdiction may satisfy this standard by providing a co-audit from an audit firm with comparable resources and experience where the PCAOB determines it has sufficient access to audit work papers and practices to conduct an appropriate inspection of the co-audit firm. The report permits the new listing standards to provide for a transition period until January 1, 2022, for listed companies, but would apply immediately to new listings once the necessary rulemakings and/or standard-setting are effective.

 

On August 10, 2020, the SEC announced that the SEC Chairman had directed the SEC staff to prepare proposals in response to the report of the President’s working group, and that the SEC was soliciting public comments and information with respect to the development of these proposals.

 

On May 20, 2020, the U.S. Senate passed the Holding Foreign Companies Accountable Act, or the Act. The Act was approved by the U.S. House of Representatives on December 2, 2020. On December 18, 2020, the Act was signed into public law by the President of the United States. In essence, the Act requires the SEC to prohibit foreign companies from listing securities on U.S. securities exchanges if a company retains a foreign accounting firm that cannot be inspected by the PCAOB for three consecutive years, beginning in 2021. On March 24, 2021, the SEC announced that it had adopted interim final amendments to implement congressionally mandated submission and disclosure requirements of the Act. The interim final amendments will apply to registrants that the SEC identifies as having filed an annual report on Forms 10-K, 20-F, 40-F or N-CSR with an audit report issued by a registered public accounting firm that is located in a foreign jurisdiction and that the PCAOB has determined it is unable to inspect or investigate completely because of a position taken by an authority in that jurisdiction.

 

On June 22, 2021, the U.S. Senate passed the Accelerating Holding Foreign Companies Accountable Act and on December 29, 2022 the Accelerating Holding Foreign Companies Accountable Act was enacted, which amended the HFCA Act by requiring the SEC to prohibit an issuer’s securities from trading on any U.S. stock exchanges if its auditor is not subject to PCAOB inspections for two consecutive years instead of three, thus reducing the time before our securities may be prohibited from trading or delisted.

 

 

 

 

On December 2, 2021, the SEC adopted amendments to finalize rules implementing the submission and disclosure requirements in the HFCA Act. The rules apply to registrants that the SEC identifies as having filed an annual report with an audit report issued by a registered public accounting firm that is located in a foreign jurisdiction and that the PCAOB is unable to inspect or investigate completely because of a position taken by an authority in a foreign jurisdiction.

 

On December 16, 2021, the PCAOB issued a report on its determinations that it is unable to inspect or investigate completely PCAOB-registered public accounting firms headquartered in China and in Hong Kong because of positions taken by Mainland China and Hong Kong authorities in those jurisdictions. The PCAOB has made such designations as mandated under the HFCA Act. Pursuant to each annual determination by the PCAOB, the SEC will, on an annual basis, identify issuers that have used non-inspected audit firms and thus are at risk of such suspensions in the future.

  

On August 26, 2022, the SEC issued a statement announcing that the PCAOB signed a SOP with the CSRC and the Ministry of Finance of the People’s Republic of China governing inspections and investigations of audit firms based in China and Hong Kong, jointly agreeing on the need for a framework.

 

On December 15, 2022, the PCAOB announced that it has secured complete access to inspect and investigate registered public accounting firms headquartered in Mainland China and Hong Kong and voted to vacate the previous Determination Report to the contrary.

 

Michael T. Studer CPA P.C. issued the audit report for our Company for the year ended July 31, 2023. Michael T. Studer CPA P.C. serves as an auditor of companies that are traded publicly in the United States and is a firm registered with the PCAOB, is subject to laws in the United States, pursuant to which the PCAOB conducts regular inspections to assess its compliance with the applicable professional standards. Michael T. Studer CPA P.C. is headquartered in Freeport, New York and has been inspected by the PCAOB on a regular basis. On September 11, we dismissed Michael T. Studer CPA P.C. and engaged Bush & Associates CPA LLC as the Company’s independent public accounting firm for the year ended July 31, 2024. Bush & Associates CPA LLC, an independent registered public accounting firm, has its principal office in Henderson, Nevada and is subject to PCAOB inspections.

 

The PCAOB is continuing to demand complete access in Mainland China and Hong Kong moving forward and is already making plans to resume regular inspections in early 2023 and beyond, as well as to continue pursuing ongoing investigations and initiate new investigations as needed. The PCAOB has indicated that it will act immediately to consider the need to issue new determinations with the HFCA Act if needed. If the PCAOB in the future again determines that it is unable to inspect and investigate completely auditors in Mainland China and Hong Kong, then the companies audited by those auditors would be subject to a trading prohibition on U.S. markets pursuant to the HFCA Act and/or the AHFCAA. These recent developments could also add uncertainties to this Underwritten Offering, and we cannot assure you that the NASDAQ Capital Market or regulatory authorities would not apply additional or more stringent criteria to us after considering the effectiveness of our auditor’s audit procedures and quality control procedures, adequacy of personnel and training, or sufficiency of resources, geographic reach or experience as it relates to the audit of our financial statements.

 

Increases in labor costs in Hong Kong and non-compliance with laws and regulations relating to employment and labor protection may adversely affect the business of Roshing and our results of operations.

 

The economy in Hong Kong has experienced increases in inflation and labor costs in recent years. As a result, average wages in Hong Kong are expected to continue to increase. We expect that Roshing’s labor costs, including wages and employee benefits, will continue to increase. Unless Roshing is able to control its labor costs or pass on these increased labor costs to its customers by increasing service fees, our financial condition and operating results may be adversely affected.

 

 

 

 

In addition, where Roshing employs any employees, it is required by Hong Kong laws and regulations to maintain various statutory employee benefits, including mandatory provident fund scheme and work-related injury insurance, to provide statutorily required paid sick leave, annual leave and maternity leave, and make severance payments or long service payments. See “Regulations — Regulations Related to our Business Operation in Hong Kong — Regulations related to employment and labor protection” for details. The relevant government agencies may examine whether an employer has complied with such requirements, and those employers who fail to comply commit a criminal offence and may be subject to fines and/or imprisonment. For example, under the Employees’ Compensation Ordinance (Chapter 282 of the Laws of Hong Kong), an employer who fails to comply with the ordinance to secure an insurance cover commits an offence and is liable on conviction upon indictment to a maximum fine of HK$100,000 (approximately US$13,000) and imprisonment for two years. Under the Mandatory Provident Fund Schemes Ordinance (Chapter 485 of the Laws of Hong Kong), an employer who, without reasonable excuse, fails to enroll employees in an MPF scheme pursuant to the ordinance commits an offence and is liable on conviction to a fine of HK$350,000 (approximately US$45,000) and to imprisonment for three years. Therefore, failure to comply with applicable laws and regulations concerning employment and labor protection by Roshing may result in material and adverse effect on Roshing’s business, our financial condition and operating results. As of the date of this prospectus, we believe that Roshing is in compliance with applicable Hong Kong laws and regulations concerning employment and labor protection in all material respects.  

 

You may incur additional costs and procedural obstacles in effecting service of legal process, enforcing foreign judgments or bringing actions in Hong Kong against us or its management named in the prospectus based on Hong Kong laws.

 

Currently, all of our operations are conducted outside the United States, and all of our assets are located outside the United States. Some of our directors and officers are Hong Kong nationals or residents. You may incur additional costs and procedural obstacles in effecting service of legal process, enforcing foreign judgments or bringing actions in Hong Kong against us or its management named in the prospectus. If you want to enforce a judgment of the United States in Hong Kong, it must be a final judgment conclusive upon the merits of the claim, for a liquidated amount in a civil matter and not in respect of taxes, fines, penalties, or similar charges, the proceedings in which the judgment was obtained were not contrary to natural justice, and the enforcement of the judgment is not contrary to public policy of Hong Kong. Such a judgment must be for a fixed sum and must also come from a “competent” court as determined by the private international law rules applied by the Hong Kong courts.

 

While we believe that we and our subsidiaries are currently not required to obtain permissions or approvals from Mainland China authorities for our business operations and/or the listing and offering of our securities, and it is very unlikely that we or our subsidiaries will be required to do so in the future, we cannot assure you that we or our subsidiaries will be able to obtain all such permissions or approvals if they are nevertheless required.

 

The Regulations on Mergers and Acquisitions of Domestic Companies by Foreign Investors (the “M&A Rules”), adopted by six PRC regulatory agencies in 2006 and amended in 2009, requires an overseas special purpose vehicle formed for listing purposes through acquisitions of PRC domestic companies and controlled by PRC companies or individuals to obtain the approval of the CSRC prior to the listing and trading of such special purpose vehicle’s securities on an overseas stock exchange.

 

We are also aware that recently, the PRC government initiated a series of regulatory actions and statements to regulate business operations in certain areas in mainland China with little advance notice, including cracking down on illegal activities in the securities market, enhancing supervision over mainland-China-based companies listed overseas using variable interest entity structure, adopting new measures to extend the scope of cybersecurity reviews, and expanding the efforts in anti-monopoly enforcement. For example, on July 6, 2021, the General Office of the Communist Party of China Central Committee and the General Office of the State Council jointly issued a document to crack down on illegal activities in the securities market and promote the high-quality development of the capital market, which, among other things, requires the relevant governmental authorities to strengthen cross-border oversight of law-enforcement and judicial cooperation, to enhance supervision over mainland-China-based companies listed overseas, and to establish and improve the system of extraterritorial application of the PRC securities laws.

 

 

 

 

On December 28, 2021, the CAC and other PRC authorities promulgated the Cybersecurity Review Measures, which took effect on February 15, 2022. In addition, the Cybersecurity Law, which was adopted by the Standing Committee of the National People’s Congress on November 7, 2016 and came into force on June 1, 2017, and the Cybersecurity Review Measures, provide that personal information and important data collected and generated by a critical information infrastructure operator, or the CIIO, in the course of its operations in Mainland China must be stored in Mainland China, and if a critical information infrastructure operator purchases internet products and services that affect or may affect national security, it should be subject to national security review by the CAC together with competent departments of the State Council. In addition, for CIIOs that purchase network-related products and services, the CIIOs shall declare any network-related product or service that affects or may affect national security to the Office of Cybersecurity Review of the CAC for cybersecurity review. Due to the lack of further interpretations, the exact scope of what constitutes a “CIIO” remains unclear. Further, the PRC government authorities may have wide discretion in the interpretation and enforcement of these laws. In addition, the Cybersecurity Review Measures stipulates that any online platform operators holding more than one million users/users’ individual information shall be subject to cybersecurity review before listing abroad. As of the date of this prospectus, we have not received any notice from any authorities identifying us as a CIIO or requiring us to undertake a cybersecurity review by the CAC. Further, as of the date of this prospectus, we have not been subject to any penalties, fines, suspensions, investigations from any competent authorities for violation of the regulations or policies that have been issued by the CAC.

 

On June 10, 2021, the Standing Committee of the National People’s Congress promulgated the Data Security Law, which took effect on September 1, 2021. The Data Security Law requires that data shall not be collected by theft or other illegal means, and it also provides for a data classification and hierarchical protection system. The data classification and hierarchical protection system protects data according to its importance in economic and social development, and the damages it may cause to national security, public interests, or the legitimate rights and interests of individuals and organizations if the data is falsified, damaged, disclosed, illegally obtained or illegally used, which protection system is expected to be built by the state for data security in the near future. On November 14, 2021, the CAC published the Regulations on the Data Security Administration Draft, or the Data Security Regulations Draft, to solicit public opinion and comments. Under the Data Security Regulations Draft, an overseas initial public offering to be conducted by a data processor processing the personal information of more than one million individuals shall apply for a cybersecurity review. Data processor means an individual or organization that independently makes decisions on the purpose and manner of processing in data processing activities, and data processing activities refers to activities such as the collection, retention, use, processing, transmission, provision, disclosure, or deletion of data. Currently we do not expect the Cybersecurity Review Measures to have an impact on the business and operations of our Hong Kong operating subsidiary, Roshing, or this offering, because (i) Roshing is incorporated and primarily operating in Hong Kong without any subsidiary or VIE structure in Mainland China; and (ii) as of the date of this prospectus, Roshing has not been informed by any PRC governmental authority of any requirement that it file for a cybersecurity review for the offering. Based on laws and regulations currently in effect in the PRC as of the date of this prospectus, we believe Roshing is not required to pass the cybersecurity review of the CAC in order to list our common stock in the U.S.

 

In addition, on December 24, 2021, the CSRC issued the Administrative Provisions of the State Council Regarding the Overseas Issuance and Listing of Securities by Domestic Enterprises (the “Draft Administrative Provisions”) and the Measures for the Overseas Issuance of Securities and Listing Record-Filings by Domestic Enterprises (Draft for Comments) (the “Draft Filing Measures”), collectively, the Draft Rules Regarding Overseas Listings. The Draft Rules Regarding Overseas Listing aim to lay out the filing regulation arrangement for both direct and indirect overseas listing and clarify the determination criteria for indirect overseas listing in overseas markets. According to the Draft Rules Regarding Overseas Listings, among other things, after making initial applications with overseas stock markets for initial public offerings or listings, all Mainland-China-based companies shall file with the CSRC within three working days.

 

On February 17, 2023, the CSRC promulgated the Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Companies (the “Trial Measures”), which took effect on March 31, 2023. Compared to the Draft Filing Measures, the Trial Measures further clarified and emphasized that the comprehensive determination of the “indirect overseas offering and listing by PRC domestic companies” shall comply with the principle of “substance over form” and particularly, an issuer will be required to go through the filing procedures under the Trial Measures if the following criteria are met at the same time: a) 50% or more of the issuer’s operating revenue, total profits, total assets or net assets as documented in its audited consolidated financial statements for the most recent accounting year are accounted for by PRC domestic companies, and b) the main parts of the issuer’s business activities are conducted in Mainland China, or its main places of business are located in Mainland China, or the majority of senior managers in charge of its business operation and management are Chinese citizens or domiciled in mainland China. Furthermore, the Trial Measures and its supporting guidelines provide a negative list of types of issuers banned from listing overseas, the issuers’ obligation to comply with national security measures and the personal data protection laws, and certain other matters such as the requirements that an issuer (i) file with the CSRC within three business days after it submits an application for initial public offering to the competent overseas regulator and (ii) file subsequent reports with the CSRC on material events, including change of control and voluntary or forced delisting, after its overseas offering and listing.

 

 

 

 

As the Trial Measures are newly issued, there remains uncertainty as to how it will be interpreted or implemented. Therefore, we cannot assure you that when the Company is subject to such filing requirements, we will be able to get clearance from the CSRC in a timely manner, or at all, even though we believe that none of the situations that would clearly prohibit overseas listing and offering applies to us. Based on laws and regulations currently in effect in the PRC as of the date of this prospectus, we believe we are not required to obtain regulatory approval from the CSRC or go through the filing procedures under the Trial Measures before our common stock can be listed or offered in the U.S. because a) we do not, directly or indirectly, own or control any entity or subsidiary in Mainland China, and b) none of our business activities are conducted in Mainland China, and our main places of business are not located in Mainland China, and the majority of senior managers in charge of our business operation and management are Hong Kong citizens and domiciled in Hong Kong.

 

Since these proposed rules, statements and regulatory actions are new, it is highly uncertain how soon the legislative or administrative regulation making bodies will respond and what existing or new laws or regulations or detailed implementations and interpretations will be modified or promulgated, if any. Any failure of us to fully comply with new regulatory requirements may significantly limit or completely hinder our ability to offer or continue to offer common stock, cause significant disruption to our business operations, severely damage our reputation, materially and adversely affect our financial condition and results of operations, and cause the common stock to significantly decline in value or become worthless.

 

In the opinion of our PRC counsel, Jiangsu Junjin Law Firm, as of the date of this prospectus, on the basis that (i) we are a Nevada company and our only operating subsidiary, Roshing, is a Hong Kong company and is headquartered in Hong Kong, neither entity has operations in Mainland China; (ii) we do not, directly or indirectly, own or control any entity or subsidiary in Mainland China, nor are us controlled by any Mainland Chinese company or individual directly or indirectly; (iii) we currently do not have or intend to set up any subsidiary or enter into any contractual arrangements to establish a VIE structure with any entity in Mainland China; (iv) only few of Roshing’s customers are Mainland China residents, which contributed 5.2% and 0.4% of our revenue for the year ended July 31, 2023 and the year ended July 31, 2024, respectively and there are no customers from Mainland China for the three months ended October 31, 2024; (v) the majority of our senior managers in charge of the Company’s business operation and management are Hong Kong nationals and domiciled in Hong Kong; and (vi) all of Roshing’s employees are Hong Kong residents, we and our subsidiaries are not required to obtain any permissions or approvals from the Mainland China authorities for consummating this offering, including but not limited to the CSRC, to operate Roshing’s business or to list our securities on the U.S. exchanges and offer securities, including but not limited to issuing our common stock to foreign investors. We and our subsidiaries have not applied for, or been denied of any such permissions or approvals from the authorities of Mainland China. In addition, in the opinion of our PRC counsel, Jiangsu Junjin Law Firm, as of the date of this prospectus, we are not subject to the cybersecurity review by the CAC over data security and our offering because we are not a Nevada company and our only operating subsidiary is a Hong Kong company, and neither entity has operations in Mainland China.

 

Further, we expect that we and our subsidiaries’ operations will continue to be conducted in Hong Kong, as is the case as of the date of this prospectus. Therefore, we believe that the chance that we and our subsidiaries will be required to obtain any permissions or approvals from the governmental authorities of Mainland China for our operations, or the listing of our securities on the U.S. exchanges and the offering of our securities in the future is very remote. If (i) we and our subsidiaries do not receive or maintain such permissions or approvals, should such approvals be required in the future by the PRC government, (ii) we and our subsidiaries inadvertently conclude that such permissions or approvals are not required, or (iii) applicable laws, regulations, or interpretations change and we are required to obtain such permissions or approvals in the future, our operations and financial condition could be materially adversely affected, and our ability to offer securities to investors could be significantly limited or completely hindered and the securities currently being offered may substantially decline in value and become worthless. Consequently, our operations and financial condition could be materially adversely affected, and our ability to offer securities to investors could be significantly limited or completely hindered and the securities currently being offered may substantially decline in value and become worthless.

 

Since these statements and regulatory actions are new, it is highly uncertain how soon the legislative or administrative regulation making bodies will respond and what existing or new laws or regulations or detailed implementations and interpretations will be modified or promulgated, if any. It is also highly uncertain what potential impact such modified or new laws and regulations will have on our daily business operations, its ability to accept foreign investments and the listing of our common stock on a U.S. or other foreign exchanges. If there is significant change to current political arrangements between Mainland China and Hong Kong, the PRC government intervenes or influences operations of companies operated in Hong Kong like us, or exerts more control through change of laws and regulations over offerings conducted overseas and/or foreign investment in issuers like us, it may result in a material change in our operations and/or the value of the securities we are registering for sale or could significantly limit or completely hinder our ability to offer or continue to offer securities to investors and cause the value of our common stock to significantly decline or become worthless.

 

 

 

 

In addition, the SEC has issued statements primarily focused on companies with significant China-based operations. For example, on July 30, 2021, Gary Gensler, Chairman of the SEC, issued a Statement on Investor Protection Related to Recent Developments in China, pursuant to which Chairman Gensler stated that he has asked the SEC staff to engage in targeted additional reviews of filings for companies with significant China-based operations. The statement also addressed risks inherent in companies with a VIE structure. However, (1) we do not have a VIE structure and are not in an industry that is subject to foreign ownership limitations by China; and (2) neither us nor our only operating subsidiary, Roshing, has operations in Mainland China.

 

Risks Related to Taxation

 

Non-compliance with tax obligations may adversely affect our business and operation results.

 

On June 5, 2023, the United States Internal Revenue Service (“IRS”) issued a notice letter imposing penalties for failure to provide information concerning certain foreign-owned U.S. Corporations for the tax period ending July 31, 2021, totaling $25,000. We promptly submitted a request for penalty abatement within 30 days of receiving the notice, asserting that the late filing was not due to willful neglect. However, as of now, we have not received any final decision from the IRS regarding their intended course of action. The total amount due now stands at $26,426.55, inclusive of accrued interest and penalties calculated up to February 26, 2022. On April 25, 2024, the Company paid the total amount of $26,854.68 to IRS by check.

 

On March 11, 2024, the Company received a new notice letter with the IRS issued a notice imposing penalties for failure to file form 5471 under Internal Revenue Code Section 6038. The penalty amounts due by April 1, 2024, is $20,000. On April 22, 2024, the Company received another notice from IRS of the intent of levy the company’s property or rights to property for the Company’s failure to pay the penalty. The total penalty due now stands at $20,184.43, inclusive of accrued interest and penalties calculated up to April 22, 2024. On April 22, 2024, we promptly submitted a request for penalty abatement within 30 days of receiving the notice, asserting that the late filing was not due to willful neglect.

 

On May 10, 2024, the company paid $20,184.43 by check to IRS for the tax period ending July 31, 2023.

 

All late filings were due to two main factors: a) the impact of the epidemic, resulting in our failure to report in a timely manner and subsequent payment of fines. We have settled the fines, but we require details regarding the date, amount, and reasons for any new penalties arising from delayed tax payments. b) The change of ownership in August 2021 led to numerous unresolved matters, compounded by various obstacles encountered during the pandemic.

 

Up to May 10, 2024, we have successfully filed tax returns for the years 2020 to 2022 and have duly remitted the two fines along with accrued interest via check. The amount owed, encompassing principal and interest, was ascertained and settled upon the submission of the prospectus. In our future operations, we will aim to pay taxes on time and as required. However, we cannot guarantee that the Company won’t make tax payment errors in the future, which could affect our operations.

 

A change in tax laws in any country in which we operate or loss of a major tax dispute or a successful tax challenge to our operating structure, intercompany pricing policies or the taxable presence of our subsidiaries in certain countries could adversely affect us.

 

Tax laws, treaties and regulations are highly complex and subject to interpretation. Consequently, we and our subsidiaries are subject to changing laws, treaties and regulations in and between the countries in which we operate. Our tax expense is based on our interpretation of the tax laws in effect at the time the expense was incurred. A change in tax laws, treaties or regulations, or in the interpretation thereof, could result in a materially higher tax expense or a higher effective tax rate on our earnings.

 

In addition, if any tax authority successfully challenges positions we may take in tax filings, our operational structure, intercompany pricing policies, the taxable presence of our subsidiaries in certain countries or any other situation, or if the terms of certain income tax treaties are interpreted in a manner that is adverse to our structure, or if we lose a material tax dispute in any country, our effective tax rate on our worldwide earnings could increase substantially and our earnings and cash flows from operations could be materially adversely affected.

 

 

 

 

An investment in this Underwritten Offering may involve adverse U.S. federal income tax consequences.

 

An investment in this Underwritten Offering may involve adverse U.S. federal income tax consequences. For instance, there is a risk that an investor’s entitlement to receive payments in excess of the investor’s initial tax basis in our common stock upon exercise of the investor’s conversion right or upon our liquidation of the trust account will result in constructive income to the investor, which could affect the timing and character of income recognition and result in U.S. federal income tax liability to the investor without the investor’s receipt of cash from us. We have also not sought a ruling from the Internal Revenue Service, or IRS, as to any U.S. federal income tax consequences described in this prospectus. The IRS may disagree with the descriptions of U.S. federal income tax consequences described herein, and its determination may be upheld by a court. Any such determination could subject an investor or our company to adverse U.S. federal income tax consequences that would be different than those described in this prospectus. Accordingly, each prospective investor is urged to consult a tax advisor with respect to the specific tax consequences of the acquisition, ownership and disposition of our securities, including the applicability and effect of state, local, or foreign tax laws, as well as U.S. federal tax laws.

 

Risks Related to Our Common Stock and this Underwritten Offering

 

Our common stock is currently quoted on the OTC Pink Market, which may have an unfavorable impact on our stock price and liquidity.

 

Our common stock is currently quoted on the OTC Pink Market. The quotation of our shares on the OTC Pink Market may result in a less liquid market available for existing and potential stockholders to trade shares of our common stock, could depress the trading price of our common stock and could have a long-term adverse impact on our ability to raise capital in the future. When fewer shares of a security are being traded on the OTC Pink Market, volatility of prices may increase and price movement may outpace the ability to deliver accurate quote information. Due to lower trading volumes in shares of our common stock, there may be a lower likelihood that orders for shares of our common stock will be executed, and current prices may differ significantly from the price that was quoted at the time of entry of the order.

 

There can be no assurances that an active trading market may develop for our common stock, or if developed, be maintained.

 

We have applied to list our common stock on the Nasdaq Capital Market. No assurance can be given that our application will be approved or that the trading prices of our common stock on the OTC Pink Market will be indicative of the prices of our common stock if our common stock were traded on the Nasdaq Capital Market. If our application is not approved, the Underwritten Offering will not be completed. This offering is contingent upon final approval of the listing of our common stock on the Nasdaq Capital Market.

 

Our common stock has traded on the OTC Pink Market since February 9, 2022. The average trading volume in our common stock has been historically low, with little or no trading at all on some days. As a result, an investor may find it difficult to dispose of, or to obtain accurate quotations of the price of, our common stock. Accordingly, investors must assume they may have to bear the economic risk of an investment in our common stock for an indefinite period of time. There can be no assurance that a more active market for the common stock will develop, or if one should develop, there is no assurance that it will be maintained. This severely limits the liquidity of our common stock and would likely have a material adverse effect on the market price of our common stock and on our ability to raise additional capital.

 

An active, liquid, and orderly market for our common stock may not develop.

 

Our common stock is expected to trade on Nasdaq Capital Market a day after the effective date of the registration statement of which this prospectus forms a part. The trading market for our common stock will depend in part on the research and reports that securities or industry analysts publish about us or our business. Several analysts may cover our stock. If one or more of those analysts downgrade our stock or publish inaccurate or unfavorable research about our business, our stock price would likely decline. If one or more of these analysts cease coverage of our Company or fail to publish reports on us regularly, demand for our stock could decrease, which might cause our stock price and trading volume to decline. An active trading market for our common stock may never develop or be sustained. If an active market for our common stock does not continue to develop or is not sustained, it may be difficult for investors to sell their shares of common stock without depressing the market price and investors may not be able to sell their securities at all. An inactive market may also impair our ability to raise capital by selling our securities and may impair our ability to acquire other businesses, applications, or technologies using our securities as consideration, which, in turn, could materially adversely affect our business and the market prices of your shares of common stock.

 

 

 

 

 

Our common stock is subject to the “penny stock” rules of the SEC and the trading market in the securities is limited, which makes transactions in the stock cumbersome and may reduce the value of an investment in the stock.

 

The SEC has adopted Rule 15g-9 which establishes the definition of a “penny stock,” for the purposes relevant to us, as any equity security that has a market price of less than $5.00 per share or with an exercise price of less than $5.00 per share, subject to certain exceptions. For any transaction involving a penny stock, unless exempt, the rules require:

 

	·	that a broker or dealer approve a person’s account for transactions in penny stocks; and
	·	the broker or dealer receives from the investor a written agreement to the transaction, setting forth the identity and quantity of the penny stock to be purchased.

 

In order to approve a person’s account for transactions in penny stocks, the broker or dealer must:

 

	·	obtain financial information and investment experience objectives of the person; and
	·	make a reasonable determination that the transactions in penny stocks are suitable for that person and the person has sufficient knowledge and experience in financial matters to be capable of evaluating the risks of transactions in penny stocks.

 

The broker or dealer must also deliver, prior to any transaction in a penny stock, a disclosure schedule prescribed by the SEC relating to the penny stock market, which, in highlight form sets forth:

 

	·	the basis on which the broker or dealer made the suitability determination; and
	·	that the broker or dealer received a signed, written agreement from the investor prior to the transaction.

 

Generally, brokers may be less willing to execute transactions in securities subject to the “penny stock” rules. This may make it more difficult for investors to dispose of common stock and cause a decline in the market value of stock.

 

Disclosure also has to be made about the risks of investing in penny stocks in both public offerings and in secondary trading and about the commissions payable to both the broker-dealer and the registered underwriter, current quotations for the securities and the rights and remedies available to an investor in cases of fraud in penny stock transactions. Finally, monthly statements have to be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stocks.

 

The Financial Industry Regulatory Authority (“FINRA”) sales practice requirements may also limit a stockholder’s ability to buy and sell our common stock.

 

In addition to the “penny stock” rules described above, FINRA has adopted rules that require that in recommending an investment to a customer, a broker-dealer must have reasonable grounds for believing that the investment is suitable for that customer. Prior to recommending speculative low-priced securities to their non-institutional customers, broker-dealers must make reasonable efforts to obtain information about the customer’s financial status, tax status, investment objectives and other information. Under interpretations of these rules, the FINRA believes that there is a high probability that speculative low-priced securities will not be suitable for at least some customers. The FINRA requirements make it more difficult for broker-dealers to recommend that their customers buy our common stock, which may limit your ability to buy and sell our common stock and have an adverse effect on the market for shares of our common stock.

 

 

 

 

Our articles of incorporation allow for our board to create a new series of preferred stock without further approval by our Stockholders, which could adversely affect the rights of the holders of our common stock.

 

Our board of directors has the authority to fix and determine the relative rights and preferences of preferred stock. Our board of directors has the authority to issue up to 80,000 shares of Series A Preferred Stock and 20,000,000 shares of undesignated preferred stock. The Board of Directors has the authority, without stockholder 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, which could decrease the relative voting power of our common stock or result in dilution to our existing Stockholders.

 

On January 27, 2023, Tianci sold 80,000 shares of its Series A Preferred Stock to RQS Capital for $24,000 cash. On January 19, 2024, the Company issued 8,000,000 shares of its common stock to RQS Capital. The shares were issued upon RQS Capital’s exercise of its right to convert 80,000 shares of Tianci’s Series A Preferred Stock into 8,000,000 shares of common stock.

 

On April 24, 2024, Tianci sold 80,000 shares of Series B Preferred Stock to RQS Capital. The shares were sold for a cash payment of $80,000. 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. As of the date of the prospectus, none of the shares of Series B Preferred Stock have been converted, and RQS Capital does not intend to convert its shares of Series B Preferred Stock into shares of common stock before the closing of this offering; however, the shares of Series B Preferred Stock may be converted into shares of common stock at any time at the option of RQS Capital.

 

Although we have no present intention to issue any additional shares of preferred stock or to create any additional series of preferred stock, we may issue such shares in the future.

 

The trading price of our common stock is likely to be volatile, which could result in substantial losses to investors.

 

The trading price of our common stock is likely to be volatile and could fluctuate widely due to factors beyond our control. This may happen because of broad market and industry factors, including the performance and fluctuation of the market prices of other companies with business operations located outside of the United States that have listed their securities in the United States. In addition to market and industry factors, the price and trading volume for our common stock may be highly volatile for factors specific to our own operations, including the following:

 

	·	variations in our revenues, earnings and cash flow;
	·	announcements of new investments, acquisitions, strategic partnerships or joint ventures by us or our competitors;
	·	announcements of new offerings, solutions and expansions by us or our competitors;
	·	detrimental adverse publicity about us, our brand, our services or our industry;
	·	additions or departures of key personnel; and
	·	potential litigation or regulatory investigations.

 

Any of these factors may result in large and sudden changes in the volume and price at which our common stock will trade.

 

In the past, stockholders of public companies have often brought securities class action suits against those companies following periods of instability in the market price of their securities. If we were involved in a class action suit, it could divert a significant amount of our management’s attention and other resources from our business and operations and require us to incur significant expenses to defend the suit, which could harm our results of operations. Any such class action suit, whether or not successful, could harm our reputation and restrict our ability to raise capital in the future. In addition, if a claim is successfully made against us, we may be required to pay significant damages, which could have a material adverse effect on our financial condition and results of operations.

 

 

 

 

Short sellers of our stock may be manipulative and may drive down the market price of our common stock.

 

Short selling is the practice of selling securities that the seller does not own but rather has borrowed or intends to borrow from a third party with the intention of buying identical securities at a later date to return them to the lender. A short seller hopes to profit from a decline in the value of the securities between the sale of the borrowed securities and the purchase of the replacement shares, as the short seller expects to pay less in that purchase than it received in the sale. As it is therefore in the short seller’s interest for the price of the stock to decline, some short sellers publish, or arrange for the publication of, opinions or characterizations regarding the relevant issuer, its business prospects and similar matters calculated to or which may create negative market momentum, which may permit them to obtain profits for themselves as a result of selling the stock short. Issuers whose securities have historically had limited trading volumes and/or have been susceptible to relatively high volatility levels can be particularly vulnerable to such short seller attacks.

 

The publication of any such commentary regarding us by a short seller may bring about a temporary, or possibly long term, decline in the market price of our common stock. No assurances can be made that we will not become a target of such commentary and declines in the market price of our common stock will not occur in the future, in connection with such commentary by short sellers or otherwise.

 

We have considerable discretion as to the use of the net proceeds from this Underwritten Offering and we may use these proceeds in ways with which you may not agree.

 

We intend to use the proceeds from this Underwritten Offering primarily to enhance and expand our business operations and for general corporate purposes. However, we have considerable discretion in the application of the proceeds. You will not have the opportunity, as part of your investment decision, to assess whether the proceeds are being used appropriately. You must rely on the judgment of our management regarding the application of the net proceeds of this Underwritten Offering. The net proceeds may be used for corporate or other purposes with which you do not agree or that do not improve our profitability or increase our share price. The net proceeds from this Underwritten Offering may also be placed in investments that do not produce income or that lose value.

 

Our expected use of net proceeds from the Underwritten Offering represents our current intentions based upon our present plans and business condition. As of the date of this prospectus, we cannot predict with certainty all of the particular uses for the net proceeds to be received upon the completion of the Underwritten Offering. The amounts and timing of our actual use of the net proceeds will vary depending on numerous factors, including the amount of cash used in our operations, which can be highly uncertain, subject to substantial risks and can often change. Our management will have broad discretion in the application of the net proceeds, and investors will be relying on our judgment regarding the application of the net proceeds of the Underwritten Offering.

 

The sale or availability for sale of substantial amounts of our common stock could adversely affect their market price.

 

Sales of substantial amounts of our common stock in the public market, or the perception that these sales could occur, could adversely affect the market price of our common stock and could materially impair our ability to raise capital through equity offerings in the future. Shares held by our existing stockholders may be sold in the public market in the future subject to the restrictions in Rule 144 and Rule 701 under the Securities. As of October 31, 2024 and the date of this prospectus, we have 14,781,803 shares of common stock issued and outstanding. We cannot predict what effect, if any, market sales of securities held by our significant stockholders or any other stockholder or the availability of these securities for future sale will have on the market price of our common stock.

 

As we do not expect to pay dividends in the foreseeable future, you must rely on a price appreciation of our common stock for return on your investment.

 

We currently intend to retain most, if not all, of our available funds and any future earnings to fund the development and growth of our business. As a result, we do not expect to pay any cash dividends in the foreseeable future. Therefore, you should not rely on an investment in our common stock as a source for any future dividend income.

 

Our board of directors has complete discretion as to whether to distribute dividends. Even if our board of directors decides to declare and pay dividends, the timing, amount and form of future dividends, if any, will depend on our future results of operations and cash flow, our capital requirements and surplus, the amount of distributions, if any, received by us from our subsidiaries, our financial condition, contractual restrictions and other factors deemed relevant by our board of directors. Accordingly, the return on your investment in our common stock will likely depend entirely upon any future price appreciation of our common stock. There is no guarantee that our common stock will appreciate in value, or even maintain the price at which you purchased the common stock. You may not realize a return on your investment in our common stock and you may even lose your entire investment in our common stock.

 

 

 

 

Our CEO beneficially owns the majority of our outstanding stock and, accordingly, will have control over stockholder matters, the Company’s business and management.

 

Shufang Gao, the Chief Executive Officer of Tianci, through his 60% holding in RQS Capital, which has 61.89% of the voting power, together with common stock owned by himself, controls securities with 62.11% of the voting power in Tianci. As a result, Mr. Gao will have the ability to:

 

	·	Elect or defeat the election of our directors;
	·	Amend or prevent amendment of our articles of incorporation or bylaws;
	·	Effect or prevent a merger, sale of assets or other corporate transaction; and
	·	Affect the outcome of any other matter submitted to the Stockholders for vote.

 

Moreover, because of the significant ownership position held by Mr. Gao, new investors will not be able to effect a change in the Company’s business or management, and therefore, stockholders would be subject to decisions made by management and the majority stockholder.

 

In addition, Management’s stock ownership may discourage a potential acquirer from making a tender offer or otherwise attempting to obtain control of us, which in turn could reduce our stock price or prevent our Stockholders from realizing a premium over our stock price.

 

The sale of securities by us in any equity or debt financing could result in dilution to our existing Stockholders.

 

Our Board of Directors is authorized to issue up to 100,000,000 shares of common stock, up to 80,000 shares of Series A Preferred stock, up to 80,000 shares of Series B Preferred stock, and up to 19,920,000 shares of undesignated preferred stock. Of which approximately 103,048,197 shares will remain available for issuance after the Underwritten Offering, including (i) awards reserved for issuance under the 2024 Equity Incentive Plan; (ii) shares issuable upon the exercise of the underwriter’s over-allotment option. Our Board of Directors will continue to have the authority to issue additional shares of common stock without consent of any of our stockholders, unless stockholder’s approval is required under law or, if our common stock is listed on Nasdaq, under Nasdaq Rule 5635, which among other things, requires stockholder approval for change of control transactions where a stockholder acquires 20% of a Nasdaq-listed company’s common stock or securities convertible into common stock, calculated on a post-transaction basis. If our management determines to issue shares of our common stock from the large pool of authorized but unissued shares for any purpose in the future and is not required to obtain stockholder approval, your ownership position would be diluted without your further ability to vote on that transaction. In addition, our Articles of Incorporation provide that the Board can designate the voting rights, liquidation rights, dividend rights and other rights of holders of the preferred stock. The Board, therefore, could use the Preferred Stock to give an investor group disproportionate voting rights or priority over the common stock in the allocation of benefits from the operations of Roshing, including preferential dividends. The Board could also use the Preferred Stock to create a poison pill to prevent a takeover of Tianci that might be considered beneficial by the common stockholders.

 

Any sale of common stock by us in a future private placement offering could result in dilution to the existing Stockholders as a direct result of our issuance of additional shares of our capital stock. In addition, our business strategy may include expansion through internal growth by acquiring complementary businesses, acquiring, or establishing strategic relationships with targeted customers and suppliers. In order to do so, or to finance the cost of our other activities, we may issue additional equity securities that could dilute our Stockholders’ stock ownership. We may also assume additional debt and incur impairment losses related to goodwill and other tangible assets, and this could negatively impact our earnings and results of operations.

 

 

 

 

If you purchase our common stock in this offering, you will incur immediate and substantial dilution in the book value of your shares.

 

Investors purchasing our common stock in this offering will pay a price per share that substantially exceeds the pro forma as adjusted net tangible book value per share. As a result, investors purchasing shares in this offering will incur immediate dilution of $3.95 per share, representing the difference between our assumed public offering price of $4.50 per share (the midpoint of the price range set forth on the cover page of this prospectus) and our pro forma as adjusted net tangible book value of $0.55 per share as of October 31, 2024. For more information on the dilution you may experience as a result of investing in this offering, see “Dilution.”

 

A significant portion of our shares of common stock are restricted from immediate resale but may be sold into the market in the near future. This could cause the market price of our common stock to drop significantly, even if our business is doing well.

 

The sales of a substantial number of our shares of common stock in the public market could occur at any time. These sales, or the perception in the market that these sales may occur, could result in a decrease in the market price of our common stock. Immediately after this offering, we will have 16,951,803 outstanding shares of common stock, based on the number of 14,781,803 shares of common stock outstanding as of October 31, 2024 and as of the date of the prospectus, assuming no exercise of the underwriter’s over-allotment option. This includes the shares that we are selling in this offering, which may be resold in the public market immediately without restriction, unless purchased by our affiliates or existing stockholders. Of that amount, 14,529,788 shares of common stock are currently restricted as a result of securities laws and/or lock-up agreements but will be able to be sold after the closing of this offering, subject to securities laws and/or lock-up agreements. If held by one of our affiliates, the resale of those securities will be subject to volume limitations under Rule 144 of the Securities Act. See “Shares Eligible for Future Sale.”

 

If our common stock is listed on Nasdaq, we may not be able to satisfy the continued listing requirements of Nasdaq to maintain a listing of our common stock.

 

If our common stock is listed on Nasdaq, we must meet certain financial and liquidity criteria to maintain such listing. If we violate the maintenance requirements for continued listing of our common stock, our common stock may be delisted. In addition, our Board may determine that the cost of maintaining our listing on a national securities exchange outweighs the benefits of such listing. A delisting of our common stock from Nasdaq may materially impair our Stockholders’ ability to buy and sell our common stock and could have an adverse effect on the market price of, and the efficiency of the trading market for, our common stock. In addition, the delisting of our common stock could significantly impair our ability to raise capital. In addition, if we are unable to uplist our common stock to Nasdaq, our common stock will continue to trade on the OTC Pink Market, which is generally considered less liquid and more volatile than the Nasdaq Capital Market.

 

We may require additional capital to support growth, and such capital might not be available on terms acceptable to us, if at all. This could hamper our growth and adversely affect our business.

 

We intend to continue to make investments to support our business growth and may require additional funds, beyond those generated by the offering, to respond to business challenges, including the need to enhance our products and services, improve our operating infrastructure or acquire complementary businesses and technologies. Accordingly, we may need to engage in public or private equity, equity-linked or debt financing to secure additional funds. If we raise additional funds through future issuances of equity or convertible debt securities, our existing stockholders could suffer significant dilution, and any new equity securities we issue could have rights, preferences and privileges superior to those of holders of our common stock. Any debt financing that we secure in the future could involve restrictive covenants relating to our capital raising activities and other financial and operational matters, including the ability to pay dividends. This may make it more difficult for us to obtain additional capital and to pursue business opportunities, including potential acquisitions. We may not be able to obtain additional financing on terms favorable to us, if at all. If we are unable to obtain adequate financing on terms satisfactory to us when we require it, our ability to continue to support our business growth and respond to business challenges could be significantly impaired, and our business could be adversely affected.

 

  

 

 

 

 

 

 

 

A CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

 

This prospectus contains forward-looking statements which relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as “may”, “should”, “expects”, “plans”, “anticipates”, “believes”, “estimates”, “predicts”, “potential” or “continue” or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including the risks in the section entitled “Risk Factors,” that may cause our or our industry’s actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements.

 

While these forward-looking statements, and any assumptions upon which they are based, are made in good faith and reflect our current judgment regarding the direction of our business, actual results will almost always vary, sometimes materially, from any estimates, predictions, projections, assumptions or other future performance suggested herein. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.

 

In addition to these assumptions and matters discussed elsewhere herein, important factors that, in our view, could cause actual results to differ materially from those discussed in the forward-looking statements include the following:

 

	·	future general dry bulk shipping market conditions, including fluctuations in charter rates;
	·	our future operating or financial results;
	·	our ability to procure or have access to financing, our liquidity and the adequacy of cash flows for our operations;
	·	changes in our operating expenses, including bunker prices, dry docking and insurance costs;
	·	our ability to meet requirements for additional capital and financing to grow our business;
	·	planned or pending acquisitions, business strategy and expected capital spending or operating expenses, including dry-docking, surveys, upgrades and insurance costs;
	·	changes in governmental rules and regulations or actions taken by regulatory authorities;
	·	our expectations regarding the availability of vessel acquisitions and our ability to complete acquisition transactions as planned;
	·	potential conflicts of interest involving members of our board of directors, or the Board, and senior management;
	·	potential liability from pending or future litigation;
	·	potential exposure or loss from investment in derivative instruments;
	·	forecasts of our ability to make cash distributions on our common units or any increases in our cash distributions;
	·	our ability to make additional borrowings and to access debt and equity markets;
	·	the strength of world economies;
	·	fluctuations in interest rates and foreign exchange rates;
	·	changes in seaborne and other transportation;
	·	general domestic and international political conditions;
	·	our business strategy and other plans and objectives for future operations;
	·	termination dates and extensions of charters; and
	·	potential disruption of shipping routes due to accidents or political events.

 

Any forward-looking statements contained herein are made only as of the date of this prospectus, and we undertake no obligation to update any forward-looking statement or statements to reflect events or circumstances after the date on which such statement is made or to reflect the occurrence of unanticipated events. New factors emerge from time to time, and it is not possible for us to predict all or any of these factors. Further, we cannot assess the impact of each such factor on our business or the extent to which any factor, or combination of factors, may cause actual results to be materially different from those contained in any forward-looking statement.

 

 

 

 

USE OF PROCEEDS

 

We estimate that we will receive net proceeds from this Underwritten Offering of approximately $8.7 million, or approximately $10.0 million if the lead underwriter exercises its option to purchase additional shares in full, after deducting underwriting discounts and commissions, non-accountable expense allowance, and estimated offering expenses payable by us.

 

Each $1.00 increase (decrease) in the assumed public offering price of $4.50 per share (the midpoint of the price range set forth on the cover page of this prospectus) would increase (decrease) the net proceeds to us from the Underwritten Offering by $1,996,400, assuming that the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same, and after deducting the underwriting discounts and commissions, non-accountable expense allowance and estimated offering expenses payable by us. An increase (decrease) of 1.0 million in the number of shares we are offering would increase (decrease) the net proceeds to us from the Underwritten Offering by $4,140,000, assuming the assumed public offering price remains the same, and after deducting the underwriting discounts and commissions, non-accountable expense allowance, and estimated offering expenses payable by us.

 

We plan to use the net proceeds of this Underwritten Offering as follows:

 

		Amount				Percent
USE OF PROCEEDS
Logistics promotion and marketing		$	3,483,055				40%
Working capital and general corporate purposes			3,483,055				40%
Recruitment of talented personnel			1,741,528				20%
TOTAL APPLICATION OF NET PROCEEDS		$	8,707,638				100.00%

  

The foregoing represents our current intention to use and allocate the net proceeds of the Underwritten Offering based upon our present plans and business conditions. The actual allocation of proceeds realized from the Underwritten Offering will depend upon our operating revenues and cash position and our working capital requirements and may change.

 

Our management, however, will have broad discretion in the way that we use the net proceeds of the Underwritten Offering. Pending the final application of the net proceeds of the Underwritten Offering, we intend to use the net proceeds of the Underwritten Offering primarily to enhance and expand our business operations and for general corporate purposes. See “Risk Factors—Risks Related to Our Common Stock— We have considerable discretion as to the use of the net proceeds from this Underwritten Offering and we may use these proceeds in ways with which you may not agree.” on page 41.

 

 

 

 

DIVIDEND POLICY

 

We do not anticipate declaring or paying, in the foreseeable future, any cash dividends on our capital stock. We intend to retain all available funds and future earnings, if any, to fund the development and expansion of our business. Any future determination regarding the declaration and payment of dividends, if any, will be at the discretion of our board of directors and will depend on then-existing conditions, including our financial condition, operating results, contractual restrictions, capital requirements, business prospects and other factors our board of directors may deem relevant. See also “Risk Factors— Risks Related to Our Common Stock— As we do not expect to pay dividends in the foreseeable future, you must rely on a price appreciation of our common stock for return on your investment.”

 

MARKET PRICE

 

Market Information

 

Shares of our common stock are quoted on the OTC Pink Market under the symbol “CIIT.” Such quotations reflect inter-dealer prices, without retail mark-up, mark-down, or commission and do not necessarily represent actual transactions.

 

The last reported sales price of our common stock which trades under the symbol “CIIT” on the OTC Pink Market on December 9, 2024, was $3.99.

 

Holders

 

As of October 31, 2024, there were 132 stockholders of record of our common stock. As of the date of this prospectus, there were 132 stockholders of record of our common stock.

 

As of October 31, 2024, there was one stockholder of record of our Series B Preferred Stock. As of the date of this prospectus, there was one stockholder of record of our Series B Preferred Stock.

 

CAPITALIZATION

 

The following table sets forth our capitalization as of October 31, 2024:

 

	(1)	On an actual basis; and
	(2)	on a pro forma as-adjusted basis, to give effect to the issuance and sale of 2,170,000 shares of common stock by us in the Underwritten Offering at an assumed public offering price of $4.50 per share, the midpoint of the estimated public offering price range set forth on the cover page of this prospectus, after deducting the estimated underwriting discounts and commissions, non-accountable expense allowance and estimated offering expenses, assuming the lead underwriter’s over-allotment option has not been exercised.

 

 

 

 

The pro forma as adjusted information below is illustrative only and our capitalization following the completion of the Underwritten Offering is subject to adjustment based on the public offering price of our common stock. You should read this table in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and related notes included elsewhere in this prospectus.

 

		October 31, 2024
		Actual				Pro forma as adjusted (Over-allotment option not exercised)(1)
Total borrowing		$	2,271			$	2,271
Series B Preferred stock, $0.0001 par value; 80,000 shares authorized; 80,000 shares issued and outstanding			8				8
Common Stock, par value $0.0001 per share, 100,000,000 shares authorized; 14,781,803 shares issued and outstanding; 16,951,803 shares issued and outstanding pro forma			1,478				1,695
Additional paid-in capital			962,416				9,669,837
Accumulated deficit			(315,127	)			(315,127	)
Total stockholders’ equity attributable to the Company			648,775				9,356,413
Total capitalization		$	651,046			$	9,358,684

 

(1)

Reflects the sale of shares of common stock in the Underwritten Offering at an assumed public offering price of $4.50 per share (the midpoint of the price range set forth on the cover page of this prospectus), and after deducting the estimated underwriting discounts and commissions, non-accountable expense allowance, and estimated offering expenses payable by us, assuming the lead underwriter’s over-allotment option has not been exercised. Additional paid-in capital reflects the net proceeds we expect to receive, after deducting the underwriting discounts and commissions, non-accountable expense allowance, and estimated incremental offering expenses payable by us. We estimate that such net proceeds will be approximately $8,707,638 assuming the lead underwriter has not exercised the over-allotment option. The as adjusted total stockholders’ equity of $9,356,413 is the sum of the net proceeds of $8,707,638 and the actual equity of $648,775.

 

Each $1.00 increase (decrease) in the assumed public offering price of $4.50 per share (the midpoint of the price range set forth on the cover page of this prospectus) would increase (decrease) the pro forma as adjusted amount of total capitalization by $1,996,400, assuming that the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same, and after deducting underwriting discounts and commissions, non-accountable expense allowance and estimated offering expenses payable by us. An increase (decrease) of 1.0 million in the number of shares offered by us, as set forth on the cover page of this prospectus, would increase (decrease) the pro forma as adjusted amount of total capitalization by $4,140,000, assuming no change in the assumed public offering price per share as set forth on the cover page of this prospectus.

 

 

 

 

DILUTION

 

If you invest in our common stock, your interest will be diluted immediately to the extent of the difference between the public offering price per share you will pay in this Underwritten Offering and the adjusted net tangible book value per share of our common stock after this Underwritten Offering.

 

The historical net tangible book value of our common stock as of October 31, 2024 was approximately $648,775, or $0.04 per share, based upon 14,781,803 shares of common stock outstanding on such date. Historical net tangible book value per share represents the amount of our total tangible assets reduced by the amount of our total liabilities, divided by the total number of shares of common stock outstanding.

 

After giving effect to the Underwritten Offering, our adjusted net tangible book value of our common stock will be $0.55 per share. Adjusted net tangible book value per share represents adjusted net tangible book value divided by the total number of shares outstanding after giving effect to the sale of the shares in this Underwritten Offering at the assumed public offering price of $4.50 per share (the midpoint of the price range set forth on the cover page of this prospectus), after deducting underwriting discounts and commissions, non-accountable expense allowance, and other estimated offering expenses payable by us. This represents an immediate increase in as adjusted net tangible book value of $0.51 per share to existing Stockholders and an immediate dilution of $3.95 per share to investors purchasing shares of common stock in the Underwritten Offering at the assumed public offering price.

 

The following table illustrates this dilution on a per share basis to new investors:

 

Assumed public offering price per share		$	4.50
Pro forma net tangible book value per share as of October 31, 2024		$	0.04
Increase in net tangible book value per share attributable to this Underwritten Offering		$	0.51
As adjusted net tangible book value per share after giving effect to this Underwritten Offering		$	0.55
Dilution in net tangible book value per share to purchasers in this Underwritten Offering		$	3.95

 

Each $1.00 increase (decrease) in the assumed public offering price of $4.50 per share (the midpoint of the price range set forth on the cover page of this prospectus) would increase (decrease) our pro forma as adjusted net tangible book value as of October 31, 2024 after the Underwritten Offering by approximately $0.12 per ordinary, and would increase (decrease) dilution to new investors by $0.88 per share, assuming that the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same, and after deducting the underwriting discounts and commissions, non-accountable expense allowance and estimated offering expenses payable by us. An increase (decrease) of 1.0 million shares in the number of shares we are offering would increase (decrease) our pro forma as adjusted net tangible book value as of after the Underwritten Offering by approximately $0.20 per share, and would increase (decrease) dilution to new investors by approximately $0.20 per share, assuming the assumed public offering price per share, as set forth on the cover page of this prospectus remains the same, and after deducting the estimate underwriting discounts and commissions, non-accountable expense allowance and estimated incremental offering expenses payable by us. The pro forma as adjusted information is illustrative only, and we will adjust this information based on the actual public offering price and other terms of the Underwritten Offering determined at pricing.

 

If the lead underwriter’s over-allotment option is exercised in full, our adjusted net tangible book value following the Underwritten Offering will be $0.62 per share, and the dilution to investors purchasing shares of common stock in the Underwritten Offering will be $3.88 per share.

 

 

 

 

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

The following discussion and analysis should be read in conjunction with our financial statements and the related notes thereto. The management’s discussion and analysis contain forward-looking statements, such as statements of our plans, objectives, expectations, and intentions. Any statements that are not statements of historical fact are forward-looking statements. When used, the words “believe,” “plan,” “intend,” “anticipate,” “target,” “estimate,” “expect” and the like, and/or future tense or conditional constructions (“will,” “may,” “could,” “should,” etc.), or similar expressions, identify certain of these forward-looking statements. These forward-looking statements are subject to risks and uncertainties, including those under “Risk Factors,” that could cause actual results or events to differ materially from those expressed or implied by the forward-looking statements. Our actual results and the timing of events could differ materially from those anticipated in these forward-looking statements as a result of several factors. We do not undertake any obligation to update forward-looking statements to reflect events or circumstances occurring after the date of this prospectus.

 

Overview

 

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

 

RQS United is a holding company incorporated in the Republic of Seychelles. RQS United has no operations other than holding 90% of the outstanding share capital of its subsidiary, Roshing International Co., Limited, a company organized under the laws of Hong Kong (“Roshing”). Roshing was incorporated on June 22, 2011 and is primarily engaged in logistics solutions, including shipping operation management. We also generate a small portion of our revenue from our non-core businesses that we carry on through Roshing, including software development services, consulting services, and the sale of electronic parts.

 

Our primary line of business is global logistics. The Company, through its subsidiary, Roshing, provides global logistics services, encompassing booking and the transportation arrangement and related logistics solutions. Roshing’s customized logistics solutions are tailored to meet the diverse needs of its customers.

 

For the container shipping service, Roshing charters cargo space from shipping suppliers (such as shipowners, ship carrier or non-vessel operating common carriers) and then sub-charters that space to its customers (cargo owners or cargo agents). For the bulk goods shipping service, Roshing issues fixture notes to customers, and then arranges the booking of ships, and signs chartering contracts with suppliers (such as shipowners). Roshing also tailors the selection of transport options, and arranges to transport the goods from the port of loading to the port of destination, so as to complete the performance of the contract.

 

Roshing currently does not own or operate any transportation assets. By leveraging our senior management’s expertise in the global logistics industry and adopting an asset-light strategy at the early stage, Roshing has seen a significant growth in logistics revenue since 2023. Shufang Gao, our Chief Executive Officer previously worked for a globally renowned shipping conglomerate, with over 20 years of management experience. His expertise spans shipping operation management, and logistics transportation. Leveraging this experience, he has provided the Company with the managerial framework to expand its global logistics business, as well as access to relevant customer and supplier resources in the shipping industry. Roshing’s business is primarily carried out in Hong Kong and other locations in the Asia-Pacific region, mainly in Japan, South Korea, Vietnam. Roshing’s logistics services also include the shipment of goods to African countries.

 

Roshing also generates revenue from the sale of electronic parts, and certain business and technical consulting services, independent from its global logistics business.

 

 

 

 

Key factors that affect operating results

 

Our performance of operations and financial conditions have been, and are expected to continue to be, affected by a number of factors which are set forth below.

 

Economic Conditions in Hong Kong. We are a Nevada company with operations conducted by our subsidiary Roshing, which is based in Hong Kong. Accordingly, if Hong Kong experiences any adverse economic, political or regulatory conditions due to events beyond our control, such as local economic downturn, natural disasters, contagious disease outbreaks, terrorist attacks, or if the government adopts regulations that place restrictions or burdens on us or on our industry in general, our business, financial condition, results of operations and prospects may be materially and adversely affected.

 

International Trade Environment. The demand for our shipping operation services is driven by the levels of international trade, which is in turn affected by global political, economic or social conditions. Any changes in a particular country’s trade policy could trigger retaliatory actions by affected countries, potentially eventually resulting in a trade war, which could increase the cost of goods and thus reduce customer demand for products if the parties have to pay tariffs which increase their prices or if trading partners limit their trade with the particular country. Our business is also susceptible to downturns and disruptions in the business activities of their direct customers that are beyond their control. If sales in a particular geographical market in which our direct customers target operate in decline, due to unstable regional and/or global political and economic conditions, such decline will likely lead to a corresponding plunge in the international trade volume which, in turn, could reduce the demand for freight forward and adversely affect our results of operations.

 

Our Ability to Source Cargo Space from Vendors on a Cost-Efficient Manner. A significant portion of our cost of revenue is the fee that we paid to our vendors. As a result, our results of operation depend on our ability to source vendors in a cost-efficient manner by obtaining a favorable price and effectively control the cost.

 

Results of Operations

 

For the three months ended October 31, 2024 and 2023

 

		For the Three Months Ended October 31,								Change				Change
		2024				2023				Amounts				Percentage
Revenues		$	2,980,940			$	1,326,648			$	1,654,292			$	125%
Cost of Revenues			2,752,509				1,092,871				1,659,638				152%
Gross profit			228,431				233,777				(5,346	)			(2%	)
Selling and marketing			85,188				102,071				(16,883	)			(17%	)
General and administrative			260,393				118,705				141,688				119%
(Loss) income from operations			(117,150	)			13,001				(130,151	)			(1001%	)
Other income			27,391				–				27,391				100%
Provision for income taxes			2,189				19,113				(16,924	)			(89%	)
Net (loss)			(91,948	)			(6,112	)			(85,836	)			1404%
Less: net income attributable to non-controlling interest			1,108				9,672				(8,564	)			(89%	)
Net (loss) attributable to Tianci		$	(93,056	)		$	(15,784	)		$	(77,272	)		$	490%

 

 

 

 

Revenues

 

For the three months ended October 31, 2024, our total revenue increased to $2,980,940 from $1,326,648 for the three months ended October 31, 2023. The increase was mainly attributable to the continuing growth of our global logistics service and expansion of our client base. The global logistics service contributed 93% of our total revenue for the three months ended October 31, 2024.

 

The rest of our business lines represented 7% of our revenue in this quarter. We expect our operations other than global logistics to continue to contribute a relatively small portion of our revenue in the foreseeable future.

 

		For the Three Months Ended October 31,
		2024				2023
Global Logistics Service Revenue		$	2,759,693			$	1,181,720
Product Sales Revenue			–				59,902
Other Service Revenues			221,247				85,026
Total		$	2,980,940			$	1,326,648

  

Cost of Revenues

 

Total cost of revenues increased from $1,092,871 to $2,752,509 for the three months ended October 31, 2024. The increase was in line with the growth of our global logistics services.

 

A breakdown of our cost of revenues is summarized as follows:

 

		For the Three Months Ended October 31,
		2024				2023
Cost of Global Logistics Service		$	2,590,865			$	1,029,970
Cost of Products			–				50,008
Cost of Other Services			161,644				12,893
Total		$	2,752,509			$	1,092,871

 

Our cost of revenues from global logistics services represented 94% of total cost of revenues for the three months ended October 31, 2024. Cost of global logistics services primarily includes the cargo space charged by direct ocean carriers, fees charged by freight forwarders, fees charged for ancillary logistics services, and compensation we paid to our logistics employees.

 

 

 

 

Gross Profit

 

Our gross profits and gross margin of each business line are summarized as follows:

 

		For the Three Months Ended October 31,
		2024				2023
Global Logistics Service
Gross Profit		$	168,828			$	151,750
Gross Profit Margin			6.12%				12.84%
Hardware Product Sales
Gross Profit		$	–			$	9,894
Gross Profit Margin			–				16.52%
Other Services
Gross Profit		$	59,603			$	72,133
Gross Profit Margin			26.94%				84.84%
Total
Gross Profit		$	228,431			$	233,777
Gross Profit Margin			7.66%				17.62%

  

Our total gross profit decreased by $5,346 to $228,431 for the three months ended October 31, 2024 compared to the three months ended October 31, 2023. The decrease in gross profit was primarily attributable to decreasing gross profit from hardware product sales and other services, partially offset by a slight increase in gross profit from global logistics services. For the three months ended October 31, 2024, our total gross profit margin was 7.66%, as compared to 17.62% for the three months ended October 31, 2023. Our gross margin from our dominant business line global logistics service dropped significantly to 6.12% for the three months ended October 31, 2024 from 12.84% for the three months ended October 31, 2023. The same trend applies to our other business lines as we adopted a competitive pricing strategy to build up our client base promptly in the short term. We anticipate that our gross margin realized from logistics services will fluctuate in the short-term as the result of our pricing strategy.

 

Operating Expenses

 

As our business grew, there was a significant increase in our total operating expenses, which were $345,581 for the three months ended October 31, 2024 as compared to $220,776 for the three months ended October 31, 2023. Our operating expenses primarily include payroll expenses, commissions, marketing, rent and professional fees relating to our obligations as a public company. The increase was mainly due to the increase in general and administrative expenses from $118,705 for the three months ended October 31, 2023 to $260,363 for the three months ended October 31, 2024, partially offset by a $16,883 decrease in selling and marketing expenses in the same period. The increase in general and administrative expenses was attributable to increasing payroll expenses necessitated by the expansion of our logistics operations, as well as expenses incurred in anticipation of a securities offering as we prepare the Company to list on Nasdaq. The decrease in selling expenses during this period is attributable to decreasing commission expenses that we paid to third-parties as we became less dependent on brokers for new businesses.

 

 

 

 

Income tax expense

 

Our income tax expense amounted to $2,189 for the three months ended October 31, 2024 as compared to $19,113 for the three months ended October 31, 2023. The change was due to the decrease in operating income generated by Roshing during this period.

 

Net income (loss)

 

As a result of the foregoing, we incurred a net loss of $91,948 for the three months ended October 31, 2024. As the Company owns only 90% shares of its operating subsidiary, Roshing, 10% of the net income realized by Roshing was attributed to the minority interest. Therefore, the net loss for the three months ended October 31, 2024 attributable to the shareholders of the Company was $93,056. In comparison, during the three months ended October 31, 2023, the Company incurred a net loss of $6,112.

 

For the years ended July 31, 2024 and 2023

 

		For the Year ended July 31,								Change				Change
		2024				2023				Amounts				Percentage
Revenues		$	8,617,265			$	452,409			$	8,164,856			$	1,805%
Cost of Revenues			7,562,086				456,494				7,105,592				1557%
Gross profit			1,055,179				(4,085	)			1,059,264				(25931%	)
Selling and marketing			365,992				54,169				311,823				576%
General and administrative			520,884				285,740				235,144				82%
(Loss) from operations			168,303				(343,994	)			512,297				(149%	)
Other (expense)			(22,077	)			–				(22,077	)			N/A
Provision for income taxes			35,906				12,095				23,811				197%
Net income (loss)			110,320				(356,089	)			466,409				(131%	)
Less: net income (loss) attributable to non-controlling interest			55,870				(14,879	)			70,749				(475%	)
Net income (loss) attributable to Tianci		$	54,450			$	(341,210	)		$	395,660			$	(116%	)

 

 

 

 

 

 

 

 

 

Revenues

 

For the year ended July 31, 2024, our total revenue increased significantly to $8,617,265 from $452,409 for the year ended July 31, 2023. The increase was mainly attributable to the launch and growth of our global logistics service, which contributed 97% of our revenue in the year ended July 31, 2024.

 

The rest of our business lines represent a relatively small percentage of our revenue in 2024. We expect this trend to continue in the foreseeable future.

 

		For the Year Ended July 31,
		2024				2023
Global Logistics Service Revenue		$	8,320,402			$	–
Product Sales Revenue			103,382				294880
Other Service Revenues			193,481				157,529
Total		$	8,617,265			$	452,409

  

Cost of Revenues

 

Total cost of revenues increased from $456,494 to $7,562,086 for the year ended July 31, 2024. The increase was in line with the growth of our global logistics services.

 

The breakdown of our cost of revenues is summarized as follows:

 

		For the Year Ended July 31,
		2024				2023
Cost of Global Logistics Service		$	7,432,806			$	–
Cost of Product			87,088				227,660
Cost of Other Service			42,192				228,834
Total		$	7,562,086			$	456,494

 

Our cost of revenues from global logistics services represented 98% of total cost of revenues for the year ended July 31, 2024. Cost of global logistics services primarily include the cargo space charged by direct ocean carriers, fees charged by freight forwarders, fees charged for ancillary logistics services, and compensation expenses we paid to our logistics employees.

 

 

 

 

Gross Profit

 

Our gross profits and gross margin of each business line are summarized as follows:

 

		For the Year Ended July 31,
		2024				2023
Global Logistics Service
Gross Profit		$	887,596			$	–
Gross Profit Margin			10.67%				–
Hardware Product Sales
Gross Profit		$	16,294			$	67,220
Gross Profit Margin			15.76%				22.8%
Other Services
Gross Profit		$	151,289			$	-71,305
Gross Profit Margin			78.19%				-45.26%
Total
Gross Profit		$	1,055,179			$	-4,085
Gross Profit Margin			12.24%				-0.9%

  

Our total gross profit increased by $1,059,264 to $1,055,179 for the year ended July 31, 2024. The increase in gross profit was primarily attributable to the launch and growth of our global logistics service, as discussed above. For the year ended July 31, 2024, our total gross profit margin was 12.24%, an increase from gross loss of 0.9% for the year ended July 31, 2023. Our gross margin from our dominant business line, global logistics service, was 10.67% for the year ended July 31, 2024. We anticipate that the gross margin realized from logistics services is likely to increase in the future as demand picks up post-pandemic with relatively stable global logistics supply.

 

Operating Expenses

 

As our business grew, there was a significant increase in our total operating expenses, which were $886,876 for the year ended July 31, 2024 as compared to $339,909 for the year ended July 31, 2023. Our operating expenses primarily include payroll expenses, commissions, advertising, rent and professional fees relating to our obligations as a public company. The increase was mainly due to the increased commission expenses we paid to agents for referring global logistics customers, and professional fees in relation to our proposed public offering.

 

Income tax expense

 

Our income tax expense amounted to $35,906 for the year ended July 31, 2024 as compared to $12,095 for the year ended July 31, 2023. The change was due to the increase in revenue generated during the period.

 

Net income (loss)

 

Total net income was $110,320 for the year ended July 31, 2024. As the Company owns only 90% of the shares of its operating subsidiary, Roshing, 10% of net income generated by Roshing was attributed to the minority interest. As a result, the net income for the year ended July 31, 2024 attributable to the shareholders of the Company was $54,450. In comparison, during the year ended July 31, 2023, the Company incurred a net loss of $341,210. We believe our pivot to the logistics market gives our shareholders an opportunity to benefit from the opportunity presented by this market as the global economy recovers from the pandemic.

 

 

 

 

Liquidity and Capital Resources

 

In assessing our liquidity, we monitor and analyze our cash on-hand and our operating expenditure commitments. Our liquidity needs are to meet our working capital requirements and operating expenses obligations. As of October 31, 2024, we had working capital of $696,406, as our cash amounted to $323,793, our current assets were $894,314 and our current liabilities were $197,908. On October 31, 2024 we owed $2,271 to our related parties. As of July 31, 2024, we had working capital of $788,354, as our cash amounted to $413,129, our current assets were $910,305 and our current liabilities were $121,951. To date, we have financed our operations primarily through capital contributions and advances from shareholders, as well as private investors. On July 31, 2024 we owed $2,271 to our related parties (See Note 4 to the financial statements).

  

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

 

We started providing logistics services during the quarter ended October 31, 2023. Although the business grew rapidly since then, we may require significant capital expenditure in order to obtain additional market share. If we determined that our cash requirements exceed the amount of cash and cash equivalents we have on hand at the time, we may seek to issue equity or debt securities or obtain credit facilities. The issuance and sale of additional equity may result in dilution to our shareholders. The incurrence of indebtedness would result in increased fixed obligations and could result in operating covenants that would restrict our operations. Our obligation to bear credit risk for certain financing transactions we facilitate may also strain our operating cash flow. We cannot assure you that financing will be in place or on terms acceptable to us, if at all.

 

The following table summarizes the key components of our cash flows for the three months ended October 31, 2024 and 2023.

 

		For the Three Months ended October 31,
		2024				2023
Net cash provided by (used in) operating activities		$	(15,211	)		$	124,491
Net cash used in investing activities			–				–
Net cash provided by (used in) financing activities			(74,125	)			–
Net change in cash and restricted cash		$	(89,336	)		$	124,491

 

 

 

 

Operating activities

 

Net cash of $15,211 used in operating activities for the three months ended October 31, 2024 was primarily the result of net loss of $91,948, which was only partially offset by a $73,768 increase in accrued liabilities and other payables.

 

Net cash of $124,524 provided by operating activities for the three months ended October 31, 2023 was primarily the result of an increase in accounts payable of $195,232 and an increase in accrued liabilities and other payables of $140,354 which was partially offset by the increase of $ 195,629 in accounts receivable.

 

Investing activities

 

The company had no investing activities during the three months ended October 31, 2024 and 2023.

 

Financing activities

 

Net cash used in financing activities for the three months ended October 31, 2024 was $74,125 which was attributable to the payment of fees incurred in anticipation of a public offering of the Company’s securities.

 

The following table summarizes the key components of our cash flows for the years ended July 31, 2024 and 2023.

 

		For the Year Ended July 31
		2024				2023
Net cash provided by operating activities		$	112,740			$	324,581
Net cash used in investing activities			–				–
Net cash provided by (used in) financing activities			44,047				(89,476	)
Net change in cash and restricted cash		$	156,787			$	235,105

 

Operating activities

 

Net cash of $112,740 provided by operating activities for the year ended July 31, 2024 was primarily the result of net income of $110,320. A $35,906 increase in income taxes payable and a $21,498 increase in accrued liabilities were offset by an noncash item, $24,953 of debt forgiven by a related party, and a decrease of $29,070 in our advances from customers account.

 

Despite our net loss of $356,089 for the year ended July 31, 2023, net cash was provided by operating activities, primarily because our accounts receivable balance decreased by $737,663 during the period, as we made efforts on the collection process. The decrease was offset by a decrease of $447,292 in our accounts payable balance as we used the accounts payable proceeds to settle our liabilities to our vendors. In addition, our operating loss of $356,089 included $210,000 in stock compensation, a noncash expense.

 

Investing activities

 

The company had no investing activities during the year ended July 31, 2024 and 2023.

 

 

 

 

Financing activities

 

Net cash provided by financing activities for the year ended July 31, 2024 was $44,047, as proceeds of $513,213 that we received from a private placement offering was partially offset by the $495,356 in fees that we paid to various service providers in anticipation of a public offering of stock.

 

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

 

Critical Accounting Estimates

 

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

 

In connection with the preparation of our financial statements for the year ended July 31, 2024 and for the three months ended October 31, 2024, there was no accounting estimate we made that was subject to a high degree of uncertainty and was critical to our results.

 

Recently Issued Accounting Pronouncements

 

The Company 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 that any recently issued but not yet effective accounting standards, if currently adopted, would have a material effect on the Company’s consolidated balance sheets.

 

 

 

 

 

DESCRIPTION OF BUSINESS

 

Overview

 

The Company through Roshing provides global logistics services, encompassing booking and transportation arrangement and related logistics solutions. Roshing’s customized logistics solutions are tailored to meet the diverse needs of its customers.

 

As a logistics shipping operator, Roshing focuses on ocean freight forwarding services, including container shipping and bulk goods shipping service.

 

For the container shipping service, Roshing charters cargo space from shipping suppliers (such as shipowners, ship carrier or non-vessel operating common carriers) and then sub-charters that cargo space to its customers (cargo owners or cargo agents). For the bulk goods shipping service, Roshing issues fixture notes to customers, and then arranges the booking of ships, and signs chartering contracts with suppliers (such as shipowners). Roshing also tailors the selection of transport options, and arranges to transport the goods from the port of loading to the port of destination, so as to complete the performance of the contract.

 

Roshing currently does not own or operate any transportation assets. By leveraging our senior management’s expertise in the global logistics industry and adopting an asset-light strategy at the early stage, Roshing has seen a significant growth in logistics revenue since 2023. Shufang Gao, our CEO previously worked for a globally renowned shipping conglomerate, with over 20 years of management experience. His expertise spans shipping operation management, and logistics transportation. Leveraging this experience, he has provided the Company with the managerial framework to expand its global logistics business, as well as access to relevant customer and supplier resources in the shipping industry. Roshing’s business is primarily carried out in Hong Kong and other locations in the Asia-Pacific region, mainly in Japan, South Korea, Vietnam. Roshing’s logistics services also include the shipment of goods to African countries.

 

Roshing also generates revenue from the sale of electronic parts, and certain business and technical consulting services, independent from its global logistics business.

 

Our Mission

 

Creating Value

 

As a global logistics enterprise, our primary mission is to provide customers with efficient, reliable, and safe shipping services that create value.

 

Promoting Global Trade & Connectivity

 

As an important component of global trade, global logistics enterprises also have a mission to promote the development and connectivity of global trade, and promote the prosperity and development of the global economy, by facilitating cross-border operations for businesses. We are committed to cultivating a robust global network, both online and offline. The online part involves connecting with customers and suppliers through social media platforms. The offline part includes acquiring potential customer through exhibitions, recommendations, and other direct interactions.

 

 

 

 

Undertaking Social Responsibility

 

We believe that shipping companies also need to be socially responsible, pay attention to environmental protection, social welfare, promote sustainable development and contribute to the prosperity and development of society.

 

We strive to optimize shipping routes and transportation plans to reduce energy consumption and emissions. Moreover, we will encourage our supply chain partners to adopt greener transportation and packaging methods, contributing to the sustainability of the entire industry. We also seek to actively participate in environmental projects and initiatives and collaborate with government and non-governmental organizations to focus on environmental protection.

 

Our Services

 

Our operations conducted through Roshing include providing the following services to our customers.

 

1. Global Logistics Services

 

Our global logistics services provided through Roshing accounted for the vast majority of our revenue for the year ended July 31, 2024 and three months ended October 31, 2024. These services encompass shipping operations and related logistics solutions. Roshing customizes its logistics solutions to meet the diverse needs of its customers, including the optimization of shipping routes and the utilization of vessels with different tonnages. As a global logistics enterprise, depending on the type of cargo, Roshing provides container shipping and bulk goods shipping services. Container shipping is generally for small merchandise which can be palletized and fit into a container. Bulk goods shipping is generally for bulk commodities, such as lumber, steel, construction materials, chemicals, and agricultural products.

 

a. Container shipping

 

  

 

 

 

 

Roshing’s container shipping service includes:

 

i. Customer Service and Support

 

	·	Customer Consultation: Implementing strategies to identify, assess, and mitigate risks associated with cargo transportation.
	·	Customized Solutions: Implementing strategies to identify, assess, and mitigate risks associated with cargo transportation.

 

ii. Contract and Quotation Management

 

	·	Transport Contracts: Implementing strategies to identify, assess, and mitigate risks associated with cargo transportation.
	·	Quotation Services: Providing quotes to customers based on the number of containers, size of containers, routes, shipping dates and various other factors.

 

iii. Financial Management

 

	·	Cost Management: Managing and optimizing the costs associated with cargo transportation.
	·	Billing and Collection: Handling the billing process and ensuring the timely collection of payments.

 

iv. Risk Management

 

Implementing strategies to identify, assess, and mitigate risks associated with cargo transportation.

 

b. Bulk goods shipping

 

 

 

 

Roshing’s bulk goods shipping service includes:

 

i. Customer Service and Communication

 

Providing ongoing support and clear communication to customers throughout the shipping process, addressing any queries or issues promptly.

 

ii. Fixture Note and Quotation Management

 

	·	Fixture Note: Managing and maintaining transport contracts to ensure clear and effective agreements for bulk shipping.
	·	Quotation Services: Offering detailed quotations for bulk shipping services, helping customers understand and proposing plans for budget control.

 

iii. Chartering: Arranging the chartering of bulk cargo vessels including negotiating terms and conditions.

 

iv. Ship Operations Management

 

Overseeing and supervising the day-to-day operations of the ships involved in bulk cargo transportation.

 

v. Cooperation and Coordination

 

Facilitating collaboration and coordination between various stakeholders involved in the shipping process, such as port authorities, cargo handlers, and other service providers.

 

vi. Financial Management

 

	·	Cost Management: Monitoring and optimizing the costs associated with bulk cargo transportation to ensure efficiency and cost-effectiveness.
	·	Billing and Collection: Handling the billing processes and ensuring timely collection of payments.

 

Our General Logistics Service Process

 

Roshing has a long-term and close cooperation with ocean shipping suppliers, including the signing of charter contracts, and service contracts. When a customer makes an inquiry to Roshing, we are usually able to offer competitive quotes and customize shipping solutions quickly.

 

Roshing begins by thoroughly evaluating the customer’s logistics needs, including the type of goods being shipped, the destination, and the required transportation time. Based on this information, Roshing designs an optimal transportation plan tailored to the customer’s specific requirements. This plan includes selecting the most efficient shipping routes, determining the appropriate container or bulk cargo vessel size and type, and considering any special handling or regulatory compliance requirements. Roshing then enters into a written contract with the customer for ocean shipping that can best meet the customer’s needs. This includes selecting a shipment method that aligns with the customer’s timeline and cargo specifications.

 

 

 

 

Roshing works with each customer to develop a cost-effective plan and service terms to meet the client’s specific needs. This involves detailed discussions to ensure that both parties have a clear understanding of expectations, costs, and responsibilities. Roshing will assign cargo space from the appropriate container or bulk cargo vessel based on the volume and weight of the shipment, minimize shipping costs, select the shortest route to save on freight, and choose the port closest to the customer’s destination.

 

Throughout the entire shipping process, Roshing maintains close oversight to ensure the safety and timely arrival of goods at the destination port. This involves real-time tracking and monitoring of the shipment, handling any unforeseen issues that may arise, and providing regular updates to the customer. By doing so, Roshing ensures that the goods are transported safely and arrive within the agreed timeframe, meeting all customer expectations.

 

We believe that Roshing stands out in the global logistics landscape because of its core strengths. First, Roshing’s management’s extensive network and industry relationships empower us with access to a wide customer base, enabling tailored solutions for an array of logistics requirements. Additionally, our collaboration with direct shipping suppliers ensures competitive rates and transparent service delivery. Moreover, Roshing’s expertise in route optimization enables us to efficiently manage logistics routes and secure favorable terms for its clients. These strengths collectively position us as a competitive player in the industry.

 

1. Container shipping process

 

Roshing has a large network of international container shipping resources to provide customers with flexible booking services and personalized logistics solutions to meet the different needs of customers.

 

 

 

 

 

a. Long-term cooperation service agreements

 

·

Roshing has a long-term cooperation agreement with container suppliers which grants it priority for container space and preferential prices.

 

b. Customer source and inquiry quotation

 

	·	Current container shipping logistics customers of Roshing mainly come from the direct business contacts of the Company’s management. Roshing’s customers are mainly cargo owners, cargo agents, international trade companies and large commodity buyers. At present, the main cargo types of container shipping include auto parts, electronics and electrical products, clothing and shoes, small consumer products, etc. The primary routes are from Asia to Africa, America, Europe and Australia.
	·	Customer Inquiry: The customer usually makes an inquiry to Roshing based on the product name, category, quantity, volume, weight, departure port, destination port, arrival time or delivery time of the goods.
	·	Quotation: Roshing generates shipping quotes for its clients based on the size, type and quantity of containers, the customer’s date, shipping providers and route needs.

 

c. Contract signing and fee collection

 

	·	The customer places a confirmation order with Roshing, usually in the form of booking order which includes route, shipper, consignee, name of vessel, loading port, discharge port, container type, container quantity, cargo quantity, cargo description, gross weight and other information.
	·	Roshing issues an invoice and debit note to the customer for fee collection.

 

d. Container freight payment

 

	·	Roshing notifies the supplier (shipowner, ship carrier, non-vessel operating common carriers and freight forwarder) to confirm the booking information, and the supplier issues an invoice to Roshing for payment.
	·	Roshing makes payment to the supplier and ensures that the supplier completes the shipment according to the agreed upon terms.

 

e. Transportation arrangements

 

	·	The customer is responsible for loading goods, container trailers, customs declaration, purchase of insurance and delivery of containers to the container yard at the loading port prior to the shipping cutoff date.
	·	After the customer completes the customs declaration and releases the products, the shipowner loads the containers onto the vessel and ships them to the designated port of destination according to the selected route. During this period, Roshing notifies the shipowner or the freight forwarder to issue a sea waybill or proforma to the customer detailing the condition that the freight has been received.
	·	After discharging the goods at the destination port, the shipowner will notify the local freight forwarder designated by the customer to complete the customs clearance of the goods and land transportation of the containers to their destination.

 

 

 

 

f. Follow up work

 

·

Roshing oversees the shipment process to ensure it meets the customer’s satisfaction.

 

2. Bulk goods shipping process

 

Roshing’s bulk shipping operator services encompass a broad range of bulk merchandise, including steel, building materials, and engineering materials. Roshing provides customized maritime logistics solutions for customers. At present, Roshing’s main bulk shipping route covers: Japan, South Korea and Vietnam. To ensure that its customers receive customized shipping plans, Roshing closely follows shipping industry development trends, analyzes the characteristics of its customer’s goods, the port of destination, and timing requirements. Roshing also constantly optimizes the route layout to improve transportation efficiency and ensure that the goods arrive at the destination safely and on time.

 

a. Customer development

 

	·	The management and business teams of Roshing promote its services, develop customers and obtain cooperation opportunities through customer visits and direct sales.
	·	Roshing gets referrals from customers and agents. Roshing then pays a sales commission to the referring customers and agents.

 

 

 

 

b. Customer inquiry and quotation

 

	·	Inquiry: The customer puts forward the shipping requirements to Roshing, including the goods to be transported, the type and quantity of the goods, the characteristics of the goods, the transportation time, the destination port, any special arrangements and other needs.
	·	Customized quotation: Roshing carries out pre-quotation work based on customer needs, such as shipping route supply resource inquiry and shipping demand matching. Roshing then confirms the shipping plan and cost quote with the customer.

 

c. Contract signing and payments

 

	·	Contract signing: Roshing usually enters a fixture note with the customer, which contains the details of the specifications, quantities, transit times, prices, pricing methods, and others.
	·	Payment: Roshing calculates the sea freight according to the fixture note and issues an invoice to the customer for the sea freight payment.

 

d. Supplier’s selecting and chartering

 

	·	When selecting shipping supplier, Roshing considers the cargo characteristics, ship characteristics, cargo type & quantity, transportation requirements and shipment date.
	·	When signing a fixture note with its customer, Roshing will sign a fixture note with the shipping supplier as well. The shipping suppliers are usually shipowners or ship carriers.

 

e. Transportation arrangement and payment

 

i. Most of Roshing’s bulk cargo logistics are carried out on a Free In and Out (“FIO”), which means that the shipper is responsible for loading the cargo onto the vessel, the shipowner is responsible for the transport and the consignee is responsible for the unloading process. The FIO process for international shipping includes:

 

	·	Merchandise packing, land transportation, warehousing, port operation, customs clearance, loading operation and other work shall be completed by the cargo owner or its agency.
	·	Usually after the goods are loaded on board, the agency obtains the captain’s receipt and issues the bill of landing.
	·	Roshing’s responsibilities include ocean transportation of the goods from the time the goods are loaded onboard, onboard storage management, transportation process, sea navigation planning and adjustment, risk management, until the arrival of the goods at the destination port, and cargo unloading operations. Roshing’s obligation of carriage is completed when the merchandise is unloaded from the ship.

 

ii. Customs clearance, delivery of goods, and delivery of shipping documents are usually completed by agencies in different ports. In most shipping scenarios, the consignment arrangement is made by the consensual shipping supplier. In some transport scenarios, Roshing directly assigns the agency for customers.

 

iii. Transportation Fee payment: Roshing usually pays the transportation fee to the shipping supplier in 3-4 days. If there are other fees, such as processing fees, port fees, commission, agency fees and other related fees, the fees are settled according to the customer’s contract with Roshing.

 

 

 

 

f. Follow up service

 

i. File Organizing

 

Transportation records: After the shipping process, Roshing will organize and keep all documents and records generated during transportation for record.

 

ii. Customer Feedback

 

Customer feedback: Roshing pays great attention to its customer experience. It collects customer feedback on transportation services and addresses any problems or complaints that may arise.

 

Other Product & Services

 

	·	Electronic Device Hardware: Roshing is a distributor of hardware components for electronic devices and generates revenue from reselling these components and is not involved in product development and manufacturing. The main products include Wi-Fi modules, Bluetooth modules, 4G network modules, LED screens and touch screens, and software technical services. Roshing’s main customers are oversea traders, direct traders of hardware components, companies engaged in the assembly and sale of finished products and private label entities seeking electronic component procurement with light customization.
	·	Software Technical Services: Roshing 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. Roshing also provides software maintenance service to keep customer’s software up to date and assists customers in promoting business with ongoing marketing support.
	·	Business Consulting Services: Roshing provides business consulting services to help customers apply for immigration and non-immigration visas. The Company is responsible for performing background checks, assessment, and preparing related application paper works.

 

 

 

 

INDUSTRY AND MARKET OPPORTUNITIES

 

Logistics Market

 

The classification of the logistics service providers in the global logistics industry

 

 

Global logistics includes: Air Transport Logistics, Land Transport Logistics, Marine Transport Logistics, Terminal Operator etc. Among them, the Marine Transport Logistics is usually divided into shipping owner (holding ship assets) and shipping operator (not holding ship assets). The shipping operator includes Container Shipping Operator/ Bulk Shipping Operator/ Liquid Shipping Operator/ Others Shipping Operator. The main business of Roshing belongs to Container Shipping Operator and Bulk Shipping Operator categories.

 

Shipping operators, such as Roshing, play a key role in the global logistics industry. Their efficient operation management and services not only ensure the safety and punctual delivery of goods, but also play an important role in optimizing the logistics efficiency of global trade.

 

We believe the outlook for the shipping industry is strong. According to BIMCO (BIMCO is the world’s largest international shipping association, with over 2,000 members in more than 130 countries, representing 62% of the world’s tonnage.), ship supply is expected to grow on average 9.1% in 2024 and 4.1% in 2025. Ship deliveries are expected to hit a new record high in 2024, beating the record set in 2023. The fleet is expected to grow 14.9% between the end of 2023 and the end of 2025. Cargo volumes are expected to grow 3-4% in both 2024 and 2025.

 

 

 

 

Macro Economy Growth

 

According to the International Monetary Fund’s (IMF) estimates, the global economy should grow 3.1% in 2024 and 3.2% in 2025, slightly higher than the 3.0% estimated for 2023, indicating a modest but positive trend in global economic expansion. In our primary area of operations in East and Southeast Asia, the growth is expected to be 4.0% in 2024 and 3.8% in 2025.

 

 

According to BIMCO: Iron ore shipments are estimated to grow 2.5% from 2023 to 2025. BIMCO estimates that iron ore shipments will grow by 1-2% in 2024 and 0.5-1.5% in 2025. They will benefit from a 1.7% and 1.2% increase in global steel demand in 2024 and 2025 respectively as forecast by the World Steel Association.

 

 

 

 

Strong demand in the bulk cargo market

 

We believe that there is strong demand in the bulk cargo market and challenges and opportunities in the container shipping industry. The global bulk carrier market is driven by factors such as increased demand from China and export bans from Indonesia. Container carriers profited from disruptions in the Red Sea, with some routes experiencing skyrocketing freight rates.

 

In mid-January 2024, a 40-day blockade in the Red Sea resulted in multiple detours of vessels from Africa, absorbing about 6% of global capacity. As a result, spot container freight rates on some routes almost doubled, with freight rates from China to Northern Europe rising by 237% since December 1st, according to the Shanghai Containerized Freight Index (SCFI). Additionally, it is forecasted that container capacity shortages in China will persist from the start of the Chinese Spring Festival in 2024, which may take months to resolve. With vessel supply remaining lower for an extended period, freight rates have been driven up, enabling shipowners to profit from prolonged disruptions in global trade.

 

Other Products & Services Market

 

Electronic Device Hardware Components Products Sales & Software Technology Consulting Services

 

The market for hardware components of electronic devices, including Wi-Fi modules, Bluetooth modules, 4G network modules, LED screens and touch screens, and other electronic components is highly competitive. The software technology services market is also a highly competitive market.

 

We believe that obtaining a competitive advantage in the electronic device hardware components products and software technology services markets requires the following:

 

Customization needs of existing customers: As the market continues to segment, we believe that the electronic product market has entered a period of highly integrated hardware and software. Some existing customers, as well as those requiring small-batch customization or product testing, have a certain demand for small and medium-sized batch customized hardware construction, software debugging and cooperation services.

 

Additionally, in a competitive market, we believe that cost control is crucial for the survival and growth of enterprises. Faced with customized demand orders, enterprises are trying to minimize expenses by optimizing supplier selection, refining supply management practices, and exploring avenues for collaboration with customers.

 

Business Consulting Services

 

At the end of 2023, in line with the continuous adjustment of the Talent Admission & Employment Policy in Hong Kong, such as talent scheme and other employment opportunities, we expect that the talent introduction consulting business may be revised after the second half of 2024, and the consulting services for Mainland Chinese residents may shrink or end. Predictably, providing some consulting services for local enterprises will be a major part of our consulting business.

 

At the same time, as an important business and financial center in Asia, Hong Kong has also attracted many companies to set up branches or expand operations there. This growth has provided a broad market space for local enterprises to serve. At the same time, we also take advantage of Hong Kong’s localization to provide some Hong Kong enterprises with corporate management, business services, administrative affairs consulting and other services. It is expected that this consulting business will evolve into a long-term service, fueled by the growing base of local corporate clients in Hong Kong, offering ample room for expansion.

 

 

 

 

Our Strengths

 

	·	We have a comprehensive service portfolio and can provide customers with a range of solutions.
	·	We focus on the customer demand and ensure our services are efficient.
	·	We maintain a strong global presence with extensive networks of shipping companies and customers (such as e-commerce companies, commodity trading companies, and manufacturers)
	·	We have a founder-led management team with strong operational track records and capital market backgrounds.

 

Global Logistics Business Strengths

 

	·	Specialized Services: We boast a professional team that uses its collective experience and connections to provide clients with tailored, efficient, and reliable global logistics solutions. Shufang Gao, our CEO previously worked for a globally renowned shipping conglomerate, with over 20 years of management experience. His expertise spans shipping operation management and logistics transportation. Leveraging this experience, he has provided the Company with the managerial framework for expanding its global logistics business, as well as access to relevant customer and supplier resources in the shipping industry. Based on our collective knowledge and experience, we are able to tailor our services according to the needs of our customers’ needs, including route optimization, vessel selection, port logistics scheduling, and stringent cost management.
	·	Regional Network: With the collective experience of our team, we have cultivated a network of valuable partnerships, particularly in our core regions of Japan, South Korea, and Vietnam. By focusing our efforts on these regions, we are able to offer tailored solutions that leverage our deep understanding of local regulations and market dynamics. This allows us to provide efficient and cost-effective services to our clients, facilitating logistics operations across borders. Our collaborative approach and dedication make us a trusted partner for businesses seeking reliable logistics solutions in the global marketplace.
	·	Stable Transport Capacity and Reserved Space: We maintain enduring and strong relationships with major shipping suppliers, allowing us to secure vessel space in advance and ensure reliable and timely delivery of clients’ goods. This stability in transport capacity is particularly beneficial for clients with recurring shipping needs.

 

Other Products & Services Strengths

 

Electronic and Hardware Products Trading & Software Technology Services Strengths

 

	·	Integration capability: Hardware trading and software technology services, as the cornerstone of our company for a long time, we are good at integrating different resources and stakeholders, including suppliers and distributors, with our own team’s customer service experience to provide services.
	·	Cost optimization: Through careful management and process optimization, we help our customers to minimize the cost of procurement phase, especially controlling the cost of some customized and small batch orders.

 

 

 

 

Business Consulting Services Strengths

 

	·	Professional expertise and experience: Our consulting team consists of experienced senior consultants and senior personnel with expertise in navigating the talent admission and employment schemes in Hong Kong.
	·	Tailored solutions: We give priority to planning solutions based on the characteristics, needs and goals of each corporate client.
	·	Objectivity: As an independent third-party consultant, we provide an objective and impartial perspective on the policy issues and business consulting issues of our clients and provide unbiased advice and solutions.
	·	Comprehensive project management ability: Members of our consulting department are good at customer project management and can cooperate with corporate clients to carry out medium and long-term enterprise management, business services, administrative affairs consulting and other related services, so as to achieve the expected consulting results for clients.

 

Our Growth Strategies

 

Our growth plan includes a continued focus on the global logistics service as our primary business segment. We intend to use a portion of the proceeds from this Underwritten Offering to scale up our shipping operations, including chartering additional vessels. We believe that the expansion of shipping operations will allow us to provide more cost-effective shipping options to our clients, particularly those with large load needs.

 

Not only have we increased the size of our shipping business, but we also intend to continue to grow our shipping operation business by expanding global routes in addition to focusing on maritime shipping in the Asian region.

 

	·	Global logistics Network Expansion and Collaborative Partnerships: We aim to broaden our global presence to South America and Africa and forge strategic alliances with regional partners to ensure that we remain agile and responsive to the dynamic demand of the market.
	·	Risk Management and Compliance Adherence: We intend to maintain compliance with pertinent international and local regulations as a priority to mitigate associated risks. Additionally, we have designated a risk management strategy to effectively address and mitigate potential risk issues, ensuring that we operate in accordance with regulatory requirements and maintain the highest standards of corporate governance.
	·	Environmental Responsibility and Sustainable Practices: We are committed to environmental responsibility and sustainable practices, and as such, we plan to prioritize environmentally friendly ship cooperation. Through the optimization of transportation routes and the reduction of carbon emissions, we aim to further demonstrate our dedication to sustainability and contribute to a greener future.
	·	Continuous Training and Development: We intend to prioritize continuous training and development for our team members to uphold professionalism and ensure their skills remain aligned with industry advancements.

 

 

 

 

Global Logistics Business

 

Market Positioning and Route Optimization

 

	·	Precise Target Market Positioning: Based on the actual situation and requirements of the Company and our clients, we select the main segments of the shipping market to focus on, such as bulk cargo or containers, and provide customized services tailored to different market demands.
	·	Optimization of Route Layout: Dynamically adjust shipping routes based on global trade flows and customer demands, increase or optimize the allocation of capacity on key routes and improve route coverage and timeliness.

 

Capacity Management and Cooperative Alliances

 

	·	Reasonable Allocation of Capacity Resources: Develop plans for chartering based on market demand and supply trends, to optimize the allocation of capacity resources.
	·	Strengthen Cooperation and Alliances: Actively establish close cooperative relationships with other shipping companies, shipping agents, ports, logistics providers, etc., to reduce costs and improve efficiency through resource sharing and mutual benefit.

 

Service Innovation and Quality Enhancement

 

Strict Control of Service Quality: Strengthen internal management, improve employee quality, ensure that service quality and safety levels meet international standards, and build a good corporate image.

 

Sustainable Development

 

Formulation of Sustainable Development Strategies: Integrate environmental protection concepts into the Company’s long-term development plans and achieve sustainable development goals through measures such as optimizing routes and reducing emissions.

 

Risk Management and Response Mechanisms

 

Establishment of Sound Risk Management Systems: Establish sound risk warning and prevention mechanisms for various risks faced by the shipping market, such as freight rate fluctuations, exchange rate changes, and policy adjustments.

 

Formulation of Flexible Response Strategies: Timely formulate or adjust operational strategies based on market changes and policy adjustments to ensure stable business development.

 

Other Products & Services

 

1. Electronic Device Hardware Components Products Sales & Software Technology Consulting Services

 

	·	Both electronic device hardware and software technology services are facing strong competition and new challenges. Our strategy is to:
	·	Cooperate with customers to complete personalized customized products;
	·	Continuously optimize suppliers’ purchasing costs, such as continuously control suppliers’ preferential prices, yield and quality;
	·	Maintain interaction and contact with existing customers to gain customer relationship and business opportunities.

 

 

 

 

2. Business Consulting Services

 

Our personal and corporate services business plan can be further refined by considering the following strategies:

 

a. Technological Innovation and Digital Transformation

 

Introducing Advanced Technology: With the advancement of technology, consider incorporating advanced technologies such as artificial intelligence and big data analytics to optimize personal consulting and enterprise services. For example, leveraging AI technology to automate certain document tasks to improve processing efficiency.

 

Digital transformation: Strengthen the Company’s digital transformation by establishing an online service platform so that customers can easily access information and submit their consultation needs. Through online channels, the Company can provide services such as online consultation and progress tracking.

 

b. Deepening Cooperation and Alliances

 

Establishing agency cooperation with law firms, accounting firms, financial institutions, real estate agencies, overseas study agencies and other related industries, and obtain some new customer channels through customer recommendation and introduction mechanism.

 

Joining industry associations and alliances: actively participate in and join relevant industry associations and alliances and enhance the Company’s industry influence and competitiveness through sharing resources, information and experience.

 

c. Customer Experience and Relationship Management

 

Enhancing Customer Experience: Continuously optimize the customer service process, emphasizing detail and personalized service to ensure customers have a good experience throughout the consulting process and enterprise service process.

 

Customer Relationship Management: Establish a comprehensive customer relationship management system, regularly communicate with customers, understand their feedback and changing needs, and adjust service strategies promptly.

 

d. Risk Management and Compliance

 

Strengthen risk management: Establish comprehensive risk management mechanisms for potential risk points in the process of individual customer consultation and enterprise service to ensure the steady development of business.

 

Maintain compliance: closely monitor changes in relevant policies and laws and regulations in Hong Kong and internationally to ensure that the Company’s business always complies with legal requirements and avoids compliance risks.

 

 

 

 

Our Growth Plan

 

Our growth plan includes a continued focus on the global logistics service as our primary business segment. We intend to use a portion of the proceeds from this Underwritten Offering to scale up our shipping operations, including chartering additional vessels. We believe that the expansion of shipping operations will allow us to provide more cost-effective shipping options to our clients, particularly those with large load needs.

 

Not only have we increased the size of our shipping business, but we also intend to continue to grow our shipping operation business by expanding global routes in addition to focusing on maritime shipping in the Asian region. Our growth plan includes:

 

Growth plan for container shipping operator service

 

a. Increase the number of container shipping customers

 

	·	Expand direct customers: Increase customer development activities by the Company’s management and business team.
	·	Our goal is to increase the number of container shipping customers by approximately 50% annually.

 

b. Increase industry acquisition

 

	·	Acquire a container operator: We hope to identify and acquire an appropriate container shipping operating company with annual revenue of more than $10 million, that has experience operating routes in South America and Africa, a good reputation in the market and long-term customer relationships.
	·	Increase the Dry Bulk and Container business of subsidiaries outside Hong Kong: We hope to expand our operations outside Hong Kong to include new dry bulk markets, particularly in South America and Africa. We also hope to increase coverage of major global trade routes, enhancing market diversification and risk resilience.

 

We hope to expand the scale of the charter fleet to support increased operations and market reach.

 

Growth plan of Bulk shipping operator service

 

a. Increase the number of bulk shipping customers

 

	·	Online: Increase contact with customers via Internet/communication. Offline: Establish contact with new customers by participating in exhibitions and increasing channel agent cooperation.
	·	Expand direct customers: Increase customer development activities by the Company’s management and business team.
	·	Our goal is to increase the number of bulk shipping customers by approximately 30% annually.

 

 

 

 

b. Increase the number of ship charters and freight capacity

 

·

We hope to increase the number of ship charters from our current monthly transport of bulk and general cargo of 2-3 ships with a volume of about 4,000-10,000 tons to 4-5 ships per month by 2025, with an approximate volume of about 8,000-15,000 tons.

 

iii. Increase the number of routes

 

·

At present, Asia is our primary area of operation. We seek to expand our area of operations and increase the number of routes to South America and Africa in the future.

 

Competition

 

Roshing’s container shipping operation faces competition from global and regional shipping companies such as Maersk, Mediterranean Shipping Company (MSC), and CMA CGM Group. These companies offer extensive networks and comprehensive services, including advanced tracking technology, competitive pricing, and strong customer service capabilities. Additionally, logistics companies like DHL and FedEx also provide integrated transportation solutions, including container shipping.

 

To maintain competitiveness, Roshing focuses on providing high-quality, customized services, leveraging expertise, and maintaining strong relationships with customers through dedicated support and tailored solutions.

 

Roshing’s bulk shipping operation services compete with major bulk shipping companies such as Oldendorff Carriers, Pacific Basin, and Star Bulk Carriers. These companies typically have large fleets and extensive global networks, enabling them to offer competitive pricing and reliable services. Additionally, they may have long-term relationships with major industry players and ports, enhancing their operational efficiency.

 

To compete effectively, Roshing emphasizes efficient operational management, strong collaboration and coordination with stakeholders, and transparent financial management. By offering personalized customer service and flexible chartering options, Roshing strives to stand out in the market and build long-term customer loyalty.

 

Marketing and Promotion Activities

 

For the year ended July 31, 2024 and three months ended October 31, 2024, Roshing maintains its marketing and sales team in its corporate office with four employees. Roshing implements the following strategies when engaging in marketing and customer acquisition:

 

	·	Market positioning: Roshing targets specific customer demographics, analyzes market segments and the needs of its target customers, and identifies high-value customer segments. For example, in the shipping/logistics sector its potential clients include import/export companies, manufacturing enterprises, e-commerce platforms, and distributors for large logistics companies. In the electronic device hardware trading sector, its clients are typically medium-sized non-Hong Kong traders and direct hardware and finished product sales brands. In the consulting services sector, its target groups encompass companies with software technology needs, business owners with domestic and international operations requirements, and clients seeking cross-border business consulting services.
	·	Marketing mix strategies: Roshing develops comprehensive marketing mix strategies, encompassing product, pricing, and distribution strategies. This involves offering a diverse range of services to meet varying customer needs, devising reasonable pricing strategies based on customer demands and market competition, and establishing diverse sales channels including direct and agent sales.

 

 

 

 

	·	Customer relationship management: Roshing establishes robust customer relationship management systems through regular customer communication and satisfaction surveys to understand customer needs and feedback. This enables us to adjust service strategies promptly, thereby enhancing customer satisfaction and loyalty.
	·	Industry resources: Roshing conducts interviews and business introductions targeting potential customers leveraging the industry resources and customer base accumulated by its management and teams.
	·	Digital transformation: Roshing leverages technologies such as big data and customer management systems for customer data analysis, enabling precision marketing through online channels like social media and e-commerce platforms. This facilitates the expansion of its customer base and enhances marketing effectiveness.

 

For consulting service clients, Roshing’s future plans include increasing customer acquisition through social media, community marketing, website content, and participation in thematic exhibitions.

 

Customers

 

For the three months ended October 31, 2024, two customers accounted for 56.5%, and 19.7% of the Company’s total revenues. For the three months ended October 31, 2023, two customers accounted for 61.2% and 13.1% of the Company’s total revenues.

 

For the year ended July 31, 2024, three customers accounted for 47.7%, 24.8% and 11.1% of the Company’s total revenues. All of them belong to the logistics business section. For the year ended July 31, 2023, two customers accounted for 40.9% and 11.5% of the Company’s total revenues. As of October 31, 2024 and July 31, 2024, no accounts receivable are outstanding.

 

Roshing’s customer structure varies according to its various business sectors.

 

Global Logistics Business

 

Roshing’s customer structure in the shipping and logistics business is highly diversified and encompasses various entities:

 

	·	Cargo Owners: These are businesses or individuals requiring the transportation of goods. They may need to charter vessels for transporting their cargo.
	·	Cargo Agents: These agents are engaged by diverse cargo owners to implement logistics solutions and often have significant booking demands.
	·	Logistics Companies: Regular patrons of shipping companies, these firms offer cargo transportation services to clients. They collaborate with shipping companies to tailor shipping solutions, coordinating shipping schedules and alternative routes to meet transportation needs effectively.
	·	Ship Brokers: Serving as intermediaries between shipowners and carriers, ship brokers work with shipping companies to arrange vessel leases and transportation services.

 

Other Product & Services

 

Electronic Device Hardware Components Products Sales & Software Technology Consulting Services 

 

Roshing’s customer structure includes non-Hong Kong traders, direct traders of hardware components, companies engaged in the assembly and sale of finished products, and private label entities seeking electronic component procurement and small volume customization.

 

 

 

 

 

Business Consulting Services

 

Roshing’s client mix includes individual clients seeking policy advice in Hong Kong, and enterprises requiring local business services in Hong Kong and consulting services for cross-border business operations.

 

Seasonality

 

Roshing’s container shipments are influenced by seasonal factors, with February to April being off-peak seasons, and June to October being peak seasons. Dry bulk cargo is not subject to seasonal limitations and depends primarily on customer orders. The container logistics business is subject to seasonal influences, primarily manifested in the seasonality of international shipping, which is mainly reflected in seasonal fluctuations in cargo transportation volume. For example, in the lead-up to major holidays such as Christmas and Chinese Spring Festival, increased consumer demand often leads to a short-term surge in cargo transportation volume. Conversely, in the later stages of holidays and traditional off-peak seasons, cargo transportation volume may significantly decrease. This seasonal variation has a significant impact on shipping companies’ capacity allocation, route scheduling, and pricing strategies.

 

Roshing has implemented strategies to address seasonal influences. Seasonal fluctuations can lead to unstable vessel utilization rates, with possible capacity surplus during off-peak seasons and potential capacity constraints during peak seasons. Shipping companies can balance the effects of seasonal fluctuations by the number of chartered vessels, optimizing route layouts, signing long-term transportation contracts, and employing pricing strategies (such as off-peak discounts).

 

Our People and Culture

 

As of October 31, 2024, we had a total of 11 full time employees, and 1 part time employee. As of July 31, 2024, we had a total of 11 full time employees, and 1 part time employee. As of July 31, 2023, we had a total of 10 full time employees, and 1 part time employee. The following table sets forth the number of our full time employees by function as of October 31, 2024, July 31, 2024 and July 31, 2023:

 

Function		As of October 31, 2024		As of July 31, 2024		As of July 31, 2023
Senior Management		7		7		3
Human Resources and Administration		1		1		1
Finance		1		1		1
Sales and Marketing		2		2		2
Procurement		0		0		1
Technical		0		0		2
TOTAL		11		11		10

 

Real Property

 

Our principal executive office is located at Unit B, 10/F., Ritz Plaza, No.122 Austin Road, Tsim Sha Tsui, Kowloon, Hong Kong, overing a total area of approximately 200 square feet. The premises are provided by a third-party pursuant to an office rental service agreement and the service term expires in September 2025. After that, we intend to renew the service term. The office meets the office space needs of all of our business segments.

 

 

 

 

 

Insurance

 

We participate in employee social security plans for our full-time employees.

 

Intellectual Property

 

As of the date of this prospectus, we have two domain names: roshing.com and tianci-ciit.com. We do not own or have rights to any other IP, such as patents, copyrights and trademarks.

 

Environmental Matters

 

We strictly comply with laws and regulations relating to environmental protection in Hong Kong since our main operation is in Hong Kong. It has not had a material adverse effect upon our capital expenditures, earnings, and we do not anticipate any material adverse effects in the future based on the nature of our future operations. We do not have any relevant records of being penalized for violating environmental protection regulations.

 

Legal Proceedings

 

From time to time, we may become involved in legal proceedings or be subject to claims arising in the ordinary course of our business. We are not presently a party to any legal proceedings that, if determined adversely to us, would individually or taken together have a material adverse effect on our business, results of operations, financial condition or cash flows. Regardless of the outcome, litigation and other legal proceedings can have an adverse impact on us because of defense and settlement costs, diversion of management resources, reputation damage and other factors.

 

REGULATIONS

 

Regulations Related to our Business Operation in Hong Kong

 

Roshing is Tianci’s subsidiary established in Hong Kong through which Tianci conducts its operations. As of the date of this prospectus, there was no statutory or mandatory licensing and qualification system in Hong Kong governing the global logistics services, electronic device hardware components products sales, technical service of the software and website development and business consulting services provided by Roshing.

 

Below sets out a summary of certain aspects of the Hong Kong laws and regulations which are relevant to our operation and business.

 

Business Registration Ordinance (Chapter 310 of the Laws of Hong Kong)

 

The Business Registration Ordinance requires every person carrying on any business to make an application to the Commissioner of Inland Revenue in the prescribed manner for the registration of that business within one month after the commencement of business. The Commissioner of Inland Revenue must register each business for which a business registration application is made and as soon as practicable after the prescribed business registration fee and levy are paid and issue a business registration certificate or branch registration certificate for the relevant business or the relevant branch, as the case may be. Any person who fails to apply for business registration shall be guilty of an offence and shall be liable to a fine of HK$5,000 and to imprisonment for 1 year.

 

 

 

 

Personal Data (Privacy) Ordinance (Chapter 486 of the Laws of Hong Kong), or the PDPO

 

The PDPO imposes a statutory duty on data users to comply with the requirements of the six data protection principles (the “Data Protection Principles”) contained in Schedule 1 to the PDPO. The PDPO provides that a data user shall not do an act, or engage in a practice, that contravenes a Data Protection Principle unless the act or practice, as the case may be, is required or permitted under the PDPO. The six Data Protection Principles are:

 

	·	Principle 1—purpose and manner of collection of personal data;
	·	Principle 2—accuracy and duration of retention of personal data;
	·	Principle 3—use of personal data;
	·	Principle 4—security of personal data;
	·	Principle 5—information to be generally available; and
	·	Principle 6—access to personal data.

 

Non-compliance with a Data Protection Principle may lead to a complaint to the Privacy Commissioner for Personal Data (the “Privacy Commissioner”). The Privacy Commissioner may serve an enforcement notice to direct the data user to remedy the contravention and/ or instigate prosecution actions. A data user who contravenes an enforcement notice commits an offense which may lead to a fine and imprisonment.

 

The PDPO also gives data subjects certain rights, inter alia:

 

	·	the right to be informed by a data user whether the data user holds personal data of which the individual is the data subject;
	·	if the data user holds such data, to be supplied with a copy of such data; and
	·	the right to request correction of any data they consider to be inaccurate.

 

The PDPO criminalizes, including but not limited to, the misuse or inappropriate use of personal data in direct marketing activities, non-compliance with a data access request and the unauthorized disclosure of personal data obtained without the relevant data user’s consent. An individual who suffers damage, including injured feelings, by reason of a contravention of the PDPO in relation to his or her personal data, may seek compensation from the data user concerned.

 

Tortious Duty Under Common Law

 

Apart from contractual liability, under common law, services providers also owe a duty of care to customers and may be liable for damage resulting from defects in services caused by their negligent acts or for any fraudulent misrepresentation made in the provision of services. Any person who undertakes to provide a service and who negligently performs his work and causes damage to another person or property, will also attract civil liability.

 

 

 

 

Trade Description Ordinance (Chapter 362 of the Laws of Hong Kong), or the TDO

 

The TDO aims to protect customers against unfair trade practices by regulating businesses to sell products and services in a truthful manner. It prohibits false trade descriptions in respect of services supplied in the course of trade.

 

Section 7A of the TDO provides that a trader who applies a false trade description to a service supplied or offered to be supplied to a consumer or supplies or offers to supply to a consumer a service to which a false trade description is applied, commits an offence.

 

Sections 13E, 13F, 13G, 13H and 13I of the TDO provide that a trader who engages in relation to a consumer in a commercial practice that (a) is a misleading omission; or (b) is aggressive; (c) constitutes bait advertising; (d) constitutes a bait and switch; or (e) constitutes wrongly accepting payment for a product, commits an offence.

 

A person who commits an offence under sections 7A, 13E, 13F, 13G, 13H or 13I shall be subject, on conviction on indictment, to a fine of HK$500,000 and to imprisonment for five years, and on summary conviction, to a fine at HK$100,000 and to imprisonment for two years.

 

Trade Marks Ordinance (Chapter 559 of the Laws of Hong Kong), or the TMO

 

The TMO provides for the registration of trademarks, the use of registered trademarks and connected matters. Hong Kong provides territorial protection for trademarks. Therefore, trademarks registered in other countries or regions are not automatically entitled to protection in Hong Kong. In order to enjoy protection by the laws of Hong Kong, trademarks must be registered with the Trade Marks Registry of the Intellectual Property Department under the Trade Marks Ordinance and the Trade Marks Rules (Chapter 559A of the Laws of Hong Kong).

 

According to section 10 of the TMO, a registered trademark is a property right acquired through due registration under such ordinance. The owner of a registered trademark is entitled to the rights provided by the ordinance.

 

By virtue of section 14 of the TMO, the owner of a registered trademark is conferred exclusive rights in the trademark. The rights of the owner in respect of the registered trademark come into existence from the date of the registration of the trademark. According to section 48 of such ordinance, the registration date is the filing date of the application for registration.

 

Subject to the exceptions in section 19 to section 21 of the TMO, any use of the trademark by third parties without the consent of the owner is an infringement of the trademark. Conducts which amount to infringement of the registered trademark are further specified in section 18 of the same ordinance.

 

Copyright Ordinance (Chapter 528 of the Laws of Hong Kong)

 

Pursuant to the Copyright Ordinance, a person may incur civil liability for ’’secondary infringement’’ if that person possesses, sells, distributes or deals with a copy of a work which is, and which he knows or has reason to believe to be, an infringing copy of the work for the purposes of or in the course of any trade or business without the consent of the copyright owner.

 

 

 

 

The Supply of Services (Implied Terms) Ordinance (Chapter 457 of the Laws of Hong Kong), or the SOSO

 

The SOSO which aims to consolidate and amend the law with respect to the terms to be implied in contracts for the supply of services (including a contract for the supply of a service whether or not goods are also transferred or to be transferred, or bailed or to be bailed by way of hire under the contract) provides that:

 

	(a)	where the supplier is acting in the course of a business, there is an implied term that the supplier will carry out the service with reasonable care and skill; and
	(b)	where the supplier is acting in the course of a business, the time for service to be carried out is not fixed by the contract, is not left to be fixed in a manner agreed by the contract or is not determined by the course of dealing between the parties, there is an implied term that the supplier will carry out the service within a reasonable time.

 

Where a supplier is dealing with a party to a contract for supply of service who deals as a consumer, the supplier cannot, by reference to any contract term, exclude or restrict any liability of his arising under the contract by virtue of the SOSO. Otherwise, where any right, duty or liability would arise under a contract for the supply of a service by virtue of the SOSO, it may (subject to the Control of Exemption Clauses Ordinance (Chapter 71 of the Laws of Hong Kong)) be negatived or varied by express agreement, or by the course of dealing between the parties, or by such usage as binds both parties to the contract.

 

The Control of Exemption Clauses Ordinance (Chapter 71 of the Laws of Hong Kong), or the CECO

 

The CECO, which aims to limit the extent to which civil liability for breach of contract, or for negligence or other breach of duty, can be avoided by means of contract terms and otherwise, among others, provides that:

 

	(a)	under section 7, a person cannot by reference to any contract term or to a notice given to persons generally or to particular persons exclude or restrict his liability for death or personal injury resulting from negligence and in the case of other loss or damage, a person cannot exclude or restrict his liability for negligence except in so far as the term or notice satisfies the requirement of reasonableness.
	(b)	under section 8, as between contracting parties where one of them deals as consumer or on the other’s written standard terms of business, as against that party, the other cannot by reference to any contract term (i) when himself in breach of contract, exclude or restrict any liability of his in respect of the breach, or (ii) claim to be entitled to render a contractual performance substantially different from that which was reasonably expected of him, or (iii) claim to be entitled in respect of the whole or any part of his contractual obligation, to render no performance at all, except in so far as the contract term satisfies the requirement of reasonableness.
	(c)	under section 9, a person dealing as a consumer cannot by reference to any contract term be made to indemnify another person (whether a party to the contract or not) in respect of liability that may be incurred by the other for negligence or breach of contract, except in so far as the contract term satisfies the requirement of reasonableness; and
	(d)	under section 11, as against a person dealing as consumer, the liability for breach of the obligations arising under sections 15, 16 and 17 of the Sales of Goods Ordinance (Chapter 26 of the Laws of Hong Kong) cannot be excluded or restricted by reference to any contract term, and as against person dealing otherwise than as consumer, the liability arising under sections 15, 16 and 17 of the Sales of Goods Ordinance can be excluded or restricted by reference to a contract term, but only in so far as the terms satisfy the requirement of reasonableness.

 

Sections 7, 8 and 9 of the CECO do not apply to, among others, any contract so far as it relates to the creation or transfer of a right or interest in any patent, trademark, copyright, registered design, technical or commercial information or other intellectual property, or relates to the termination of any such right or interest.

 

In relation to a contract term, the requirement of reasonableness for the purpose of the CECO is satisfied only if the court or arbitrator determines that the term was a fair and reasonable one to be included having regarded to the circumstances which were, or ought reasonably to have been, known to or in the contemplation of the parties when the contract was made.

 

 

 

 

Regulations related to employment and labor protection

 

Employment Ordinance (Chapter 57 of the Laws of Hong Kong), or the EO

 

The EO is an ordinance enacted for, amongst other things, the protection of the wages of employees and the regulation of the general conditions of employment and employment agencies. Under the EO, an employee is generally entitled to, amongst other things, notice of termination of his or her employment contract; payment in lieu of notice; maternity protection in the case of a pregnant employee; not less than one rest day in every period of seven days; severance payments or long service payments; sickness allowance; statutory holidays or alternative holidays; and paid annual leave depending on the period of employment.

 

Employees’ Compensation Ordinance (Chapter 282 of the Laws of Hong Kong), or the ECO

 

The ECO is an ordinance enacted for the purpose of providing for the payment of compensation to employees injured in the course of employment.

 

The ECO establishes a no-fault and non-contributory employee compensation system for work injuries and lays down the rights and obligations of employers and employees in respect of injuries or death caused by accidents arising out of and in the course of employment, or by prescribed occupational diseases.

 

As stipulated by the ECO, no employer shall employ any employee in any employment unless there is in force in relation to such employee a policy of insurance issued by an insurer for an amount not less than the applicable amount specified in the Fourth Schedule of the ECO in respect of the liability of the employer. According to the Fourth Schedule of the ECO, the insured amount shall be not less than HKD100,000,000 (approximately $13,000,000) per event if a company has no more than 200 employees. Any employer who contravenes this requirement commits a criminal offence and is liable on conviction to a fine and imprisonment. An employer who has taken out an insurance policy under the ECO is required to display a prescribed notice of insurance in a conspicuous place on each of its premises where any employee is employed.

 

Mandatory Provident Fund Schemes Ordinance (Chapter 485 of the Laws of Hong Kong), or the MPFSO

 

The MPFSO is an ordinance enacted for the purposes of providing for the establishment of non-governmental mandatory provident fund schemes, or the MPF Schemes. The MPFSO requires every employer of an employee of 18 years of age or above but under 65 years of age to take all practical steps to ensure the employee becomes a member of a registered MPF Scheme within the first 60 days of employment. Subject to the minimum and maximum relevant income levels, it is mandatory for both employers and their employees to contribute 5% of the employee’s relevant income to the MPF Scheme. Any employer who contravenes the requirement of enrolling eligible employees in a registered MPF Scheme or the requirement of paying mandatory contributions to the MPF Schemes commits a criminal offence and is liable on conviction to a fine and imprisonment.

 

Minimum Wage Ordinance (Chapter 608 of the Laws of Hong Kong), or the MWO

 

The MWO provides a prescribed minimum hourly wage rate (currently at HK$40 per hour) during the wage period for every employee engaged under a contract of employment under the EO. Any provision of the employment contract which purports to extinguish or reduce the right, benefit or protection conferred on the employee by the MWO is void.

 

Failure to pay minimum wage amounts to a breach of the wage provisions under EO. An employer who willfully and without reasonable excuse fails to pay wages to an employee when it becomes due commits a criminal offence and is liable on conviction to a fine and imprisonment.

 

 

 

 

Occupational Safety and Health Ordinance (Chapter 509 of the Laws of Hong Kong), or the OSHO

 

The OSHO aims to ensure the safety and health of employees when they are at work. Under the OSHO, an employer must ensure the safety and health of his workplace by (i) providing and maintaining plant and work systems that are safe and without risks to health, (ii) making arrangement for ensuring safety and health in connection with the use, handling, storage or transport of plant or substances, (iii) providing all necessary information, instruction, training and supervision for ensuring safety and health, (iv) providing and maintaining safe access to and egress from the workplace, and (v) providing and maintaining a safe and healthy work environment. An employer who fails to comply with the above may be liable on conviction to a fine and imprisonment, if he did so intentionally, knowingly or recklessly.

 

Occupational Safety and Health Regulation (Chapter 509A of the Laws of Hong Kong)

 

The Occupational Safety and Health Regulation (Chapter 509A of the Laws of Hong Kong) further sets out basic requirements for accident prevention, fire precaution, workplace environment control, hygiene at workplaces, first aid, as well as what employers and employees are expected to do in manual handling operations.

 

Occupiers Liability Ordinance (Chapter 314 of the Laws of Hong Kong)

 

The Occupiers Liability Ordinance regulates the obligations of a person occupying or having control of premises on injury resulting to persons or damage caused to goods or other property lawfully on the land. The Occupiers Liability Ordinance imposes a common duty of care on an occupier of premises to take such care as in all the circumstances of the case is reasonable to see that the visitors will be reasonably safe in using the premises for the purposes for which he is invited or permitted by the occupier to be there.

 

For the risk factor concerning regulations related to employment and labor protection, please see “Risk Factors — Risks Related to Doing Business in Hong Kong — Increases in labor costs in Hong Kong and non-compliance with laws and regulations relating to employment and labor protection may adversely affect the business of Roshing and our results of operations.”

 

Regulations related to Hong Kong Taxation

 

Inland Revenue Ordinance (Chapter 112 of the Laws of Hong Kong)

 

Under the Inland Revenue Ordinance, where an employer commences to employ in Hong Kong an individual who is or is likely to be chargeable to tax, or any married person, the employer shall give a written notice to the Commissioner of Inland Revenue not later than three months after the date of commencement of such employment. Where an employer ceases or is about to cease to employ in Hong Kong an individual who is or is likely to be chargeable to tax, or any married person, the employer shall give a written notice to the Commissioner of Inland Revenue not later than one month before such individual ceases to be employed in Hong Kong, provided that a shorter notice may be accepted if deemed reasonable.

 

Tax on dividends

 

Based on the current practice of the Inland Revenue Department of Hong Kong, no tax is payable in Hong Kong in respect of dividends paid by Roshing.

 

 

 

 

Capital gains and profits tax

 

The Inland Revenue Ordinance provides, among other things, that profits tax shall be charged on every person carrying on a trade, profession or business in Hong Kong in respect of his or her assessable profits arising in or derived from Hong Kong. Roshing is currently subject to the two-tiered profits tax regime according to Hong Kong tax rules and regulations.

 

The two-tier profits tax rates system of Hong Kong became effective since the assessment year 2018/2019. Under the two-tier profit tax rates regime, the profits tax rate for the first HKD2 million (approximately US$260,000) of assessable profits of a corporation will be subject to the lowered tax rate, 8.25%, while the remaining assessable profits will be subject to the legacy tax rate, 16.5%.

 

No tax is imposed in Hong Kong in respect of capital gains from the sale of shares. However, trading gains from the sale of shares by persons carrying on a trade, profession or business in Hong Kong, where such gains are derived from or arise in Hong Kong, will be subject to Hong Kong profits tax.

 

Stamp Duty Ordinance (Chapter 117 of the Laws of Hong Kong)

 

Under the Stamp Duty Ordinance (Chapter 117 of the Laws of Hong Kong), a total of 0.2% of the higher of the consideration for or market value of the shares is currently payable on a typical sale and purchase transaction of Hong Kong shares. In addition, a fixed duty of HKD5 is currently payable on any instrument of transfer of Hong Kong shares. If no stamp duty is paid on or before the due date, a penalty of up to ten times the duty payable may be imposed.

 

Estate duty

 

Hong Kong estate duty was abolished effective from February 11, 2006. No Hong Kong estate duty is payable by Roshing’s stockholders in relation to the shares owned by them upon death.

 

MANAGEMENT

 

Directors, Executive Officers and Corporate Governance

 

The following table sets forth certain information regarding our current executive officers and directors as of the date of this prospectus. Unless otherwise stated, the business address for our executive officers and directors is that of our principal executive offices located at Unit B, 10/F., Ritz Plaza, No. 122 Austin Road, Tsim Sha Tsui, Kowloon, Hong Kong.

 

Name		Age		Position(s)
Shufang Gao		55		Director, Chief Executive Officer
Wei Fang		52		Director, Chief Financial Officer
Ying Deng		41		Director, Vice President
Yee Man Yung		31		Independent Director
Fan Liu		45		Independent Director
Juan Chang		45		Independent Director
Guilin Zhang		67		Independent Director

 

 

 

 

Directors hold office until the annual meeting of Tianci’s Stockholders and the election and qualification of their successors. Officers hold office, subject to removal at any time by the Board, until the meeting of directors immediately following the annual meeting of Stockholders and until their successors are appointed and qualified.

 

Shufang Gao has worked as CEO of Hong Kong listed groups, president of domestic capital companies, and vice president of Chinese A-share listed companies. He is familiar with the Chinese A-share capital market and the Hong Kong capital market, and has experience in the strategic development of listed companies. Mr. Gao joined Tianci on August 26, 2021, as a member of our Board and became Chief Executive Officer on January 27, 2023. He also served as Chief Financial Officer from April 2023 until his resignation on January 22, 2024. On the same day, he was appointed Chairman of the Board. From October 2020 to August 2021, Mr. Gao served as the Vice President and Director of Sichuan Jinding Group. Prior to that, he was the Vice Chairman of Luoyang Yongning Nonferrous Technology Co., Ltd. from August 2019 to September 2020. From April 2018 to July 2019, Mr. Gao served as the Vice President of Tibet Huayu Mining Co., Ltd., an A-share listed company. He was the Chief Executive Officer of Haotian Development Group Co., Ltd. (Hong Kong Main Board Listed Company 00474) from August 2016 to September 2017. From August 2012 to August 2016, Mr. Gao served as the President of Haihua Group Holdings Co., Ltd., an international container leasing company. Mr. Gao received his Bachelor of Management Degree from Dalian University of Technology in 1999. He received his Master’s Degree in Finance and Accounting from the Chinese University of Hong Kong in 2008. Mr. Gao brings to the Board his international experience in the operation and governance of listed companies.

 

Wei Fang has over ten years of experience in the securities and investment industry. He joined Tianci on August 27, 2021 as a member of the Board and was appointed Chief Financial Officer of Tianci on January 23, 2024. Mr. Fang served as the Partner of Tiger Securities and the CEO of Tiger Securities International in Hong Kong from May 2018 to July 2019. From January 2017 to April 2018, Mr. Fang served as the CEO of Haotian International Securities in Hong Kong. Mr. Fang was the Head of High Net Worth Individual, Corporate Client and ICBC Global Wealth Management Center of ICBC International in Hong Kong from October 2014 to December 2016. Mr. Fang earned a Bachelor’s degree in Economics from Anhui University of Finance and Economics in 1994. Mr. Fang obtained his Master of Business Administration Degree from South Georgia University in 2004. Mr. Fang brings to the Board his deep experience in the securities and investment industry.

 

Ying Deng has over fifteen years of experience in corporate finance, asset management and banking. Ms. Deng became Vice President of Tianci and was appointed to Tianci’s Board in January 2023. She has been employed by RQS Capital Limited since September 2022 as a Director responsible for business development and financial planning. Since July 2017 Ms. Deng has been employed as Director and Chief Executive Officer by Shenzhen Dandelion Club Investment Development Co., Ltd., where she is responsible for project due diligence and investment management. Since June 2011 Ms. Deng has been employed as a Director by Roshing International Co., Limited, where she is responsible for strategic planning and daily operations. In 2020 Ms. Deng was awarded a Master’s Degree in Business Administration by Nankai University. She earned a Bachelor’s Degree from Jinan University in 2006. Ms. Deng brings to the Board her extensive experience in business administration.

 

Yee Man Yung has more than 5 years of experience as a human resources manager for both Hong Kong and NASDAQ listed companies. She also has two years’ experience as an assistant to board members. Ms. Yung joined Tianci on 26 August, 2021 as an independent director of our Board. Since 2020 she has served as Human Resources Manager for Link-Asia International Med-Tech Group Limited. From 2018 to 2019 Ms. Yung was employed as Account Manager by Tiger Brokers (HK) Global Limited. Ms. Yung earned a Master’s degree in Corporate Communication from University of Leeds in 2017. Ms. Yung is currently pursuing an MBA Degree at the University of South Australia. Ms. Yung brings to the Board her human resources and public company experience as an independent director.

   

Fan Liu joined Tianci on August 26, 2021 as an independent director of our Board. Prior to joining us, Mr. Liu was the Vice President of China Regenerative Medicine International Limited from September 2014 to October 2017. From July 2009 to August 2014, Mr. Liu was the Investment Director of Tian Huan Investment Company. He was a financial analyst at Founder Securities (SSE:601901) from May 2007 to June 2009. Mr. Liu received his B.A. in Engineering from Nanjing Tech University in 2001 and his Master of Economics from Concordia University, Canada in 2006. He brings to the Board his experience and knowledge of investments and mergers and acquisitions of companies in Hong Kong and China.

 

 

 

 

Juan Chang joined Tianci in January 2024 as an independent director of our Board. She has over 20 years of expertise in financial management and corporate leadership. From 2003 to 2009, Ms. Chang served as a settlement supervisor and financial manager at Suning.com, a Shenzhen Company, overseeing supplier accounts, accounts receivable and taking management duty. Since 2010, she held the position of Deputy General Manager and Chief Financial Officer at Suning Easy Buy Limited in Hong Kong, where her responsibilities included achieving the Company’s business performance, financial management and risk control, asset management, financial statement issuance, and annual audit. In 2021 to 2023, she acted as the Director of Suning Financial Limited in Hong Kong, overseeing daily management and internal control supervision of the Hong Kong Suning Financial MSO license business. Since June 2023, Ms. Chang has been serving as the Financial Director of Suning.com South Region, responsible for financial management and supervision of companies in Guangzhou, Shenzhen, Wuhan, Haikou, Nanning, Zhongshan, and Hong Kong. Ms.Juan Chang obtained her Bachelor of Management degree from Xi’an University of Finance and Economics in July 2003. In 2013 to 2015, She pursued further education, completing an MBA from the Chinese University of Hong Kong.

 

Guilin Zhang has a strong background in the maritime and shipping industries, with over 30 years of experience. Mr. Zhang recently joined Tianci in January 2024 as an independent director of our Board. His career started at Singapore IMC Shipping, where he worked as a Senior Executive in the Fleet Management Department from 1994 to 1997. Later, he became the General Manager of China Region at Wah Shun Shipping Co., Ltd. and Best Power Holdings (HK) Limited, overseeing ship chartering and iron ore trading until 2002. He then held key roles as Vice President at North China Shipping Holdings Ltd. and General Manager at Continental Minerals Co., Ltd. until 2011. From 2012 to 2023, he ventured into entrepreneurship, establishing Guochuang International Holdings Co., Ltd. and GC Resources Co., Ltd., where he now serves as Executive Director and CEO. Throughout his career, Mr. Zhang has shown exceptional expertise in fleet management, trading, and strategic development, making him an excellent fit for the role of independent director. Mr. Zhang Graduated from Dalian Maritime University with a Bachelor of Engineering degree in 1981.

 

Family Relationships

 

There are no family relationships among any of our officers or directors.

 

Involvement in Certain Legal Proceedings

 

To the best of our knowledge, none of our directors or executive officers has, during the past ten years, been involved in any legal proceedings described in subparagraph (f) of Item 401 of Regulation S-K.

 

Qualification

 

There is currently no shareholding qualification for directors, although a shareholding qualification for directors may be fixed by our stockholders by ordinary resolution.

 

Corporate Governance

 

Board Committees

 

We have established three committees under the board of directors: an audit committee, a compensation committee and a nominating and corporate governance committee (the “Committee”). We have adopted a charter for each of the three committees. Each committee’s members and functions are described below.

 

 

 

 

The business and affairs of the company are managed under the direction of our Board. We have conducted Board meetings regularly since inception. Each of our directors has attended all meetings either in person, via telephone conference, or through written consent for special meetings. In addition to the contact information in this prospectus, the Board has adopted procedures for communication with the officers and directors as the date hereof. Each stockholder will be given specific information on how he/she can direct communications with the officers and directors of the Company at our annual stockholders’ meetings. All communications from stockholders are relayed to the members of the Board.

 

Audit Committee. Our audit committee consists of Juan Chang, Fan Liu and Yee Man Yung. Juan Chang is the chairperson of the audit committee. We have determined that Juan Chang, Fan Liu and Yee Man Yung each satisfy the “independence” requirements of Nasdaq Listing Rule 5605(a)(2) and meets the independence standards under Rule 10A-3 under the Exchange Act. We have determined that Ms. Chen qualifies as an “audit committee financial expert.” The audit committee oversees our accounting and financial reporting processes and the audits of the financial statements of our company. The audit committee is responsible for, among other things: (a) monitoring and reviewing: i) The integrity of the Company’s financial reports and other financial information provided by the Company to the public or any governmental body; ii) The Company’s compliance with applicable legal and regulatory requirements; iii) The qualifications and independence of the Company’s independent auditing firm and iv) the performance of the Company’s independent auditors and the Company’s Internal audit function; (b) selecting and terminating the Company’s independent auditors; (c) conducting any investigation appropriate to fulfilling its responsibilities, and it shall have the authority to communicate directly with the independent audit firm and any employee of the Company; (d) preparing and publish an annual Committee report as required by the SEC to be included in the Company’s annual proxy statement; (e) approving in advance all audit and permissible non-audit services to be performed by the independent auditors; (f) discussing with management the Company’s risk assessment and risk management policies.;(g) retaining outside counsel, experts and other advisors as the Committee may deem appropriate in its sole discretion; and (h) setting policies for the hiring of employees or former employees of the Company’s independent auditor. The Audit Committee shall consist of three or more directors, who shall be appointed annually and subject to removal at any time, by the Board. No member of the Audit Committee shall receive directly any compensation from the Company other than his or her directors’ fees and benefits.

 

Compensation Committee. Our compensation committee consists of Fan Liu, Juan Chang and Guilin Zhang. Fan Liu is the chairperson of our compensation committee. We have determined that Fan Liu, Juan Chang and Guilin Zhang each are “independent,” as such term is defined for directors and compensation committee members in the listing standards of the NASDAQ Stock Market LLC. Additionally, each qualify as “non-employee directors” for purposes of Rule 16b-3 under the Securities Exchange Act of 1934 and as “outside directors” for purposes of Section 162(m) of the Internal Revenue Code. The Committee has been established to: (a) have all the powers of administration under all of the Company’s employee benefit plans, including any stock compensation plans, bonus plans, retirement plans, stock purchase plans, and medical, dental and other insurance plan; (b) assist the Board in seeing that a proper system of long-term and short-term compensation is in place to provide performance oriented incentives to attract and retain management, and that compensation plans are appropriate and competitive and properly reflect the objectives and performance of management and the Company; (c) have the sole authority to retain, at the Company’s expense, and terminate any compensation consultant to be used to assist in the evaluation of director or executive compensation and shall have sole authority to approve the consultant’s fees and other retention terms, The Committee shall also have the authority to obtain advice and assistance from legal, accounting or other advisors at the Company’s expense; (d) evaluate the Company’s Chief Executive Officer and set his or her remuneration package; and (e) review and assess the adequacy of this Charter annually and recommend any proposed changes to the Board for approval. The Committee shall consist of three or more directors, who shall be appointed annually and subject to removal at any time, by the Board.

 

Nominating and Corporate Governance Committee. Our nominating and corporate governance committee consists of Juan Chang and Fan Liu. Yee Man Yung is the chairperson of our nominating and corporate governance committee. We have determined that each of Yee Man Yung, Juan Chang and Fan Liu qualify as “independent” as that term is defined by Nasdaq Listing Rule 5605(a)(2). The Committee is responsible for: (a) assisting the Board in identifying individuals qualified to become Board members and recommending to the Board the director nominees for each annual meeting of stockholders; (b) recommending to the Board Corporate Governance Principles applicable to the Company; (c) leading the Board in its annual review of the performance of the Board and its committees; (d) recommending to the Board director nominees for each committee; (e) developing criteria for selection of members of the Board and its committees and reviewing with the Board, on an annual basis, the requisite skills and characteristics of new Board members as well as the composition of the Board as a whole; (f) recommending individuals qualified to become Board members to the Board; (g) reviewing and re-assessing the adequacy of this Charter and the Company’s Corporate Governance Principles annually and recommend any proposed changes to the Board for approval. The Committee shall be comprised of no less than three directors, the exact number to be determined by the Board of Directors.

 

 

 

 

Director Independence

 

The Board of Directors has determined that Juan Chang, Fan Liu, Guilin Zhang and Yee Man Yung and are independent directors, as the term “independent” is defined by the Rule 5605(a)(2) of the Listing Rules of the Nasdaq Stock Market and Rule 10A-3 under the Exchange Act.

 

Term of Office

 

Our directors hold office until the next annual meeting of stockholders of the Company and until their successors have been elected and qualified. Our officers are elected by the board of directors and serve at the discretion of the board of directors.

 

The members of the committees shall be appointed and removed by the Board on the recommendation of the nominating and corporate governance committee. The members of the committees shall designate a chairman.

 

Compensation of Directors

 

Tianci currently maintains seven director retainer agreements with its 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.

 

EXECUTIVE COMPENSATION

 

Tianci International, Inc.

 

Tianci has paid no compensation to any officer or director during the past three fiscal years or any subsequent period. Unpaid compensation has been accrued pursuant to the Employment Agreements described below, totaling an aggregate of $240,800 as of October 31, 2024.

 

RQS United Group Limited

 

RQS United did not pay compensation to any officer or director for services in those roles during its past three fiscal years.

 

Roshing International Co., Limited

 

Roshing pays Ying Deng, its Manager, and Shufang Gao, its CEO, a salary of HKD 20,000 and HKD 30,000 per month respectively.

 

 

 

 

 

 

Employment Agreements with Key Executives

 

Employment Agreements

 

On August 27, 2021, we entered into employment agreements with each of Shufang Gao and Wei Fang and on January 27, 2023, we entered into an employment agreement with Ying Deng (collectively, the “Employment Agreements”), whereby each individual agreed to serve as an Executive Director for monthly compensation equal to U.S. $3,800. Each Employment Agreement expires after three years, unless earlier terminated by death, resignation or removal.

 

We are entitled to terminate the each Employment Agreement for “cause” without notice or remuneration (unless otherwise required by law) if: (i) the executive is convicted or pleads guilty to a felony or to an act of fraud, misappropriation or embezzlement; (ii) the executive has been grossly negligent or acted dishonestly to the detriment of the Company; (iii) the executive has engaged in actions amounting to willful misconduct or failed to perform his duties hereunder and such failure continues after the executive is afforded a reasonable opportunity to cure such failure; or (iv) the executive violates the provisions relating to confidentiality, non-competition and non-solicitation of the Employment Agreement. Upon a termination for “cause,” the executive shall not be entitled to any severance or other benefits under the Employment Agreement but shall be entitled to receive accrued base salary.

 

If the Employment Agreement is terminated due to the executive’s death or disability, the executive shall be entitled to receive accrued base salary.

 

If the Employment Agreement is terminated by the Company without “cause”, the executive will receive a lump sum payment equal to 12 months of base salary, a lump sum cash payment equal to a pro-rated amount of his/her target annual bonus for the year immediately preceding the termination, payment of premiums for continued health benefits under the Company’s health plans for 12 months following termination, and immediate vesting of 100% of the then-unvested portion of any outstanding equity awards held by the executive, if any.

 

If the Employment Agreement is terminated due to a change in control, the executive will receive a lump sum payment equal to 12 months of base salary, a lump sum cash payment equal to a pro-rated amount of his/her target annual bonus for the year immediately preceding the termination, and immediate vesting of 100% of the then-unvested portion of any outstanding equity awards held by the executive.

 

If the Employment Agreement is terminated by the executive due to (1) a material reduction in the executive’s authority, duties and responsibilities, or (2) a material reduction in the executive’s annual salary, the executive will receive a lump sum payment equal to 12 months of base salary.

 

Retainer Agreements

 

We also maintain seven director retainer agreements with our officers and directors. The agreements have terms of 3 years. The monthly compensation for directors is $3,800, and $1,300 for independent directors. The Director Retainer Agreements contain normal and customary terms including provisions relating to indemnification and confidentiality.

 

For the three months ended October 31, 2024, we incurred management compensation expenses of $56,400. For the years ended July 31, 2024 and 2023, we incurred management compensation expenses of $232,800 and $120,000, respectively.

 

 

 

 

Stock Incentive Plan

 

Overview

 

On April 25, 2024, the Board and majority stockholder adopted the Tianci International, Inc. 2024 Equity Incentive Plan (the “2024 Plan”). The Plan provides for the grant of the following types of stock awards: (a) incentive stock options, (b) stock appreciation rights, (c) restricted stock, (d) restricted stock unit and deferred stock units and (e) performance shares. The Plan is intended to enable the Company and its affiliated companies to recruit and retain highly qualified personnel, to provide those personnel with an incentive for productivity and to provide those personnel with an opportunity to share in the growth and value of the Company. The Company reserved 7,000,000 shares of common stock issuable upon the grant of awards under the Plan. As of the date of this prospectus, we have not issued any shares of common stock to our employees, any directors, consultants or any other individuals under the Plan.

 

Plan Administration

 

The Plan will be administered by the Committee. The Committee will have full authority to grant Awards under this Plan. In particular, subject to the terms of the Plan, the Committee will have the authority: (a) to select the Persons to whom Awards may from time to time be granted hereunder; (b) to determine the type of Award to be granted to any Person hereunder; (c) to determine the number of Shares, if any, to be covered by each Award; (d) to establish the terms and conditions of each Award Agreement; (e) to adopt, alter and repeal such administrative rules, guidelines and practices governing the Plan as it, from time to time, deems advisable; 5 (f) to interpret the terms and provisions of the Plan and any Award issued under the Plan (and any Award Agreement); (g) to correct any defect, supply any omission or reconcile any inconsistency in the Plan or in any Award Agreement in the manner and to the extent it deems necessary to carry out the intent of the Plan; and (h) to otherwise supervise the administration of the Plan. All decisions made by the Committee pursuant to the provisions of the Plan will be final and binding on all persons, including the Company and Participants. No Director will be liable for any good faith determination, act or omission in connection with the Plan or any award.

 

Eligibility

 

Employees, Directors, consultants, and other individuals who provide services to the Company or its Affiliates are eligible to be granted Awards under the Plan; provided, however, that only employees of the Company, its parent or a subsidiary are eligible to be granted Incentive Stock Options.

 

Employee Pension, Profit Sharing or other Retirement Plans

 

We do not have a defined benefit, pension plan, profit sharing or other retirement plan, although we may adopt one or more of such plans in the future.

 

Clawback Policy

 

In connection with this offering, we have adopted an incentive compensation recovery policy, or a clawback policy, that is compliant with the Nasdaq Listing Rules, as required by the Dodd-Frank Wall Street Reform and Consumer Protection Act.

 

 

 

 

CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

 

The following are summaries of certain provisions of our related party agreements and are qualified in their entirety by reference to all of the provisions of such agreements. Because these descriptions are only summaries of the applicable agreements, they do not necessarily contain all of the information that you may find useful. We, therefore, urge you to review the agreements in their entirety. Copies of the forms of the agreements have been filed as exhibits to the registration statement of which this prospectus is a part.

 

For the three months ended October 31, 2024

 

Due to related parties consists of:

				Transaction		October 31,
Name		Relationship		Nature		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.

 

For the years ended July 31, 2024 and 2023

 

Due from related party consists of:

 

Due from related party represents a receivable of $54,134 from RQS Capital at July 31, 2023. The receivable, which was non-interest bearing and due on demand, was collected by the Company in December 2023.

 

Due to related parties consists of:

				Transaction		July 31,				July 31,
Name		Relationship		Nature		2024				2023
Zhigang Pei*		Former Chairman of the Board and owner of Silver Glory Group Limited		Working capital advances and operating expenses paid on behalf of the Company		$	–			$	220,909
RQS Capital		61.89% shareholder		Company cash collection due to RQS Capital			2,271				2,132
Ying Deng**		Director and Vice President, RQS Capital’s 30% owner and Roshing’s 10% owner		Working capital advances and operating expenses paid on behalf of the Company			–				53,036
TOTAL						$	2,271			$	276,077

___________________

*	$220,909 of this liability was converted to 220,909 shares of common stock on January 19, 2024.

 

**	$24,953 of this liability was forgiven in November 2023.

 

These liabilities are 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 provide for monthly compensation in amounts ranging from $1,300 per month to $3,800 per month.

 

For the three months ended October 31, 2024, the Company incurred management compensation expenses of $56,400. For the years ended July 31, 2024 and 2023, the Company incurred management compensation expenses of $232,800 and $120,000, respectively. These amounts are included in “general and administrative expenses” in the accompanying consolidated statements 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 provided 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 $1,726) to RMB 13,583 (approximately $1,903) on behalf of Roshing. The rent expenses paid by Gao and Deng were 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 years ended July 31, 2024 and 2023, the Company has accounted for this agreement by charging general and administrative expenses for $0 and $16,580, respectively, and crediting additional paid-in capital for $0 and $16,580, respectively. The office sharing agreement was terminated on May 31, 2023 when Roshing moved all of its operations to its office in Hong Kong.

 

Related Party Transactions

 

On January 27, 2023, Tianci sold 80,000 shares of Series A Preferred Stock to RQS Capital. The shares were sold for a cash payment of $24,000, which was contributed to Tianci’s capital on behalf of RQS Capital by members of its management. Shufang Gao, a member of Tianci’s Board of Directors, is the principal owner of RQS Capital.

 

As of July 31, 2023, Roshing was indebted to Zhigang Pei in the amount of $220,909 and to Ying Deng in the amount of $53,035, representing amounts they have advanced to fund Roshing’s operations. The loans are not interest-bearing and are due on demand.

 

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; Wei Fang – 64,600 shares; Fan Liu – 22,100 shares, Jimmy Weiyu Zhu – 5,200 shares; and Yee Man Yung - 22,100 shares) in satisfaction of the Company’s liability to them for unpaid compensation.

 

On April 24, 2024, the Company sold 80,000 shares of Series B Preferred Stock to RQS Capital Limited. The shares were sold for a cash payment of $80,000. 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. The holder of Series B Preferred Stock will have voting rights equal to the holder of the number of shares of common stock into which the Series B Preferred Stock is convertible. 

 

Except as described above, there have been no transactions since August 1, 2022, or any currently proposed transaction, in which Tianci, RQS United or Roshing was or are to be a participant and the amount involved exceeded or exceeds the lesser of $120,000 or one percent of the average of the total assets of Tianci at year-end for the last two completed fiscal years, and in which any related person had or will have a direct or indirect material interest.

 

Review, approval or ratification of transactions with related persons

 

We have adopted “The Review Policy for Related Party Transaction”, which has the purpose of ensuring transactions with the Company and its affiliates are consistent with the principles of fair dealing and to minimize the potential conflicts of interest and moral hazard. The policy encompasses procedures related to review, disclosure requirements, conflict resolution, and approval of penalties for violations.

 

 

 

 

DESCRIPTION OF CAPITAL STOCK

 

The following description of our securities is only a summary and is qualified in its entirety by reference to the actual terms and provisions of the capital stock contained in our Articles of Incorporation and our Bylaws.

 

General

 

We are authorized to issue common stock and preferred stock. The total number of shares of stock which we are authorized to issue is 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 per share, 20,000,000 shares of undesignated preferred stock (“Undesignated Preferred Stock”), $0.0001 par value per share. As of the date of this prospectus, 80,000 shares of Undesignated Preferred Stock have been established and designated as Series B Preferred stock. We will have 16,951,803 shares of common stock outstanding immediately after the closing of this offering.

 

Description of Common Stock

 

We are authorized to issue 100,000,000 shares of common stock at a par value of $0.0001 per share, and as of October 31, 2024 and the date of this prospectus, we had 14,781,803 shares of common stock issued and outstanding.

 

Voting Rights. Each share of our common stock entitles its holder to one vote per share on all matters to be voted or consented upon by the stockholders.

 

Dividend Rights. Subject to limitations under the Nevada Revised Statutes, holders of our common stock are entitled to receive ratably such dividends or other distributions, if any, as may be declared by our Board out of funds legally available therefor.

 

Liquidation Rights. In the event of liquidation, dissolution or winding up of our business, the holders of our common stock are entitled to share ratably in the assets available for distribution after the payment of all of our debts and other liabilities.

 

Other Matters. The holders of our common stock have no subscription, redemption or conversion privileges; in addition, such common stock does not entitle its holders to pre-emptive rights. All of the outstanding shares of our common stock are fully paid and non-assessable.

 

As of the date of this prospectus, there are no outstanding stock options.

 

Description of Preferred Stock

 

Our Certificate of Incorporation authorizes 80,000 shares of Series A Preferred Stock, $0.0001 par value per share, and 20,000,000 shares of undesignated preferred stock, $0.0001 par value per share. As of the date of this prospectus, 80,000 shares of undesignated preferred stock have been established and designated as Series B Preferred Stock.

 

The issuance of preferred stock could adversely affect, among other things, the voting power of holders of common stock and the likelihood that stockholders will receive dividend payments and payments upon our liquidation, dissolution or winding up. The issuance of preferred stock could also have the effect of delaying, deferring or preventing a change in control of us.

 

The Board of Directors shall have authority, without stockholder approval, to amend the Tianci’s Articles of Incorporation to divide the class of 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.

 

 

 

 

Series A Preferred Stock

 

On January 26, 2023, we issued 80,000 shares of 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.

 

The following is a summary of the terms of the Series A Preferred Stock, which is qualified in its entirety the Supplement to Item 3: Authorized Stock of Attachment to Certificate of Amendment of Articles of Incorporation, which was filed as Exhibit 10-a to our Current Report on Form 8-K filed with the SEC on January 26, 2023 and which is incorporated into this prospectus by reference.

 

Liquidation

 

Upon the liquidation, dissolution and winding up of the Corporation, the holder of each share of the Series A Preferred Stock shall be entitled to receive out of the net assets of the Corporation, before any amount shall be paid to the holders of any other class of stock, the sum of One Cent ($0.01) per share, after which the Holders of Series A Preferred Stock shall share in the distribution with the holders of the common stock on a pari passu basis, except that in determining the appropriate distribution of available cash among the stockholders, each share of Series A Preferred Stock shall be deemed to have been converted into the number of shares of the Corporation’s common stock into which that holder’s Series A Preferred Stock could be converted on the record date for the distribution.

 

Voting

 

Each share of Series A Preferred Stock shall entitle the holder thereof to cast on all matters submitted to a vote of the stockholders of the Corporation that number of votes which equals the number of shares of Common Stock into which such holder's shares of Series A Preferred Stock are convertible on the record date for the stockholder action.

 

Conversion

 

Any shares of Series A Preferred Stock may, at any time, at the option of the holder, be converted into fully paid and nonassessable shares of common stock (a “Conversion”). The number of shares of common stock to which a holder of Series A Preferred Stock shall be entitled upon a Conversion shall be the product obtained by multiplying the number of shares of Series A Preferred Stock being converted by one hundred (100).

 

Consolidation, Merger, etc. In case the Corporation shall enter into any consolidation, merger, reorganization, or other transaction in which the shares of Common Stock are exchanged for or changed into other stock or securities, cash and/or any other property, then in any such case the Conversion Rights of Series A Preferred Stock shall at the same time be modified such that upon Conversion of a share of Series A Preferred Stock the holder shall receive the product of the Adjustment Number times the aggregate amount of stock, securities, cash and/or any other property (payable in kind), as the case may be, into which or for which each share of common stock is changed or exchanged.

 

Adjustment for Reclassification, Exchange and Substitution. At any time or times the Common Stock issuable upon the conversion of the Series A Preferred Stock is changed into the same or a different number of shares of any class or classes of the Corporation’s stock, whether by recapitalization, combination, consolidation, reverse stock split, reclassification or otherwise, the Adjustment Number shall be changed proportionately to the change in the number of shares of common stock resulting from the recapitalization, reclassification or other change.

 

Fractional Shares. The Corporation shall not, nor shall it cause its transfer agent to, issue any fraction of a share of common stock upon any conversion. If the issuance would result in the issuance of a fraction of a share of common stock, the Corporation shall round, or cause the Transfer Agent to round, such fraction of a share of common stock up to the nearest whole share.

 

 

 

 

Dividend Payable in Shares of Stock

 

In the event the Corporation shall at any time declare or pay any dividend on common stock payable in shares of common stock, then the Adjustment Number in effect immediately prior to such event shall be adjusted by multiplying such Adjustment Number by a fraction, the numerator of which is the number of shares of common stock outstanding immediately after such event and the denominator of which is the number of shares of common stock that were outstanding immediately prior to such event

 

As of the date of this prospectus, all shares of Series A Preferred Stock have been converted into 8,000,000 shares of common stock, and no shares of Series A Preferred Stock are outstanding.

 

Series B Preferred Stock

 

On April 24, 2024, we issued 80,000 shares of Series B Preferred Stock, each of which is convertible at any time, by the holder of the share into 100 shares of common stock (an aggregate of 8,000,000 shares of common stock), subject to equitable adjustment of the conversion rate. The holder of Series B Preferred Stock will have 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 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.

 

The following is a summary of the terms of the Series B Preferred Stock, which is qualified in its entirety by Exhibit A to Certificate of Designation Establishing Series B Preferred Stock, which was filed as Exhibit 10-a to our Current Report on Form 8-K filed with the SEC on April 24, 2024 and which is incorporated into this prospectus by reference.

 

Liquidation

 

Upon the liquidation, dissolution and winding up of the Corporation, the holder of each share of the Series B Preferred Stock shall be entitled to receive out of the net assets of the Corporation, before any amount shall be paid to the holders of any other class of stock, the sum of One Cent ($0.01) per share, after which the Holders of Series B Preferred Stock shall share in the distribution with the holders of the common stock on a pari passu basis, except that in determining the appropriate distribution of available cash among the stockholders, each share of Series B Preferred Stock shall be deemed to have been converted into the number of shares of the Corporation’s common stock into which that holder’s Series B Preferred Stock could be converted on the record date for the distribution.

 

Voting

 

Each share of Series B Preferred Stock shall entitle the holder thereof to cast on all matters submitted to a vote of the stockholders of the Corporation that number of votes which equals the number of shares of Common Stock into which such holder's shares of Series B Preferred Stock are convertible on the record date for the stockholder action.

 

Conversion

 

Any shares of Series B Preferred Stock may, at any time, at the option of the holder, be converted into fully paid and nonassessable shares of common stock (a “Conversion”). The number of shares of common stock to which a holder of Series B Preferred Stock shall be entitled upon a Conversion shall be the product obtained by multiplying the number of shares of Series B Preferred Stock being converted by one hundred (100).

 

Consolidation, Merger, etc. In case the Corporation shall enter into any consolidation, merger, reorganization, or other transaction in which the shares of Common Stock are exchanged for or changed into other stock or securities, cash and/or any other property, then in any such case the Conversion Rights of Series B Preferred Stock shall at the same time be modified such that upon Conversion of a share of Series B Preferred Stock the holder shall receive the product of the Adjustment Number times the aggregate amount of stock, securities, cash and/or any other property (payable in kind), as the case may be, into which or for which each share of common stock is changed or exchanged.

 

 

 

 

Adjustment for Reclassification, Exchange and Substitution. At any time or times the Common Stock issuable upon the conversion of the Series A Preferred Stock is changed into the same or a different number of shares of any class or classes of the Corporation’s stock, whether by recapitalization, combination, consolidation, reverse stock split, reclassification or otherwise, the Adjustment Number shall be changed proportionately to the change in the number of shares of common stock resulting from the recapitalization, reclassification or other change.

 

Fractional Shares. The Corporation shall not, nor shall it cause its transfer agent to, issue any fraction of a share of common stock upon any conversion. If the issuance would result in the issuance of a fraction of a share of common stock, the Corporation shall round, or cause the Transfer Agent to round, such fraction of a share of common stock up to the nearest whole share.

 

Dividend Payable in Shares of Stock

 

In the event the Corporation shall at any time declare or pay any dividend on common stock payable in shares of common stock, then the Adjustment Number in effect immediately prior to such event shall be adjusted by multiplying such Adjustment Number by a fraction, the numerator of which is the number of shares of common stock outstanding immediately after such event and the denominator of which is the number of shares of common stock that were outstanding immediately prior to such event.

 

As of the date of this prospectus, 80,000 shares of Series B Preferred Stock are outstanding and are convertible into an aggregate of 8,000,000 shares of common stock, and none have been converted into common stock.

 

Undesignated Preferred Stock

 

The Board of Directors shall have authority, without stockholder approval and by resolution of the Board of Directors, to amend the Corporation's Articles of Incorporation to divide the class of Preferred Stock into series, to designate each such series by a distinguishing letter, number or title so as to distinguish the shares thereof from the shares of all other series and classes, and to fix and determine the relative rights and preferences of the shares of each series so established, including (a) voting power, (b) the rate of dividend, (c) 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, (d) any sinking fund provision for the redemption or purchase of the shares, and (e) 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.

 

Warrants

 

As of the date of this prospectus, there are no outstanding warrants to purchase any shares of our common stock or preferred stock.

 

 

 

 

 

Nevada Business Combination Statutes

 

The “business combination” provisions of Sections 78.411 to 78.444, inclusive, of the Nevada Revised Statutes, (the “NRS”), generally prohibit a Nevada corporation with at least 200 stockholders of record from engaging in various “combination” transactions with any interested stockholder for a period of two years after the date of the transaction in which the person became an interested stockholder, unless the transaction is approved by the Board prior to the date the interested stockholder obtained such status or the combination is approved by the Board and thereafter is approved at a meeting of the stockholders by the affirmative vote of stockholders representing at least 60% of the outstanding voting power held by disinterested stockholders, and extends beyond the expiration of the two-year period, unless:

 

	·	the combination was approved by the Board prior to the person becoming an interested stockholder or the transaction by which the person first became an interested stockholder was approved by the Board before the person became an interested stockholder or the combination is later approved by a majority of the voting power held by disinterested stockholders; or
	·	if the consideration to be paid by the interested stockholder is at least equal to the highest of: (a) the highest price per share paid by the interested stockholder within the two years immediately preceding the date of the announcement of the combination or in the transaction in which it became an interested stockholder, whichever is higher, (b) the market value per share of common stock on the date of announcement of the combination and the date the interested stockholder acquired the shares, whichever is higher, or (c) for holders of preferred stock, the highest liquidation value of the preferred stock, if it is higher.

 

A “combination” is generally defined to include mergers or consolidations or any sale, lease exchange, mortgage, pledge, transfer, or other disposition, in one transaction or a series of transactions, with an “interested stockholder” having: (a) an aggregate market value equal to 5% or more of the aggregate market value of the assets of the corporation, (b) an aggregate market value equal to 5% or more of the aggregate market value of all outstanding voting shares of the corporation, (c) more than 10% of the earning power or net income of the corporation, and (d) certain other transactions with an interested stockholder or an affiliate or associate of an interested stockholder.

  

In general, an “interested stockholder” is a person who, together with affiliates and associates, beneficially owns (or within two years, did own) 10% or more of the voting power of the outstanding voting shares of a corporation. The statute could prohibit or delay mergers or other takeover or change in control attempts and, accordingly, may discourage attempts to acquire us even though such a transaction may offer our stockholders the opportunity to sell their stock at a price above the prevailing market price.

 

Anti-Takeover Provisions

 

Certain provisions of Nevada law and our bylaws summarized below, may have the effect of delaying, deferring or discouraging another person from acquiring control of us.

 

It is possible that these provisions could make it more difficult to accomplish or could deter transactions that stockholders may otherwise consider to be in their best interest or in our best interests, including transactions that might result in a premium over the market price for our shares.

 

These provisions are expected to discourage coercive takeover practices and inadequate takeover bids. These provisions are also designed to encourage persons seeking to acquire control of us to first negotiate with our board of directors. We believe that the benefits of increased protection of our potential ability to negotiate with the proponent of an unfriendly or unsolicited proposal to acquire or restructure us outweigh the disadvantages of discouraging these proposals because negotiation of these proposals could result in an improvement of their terms.

 

 

 

 

Control Share Acquisitions

 

The “control share” provisions of Sections 78.378 to 78.3793, inclusive, of the NRS apply to “issuing corporations” that are Nevada corporations with at least 200 stockholders, including at least 100 stockholders of record who are Nevada residents, and that conduct business directly or indirectly in Nevada. The control share statute prohibits an acquirer, under certain circumstances, from voting its shares of a target corporation’s stock after crossing certain ownership threshold percentages, unless the acquirer obtains approval of the target corporation’s disinterested stockholders. The statute specifies three thresholds: one-fifth or more but less than one-third, one-third but less than a majority, and a majority or more, of the outstanding voting power. Generally, once an acquirer crosses one of the above thresholds, those shares in an offer or acquisition and acquired within 90 days thereof become “control shares” and such control shares are deprived of the right to vote until disinterested stockholders restore the right. These provisions also provide that if control shares are accorded full voting rights and the acquiring person has acquired a majority or more of all voting power, all other stockholders who do not vote in favor of authorizing voting rights to the control shares are entitled to demand payment for the fair value of their shares in accordance with statutory procedures established for dissenters’ rights.

 

A corporation may elect to not be governed by, or “opt out” of, the control share provisions by making an election in its articles of incorporation or bylaws, provided that the opt-out election must be in place on the 10th day following the date an acquiring person has acquired a controlling interest, that is, crossing any of the three thresholds described above. We have not opted out of the control share statutes, and will be subject to these statutes if we are an “issuing corporation” as defined in such statutes.

 

The effect of the Nevada control share statutes is that the acquiring person, and those acting in association with the acquiring person, will obtain only such voting rights in the control shares as are conferred by a resolution of the stockholders at an annual or special meeting. The Nevada control share law, if applicable, could have the effect of discouraging takeovers of our company.

 

Listing

 

We have applied to list our common stock on The Nasdaq Capital Market under the symbol “CIIT”. The closing of the Underwritten Offering is conditioned upon Nasdaq’s final approval of our listing application, and there is no guarantee or assurance that our common stock will be approved for listing on Nasdaq. If our application is not approved, the Underwritten Offering will not be completed.

 

Transfer Agent and Register

 

Our transfer agent is Securities Transfer Corporation, with offices located at 2901 Dallas Parkway #380 Plano, TX 75093. The phone number and facsimile number are 1-(469) 633-0101 and 1-(469)-633-0088, respectively. Additional information about Securities Transfer Corporation Transfer can be found on its website at www. stctransfer.com.

 

 

 

 

 

PRINCIPAL STOCKHOLDERS

 

The following table sets forth information with respect to the securities holdings of (a) Tianci’s executive officers and directors, and (b) all persons which, pursuant to filings with the SEC and our stock transfer records, we have reason to believe they are deemed the beneficial owner of more than five percent (5%) of any class of Tianci’s voting stock as of the date of the prospectus. The securities “beneficially owned” by an individual are determined in accordance with the definition of “beneficial ownership” set forth in the regulations promulgated under Section 13(d) of the Exchange Act and the rules and regulations thereunder and, accordingly, may include securities owned by or for, among others, the spouse and/or minor children of an individual and any other relative who resides in the same home as such individual, as well as other securities as to which the individual has or shares voting or investment power or which each person has the right to acquire within 60 days through the exercise of options or otherwise. Under the SEC rules, more than one person may be deemed to be a beneficial owner of the same securities, and a person may be deemed to be a beneficial owner of securities as to which he or she may not have any pecuniary interest.

 

The number and percentage of beneficial ownership of each listed person prior to the offering is based on 14,781,803 shares of common stock outstanding as of October 31, 2024 and as of the date of this prospectus. The voting power of each stockholder with respect to their securities is calculated based on 14,781,803 shares of common stock outstanding as October 31, 2024 and as of the date of the prospectus, and 80,000 shares of Series B Preferred Stock that have same voting rights equal to the holder of 100 shares of common stock per each outstanding share of Series B Preferred Stock. The number and percentage of common stock beneficially owned after the offering are 16,433,271 shares of common stock outstanding upon the completion of the Underwritten Offering, assuming the lead underwriter does not exercise its over-allotment option. To calculate a stockholder’s percentage of beneficial ownership of common stock, we must include in the numerator and denominator those shares of common stock underlying convertible securities that such stockholder is considered to beneficially own. Shares of common stock underlying convertible securities held by other stockholders, however, are disregarded in this calculation. Therefore, the denominator used in calculating beneficial ownership of each of the stockholders may be different.

 

	Shares Beneficially Owned Prior to the Underwritten Offering			Shares Beneficially Owned After the Underwritten offering			Voting Power
Name of Beneficial Owner(1)	Number	Percentage		Number	Percentage		Prior to the Underwritten Offering	After the Underwritten Offering
Executive Officers and Directors
Shufang Gao	14,150,362(2)	62.11%		14,150,362(2)	56.71%		62.11%	56.71%
Wei Fang	64,600	*		64,600
Ying Deng	50,000	*		50,000
Yee Man Yung	22,100	*		22,100
Fan Liu	22,100	*		22,100
Juan Chang	-	-		-
Guilin Zhang	-	-		-
All executive officers and directors as a group (7 persons)	14,309,162	62.81%		14,309,162	57.35%		62.81%	57.35%
5% or Greater Stockholders
RQS Capital Limited	14,100,362(3)	61.89%		14,100,362(3)	56.51%		61.89%	56.51%
Zhigang Pei	2,124,109(4)	14.37%		2,124,109(4)	12.93%		9.32%	8.51%
Silver Glory Group Limited	1,793,000(5)	12.13%		1,793,000(5)	10.91%		7.87%	7.19%

___________________

* Less than 1%

 

 

 

 

Unless otherwise specified, the address of each of the persons set forth below is in care of Tianci, Unit B,10/F., Ritz Plaza, No.122 Austin Road, Tsim Sha Tsui, Kowloon, Hong Kong 999077.

 

	(1)	Beneficial ownership is determined in accordance with the rules of the SEC and generally includes voting or investment power with respect to securities, which includes shares of common stock held as of the date of the prospectus and 100% of the shares of common stock issuable upon conversion of the Series B Preferred Stock. Pursuant to the Exhibit A to Certificate of Designation Establishing Series B Preferred Stock, any shares of Series B Preferred Stock may, at any time, at the option of the holder, be converted into fully paid and nonassessable shares of common stock.
	(2)	Shufang Gao’s ownership as of the date of the prospectus consists of (1) 6,100,362 shares of common stock held by RQS Capital Limited, of which Shufang Gao is deemed to have voting and dispositive power; (2) 80,000 shares of Series B Preferred Stock held by RQS Capital Limited, of which Shufang Gao is deemed to have voting and dispositive power, which are convertible into an aggregate of 8,000,000 shares of common stock at any time at the option of RQS Capital Limited; and (3) 50,000 shares of common stock issued in a share exchange on March 3, 2023
	(3)	RQS Capital Limited’s ownership as of the date of the prospectus consists of (1) 6,100,362 shares of common stock; and (2) 80,000 shares of Series B Preferred Stock held by RQS Capital Limited, which are convertible into an aggregate of 8,000,000 shares of common stock at any time at the option of RQS Capital Limited. Shufang Gao is 60% owner of RQS Capital and deemed to have voting and dispositive power over the shares of the issuer held by RQS Capital. The business address of this entity is Unit B,10/F., Ritz Plaza, No.122 Austin Road, Tsim Sha Tsui, Kowloon, Hong Kong 999077.
	(4)	Zhigang Pei’s ownership as of the date of the prospectus consists of (1) 1,793,000 shares of common stock held by Silver Glory Group Limited (“Silver Glory”), of which Zhigang Pei is the beneficial owner; and (2) 331,109 shares of common stock issued to Zhigang Pei as a debt-for-equity conversion.
	(5)	Silver Glory’s ownership as of the date of the prospectus is 1,793,000 shares of common stock and Zhigang Pei deemed to have voting and dispositive power over the shares of Silver Glory. The business address of Silver Glory is 20 Holbeche Road, Arndell Park NSW 2148.

 

We are not aware of any arrangement that may, at a subsequent date, result in a change of control of the Company.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES TO NON-U.S. HOLDERS

 

The following discussion is a summary of the material U.S. federal income tax consequences to Non-U.S. Holders (as defined below) of the purchase, ownership and disposition of our common stock, but does not purport to be a complete analysis of all potential tax effects. The effects of other U.S. federal tax laws, such as estate and gift tax laws, and any applicable state, local or non-U.S. tax laws are not discussed. This discussion is based on the Code, Treasury Regulations promulgated thereunder, judicial decisions, and published rulings and administrative pronouncements of the U.S. Internal Revenue Service (the “IRS”), in each case in effect as of the date hereof. These authorities may change or be subject to differing interpretations. Any such change or differing interpretation may be applied retroactively in a manner that could adversely affect a Non-U.S. Holder. We have not sought and will not seek any rulings from the IRS regarding the matters discussed below. There can be no assurance the IRS or a court will not take a contrary position to that discussed below regarding the tax consequences of the purchase, ownership, and disposition of our common stock.

 

This discussion is limited to Non-U.S. Holders that hold our common stock as a “capital asset” within the meaning of Section 1221 of the Code (generally, property held for investment). This discussion does not address all U.S. federal income tax consequences relevant to a Non-U.S. Holder’s particular circumstances, including the impact of the Medicare contribution tax on net investment income or the alternative minimum tax. In addition, it does not address consequences relevant to Non-U.S. Holders subject to special rules, including, without limitation:

 

	·	U.S. expatriates and former citizens or long-term residents of the United States;
	·	persons holding our common stock as part of a hedge, straddle, or other risk reduction strategy or as part of a conversion transaction or other integrated investment;
	·	banks, insurance companies, and other financial institutions;
	·	brokers, dealers, or traders in securities;
	·	“controlled foreign corporations,” “passive foreign investment companies,” and corporations that accumulate earnings to avoid U.S. federal income tax;
	·	partnerships or other entities or arrangements treated as partnerships for U.S. federal income tax purposes (and investors therein);
	·	tax-exempt organizations or governmental organizations;
	·	persons deemed to sell our common stock under the constructive sale provisions of the Code;
	·	persons who hold or receive our common stock pursuant to the exercise of any employee stock option or otherwise as compensation;
	·	tax-qualified retirement plans;
	·	“qualified foreign pension funds” as defined in Section 897(l)(2) of the Code and entities all of the interests of which are held by qualified foreign pension funds; and
	·	persons subject to special tax accounting rules as a result of any item of gross income with respect to our common stock being taken into account in an applicable financial statement.

 

 

 

 

If an entity treated as a partnership for U.S. federal income tax purposes holds our common stock, the tax treatment of a partner in the partnership will depend on the status of the partner, the activities of the partnership and certain determinations made at the partner level. Accordingly, partnerships holding our common stock and the partners in such partnerships should consult their tax advisors regarding the U.S. federal income tax consequences to them.

 

THIS DISCUSSION IS NOT TAX ADVICE. INVESTORS SHOULD CONSULT THEIR TAX ADVISORS WITH RESPECT TO THE APPLICATION OF THE U.S. FEDERAL INCOME TAX LAWS TO THEIR PARTICULAR SITUATIONS AS WELL AS ANY TAX CONSEQUENCES OF THE PURCHASE, OWNERSHIP, AND DISPOSITION OF OUR COMMON STOCK ARISING UNDER THE U.S. FEDERAL ESTATE OR GIFT TAX LAWS OR UNDER THE LAWS OF ANY STATE, LOCAL, OR NON-U.S. TAXING JURISDICTION OR UNDER ANY APPLICABLE INCOME TAX TREATY.

 

Definition of Non-U.S. Holder

 

For purposes of this discussion, a “Non-U.S. Holder” is any beneficial owner of our common stock that is neither a “U.S. person” nor an entity treated as a partnership for U.S. federal income tax purposes. A U.S. person is any person that, for U.S. federal income tax purposes, is or is treated as any of the following:

 

	·	an individual who is a citizen or resident of the United States;
	·	a corporation created or organized under the laws of the United States, any state thereof, or the District of Columbia;
	·	an estate, the income of which is subject to U.S. federal income tax regardless of its source; or
	·	a trust that (a) is subject to the primary supervision of a U.S. court and all substantial decisions of which are subject to the control of one or more “United States persons” (within the meaning of Section 7701(a)(30) of the Code), or (b) has a valid election in effect to be treated as a United States person for U.S. federal income tax purposes.

 

Distributions

 

As described in the section titled “Dividend Policy,” we do not anticipate declaring or paying any cash dividends in the foreseeable future. However, if we do make distributions of cash or property on our common stock, such distributions will constitute dividends for U.S. federal income tax purposes to the extent paid from our current or accumulated earnings and profits, as determined under U.S. federal income tax principles. Amounts not treated as dividends for U.S. federal income tax purposes will constitute a return of capital and first be applied against and reduce a Non-U.S. Holder’s adjusted tax basis in its common stock, but not below zero. Any excess will be treated as capital gain and will be treated as described below under the subsection titled “Sale or Other Taxable Disposition.”

 

Subject to the discussion below on effectively connected income, dividends paid to a Non-U.S. Holder will be subject to U.S. federal withholding tax at a rate of 30% of the gross amount of the dividends (or such lower rate specified by an applicable income tax treaty, provided the Non-U.S. Holder furnishes a valid IRS Form W-8BEN or W-8BEN-E (or other applicable documentation) certifying qualification for the lower treaty rate). A Non-U.S. Holder that does not timely furnish the required documentation, but that qualifies for a reduced treaty rate, may obtain a refund of any excess amounts withheld by timely filing an appropriate claim for refund with the IRS. Non-U.S. Holders should consult their tax advisors regarding their entitlement to benefits under any applicable tax treaties.

 

 

 

 

If dividends paid to a Non-U.S. Holder are effectively connected with the Non-U.S. Holder’s conduct of a trade or business within the United States (and, if required by an applicable income tax treaty, the Non-U.S. Holder maintains a permanent establishment in the United States to which such dividends are attributable), the Non-U.S. Holder will be exempt from the U.S. federal withholding tax described above. To claim the exemption, the Non-U.S. Holder must furnish to the applicable withholding agent a valid IRS Form W-8ECI, certifying that the dividends are effectively connected with the Non-U.S. Holder’s conduct of a trade or business within the United States.

 

Any such effectively connected dividends will be subject to U.S. federal income tax on a net income basis at the regular rates. A Non-U.S. Holder that is a corporation also may be subject to a branch profits tax at a rate of 30% (or such lower rate specified by an applicable income tax treaty) on such effectively connected dividends, as adjusted for certain items. Non-U.S. Holders should consult their tax advisors regarding any applicable tax treaties that may provide for different rules.

 

Sale or Other Taxable Disposition

 

Subject to the discussion below regarding backup withholding, a Non-U.S. Holder will not be subject to U.S. federal income tax on any gain realized upon the sale or other taxable disposition of our common stock unless:

 

	·	the gain is effectively connected with the Non-U.S. Holder’s conduct of a trade or business within the United States (and, if required by an applicable income tax treaty, the Non-U.S. Holder maintains a permanent establishment in the United States to which such gain is attributable);
	·	the Non-U.S. Holder is a nonresident alien individual present in the United States for 183 days or more during the taxable year of the disposition and certain other requirements are met; or
	·	our common stock constitutes a U.S. real property interest (“USRPI”), by reason of our status as a U.S. real property holding corporation (“USRPHC”), for U.S. federal income tax purposes.

 

Gain described in the first bullet point above generally will be subject to U.S. federal income tax on a net income basis at the regular rates. A Non-U.S. Holder that is a corporation also may be subject to a branch profits tax at a rate of 30% (or such lower rate specified by an applicable income tax treaty) on such effectively connected gain, as adjusted for certain items.

 

A Non-U.S. Holder described in the second bullet point above will be subject to U.S. federal income tax at a rate of 30% (or such lower rate specified by an applicable income tax treaty) on any gain realized upon the sale or other taxable disposition, which may be offset by certain U.S. source capital losses of the Non-U.S. Holder (even though the individual is not considered a resident of the United States), provided the Non-U.S. Holder has timely filed U.S. federal income tax returns with respect to such losses.

 

With respect to the third bullet point above, we believe we currently are not, and do not anticipate becoming, a USRPHC. Because the determination of whether we are a USRPHC depends, however, on the fair market value of our USRPIs relative to the fair market value of our non-U.S. real property interests and our other business assets, there can be no assurance we currently are not a USRPHC or will not become one in the future. Even if we are or were to become a USRPHC, gain arising from the sale or other taxable disposition of our common stock by a Non-U.S. Holder will not be subject to U.S. federal income tax if our common stock is “regularly traded,” as defined by applicable Treasury Regulations, on an established securities market, and such Non-U.S. Holder owned, actually and constructively, 5% or less of our common stock throughout the shorter of the five-year period ending on the date of the sale or other taxable disposition or the Non-U.S. Holder’s holding period.

 

Non-U.S. Holders should consult their tax advisors regarding any applicable tax treaties that may provide for different rules.

 

 

 

 

Information Reporting and Backup Withholding

 

Payments of dividends on our common stock will not be subject to backup withholding, provided the Non-U.S. Holder certifies its non-U.S. status, such as by furnishing a valid IRS Form W-8BEN, W-8BEN-E, or W-8ECI, or otherwise establishes an exemption. However, information returns are required to be filed with the IRS in connection with any distributions on our common stock paid to the Non-U.S. Holder, regardless of whether any tax was actually withheld. In addition, proceeds of the sale or other taxable disposition of our common stock within the United States or conducted through certain U.S.-related brokers generally will not be subject to backup withholding or information reporting if the applicable withholding agent receives the certification described above or the Non-U.S. Holder otherwise establishes an exemption. Proceeds of a disposition of our common stock conducted through a non-U.S. office of a non-U.S. broker that does not have certain enumerated relationships with the United States generally will not be subject to backup withholding or information reporting.

 

Copies of information returns that are filed with the IRS may also be made available under the provisions of an applicable treaty or agreement to the tax authorities of the country in which the Non-U.S. Holder resides or is established.

 

Backup withholding is not an additional tax. Any amounts withheld under the backup withholding rules may be allowed as a refund or a credit against a Non-U.S. Holder’s U.S. federal income tax liability, provided the required information is timely furnished to the IRS.

 

Additional Withholding Tax on Payments Made to Foreign Accounts

 

Withholding taxes may be imposed under Sections 1471 to 1474 of the Code (such Sections commonly referred to as the Foreign Account Tax Compliance Act (“FATCA”)) on certain types of payments made to non-U.S. financial institutions and certain other non-U.S. entities. Specifically, a 30% withholding tax may be imposed on dividends on, or (subject to the proposed Treasury Regulations discussed below) gross proceeds from the sale or other disposition of, our common stock paid to a “foreign financial institution” or a “non-financial foreign entity” (each as defined in the Code), unless (i) the foreign financial institution undertakes certain diligence and reporting obligations, (ii) the non-financial foreign entity either certifies it does not have any “substantial United States owners” (as defined in the Code) or furnishes identifying information regarding each substantial United States owner, or (iii) the foreign financial institution or non-financial foreign entity otherwise qualifies for an exemption from these rules. If the payee is a foreign financial institution and is subject to the diligence and reporting requirements in (i) above, it must enter into an agreement with the U.S. Department of the Treasury requiring, among other things, that it undertake to identify accounts held by certain “specified United States persons” or “United States owned foreign entities” (each as defined in the Code), annually report certain information about such accounts, and withhold 30% on certain payments to non-compliant foreign financial institutions and certain other account holders. Foreign financial institutions located in jurisdictions that have an intergovernmental agreement with the United States governing FATCA may be subject to different rules.

 

Under the applicable Treasury Regulations and administrative guidance, withholding under FATCA generally applies to payments of dividends on our common stock. While withholding under FATCA would have applied also to payments of gross proceeds from the sale or other disposition of stock on or after January 1, 2019, proposed Treasury Regulations eliminate FATCA withholding on payments of gross proceeds entirely. Taxpayers generally may rely on these proposed Treasury Regulations until final Treasury Regulations are issued.

 

Prospective investors should consult their tax advisors regarding the potential application of withholding under FATCA to their investment in our common stock.

 

 

 

 

SHARES ELIGIBLE FOR FUTURE SALE

 

Prior to this Underwritten Offering, only a limited public market for our common stock existed on the OTC Pink Market since February 9, 2022. We cannot predict the effect, if any, that market sales of shares of our common stock or the availability of shares of our common stock for sale will have on the market price of our common stock prevailing from time to time. Sales of substantial amounts of our common stock in the public market after this Underwritten Offering could adversely affect market prices prevailing from time to time and could impair our ability to raise capital through the sale of our equity securities.

 

Upon the closing of this Underwritten Offering, we will have 16,951,803 shares of our common stock outstanding pursuant to this Underwritten Offering (assuming no exercise of the lead underwriter’s option to purchase additional shares of common stock).

 

All previously issued shares of common stock that were not offered and sold as part of this Underwritten Offering, are or will be upon issuance, “restricted securities,” as that term is defined in Rule 144 under the Securities Act. These restricted securities are eligible for public sale only if such public resale is registered under the Securities Act or if the resale qualifies for an exemption from registration under Rule 144 under the Securities Act, which is summarized below.

 

In general, a person who has beneficially owned restricted shares of our common stock for at least six months in the event we have been a reporting company under the Exchange Act for at least ninety (90) days before the sale, would be entitled to sell such securities, provided that such person is not deemed to be an affiliate of ours at the time of sale or to have been an affiliate of ours at any time during the ninety (90) days preceding the sale. A person who is an affiliate of ours at such time would be subject to additional restrictions, by which such person would be entitled to sell within any three-month period only a number of shares that does not exceed the greater of the following:

 

	·	1% of the number of shares of our common stock then outstanding; or
	·	1% of the average weekly trading volume of our common stock during the four calendar weeks preceding the filing by such person of a notice on Form 144 with respect to the sale;

 

provided that, in each case, we are subject to the periodic reporting requirements of the Exchange Act for at least 90 days before the sale. Rule 144 trades must also comply with the manner of sale, notice and other provisions of Rule 144, to the extent applicable.

 

Historically, the SEC has taken the position that Rule 144 under the Securities Act is not available for the resale of securities initially issued by companies that are, or previously were, blank check companies to their promoters or affiliates despite technical compliance with the requirements of Rule 144. The SEC has codified and expanded this position in its amendments effective on February 15, 2008, which applies to securities acquired both before and after that date by prohibiting the use of Rule 144 for the resale of securities issued by shell companies (other than business transaction related shell companies) or issuers that have been at any time previously a shell company. The SEC has provided an important exception to this prohibition, however, if the following conditions are met:

 

	·	the issuer of the securities that was formerly a shell company has ceased to be a shell company;
	·	the issuer of the securities is subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act;

 

	·	the issuer of the securities has filed all Exchange Act reports and material required to be filed, as applicable, during the preceding 12 months (or such shorter period that the issuer was required to file such reports and materials), other than Form 8-K reports; and
	·	at least one year has elapsed from the time that the issuer filed current Form 10 type information with the SEC reflecting its status as an entity that is not a shell company.

 

 

 

 

In addition, for proposed sales under Rule 144(i), there must be adequate current publicly available information about the issuing company before the sale can be made. For reporting companies, this generally means that the companies have complied with the periodic reporting requirements of the Exchange Act. As such, due to the fact that we were a shell company until the effective time of the reverse merger, holders of “restricted securities” within the meaning of Rule 144 will be subject to the above conditions.

 

Lock-up Agreements

 

We, our directors, officers and certain stockholders have agreed, subject to limited exceptions, not to offer, pledge, announce the intention to sell, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase or otherwise dispose of, directly or indirectly, or enter into any swap or other agreement that transfers, in whole or in part, any of the economic consequences of ownership of our common stock or such other securities for a period of one hundred eighty (180) days after the date of this prospectus, without the prior written consent of Benjamin Securities, Inc.

 

Registration Rights

 

As of the date of this prospectus, we do not have registration rights arrangements with the holders of our common stock or their transferees, but we may enter into registration rights agreements with certain holders of our common stock or their transferees in the future, under which they will be entitled to request that we register their common stock for resale under the Securities Act upon completion of the Underwritten Offering and following the expiration of the lock-up agreements described above.

 

UNDERWRITING

 

Under the terms and subject to the conditions of an underwriting agreement dated the date of this prospectus, the underwriter named below, Benjamin Securities, Inc., is acting as an exclusive lead and managing underwriter and sole book-running manager, has agreed to purchase, and we have agreed to sell to them, the number of shares of our common stock at the public offering price, less the underwriting discounts, as set forth on the cover page of this prospectus and as indicated below:

 

Underwriter			Number of Shares
Benjamin Securities, Inc.
Total

 

The underwriter is offering the shares subject to their acceptance of the shares from us and subject to prior sale. The underwriting agreement provides that the obligations of the underwriter to pay for and accept delivery of the common stock offered by this prospectus are subject to the approval of certain legal matters by their counsel and to other conditions. The underwriter is obligated to take and pay for all of the common stock offered by this prospectus if any such shares are taken. However, the underwriter is not required to take or pay for the shares covered by the underwriter’s option to purchase additional shares described below.

 

We have granted to the underwriter an option, exercisable for 45 days from the date of this prospectus, to purchase up to additional shares of common stock, or 15% of the total shares of the common stock to be offered by us pursuant to the Underwritten Offering, at the public offering price listed on the cover page of this prospectus, less underwriting discounts. The underwriter may exercise this option solely for the purpose of covering over-allotments, if any, made in connection with the offering contemplated by this prospectus. To the extent the option is exercised, the underwriter will become obligated, subject to certain conditions, to purchase about the same percentage of the additional common stock as the number listed next to the underwriter’s name in the preceding table bears to the total number of common stock listed next to the names of the underwriter in the preceding table.

 

 

 

 

The underwriter will offer the shares to the public at the public offering price set forth on the cover of this prospectus and to selected dealers at the public offering price less a selling concession not in excess of $[●] per share. After this Underwritten Offering, the public offering price, concession and reallowance to dealers may be reduced by Benjamin Securities, Inc. No change in those terms will change the amount of proceeds to be received by us as set forth on the cover of this prospectus. The securities are offered by the underwriter as stated herein, subject to receipt and acceptance by them and subject to their right to reject any order in whole or in part.

 

Discounts, Commissions and Expenses

 

The following table shows the per share and total public offering price, underwriting discounts and commissions, and proceeds before expenses to us. These amounts are shown assuming both no exercise and full exercise of the underwriter’s option to purchase up to an additional 325,500 shares of common stock.

 

Per Share

Total Without Exercise of Over- allotment Option

Total With Full Exercise of Over- allotment Option

Public offering price

$

–

$

–

$

–

Underwriting discounts and commissions to be paid by us (7.0%)

$

–

$

–

$

–

Proceeds, before expenses, to us

$

–

$

–

$

–

 

We have also agreed to pay to the underwriter a non-accountable expense allowance equal to 1.0% of the gross proceeds of the Underwritten Offering.

 

In addition, we will also reimburse the underwriter for its out-of-pocket accountable expenses up to a maximum of $150,000, including, but not limited to, (A) fees of legal counsel; (B) background check fee; and (C) necessary travel expenses. We have paid a total of $60,000 as an advance to be applied towards reasonable out-of-pocket accountable expenses. Any advances will be returned to us to the extent the underwriter’s out-of-pocket accountable expenses are not actually incurred or are less than the advances paid in accordance with FINRA Rule 5110(g)(4).

 

We will also pay expenses relating to the offering, including the following: (i) all expenses incidental to the issuance and delivery of the common stock offered (including all printing and engraving costs, if any), (ii) all fees and expenses of the clearing firm, registrar and transfer agent, (iii) all necessary issue, transfer and other stamp taxes in connection with the offering, (iv) all fees and expenses of the Company’s counsel, independent public or certified public accountants and other advisors, (v) all costs and expenses incurred in connection with the preparation, printing, filing, shipping and distribution of the registration statement (including financial statements, exhibits, schedules, consents and certificates of experts), and (vi) all filing fees, attorneys’ fees and expenses incurred by the Company in connection with qualifying or registering (or obtaining exemptions from the qualification or registration of) all or any part of the common stock for offer and sale under the state securities or blue sky laws.

 

We estimate that the total expenses of the offering payable by us, excluding the underwriting discounts and commissions, non-accountable expense allowance and expenses, will be approximately $935,130. The company has already paid a portion of those expenses. As of October 31, 2024, the company’s estimated incremental offering expense is $276,162.

 

 

 

 

In addition, during the term of our engagement with the underwriter, we have agreed not to, directly or indirectly, offer any securities or solicit an offer to purchase any securities, or otherwise contact or enter into a discussion with any other party in connection with the structuring, issuance, sale, arrangement, offering or purchase of securities, other than through the underwriter. In addition, and without limitation foregoing, during the term of our engagement with the underwriter, we will not, and will not permit any of our affiliates, advisors, or other underwriter to engage any other party to perform any services or act in any capacity for which the underwriter has been engaged with respect to any potential transaction without the prior written consent of the underwriter.

 

In addition, subject to FINRA Rule 5110 (g)(5)(B), we have agreed that if, within 18 months of termination of our engagement with the underwriter, the closing of a transaction occurs in which we or any of our subsidiaries or immediate holding entity sells securities (including securities convertible into securities or substantially similar securities), or any securities substantially similar thereto, in an offering that is similar to the Underwritten Offering (except in the case of a termination by the underwriter or us for cause, as defined in our engagement letter with the underwriter), upon completion of such closing, the underwriter shall remain entitled to its underwriting fee, as if the closing of such sale had occurred during the term of the underwriter’s engagement and as if the securities sold were the securities to be offered hereby.

 

We have applied to list our common stock on the Nasdaq Capital Market. No assurance can be given that our application will be approved or that the trading prices of our common stock on the OTC Pink Market will be indicative of the prices of our common stock if our common stock were traded on the Nasdaq Capital Market. If our application is not approved, the Underwritten Offering will not be completed. The Underwritten Offering is contingent upon final approval of the listing of our common stock on the Nasdaq Capital Market.

 

Previously, we paid a fee of $100,000 upon signing the engagement letter with Prime Number Capital LLC, the former underwriter, whose engagement was terminated on August 20, 2024. The incurred out-of-pocket accountable expenses were $50,000, and upon termination, the remaining $50,000 was refunded to us in accordance with FINRA Rule 5110(g)(4)(A).

 

Right of First Refusal

 

We have agreed that for a period of 12 months from the closing of our initial public offering, the underwriter has the right to act as lead or joint investment banker, lead or joint book-runner, and/or lead or joint placement agent, for each and every future public and private equity and debt offering, including but not limited to, (i) any equity, equity-linked, debt or mezzanine financing or other investment in us (including a secondary sale or offering by security holders effected with our assistance); (ii) any tender offer or exchange offer for, debt, convertible debt securities; (iii) any merger, consolidation, sale, transfer or other disposition of all or a material portion of our stocks or assets; (iv) restructuring transactions including extraordinary dividend, stock repurchase, spin-off, which is operated by us or any successor to, or any of our subsidiaries; provided however, that this right of first refusal shall be contingent upon the written agreement by the underwriter to participate in any such subject transaction upon the terms and conditions that should contain reasonable and customary fees for transactions of similar size and nature; and provided further that in the event we terminate our agreement with the underwriter for cause (which shall mean a material failure to provide the underwritten services contemplated in its agreement with us), then such right of first refusal shall become null and void, in compliance with FINRA Rule 5110(g).

 

 

 

 

Indemnification

 

Pursuant to the underwriting agreement, we have agreed to indemnify the underwriter and certain of their controlling persons against certain liabilities, including liabilities under the Securities Act, or to contribute to payments that the underwriter or such other indemnified parties may be required to make in respect of those liabilities.

 

Pricing of the Offering

 

Prior to this Underwritten Offering, our common stock was traded on the OTC Pink Market since February 9, 2022, and there was a limited public market for our common stock. The public offering price of the shares of common stock was negotiated between us and the underwriter. Among the factors considered in determining the public offering price of the shares, in addition to the prevailing market conditions, are our historical performance, estimates of our business potential and earnings prospects, an assessment of our management and the consideration of the above factors in relation to market valuation of companies in related businesses.

 

Lock-up Agreements

 

We, our directors, officers and certain stockholders have agreed, subject to limited exceptions, not to offer, pledge, announce the intention to sell, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase or otherwise dispose of, directly or indirectly, or enter into any swap or other agreement that transfers, in whole or in part, any of the economic consequences of ownership of our common stock or such other securities for a period of one hundred eighty (180) days after the date of this prospectus, without the prior written consent of Benjamin Securities, Inc.

 

Electronic Offer, Sale and Distribution of Securities

 

A prospectus in electronic format may be made available on the websites maintained by the underwriter or selling group members, if any, participating in this Underwritten Offering and the underwriter may distribute prospectuses electronically. The underwriter may agree to allocate a number of common stock to selling group members for sale to their online brokerage account holders. The common stock to be sold pursuant to internet distributions will be allocated on the same basis as other allocations. Other than the prospectus in electronic format, the information on these websites is not part of, nor incorporated by reference into, this prospectus or the registration statement of which this prospectus forms a part, has not been approved or endorsed by us or the underwriter, and should not be relied upon by investors.

 

Price Stabilization, Short Positions and Penalty Bids

 

In connection with this Underwritten Offering, the underwriter may engage in transactions that stabilize, maintain or otherwise affect the price of our common stock. Specifically, the underwriter may sell more shares than they are obligated to purchase under the underwriting agreement, creating a short position. A short sale is covered if the short position is no greater than the number of shares available for purchase by the underwriter under option to purchase additional shares. The underwriter can close out a covered short sale by exercising the option to purchase additional shares or purchasing shares in the open market. In determining the source of shares to close out a covered short sale, the underwriter will consider, among other things, the open market price of shares compared to the price available under the option to purchase additional shares. The underwriter may also sell shares in excess of the option to purchase additional shares, creating a naked short position. The underwriter must close out any naked short position by purchasing shares in the open market. A naked short position is more likely to be created if the underwriter is concerned that there may be downward pressure on the price of the shares in the open market after pricing that could adversely affect investors who purchase in the offering.

 

The underwriter may also impose a penalty bid. This occurs when a particular underwriter or dealer repays selling concessions allowed to it for distributing our common stock in this Underwritten Offering because such underwriter repurchases those shares in stabilizing or short covering transactions.

 

 

 

 

Finally, the underwriter may bid for, and purchase, our common stock in market making transactions, including “passive” market making transactions as described below.

 

These activities may stabilize or maintain the market price of our common stock at a price that is higher than the price that might otherwise exist in the absence of these activities. The underwriter is not required to engage in these activities and may discontinue any of these activities at any time without notice. These transactions may be effected on the Nasdaq Capital Market, in the over-the-counter market, or otherwise.

 

Passive Market Making

 

In connection with this Underwritten Offering, the underwriter may engage in passive market making transactions in our common stock on the Nasdaq Capital Market in accordance with Rule 103 of Regulation M under the Exchange Act, during a period before the commencement of offers or sales of the shares and extending through the completion of the distribution. A passive market maker must display its bid at a price not in excess of the highest independent bid of that security. However, if all independent bids are lowered below the passive market maker’s bid, then that bid must then be lowered when specified purchase limits are exceeded.

 

Potential Conflicts of Interest

 

The underwriter and its affiliates may, from time to time, engage in transactions with and perform services for us in the ordinary course of their business for which they may receive customary fees and reimbursement of expenses. In the ordinary course of their various business activities, the underwriter and its affiliates may make or hold a broad array of investments and actively trade debt and equity securities (or related derivative securities) and financial instruments (including bank loans) for their own accounts and for the accounts of their customers and such investment and securities activities may involve securities and/or instruments of our Company. The underwriter and its affiliates may also make investment recommendations and/or publish or express independent research views in respect of such securities or instruments and may at any time hold, or recommend to clients that they acquire, long and/or short positions in such securities and instruments.

 

Other Relationships

 

The underwriter and certain of its affiliates are full service financial institutions engaged in various activities, which may include securities trading, commercial and investment banking, financial advisory, investment management, investment research, principal investment, hedging, financing and brokerage activities. Some of the underwriter and certain of its affiliates may in the future engage in investment banking and other commercial dealings in the ordinary course of business with us and our affiliates, for which they may in the future receive customary fees, commissions and expenses.

 

In addition, in the ordinary course of their business activities, the underwriter and its affiliates may make or hold a broad array of investments and actively trade debt and equity securities (or related derivative securities) and financial instruments (including bank loans) for their own account and for the accounts of their customers. Such investments and securities activities may involve securities and/or instruments of ours or our affiliates. The underwriter and its affiliates may also make investment recommendations and/or publish or express independent research views in respect of such securities or financial instruments and may hold, or recommend to clients that they acquire, long and/or short positions in such securities and instruments.

 

 

 

 

Selling Restrictions

 

No action may be taken in any jurisdiction other than the United States that would permit a public offering of the shares or the possession, circulation or distribution of this prospectus in any jurisdiction where action for that purpose is required. Accordingly, the common stock offered by this prospectus may not be offered or sold, directly or indirectly, nor may this prospectus or any other offering material or advertisements in connection with the offer and sale of any such securities be distributed or published in any jurisdiction, except under circumstances that will result in compliance with the applicable rules and regulations of that jurisdiction. Persons into whose possession this prospectus comes are advised to inform themselves about and to observe any restrictions relating to the offering and the distribution of this prospectus. This prospectus does not constitute an offer to sell or a solicitation of an offer to buy any securities offered by this prospectus in any jurisdiction in which such an offer or a solicitation is unlawful.

 

In addition to the public offering of the common stock in the United States, the underwriter may, subject to applicable foreign laws, also offer the common stock in certain countries.

 

Notice to prospective investors in Hong Kong

 

The contents of this prospectus have not been reviewed by any regulatory authority in Hong Kong. You are advised to exercise caution in relation to the offer. If you are in any doubt about any of the contents of this prospectus, you should obtain independent professional advice. Please note that (i) our shares may not be offered or sold in Hong Kong, by means of this prospectus or any document other than to “professional investors” within the meaning of Part I of Schedule 1 of the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong) (the “SFO”) and any rules made thereunder, or in other circumstances which do not result in the document being a “prospectus” within the meaning of the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Chapter 32 of the Laws of Hong Kong) (the “C(WUMP)O”) or which do not constitute an offer or invitation to the public for the purpose of the C(WUMP)O or the SFO, and (ii) no advertisement, invitation or document relating to our shares may be issued or may be in the possession of any person for the purpose of issue (in each case whether in Hong Kong or elsewhere), which is directed at, or the contents of which are likely to be accessed or read by, the public in Hong Kong (except if permitted to do so under the securities laws of Hong Kong) other than with respect to the shares which are or are intended to be disposed of only to persons outside Hong Kong or only to “professional investors” within the meaning of the SFO and any rules made thereunder.

 

Notice to prospective investors in Mainland China

 

This prospectus may not be circulated or distributed in Mainland China and the shares may not be offered or sold, and will not offer or sell to any person for re-offering or resale directly or indirectly to any resident of Mainland China except pursuant to applicable laws, rules and regulations of Mainland China. For the purpose of this paragraph only, the Mainland China does not include Taiwan and the special administrative regions of Hong Kong and Macau.

 

Notice to prospective investors in Taiwan, the Republic of China

 

The common stock have not been and will not be registered with the Financial Supervisory Commission of Taiwan, the Republic of China, pursuant to relevant securities laws and regulations and may not be offered or sold in Taiwan through a public offering or in any manner which would constitute an offer within the meaning of the Securities and Exchange Act of Taiwan or would otherwise require registration with or the approval of the Financial Supervisory Commission of Taiwan.

 

 

 

 

Notice to prospective investors in the British Virgin Islands

 

The shares are not being, and may not be offered to the public or to any person in the BVI for purchase or subscription by us or on our behalf. The shares may be offered to companies incorporated under the BVI Business Companies Act (each a “BVI Company”), but only where the offer will be made to, and received by, the relevant BVI Company entirely outside of the BVI.

 

Notice to prospective investors in Singapore

 

This prospectus has not been registered as a prospectus with the Monetary Authority of Singapore. Accordingly, this prospectus and any other document or material in connection with the offer or sale, or invitation for subscription or purchase, of the common stock may not be circulated or distributed, nor may the common stock be offered or sold, or be made the subject of an invitation for subscription or purchase, whether directly or indirectly, to persons in Singapore other than (i) to an institutional investor under Section 274 of the Securities and Futures Act, Chapter 289 of Singapore (the “SFA”), (ii) to a relevant person pursuant to Section 275(1), or any person pursuant to Section 275(1A), and in accordance with the conditions specified in Section 275 of the SFA or (iii) otherwise pursuant to, and in accordance with the conditions of, any other applicable provision of the SFA, in each case subject to compliance with conditions set forth in the SFA.

 

Where the common stock are subscribed or purchased under Section 275 of the SFA by a relevant person which is:

 

	·	a corporation (which is not an accredited investor (as defined in Section 4A of the SFA)) the sole business of which is to hold investments and the entire share capital of which is owned by one or more individuals, each of whom is an accredited investor; or
	·	a trust (where the trustee is not an accredited investor) whose sole purpose is to hold investments and each beneficiary of the trust is an individual who is an accredited investor,
	·	shares, debentures and units of shares and debentures of that corporation or the beneficiaries’ rights and interest (howsoever described) in that trust shall not be transferred within six months after that corporation or that trust has acquired the common stock pursuant to an offer made under Section 275 of the SFA except:
	·	shares, debentures and units of shares and debentures of that corporation or the beneficiaries’ rights and interest (howsoever described) in that trust shall not be transferred within six months after that corporation or that trust has acquired the common stock pursuant to an offer made under Section 275 of the SFA except:
	·	to an institutional investor (for corporations, under Section 274 of the SFA) or to a relevant person defined in Section 275(2) of the SFA, or to any person pursuant to an offer that is made on terms that such shares, debentures and units of shares and debentures of that corporation or such rights and interest in that trust are acquired at a consideration of not less than US$200,000 (or its equivalent in a foreign currency) for each transaction, whether such amount is to be paid for in cash or by exchange of securities or other assets, and further for corporations, in accordance with the conditions specified in Section 275 of the SFA;
	·	where no consideration is or will be given for the transfer; or
	·	where the transfer is by operation of law.

 

 

 

 

Notice to prospective investors in Japan

 

The common stock offered in this prospectus have not been and will not be registered under the Financial Instruments and Exchange Law of Japan. The common stock have not been offered or sold and will not be offered or sold, directly or indirectly, in Japan or to or for the account of any resident of Japan (including any corporation or other entity organized under the laws of Japan), except (i) pursuant to an exemption from the registration requirements of the Financial Instruments and Exchange Law and (ii) in compliance with any other applicable requirements of Japanese law.

 

Notice to prospective investors in the European Economic Area

 

In relation to each member state of the European Economic Area, an offer of common stock described in this prospectus may not be made to the public in that member state unless the prospectus has been approved by the competent authority in such member state or, where appropriate, approved in another member state and notified to the competent authority in that member state, all in accordance with the Prospectus Regulation, except that an offer to the public in that member state of any common stock may be made at any time under the following exemptions under the Prospectus Regulation:

 

	·	to any legal entity which is a qualified investor as defined in the Prospectus Regulation;
	·	to fewer than 150 natural or legal persons (other than qualified investors as defined in the Prospectus Regulation), as permitted under the Prospectus Directive, subject to obtaining the prior consent of the relevant Dealer or Dealers nominated by us for any such offer; or
	·	in any other circumstances falling within Article 1(4) of the Prospectus Regulation,

 

provided that no such offer of common stock shall require us or any underwriter to publish a prospectus pursuant to Article 3 of the Prospectus Regulation or supplement a prospectus pursuant to Article 23 of the Prospectus Regulation.

 

For purposes of this provision, the expression an “offer of securities to the public” in any member state means the communication in any form and by any means of sufficient information on the terms of the offer and the common stock to be offered so as to enable an investor to decide to purchase or subscribe for the common stock and the expression “Prospectus Regulation” means Regulation (EU) 2017/1129.

 

The sellers of the common stock have not authorized and do not authorize the making of any offer of common stock through any financial intermediary on their behalf, other than offers made by the underwriter with a view to the final placement of the common stock as contemplated in this prospectus. Accordingly, no purchaser of the common stock, other than the underwriter, is authorized to make any further offer of the common stock on behalf of the sellers or the underwriter.

 

Notice to prospective investors in the United Kingdom

 

This prospectus is only being distributed to, and is only directed at, persons in the United Kingdom that are qualified investors as defined in the Prospectus Regulation that are also (i) investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, or Order, or (ii) high net worth entities, and other persons to whom it may lawfully be communicated, falling within Article 49(2)(a) to (d) of the Order (each such person being referred to as a “relevant person”). This prospectus and its contents are confidential and should not be distributed, published or reproduced (in whole or in part) or disclosed by recipients to any other persons in the United Kingdom. Any person in the United Kingdom that is not a relevant person should not act or rely on this document or any of its contents.

 

 

 

Notice to prospective investors in France

 

Neither this prospectus nor any other offering material relating to the common stock described in this prospectus has been submitted to the clearance procedures of the Autorité des Marchés Financiers or of the competent authority of another member state of the European Economic Area and notified to the Autorité des Marchés Financiers. The common stock have not been offered or sold and will not be offered or sold, directly or indirectly, to the public in France. Neither this prospectus nor any other offering material relating to the common stock has been or will be:

 

	·	released, issued, distributed or caused to be released, issued or distributed to the public in France; or
	·	used in connection with any offer for subscription or sale of the common stock to the public in France.

 

Such offers, sales and distributions will be made in France only:

 

	·	to qualified investors (investisseurs qualifiés) and/or to a restricted circle of investors (cercle restreint d’investisseurs), in each case investing for their own account, all as defined in, and in accordance with articles L.411-2, D.411-1, D.411-2, D.734-1, D.744-1, D.754-1 and D.764-1 of the French Code monétaire et financier;
	·	to investment services providers authorized to engage in portfolio management on behalf of third parties; or
	·	in a transaction that, in accordance with article L.411-2-II-1° -or-2° -or 3° of the French Code monétaire et financier and article 211-2 of the General Regulations (Règlement Général) of the Autorité des Marchés Financiers, does not constitute a public offer (appel public à l’épargne).

 

The common stock may be resold directly or indirectly, only in compliance with articles L.411-1, L.411-2, L.412-1 and L.621-8 through L.621-8-3 of the French Code monétaire et financier.

 

Notice to prospective investors in Switzerland

 

This document, as well as any other offering or marketing material relating to the common stock which are the subject of the offering contemplated by this prospectus, neither constitutes a prospectus pursuant to Article 652a or Article 1156 of the Swiss Code of Obligations nor a simplified prospectus as such term is understood pursuant to article 5 of the Swiss Federal Act on Collective Investment Schemes. Neither the common stock nor the shares underlying the common stock will be listed on the SIX Swiss Exchange and, therefore, the documents relating to the common stock, including, but not limited to, this document, do not claim to comply with the disclosure standards of the listing rules of SIX Swiss Exchange and corresponding prospectus schemes annexed to the listing rules of the SIX Swiss Exchange.

 

The common stock are being offered in Switzerland by way of a private placement, i.e. to a small number of selected investors only, without any public offer and only to investors who do not purchase the common stock with the intention to distribute them to the public. The investors will be individually approached from time to time. This document, as well as any other offering or marketing material relating to the common stock, is confidential and it is exclusively for the use of the individually addressed investors in connection with the offer of the common stock in Switzerland and it does not constitute an offer to any other person. This document may only be used by those investors to whom it has been handed out in connection with the offering described herein and may neither directly nor indirectly be distributed or made available to other persons without our express consent. It may not be used in connection with any other offer and shall in particular not be copied and/or distributed to the public in or from Switzerland.

 

 

 

 

Notice to prospective investors in Australia

 

This prospectus is not a formal disclosure document and has not been, nor will be, lodged with the Australian Securities and Investments Commission. It does not purport to contain all information that an investor or their professional advisers would expect to find in a prospectus or other disclosure document (as defined in the Corporations Act 2001 (Australia)) for the purposes of Part 6D.2 of the Corporations Act 2001 (Australia) or in a product disclosure statement for the purposes of Part 7.9 of the Corporations Act 2001 (Australia), in either case, in relation to the common stock.

 

The common stock are not being offered in Australia to “retail clients” as defined in sections 761G and 761GA of the Corporations Act 2001 (Australia). The offering is being made in Australia solely to “wholesale clients” for the purposes of section 761G of the Corporations Act 2001 (Australia) and, as such, no prospectus, product disclosure statement or other disclosure document in relation to the securities has been, or will be, prepared.

 

This prospectus does not constitute an offer in Australia other than to wholesale clients. By submitting an application for the common stock, you represent and warrant to us that you are a wholesale client for the purposes of section 761G of the Corporations Act 2001 (Australia). If any recipient of this prospectus is not a wholesale client, no offer of, or invitation to apply for, the common stock shall be deemed to be made to such recipient and no applications for the common stock will be accepted from such recipient. Any offer to a recipient in Australia, and any agreement arising from acceptance of such offer, is personal and may only be accepted by the recipient. In addition, by applying for the common stock you undertake to us that, for a period of 12 months from the date of issue of the common stock, you will not transfer any interest in the common stock to any person in Australia other than to a wholesale client.

 

Notice to prospective investors in Canada

 

The common stock may be sold only to purchasers purchasing, or deemed to be purchasing, as principal that are accredited investors, as defined in National Instrument 45-106 Prospectus Exemptions or subsection 73.3(1) of the Securities Act (Ontario), and are permitted clients, as defined in National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations. Any resale of the common stock must be made in accordance with an exemption from, or in a transaction not subject to, the prospectus requirements of applicable securities laws.

 

Securities legislation in certain provinces or territories of Canada may provide a purchaser with remedies for rescission or damages if this prospectus (including any amendment thereto) contains a misrepresentation, provided that the remedies for rescission or damages are exercised by the purchaser within the time limit prescribed by the securities legislation of the purchaser’s province or territory. The purchaser should refer to any applicable provisions of the securities legislation of the purchaser’s province or territory for particulars of these rights or consult with a legal advisor.

 

Pursuant to section 3A.3 (or, in the case of securities issued or guaranteed by the government of a non-Canadian jurisdiction, section 3A.4) of National Instrument 33-105 Underwriting Conflicts (NI 33-105), the underwriter are not required to comply with the disclosure requirements of NI 33-105 regarding underwriter conflicts of interest in connection with the offering.

  

Stamp Taxes

 

If you purchase common stock offered in this prospectus, you may be required to pay stamp taxes and other charges under the laws and practices of the country of purchase, in addition to the offering price listed on the cover page of this prospectus.

 

 

 

 

Electronic Distribution

 

In addition to the public offering of the common stock in the United States, the underwriter may, subject to applicable foreign laws, also offer the common stock in certain countries.

 

LEGAL MATTERS

 

Certain legal matters as to U.S. federal and New York state law in connection with this Underwritten Offering will be passed upon for us by Kaufman & Canoles, P.C. Certain legal matters as to Hong Kong law will be passed upon for us by Han Kun Law Offices LLP. Certain legal matters as to PRC law will be passed upon for us by Jiangsu Junjin Law Firm. Certain legal matters relating to Nevada law will be passed upon for us by Parsons Behle & Latimer, Reno, Nevada. Certain legal matters will be passed upon for the underwriter by K&L Gates LLP.

 

EXPERTS

 

The consolidated financial statements included in this prospectus and in the registration statement as of and for the fiscal year ended July 31, 2023 have been audited by Michael T. Studer CPA P.C., an independent registered public accounting firm, and are included in reliance upon such report given upon the authority of said firm as experts in auditing and accounting. The office of Michael T. Studer CPA P.C. is located at 111 West Sunrise Highway, Freeport, NY 11520. The consolidated financial statements included in this prospectus and in the registration statement as of and for the year ended July 31, 2024 has been audited by Bush & Associates CPA LLC, an independent registered public accounting firms and are included in reliance upon such report given upon the authority of said firm as experts in auditing and accounting. The office of Bush & Associates CPA LLC is located at 179 N Gibson Rd, Henderson, NV 89014.

 

CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT

 

On September 11, 2024 we dismissed Michael T. Studer CPA P.C. from its position as the principal independent accountant for Tianci International, Inc. The dismissal was approved by the Audit Committee of the Board of Directors.

 

The audit report of Michael T. Studer CPA P.C. on our financial statements for the years ended July 31, 2023 and July 31, 2022 did not contain any adverse opinion or disclaimer of opinion or qualification, except that the audit report of Michael T. Studer CPA P.C. on our financial statements for the years ended July 31, 2023 and July 31, 2022 did contain a modification expressing substantial doubt about the ability of Tianci International, Inc. to continue as a going concern. Michael T. Studer CPA P.C. did not, during the applicable period, advise Tianci International, Inc. of any of the enumerated items described in Item 304(a)(1)(iv) of Regulation S-K.

 

During the two most recent fiscal years and the subsequent interim period through September 11, 2024, there was no disagreement between Michael T. Studer CPA P.C. and us on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which disagreement, if not resolved to its satisfaction, would have caused Michael T. Studer CPA P.C. to make reference to the subject matter of such disagreement in connection with its report. During the same period, there was no “reportable event,” as described in Item 304(a)(1)(v) of Regulation S-K.

 

We requested Michael T. Studer CPA P.C. to furnish a letter addressed to the Securities Exchange Commission stating whether or not Michael T. Studer CPA P.C. agrees with above statements pertaining to Michael T. Studer CPA P.C. A copy of the letter is filed as exhibit 16.1 to the registration statement of which this prospectus is a part.

 

On September 11, 2024, we retained the firm of Bush & Associates CPA LLC to serve as our new independent public accounting firm. At no time during the past two fiscal years or any subsequent period prior to September 11, 2024 did we consult with Bush & Associates CPA LLC regarding any matter of the sort described above with reference to Michael T. Studer CPA P.C., any issue relating to the financial statements of ours, or the type of audit opinion that might be rendered for us.

 

 

 

 

 

WHERE YOU CAN FIND MORE INFORMATION

 

We have filed with the SEC this registration statement on Form S-1 under the Securities Act with respect to the shares of common stock being offered by this prospectus. This prospectus, which constitutes a part of this registration statement, does not contain all of the information in this registration statement and its exhibits. For further information with respect to us and the common stock offered by this prospectus, you should refer to this registration statement and the exhibits filed as part of that document. Statements contained in this prospectus as to the contents of any contract or any other document referred to are not necessarily complete, and in each instance, we refer you to the copy of the contract or other document filed as an exhibit to this registration statement. Each of these statements is qualified in all respects by this reference.

 

We are subject to the informational requirements of the Exchange Act and file annual, quarterly and current reports, proxy statements and other information with the SEC. You can read our SEC filings, including this registration statement, over the Internet at the SEC’s website at http://www.sec.gov. You may also request a copy of these filings, at no cost, by writing or telephoning us at: Unit B, 10/F., Ritz Plaza, No. 122 Austin Road, Tsim Sha Tsui, Kowloon, Hong Kong or 852-22510781.

 

 

 

 

 

 

INDEX TO FINANCIAL STATEMENTS

 

 

 

	Page
Condensed Balance Sheets – October 31, 2024 (Unaudited) and July 31, 2024	F-2
Consolidated Statements of Operations (Unaudited) - for the Three Months Ended October 31, 2024 and 2023	F-3
Condensed Statement of Changes in Stockholders' Equity (Unaudited) for the Three Months Ended October 31, 2024 and 2023	F-4
Statements of Cash Flows (Unaudited) – for the Three Months Ended October 31, 2024 and 2023	F-5
Notes to Consolidated Financial Statements (Unaudited)	F-6 to F-20

 

 

 

	Page
Report of Independent Registered Public Accounting Firm (PCAOB ID#6797)	F-21
Report of Independent Registered Public Accounting Firm (PCAOB ID#822)	F-22
Consolidated Balance Sheets as of July 31, 2024 and 2023	F-23
Consolidated Statements of Operations for the Years Ended July 31, 2024 and 2023	F-24
Consolidated Statements of Changes in Stockholders’ Equity for the Years Ended July 31, 2024 and 2023	F-25
Consolidated Statements of Cash Flows for the Years Ended July 31, 2024 and 2023	F-26
Notes to Consolidated Financial Statements	F-26 to F-44

 

 

 

 

 

 

TIANCI INTERNATIONAL, INC. AND SUBSIDIARIES

UNAUDITED INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS

(EXPRESSED IN UNITED STATES DOLLARS)

 

		October 31,				July 31,
		2024				2024
			(Unaudited)
ASSETS
Current assets:
Cash		$	323,793			$	413,129
Prepaid expense			1,040				1,820
Deferred offering costs			569,481				495,356
Total current assets			894,314				910,305
Other assets:
Lease security deposit			1,656				1,656
Total non-current assets			1,656				1,656
TOTAL ASSETS		$	895,970			$	911,961
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Income taxes payable		$	64,393			$	62,204
Due to related parties			2,271				2,271
Accrued liabilities and other payables			131,244				57,476
Total current liabilities			197,908				121,951
Total liabilities			197,908				121,951
Commitments and contingencies			–				–
Stockholders’ equity (deficit):
Series A Preferred stock, $0.0001 par value; 80,000 shares authorized; no shares issued and outstanding as of October 31, 2024 and July 31, 2024			–				–
Series B Preferred stock, $0.0001 par value; 80,000 shares authorized; 80,000 shares issued and outstanding as of October 31, 2024 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; 14,781,803 shares issued and outstanding as of October 31, 2024 and July 31, 2024			1,478				1,478
Additional paid-in capital			962,416				962,416
Accumulated deficit			(315,127	)			(222,071	)
Total stockholders' equity attributable to TIANCI INTERNATIONAL, INC.			648,775				741,831
Non-controlling interest			49,287				48,179
Total stockholders’ equity			698,062				790,010
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY		$	895,970			$	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 October 31,
		2024				2023
		(Unaudited)				(Unaudited)
OPERATING REVENUES
Global logistics services		$	2,759,693			$	1,181,720
Other revenue			221,247				144,928
Total Operating Revenues			2,980,940				1,326,648
COST OF REVENUES
Global logistics services			2,590,865				1,029,970
Other revenue			161,644				62,901
Total Cost of Revenues			2,752,509				1,092,871
Gross profit			228,431				233,777
Operating expenses:
Selling and marketing			85,188				102,071
General and administrative			260,393				118,705
Total operating expenses			345,581				220,776
Income (loss) from operations			(117,150	)			13,001
Other income net			27,391				–
Income (loss) before provision for income taxes			(89,759	)			13,001
Provision for income taxes			2,189				19,113
Net (loss)			(91,948	)			(6,112	)
Less: net income attributable to non-controlling interest			1,108				9,672
Net (loss) attributable to TIANCI INTERNATIONAL, INC.		$	(93,056	)		$	(15,784	)
Weighted average number of common shares*
Basic and diluted			14,781,803				5,903,481
(Loss) per common share attributable to TIANCI INTERNATIONAL, INC.*
Basic and diluted		$	(0.01	)		$	(0.00	)
Weighted average number of preferred shares A*
Basic and diluted			–				80,000
(Loss) per preferred share A attributable to TIANCI INTERNATIONAL, INC.*
Basic and diluted		$	–			$	(0.20	)
Weighted average number of preferred shares B*
Basic and diluted			80,000				–
(Loss) per preferred share B attributable to TIANCI INTERNATIONAL, INC.*
Basic and diluted		$	(1.16	)		$	–

 

*	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 MONTHS ENDED OCTOBER 31, 2024 AND 2023

(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

 

 

 

 

			Series A Preferred Stock				Series A Preferred Stock amount*				Common stock*				Common stock amount*				Subscription receivable*				Additional Paid-in Capital				(Accumulated Deficit)				Noncontrolling interest				Total
Balance at July 31, 2023			80,000			$	8				5,903,481			$	590			$	–			$	4,982			$	(276,521	)		$	(7,691	)		$	(278,632	)
Net loss			–				–				–				–				–				–				(15,784	)			9,672				(6,112	)
Balance at October 31, 2023 (unaudited)			80,000			$	8				5,903,481			$	590			$	–			$	4,982			$	(292,305	)		$	1,981			$	(284,744	)

 

*Shares are presented on a retroactive basis to reflect the reorganization on March 3, 2023.

 

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

 

 

 

TIANCI INTERNATIONAL, INC. AND SUBSIDIARIES

UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(EXPRESSED IN UNITED STATES DOLLARS)

 

		For the three months ended October 31,
		2024				2023
		(Unaudited)				(Unaudited)
Cash flows from operating activities:
Net income (loss)		$	(91,948	)		$	(6,112	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Amortization of operating lease right-of-use asset			–				356
Change in operating assets and liabilities:
Accounts receivable			–				(195,629	)
Prepaid expense			780				750
Lease security deposit			–				(114	)
Due from related party			–				(33	)
Advances from customers			–				(29,070	)
Accounts payable			–				195,232
Income taxes payable			2,189				19,113
Operating lease liabilities			–				(356	)
Accrued liabilities and other payables			73,768				140,354
Net cash (used in) provided by operating activities			(15,211	)			124,491
Cash flows from financing activities:
Deferred offering costs incurred			(74,125	)			–
Net cash (used in) financing activities			(74,125	)			–
Net (decrease) increase in cash			(89,336	)			124,491
Cash, beginning			413,129				256,342
Cash, ending		$	323,793			$	380,833
Supplemental disclosure of cash flow information:
Cash paid during the period for:
Interest		$	–			$	–
Income taxes		$	–			$	–
Non-Cash Activities:
Early termination of right-of-use assets and lease liabilities		$	–			$	6,080

 

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

 

 

 

 

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 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.

 

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 4% of its revenue for the nine months ended July 31, 2024 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.

 

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.

 

 

 

F-6

TIANCI INTERNATIONAL, INC.

Notes to Consolidated Financial Statements

Three Months Ended October 31,2024

(Unaudited)

 

Results of the three months ended October 31, 2024 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 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 October 31, 2024 and July 31, 2024, 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.

  

 

 

F-7

TIANCI INTERNATIONAL, INC.

Notes to Consolidated Financial Statements

Three Months Ended October 31,2024

(Unaudited)

 

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:

 

·	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.

 

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 destination port and accepted by its customers. The Company does not have significant variable consideration in its contracts. Taxes assessed concurrently with a specific revenue-producing transaction that are collected by the Company from a customer are excluded from revenues.

 

 

 

F-8

TIANCI INTERNATIONAL, INC.

Notes to Consolidated Financial Statements

Three Months Ended October 31,2024

(Unaudited)

 

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.

 

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.

 

 

 

F-9

TIANCI INTERNATIONAL, INC.

Notes to Consolidated Financial Statements

Three Months Ended October 31,2024

(Unaudited)

 

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.

 

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 months ended October 31, 2024 and 2023, respectively. Advertising costs are expensed as incurred and included in selling and marketing expenses.

 

Operating leases

 

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

 

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

 

 

 

F-10

TIANCI INTERNATIONAL, INC.

Notes to Consolidated Financial Statements

Three Months Ended October 31,2024

(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% likely of being realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. Penalties and interest incurred related to underpayment of income tax for uncertain tax positions are classified as income tax expenses in the period incurred.

 

During the year ended July 31, 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 year ended July 31, 2024. During the three months ended October 31, 2024, the Company received a refund $24,953 from the IRS for the penalty previously charged. The refund is included in other income in the statements of operations for the three months ended October 31, 2024.

 

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

 

The US tax returns filed for 2021 and subsequent years are subject to examination by the applicable tax authorities.

 

 

 

F-11

TIANCI INTERNATIONAL, INC.

Notes to Consolidated Financial Statements

Three Months Ended October 31,2024

(Unaudited)

 

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 shares of common stock outstanding for the period. Diluted EPS presents the diluted effect on a per share basis of the potential shares of 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 shares of common stock that have an anti-dilutive effect (i.e., those that increase income per share or decrease loss per share) are excluded from the calculation of diluted EPS. As of October 31, 2024 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.

 

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 a smaller reporting company. The adoption of this standard on August 1, 2023 has not had and is not expected to have a material impact on the Company’s future consolidated financial statements.

 

 

 

F-12

TIANCI INTERNATIONAL, INC.

Notes to Consolidated Financial Statements

Three Months Ended October 31,2024

(Unaudited)

 

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 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 consolidated Financial Statements.

 

NOTE 3 – PUBLIC OFFERING AND DEFERRED OFFERING COSTS

 

On March 14, 2024, the Company executed an agreement with Prime Number Capital LLC (“Prime”) for Prime to act as the Company’s Lead Underwriter on a “firm commitment” basis in connection with a public offering of shares of the Company’s common stock. The agreement provides for compensation to Prime of, among other things, (1) Underwriter’s Commission equal to 7.0% of Gross Proceeds, (2) Non-accountable Expenses equal to 1.0% of Gross Proceeds, (3) Underwriter’s warrants equal to 5.0% of the shares issued in the offering, and (4) a cash advance of $100,000 offsetable against the Underwriter’s Commission (of which the Company paid $50,000 to Prime on March 14, 2024). Prime’s obligation to initiate the offering is subject to satisfaction of several conditions, and there is no assurance that the offering will occur.

 

As of October 31, 2024, deferred offering costs relating to the public offering consist of:

Schedule of deferred offering costs relating to the public offering
Cash advance to Prime		$	100,000
Attorney fees			452,356
Accountant fees			49,125
Total		$	569,481

 

Upon closing of the public offering, the deferred offering costs will be offset against the proceeds from the public offering and included as part of the total public offering stock issuance costs.

 

NOTE 4 – RELATED PARTIES BALANCES AND TRANSACTIONS

 

Due to related parties consists of:

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

  

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

 

 

 

F-13

TIANCI INTERNATIONAL, INC.

Notes to Consolidated Financial Statements

Three Months Ended October 31,2024

(Unaudited)

 

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 October 31, 2024 and 2023, the Company incurred management compensation expenses of $56,400 and $60,000, respectively. These amounts are included in “general and administrative expenses” in the accompanying consolidated statements of operations.

  

NOTE 5 – 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 October 31, 2024, regarding the classes of capital stock that are authorized by the Articles of Incorporation of Tianci International, Inc.

Schedule of classes of capital stock
						October 31, 2024
Class		Shares Authorized				Shares Outstanding
Common Stock, $.0001 par value			100,000,000				14,781,803
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.

 

 

 

F-14

TIANCI INTERNATIONAL, INC.

Notes to Consolidated Financial Statements

Three Months Ended October 31,2024

(Unaudited)

 

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 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) in satisfaction of the Company’s liability to them 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.

 

NOTE 6 – 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 three months ended October 31, 2024 and 2023 amounted to $2,189 and $19,113, respectively.

 

 

 

F-15

TIANCI INTERNATIONAL, INC.

Notes to Consolidated Financial Statements

Three Months Ended October 31,2024

(Unaudited)

 

For the three months ended October 31, 2024, the loss before provision for income taxes of $89,759, consisted of United States source loss of $(103,024) and Hong Kong source income of $11,076. For the three months ended October 31, 2023, the income before provision for income taxes of $13,001 consisted of United States source loss of $(102,833) and Hong Kong source income of $115,834.

 

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

Schedule of components of the provision for income taxes
		For the three months ended
		October 31, 2024				October 31, 2023
Current Hong Kong		$	2,189			$	19,113
Deferred Hong Kong			–				–
Provision for income taxes		$	2,189			$	19,113

 

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

Schedule of Hong Kong effective tax rate
		For the three months ended
		October 31, 2024				October 31, 2023
Hong Kong statutory income tax rate			16.50%				16.50%
Effective tax rate			16.50%				16.50%

 

For United States income tax purposes, Tianci has a net operating loss carryforward of approximately $1,519,000 at October 31, 2024. Management has not determined that it is more likely than not that this carryforward will be realized and thus the Company maintained a 100% valuation allowance for the deferred tax asset relating to the United States net operating loss carryforward. Current United States income tax law limits the amount of loss available to offset against future taxable income when a substantial change in ownership occurs.

 

Uncertain tax positions

 

The Company evaluates each uncertain tax position (including the potential application of interest and penalties) based on the technical merits, and measures the unrecognized benefits associated with the tax positions. As of October 31, 2024 and July 31, 2024, the Company did not have any significant unrecognized uncertain tax positions.

 

As of July 31, 2024, tax years 2021 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.

 

 

 

F-16

TIANCI INTERNATIONAL, INC.

Notes to Consolidated Financial Statements

Three Months Ended October 31,2024

(Unaudited)

 

NOTE 7 — CONCENTRATION OF RISK

 

Credit risk

 

Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash held in banks. The cash balance in each financial institution in the United States is insured by the FDIC up to $250,000. As of October 31, 2024, no United States account balance exceeded $250,000. The Hong Kong Deposit Protection Board pays compensation up to a limit of HKD 500,000 (approximately US$64,000) if the bank with which an individual/company holds its eligible deposit fails. As of October 31, 2024, a cash balance of $ 228,644 was maintained at a financial institution in Hong Kong of which approximately $158,000 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 three months ended October 31, 2024, two customers accounted for 56.5%, and 19.7% of the Company’s total revenues.

 

For the three months ended October 31, 2023, two customers accounted for 61.2% and 13.1% of the Company’s total revenues.

 

As of October 31, 2024 and July 31, 2024, no customer accounted for over 10% of the Company’s total accounts receivable.

 

Vendor concentration risk

 

For the year ended July 31, 2024, three vendors accounted for 59.0%, 20.6% and 1.3% of the Company’s total purchases. For the three months ended October 31, 2023, two vendors accounted for 65.9% and 13.7% of the Company’s total purchases. As of October 31, 2024 and July 31, 2024, no vendor accounted for over 10% of the Company’s total accounts payable.

 

NOTE 8— COMMITMENTS AND CONTINGENCIES

 

Lease commitments

 

On January 1, 2021, Roshing entered into an operating lease agreement for office space in Hong Kong with a third party. The agreement had a term of two years and provided for monthly rent of HKD 2,800 (approximately $360). On January 13, 2023, the Company entered a new operating lease agreement for office space in Hong Kong with a third party for two years with monthly rent of HKD 3,000 (approximately $382). Upon adoption of ASU 2016-02 effective August 1, 2022, the Company recognized a $8,704 right of use (“ROU”) asset and operating lease liabilities in January 2023 based on the present value of the future minimum rental payments of leases, using an incremental borrowing rate of 5%. The Company’s lease agreement does not contain any material residual value guarantees or material restrictive covenants. The lease does not contain an option to extend at the time of expiration. The lease was early terminated in September 2023 which resulted in a derecognition of $6,080 right of use (“ROU”) asset and operating lease liabilities in August 2023.

 

In September 2023, the Company entered into a one-year office rental service agreement with a monthly lease payment of approximately $828 (HKD 6,500). In September 2024, the Company further renewed the lease for one year with a monthly lease payment of approximately $847 (HKD 6,650).

 

Rent expenses were $2,522 and $3,184 for the three months ended October 31, 2024 and 2023, respectively.

 

 

 

F-17

TIANCI INTERNATIONAL, INC.

Notes to Consolidated Financial Statements

Three Months Ended October 31,2024

(Unaudited)

 

Contingencies

 

From time to time, the Company may be a party to legal proceedings, as well as certain asserted and un-asserted claims. The Company was not involved in any material legal proceedings nor asserted claims as of October 31, 2024.

  

NOTE 9 — ENTERPRISE-WIDE DISCLOSURE

 

The Company follows ASC 280, Segment Reporting, which requires companies to disclose segment data based on how management makes decisions about allocating resources to each segment and evaluates their performances. The Company’s chief operating decision-makers (i.e., the Company’s chief executive officer and his direct assistants, including the Company’s chief financial officer) review financial information presented on a consolidated basis, accompanied by disaggregated information about revenues, cost of revenues, and gross profit by business lines and by regions (Hong Kong, Vietnam, Japan and Singapore) for purposes of allocating resources and evaluating financial performance. There are no segment managers who are held accountable for operations, operating results and plans for levels or components below the consolidated unit level. Based on qualitative and quantitative criteria established by ASC 280, the Company considers itself to be operating within one reportable segment.

 

Disaggregated information of revenues by business lines are as follows:

Schedule of disaggregated information of revenues by business lines
		For the three months ended
		October 31,
		2024				2023
Electronic Device Hardware Components Sales		$	–			$	59,902
Software and Website Development Services			–				19,230
Software Maintenance and Business Promotion Services			–				15,263
Business Consulting Services			221,247				50,533
Global Logistics Services			2,759,693				1,181,720
Total revenues		$	2,980,940			$	1,326,648

 

Disaggregated information of revenues by regions are as follows:

Schedule of disaggregated information of revenues by regions
		For the three months ended
		October 31,
		2024				2023
Hong Kong		$	2,576,170			$	1,051,017
Vietnam			166,770				173,531
Japan			238,000				100,850
Singapore			–				1,250
Total revenues		$	2,980,940			$	1,326,648

  

 

 

F-18

TIANCI INTERNATIONAL, INC.

Notes to Consolidated Financial Statements

Three Months Ended October 31,2024

(Unaudited)

 

NOTE 10 — CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY (Unaudited)

 

The Company performed a test on the restricted net assets of its consolidated subsidiaries in accordance with Rule 4-08(e)(3) of Regulation S-X promulgated by the SEC, “General Notes to Financial Statements” and concluded that it was applicable and the Company is required to disclose the required financial statement information for the parent company.

 

The subsidiaries did not pay any dividends to the parent during the periods presented. For the purpose of presenting parent only financial information, the Company records its investment in its subsidiaries under the equity method of accounting. Such investments are presented on the separate parent only balance sheets as “investment in subsidiaries” and the income (loss) of the subsidiaries is presented as “share of income (loss) of subsidiaries.” Certain information and footnote disclosures generally included in financial statements prepared in accordance with U.S. GAAP have been condensed or are not required.

 

PARENT COMPANY BALANCE SHEET

Schedule of balance sheet
		October 31,				July 31,
		2024				2024
ASSETS
Cash		$	94,651			$	14,621
Prepaid expense			1,040				1,820
Investment in subsidiaries			665,755				781,661
Total Assets		$	761,446			$	798,102
LIABILITIES
Accounts payable and other accrued liabilities			110,400				54,000
Payable to subsidiaries			512,416				312,416
Due to related parties			2,271				2,271
Total Liabilities		$	112,671			$	56,271
Stockholders’ Equity
Series A Preferred stock, $0.0001 par value; 80,000 shares authorized; no shares issued and outstanding as of October 31, 2024 and July 31, 2024			–				–
Series B Preferred stock, $0.0001 par value; 80,000 shares authorized; 80,000 shares issued and outstanding as of October 31, 2024 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; 14,781,803 shares issued and outstanding as of October 31, 2024 and July 31, 2024			1,478				1,478
Additional paid-in capital			962,416				962,416
Accumulated deficit			(315,127	)			(222,071	)
Total Stockholders’ Equity			648,775				741,831
Total Liabilities and Stockholders’ Equity		$	761,446			$	798,102

 

 

 

F-19

TIANCI INTERNATIONAL, INC.

Notes to Consolidated Financial Statements

Three Months Ended October 31,2024

(Unaudited)

 

PARENT COMPANY STATEMENT OF OPERATIONS

Schedule of statement of operations
		For the three months ended October 31,
		2024				2023
EXPENSE:
General and administrative		$	(130,415	)		$	(102,833	)
OTHER INCOME
Gain from investment in subsidiaries			9,968				87,049
Other income net			27,391				–
Total other income			37,359				87,049
Net (loss)		$	(93,056	)		$	(15,784	)

 

PARENT COMPANY STATEMENT OF CASH FLOWS

Schedule of statement of cash flow
		For the three months ended October 31,
		2024				2023
Cash flows from operating activities:
Net (loss)		$	(93,056	)		$	(15,784	)
Adjustments to reconcile net income to net cash provided by operating activities:
Share of (gain) from investment in subsidiaries			(9,968	)			(87,049	)
Change in operating assets and liabilities:
Prepaid expense and other assets			780				750
Accounts payable and other accrued liabilities			56,399				59,352
Net cash (used in) operating activities			(45,845	)			(42,731	)
Cash flows from financing activities:
Operating proceeds from subsidiaries			200,000
Deferred offering costs incurred			(74,125	)			–
Net cash provided by financing activities			125,875				–
Net (decrease) increase in cash and cash equivalents			80,030				(42,731	)
Cash and cash equivalents at beginning			14,621				66,553
Cash and cash equivalents at ending		$	94,651			$	23,822

 

NOTE 11 — 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.

 

 

 

 

 

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

 

 

To the Shareholders and the Board of Directors of

Tianci International, Inc.

 

OPINION ON THE FINANCIAL STATEMENTS

 

We have audited the accompanying consolidated balance sheet of Tianci International, Inc. (the “Company”) as of July 31, 2024 and the related consolidated statements of operations, changes in stockholders’ equity, and cash flows for the year then ended, and the related notes (collectively referred to as the “financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of Tianci International, Inc. as of July 31, 2024 and the results of its operations and cash flows for the year then ended in conformity with accounting principles generally accepted in the United States.

 

BASIS FOR OPINION

 

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

 

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

 

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

 

CRITICAL AUDIT MATTERS

 

Critical audit matters are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgements. We determined that there are no critical audit matters.

 

/s/ Bush & Associates CPA LLC

 

We have served as the Company’s auditor since 2024.

 

Henderson, Nevada

December 10, 2024

PCAOB ID Number 6797

 

 

 

 

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

 

To the Board of Directors and Stockholders of Tianci International, Inc.

 

Opinion on the Financial Statements

 

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

 

Explanatory Paragraph Regarding Going Concern

 

The accompanying financial statements as of July 31, 2023 and for the year ended July 31, 2023 have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the consolidated financial statements, the Company’s then financial situation raised substantial doubt about its ability to continue as a going concern. Management’s then plans in regard to this matter are also described in Note 1. These financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 

Basis for Opinion

 

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

 

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

 

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

 

Critical Audit Matters

 

Critical audit matters are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. We determined that there were no critical audit matters.

 

 

/s/ Michael T. Studer CPA P.C.

Michael T. Studer CPA P.C.

 

 

Freeport, New York

October 20, 2023

 

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

 

 

 

 

TIANCI INTERNATIONAL, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(EXPRESSED IN UNITED STATES DOLLARS)

 

		July 31,				July 31,
		2024				2023
ASSETS
Current assets:
Cash		$	413,129			$	256,342
Accounts receivable			–				–
Prepaid expense			1,820				1,750
Deferred offering costs			495,356				–
Due from related party			–				54,134
Total current assets			910,305				312,226
Other assets:
Lease security deposit			1,656				1,542
Right-of-use asset			–				6,436
Total non-current assets			1,656				7,978
TOTAL ASSETS		$	911,961			$	320,204
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable		$	–			$	779
Income taxes payable			62,204				26,298
Due to related parties			2,271				276,077
Lease liability - current			–				4,368
Advances from customers			–				29,070
Accrued liabilities and other payables			57,476				260,176
Total current liabilities			121,951				596,768
Lease liability - noncurrent			–				2,068
Total liabilities			121,951				598,836
Commitments and contingencies			–				–
Stockholders’ equity (deficit):
Series A Preferred stock, $0.0001 par value; 80,000 shares authorized; 0 and 80,000 shares issued and outstanding as of July 31, 2024 and 2023, respectively			–				8
Series B Preferred stock, $0.0001 par value; 80,000 shares authorized; 80,000 and 0 shares issued and outstanding as of July 31, 2024 and 2023, respectively			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; 14,781,803 and 5,903,481 shares issued and outstanding as of July 31, 2024 and 2023, respectively			1,478				590
Additional paid-in capital			962,416				4,982
Accumulated deficit			(222,071	)			(276,521	)
Total stockholders’ equity (deficit) attributable to TIANCI INTERNATIONAL, INC.			741,831				(270,941	)
Non-controlling interest			48,179				(7,691	)
Total stockholders’ equity (deficit)			790,010				(278,632	)
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY		$	911,961			$	320,204

 

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

 

 

 

 

TIANCI INTERNATIONAL, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(EXPRESSED IN UNITED STATES DOLLARS)

 

		For the year ended July 31,
		2024				2023
OPERATING REVENUES
Global logistics services		$	8,320,402			$	–
Other revenue			296,863				452,409
Total Operating Revenues			8,617,265				452,409
COST OF REVENUES
Global logistics services			7,432,806				–
Other revenue			129,280				456,494
Total Cost of Revenues			7,562,086				456,494
Gross profit (loss)			1,055,179				(4,085	)
Operating expenses:
Selling and marketing			365,992				54,169
General and administrative			520,884				285,740
Total operating expenses			886,876				339,909
Income (loss) from operations			168,303				(343,994	)
Other (expense) net			(22,077	)			–
Income (loss) before provision for income taxes			146,226				(343,994	)
Provision for income taxes			35,906				12,095
Net income (loss)			110,320				(356,089	)
Less: net income (loss) attributable to non-controlling interest			55,870				(14,879	)
Net income (loss) attributable to TIANCI INTERNATIONAL, INC.		$	54,450			$	(341,210	)
Weighted average number of common shares*
Basic and diluted			10,560,950				3,314,621
Income (loss) per common share attributable to TIANCI INTERNATIONAL, INC.*
Basic and diluted		$	0.01			$	(0.10	)
Weighted average number of preferred shares A*
Basic and diluted			37,260				40,659
Income (loss) per preferred share A attributable to TIANCI INTERNATIONAL, INC.*
Basic and diluted		$	1.46			$	(8.39	)
Weighted average number of preferred shares B*
Basic and diluted			21,319				–
Income (loss) per preferred share B attributable to TIANCI INTERNATIONAL, INC.*
Basic and diluted		$	2.55			$	–

 

*	Shares are presented on a retroactive basis to reflect the reorganization on March 3, 2023

 

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

 

 

 

 

TIANCI INTERNATIONAL, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

FOR THE YEARS ENDED JULY 31, 2024 AND 2023 (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, 2022		–			$	–			–			$	–			1,500,000			$	150			$	(50,000	)		$	82,732			$	64,689			$	7,188			$	104,759
RQS United Subscription receivable		–				–			–				–			–				–				50,000				–				–				–				50,000
Capital contribution		–				–			–				–			–				–				–				65,650				–				–				65,650
Payments of Shenzhen China rent by related parties (Note 3)		–				–			–				–			–				–				–				16,580				–				–				16,580
Stock compensation issued		–				–			–				–			700,000				70				–				209,930				–				–				210,000
Reverse merger adjustment		80,000				8			–				–			3,703,481				370				–				(369,910	)			–				–				(369,532	)
Net loss		–				–			–				–			–				–				–				–				(341,210	)			(14,879	)			(356,089	)
Balance at July 31, 2023		80,000			$	8			–			$	–			5,903,481			$	590			$	–			$	4,982			$	(276,521	)		$	(7,691	)		$	(278,632	)
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	)			–				–				–
Common stock private offering		–				–			–				–			433,213				44				–				433,169				–				–				433,213
Preferred stock private offering		–				–			80,000				8			–				–				–				79,992				–				–				80,000
Net income		–				–			–				–			–				–				–				–				54,450				55,870				110,320
Balance at July 31, 2024		–			$	–			80,000			$	8			14,781,803			$	1,478			$	–			$	962,416			$	(222,071	)		$	48,179			$	790,010

 

*	Shares are presented on a retroactive basis to reflect the reorganization on March 3, 2023

 

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

 

 

 

 

TIANCI INTERNATIONAL, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(EXPRESSED IN UNITED STATES DOLLARS)

 

		For the year ended July 31,
		2024				2023
Cash flows from operating activities:
Net income (loss)		$	110,320			$	(356,089	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Deferred income tax benefit			–				–
Stock compensation issued			–				210,000
Amortization of operating lease right-of-use asset			356				–
Debt forgave by related party			(24,953	)			–
Change in operating assets and liabilities:
Accounts receivable			–				737,663
Prepaid expense			(70	)			1,397
Lease security deposit			(114	)			–
Advances from customers			(29,070	)			29,070
Accounts payable			(777	)			(447,292	)
Income taxes payable			35,906				12,096
Operating lease liabilities			(356	)			–
Accrued liabilities and other payables			21,498				137,736
Net cash provided by operating activities			112,740				324,581
Cash flows from financing activities:
Cash received in connection with reverse acquisition			–				4,186
Proceeds received from private offerings			513,213				–
Subscription receivable collected			–				50,000
Capital contribution received			–				65,650
Working capital advance from related party			54,134				31,490
Repayment of working capital advance from related party			(28,083	)			(341,885	)
Operating expenses directly paid by shareholders			139				84,503
Payments of Shenzhen China rent by related parties			–				16,580
Deferred offering costs incurred			(495,356	)			–
Net cash (used in) provided by financing activities			44,047				(89,476	)
Net increase in cash			156,787				235,105
Cash, beginning			256,342				21,237
Cash, ending		$	413,129			$	256,342
Supplemental disclosure of cash flow information:
Cash paid during the period for:
Interest		$	–			$	–
Income taxes		$	–			$	–
Non-Cash Activities:
Initial recognition of right-of-use assets and lease liabilities		$	–			$	6,436
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			$	–
Noncash assets (liabilities) received in connection with reverse acquisition:
Prepaid expense and other current assets		$	–			$	3,250
Accounts payable			–				(3,127	)
Due to related parties			–				(253,041	)
Accrued liabilities and other payables			–				(120,800	)
Net		$	–			$	(373,718	)

 

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

 

 

TIANCI INTERNATIONAL, INC.

Notes to Consolidated Financial Statements

For the years ended July 31, 2024 and 2023

 

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 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.

 

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 4% of its revenue for the year ended July 31, 2024 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.

 

Going Concern Uncertainty

 

The accompanying consolidated Financial Statements have been prepared applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. As of July 31, 2023, the Company had cash of $256,342 and a working capital deficit of $284,542. For the year ended July 31, 2023, the Company had total operating revenues of $452,409 and a net loss of $356,089. These factors among others raised substantial doubt about the ability of the Company to continue as a going concern for a reasonable period of time as of October 20, 2023, the issuance date of the July 31, 2023 Financial Statements. As of October 20, 2023, Management plans were to seek debt and/or equity financing to operate until such time as the Company has established sufficient ongoing revenues to cover its costs. The July 31, 2023 financial statements did not include any adjustments relating to the recoverability and classification of assets or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

 

As of July 31, 2024, the Company had cash of $413,129 and positive working capital of $788,354. For the year ended July 31, 2024, the Company had total operating revenues of $8,617,265 and net income of $110,320. For these reasons, the Company believes that the going concern uncertainty has been alleviated as of July 31, 2024.

 

 

 

 

TIANCI INTERNATIONAL, INC.

Notes to Consolidated Financial Statements

For the years ended July 31, 2024 and 2023

 

 

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Basis of Presentation

 

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

 

Principles of consolidation

 

The 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 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 July 31, 2024 and 2023, 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.

 

 

 

 

TIANCI INTERNATIONAL, INC.

Notes to Consolidated Financial Statements

For the years ended July 31, 2024 and 2023

 

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:

 

·		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.

 

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.

 

 

 

 

TIANCI INTERNATIONAL, INC.

Notes to Consolidated Financial Statements

For the years ended July 31, 2024 and 2023

 

The Company typically satisfies its performance obligations at a point in time when freight is shipped to destination port and accepted by its customers. The Company does not have significant variable consideration in its contracts. Taxes assessed concurrently with a specific revenue-producing transaction that are collected by the 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.

 

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.

 

 

 

 

TIANCI INTERNATIONAL, INC.

Notes to Consolidated Financial Statements

For the years ended July 31, 2024 and 2023

 

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 service 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.

 

f. Business Consulting Services

 

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

 

Cost of revenues

 

For global logistics services, cost of revenue consists primarily of cargo space charged by direct ocean carriers, freight forwarders and ancillary logistics services fees.

 

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

 

For software, consulting, services-based revenue, the cost of revenue consists primarily of costs paid to outsourced service providers and compensation expenses paid the Company’s service vendor.

  

Advertising costs

 

Advertising costs amounted to $0 and $192 for the years ended July 31, 2024 and 2023, respectively. Advertising costs are expensed as incurred and included in selling and marketing expenses.

 

 

 

 

TIANCI INTERNATIONAL, INC.

Notes to Consolidated Financial Statements

For the years ended July 31, 2024 and 2023

 

Operating leases

 

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

 

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

 

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

 

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.

 

 

 

 

TIANCI INTERNATIONAL, INC.

Notes to Consolidated Financial Statements

For the years ended July 31, 2024 and 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% likely of being realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. Penalties and interest incurred related to underpayment of income tax for uncertain tax positions are classified as income tax expenses in the period incurred.

 

During the year ended July 31, 2024, the Company incurred a IRS penalty amount 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 year ended July 31, 2024.

 

The Hong Kong tax returns filed for 2017 and subsequent years are subject to examination by the applicable tax authorities.

 

The US tax returns filed for 2021 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 have an anti-dilutive effect (i.e., those that increase income per share or decrease loss per share) are excluded from the calculation of diluted EPS. As of July 31, 2024 and 2023, there were 8,000,000 and 8,000,000 dilutive shares outstanding related to the convertible Series B Preferred Stock (at July 31, 2024) and convertible Series A Preferred Stock (at July 31, 2023) (see Note 5), respectively. 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.

 

 

 

 

TIANCI INTERNATIONAL, INC.

Notes to Consolidated Financial Statements

For the years ended July 31, 2024 and 2023

 

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.

 

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 a smaller reporting company. The adoption of this standard on August 1, 2023 has not had and is not expected to have a material impact on the Company’s future consolidated financial statements.

 

In December 2019, the FASB issued ASU 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes”. 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 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 consolidated Financial Statements.

 

 

 

 

TIANCI INTERNATIONAL, INC.

Notes to Consolidated Financial Statements

For the years ended July 31, 2024 and 2023

 

NOTE 3 – PUBLIC OFFERING AND DEFERRED OFFERING COSTS

 

On March 14, 2024, the Company executed an agreement with Prime Number Capital LLC (“Prime”) for Prime to act as the Company’s Lead Underwriter on a “firm commitment” basis in connection with a public offering of shares of the Company’s common stock. The agreement provides for compensation to Prime of, among other things, (1) Underwriter’s Commission equal to 7.0% of Gross Proceeds, (2) Non-accountable Expenses equal to 1.0% of Gross Proceeds, (3) Underwriter’s warrants equal to 5.0% of the shares issued in the offering, and (4) a cash advance of $100,000 offsetable against the Underwriter’s Commission (of which the Company paid $50,000 to Prime on March 14, 2024). Prime’s obligation to initiate the offering is subject to satisfaction of several conditions, and there is no assurance that the offering will occur.

 

As of July 31, 2024, deferred offering costs relating to the public offering consist of:

Schedule of deferred offering costs relating to the public offering
Cash advance to Prime		$	100,000
Attorney fees			350,356
Accountant fees			45,000
Total		$	495,356

 

Upon closing of the public offering, the deferred offering costs will be offset against the proceeds from the public offering and included as part of the total public offering stock issuance costs.

 

NOTE 4 – RELATED PARTIES BALANCES AND TRANSACTIONS

 

Due from related party consists of:

 

Due from related party represents a receivable of $54,134 from RQS Capital at July 31, 2023. The receivable, which was non-interest bearing and due on demand, was collected by the Company in December 2023.

 

Due to related parties consists of:

Schedule of due to related parties

Transaction

July 31,

July 31,

Name

Relationship

Nature

2024

2023

Zhigang Pei*

Former Chairman of the Board and owner of Silver Glory Group Limited

Working capital advances and operating expenses paid on behalf of the Company

$

–

$

220,909

RQS Capital

61.89% shareholder

Company cash collection due to RQS Capital

2,271

2,132

Ying Deng**

Director and Vice President, RQS Capital’s 30% owner and Roshing’s 10% owner

Working capital advances and operating expenses paid on behalf of the Company

–

53,036

TOTAL

$

2,271

$

276,077

 

*	$220,909 of this liability was converted to 220,909 shares of common stock on January 19, 2024.

 

**	$24,953 of this liability was forgiven in November 2023.

 

 

 

 

TIANCI INTERNATIONAL, INC.

Notes to Consolidated Financial Statements

For the years ended July 31, 2024 and 2023

 

These liabilities are 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 provide for monthly compensation in amounts ranging from $1,300 per month to $3,800 per month.

 

For the years ended July 31, 2024 and 2023, the Company incurred management compensation expenses of $232,800 and $120,000, respectively. These amounts are included in “general and administrative expenses” in the accompanying consolidated statements 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 provided 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 $1,726) to RMB 13,583 (approximately $1,903) on behalf of Roshing. The rent expenses paid by Gao and Deng were 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 October 31, 2024, the Company has accounted for this agreement by charging general and administrative expenses $0. For the years ended July 31, 2024 and 2023, the Company has accounted for this agreement by charging general and administrative expenses for $0 and $16,580, respectively, and crediting additional paid-in capital for $0 and $16,580, respectively. The office sharing agreement was terminated on May 31, 2023 when Roshing moved all of its operations to its office in Hong Kong.

 

NOTE 5 – 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 established and designated as Series B Preferred stock.

 

The following table sets forth information, as of July 31, 2024, regarding the classes of capital stock that are authorized by the Articles of Incorporation of Tianci International, Inc.

Schedule of classes of capital stock authorized
						July 31, 2024
Class		Shares Authorized				Shares Outstanding
Common Stock, $.0001 par value			100,000,000				14,781,803
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				–

 

 

 

 

TIANCI INTERNATIONAL, INC.

Notes to Consolidated Financial Statements

For the years ended July 31, 2024 and 2023

 

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.

 

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 year ended July 31, 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).

 

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; Wei Fang – 64,600 shares; Fan Liu – 22,100 shares, Weiyu Zhu – 5,200 shares; and Yee Man Yung - 22,100 shares) in satisfaction of the Company’s liability to them for unpaid compensation.

 

 

 

 

TIANCI INTERNATIONAL, INC.

Notes to Consolidated Financial Statements

For the years ended July 31, 2024 and 2023

 

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.

 

NOTE 6 – INCOME TAXES

 

Income Taxes

 

Seychelles

 

RQS United is incorporated in Seychelles and is not subject to tax on income generated outside of Seychelles under the current law. In addition, upon payment of dividends, no withholding tax is imposed under current law.

 

Hong Kong

 

Roshing is incorporated in Hong Kong and is subject to Hong Kong Profits Tax on the taxable income as reported in its statutory financial statements adjusted in accordance with relevant Hong Kong tax laws. The applicable tax rate is 8.25% in Hong Kong. Hong Kong income tax expenses (benefit) for the years ended July 31, 2024 and 2023 amounted to $35,906 and $12,095, respectively.

 

For the year ended July 31, 2024, the income before provision for income taxes of $110,320, consisted of United States source loss of $(448,384) and Hong Kong source income of $558,704. For the year ended July 31, 2023, the loss before provision for income taxes of $(343,994), consisted of United States source loss of $(207,297) and Hong Kong source loss of $(136,697).

 

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

Schedule of provision for income taxes
		For the year ended
		July 31, 2024				July 31, 2023
Current Hong Kong		$	22,023			$	12,095
Deferred Hong Kong			–				–
Provision for income taxes		$	22,023			$	12,095

 

 

 

 

TIANCI INTERNATIONAL, INC.

Notes to Consolidated Financial Statements

For the years ended July 31, 2024 and 2023

 

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

Schedule of Hong Kong effective tax rate
		For the year ended July 31, 2024				For the year ended July 31, 2023
Hong Kong statutory income tax rate			8.25%				16.50%
Non deductible stock compensation			–				(25.30%	)
Prior year over-accrual of provision for income taxes			(2.21%	)			–
Effective tax rate			6.04%				(8.80%	)

 

For United States income tax purposes, Tianci has a net operating loss carryforward of approximately $1,416,000 at July 31, 2024. 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 July 31, 2024 and 2023, the Company did not have any significant unrecognized uncertain tax positions.

 

As of July 31, 2024, tax years 2021 and forward generally remain open for examination for United States Federal and State tax purposes and tax years 2017 and forward generally remain open for examination for Hong Kong tax purposes.

 

NOTE 7 — 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 July 31, 2024, no United States account balance exceeded $250,000. The Hong Kong Deposit Protection Board pays compensation up to a limit of HKD 500,000 (approximately US$64,000) if the bank with which an individual/company holds its eligible deposit fails. As of July 31, 2024, a cash balance of $386,936 was maintained at a financial institution in Hong Kong of which approximately $323,000 was subject to credit risk. Management believes that the financial institution is of high credit quality and continually monitors its credit worthiness.

 

 

 

 

TIANCI INTERNATIONAL, INC.

Notes to Consolidated Financial Statements

For the years ended July 31, 2024 and 2023

 

Customer concentration risk

 

For the year ended July 31, 2024, three customers accounted for 48%, 25%, and 11% of the Company’s total revenues.

 

For the year ended July 31, 2023, two customers accounted for 40.9% and 11.5% of the Company’s total revenues.

 

As of July 31, 2024 and 2023, no customer accounted for over 10% of the Company’s total accounts receivable.

 

Vendor concentration risk

 

For the year ended July 31, 2024, two vendors accounted for 53.5% and 22.2% of the Company’s total purchases. For the year ended July 31, 2023, two vendors accounted for 76% and 16% of the Company’s total purchases. As of July 31, 2024 and 2023, no vendor accounted for over 10% of the Company’s total accounts payable.

 

NOTE 8— COMMITMENTS AND CONTINGENCIES

 

Lease commitments

 

On January 1, 2021, Roshing entered into an operating lease agreement for office space in Hong Kong with a third party. The agreement had a term of two years and provided for monthly rent of HKD 2,800 (approximately $360). On January 13, 2023, the Company entered a new operating lease agreement for office space in Hong Kong with a third party for two years with monthly rent of HKD 3,000 (approximately $382). Upon adoption of ASU 2016-02 effective August 1, 2022, the Company recognized a $8,704 right of use (“ROU”) asset and operating lease liabilities in January 2023 based on the present value of the future minimum rental payments of leases, using an incremental borrowing rate of 5%. The Company’s lease agreement does not contain any material residual value guarantees or material restrictive covenants. The lease does not contain an option to extend at the time of expiration. The lease was early terminated in September 2023 which resulted in a derecognition of $6,080 right of use (“ROU”) asset and operating lease liabilities in August 2023.

 

In September 2023, the Company entered into a one-year office rental service agreement with a monthly lease payment of approximately $828 (HKD 6500).

 

Rent expenses were $10,637 and $26,159 for the years ended July 31, 2024 and 2023, respectively.

 

Contingencies

 

From time to time, the Company may be a party to legal proceedings, as well as certain asserted and un-asserted claims. The Company was not involved in any material legal proceedings nor asserted claims as of July 31, 2024.

 

 

 

 

TIANCI INTERNATIONAL, INC.

Notes to Consolidated Financial Statements

For the years ended July 31, 2024 and 2023

 

NOTE 9 — ENTERPRISE-WIDE DISCLOSURE

 

The Company follows ASC 280, Segment Reporting, which requires companies to disclose segment data based on how management makes decisions about allocating resources to each segment and evaluates their performances. The Company’s chief operating decision-makers (i.e., the Company’s chief executive officer and his direct assistants, including the Company’s chief financial officer) review financial information presented on a consolidated basis, accompanied by disaggregated information about revenues, cost of revenues, and gross profit by business lines and by regions (Hong Kong, Vietnam, Japan and Singapore) for purposes of allocating resources and evaluating financial performance. There are no segment managers who are held accountable for operations, operating results and plans for levels or components below the consolidated unit level. Based on qualitative and quantitative criteria established by ASC 280, the Company considers itself to be operating within one reportable segment.

 

Disaggregated information of revenues by business lines are as follows:

Schedule of disaggregated information of revenues by business lines
		For the year ended
		July 31,
		2024				2023
Electronic Device Hardware Components Sales		$	103,382			$	294,880
Software and Website Development Services			19,230				10,000
Technical Consulting and Training Services			–				14,470
Software Maintenance and Business Promotion Services			29,276				86,776
Business Consulting Services			144,975				46,283
Global Logistics Services			8,320,402				–
Total revenues		$	8,617,265			$	452,409

 

Disaggregated information of revenues by regions are as follows:

Schedule of disaggregated information of revenues by regions
		For the year ended
		July 31,
		2024				2023
Hong Kong		$	6,637,414			$	395,633
Vietnam			953,251				–
Japan			1,025,350				–
Singapore			1,250				56,776
Total revenues		$	8,617,265			$	452,409

  

 

 

 

TIANCI INTERNATIONAL, INC.

Notes to Consolidated Financial Statements

For the years ended July 31, 2024 and 2023

 

NOTE 10 — CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY (Unaudited)

 

The Company performed a test on the restricted net assets of its consolidated subsidiaries in accordance with Rule 4-08(e)(3) of Regulation S-X promulgated by the SEC, “General Notes to Financial Statements” and concluded that it was applicable and the Company is required to disclose the required financial statement information for the parent company.

 

The subsidiaries did not pay any dividends to the parent during the periods presented. For the purpose of presenting parent only financial information, the Company records its investment in its subsidiaries under the equity method of accounting. Such investments are presented on the separate parent only balance sheets as “investment in subsidiaries” and the income (loss) of the subsidiaries is presented as “share of income (loss) of subsidiaries.” Certain information and footnote disclosures generally included in financial statements prepared in accordance with U.S. GAAP have been condensed or are not required.

 

PARENT COMPANY BALANCE SHEET

Schedule of balances sheet
		July 31,				July 31,
		2024				2023
ASSETS
Cash		$	14,621			$	66,553
Prepaid expense			1,820				1,750
Receivable from subsidiaries			–				29,487
Investment in subsidiaries			781,661				95,889
Total Assets		$	798,102			$	193,679
LIABILITIES
Accounts payable and other accrued liabilities		$	54,000			$	241,579
Payable to subsidiaries			312,416				–
Due to related parties			2,271				223,041
Total liabilities			56,271				464,620
Stockholders’ equity
Series A Preferred stock, $0.0001 par value; 80,000 shares authorized; 0 and 80,000 shares issued and outstanding as of July 31, 2024 and 2023, respectively			–				8
Series B Preferred stock, $0.0001 par value; 80,000 shares authorized; 80,000 and 0 shares issued and outstanding as of July 31, 2024 and 2023, respectively			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; 14,781,803 and 5,903,481 shares issued and outstanding as of July 31, 2024 and 2023, respectively			1,478				590
Additional paid-in capital			962,416				4,982
Accumulated deficit			(222,071	)			(276,521	)
Total stockholders’ equity			741,831				(270,941	)
Total Liabilities and Stockholders’ Equity		$	798,102			$	193,679

 

 

 

 

TIANCI INTERNATIONAL, INC.

Notes to Consolidated Financial Statements

For the years ended July 31, 2024 and 2023

 

PARENT COMPANY STATEMENT OF OPERATIONS

Schedule of statement of operations
		For the year ended July 31,
		2024				2023
EXPENSE:
General and administrative		$	(401,354	)		$	(207,297	)
OTHER INCOME (EXPENSE)
Gain (loss) from investment in subsidiaries			502,834				(133,913	)
Other (expense) net			(47,030	)			–
Total other income			455,804				(133,913	)
Net income (loss)		$	54,450			$	(341,210	)

 

PARENT COMPANY STATEMENT OF CASH FLOWS

Schedule of statement of cash flow
		For the year ended July 31,
		2024				2023
Cash flows from operating activities:
Net income (loss)		$	54,450			$	(341,210	)
Adjustments to reconcile net income to net cash provided by operating activities:
Share of (gain) loss from investment in subsidiaries			(502,834	)			133,913
Change in operating assets and liabilities:
Prepaid expense and other assets			(70	)			1,500
Accounts payable and other accrued liabilities			36,623				117,651
Net cash (used in) operating activities			(411,831	)			(88,146	)
Cash flows from financing activities:
Proceeds received from private offerings			513,213				–
Operating expenses directly paid for subsidiary			–				(29,487	)
Repayment working capital advance from related party			–				(30,000	)
Working capital advance from related party			342,042				–
Capital contribution received			–				210,000
Deferred offering costs incurred			(495,356	)			–
Net cash provided by financing activities			359,899				150,513
Net (decrease) increase in cash and cash equivalents			(51,932	)			62,367
Cash and cash equivalents at beginning			66,553				4,186
Cash and cash equivalents at ending		$	14,621			$	66,553

 

 

 

 

TIANCI INTERNATIONAL, INC.

Notes to Consolidated Financial Statements

For the years ended July 31, 2024 and 2023

 

NOTE 11 — 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.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2,170,000 Shares of Common Stock

 

 

 

TIANCI INTERNATIONAL, INC.

 

 

 

PROSPECTUS

 

 

Benjamin Securities, Inc.

 

[●], 2024

 

Through and including [●], 2025 (the 25^th day after the date of this prospectus), all dealers effecting transactions in the shares whether or not participating in this Underwritten Offering, may be required to deliver a prospectus. This delivery requirement is in addition to a dealer’s obligation to deliver a prospectus when acting as an underwriter and with respect to an unsold allotment or subscription.

 

 

 

 

 

 

 

The information in this prospectus is not complete and may be changed. These securities may not be sold until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and is not soliciting an offer to buy these securities in any state or other jurisdiction where the offer or sale is not permitted.

 

PRELIMINARY RESALE PROSPECTUS

SUBJECT TO COMPLETION

DATED [●], 2024

 

3,260,000 Shares of Common Stock

 

 

TIANCI INTERNATIONAL, INC.

 

This prospectus relates to the resale of 3,260,000 shares of common stock, par value $0.0001 per share, by the selling stockholders (the “Selling Stockholders”) Of Tianci International, Inc. We will not receive any proceeds from the sale or other disposition of shares by the Selling Stockholders.

 

Our common stock is quoted on the OTC Pink Market under the symbol “CIIT.” The closing price of our common stock on December 9, 2024, was $3.99 per share. There is currently a limited public trading market for our common stock.

 

We have applied to have our common stock listed on The Nasdaq Capital Market under the symbol “CIIT,” which listing is a condition to this Offering. No assurance can be given that our application will be approved or, if we receive approval, that a trading market will develop, if developed, that it will be sustained or that the trading prices of our common stock on the OTC Pink Market will be indicative of the prices of our common stock if traded on The Nasdaq Capital Market. We will not receive any proceeds from the sale of shares by the Selling Stockholders.

 

Any shares sold by the Selling Stockholders until our common stock is listed on an established public trading market will take place at $[●] per share, which is the per share offering price we are selling in our public offering. Thereafter, any sales will occur at prevailing market prices or in privately negotiated prices. The distribution of securities offered hereby may be effected in one or more transactions that may take place in ordinary brokers’ transactions, privately negotiated transactions or through sales to one or more dealers for resale of such securities as principals. Usual and customary or specifically negotiated brokerage fees or commissions may be paid by the Selling Stockholders.

 

Shufang Gao, our Chief Executive Officer, President and Chairperson of the Board of Directors (“Board”), has voting control over approximately 62.11% of our voting power of our outstanding voting stock and therefore we currently meet the definition of a “controlled company” under the corporate governance standards for companies listed on The Nasdaq Stock Market LLC (“Nasdaq”) and for so long as we remain a controlled company under this definition, we are eligible to utilize certain exemptions from the corporate governance requirements of Nasdaq. Upon the closing of this Offering, Mr. Gao will own approximately 56.71% of the voting power of our outstanding voting stock.

 

On [●], 2024, a registration statement under the Securities Act of 1933, as amended (the “Securities Act”) with respect to our public offering of common stock, was declared effective by the Securities and Exchange Commission (the “SEC”). We received approximately $ [●] million in net proceeds from the offering (assuming no exercise of the underwriter’s over-allotment option) after payment of underwriting discounts and commissions and estimated expenses of the offering.

 

Investing in our common stock involves a high degree of risk, including the risk of losing your entire investment. See “Risk Factors” beginning on page 17 of the primary offering prospectus contained in the registration statement of which this prospectus forms a part, to read about factors you should consider before buying our common stock.

 

Neither the SEC nor any state securities commission nor any other regulatory body has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

 

The date of this prospectus is                                  , 2024

 

 

 

 

PROSPECTUS SUMMARY

 

This summary highlights certain information contained elsewhere in this prospectus. You should read the entire prospectus carefully, including our financial statements and related notes, and especially the “Risk Factors” beginning on page 17. All references to “we,” “us,” “our,” “Company” or similar terms used in this prospectus refer to Tianci International, Inc. a Nevada corporation. Unless otherwise indicated, the term “fiscal year” refers to our fiscal year ending July 31. Unless otherwise indicated, the term “common stock” refers to shares of CIIT’s common stock.

 

Overview

 

The Company’s business is global logistics. The Company through its subsidiary, Roshing, provides global logistics services, encompassing booking and the transportation arrangement and related logistics solutions. Roshing’s customized logistics solutions are tailored to meet the diverse needs of its customers.

 

As a logistics shipping operator, Roshing focuses on ocean freight forwarding services, including container shipping and bulk goods shipping service.

 

For the container shipping service, Roshing charters cargo space from shipping suppliers (such as shipowners, ship carrier or non-vessel operating common carriers) and then sub-charters that cargo space to its customers (cargo owners or cargo agents). For the bulk goods shipping service, Roshing issues fixture notes to customers, and then arranges the booking of ships, and signs chartering contracts with suppliers (such as shipowners). Roshing also tailors the selection of transport options, and arranges to transport the goods from the port of loading to the port of destination, so as to complete the performance of the contract.

 

Roshing currently does not own or operate any transportation assets. By leveraging our senior management’s expertise in the global logistics industry and adopting an asset-light strategy at the early stage, Roshing has seen a significant growth in logistics revenue since 2023. Shufang Gao, our Chief Executive Officer previously worked for a globally renowned shipping conglomerate, with over 20 years of management experience. His expertise spans shipping operation management, and logistics transportation. Leveraging this experience, he has provided the Company with the managerial framework to expand its global logistics business, as well as access to relevant customer and supplier resources in the shipping industry. Roshing’s business is primarily carried out in Hong Kong and other locations in the Asia-Pacific region, mainly in Japan, South Korea, Vietnam. Roshing’s logistics services also include the shipment of goods to African countries.

 

Roshing also generates revenue from the sale of electronic parts, and certain business and technical consulting services, independent from its global logistics business.

 

Our Services

 

Our operations conducted through Roshing include providing the following services to our customers.

 

1. Global Logistics Services

 

Our global logistics services provided through Roshing accounted for 96.6% of our revenue for the year ended July 31, 2024 and 92.6% for the three months ended October 31, 2024. These services encompass ocean shipping operations and related logistics solutions. Roshing focuses on ocean freight forwarding services, including container shipping and bulk goods shipping. Roshing customizes its logistics solutions to meet the diverse needs of our customers, including the optimization of shipping routes and the utilization of vessels with different tonnages.

 

Roshing derives revenues by entering into agreements that are generally comprised of a single performance obligation to ship freight either by container ships or by bulk cargo vessels. The most significant drivers of changes in Roshing’s global logistics service revenue and related transportation expenses are cargo volume, weight and sea route.

 

 

 

 

Our Service Process

 

Roshing has long-term and close relationships with ocean shipping suppliers. When a customer makes an inquiry to Roshing, we are usually able to offer competitive quotes and customize shipping solutions quickly.

 

Roshing begins by thoroughly evaluating the customer’s logistics needs, including the type of goods being shipped, the destination, and the required transportation time. Based on this information, Roshing designs an optimal transportation plan tailored to the customer’s specific requirements. This plan includes selecting the most efficient shipping routes, determining the appropriate container or vessel size and type, and considering any special handling or regulatory compliance requirements. Roshing then enters into a written contract with the customer for ocean shipping that can best meet the customer’s needs and aligns with the customer’s timeline and cargo specifications.

 

Roshing works with each customer to develop a cost-effective plan and service terms to meet the client’s needs. This involves detailed discussions to ensure that both parties have a clear understanding of expectations, costs, and responsibilities. Roshing will assign cargo space from an appropriate container ship or bulk cargo vessel based on the volume and weight of the shipment, minimize shipping costs, select the shortest route to save on freight, and choose the port closest to the customer’s destination.

 

Throughout the entire shipping process, Roshing maintains close oversight to ensure the safety and timely arrival of goods at the destination port. This involves real-time tracking and monitoring of the shipment, handling any unforeseen issues that may arise, and providing regular updates to the customer. By doing so, Roshing ensures that the goods are transported safely and arrive within the agreed timeframe, meeting all customer expectations.

 

We believe that Roshing stands out in the global logistics landscape because of its core strengths. Firstly, Roshing’s management’s extensive network and industry relationships empower us with access to a wide customer base, enabling tailored solutions for an array of logistics requirements. Additionally, Roshing’s collaboration with direct shipping suppliers ensures transparent service delivery. Moreover, our expertise in route optimization enables us to efficiently manage logistics routes and secure favorable terms for our clients. These strengths collectively position us as a competitive player in the industry.

 

2. Other Products & Services

 

	·	Electronic Device Hardware: Roshing is a distributor of hardware components for electronic devices and generates revenue from reselling these components. It is not engaged in product development or direct manufacturing of hardware. The main products include Wi-Fi modules, Bluetooth modules, 4G network modules, LED screens and touch screens. Roshing’s main customers are non-Hong Kong traders, direct traders of hardware components, companies engaged in the assembly and sale of finished products and private label entities seeking electronic component procurement and light customization.
	·	Software Technical Services: Roshing 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. Roshing also provides software maintenance services to keep customers’ software up to date and assists customers in promoting their businesses with ongoing marketing support.
	·	Business Consulting Services: Roshing provides business consulting services to help customers apply for immigration and non-immigration visas. Roshing is responsible for performing background checks, assessment, and preparing related application paperwork.

 

 

 

 

Our Market Opportunities

 

The shipping industry holds significant potential, as indicated by BIMCO’s projections of substantial growth in ship supply and deliveries through 2025. With an expected increase of 9.1% in 2024 and 4.1% in 2025, and a fleet growth of 14.9% by 2025, we believe that the industry is poised for expansion. Cargo volumes are anticipated to grow steadily at a rate of 3-4% annually during this period. Moreover, the global economy is forecasted to experience moderate growth, with the IMF estimating rates of 3.1% in 2024 and 3.2% in 2025.

 

In the bulk cargo market, strong demand is being driven by factors such as heightened demand from China and export restrictions from Indonesia. We believe that the container shipping sector will also see opportunities. Disruptions like the 40-day blockade in the Red Sea in January 2024 have led to notable increases in freight rates. Additionally, ongoing container capacity shortages in China, which is expected to persist from the onset of the Chinese Spring Festival in 2024, could further elevate freight rates, offering potential benefits to shipowners.

 

Our Mission

 

Creating Value

 

As a global logistics enterprise, our primary mission is to provide customers with efficient, reliable, and safe shipping services that create value.

 

Promoting Global Trade & Connectivity

 

As an important component of global trade, we believe that global logistics enterprises have a mission to promote the development and connectivity of global trade and promote the prosperity and development of the global economy by facilitating cross-border operations for businesses. We are committed to cultivating a robust global network, both online and offline. The online part involves connecting with customers and suppliers through social media platforms. The offline part includes acquiring potential customers through exhibitions, recommendations, and other direct interactions.

 

Undertaking Social Responsibility

 

We believe that shipping companies also need to be socially responsible, pay attention to environmental protection, social welfare, promote sustainable development, and contribute to the prosperity and development of society.

 

We strive to optimize shipping routes and transportation plans to reduce energy consumption and emissions. Moreover, we intend to encourage our supply chain partners to adopt greener transportation and packaging methods, contributing to the sustainability of the entire industry. We also seek to actively participate in environmental projects and initiatives and collaborate with government and non-governmental organizations to focus on environmental protection.

 

 

 

 

CORPORATE HISTORY AND STRUCTURE

 

The following diagram illustrates our corporate structure as of the date of the prospectus. Tianci, as the ultimate holding company, owns 100% of the equity interests in RQS United and Tianci Seychelles, and indirectly, holds 90% of the equity interests in Roshing.

 

 

For details of our principal stockholders’ ownership, please refer to the beneficial ownership table in the section captioned “Principal Stockholders.”

 

Roshing International Co., Limited History Before Share Exchange

 

On June 22, 2011, Roshing International Co., Limited (“Roshing”) was incorporated in Hong Kong with a share capital of HKD 100,000 divided into 100,000 shares. Ying Deng was the registered shareholder of the said 100,000 shares.

 

RQS United Group Limited History

 

On November 4, 2022, RQS United Group Limited (“RQS United”) was incorporated in the Republic of Seychelles as an international business company 100% owned by RQS Capital with 50,000 shares.

 

On January 16, 2023, RQS United was allotted 900,000 shares of Roshing.

 

RQS United holds 90% of share capital of Roshing, while Ying Deng holds 10% of the share capital of Roshing.

 

 

 

 

RQS Capital Limited History

 

On July 05, 2022, RQS Capital Limited was incorporated in British Virgin Islands authorized with 50,000 shares 100% owned by Ying Deng (“RQS Capital”).

 

On September 29, 2022, Ying Deng transferred 30,000 shares to Shufang Gao, 2,500 shares to Zhu Weiyu and 2,500 shares to Bo Ye respectively.

 

On January 06, 2023, Zhu Weiyu transferred 2,500 shares to Bo Ye. By this time, RQS Capital was owned by Ying Deng (30%), Shufang Gao (60%) and Bo Ye (10%) respectively.

 

Tianci History before Share Exchange

 

On June 13, 2012, Freedom Petroleum Inc. was incorporated under the laws of the State of Nevada.

 

On July 02, 2015, Freedom Petroleum, Inc. changed its name from Freedom Petroleum to Steampunk Wizards, Inc.(“Steampunk”).

 

On October 26, 2016, Steampunk completed a reverse merger, with Steampunk as the public shell company. Tianci merged with and into Steampunk. This transaction was carried out in accordance with the terms set forth in the Merger Agreement which took effective On November 9, 2016, and on the same day, Steampunk changed its name to Tianci International, Inc.

 

On August 3, 2017, Tianci entered into a Stock Purchase Agreement (the “SPA”) with Shifang Wan (the “Seller”), the record holder of 4,397,837 shares of common stock, or approximately 87.00% of the issued and outstanding of Common Stock of Tianci, and Chuah Su Chen and Chuah Su Mei (collectively, the “Purchasers”, and together with Tianci and the Seller, the “Parties”). Pursuant to the SPA, the Seller sold to the Purchasers and the Purchasers acquired from the Sellers the Shares for a total gross purchase price of Three Hundred Fifty Thousand Dollars ($350,000). The acquisition was consummated on August 15, 2017.

 

Effective August 6, 2021, Tianci, Chuah Su Mei, Tianci’s 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 Tianci 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 Tianci. The sale of the Shares consummated on August 26, 2021. As a result of the Transaction, Silver Glory Group Limited holds a controlling interest in Tianci.

 

Upon the closing of the Transaction, on August 26, 2021, each of Chuah Su Chen, Chuah Su Mei, and Jerry Ooi, constituting all current directors and officers of Tianci, resigned from his or her positions with Tianci. Each of the foregoing former officers and directors also forgave all amounts due to them from Tianci in connection with the closing of the Transaction.

 

On January 26, 2023, Tianci filed with the Nevada Secretary of State a Certificate of Amendment of Articles of Incorporation (the “Amendment”). The Amendment amended Article 3 of the Articles of Incorporation to provide that the authorized capital stock of the Tianci 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.

 

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. The 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 Tianci, each holder of Series A Preferred Stock will be entitled to receive, out of the net assets of Tianci, $0.01 per share, then to share in the distribution on an as-converted basis.

 

 

 

 

On January 27, 2023, Tianci sold 80,000 shares of Series A Preferred Stock to RQS Capital. The shares were sold for a cash payment of $24,000, which was contributed to Tianci International, Inc.’s capital on behalf of RQS Capital by members of its management.

 

On February 13, 2023, Tianci Group Holding Limited (“Tianci Seychelles”) was incorporated in the Republic of Seychelles as an international business company 100% owned by Tianci, with 100,000 shares, with no operation.

 

On March 1, 2023, Tianci entered into agreements to sell a total of 1,253,333 shares of its common stock to 13 investors for a price of $0.30 per share (i.e. an aggregate price of $376,000). The shares were issued in a private offering to investors that were acquiring the shares each for his or her own account. The offering, therefore, was exempt from registration under the Securities Act of 1933 pursuant to Section 4(a)(2) of the Securities Act. The sale was also exempt from registration pursuant to Rule 902(1)(i) of Regulation S, as the purchasers were non-U.S. persons and Rule 903 was complied with.

 

Share Exchange

 

On March 3, 2023, Tianci acquired RQS United, pursuant to the Share Exchange Agreement dated March 3, 2023, entered into among Tianci, RQS United and RQS Capital, the prior owner of RQS United.

 

Prior to the Share Exchange, Tianci was a shell company as defined in Rule 12b-2 under the Exchange Act. As a result of the transactions under the Exchange Agreement, Tianci ceased to be a shell company.

 

RQS United is a holding company incorporated in the Republic of Seychelles. RQS United has no operation other than holding 90% of the share capital of its subsidiary, Roshing.

 

Tianci History after Share Exchange

 

On January 19, 2024, Tianci issued 8,000,000 shares of its common stock to RQS Capital. The shares were issued upon RQS Capital’s exercise of its right to convert 80,000 shares of Tianci’s Series A Preferred Stock into 8,000,000 shares of common stock. As of the date of the prospectus, there are no Series A Preferred Stock outstanding. Upon completion of the conversion, RQS Capital owned 9,500,000 shares of Tianci’s common stock, representing 66.2% of the 14,348,590 shares outstanding. Shufang Gao, the Chief Executive Officer, is also the Chairman of RQS Capital.

 

On January 22, 2024, Tianci 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 who were acquiring the shares each for his own account. The offering, therefore, was exempt from registration under the Securities Act of 1933 pursuant to Section 4(a)(2) of the Securities Act. The sale was also exempt from registration pursuant to Rule 902(1)(i) of Regulation S, as the purchasers were non-U.S. persons and Rule 903 was complied with. There was no underwriter for the offering.

 

On February 28, 2024, RQS Capital transferred 2,540,000 shares of Tianci to Carson (BVI) Limited (730,000 shares), Cobalt Capital Holding Limited (650,000 shares), Elysium Capital Holding Limited (610,000 shares), and Global View Capital Limited (550,000 shares) respectively.

 

On April 24, 2024, Tianci sold 80,000 shares of Series B Preferred Stock to RQS Capital. The shares were sold for a cash payment of $80,000. The shares were issued in a private offering to an investor that was acquiring the shares for its own account. Shufang Gao, Tianci’s Chief Executive Officer, is the majority shareholder and Chairman of RQS Capital.

 

 

 

 

 

 

On April 24, 2024, Tianci filed with the Nevada Secretary of State a Certificate of Designation of 80,000 shares of 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 (an aggregate of 8,000,000 shares of common stock), subject to equitable adjustment of the conversion rate. The holder of Series B Preferred Stock has voting rights equal to the number of shares of common stock into which the Series B Preferred Stock is convertible. Upon liquidation of Tianci, each holder of Series B Preferred Stock will be entitled to receive, out of the net assets of Tianci, $0.01 per share, then to share in the distribution on an as-converted basis.

 

As of the date of this prospectus, RQS Capital does not intend to convert its shares of Series B Preferred Stock into shares of common stock before the closing of this offering, and such shares of Series B Preferred Stock will not automatically convert into shares of common stock in connection with this offering. However, the shares of Series B Preferred Stock may be converted into shares of common stock at any time at the option of RQS Capital.

 

On May 2, 2024, RQS Capital transferred 720,000 shares of Tianci to Broadness (BVI) Limited and transferred 69,638 shares of Tianci to one individual.

 

On May 31, 2024, RQS Capital transferred 70,000 shares of Tianci to one individual.

 

As of the date of this prospectus, RQS Capital held 61.89% of the aggregate voting power of Tianci.

 

Listing on OTC Pink Market

 

The Company’s common stock is quoted on the OTC Pink Market under the symbol “CIIT”. The quotations reported on the OTC Pink Market reflect inter-dealer prices without retail markup, markdown or commissions, and may not necessarily represent actual transactions.

 

The Company’s common stock is thinly traded. The quoted bid and asked prices for the common stock vary significantly from week to week. An investor holding shares of the Company’s common stock may find it difficult to sell the shares and may find it impossible to sell more than a small number of shares at the quoted bid price.

 

Listing on the Nasdaq Capital Market

 

Our common stock is currently quoted on the OTC Pink Market under the symbol “CIIT.” In connection with this offering, we have applied to list our common stock on the Nasdaq Capital Market (“Nasdaq”) under the symbol “CIIT.” If our listing application is approved, we expect to list our common stock on Nasdaq in connection with the Offering, at which point our common stock will cease to be traded on the OTC Pink Market. No assurance can be given that our listing application will be approved. Nasdaq listing requirements include, among other things, a stock price threshold. As a result, prior to effectiveness, we will need to take the necessary steps to meet Nasdaq listing requirements, which may include, but not be limited to, effectuating a reverse split of our common stock. If our application is not approved, the offering will not be completed. The offering is contingent upon final approval of the listing of our common stock on the Nasdaq Capital Market.

 

Corporate Information

 

We are incorporated under the laws of the State of Nevada. Our principal executive offices are located at Unit B,10/F., Ritz Plaza, No.122 Austin Road, Tsim Sha Tsui, Kowloon, Hong Kong. Our telephone number is 852-22510781. Our website is www.tianci-ciit.com. Information contained in, or that can be accessed through, our website is not incorporated by reference into this registration statement, and you should not consider information on our website to be part of this registration statement. Our agent for service of process in the United States is Northwest Registered Agent, LLC.

 

Implications of Being a Smaller Reporting Company

 

We are a “smaller reporting company” as defined in Rule 12b-2 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and have elected to take advantage of certain of the scaled disclosure available for smaller reporting companies. We will remain a smaller reporting company until the end of the fiscal year in which (1) we have a public common equity float of more than $250 million, or (2) we have annual revenues for the most recently completed fiscal year of more than $100 million and a public common equity float or public float of more than $700 million. We also would not be eligible for status as a smaller reporting company if we become an investment company, an asset-backed issuer or a majority-owned subsidiary of a parent company that is not a smaller reporting company.

 

 

 

 

We have elected to take advantage of certain of the reduced disclosure obligations in the registration statement of which this prospectus is a part and may elect to take advantage of other reduced reporting requirements in future filings. As a result, the information that we provide to our stockholders may be different from what you might receive from other public reporting companies in which you hold equity interests.

 

Implications of Being a Controlled Company

 

Shufang Gao, our Chief Executive Officer, has voting control over approximately 62.11% of the aggregate voting power of the Company. And therefore, we currently meet the definition of a “controlled company” under the corporate governance standards for Nasdaq listed companies and for so long as we remain a controlled company under this definition, we are eligible to utilize certain exemptions from the corporate governance requirements of Nasdaq. Upon the closing of the Offering, Shufang Gao will own approximately 56.71% of the voting power of our outstanding voting stock.

 

As long as Shufang Gao owns at least 50% of the voting power of our Company, we will be a “controlled company” as defined under the Nasdaq rules.

 

For so long as we are a controlled company under that definition, we are permitted to rely on certain exemptions from corporate governance rules, including:

 

	·	an exemption from the rule that a majority of our Board must be independent directors;
	·	an exemption from the rule that the compensation of our chief executive officer must be determined or recommended solely by independent directors; and
	·	an exemption from the rule that our director nominees must be selected or recommended solely by independent directors.

 

Although we do not intend to rely on the “controlled company” exemption under Nasdaq listing rules, we could elect to rely on this exemption in the future. If we elect to rely on the “controlled company” exemption, a majority of the members of our Board might not be independent directors and our nominating and corporate governance and compensation committees might not consist entirely of independent directors.

 

As a result, you will not have the same protection afforded to stockholders of companies that are subject to these corporate governance requirements.

 

Summary Risk Factors

 

Our business is subject to a number of risks. You should be aware of these risks before making an investment decision. These risks are discussed more fully in the section of this prospectus titled “Risk Factors,” which begins on page 17 of this prospectus. These risks include, among others, that:

 

RISKS RELATED TO OUR BUSINESS

 

Risks Related to the Global Logistics Services

 

	·	Geopolitical conditions, such as political instability or conflict, terrorist attacks and international hostilities can affect the Maritime transportation industry, which could adversely affect our business. See “Risk Factors - Geopolitical conditions, such as political instability or conflict, terrorist attacks and international hostilities can affect the Maritime transportation industry, which could adversely affect our business.” on page 17.
	·	Any reduction in international commerce or disruption in global trade may adversely impact our business and operating results. See “Risk Factors - Any reduction in international commerce or disruption in global trade may adversely impact our business and operating results.” on page 17.
	·	Failure to compete in our highly competitive industry could harm our business. See “Risk Factors - Our industry is highly competitive, and failure to compete or respond to customer requirements could damage our business and results of operations.” on page 18.
	·	Uncertainty in customer shipments or carrier rates could impact on our margins and results. See “Risk Factors - Difficulty in forecasting timing or volumes of customer shipments or rate changes by carriers could adversely impact our margins and operating results.” on page 18.
	·	Climate change and related measures could harm our business and finances. See “Risk Factors - Climate change, including measures to address climate change, could adversely impact our business and financial results.” on page 18.

 

 

 

 

 

	·	Roshing faces risks from shipment contents, quality or health issues, and inherent logistics dangers like injury, product damage, and transport incidents. See “Risk Factors - Roshing faces risks associated with the contents of shipments and inventories handled through its logistics services, including real or perceived quality or health issues with the products that are handled through Roshing’s logistics services, and risks inherent in the logistics industry, including personal injury, product damage, and transportation-related incidents.” on page 19.
	·	Roshing faces risks from contracts with shipping suppliers. See “Risk Factors - Roshing is subject to potential risks arising from contractual obligations with shipping suppliers.” on page 19.
	·	Roshing faces risks from evolving customer needs and contracts, risking financial losses, legal liabilities, and reputational damage if not managed carefully. See “Risk Factors - Roshing faces risks from changing customer logistics needs, contractual obligations, and failure to meet customer requirements, which could lead to financial losses, legal liabilities, and damage to Roshing’s reputation if not managed proactively.” on page 19.
	·	Our revenues, operating income, and cash flows may fluctuate due to uncertainty and potential volatility in cargo space and container load demand and supply. See “Risk Factors - Our revenues, operating income and cash flows are likely to fluctuate and are subject to uncertainty and potential volatility in demand and supply for cargo space and container loads from time to time.” on page 20.
	·	Seasonality and the impact of weather and other catastrophic events adversely affect Roshing’s operations and profitability. See “Risk Factors - Seasonality and the impact of weather and other catastrophic events adversely affect Roshing’s operations and profitability.” on page 21.

 

Risks Related to Other Products & Services

 

	·	Roshing heavily relies on a few suppliers. See “Risk Factors - Roshing has a great dependence on a limited number of suppliers and the loss of their manufacturing capability could materially impact on its operations.” on page 21.
	·	Defects in Roshing’s hardware products or quality control failures in distribution could hinder sales and lead to product liability claims and costly litigation. See “Risk Factors - Defects in the Hardware Products Roshing sells or failures in quality control related to its distribution of products could impair its ability to sell its products or could result in product liability claims, litigation and other significant events involving substantial costs.” on page 21.
	·	The software and website development market are highly competitive. See “Risk Factors - The software and website development market are highly competitive.” on page 22.
	·	Roshing’s software and website may not perform in line with customer specifications or expectations. See “Risk Factors - Roshing’s software and website may not perform in line with customer specifications or expectations.” on page 22.
	·	If Roshing does not update its products and services, they may become outdated and unable to compete. See “Risk Factors - If Roshing does not continually update its products and/or services, they may become obsolete and Roshing may not be able to compete with other companies.” on page 23.
	·	Roshing may not be able to continue to recruit, train and retain dedicated and qualified consultants. See “Risk Factors - Roshing may not be able to continue to recruit, train and retain dedicated and qualified consultants who are essential to the success of our business and the effective delivery of policy and business advisory services to our individual and corporate clients.” on page 23.
	·	A decline in the market for individual clients could have a material adverse effect on our its business. See “Risk Factors - A decline in the market for individual clients of our Roshing’s business enterprise consulting services and corporate business consulting could have a material adverse effect on our its business, prospects, financial condition and results of operations.” on page 23.

 

General Business Risks

 

	·	We have a limited operating history. See “Risk Factors - We have a limited operating history and face significant challenges and will incur substantial expenses as we build our capabilities.” on page 23.
	·	We are currently dependent on a small group of customers for most of our revenue. See “Risk Factors - We are currently dependent on a small group of customers for most of our revenue. If we cannot expand our customer base many-fold, our business may not be successful.” on page 24.

 

 

 

 

 

	·	COVID-19 may adversely impact our business and operating results. See “Risk Factors - We rely on shipping suppliers, cargo owner and cargo agents and Hardware Products suppliers, if they become financially unstable or have reduced capacity to provide services because of pandemics, such as COVID-19, it may adversely impact our business and operating results.” on page 24.
	·	Our business could be negatively affected by rising inflation and interest rates. See “Risk Factors - Our business could be negatively affected by rising inflation and interest rates.” on page 24.
	·	If we are unable to hire, retain or motivate qualified personnel, consultants, independent contractors, and advisors, we may not be able to grow effectively. See “Risk Factors - If we are unable to hire, retain or motivate qualified personnel, consultants, independent contractors, and advisors, we may not be able to grow effectively.” on page 25.
	·	We do not maintain sufficient insurance for our business. See “Risk Factors - The Company and its subsidiaries do not presently maintain fire, theft, product liability or any other property insurance, which leaves us with exposure in the event of loss or damage to our properties or claims filed against us.” on page 25.
	·	Our operating history may not be indicative of our future growth or financial results. See “Risk Factors - Our operating history may not be indicative of our future growth or financial results and we may not be able to sustain our historical growth rates.” on page 25.
	·	Meeting public company regulations is costly and resource-intensive; lacking proper internal controls could harm financial reporting and disclosure, impacting operations and reputation. See “Risk Factors - We incur significant costs and demands upon management and accounting and finance resources as a result of complying with the laws and regulations affecting public companies; if we fail to maintain proper and effective internal controls, our ability to produce accurate and timely financial statements and otherwise make timely and accurate public disclosure could be impaired, which could harm our operating results, our ability to operate our business and our reputation.” on page 25.
	·	We may fail to make necessary acquisitions or investments or enter desirable strategic alliances. See “Risk Factors - We may fail to make necessary acquisitions or investments or enter desirable strategic alliances, and we may not be able to achieve the anticipated benefits from such acquisitions, investments or strategic alliances.” on page 26.
	·	We may not be able to prevent others from unauthorized use of our intellectual property. See “Risk Factors - We may not be able to prevent others from unauthorized use of our intellectual property, which could harm our business and competitive position.” on page 27.
	·	We are a “smaller reporting company” under the Securities Exchange Act. See “Risk Factors - We are a “smaller reporting company” under Rule 12b-2 of the Securities Exchange Act of 1934, and we cannot be certain if the scaled disclosure requirements applicable to smaller reporting companies will make our common stock less attractive to investors and make it more difficult to raise capital as and when we need it.” on page 27.
	·	Anti-takeover provisions contained in our bylaws and articles of incorporation as well as provisions of Nevada law, could impair a takeover attempt. See “Risk Factors - Anti-takeover provisions contained in our bylaws and articles of incorporation as well as provisions of Nevada law, could impair a takeover attempt.” on page 27.
	·	Any damage to the reputation and recognition of our brand names, may materially and adversely affect our business operations and prospects. See “Risk Factors - Any damage to the reputation and recognition of our brand names, including negative publicity against us, our services, operations and our directors, senior management and business partners may materially and adversely affect our business operations and prospects.” on page 28.
	·	We may from time to time be subject to claims, disputes, lawsuits and other legal and administrative proceedings. See “Risk Factors - We may from time to time be subject to claims, disputes, lawsuits and other legal and administrative proceedings.” on page 28.
	·	We believe no additional permissions from Hong Kong authorities are required, but cannot guarantee we will obtain them if needed. See “While we believe that we and our subsidiaries are currently not required to obtain any other permissions or approvals from Hong Kong authorities for our business operations, we cannot assure you that we or our subsidiaries will be able to obtain all such permissions or approvals if they are nevertheless required.” on page 28.
	·	We may engage in transactions that present conflicts of interest. See “Risk Factors - We may engage in transactions that present conflicts of interest.” on page 27.
	·	We face rising labor costs in Hong Kong and risks from non-compliance with employment and labor protection laws. See “Risk Factors - Increases in labor costs in Hong Kong and non-compliance with laws and regulations relating to employment and labor protection may adversely affect the business of Roshing and our results of operations.” on page 33.
	·	We may adjust our business strategies and models. See “Risk Factors - We may adjust our business strategies and models in response to changing market conditions, competitive pressures, or regulatory changes. However, there is no guarantee that these adjustments will be successful, and they may not achieve the desired results, potentially impacting our performance and financial results.” on page 29.

 

 

 

 

RISKS RELATED TO DOING BUSINESS IN HONG KONG

 

	·	the Chinese government may exercise significant oversight and discretion over the conduct of our business and may intervene in or influence our operations. See “Risk Factors - All our operations are in Hong Kong. However, due to the long arm provisions under the current PRC laws and regulations, the Chinese government may exercise significant oversight and discretion over the conduct of our business and may intervene in or influence our operations at any time, which could result in a material change in our operations and/or the value of our common stock.” on page 29.
	·	We will rely on dividends and other distributions on equity paid by our Hong Kong subsidiary to fund any cash and financing requirements we may have. See “Risk Factors - We will rely on dividends and other distributions on equity paid by our Hong Kong subsidiary to fund any cash and financing requirements we may have. In the future, the Mainland China government may impose restrictions on our ability to transfer funds out of Hong Kong to fund operations or for other use outside of Hong Kong. Any limitation on the ability of our Hong Kong subsidiary to make payments to us could have a material adverse effect on our ability to conduct our business and might materially decrease the value of our common stock.” on page 30.
	·	Changes in international trade policies, trade disputes, barriers to trade, or the emergence of a trade war may dampen growth in Hong Kong, Mainland China and other markets where the majority of our clients reside. See “Risk Factors - Changes in international trade policies, trade disputes, barriers to trade, or the emergence of a trade war may dampen growth in Hong Kong, Mainland China and other markets where the majority of our clients reside.” on page 30.
	·	The “Hong Kong National Security Law” could impact our Hong Kong subsidiary. See “Risk Factors - The enactment of Law of the Mainland China on Safeguarding National Security in the Hong Kong Special Administrative Region (the “Hong Kong National Security Law”) could impact our Hong Kong subsidiary.” on page 31.
	·	There are political risks associated with conducting business in Hong Kong. See “Risk Factors - There are political risks associated with conducting business in Hong Kong.” on page 31.
	·	New regulatory changes may impact our common stock trading on U.S. exchanges and risk delisting if our auditor remains uninspected by the PCAOB. See “Risk Factors - Recent joint statement by the SEC and the Public Company Accounting Oversight Board (United States), or the PCAOB, proposed rule changes submitted by Nasdaq, and the newly enacted Holding Foreign Companies Accountable Act all call for additional and more stringent criteria to be applied to emerging market companies upon assessing the qualification of their auditors, especially the non-U.S. auditors who are not inspected by the PCAOB. These developments could add uncertainties to the trading of our common stock on U.S. stock exchanges, including the possibility that our securities can be delisted if the PCAOB cannot inspect or fully investigate our auditor.” on page 32.
	·	You may incur additional costs and procedural obstacles in effecting the service of legal process. See “Risk Factors - You may incur additional costs and procedural obstacles in effecting service of legal process, enforcing foreign judgments or bringing actions in Hong Kong against us or its management named in the prospectus based on Hong Kong laws.” on page 34.
	·	While we believe that we and our subsidiaries are currently not required to obtain permissions or approvals from Mainland China authorities for our business operations and/or the listing and offering of our securities, and it is very unlikely that we or our subsidiaries will be required to do so in the future, we and our subsidiaries may not be able to obtain such permissions or approvals if they are nevertheless required. See “Risk Factors - While we believe that we and our subsidiaries are currently not required to obtain permissions or approvals from Mainland China authorities for our business operations and/or the listing and offering of our securities, and it is very unlikely that we or our subsidiaries will be required to do so in the future, we cannot assure you that we or our subsidiaries will be able to obtain all such permissions or approvals if they are nevertheless required.” on page 34.

 

RISKS RELATED TO TAXATION

 

	·	Non-compliance with tax obligations may adversely affect our business and operation results. See “Risk Factors - Non-compliance with tax obligations may adversely affect our business and operation results.” on page 37.
	·	A change in tax laws in any country in which we operate might adversely affect us. See “Risk Factors - A change in tax laws in any country in which we operate or loss of a major tax dispute or a successful tax challenge to our operating structure, intercompany pricing policies or the taxable presence of our subsidiaries in certain countries could adversely affect us.” on page 37.
	·	An investment in this Offering may involve adverse U.S. federal income tax consequences. See “Risk Factors - An investment in this Underwritten Offering may involve adverse U.S. federal income tax consequences.” on page 38.

 

 

 

 

RISKS RELATED TO OUR COMMON STOCK AND THIS OFFERING

 

	·	Our common stock is currently quoted on the OTC Pink Market. See “Risk Factors - Our common stock is currently quoted on the OTC Pink Market, which may have an unfavorable impact on our stock price and liquidity.” on page 38.
	·	There can be no assurances that an active trading market may develop for our common stock, or if developed, be maintained. See “Risk Factors - There can be no assurances that an active trading market may develop for our common stock, or if developed, be maintained.” on page 38.
	·	An active, liquid, and orderly market for our common stock may not develop. See “Risk Factors - An active, liquid, and orderly market for our common stock may not develop.” on page 38.
	·	Our common stock is subject to the “penny stock” rules of the SEC. See “Risk Factors - Our common stock is subject to the “penny stock” rules of the SEC and the trading market in the securities is limited, which makes transactions in the stock cumbersome and may reduce the value of an investment in the stock.” on page 39.
	·	The FINRA sales practice requirements may also limit a stockholder’s ability to buy and sell our common stock. See “Risk Factors - The Financial Industry Regulatory Authority (“FINRA”) sales practice requirements may also limit a stockholder’s ability to buy and sell our common stock.” on page 39.
	·	Our articles of incorporation allow for our board to create a new series of preferred stock without further approval by our Stockholders. See “Risk Factors - Our articles of incorporation allow for our board to create a new series of preferred stock without further approval by our Stockholders, which could adversely affect the rights of the holders of our common stock.” on page 40.
	·	The trading price of our common stock is likely to be volatile. See “Risk Factors - The trading price of our common stock is likely to be volatile, which could result in substantial losses to investors.” on page 40.
	·	Short sellers of our stock may be manipulative and may drive down the market price of our common stock. See “Risk Factors - Short sellers of our stock may be manipulative and may drive down the market price of our common stock.” on page 41.
	·	The sale or availability for sale of substantial amounts of our common stock could adversely affect their market price. See “Risk Factors - The sale or availability for sale of substantial amounts of our common stock could adversely affect their market price.” on page 41.
	·	As we do not expect to pay dividends in the foreseeable future, you must rely on a price appreciation of our common stock for return on your investment. See “Risk Factors - As we do not expect to pay dividends in the foreseeable future, you must rely on a price appreciation of our common stock for return on your investment.” on page 41.
	·	Our CEO beneficially owns the majority of our outstanding stock. See “Risk Factors - Our CEO beneficially owns the majority of our outstanding stock and, accordingly, will have control over stockholder matters, the Company’s business and management.” on page 42.
	·	The sale of securities by us in any equity or debt financing could result in dilution to our existing Stockholders. See “Risk Factors - The sale of securities by us in any equity or debt financing could result in dilution to our existing Stockholders.” on page 42.
	·	If you purchase our common stock in the offering, you will incur immediate and substantial dilution. See “Risk Factors - If you purchase our common stock in the offering, you will incur immediate and substantial dilution in the book value of your shares.” on page 43.
	·	A significant portion of our shares of common stock are restricted from immediate resale but may be sold into the market in the near future. See “Risk Factors - A significant portion of our shares of common stock are restricted from immediate resale but may be sold into the market in the near future. This could cause the market price of our common stock to drop significantly, even if our business is doing well.” on page 43.
	·	If our common stock is listed on Nasdaq, we may not be able to satisfy the continued listing requirements of Nasdaq to maintain a listing of our common stock. See “Risk Factors - If our common stock is listed on Nasdaq, we may not be able to satisfy the continued listing requirements of Nasdaq to maintain a listing of our common stock.” on page 43.
	·	We may require additional capital to support growth. See “Risk Factors - We may require additional capital to support growth, and such capital might not be available on terms acceptable to us, if at all. This could hamper our growth and adversely affect our business.” on page 43.

 

 

 

 

Cash Flows through Our Organization

 

We are a holding company without operations of its own. We conduct our all operations through our Hong Kong subsidiary, Roshing. As a result, our ability to pay dividends depends upon dividends paid by Roshing. If our existing subsidiaries or any newly formed ones incur debt on their own behalf in the future, the instruments governing their debt may restrict their ability to pay dividends to Tianci. Under the current practice of the Inland Revenue Department of Hong Kong, no tax is payable in Hong Kong in respect of dividends paid by Roshing. The Mainland China laws and regulations do not currently have any material impact on transfers of cash from Roshing to Tianci or from Tianci to Roshing. The statutory reserve funds and the discretionary funds are not distributable as cash dividends. See “Regulations related to Hong Kong Taxation -Tax on dividends” on page 84.

 

We have established controls and procedures for cash flows within our organization. Our management team is the special task force that manages and supervises the transfers of funds among Tianci and its subsidiaries under the Cash Flow Management Policy, an internal policy adopted by Tianci. Under this policy, Tianci focuses on revenue management, cost control, working capital management, implementing financial strategies, and fulfilling compliance reporting duties. Our management team closely monitors and manages cash transfers within our organization by preparing monthly reports and annual budget plans. Each transfer of cash between Tianci, and a subsidiary is also subject to internal report and approval process by reference to such policy. Each transfer of cash between Tianci, RQS Capital, and a subsidiary or branch is also subject to an internal report and approval process by reference to such policy. In addition, cash transfers between Tianci, its subsidiaries, or investors shall follow the applicable Hong Kong laws and regulations.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

THE RESALE OFFERING

 

Common stock offered:		3,260,000 shares
Shares of common stock outstanding before the resale offering:		14,781,803 shares
Shares of common stock outstanding after the resale offering:		14,781,803 shares
Shares of common stock outstanding after the resale offering and the primary offering:		16,951,803 shares(1)
Use of proceeds:		We will not receive any proceeds from the sale of common stock held by the Selling Stockholders being registered in this prospectus.
Proposed Listing:		We have applied to have our common stock listed on The Nasdaq Capital Market under the symbol “CIIT,” which listing is a condition to this Offering.
Risk factors:		An investment in our securities involves a high degree of risk. See “Risk Factors” beginning on page 17 of the primary offering prospectus contained in the registration statement of which this prospectus forms a part, and other information included in this prospectus and the registration statement of which this prospectus forms a part, for a discussion of factors you should carefully consider before deciding to invest in our common stock.

 

(1)

Assumes the issuance and sale by us of 2,170,000 shares of our common stock pursuant to the primary offering prospectus filed contemporaneously herewith and assumes the 325,500 over-allotment option shares of common stock available for sale to the underwriter in the primary offering prospectus has not been exercised.

 

USE OF PROCEEDS

 

We will not receive any of the proceeds from the sale of the common stock held by the Selling Stockholders.

 

 

 

 

 

SELLING STOCKHOLDERS

 

This prospectus relates to the sale or other disposition of up to 3,260,000 shares of our common stock by the Selling Stockholders and their donees, pledgees, transferees or other successors-in-interest selling shares of common stock or interests in shares of common stock received after the date of this prospectus from a Selling Stockholder as a gift, pledge, partnership distribution or other transfer.

 

The table below sets forth information as of the date of this prospectus, to our knowledge, the Selling Stockholders and other information regarding the beneficial ownership (as determined under Section 13(d) of the Exchange Act and the rules and regulations thereunder) of the shares of common stock held by the Selling Stockholders. The second column lists the number of shares of common stock beneficially owned by the Selling Stockholders, as of December 10, 2024. The third column lists the maximum number of shares of common stock that may be sold or otherwise disposed of by the Selling Stockholders pursuant to the registration statement of which this prospectus forms a part. The Selling Stockholders may sell or otherwise dispose of some, all or none of their shares. Pursuant to Rules 13d-3 and 13d-5 of the Exchange Act, beneficial ownership includes any shares of our common stock as to which a Stockholder has sole or shared voting power or investment power, and also any shares of our common stock which the Stockholder has the right to acquire within 60 days.

 

The percentage of beneficial ownership for the Selling Stockholders is based on shares of common stock outstanding as of the date of this prospectus.

 

Except as described below, to our knowledge, none of the Selling Stockholders have had any material relationship with us within the past three years. Our knowledge is based on information provided by the Selling Stockholders in registration statement questionnaires.

 

The shares of common stock being covered hereby may be sold or otherwise disposed of from time to time during the period the registration statement of which this prospectus is a part remains effective, by or for the account of the Selling Stockholders. After the date of effectiveness of the registration statement of which this prospectus forms a part, the Selling Stockholders may have sold or transferred, in transactions covered by this prospectus, some or all of their common stock.

 

Information about the Selling Stockholders may change over time. Any changed information will be set forth in an amendment to the registration statement or supplement to this prospectus, to the extent required by law.

 

		Shares Beneficially Owned as of the date of this Prospectus								Shares Offered by this				Shares Beneficially Owned After the offering(1)
Name of Selling Stockholder		Number				Percent				Prospectus				Number				Percent
Carson (BVI) Limited			730,000				4.94%				730,000				–
Cobalt Capital Holding Limited			650,000				4.40%				650,000				–
Elysium Capital Holding Limited			610,000				4.13%				610,000				–
Global View Capital Limited			550,000				3.72%				550,000				–
Broadness (BVI) Limited			720,000				4.87%				720,000				–
Total			3,260,000				22.06%				3,260,000				–				–%

 

(1)	Assumes the sale of all shares offered pursuant to the primary offering prospectus.

 

 

 

 

SELLING STOCKHOLDER PLAN OF DISTRIBUTION

 

The Selling Stockholders may, from time to time, sell any or all of their shares of common stock on any stock exchange, market or trading facility on which the shares are traded or in private transactions. These sales may be at fixed or negotiated prices. The Selling Stockholders may use any one or more of the following methods when selling shares:

 

	·	ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers;
	·	block trades in which the broker-dealer will attempt to sell the shares as agent but may position and resell a portion of the block as principal to facilitate the transaction;
	·	purchases by a broker-dealer as principal and resale by the broker-dealer for its account;
	·	an exchange distribution in accordance with the rules of the applicable exchange;
	·	privately negotiated transactions;
	·	short sales effected after the date the registration statement of which this prospectus is a part is declared effective by the SEC;
	·	broker-dealers may agree with the Selling Stockholders to sell a specified number of such shares at a stipulated price per share;
	·	a combination of any such methods of sale; and
	·	any other method permitted pursuant to applicable law.

 

Broker-dealers engaged by the Selling Stockholders may arrange for other brokers-dealers to participate in sales. Broker-dealers may receive commissions or discounts from the Selling Stockholders (or, if any broker-dealer acts as agent for the purchaser of shares, from the purchaser) in amounts to be negotiated. The Selling Stockholders do not expect these commissions and discounts to exceed what is customary in the types of transactions involved. Any profits on the resale of shares of common stock by a broker-dealer acting as principal might be deemed to be underwriting discounts or commissions under the Securities Act. Discounts, concessions, commissions and similar selling expenses, if any, attributable to the sale of shares will be borne by a Selling Stockholder. The Selling Stockholders may agree to indemnify any agent, dealer or broker-dealer that participates in transactions involving sales of the shares if liabilities are imposed on that person under the Securities Act.

 

The Selling Stockholders may from time to time pledge or grant a security interest in some or all of the shares of common stock owned by them and, if they default in the performance of their secured obligations, the pledgees or secured parties may offer and sell the shares of common stock from time to time under this prospectus after we have filed a supplement to this prospectus under Rule 424(b)(3) or other applicable provision of the Securities Act supplementing or amending the list of Selling Stockholders to include the pledgee, transferee or other successors in interest as Selling Stockholders under this prospectus.

 

The Selling Stockholders also may transfer the shares of common stock in other circumstances, in which case the transferees, pledgees or other successors in interest will be the selling beneficial owners for purposes of this prospectus and may sell the shares of common stock from time to time under this prospectus after we have filed a supplement to this prospectus under Rule 424(b)(3) or other applicable provision of the Securities Act supplementing or amending the list of Selling Stockholders to include the pledgee, transferee or other successors in interest as Selling Stockholders under this prospectus.

 

 

 

 

The Selling Stockholders and any broker-dealers or agents that are involved in selling the shares of common stock held by the Selling Stockholders or its transferees, pledgees or other successors in interest may be deemed to be “underwriter” within the meaning of the Securities Act in connection with such sales. In such event, any commissions received by such broker-dealers or agents and any profit on the resale of the shares of common stock purchased by them may be deemed to be underwriting commissions or discounts under the Securities Act.

 

We are required to pay all fees and expenses incident to the registration of the shares of common stock held by the Selling Stockholders. We have agreed to indemnify the Selling Stockholders against certain losses, claims, damages and liabilities, including liabilities under the Securities Act.

 

The Selling Stockholders have advised us that they have not entered into any agreements, understandings or arrangements with any underwriter or broker-dealers regarding the sale of their shares of common stock, nor is there an underwriter or coordinating broker acting in connection with a proposed sale of common stock by any Selling Stockholder. If we are notified by any Selling Stockholder that any material arrangement has been entered into with a broker-dealer for the sale of shares of his, her, or its common stock, if required, we will file a supplement to this prospectus. If the Selling Stockholders use this prospectus for any sale of their shares of common stock, they will be subject to the prospectus delivery requirements of the Securities Act.

 

In order to comply with the securities laws of some states, if applicable, the common stock held by the Selling Stockholders or its transferees, pledgees or other successors in interest may be sold in these jurisdictions only through registered or licensed brokers or dealers. In addition, in some states the common stock may not be sold unless it has been registered or qualified for sale or an exemption from registration or qualification requirements is available and is complied with.

 

We have advised the Selling Stockholders that the anti-manipulation rules of Regulation M under the Exchange Act may apply to sales of shares in the market and to the activities of the Selling Stockholders and their affiliates. In addition, to the extent applicable we will make copies of this prospectus (as it may be supplemented or amended from time to time) available to the Selling Stockholders for the purpose of satisfying the prospectus delivery requirements of the Securities Act. The Selling Stockholders may indemnify any broker-dealer that participates in transactions involving the sale of the shares against certain liabilities, including liabilities arising under the Securities Act.

 

We have agreed with the Selling Stockholders to keep the registration statement of which this prospectus constitutes a part effective until the earliest of (1) such time as all of the shares covered by this prospectus have been disposed of pursuant to and in accordance with the registration statement and (2) the date on which all of the shares may be sold without restriction pursuant to Rule 144 of the Securities Act.

 

Selling Stockholder Resale Prospectus

 

As described in the Explanatory Note to the registration statement of which this prospectus forms a part, the registration statement also contains the Resale Prospectus to be used in connection with the potential resale by certain Selling Stockholders of our common stock. These shares of common stock have been registered to permit public resale of such shares, and the Selling Stockholders may offer the shares for resale from time to time pursuant to the Resale Prospectus. The Selling Stockholders may also sell, transfer or otherwise dispose of all or a portion of their shares of common stock in transactions exempt from the registration requirements of the Securities Act or pursuant to another effective registration statement covering those shares. Any shares sold by the Selling Stockholders will occur at prevailing market prices or in privately negotiated prices.

 

LEGAL MATTERS

 

Certain legal matters with respect to the validity of the securities being offered by this prospectus will be passed upon by Kaufman & Canoles P.C. Certain legal matters relating Nevada law will be passed upon for us by Parsons Behle & Latimer, Reno, Nevada.

 

 

 

 

 

3,260,000 Shares of Common Stock

 

 

 

TIANCI INTERNATIONAL, INC.

 

 

 

RESALE PROSPECTUS

 

 

 

You should rely only on the information contained in this prospectus. No dealer, salesperson or other person is authorized to give information that is not contained in this prospectus. This prospectus is not an offer to sell nor is it seeking an offer to buy these securities in any jurisdiction where the offer or sale is not permitted. The information contained in this prospectus is correct only as of the date of this prospectus, regardless of the time of the delivery of this prospectus or the sale of these securities.

 

Prospectus dated ______________, 2024

 

 

 

 

 

 

PART II - INFORMATION NOT REQUIRED IN PROSPECTUS

 

Item 13. Other Expenses of Issuance and Distribution.

 

The following table indicates the expenses to be incurred in connection with the Underwritten Offering and resale offering described in this registration statement, other than underwriting discounts and commissions and non-accountable expense allowance, all of which will be paid by us. All amounts are estimated except the Securities and Exchange Commission, or SEC registration fee and the Financial Industry Regulatory Authority, Inc., or FINRA filing fee, and exchange listing fee.

 

SEC Registration Fee		$	4,248
FINRA Filing Fee			4,817
Exchange Listing Fee			50,000
Audit and Accounting Related Expenses			130,000
Legal Fees			589,081
Other Expenses			156,984
TOTAL		$	935,130

 

______________________

Note: The company has already paid a portion of those expenses. As of October 31, 2024, the company’s estimated incremental offering expense is $276,162.

 

Item 14. Indemnification of Directors and Officers.

 

Limitation of Directors’ and Officers’ Liability and Indemnification

 

Nevada Law

 

Section 78.7502 of the Nevada Revised Statutes provides that a Nevada corporation may indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, except an action by or in the right of the corporation, by reason of the fact that he is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses, including attorneys’ fees, judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with the action, suit or proceeding if he is not liable under Section 78.138 of the Nevada Revised Statutes for breach of his or her fiduciary duties to the corporation or he acted in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful.

 

Section 78.7502 further provides a Nevada corporation may indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the corporation to procure a judgment in its favor by reason of the fact that he is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against expenses, including amounts paid in settlement and attorneys’ fees actually and reasonably incurred by him in connection with the defense or settlement of the action or suit if he is not liable under Section 78.138 of the Nevada Revised Statutes for breach of his or her fiduciary duties to the corporation or he acted in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the corporation.

 

Indemnification may not be made for any claim, issue or matter as to which such a person has been adjudged by a court of competent jurisdiction, after exhaustion of all appeals therefrom, to be liable to the corporation or for amounts paid in settlement to the corporation, unless and only to the extent that the court in which the action or suit was brought or other court of competent jurisdiction determines upon application that in view of all the circumstances of the case, the person is fairly and reasonably entitled to indemnity for such expenses as the court deems proper.

 

To the extent that a director, officer, employee or agent of a corporation has been successful on the merits or otherwise in defense of any non-derivative proceeding or any derivative proceeding, or in defense of any claim, issue or matter therein, the corporation shall indemnify him or her against expenses, including attorneys’ fees, actually and reasonably incurred in connection with the defense.

 

 

 

 

Further, Nevada law permits a Nevada corporation to purchase and maintain insurance or to make other financial arrangements on behalf of any person who is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise for any liability asserted against him or her and liability and expenses incurred by him or her in his or her capacity as a director, officer, employee or agent, or arising out of his or her status as such, whether or not the corporation has the authority to indemnify him or her against such liability and expenses.

 

Charter Provisions

 

Pursuant to our bylaws, we may indemnify all of its officers and directors, past, present and future, against any and all expenses incurred by them, and each of them, including, but not limited to, legal fees, judgments and penalties which may be incurred, rendered or levied in any legal action brought against any or all of them for or on account of any act or omission alleged to have been committed while acting within the scope of their duties as officers or directors of the Company.

 

Pursuant to our articles, the expenses of officers and directors incurred in defending a civil or criminal action, suit or proceeding must be paid by the Company as they are incurred and in advance of the final disposition of the action, suit or proceeding, or upon receipt of an undertaking or surety by or on behalf of the director or officer to repay the amount if it is ultimately determined by a court of competent jurisdiction that such person is not entitled to be indemnified by the Company. Such right of indemnification shall not be exclusive of any other right which such directors, officers or underwriter may have or thereafter acquire, and, without limiting the generality of such statement, they shall be entitled to their respective rights of indemnification under any bylaw, agreement, vote of stockholders, provision of law, or otherwise, as well as their rights under the article.

 

Pursuant to the Underwriting Agreement to be filed as Exhibit 1.1 to this prospectus, we have agreed to indemnify the underwriter and the underwriter has agreed to indemnify us against certain civil liabilities that may be incurred in connection with the Underwritten Offering, including certain liabilities under the Securities Act.

 

Item 15. Recent Sales of Unregistered Securities.

 

Set forth below is information regarding shares of capital stock issued by us within the past three years which were not registered under the Securities Act.

 

(a) Issuance of Capital Stock.

 

	·	On March 3, 2023, the Company issued to RQS Capital 1,500,000 shares of our common stock and paid a cash price of $350,000 in a 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.
	·	On March 1, 2023, the Company entered into agreements to sell a total of 1,253,333 shares of its common stock to 13 investors for a price of $0.30 per share, with an aggregate price of $376,000. No commissions were paid regarding the share issuance and the share certificates were issued with a Rule 144 restrictive legend
	·	On January 22, 2024, the Company sold 433,213 shares of its common stock pursuant to a private placement to 9 investors for $1.00 per share for an aggregate of $433,213. No commissions were paid regarding the share issuance and the share certificates were issued with a Rule 144 restrictive legend
	·	On January 19, 2024, the Company converted debt from five lenders in the aggregate amount of $445,109 into 445,109 shares of its common stock for $1.00 per share. No commissions were paid regarding the loan conversions and the share certificates were issued with a Rule 144 restrictive legend.

 

 

 

 

The foregoing securities were issued in reliance on the exclusion from registration provided by either (i) Rule 903 of Regulation S under the Securities Act of the Securities Act because the recipient was a non-U.S. Person (as defined under Rule 902 Section (k)(2)(i) of Regulation S), or (ii) Section 4(a)(2) of the Securities Act due to the fact the issuance did not involve a public offering of securities.

 

(b) Warrants.

 

None.

 

(c) Option Grants.

 

None.

 

Item 16. Exhibits and Financial Statement Schedules.

 

(a) Exhibits: Reference is made to the Exhibit Index following the signature pages hereto, which Exhibit Index is hereby incorporated into this Item.

 

(b) Financial Statement Schedules: All schedules are omitted because the required information is inapplicable or the information is presented in the financial statements and the related notes.

 

Item 17. Undertakings.

 

The undersigned registrant hereby undertakes:

 

(1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:

 

(i) To include any prospectus required by section 10(a)(3) of the Securities Act of 1933, as amended (the “Securities Act”);

 

(ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Securities and Exchange Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20 percent change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement; and

 

(iii) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement; provided, however, that paragraphs (1)(i), (1)(ii) and (1)(iii) above do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in reports filed with or furnished to the Securities and Exchange Commission by the registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the registration statement, or is contained in a form of prospectus filed pursuant to Rule 424(b) that is part of the registration statement.

 

(2) That, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

 

(3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.

 

 

 

 

(4) That, for the purpose of determining liability under the Securities Act to any purchaser:

 

(A) Each prospectus filed by the registrant pursuant to Rule 424(b)(3) shall be deemed to be part of the registration statement as of the date the filed prospectus was deemed part of and included in the registration statement; and

  

(B) Each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use.

 

(5) That for the purpose of determining liability of the registrant under the Securities Act to any purchaser in the initial distribution of securities, the undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:

 

(i) Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424;

 

(ii) Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant;

 

(iii) The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and

 

(iv) Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser.

 

Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the registrant pursuant to any charter provision, by law or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.

 

The undersigned registrant hereby undertakes that:

 

(1) For purposes of determining any liability under the Securities Act, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective.

 

(2) For the purpose of determining any liability under the Securities Act, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

 

 

 

 

EXHIBITS TO REGISTRATION STATEMENT

 

Exhibit Number		Description of Exhibit
1.1*		Form of Underwriting Agreement
2.1**		Stock Purchase Agreement with Tianci, Chuah Su Mei and Silver Glory Group Limited (incorporated by reference to Exhibit 10.1 of the Form 8-K filed on August 6, 2021)
3.1**		Articles of Incorporation
3.2**		Certificate of Amendment of Articles of Incorporation (incorporated by reference to Exhibit 10.a of the Form 8-K filed on January 27, 2023)
3.3**		Amended and Restated Bylaws of Tianci International, Inc., as adopted on August 2, 2024 (incorporated by reference to Exhibit 3-a of the Form 8-K filed on August 14, 2024)
4.1**		Form of Common Stock Certificate
4.2**		Certificate of Designation of Series B Preferred Stock filed with the Secretary of State of Nevada (incorporated by reference to Exhibit 10.a of the Form 8-K filed on April 26, 2024)
5.1*		Opinion of Parsons Behle & Latimer with respect to the legality of the common stock registered hereby
8.1*		Opinion of Kaufman & Canoles, P.C. regarding certain U.S. federal income tax matters
10.1**		Employment Agreement dated August 27, 2021 between Shufang Gao and Tianci International, Inc. (incorporated by reference to Exhibit 10.2 of the Form 10-K filed on October 31, 2022).
10.2**		Employment Agreement dated August 27, 2021 between Wei Fang and Tianci International, Inc. (incorporated by reference to Exhibit 10.3 of the Form 10-K filed on October 31, 2022).
10.3**		Employment Agreement dated January 23, 2023 between Ying Deng and Tianci International Inc. (incorporated by reference to Exhibit 10.4 of the Form 10-K filed on October 23, 2023).
10.4**		Form of Director Retainer Agreement (incorporated by reference to Exhibit 10.2 of our Current Report on Form 10-Q filed on December 14, 2021).
10.5**		Tianci 2024 Equity Incentive Plan
10.6**		Share Exchange Agreement dated March 3, 2023 between Tianci, RQS United and RQS Capital
10.7**		Share Purchase Agreement between Tianci and RQS, dated April 23, 2024
10.8**		Form of Private Offering of Common Stock to Non-U.S. Persons Subscription Agreement, dated December 29, 2023
10.9**		Form of Debt Conversion by Non-U.S. Persons Subscription Agreement
10.10**		Office Rental Service Agreement
14.1**		Code of Business Conduct and Ethics
14.2**		The Review Policy for Related Party Transaction
16.1**		Letter from Michael T. Studer CPA P.C. regarding change in certifying accountant (incorporated by reference to Exhibit 16 of the Form 8-K filed on September 13, 2024)
21.1**		List of Subsidiaries
23.1*		Consent of Michael T. Studer CPA P.C.
23.2*		Consent of Bush & Associates CPA LLC
23.3*		Consent of Parsons Behle & Latimer (included in Exhibit 5.1)
23.4*		Consent of Kaufman & Canoles, P.C. (included in Exhibit 8.1)
23.5*		Consent of Han Kun Law Offices LLP (included in Exhibit 99.4)
23.6*		Consent of Jiangsu Junjin Law Firm (included in Exhibit 99.5)
24.1*		Power of Attorney (included on signature page to this filing of the Registration Statement on Form S-1)
99.1**		First Amended Audit Committee Charter
99.2**		Nominating and Corporate Governance Committee Charter
99.3**		Compensation Committee Charter
99.4*		Opinion of Han Kun Law Offices LLP
99.5*		Opinion of Jiangsu Junjin Law Firm regarding certain PRC law matters
107**		Filing Fee Table

___________________ 

	*	Filed herewith
	**	Previously filed

 

 

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, at the location of Hong Kong, China on December 10, 2024.

 

	TIANCI INTERNATIONAL, INC.
Date: December 10, 2024	By:	/s/ Shufang Gao
	Shufang Gao, Chief Executive Officer
Date: December 10, 2024	By:	/s/ Wei Fang
	Wei Fang, Chief Financial Officer

 

POWER OF ATTORNEY

 

KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Shufang Gao and Wei Fang, and each of them, as a true and lawful attorney-in-fact and agent, with full power of substitution and re-substitution, for each of them and in each name, place and stead, in any and all capacities, to sign any and all pre- or post-effective amendments to this registration statement, and to file the same with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact and agent, full power and authority to do and perform each and every act and thing requisite or necessary to be done in and about the premises, as fully to all intents and purposes as each might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent or his substitute, may lawfully do or cause to be done by virtue hereof. In accordance with the requirements of the Securities Act of 1933, as amended, this registration statement was signed by the following person in the capacities and on the dates stated.

 

Signature		Title		Date
/s/ Shufang Gao		Chief Executive Officer and Director		December 10, 2024
Shufang Gao		(Principal Executive Officer)
/s/ Wei Fang		Chief Financial Officer and Director		December 10, 2024
Wei Fang		(Principal Financial Officer and Accounting Officer)
/s/ Ying Deng		Vice President and Director		December 10, 2024
Ying Deng
/s/ Yee Man Yung		Independent Director		December 10, 2024
Yee Man Yung
/s/ Fan Liu		Independent Director		December 10, 2024
Fan Liu
/s/ Juan Chang		Independent Director		December 10, 2024
Juan Chang
/s/ Guilin Zhang		Independent Director		December 10, 2024
Guilin Zhang

 

 

 

 

Exhibit 1.1

 

Tianci International, Inc.

 

UNDERWRITING AGREEMENT

 

[•], 2024

 

Benjamin Securities, Inc.

3 West Garden Street, Suite 407

Pensacola, FL 32502

 

As Representative of the Underwriters

named on Schedule A hereto

 

Ladies and Gentlemen:

 

The undersigned, Tianci International, Inc., a Nevada company (the “Company”), hereby confirms its agreement (this “Agreement”) with the several underwriters named in Schedule A hereto (such underwriters including Representative (as defined below), collectively, hereafter referred to as the “Underwriters”, and each of them as an “Underwriter”), for which Benjamin Securities, Inc. acting as the representative of the several Underwriters (in such capacity, the “Representative”), to issue and sell an aggregate of [•] shares of common stock (the “Firm Shares”) of the Company, par value of $0.0001 per share (the “Common Stock”).

 

The Company has also granted to the Underwriters an option to purchase up to [•] additional shares of Common Stock, on the terms and conditions for the purposes set forth in Section 2(c) hereof (the “Additional Shares”). The Firm Shares and any Additional Shares purchased pursuant to this Agreement are herein collectively referred to as the “Offered Securities.” The offering and sale of the Offered Securities contemplated by this Agreement is referred to herein as the “Offering.”

 

The Company confirms its agreement with the Underwriters as follows:

 

SECTION 1. Representations and Warranties of the Company.

 

The Company represents and warrants to each of the Underwriters as follows with the understanding that the same may be relied upon by the Underwriters in the Offering, as of the date hereof and as of the Closing Date (as defined below) and each Option Closing Date (as defined below), if any:

 

(a) Filing of the Registration Statement. The Company has prepared and filed with the Securities and Exchange Commission (the “Commission”) a registration statement on Form S-1 (File No. 333-280089), which contains a form of prospectus to be used in connection with the Offering. Such registration statement, as amended, including the financial statements, exhibits and schedules thereto contained in the registration statement at the time such registration statement became effective, in the form in which it was declared effective by the Commission under the Securities Act of 1933, as amended (the “Securities Act”), and the rules and regulations promulgated thereunder (the “Securities Act Regulations”), and including any required information deemed to be a part thereof at the time of effectiveness pursuant to Rule 430A under the Securities Act, or pursuant to the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and the rules and regulations promulgated thereunder (the “Exchange Act Regulations”), is called the “Registration Statement.” Any registration statement filed by the Company pursuant to Rule 462(b) under the Securities Act is called the “Rule 462(b) Registration Statement,” and from and after the date and time of filing of the Rule 462(b) Registration Statement, the term “Registration Statement” shall include the Rule 462(b) Registration Statement. Such prospectus, in the form first filed pursuant to Rule 424(b) under the Securities Act after the date and time that this Agreement is executed and delivered by the parties hereto, or, if no filing pursuant to Rule 424(b) under the Securities Act is required, the form of final prospectus relating to the Offering included in the Registration Statement at the effective date of the Registration Statement (“Effective Date”), is called the “Prospectus.” All references in this Agreement to the Registration Statement, the Rule 462(b) Registration Statement, the preliminary prospectus included in the Registration Statement (each, a “preliminary prospectus”), the Prospectus, or any amendments or supplements to any of the foregoing, shall include any copy thereof filed with the Commission pursuant to its Electronic Data Gathering, Analysis and Retrieval System (“EDGAR”). The preliminary prospectus that was included in the Registration Statement immediately prior to the Applicable Time (as defined below) is hereinafter called the “Pricing Prospectus.” Any reference to the “most recent preliminary prospectus” shall be deemed to refer to the latest preliminary prospectus included in the registration statement. Any reference herein to any preliminary prospectus or the Prospectus or any supplement or amendment to either thereof shall be deemed to refer to and include any documents incorporated by reference therein as of the date of such reference.

 

 

 

 

(b) “Applicable Time” means 5:00 pm, Eastern Standard Time (EST), on the date of this Agreement.

 

(c) Compliance with Registration Requirements. The Registration Statement has been declared effective by the Commission under the Securities Act and the Securities Act Regulations on [•], 2024. The Company has complied, to the Commission’s satisfaction, with all requests of the Commission for additional or supplemental information. No stop order preventing or suspending the effectiveness of the Registration Statement, or any Rule 462(b) Registration Statement is in effect and no proceedings for such purpose have been instituted or are pending or, to the knowledge of the Company, are contemplated or threatened by the Commission.

 

Each preliminary prospectus and the Prospectus when filed complied or will comply in all material respects with the Securities Act and, if filed by electronic transmission pursuant to EDGAR (except as may be permitted by Regulation S-T under the Securities Act), was identical in content to the copy thereof delivered to the Underwriters for use in connection with the Offering, other than with respect to any artwork and graphics that were not filed. Each of the Registration Statement and any post-effective amendment to the Registration Statement, at the time it became effective and at all subsequent times until the expiration of the prospectus delivery period required under Section 5(b) of the Securities Act, complied and will comply in all material respects with the Securities Act and the Securities Act Regulations and did not and will not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading. The Prospectus, as amended or supplemented, as of its date and at all subsequent times until the Underwriters have completed the Offering, did not and will not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. The representations and warranties set forth in the two immediately preceding sentences do not apply to statements in or omissions from the Registration Statement or any post-effective amendment to the Registration Statement, or in the Pricing Prospectus or the Prospectus, or any amendment or supplement thereto, made in reliance upon and in conformity with information relating to the Underwriters furnished to the Company in writing expressly for use therein, it being understood and agreed that the only such information furnished on behalf of any of the Underwriters consists of (i) the name of the Underwriters contained on the cover page of the Registration Statement, the Pricing Prospectus and Prospectus and (ii) the sub-sections titled “Indemnification,” “Lock-up Agreements,” “Pricing of the Offering,” “Electronic Offer, Sale and Distribution of Securities,” “Price Stabilization, Short Positions and Penalty Bids,” “Passive Market Making,” “Other Relationships,” and “Selling Restrictions,” in each case under the caption “Underwriting” in the Registration Statement, the Pricing Prospectus, the Prospectus (the “Underwriter Information”). There are no contracts or other documents required to be described in the Registration Statement, the Pricing Prospectus or the Prospectus or to be filed as exhibits to the Registration Statement that have not been fairly and accurately described in all material respects or filed as required.

 

(d) Disclosure Package. The term “Disclosure Package” shall mean (i) the Pricing Prospectus, as amended or supplemented, (ii) each issuer free writing prospectus, as defined in Rule 433 under the Securities Act (each, an “Issuer Free Writing Prospectus”), if any, identified in Schedule B hereto, (iii) the pricing terms set forth in Schedule C to this Agreement, and (iv) any other free writing prospectus that the parties hereto shall hereafter expressly agree in writing to treat as part of the Disclosure Package. As of the Applicable Time, the Disclosure Package did not contain any untrue statement of a material fact or omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. The preceding sentence does not apply to statements in or omissions from the Disclosure Package based upon and in conformity with the Underwriter Information.

 

(e) Company Not Ineligible Issuer. (i) At the time of filing the Registration Statement and (ii) as of the date of the execution and delivery of this Agreement (with such date being used as the determination date for purposes of this clause (ii)), the Company was not and is not an Ineligible Issuer (as defined in Rule 405 under the Securities Act), without taking account of any determination by the Commission pursuant to Rule 405 under the Securities Act that it is not necessary that the Company be considered an Ineligible Issuer.

 

(f) Issuer Free Writing Prospectuses. No Issuer Free Writing Prospectus includes any information that conflicts with the information contained in the Registration Statement, including any document incorporated by reference therein that has not been superseded or modified. The foregoing sentence does not apply to statements in or omissions from any Issuer Free Writing Prospectus based upon and in conformity with the Underwriter Information.

 

 

 

 

 

(g) Offering Materials Furnished to the Underwriters. The Company has delivered to the Underwriters copies of the Registration Statement and of each consent and certificate of experts filed as a part thereof, and each preliminary prospectus and the Prospectus, as amended or supplemented, in such quantities and at such places as the Underwriters have reasonably requested in writing.

 

(h) Distribution of Offering Material by the Company. The Company has not distributed or authorized the distribution of, and will not distribute, prior to the completion of the Offering, any offering material in connection with the Offering other than a preliminary prospectus, the Pricing Prospectus, the Prospectus, any Issuer Free Writing Prospectus reviewed and consented to by the Underwriters, and the Registration Statement.

 

(i) The Underwriting Agreement. This Agreement has been duly authorized, executed and delivered by, and is a valid and binding agreement of, the Company, enforceable in accordance with its terms, except as rights to indemnification hereunder may be limited by applicable law and except as the enforcement hereof may be limited by bankruptcy, insolvency, reorganization, moratorium, or other similar laws relating to or affecting the rights and remedies of creditors or by general equitable principles.

 

(j) Authorization of the Offered Securities. The Offered Securities to be sold by the Company through the Underwriters have been duly and validly authorized by all required corporate action and have been reserved for issuance and sale pursuant to this Agreement and, when so issued and delivered by the Company, will be validly issued, fully paid and non-assessable, free, and clear of all Liens (as defined below under Section 1(r)) imposed by the Company. The Company has a sufficient number of authorized Common Stock for the issuance of the maximum number of Offered Securities issuable pursuant to the Offering as described in the Prospectus.

 

(k) No Applicable Registration or Other Similar Rights. There are no persons with registration or other similar rights to have any securities of the Company registered for sale under the Registration Statement and included in the Offering.

 

(l) No Material Adverse Change. Prior to and on each of the Closing Date and each Option Closing Date, if any, except as otherwise disclosed in the Disclosure Package, subsequent to the respective dates as of which information is given in the Disclosure Package: (i) there has been no material adverse change, or any development that could reasonably be expected to result in a material adverse change, in the condition, financial or otherwise, or in the earnings, business or operations, whether or not arising from transactions in the ordinary course of business, of the Company (any such change, a “Material Adverse Change”, and any resulting effect, a “Material Adverse Effect”); (ii) the Company has not incurred any material liability or obligation, indirect, direct or contingent, not in the ordinary course of business nor entered into any material transaction or agreement not in the ordinary course of business; and (iii) there has been no dividend or distribution of any kind declared, paid or made by the Company in respect of its Common Stock.

 

(m) Independent Accountants. Michael T. Studer CPA P.C. (the “Prior Accountant”), which has expressed its opinions with respect to certain of the audited financial statements (which term as used in this Agreement includes the related notes thereto) of the Company filed with the Commission as a part of the Registration Statement and included in the Disclosure Package and the Prospectus, is an independent registered public accounting firm as required by the Securities Act and the Exchange Act and is not in violation of the auditor independence requirements of the Sarbanes-Oxley Act. Bush & Associates CPA (the “Current Accountant”), which has expressed its opinions with respect to certain of the audited financial statements (which term as used in this Agreement includes the related notes thereto) of the Company filed with the Commission as a part of the Registration Statement and included in the Disclosure Package and the Prospectus, is an independent registered public accounting firm as required by the Securities Act and the Exchange Act and is not in violation of the auditor independence requirements of the Sarbanes-Oxley Act.

 

(n) Preparation of the Financial Statements. The financial statements of the Company included in the Registration Statement, the Disclosure Package, and the Prospectus, presents fairly the information provided as of and at the dates and for the periods indicated (provided that unaudited interim financial statements are subject to year-end audit adjustments that are not expected to be material in the aggregate and do not contain all footnotes required by U.S. generally accepted accounting principles (“U.S. GAAP”). Such financial statements comply as to form with the applicable accounting requirements of the Securities Act and the Securities Act Regulations and have been prepared in conformity with generally accepted accounting principles applied on a consistent basis throughout the periods involved, except as may be expressly stated in the related notes thereto. Except as included therein, no other financial statements or supporting schedules are required to be included or incorporated by reference in the Registration Statement, the Disclosure Package, or the Prospectus.

 

 

 

 

(o) Incorporation and Good Standing. The Company has been duly formed and is validly existing as a company limited by shares under the laws of the jurisdiction of its formation and has corporate power and authority to own, lease and operate its properties and to conduct its business as described in the Registration Statement, the Disclosure Package, and the Prospectus and to enter into and perform its obligations under this Agreement. As of the Closing Date, the Company does not own or control, directly or indirectly, any corporation, association or other entity that is not otherwise disclosed in the Registration Statement, the Disclosure Package, or the Prospectus.

 

(p) Capitalization and Other Share Capital Matters. The authorized, issued, and outstanding shares of the Company is as set forth in each of the Disclosure Package and the Prospectus (other than for subsequent issuances, if any, pursuant to employee benefit plans described in each of the Disclosure Package and the Prospectus or upon exercise of outstanding options or warrants described in the Disclosure Package and Prospectus, as the case may be). The Common Stock conforms, and, when issued and delivered as provided in this Agreement, the Offered Securities will conform, in all material respects to the description thereof contained in each of the Disclosure Package and Prospectus. All the issued and outstanding shares of Common Stock have been duly authorized and validly issued, are fully paid and non-assessable and have been issued in compliance with applicable laws. None of the outstanding shares of Common Stock were issued in violation of any preemptive rights, rights of first refusal or other similar rights to subscribe for or purchase securities of the Company. There are no authorized or outstanding options, warrants, preemptive rights, rights of first refusal or other rights to purchase, or equity or debt securities convertible into or exchangeable or exercisable for, any shares of the Company other than those described in the Disclosure Package and the Prospectus. The description of the Company’s stock option and other stock plans or arrangements, and the options or other rights granted thereunder, set forth in the Disclosure Package and the Prospectus accurately and fairly presents the information required to be shown with respect to such plans, arrangements, options, and rights. No further approval from Nasdaq or authorization of any shareholder, the Board of Directors or others is required for the issuance and sale of the Offered Securities. Except as set forth in the Registration Statement, the Disclosure Package and the Prospectus, there are no shareholders agreements, voting agreements or other similar agreements with respect to the Common Stock to which the Company is a party or, to the knowledge of the Company, between or among any of the Company’s shareholders.

 

(q) Non-Contravention of Existing Instruments; No Further Authorizations or Approvals Required. The Company is not in violation of its memorandum and articles of association, as amended and restated or in default (or, with the giving of notice or lapse of time, would be in default) (“Default”) under any indenture, mortgage, loan or credit agreement, note, contract, franchise, lease or other instrument to which it is a party or by which it may be bound (including, without limitation, any agreement or contract filed as an exhibit to the Registration Statement or to which any of the property or assets of the Company are subject (each, an “Existing Instrument”), except for such Defaults as would not, individually or in the aggregate, result in a Material Adverse Change. The Company’s execution, delivery and performance of this Agreement and consummation of the transactions contemplated hereby (i) have been duly authorized by all necessary corporate action and will not result in any violation of the provisions of the amended and restated memorandum and articles of association of the Company, as amended and restated, (ii) will not conflict with or constitute a breach of, or Default under, or result in the creation or imposition of any lien, charge or encumbrance upon any property or assets of the Company pursuant to, or require the consent of any other party to, any Existing Instrument and (iii) will not result in any violation of any law, administrative regulation or administrative or court decree applicable to the Company, except in the case of each of clauses (ii) and (iii), to the extent such conflict, breach Default or violation could not reasonably be expected to result in a Material Adverse Effect. No consent, approval, authorization or other order of, or registration or filing with, any court or other governmental or regulatory authority or agency, is required for the Company’s execution, delivery and performance of this Agreement and consummation of the transactions contemplated hereby, except the registration or qualification of the Offered Securities under the Securities Act and applicable state securities or blue sky laws and from the Financial Industry Regulatory Authority Inc. (“FINRA”).

 

 

 

 

(r) Subsidiaries. Each of the Company’s direct and indirect subsidiaries (each a “Subsidiary”, and collectively, the “Subsidiaries”) has been identified on Schedule E hereto. Each of the Subsidiaries has been duly formed, is validly existing under the laws of Seychelles or Hong Kong, as the case may be, and in good standing under the laws of the jurisdiction of its incorporation, has full power and authority (corporate or otherwise) to own its property and to conduct its business as described in the Registration Statement, the Disclosure Package, the Prospectus, and is duly qualified to transact business and is in good standing in each jurisdiction in which the conduct of its business or its ownership or leasing of property requires such qualification, except to the extent that the failure to be so qualified or be in good standing would not result in a Material Adverse Change on the Company and its Subsidiaries, taken as a whole. Except as otherwise disclosed in the Registration Statement, the Disclosure Package, and the Prospectus, all of the equity interests of each Subsidiary have been duly and validly authorized and issued, are owned or controlled directly or indirectly by the Company, are fully paid in accordance with its articles of association, memorandum of association or charter documents, as amended and restated from time to time and non-assessable and are free and clear of all liens, encumbrances, equities or claims (“Liens”). None of the outstanding share capital or equity interest in any Subsidiary was issued in violation of preemptive or similar rights of any security holder of such Subsidiary. All the constitutive or organizational documents of each of the Subsidiaries comply with the requirements of applicable laws of its jurisdiction of incorporation or organization and are in full force and effect. Apart from the Subsidiaries, the Company has no direct or indirect subsidiaries or any other company over which it has direct or indirect effective control. Other than the Subsidiaries, the Company does not directly or indirectly control any entity through contractual arrangements or otherwise such that the entity would be deemed a consolidated affiliated entity whose financial results would be consolidated under U.S. GAAP with the financial results of the Company on the consolidated financial statements of the Company, regardless of whether the Company directly or indirectly owns less than a majority of the equity interests of such person.

 

(s) No Actions or Proceedings. Except as otherwise disclosed in the Disclosure Package and the Prospectus, there are no legal, governmental or regulatory investigations, actions, demands, claims, suits, arbitrations, inquiries or proceedings (collectively, “Actions”) pending or, to the Company’s knowledge, (i) threatened against the Company or any of its Subsidiaries or (ii) have as the subject thereof any of the executive officers, directors, or key employees of the Company or any of its Subsidiaries or any of the properties owned or leased by the Company or any of its Subsidiaries, where in any such case (A) there is a reasonable possibility that such Action might be determined adversely to the Company and (B) any such Action, if so determined adversely, would reasonably be expected to result in a Material Adverse Change or adversely affect the consummation of the transactions contemplated by this Agreement. Except as otherwise disclosed in the Disclosure Package and the Prospectus, no material labor dispute with the employees of the Company exists or, to the Company’s knowledge, is threatened or imminent. None of the Company’s or its Subsidiaries’ employees is a member of a union that relates to such employee’s relationship with the Company or such Subsidiary, and neither the Company nor any of its Subsidiaries is a party to a collective bargaining agreement, and the Company and its Subsidiaries believe that their relationships with their employees are good. No executive officer, to the knowledge of the Company, is in violation of any material term of any employment contract, confidentiality, disclosure or proprietary information agreement or non-competition agreement, or any other contract or agreement or any restrictive covenant in favor of any third party, and the continued employment of each such executive officer does not subject the Company or any of its Subsidiaries to any liability with respect to any of the foregoing matters. Except as otherwise disclosed in the Disclosure Package and the Prospectus, the Company and its Subsidiaries are in compliance with all applicable laws and regulations relating to employment and employment practices, terms and conditions of employment and wages and hours, except where the failure to be in compliance could not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Change. Except as otherwise disclosed in the Disclosure Package and the Prospectus, neither the Company or any Subsidiary, nor to the knowledge of the Company any director or officer of the Company, is or has within the last ten (10) years been the subject of any Action involving a claim of violation of or liability under federal or state securities laws or a claim of breach of fiduciary duty. Except as otherwise disclosed in the Disclosure Package and the Prospectus, there has not been, and to the knowledge of the Company, there is no pending or contemplated, any investigation by the Commission involving the Company or any current or former director or officer of the Company.

 

(t) Intellectual Property Rights. The Company owns, possesses or licenses, and otherwise has legally enforceable rights to use all patents, patent applications, trademarks, trade names, copyrights, domain names, licenses, approvals and trade secrets (collectively, “Intellectual Property Rights”) reasonably necessary to conduct its business as now conducted or, otherwise, as disclosed in the Registration Statement, the Disclosure Package and the Prospectus, except to the extent such failure to own, possess or have other rights to use such Intellectual Property would not be expected to result in a Material Adverse Change. Except as otherwise disclosed in the Registration Statement, the Disclosure Package and the Prospectus: (i) the Company has not received any written notice of infringement or conflict with asserted Intellectual Property Rights of others; (ii) the Company is not a party to or bound by any options, licenses or agreements with respect to the Intellectual Property Rights of any other person or entity that are required to be set forth in the Registration Statement, Disclosure Package and the Prospectus and are not described in all material respects; (iii) none of the technology employed by the Company has been obtained or is being used by the Company in violation of any contractual obligation binding on the Company or, to the Company’s knowledge, in violation of the rights of any persons; and (iv) the Company is not subject to any judgment, order, writ, injunction or decree of any court or any governmental department, commission, board, bureau, agency or instrumentality, or any arbitrator, nor has it entered into nor is it a party to any agreement made in settlement of any pending or threatened litigation, which materially restricts or impairs its use of any Intellectual Property Rights.

 

 

 

 

(u) All Necessary Permits, etc. Except as otherwise disclosed in the Disclosure Package and the Prospectus, the Company, and each of its Subsidiaries, possess such valid and current certificates, authorizations or permits issued by the applicable regulatory agencies or bodies necessary to conduct its business, and has made all declarations and filings with, the appropriate national, regional, local or other governmental or regulatory authorities that are necessary for the ownership or lease of their respective properties or assets or the conduct of their respective businesses as described in (the Registration Statement), the Disclosure Package and the Prospectus, except where any lack of the licenses would not reasonably be expected to have, individually or in aggregate, a Material Adverse Effect, and has not received any notice of proceedings relating to the revocation or modification of any such licenses and, to the knowledge of the Company, the Company has no reason to believe that such licenses will not be renewed in the ordinary course of their respective businesses that, if determined adversely to the Company, would individually or in the aggregate have a Material Adverse Effect. Such licenses are valid and in full force and effect and contain no materially burdensome restrictions or conditions not described in the Registration Statement, the Disclosure Package, or the Prospectus.

 

(v) Title to Properties. Except as otherwise disclosed in the Disclosure Package and the Prospectus, the Company has good and marketable title to all the properties and assets reflected as owned by it in the financial statements referred to in Section 1(n) above (or elsewhere in the Disclosure Package and the Prospectus), in each case free and clear of any security interest, mortgage, lien, encumbrance, equity, adverse claim or other defect, except such as do not materially and adversely affect the value of such property and do not materially interfere with the use made or proposed to be made of such property by the Company. The real property, improvements, equipment, and personal property held under lease by the Company are held under valid and enforceable leases, with such exceptions as are not material and do not materially interfere with the use made or proposed to be made of such real property, improvements, equipment, or personal property by the Company.

 

(w) Tax Law Compliance. (i) Except as otherwise disclosed in the Registration Statement, the Disclosure Package and the Prospectus, the Company and its Subsidiaries have each filed all federal, state, local and foreign income tax returns required to be filed as of the date of this Agreement or has timely and properly filed requested extensions thereof and has paid taxes required to be paid by them and, if due and payable, any related or similar assessment, fine or penalty levied against any of them in all material respects. (ii) No tax deficiency has been determined adversely to the Company or any of its Subsidiaries that has had (nor does the Company nor any of its Subsidiaries have any notice or knowledge of any tax deficiency which could reasonably be expected to be determined adversely to the Company or its Subsidiaries and which could reasonably be expected to have) a Material Adverse Effect. (iii) The Company has made adequate charges, accruals and reserves in the applicable financial statements referred to in Section 1(n) above in respect of all federal, state, and foreign income and franchise taxes for all periods as to which the tax liability of the Company has not been finally determined.

 

(x) Company Not an “Investment Company.” The Company is not, and after giving effect to payment for the Offered Securities and the application of the proceeds as contemplated under the caption “Use of Proceeds” in each of the Disclosure Package and the Prospectus will not be, required to register as an “investment company” within the meaning of the Investment Company Act of 1940, as amended (the “Investment Company Act”).

 

(y) No Price Stabilization or Manipulation. The Company has not taken and will not take, directly or indirectly, any action designed to, or that might be reasonably expected to cause or result in, stabilization or manipulation of the price of any securities of the Company to facilitate the sale or resale of the Offered Securities.

 

(z) Related Party Transactions. There are no business relationships or related-party transactions, directly or indirectly, involving the Company or its Subsidiaries with any related person required to be described or filed in the Registration Statement, or described in the Disclosure Package or the Prospectus, that have not been as set forth in the Registration Statement, the Prospectus, and the Pricing Prospectus.

 

(aa) Disclosure Controls and Procedures. To the extent required, the Company has established and maintains disclosure controls and procedures (as such term is defined in Rule 13a-15(e) of the Exchange Act Regulations) designed to ensure that information required to be disclosed by the Company in the reports it files or submits under the Exchange Act is recorded, processed, summarized, and reported, within the time periods specified in the Commission’s rules and forms. Except as otherwise disclosed in the Registration Statement, the Disclosure Package and the Prospectus, the Company is not aware of (a) any significant deficiency in the design or operation of internal controls which could adversely affect the Company’s ability to record, process, summarize and report financial data or any material weaknesses in internal controls or (b) any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal controls.

 

 

 

 

 

(bb) Company’s Accounting System. To the extent required, the Company maintains a system of accounting controls designed to provide reasonable assurances that (i) transactions are executed in accordance with management’s general or specific authorization; (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles and to maintain accountability for assets; (iii) access to assets is permitted only in accordance with management’s general or specific authorization; and (iv) the recorded accountability for assets is compared with existing assets at reasonable intervals and appropriate action is taken with respect to any differences.

 

(cc) Money Laundering Law Compliance. The operations of the Company are and have been conducted at all times in material compliance with all applicable financial recordkeeping and reporting requirements, including those of the United States Bank Secrecy Act, as amended by Title III of the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (USA PATRIOT Act), and the applicable anti-money laundering statutes of jurisdictions where the Company conducts business, and the rules and regulations thereunder and any related or similar rules, regulations or guidelines, issued, administered or enforced by any competent governmental agency (collectively, the “Anti-Money Laundering Laws”), and no action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Company with respect to any Anti-Money Laundering Laws is pending or, to the knowledge of the Company, threatened.

 

(dd) No Accounting Issues. The Company has not received any notice, oral or written, from its Board of Directors or Audit Committee stating that it is reviewing or investigating, and neither the Company’s independent auditors nor its internal auditors have recommended that the Board of Directors or Audit Committee review or investigate, (i) adding to, deleting, changing the application of, or changing the Company’s disclosure with respect to, any of the Company’s material accounting policies; or (ii) any matter which could result in a restatement of the Company’s financial statements for any annual or interim period during the current or prior two (2) fiscal years.

 

(ee) OFAC. (i) Neither the Company, any of its Subsidiaries nor, to the knowledge of the Company, any director, officer, employee or affiliate of the Company or any Subsidiary, is an individual or entity (“Person”) that is, or is owned or controlled by a Person that is:

 

A. the subject of any sanctions administered or enforced by the U.S. Department of Treasury’s Office of Foreign Assets Control (“OFAC”), the United Nations Security Council (“UNSC”), the European Union (“EU”), Her Majesty’s Treasury (“HMT”), or other relevant sanctions authority (collectively, “Sanctions”), nor

 

B. located, organized or resident in a country or territory that is the subject of Sanctions (including, without limitation, Burma/Myanmar, Cuba, Iran, Libya, North Korea, Sudan and Syria).

 

(ii) The Company will not, directly, or indirectly, use the proceeds of the Offering, or lend, contribute or otherwise make available such proceeds to any Subsidiary or affiliated entity, joint venture partner or other Person:

 

A. to fund or facilitate any activities or business of or with any Person or in any country or territory that, at the time of such funding or facilitation, is the subject of Sanctions; or

 

B. in any other manner that will result in a violation of Sanctions by any Person (including any Person participating in the Offering, whether as underwriter, advisor, investor or otherwise).

 

 

 

 

(ff) Foreign Corrupt Practices Act. Neither the Company nor any of its Subsidiaries to the best of the Company’s knowledge, any director, officer, employee or affiliate of the Company, any Subsidiary or any other person acting on behalf of the Company has, directly or indirectly, taken any action that (i) would result in a violation by such persons of the Foreign Corrupt Practices Act of 1977, as amended, and the rules and regulations thereunder (the “FCPA”) or otherwise subject the Company to any damage or penalty in any civil, criminal or governmental litigation or proceeding; (ii) if done in the past, might reasonably be expected to have a Material Adverse Effect or (iii) if continued in the future, might reasonably be expected to materially and adversely affect the assets, business, or operations of the Company. The foregoing includes, without limitation, giving or agreeing to give any money, gift or similar benefit (other than legal price concessions to customers in the ordinary course of business) official or employee of any governmental agency or instrumentality of any government (domestic or foreign) or other person who was, is, or may be in a position to help or hinder the business of the Company (or assist it in connection with any actual or proposed transaction).

 

(gg) Internal Control and Compliance with Sarbanes-Oxley Act of 2002. The Company, its Subsidiaries and the Company’s Board of Directors have taken all reasonably necessary actions to ensure that, upon the effectiveness of the Registration Statement, the Company will be in compliance with any provision applicable to it of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”) and the rules and regulations promulgated in connection therewith, including, without limitation, Section 402 related to loans and Sections 302 and 906 related to certifications of the Sarbanes-Oxley Act, and all applicable rule of the Exchanges. The Company maintains a system of internal controls, including, but not limited to, disclosure controls and procedures, internal controls over accounting matters and financial reporting, an internal audit function and legal and regulatory compliance controls (collectively, “Internal Controls”) to comply with all applicable laws and regulations including without limitation the Securities Act, the Exchange Act, the Sarbanes-Oxley Act, the rules and regulations of the Commission, and the rules of the listing exchanges.

 

(hh) Exchange Act Filing. A registration statement in respect of the Offered Securities has been filed on Form 8-A pursuant to Section 12(b) of the Exchange Act, which registration statement complies in all material respects with the Exchange Act, and the Company has taken no action designed to, or which to its knowledge is likely to have the effect of, terminating the registration of the Offered Securities under the Exchange Act nor has the Company received any notification that the Commission is contemplating terminating such registration.

 

(ii) Earning Statements. The Company will make generally available (which includes filings pursuant to the Exchange Act made publicly through the EDGAR system) to its security holders as soon as practicable, but in any event not later than sixteen (16) months after the end of the Company’s current fiscal year, an earnings statement (which need not be audited) covering a twelve (12) month period that shall satisfy the provisions of Section 11(a) of the Securities Act and Rule 158 of the Rules and Regulations.

 

(jj) Periodic Reporting Obligations. During the Prospectus Delivery Period (as defined below), the Company shall file, on a timely basis, with the Commission all reports and documents required to be filed under the Exchange Act. Additionally, the Company shall report the use of proceeds from the issuance of the Firm Shares as may be required under Rule 463 under the Securities Act.

 

(kk) Forward-looking Statements. No forward-looking statement (within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act) contained in the Registration Statement, the Disclosure Package, the Prospectus, or shall be contained in any amendments and supplements thereof, has been made, or will be made, without a reasonable basis as reasonably determined by the Company at the moment such a statement is made or will be made, or has been disclosed or will be disclosed other than in good faith.

 

 

 

 

(ll) Foreign Tax Compliance. Except as otherwise disclosed in the Disclosure Package and the Prospectus, no transaction, stamp, capital or other issuance, registration, transaction, transfer or withholding taxes or duties are payable in Seychelles or Hong Kong or to any Seychelles or Hong Kong taxing authority in connection with the issuance, sale and delivery of the Offered Securities, and the delivery of the Offered Securities to or for the account of the Underwriters.

 

(mm) Mainland China. The Company and its Subsidiaries (i) are not subject to mainland China laws and regulations, such as those relating to data and cyberspace security, and anti-monopoly concerns; (ii) are not required to obtain any permissions or approvals from the mainland China authorities, including but not limited to the China Securities Regulatory Commission and the Cyberspace Administration of China (“CAC”), to operate the business or to list securities on the U.S. exchanges and offer securities, including but not limited to this Offering and to issuing Common Stock to foreign investors; and (iii) have not applied for or been denied of any such permissions or approvals from the mainland China authorities. For avoidance of doubt, the oversight by the CAC over data security does not have any impact on the business of the Company and its Subsidiaries or this Offering.

 

(nn) D&O Questionnaires. To the Company’s knowledge, all information contained in the questionnaires (the “Questionnaires”) completed by each of the Company’s directors and officers prior to the Offering (the “Insiders”) as well as in the Lock-up Agreement in the form attached hereto as Exhibit A provided to the Representative is true and correct in all respects and the Company has not become aware of any information which would cause the information disclosed in the Questionnaires completed by each Insider to become inaccurate and incorrect.

 

(oo) Solvency. Based on the consolidated financial condition of the Company as of each Closing Date, after giving effect to the receipt by the Company of the proceeds from the sale of the Offered Securities hereunder, the current cash flow of the Company, together with the proceeds the Company would receive, were to liquidate all of its assets, after taking into account all anticipated uses of the cash, are sufficient to pay all amounts on or in respect of its liabilities when such amounts are required to be paid. The Company does not intend to incur debts beyond its ability to pay such debts as they mature (taking into account the timing and amounts of cash to be payable on or in respect of its debt). Except as set forth in the Registration Statement and the Prospectus, the Company has no knowledge of any facts or circumstances which lead it to believe that it will file for reorganization or liquidation under the bankruptcy or reorganization laws of any jurisdiction within one (1) year from each Closing Date. The Registration Statement and the Prospectus set forth as of the date hereof all outstanding secured and unsecured Indebtedness of the Company or any Subsidiary, or for which the Company or any Subsidiary has commitments. For the purposes of this Agreement, “Indebtedness” means (A) any liabilities for borrowed money or amounts owed in excess of $50,000 (other than trade accounts payable incurred in the ordinary course of business), (B) all guaranties, endorsements and other contingent obligations in respect of indebtedness of others, whether or not the same are or should be reflected in the Company’s consolidated balance sheet (or the notes thereto), except guaranties by endorsement of negotiable instruments for deposit or collection or similar transactions in the ordinary course of business; and (C) the present value of any lease payments in excess of $50,000 due under leases required to be capitalized in accordance with U.S. GAAP. Except as set forth in the Registration Statement and the Prospectus, neither the Company nor any Subsidiary is in default with respect to any Indebtedness.

 

(pp) Regulation M Compliance. The Company has not, and to its knowledge no one authorized to act on its behalf has, (i) taken, directly or indirectly, any action designed to cause or to result in the stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of any of the Offered Securities or Underlying Shares, (ii) sold, bid for, purchased, or, paid any compensation for soliciting purchases of, any of the Offered Securities of the Underlying Shares, or (iii) paid or agreed to pay to any Person any compensation for soliciting another to purchase any other securities of the Company, other than, in the case of clauses (ii) and (iii), compensation paid to the Underwriter in connection with the Offering.

 

 

 

 

(qq) EGC Status and Testing-the-Waters Communications. From the time of the initial confidential submission of the Registration Statement to the Commission (or, if earlier, the first date on which the Company engaged directly or through any person authorized to act on its behalf in any Test-the-Waters Communication), or, if no initial confidential submission of the Registration statement, then the initial filing of the Registration Statement with the Commission, through the date hereof, the Company has been and is an “emerging growth company”, as defined in Section 2(a) of the Act (“Emerging Growth Company”). “Testing-the-Waters Communication” means any oral or written communication with potential investors undertaken in reliance on Section 5(d) of the Act. The Company (i) has not alone engaged in any Testing-the-Waters Communications other than Testing-the-Waters Communications with the consent of the Representative with entities that are qualified institutional buyers within the meaning of Rule 144A under the Securities Act or institutions that are accredited investors within the meaning of Rule 501 under the Securities Act and (ii) has not authorized anyone other than the Representative to engage in Testing-the-Waters Communications. The Company reconfirms that the Representative have been authorized to act on its behalf in undertaking Testing-the-Waters Communications. The Company has not distributed any Written Testing-the-Waters Communications other than those listed on Schedule F hereto. “Written Testing-the-Waters Communication” means any Testing-the-Waters Communication that is a written communication within the meaning of Rule 405 under the Securities Act. As of the time of each sale of the Shares in connection with the offering when the Prospectus is not yet available to prospective purchasers, no individual Written Testing-the-Waters Communications, when considered together with the Time of Sale Prospectus, included, includes or will include an untrue statement of a material fact or omitted, omits or will omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.

 

(rr) Margin Securities. The Company owns no “margin securities” as that term is defined in Regulation U of the Board of Governors of the Federal Reserve System (the “Federal Reserve Board”), and none of the proceeds of Offering will be used, directly or indirectly, for the purpose of purchasing or carrying any margin security, for the purpose of reducing or retiring any indebtedness which was originally incurred to purchase or carry any margin security or for any other purpose which might cause any of the Offered Securities to be considered a “purpose credit” within the meanings of Regulation T, U or X of the Federal Reserve Board.

 

(ss) Insurance. The Company and each of its Subsidiaries are insured by insurers of recognized financial responsibility against such losses and risks and in such amounts as are prudent and customary in the businesses in which they are engaged; neither the Company nor any of its Subsidiaries has been refused any insurance coverage sought or applied for; and neither the Company nor any of its Subsidiaries has any reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business at a cost that would not have a Material Adverse Effect.

 

(tt) No Finder’s Fee. There are no contracts, agreements, or understandings between the Company or its Subsidiaries and any other person that would give rise to a valid claim against the Company or its Subsidiaries or any Underwriter for a brokerage commission, finder’s fee or other like payment in connection with this Offering, or any other arrangements, agreements, understandings, payments, or issuance with respect to the Company, or its Subsidiaries, or any of their respective officers, directors, shareholders, partners, employees or related parties that may affect the Underwriters’ compensation as determined by FINRA.

 

(uu) Payments Within Twelve (12) Months. Except as described in the Disclosure Package and the Prospectus, none of the Company or its Subsidiaries has made any direct or indirect payments (in cash, securities or otherwise) to: (A) any person, as a finder’s fee, consulting fee or otherwise, in consideration of such person raising capital for the Company or introducing to the Company persons who raised or provided capital to the Company; (B) any FINRA member; or (C) any person or entity that has any direct or indirect affiliation or association with any FINRA member, within the twelve (12) months prior to the Effective Date, other than the payment to the Underwriters as provided hereunder in connection with the Offering.

 

(vv) Use of Proceeds. None of the net proceeds of the Offering will be paid by the Company to any participating FINRA member or its affiliates, except as specifically authorized herein.

 

(ww) Information. All information provided by the Company in its FINRA questionnaire to the Underwriters’ counsel specifically for use by the Underwriters’ counsel in connection with its Public Offering System filings (and related disclosure) with FINRA is true, correct and complete in all material respects.

 

 

 

 

 

(xx) No FINRA Affiliations. To the Company’s knowledge and except as disclosed to the Representative in writing, no (i) officer or director of the Company or its subsidiaries, (ii) owner of ten percent (10%) or more of any class of the Company’s securities or (iii) owner of any amount of the Company’s unregistered securities acquired within the one hundred eighty (180) day period immediately prior to the date that the Registration Statement was initially filed with the Commission, has any direct or indirect affiliation or association with any FINRA member. The Company will advise the Representative and counsel to the Underwriters if it becomes aware that any such person described in (i) to (iii) under this Section 1(xx) is or becomes an affiliate or associated person of a FINRA member participating in the offering.

 

(yy) Operating and Other Data. All operating and other data pertaining to the Disclosure Package and the Prospectus are true and accurate in all materials respects.

 

(zz) Third-party Data. Any statistical, industry-related and market-related data, which are included in the Disclosure Package and the Prospectus, is based on or derived from sources that the Company reasonably and in good faith believes to be reliable and accurate, and such data agrees with the sources from which it is derived, and the Company has obtained the written consent for the use of such data from such sources to the extent required.

 

(aaa) Compliance with Environmental Laws. The Company and its Subsidiaries are (A) in compliance with any and all applicable foreign, federal, state and local laws and regulations relating to the protection of human health and safety, the environment or hazardous or toxic substances or wastes, pollutants or contaminants (“Environmental Laws”), (B) have received and are in compliance with all permits, licenses or other approvals required of them under applicable Environmental Laws to conduct their respective businesses and (C) have not received notice of any actual or potential liability for the investigation or remediation of any disposal or release of hazardous or toxic substances or wastes, pollutants or contaminants, except where such non-compliance with Environmental Laws, failure to receive required permits, licenses or other approvals, or liability would not have a Material Adverse Effect.

 

(bbb) Compliance with Law, Constitutive Documents and Contracts. Neither the Company nor any of the Subsidiaries is (A) in breach or violation of any provision of applicable law (including, but not limited to, any applicable law concerning information collection and user privacy protection) or (B) in breach or violation of its respective constitutive documents, or (C) in default under (nor has any event occurred that, with notice, lapse of time or both, would result in any breach or violation of, constitute a default under or give the holder of any indebtedness (or a person acting on such holder’s behalf) the right to require the repurchase, redemption or repayment of all or a part of such indebtedness under) any agreement or other instrument that is binding upon the Company or any of the Subsidiaries, or any judgment, order or decree of any governmental body, agency or court having jurisdiction over the Company or any of the Subsidiaries, except in the cases of (A) and (B) above, where any such breach, violation or default would not have a Material Adverse Effect.

 

(ccc) No Unlawful Influence. The Company has not offered, or caused the Underwriters to offer, shares to any person or entity with the intention of unlawfully influencing: (a) a customer or supplier of the Company or any affiliate of the Company to alter the customer’s or supplier’s level or type of business with the Company or such affiliate or (b) a journalist or publication to write or publish favorable information about the Company or any such affiliate.

 

(ddd) Integration. Neither the Company, nor any of its affiliates, nor any person acting on its or their behalf has, directly or indirectly, made any offers or sales of any security or solicited any offers to buy any security, under circumstances that would cause the Offering to be integrated with prior offerings by the Company for purposes of the Securities Act that would require the registration of any such securities under the Securities Act.

 

(eee) Representation of Officers. Any certificate signed by an officer of the Company and delivered to the Representative or to counsel for the Representative shall be deemed to be a representation and warranty by the Company to the Underwriters as to the matters set forth therein. The Company acknowledges that the Underwriters and, for purposes of the opinions to be delivered pursuant to Section 6 hereof, counsel to the Company, will rely upon the accuracy and truthfulness of the foregoing representations and hereby consents to such reliance.

 

 

 

 

SECTION 2. Firm Shares; Additional Shares.

 

(a) Purchase of Firm Shares. Based on the representations and warranties herein contained, but subject to the terms and conditions herein set forth, the Company agrees to issue and sell to the Underwriters an aggregate of [•] the Firm Shares at a purchase price of $[•] per Share. The Underwriters agree to purchase from the Company the Firm Shares in such amounts as set forth opposite their respective names on Schedule A attached hereto and made a part hereof.

 

(b) Delivery of and Payment for Firm Shares. Delivery of and payment for the Firm Shares shall be made at 10:00 A.M., Eastern time, on the second (2^nd) business day following the Applicable Time, or at such time as shall be agreed upon by the Representative and the Company, at a place (including remotely by electronic transmission) as shall be agreed upon by the Representative and the Company. The hour and date of delivery of and payment for the Firm Shares is called the “Closing Date.” The closing of the payment of the purchase price for, and delivery of certificates representing the Firm Shares, is referred to herein as the “Closing.” Payment for the Firm Shares shall be made on the Closing Date by wire transfer in Federal (same day) funds upon delivery to the Underwriters of certificates (in form and substance reasonably satisfactory to the Underwriters) representing the Firm Shares (or if uncertificated through the full fast transfer facilities of the Depository Trust Company (the “DTC”)) for the account of the Underwriters. The Firm Shares shall be registered in such names and in such denominations as the Underwriters may request in writing at least two (2) business days prior to the Closing Date. If certificated, the Company will permit the Underwriters to examine and package the Firm Shares for delivery at least one full business day prior to the Closing Date. The Company shall not be obligated to sell or deliver the Firm Shares except upon tender of payment by the Underwriters for all the Firm Shares.

 

(c) Additional Shares. The Company hereby grants to the Underwriters an option (the “Over-allotment Option”) to purchase up to an additional [•] shares of Common Stock (the “Additional Shares”), in each case solely for the purpose of covering over-allotments of such securities, if any. The Over-allotment Option is exercised at the Underwriters’ sole discretion.

 

(d) Exercise of Over-allotment Option. The Over-allotment Option granted pursuant to Section 2(c) hereof may be exercised by the Representative no later than forty-five (45) days after the Closing Date. The purchase price to be paid per Additional Shares shall be equal to the price per Firm Share in Section 2(a). The Underwriters shall not be under any obligation to purchase any Additional Shares prior to the exercise of the Over-allotment Option. The Underwriters shall not be under any obligation to purchase any Additional Shares prior to the exercise of the Over-allotment Option. The Over-allotment Option granted hereby may only be exercised by a formal written notice signed by authorized signature of the Representative setting forth the number of Additional Shares to be purchased and the date and time for delivery of and payment for the Additional Shares (the “Exercise Notice”). Any oral notice or email notice to the Company from the Representative shall be confirmed by the Exercise Notice via overnight mail or electronic transmission. The date and time for delivery of and payment for the Additional Shares (the “Option Closing Date”) shall not be later than five (5) full Business Days after the date of the notice or such other time as shall be agreed upon by the Company and the Underwriters, at the offices of the Representative’s counsel at such other place (including remotely by electronic transmission) as shall be agreed upon by the Company and the Underwriters. If such a delivery and payment for the Additional Shares does not occur on the Closing Date, the Option Closing Date will be as set forth in the notice. Upon exercise of the Over-allotment Option with respect to all or any portion of the Additional Shares, subject to the terms and conditions set forth herein, (i) the Company shall become obligated to sell to the Underwriters the number of Additional Shares specified in such notice and (ii) the Underwriters shall purchase that portion of the total number of Additional Shares.

 

(e) Delivery and Payment of Additional Shares. Payment for the Additional Shares shall be made on the Option Closing Date by wire transfer in Federal (same day) funds, upon delivery to the Underwriters of certificates (in form and substance satisfactory to the Underwriters) representing the Additional Shares (or through the facilities of DTC) for the account of the Underwriters. The Additional Shares shall be registered in such name or names and in such authorized denominations as the Underwriters may request in writing at least two (2) full Business Days prior to the Option Closing Date. The Company shall not be obligated to sell or deliver the Additional Shares except upon tender of payment by the Underwriters for applicable Additional Shares. The Option Closing Date may be simultaneous with, but not earlier than, the Closing Date; and in the event that such time and date are simultaneous with the Closing Date, the term “Closing Date” shall refer to the time and date of delivery of the Firm Shares and Additional Shares.

 

(f) Underwriter’s Commission. In consideration of the services to be provided for hereunder, the Company shall pay to the Underwriters commission equal to seven percent (7%) of the gross proceeds.

 

 

 

 

SECTION 3. Covenants of the Company.

 

The Company also covenants and agrees with each of the Underwriters as follows:

 

(a) Underwriter’s Review of Proposed Amendments and Supplements. During the period beginning at the Applicable Time and ending on the later of the Closing Date or such date as, in the opinion of counsel for the Underwriters, the Prospectus is no longer required by law to be delivered in connection with sales by the Underwriters or selected dealers, including under circumstances where such requirement may be satisfied pursuant to Rule 172 under the Securities Act (the “Prospectus Delivery Period”), prior to amending or supplementing the Registration Statement or the Prospectus, including any amendment or supplement through incorporation by reference of any report filed under the Exchange Act, the Company shall furnish to the Underwriters for review a copy of each such proposed amendment or supplement, and the Company shall not file any such proposed amendment or supplement to which the Underwriters reasonably objects.

 

(b) Securities Act Compliance. After the date of this Agreement, during the Prospectus Delivery Period, the Company shall promptly advise the Underwriters in writing (i) of the receipt of any comments of, or requests for additional or supplemental information from, the Commission, (ii) of the time and date of any filing of any post-effective amendment to the Registration Statement or any amendment or supplement to the Pricing Prospectus or the Prospectus, (iii) of the time and date that any post-effective amendment to the Registration Statement becomes effective and (iv) of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or any post-effective amendment thereto or of any order or notice preventing or suspending the use of the Registration Statement, the Pricing Prospectus or the Prospectus, or of any proceedings to remove, suspend or terminate from listing or quotation the Offered Securities from any securities exchange upon which they are listed for trading or included or designated for quotation, or of the threatening or initiation of any proceedings for any of such purposes. If the Commission shall enter any such stop order or order or notice of prevention or suspension at any time, the Company will use its best efforts to obtain the lifting of such order at the earliest possible moment or will file a new registration statement and use its best efforts to have such new registration statement declared effective as soon as practicable. Additionally, the Company agrees that it shall comply with the provisions of Rules 424(b) and 430A, as applicable, under the Securities Act, including with respect to the timely filing of documents thereunder and will confirm that any filings made by the Company under such Rule 424(b) were received in a timely manner by the Commission.

 

(c) Exchange Act Compliance. During the Prospectus Delivery Period, to the extent the Company becomes subject to reporting obligation under the Exchange Act, the Company will file all documents required to be filed with the Commission pursuant to Sections 13, 14 or 15 of the Exchange Act in the manner and within the time periods required by the Exchange Act.

 

(d) Amendments and Supplements to the Registration Statement, Prospectus and Other Securities Act Matters. If, during the Prospectus Delivery Period, any event or development shall occur or condition exist as a result of which the Disclosure Package or the Prospectus as then amended or supplemented would include any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein in the light of the circumstances under which they were made, as the case may be, not misleading, or if it shall be necessary to amend or supplement the Disclosure Package or the Prospectus, in order to make the statements therein, in the light of the circumstances under which they were made, as the case may be, not misleading, or if in the opinion of the Underwriters it is otherwise necessary to amend or supplement the Registration Statement, the Disclosure Package or the Prospectus, or to file a new registration statement containing the Prospectus, in order to comply with law, including in connection with the delivery of the Prospectus, the Company agrees to (i) notify the Underwriters of any such event or condition (unless such event or condition was previously brought to the Company’s attention by the Underwriters during the Prospectus Delivery Period) and (ii) promptly prepare (subject to Section 3(a) and Section 3(e) hereof), file with the Commission (and use its best efforts to have any amendment to the Registration Statement or any new registration statement to be declared effective) and furnish at its own expense to the Underwriters and to dealers, amendments or supplements to the Registration Statement, the Disclosure Package or the Prospectus, or any new registration statement, necessary in order to make the statements in the Disclosure Package or the Prospectus as so amended or supplemented, in the light of the circumstances under which they were made, as the case may be, not misleading or so that the Registration Statement, the Disclosure Package or the Prospectus, as amended or supplemented, will comply with law.

 

 

 

 

 

(e) Permitted Free Writing Prospectuses. The Company represents that it has not made, and agrees that, unless it obtains the prior written consent of the Underwriters, it will not make, any offer relating to the Offered Securities that would constitute an Issuer Free Writing Prospectus or that would otherwise constitute a “free writing prospectus” (as defined in Rule 405 under the Securities Act) required to be filed by the Company with the Commission or retained by the Company under Rule 433 under the Securities Act; provided that the prior written consent of the Underwriters hereto shall be deemed to have been given in respect of each free writing prospectuses listed on Schedule B hereto. Any such free writing prospectus consented to by the Underwriters is hereinafter referred to as a “Permitted Free Writing Prospectus.” The Company agrees that (i) it has treated and will treat, as the case may be, each Permitted Free Writing Prospectus as an Issuer Free Writing Prospectus, and (ii) has complied and will comply, as the case may be, with the requirements of Rules 164 and 433 under the Securities Act applicable to any Permitted Free Writing Prospectus, including in respect of timely filing with the Commission, legending and record keeping.

 

(f) Copies of any Amendments and Supplements to the Prospectus. The Company agrees to furnish the Underwriters, without charge, during the Prospectus Delivery Period, as many copies of each of the preliminary prospectuses, the Prospectus and the Disclosure Package and any amendments and supplements thereto (including any documents incorporated or deemed incorporated by reference therein) as the Underwriters may reasonably request.

 

(g) Use of Proceeds. The Company shall apply the net proceeds from the sale of the Offered Securities sold by it substantially in the manner described under the caption “Use of Proceeds” in the Disclosure Package and the Prospectus.

 

(h) Transfer Agent. The Company shall engage and maintain, at its expense, a registrar and transfer agent for the Offered Securities.

 

(i) Internal Controls. The Company will maintain a system of internal accounting controls designed to provide reasonable assurances that: (i) transactions are executed in accordance with management’s general or specific authorization; (ii) transactions are recorded as necessary in order to permit preparation of financial statements in accordance with U.S. GAAP and to maintain accountability for assets; (iii) access to assets is permitted only in accordance with management’s general or specific authorization; and (iv) the recorded accountability for assets is compared with existing assets at reasonable intervals and appropriate action is taken with respect to any differences. The internal controls, upon consummation of the Offering, will be overseen by the audit committee of the Company’s board of directors in accordance with the rules of the Nasdaq Stock Exchange (“Nasdaq”).

 

(j) Exchange Listing. The Common Stock has been duly authorized for listing on the Nasdaq Capital Market, subject to official notice of issuance. Upon consummation of the Offering, the Company will be in material compliance with the provisions of the rules and regulations promulgated by Nasdaq and has no reason to believe that it will not in the foreseeable future continue to be, in compliance with all such listing and maintenance requirements (to the extent applicable to the Company as of the date hereof or the Closing Date; and subject to all exemptions and exceptions from the requirements thereof as are set forth therein, to the extent applicable to the Company). Without limiting the generality of the foregoing and subject to the qualifications above: (i) all members of the Company’s board of directors who are required to be “independent” (as that term is defined under applicable laws, rules and regulations), including, without limitation, all members of each of the audit committee, compensation committee and nominating and corporate governance committee of the Company’s board of directors, meet the qualifications of independence as set forth under such laws, rules and regulations, (ii) the audit committee of the Company’s board of directors has at least one member who is an “audit committee financial expert” (as that term is defined under such laws, rules and regulations), and (iii) that, based on discussions with Nasdaq, the Company meets all requirements for listing on the Nasdaq Capital Market.

 

 

 

 

 

(k) Absence of Further Requirements. No consent, approval, authorization, or order of, or filing or registration with, any person (including any governmental or regulatory agency or body or any court) is required to be obtained or made by the Company for the consummation of the transactions contemplated by this Agreement in connection with the Offering, issuance and sale of the Offered Securities, except such as have been obtained, or made on or prior to the Closing Date, and are, or on the Closing Date will be, in full force and effect, including (i) under applicable blue sky laws in any jurisdiction in which the Offered Securities are offered and sold ( “Blue Sky Qualification”) and (ii) under the rules and regulations of the FINRA. No authorization, consent, approval, license, qualification or order of, or filing or registration with any person (including any governmental agency or body or any court) in any foreign jurisdiction is required for the consummation of the transactions contemplated by this Agreement in connection with the Offering, issuance and sale of the Offered Securities under the laws and regulations of such jurisdiction except such as have been obtained or made.

 

(l) Future Reports to the Underwriters. For three (3) years after the date of this Agreement, the Company will furnish, if not otherwise available on EDGAR, to the Representative pursuant to the addresses and contacts provided in Section 13 of this Agreement: (i) as soon as practicable after the end of each fiscal year, copies of the Annual Report of the Company containing the balance sheet of the Company as of the close of such fiscal year and statements of income, shareholders’ equity and cash flows for the year then ended and the opinion thereon of the Company’s independent public or certified public accountants; (ii) as soon as practicable after the filing thereof, copies of each proxy statement, Annual Report on Form 10-K, quarterly financial statements on Form 10-Q, current reports on Form 8-K, or other report filed by the Company with the Commission; and (iii) as soon as available, copies of any report or communication of the Company mailed generally to holders of its shares.

 

(m) No Manipulation of Price. The Company will not take, directly or indirectly, any action designed to cause or result in, or that has constituted or might reasonably be expected to constitute, the stabilization or manipulation of the price of any securities of the Company.

 

(n) Existing Lock-up Agreements. Except as described in the Registration Statement, the Disclosure Package and the Prospectus, there are no existing agreements between the Company and its shareholders that prohibit the sale, transfer, assignment, pledge, or hypothecation of any of the shares of Common Stock. The Company will direct the transfer agent to place stop transfer restrictions upon the shares of Common Stock that are bound by such “lock-up” agreements for the duration of the periods contemplated therein.

 

(o) Company Lock-Up.

 

(i) The Company will not, without the prior written consent of the Representative, from the date of execution of this Agreement and continuing for a period of one hundred eighty (180) days after the date of the Prospectus (the “Lock-Up Period”), (i) offer, pledge, announce the intention to sell, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase or otherwise transfer or dispose of, directly or indirectly, or file with the Commission a registration statement under the Securities Act relating to, any Common Stock or any securities convertible into or exercisable or exchangeable for Common Stock, or (ii) enter into any swap or other agreement that transfers, in whole or in part, any of the economic consequences of ownership of the Common Stock or any such other securities, whether any such transaction described in clause (i) or (ii) above is to be settled by delivery of Common Stock or such other securities, in cash or otherwise, except to the Underwriters pursuant to this Agreement. The Company agrees not to accelerate the vesting of any option or warrant or the lapse of any repurchase right prior to the expiration of the Lock-Up Period.

 

(ii) The restrictions contained in Section 3(o)(i) hereof shall not apply to: (A) the Offered Securities to be sold hereunder, (B) the issuance by the Company of Common Stock upon the exercise of a stock option or warrant or the conversion of a security outstanding on the date hereof and disclosed in the Registration Statement, the Disclosure Package or the Prospectus, (C) the issuance by the Company, or the filing by the Company of a Registration Statement related thereto, of stock options or shares of the Company under any equity compensation plan of the Company and (D) securities issued pursuant to acquisitions or strategic transactions approved by a majority of the disinterested directors of the Company, provided that such securities are issued as “restricted securities” (as defined in Rule 144) and carry no registration rights that require or permit the filing of any registration statement in connection therewith during the Lock-Up Period and provided that any such issuance shall only be to a Person (or to the equity holders of a Person) which is, itself or through its subsidiaries, an operating company or an owner of an asset in a business synergistic with the business of the Company and shall provide to the Company additional benefits in addition to the investment of funds, but shall not include a transaction in which the Company is issuing securities primarily for the purpose of raising capital.

 

 

 

 

(p) Right of First Refusal. Provided that the Firm Shares are sold in accordance with the terms of this Agreement, the Representative shall have an irrevocable right of first refusal (the “Right of First Refusal”), for a period of twelve (12) months from the date of the closing of the Offering (the “ROFR Period”), to act as lead or joint-lead investment banker, lead or joint book-runner, and/or lead or joint placement agent, at the Representative’s sole and exclusive discretion, for each and every future public and private equity and debt offering, including but not limited to, (i) any equity, equity-linked, debt or mezzanine financing or other investment (including a secondary sale or offering by security holders effected with the Company’s assistance); (ii) any tender offer or exchange offer for, debt, convertible debt securities; (iii) any merger, consolidation, sale, transfer or other disposition of all or a material portion of stocks or assets; (iv) restructuring transactions including extraordinary dividend, stock repurchase, spin-off (each, a “Subsequent Transaction”), during the ROFR period, of the Company, or any successor to or subsidiary of the Company, on terms and conditions customary for the Representative for such Subsequent Transactions; provided however, that the Right of First Refusal shall be contingent upon the written agreement by the Representative to participate in any such Subsequent Transaction upon the terms and conditions that should contain reasonable and customary fees for transactions of similar size and nature; and provided further that in the event the Company terminates its agreement with the Representative for cause (which shall mean a material failure to provide the underwritten services contemplated in its agreement with the Company), then such Right of First Refusal shall become null and void, in compliance with FINRA Rule 5110(g). For the avoidance of any doubt, the Company shall not retain, engage or solicit any additional investment banker, book-runner and/or placement agent in a Subsequent Transaction during the ROFR period referred to above without the express written consent of the Representative.

 

The Company shall notify the Representative of its intention to pursue a Subsequent Transaction, including the material terms thereof, by providing written notice thereof by registered mail or overnight courier service addressed to the Representative. If the Representative fails to exercise its Right of First Refusal with respect to any Subsequent Transaction within five (5) days after receiving of such written notice, then the Representative shall have no further claim or right with respect to the Subsequent Transaction. The Representative may elect, in its sole and absolute discretion, not to exercise its Right of First Refusal with respect to any Subsequent Transaction; provided that any such election by the Representative shall not adversely affect the Representative’s Right of First Refusal with respect to any other Subsequent Transaction during the ROFR Period agreed to above. The terms and conditions of any such engagements shall be set forth in separate agreements and may be subject to, among other things, satisfactory completion of due diligence by the Representative, market conditions, the absence of a material adverse change to the Company’s business, financial condition, approval of the Representative’s internal committee and any other conditions that the Representative may deem appropriate for transactions of such nature.

 

For the avoidance of doubt, the Right of First Refusal set forth in this Section shall be subject to FINRA Rule 5110(g).

 

SECTION 4. Payment of Fees and Expenses.

 

(a) General Expenses Related to the Offering. Whether or not the transactions contemplated in this Agreement are consummated or this Agreement is terminated, the Company covenants and agrees to pay reasonable, actual and accountable costs, fees and expenses incurred in connection with the transactions contemplated hereby, including without limitation to, (i) all expenses incident to the issuance and delivery of the Offered Securities (including all printing and engraving costs, if any), (ii) all fees and expenses of the clearing firm, registrar and transfer agent of the Offered Securities, (iii) all necessary issue, transfer and other stamp taxes in connection with the Offering, (iv) all fees and expenses of the Company’s counsel, independent public or certified public accountants and other advisors, (v) all costs and expenses incurred in connection with the preparation, printing, filing, shipping and distribution of the Registration Statement (including financial statements, exhibits, schedules, consents and certificates of experts), each Issuer Free Writing Prospectus, each preliminary prospectus and the Prospectus, and all amendments and supplements thereto, and this Agreement; (vi) all filing fees, all fees and expenses in connection with listing the Firm Shares on the Exchange, attorneys’ fees and expenses incurred by the Company, or the Representative, in connection with qualifying or registering (or obtaining exemptions from the qualification or registration of) all or any part of the Offered Securities for offer and sale under the state securities or blue sky laws, and, if requested by the Representative, preparing and printing a “Blue Sky Survey” or memorandum, and any supplements thereto, advising the Representative of such qualifications, registrations and exemptions; (vii) the filing fees incident to, and the reasonable fees and disbursements of counsel for the Underwriters in connection with, any required review by FINRA of the terms of the sale of the Firm Shares; provided, that the reasonable fees and disbursements of counsel to the Underwriters; (viii) the costs and expenses of the Company relating to investor presentations on any “road show” undertaken in connection with the marketing of the Firm Shares, including without limitation, expenses associated with the production of road show slides and graphics, fees and expenses of any consultants engaged in connection with the road show presentations with the prior approval of the Company, travel and lodging expenses of the representatives and officers of the Company and any such consultants (in each case, not including the Underwriters and their representatives) and any other costs in connection with the road show; and (ix) all other costs and expenses incident to the performance of its obligations hereunder which are not otherwise specifically provided for in this Section.

 

 

 

 

(b) Non-accountable expenses. The Company will pay the Underwriters a non-accountable expense allowance of one percent (1%) of the gross proceeds from the Offering upon the Closing of the Offering.

 

(c) Accountable Expenses. The Company will also reimburse the Representative’s accountable expenses, promptly upon receipt of an invoice therefore, for out-of-pocket costs and expenses, in total up to $150,000 including but not limited to, (i) fees of legal counsel incurred by the underwriters in connection with the offering; (ii) all third party due diligence including the cost of any background checks; (iii) book-building and prospectus tracking software; (iv) reasonable roadshow expenses; (v) preparation of bound volumes and Lucite cube mementos in such quantities as the underwriters shall reasonably request, and (vi) background check consultant. The Company has advanced $60,000 to the Representative to partially cover its out-of-pocket accountable expenses. All advances will be returned to the Company to the extent the Representative’s out-of-pocket accountable expenses are not actually incurred or are less than the advances paid in accordance with FINRA Rule 5110(g)(4).

 

(d) Termination Fee. Subject to FINRA Rule 5110 (g)(5)(B), if within eighteen (18) months of the termination of the Company’s engagement with the Representative, the closing of a transaction occurs in which the Company or any of its subsidiaries or immediate holding entity sells securities (including securities convertible into securities or substantially similar securities), or any securities substantially similar thereto, in an offering that is similar to the Offering (except in the case of a termination by the Representative or the Company for cause, as defined in the Company’s engagement letter with the Representative), upon completion of such closing, the Representative shall remain entitled to its underwriting fee, as if the closing of such sale had occurred during the term of the Representative’s engagement and as if the securities sold were the securities to be offered in the Offering.

 

SECTION 5. Taxes.

 

(a) If any sum payable by the Company under this Agreement is subject to tax in the hands of an Underwriter or Representative (each a “Taxable Entity”) or taken into account as a receipt in computing the taxable income of that Taxable Entity (excluding net income taxes on underwriting commissions payable hereunder), the Company shall pay such additional amount as will ensure that the Taxable Entities shall be left with the sum it would have had in the absence of such tax.

 

(b) All sums payable by the Company under this Agreement shall be paid free and clear of and without deductions or withholdings of any present or future taxes or duties, unless the deduction or withholding is required by law, in which case the Company shall pay such additional amount as will result in the receipt by each Taxable Entity of the full amount that would have been received had no deduction or withholding been made.

 

(c) All sums payable to a Taxable Entity shall be considered exclusive of any value added or similar taxes. Where the Company is obliged to pay value added or similar tax on any amount payable hereunder to a Taxable Entity, the Company shall in addition to the sum payable hereunder pay an amount equal to any applicable value added or similar tax.

 

(d) Without prejudice to the generality of the foregoing, if a Taxable Entity is required by any Hong Kong government authority to pay any taxes imposed by the Hong Kong government or any administrative subdivision or taxing authority thereof or therein (“Hong Kong Taxes”) as a result of this Agreement, the Company will pay an additional amount to such Taxable Entity so that the full amount of such payments as agreed herein to be paid to such Taxable Entity is received by such Taxable Entity and will further, if requested by such Taxable Entity, use commercially reasonable efforts to give such assistance as such Taxable Entity may reasonably request to assist such Taxable Entity in discharging its obligations in respect of such Hong Kong Taxes, including by making filings and submissions on such basis and such terms as such Taxable Entity may reasonably request, promptly making available to such Taxable Entity notices received from any Hong Kong governmental authority and, subject to the receipt of funds from such Taxable Entity, by making payment of such funds on behalf of such Taxable Entity to the relevant Hong Kong government authority in settlement of such Hong Kong Taxes. In the event the Company must pay any such Hong Kong Taxes to a relevant taxing authority, the Company shall forward to such Taxable Entity an official receipt or a copy of the official receipt issued by the taxing authority or other document evidencing such payment.

 

 

 

 

SECTION 6. Conditions of the Obligations of the Underwriters.

 

The obligations of the Underwriters to purchase the Offered Securities as provided herein on the Closing Date or the Option Closing Date shall be subject to (1) the accuracy of the representations and warranties on the part of the Company set forth in Section 1 hereof as of the date hereof and as of the Closing Date or the Option Closing Date as though then made; (2) the timely performance by the Company of its covenants and other obligations hereunder; (3) no objections from FINRA as to the amount of compensation allowable or payable to the Underwriters as described in the Registration Statement; and (4) each of the following additional conditions:

 

(a) Accountants’ Comfort Letters. On the date hereof, the Representative shall have received from each of the Accountants, letters dated the date hereof addressed to the Representative, in form and substance satisfactory to the Representative, containing statements and information of the type ordinarily included in accountants’ “comfort letters” to Representative, delivered according to Statement of Auditing Standards No. 72 (or any successor bulletin), with respect to the audited and unaudited financial statements and certain financial information contained in the Registration Statement and the Prospectus.

 

(b) Effectiveness of Registration Statement; Compliance with Registration Requirements; No Stop Order. During the period from and after the execution of this Agreement to and including the Closing Date or the Option Closing Date, as applicable:

 

(i) the Company shall have filed the Prospectus with the Commission (including the information required by Rule 430A under the Securities Act) in the manner and within the period required by Rule 424(b) under the Securities Act; or the Company shall have filed a post-effective amendment to the Registration Statement containing the information required by such Rule 430A, and such post-effective amendment shall have become effective; and

 

(ii) no stop order suspending the effectiveness of the Registration Statement, or any post-effective amendment to the Registration Statement, shall be in effect and no proceedings for such purpose shall have been instituted or threatened by the Commission.

 

(c) No Material Adverse Change. For the period from and after the date of this Agreement to and including the Closing Date or the Option Closing Date, as applicable, in the reasonable judgment of the Representative there shall not have occurred any Material Adverse Change.

 

(d) Officers’ Certificate. On the Closing Date and/or the Option Closing Date, the Representative shall have received a written certificate executed by the Chief Executive Officer and the Chief Financial Officer of the Company, dated as of such date, to the effect that the signers of such certificate have reviewed the Registration Statement, the Disclosure Package and the Prospectus and any amendment or supplement thereto, each Issuer Free Writing Prospectus and this Agreement, to the effect that, to the knowledge of such individual:

 

(i) The representations and warranties of the Company in this Agreement are true and correct, as if made on and as of such Closing Date, and the Company has complied with all the agreements and satisfied all the conditions on its part to be performed or satisfied at or prior to such Closing Date;

 

(ii) No stop order suspending the effectiveness of the Registration Statement or the use of the Prospectus has been issued and no proceedings for that purpose have been instituted or are pending or, to the Company’s knowledge, threatened under the Securities Act; no order having the effect of ceasing or suspending the distribution of the Offered Securities or any other securities of the Company has been issued by any securities commission, securities regulatory authority or stock exchange in the United States and no proceedings for that purpose have been instituted or are pending or, to the knowledge of the Company, contemplated by any securities commission, securities regulatory authority or stock exchange in the United States; and

 

 

 

 

(iii) Subsequent to the respective dates as of which information is given in the Registration Statement and the Prospectus, there has not been: (a) any Material Adverse Change; (b) any transaction that is material to the Company and the Subsidiaries taken as a whole, except transactions entered into in the ordinary course of business; (c) any obligation, direct or contingent, that is material to the Company and the Subsidiaries taken as a whole, incurred by the Company or any Subsidiary, except obligations incurred in the ordinary course of business; (d) any material change in the share capital (except changes thereto resulting from the exercise of outstanding options or warrants or conversion of outstanding indebtedness into Common Stock) or outstanding indebtedness of the Company or any Subsidiary (except for the conversion of such indebtedness into Common Stock); (e) any dividend or distribution of any kind declared, paid or made on the Common Stock; or (f) any loss or damage (whether or not insured) to the property of the Company or any Subsidiary which has been sustained or will have been sustained which has a Material Adverse Effect.

 

(e) Secretary’s Certificate. On the Closing Date and/or the Option Closing Date, the Representative shall have received a certificate of the Company signed by the Secretary of the Company, dated such Closing Date, certifying: (i) that the Company’s memorandum and articles of association, as amended and restated, attached to such certificate is true and complete, has not been modified and is in full force and effect; (ii) that the resolutions of the Company’s board of directors relating to the Offering attached to such certificate are in full force and effect and have not been modified; (iii) the good standing of the Company and its Subsidiaries; (iv) as to the accuracy and completeness of all correspondence between the Company or its counsel and the Commission; and (v) as to the incumbency of the officers of the Company. The documents referred to in such certificate shall be attached to such certificate.

 

(f) Bring-down Comfort Letter. On the Closing Date and/or the Option Closing Date, the Representative shall have received from each of the Accountants, letters dated such date, in form and substance satisfactory to the Representative, to the effect that each of the Accountants reaffirms the statements made in the letters furnished by them pursuant to subsection (a) of this Section 6, except that the specified date referred to therein for the carrying out of procedures shall be no more than three (3) business days prior to the Closing Date and/or the Option Closing Date.

 

(g) Lock-up Agreement from Certain Securityholders of the Company. On or prior to the date hereof, the Company shall have furnished to the Representative an agreement substantially in the form of Exhibit A hereto from each of the Company’s officers, directors, and certain security holders of the Company’s Common Stock or securities convertible into or exercisable for Common Stock prior to the Offering listed on Schedule D hereto.

 

(h) Exchange Listing. The Offered Securities to be delivered on the Closing Date and/or the Option Closing Date shall have been approved for listing on the Nasdaq Capital Market, subject to official notice of issuance.

 

(i) Company Counsel Opinions. On the Closing Date and/or the Option Closing Date, the Representative shall have received

 

	(i)	the opinion of Kaufman & Canoles, P.C., counsel to the Company, in form and substance reasonably satisfactory to the Representative including negative assurance language;
	(ii)	the opinion of Parsons Behle & Latimer, Nevada state counsel to the Company, in form and substance reasonably satisfactory to the Representative;
	(iii)	the opinion of Han Kun Law Offices LLP, Hong Kong counsel to the Company, in form and substance reasonably satisfactory to the Representative; and
	(iv)	the opinion of Jiangsu Junjin Law Firm, China counsel to the Company, in form and substance reasonably satisfactory to the Representative.

 

 

 

 

The Underwriters shall also be entitled to rely on the opinions of Kaufman & Canoles, P.C., Parsons Behle & Latimer, Han Kun Law Offices LLP and Jiangsu Junjin Law Firm, filed as exhibits to the Registration Statement.

 

(j) Opinion and Negative Assurance Letter of Counsel to the Underwriters. K&L Gates LLP, the counsel to the Underwriters, shall have furnished to the Representative its (i) written opinion, addressed to the Underwriters and dated the Closing Date and/or Option Closing Date, as the case may be, and (ii) negative assurance letter, addressed to the Underwriters and dated the Closing Date and/or Option Closing Date, as the case may be, and the Company shall have furnished to such counsel such documents and information as such counsel may reasonably request to enable them to pass on such matters.

 

(k) No Legal Impediment to Issuance. No action shall have been taken and no statute, rule, regulation or order shall have been enacted, adopted or issued by any federal, state or foreign governmental or regulatory authority that would, as of such Closing Date, prevent the issuance or sale of the Securities; and no injunction or order of any federal, state or foreign court shall have been issued that would, as of such Closing Date, prevent the issuance or sale of the Offered Securities.

 

(l) Good Standing. At each applicable Closing Date, the Underwriters shall have received on and as of such Closing Date satisfactory evidence of the good standing of the Company and its Subsidiaries in their respective jurisdictions of organization and their good standing as foreign entities in such other jurisdictions as the Underwriters may reasonably request, in each case in writing or any standard form of telecommunication from the appropriate governmental authorities of such jurisdictions or, for any such jurisdiction in which evidence of good standing may not be obtained from appropriate governmental authorities, in the form of an opinion of counsel licensed in the applicable jurisdiction.

 

(m) Additional Documents. On or before the Closing Date or the Option Closing Date, as applicable, the Representative and counsel for the Representative shall have received such information, documents and opinions as they may reasonably require for the purposes of enabling them to pass upon the issuance and sale of the Offered Securities as contemplated herein, or in order to evidence the accuracy of any of the representations and warranties, or the satisfaction of any of the conditions or agreements, herein contained.

 

If any condition specified in this Section 6 is not satisfied when and as required to be satisfied, this Agreement may be terminated by the Representative by written notice to the Company at any time on or prior to the Closing Date or the Option Closing Date, as applicable, which termination shall be without liability on the part of any party to any other party, except that Section 4 (with respect to the reimbursement of out-of-pocket accountable, bona fide expenses actually incurred by the Representative) and Section 8 shall at all times be effective and shall survive such termination.

 

SECTION 7. Effectiveness of this Agreement. This Agreement shall not become effective until the later of (i) the execution of this Agreement by the parties hereto and (ii) notification (including by way of oral notification from the reviewer at the Commission) by the Commission to the Company of the effectiveness of the Registration Statement under the Securities Act.

 

 

 

 

SECTION 8. Indemnification.

 

(a) Indemnification by the Company. The Company shall indemnify and hold harmless the Underwriters, their respective affiliates and each of their respective directors, officers, members, employees and agents and each person, if any, who controls such Underwriters within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act (collectively, the “Underwriter Indemnified Parties,” and each a “Underwriter Indemnified Party”) from and against any losses, claims, damages or liabilities (including in settlement of any litigation if such settlement is effected with the prior written consent of the Company) arising out of (i) an untrue statement or alleged untrue statement of a material fact contained in the Registration Statement, including the information deemed to be a part of the Registration Statement at the time of effectiveness and at any subsequent time pursuant to Rules 430A and 430B of the Securities Act Regulations, or arise out of or are based upon the omission from the Registration Statement, or alleged omission to state therein, a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; or (ii) an untrue statement or alleged untrue statement of a material fact contained in the Prospectus, or any amendment or supplement thereto, or in any other materials used in connection with the Offering, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, and shall reimburse such Underwriter Indemnified Party for any legal or other expenses reasonably incurred by it in connection with evaluating, investigating or defending against such loss, claim, damage, liability or action; provided, however, that the Company shall not be liable in any such case to the extent that any such loss, claim, damage, expense or liability arises out of or is based upon an untrue statement in, or omission from any preliminary prospectus, the Registration Statement or the Prospectus, or any such amendment or supplement thereto, or any Issuer Free Writing Prospectus or in any other materials used in connection with the Offering made in reliance upon and in conformity with the Underwriter Information. The indemnification obligations under this Section 8(a) are not exclusive and will be in addition to any liability, which the Underwriters might otherwise have and shall not limit any rights or remedies which may otherwise be available at law or in equity to each Underwriter Indemnified Party.

 

(b) Indemnification by the Underwriters. The Underwriters shall indemnify and hold harmless the Company and the Company’s affiliates and each of their respective directors, officers, employees, agents and each person, if any, who controls the Company within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act (collectively the “Company Indemnified Parties” and each a “Company Indemnified Party”) from and against any losses, claims, damages or liabilities (including in settlement of any litigation if such settlement is effected with the prior written consent of the Underwriters) arising out (i) any untrue statement of a material fact contained in any preliminary prospectus, any Issuer Free Writing Prospectus, any “issuer information” filed or required to be filed pursuant to Rule 433(d) of the Securities Act Regulations, the Registration Statement or the Prospectus, or in any amendment or supplement thereto, or (ii) the omission to state in any preliminary prospectus, any Issuer Free Writing Prospectus, any “issuer information” filed or required to be filed pursuant to Rule 433(d) of the Securities Act Regulations, the Registration Statement or the Prospectus, or in any amendment or supplement thereto, a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, but in each case only to the extent that the untrue statement or omission was made in reliance upon and in conformity with the Underwriter Information and shall reimburse the Company for any legal or other expenses reasonably incurred by such party in connection with investigating or preparing to defend or defending against or appearing as third party witness in connection with any such loss, claim, damage, liability, action, investigation or proceeding, as such fees and expenses are incurred. Notwithstanding the provisions of this Section 8(b), in no event shall any indemnity by the Underwriters under this Section 8(b) exceed the total discounts received by the Underwriters in connection with the Offering. The indemnification obligations under this Section 8(b) are not exclusive and will be in addition to any liability, which the Company might otherwise have and shall not limit any rights or remedies which may otherwise be available at law or in equity to each Company Indemnified Party.

 

 

 

 

(c) Procedure. Promptly after receipt by an indemnified party under this Section 8 of notice of the commencement of any action, the indemnified party shall, if a claim in respect thereof is to be made against an indemnifying party under this Section 8, notify such indemnifying party in writing of the commencement of that action; provided, however, that the failure to notify the indemnifying party shall not relieve it from any liability which it may have under this Section 8 except to the extent it has been materially adversely prejudiced by such failure; and, provided, further, that the failure to notify an indemnifying party shall not relieve it from any liability which it may have to an indemnified party otherwise than under this Section 8. If any such action shall be brought against an indemnified party, and it shall notify the indemnifying party thereof, the indemnifying party shall be entitled to participate therein and, to the extent that it wishes, jointly with any other similarly notified indemnifying party, to assume the defense of such action with counsel reasonably satisfactory to the indemnified party (which counsel shall not, except with the written consent of the indemnified party, be counsel to the indemnifying party). After notice from the indemnifying party to the indemnified party of its election to assume the defense of such action, except as provided herein, the indemnifying party shall not be liable to the indemnified party under Section 8(a) or 8(b), as applicable, for any legal or other expenses subsequently incurred by the indemnified party in connection with the defense of such action other than reasonable costs of investigation; provided, however, that any indemnified party shall have the right to employ separate counsel in any such action and to participate in the defense of such action but the fees and expenses of such separate counsel (other than reasonable costs of investigation) shall be at the expense of such indemnified party unless (i) the employment thereof has been specifically authorized in writing by the Company in the case of a claim for indemnification under Section 8(a), (ii) such indemnified party shall have been advised by its counsel that there may be one or more legal defenses available to it which are different from or additional to those available to the indemnifying party, or (iii) the indemnifying party has failed to assume the defense of such action and employ counsel reasonably satisfactory to the indemnified party within a reasonable period of time after notice of the commencement of the action or the indemnifying party does not diligently defend the action after assumption of the defense, in which case, if such indemnified party notifies the indemnifying party in writing that it elects to employ separate counsel at the expense of the indemnifying party, the indemnifying party shall not have the right to assume the defense of (or, in the case of a failure to diligently defend the action after assumption of the defense, to continue to defend) such action on behalf of such indemnified party and the indemnifying party shall be responsible for reasonable legal or other expenses subsequently incurred by such indemnified party in connection with the defense of such action; provided, however, that the indemnifying party shall not, in connection with any one such action or separate but substantially similar or related actions in the same jurisdiction arising out of the same general allegations or circumstances, be liable for the reasonable fees and expenses of more than one separate firm of attorneys at any time for any such indemnified party (in addition to any local counsel), which firm shall be designated in writing by the Underwriters if the indemnified party under this Section 8 is an Underwriter Indemnified Party or by the Company if an indemnified party under this Section 8 is a Company Indemnified Party. Subject to this Section 8(c), the amount payable by an indemnifying party under Section 8 shall include, but not be limited to, (x) reasonable legal fees and expenses of counsel to the indemnified party and any other expenses in investigating, or preparing to defend or defending against, or appearing as a third party witness in respect of, or otherwise incurred in connection with, any action, investigation, proceeding or claim, and (y) all amounts paid in settlement of any of the foregoing. No indemnifying party shall, without the prior written consent of the indemnified parties, settle or compromise or consent to the entry of judgment with respect to any pending or threatened action or any claim whatsoever, in respect of which indemnification or contribution could be sought under this Section 8 (whether or not the indemnified parties are actual or potential parties thereto), unless such settlement, compromise or consent (i) includes an unconditional release of each indemnified party in form and substance reasonably satisfactory to such indemnified party from all liability arising out of such action or claim and (ii) does not include a statement as to or an admission of fault, culpability or a failure to act by or on behalf of any indemnified party. Subject to the provisions of the following sentence, no indemnifying party shall be liable for settlement of any pending or threatened action or any claim whatsoever that is effected without its written consent (which consent shall not be unreasonably withheld or delayed), but if settled with its written consent, if its consent has been unreasonably withheld or delayed or if there be a judgment for the plaintiff in any such matter, the indemnifying party agrees to indemnify and hold harmless any indemnified party from and against any loss or liability by reason of such settlement or judgment. In addition, if at any time an indemnified party shall have requested that an indemnifying party reimburse the indemnified party for fees and expenses of counsel, such indemnifying party agrees that it shall be liable for any settlement of the nature contemplated herein effected without its written consent if (i) such settlement is entered into more than ninety (90) days after receipt by such indemnifying party of the request for reimbursement, (ii) such indemnifying party shall have received notice of the terms of such settlement at least sixty (60) days prior to such settlement being entered into and (iii) such indemnifying party shall not have reimbursed such indemnified party in accordance with such request prior to the date of such settlement.

 

 

 

 

(d) Contribution. If the indemnification provided for in this Section 8 is unavailable or insufficient to hold harmless an indemnified party under Section 8(a) or Section 8(b), then each indemnifying party shall, in lieu of indemnifying such indemnified party, contribute to the amount paid, payable or otherwise incurred by such indemnified party as a result of such loss, claim, damage, expense or liability (or any action, investigation or proceeding in respect thereof), as incurred, (i) in such proportion as shall be appropriate to reflect the relative benefits received by the indemnifying party on the one hand and the indemnified party on the other hand from the Offering, or (ii) if the allocation provided by clause (i) of this Section 8(d) is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) of this Section 8(d) but also the relative fault of the indemnifying party on the one hand and the indemnified party on the other with respect to the statements, omissions, acts or failures to act which resulted in such loss, claim, damage, expense or liability (or any action, investigation or proceeding in respect thereof) as well as any other relevant equitable considerations as determined in a final judgment by a court of competent jurisdiction. The relative benefits received by the Company on the one hand and the Underwriters on the other with respect to such offering shall be deemed to be in the same proportion as the total proceeds from the Offering purchased by investors as contemplated by this Agreement (before deducting expenses) received by the Company bear to the total underwriting discounts received by the Underwriters in connection with the Offering, in each case as set forth in the table on the cover page of the Prospectus. The relative fault of the Company on the one hand and the Underwriters on the other shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company on the one hand or the Underwriters on the other, the intent of the parties and their relative knowledge, access to information and opportunity to correct or prevent such untrue statement, omission, act or failure to act; provided that the parties hereto agree that the written information furnished to the Company by the Underwriters for use in any preliminary prospectus, the Registration Statement or the Prospectus, or in any amendment or supplement thereto, consists solely of the Underwriter Information. The Company and the Underwriters agree that it would not be just and equitable if contributions pursuant to this Section 8(d) be determined by pro rata allocation or by any other method of allocation that does not take into account the equitable considerations referred to herein. The amount paid or payable by an indemnified party as a result of the loss, claim, damage, expense, liability, action, investigation or proceeding referred to above in this Section 8(d) shall be deemed to include, for purposes of this Section 8(d), any legal or other expenses reasonably incurred by such indemnified party in connection with investigating, preparing to defend or defending against or appearing as a third party witness in respect of, or otherwise incurred in connection with, any such loss, claim, damage, expense, liability, action, investigation or proceeding. Notwithstanding the provisions of this Section 8(d), the Underwriters shall not be required to contribute any amount in excess of the total discounts received in cash by the Underwriters in connection with the Offering less the amount of any damages that the Underwriters have otherwise paid or become liable to pay by reason of any untrue or alleged untrue statement, omission or alleged omission, act or alleged act or failure to act or alleged failure to act. No person, guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation.

 

SECTION 9. Termination of this Agreement.

 

Prior to the Closing Date, whether before or after notification by the Commission to the Company of the effectiveness of the Registration Statement under the Securities Act, this Agreement may be terminated by the Underwriters by written notice given to the Company if at any time (i) trading or quotation in the Common Stock shall have been suspended or limited by the Commission or by Nasdaq; (ii) a general banking moratorium shall have been declared by any U.S. federal authorities; or (iii) there shall have occurred any outbreak or escalation of national or international hostilities or any crisis or calamity, or any change in the United States or international financial markets, or any substantial change or development involving a prospective substantial change in United States’ or international political, financial or economic conditions that, in the reasonable judgment of the Underwriters, is material and adverse and makes it impracticable to market the Offered Securities in the manner and on the terms described in the Prospectus or to enforce contracts for the sale of the Offered Securities. Any termination pursuant to this Section 9 shall be without liability on the part of (a) the Company to any of the Underwriters, except that the Company shall be, subject to demand by the Underwriters, obligated to reimburse the Underwriters for only those reasonable, accountable and properly documented out-of-pocket expenses (including the reasonable fees and expenses of their counsel, and expenses associated with a due diligence report), actually incurred by the Underwriters in connection herewith as allowed under FINRA Rule 5110, less any amounts previously paid by the Company; provided, however, that all such expenses shall not exceed $150,000 in the aggregate, (b) the Underwriters to the Company, or (c) of any party hereto to any other party except that the provisions of Section 4 (with respect to the reimbursement of out-of-pocket accountable, bona fide expenses actually incurred by the Underwriters) and Section 8 shall at all times be effective and shall survive such termination.

 

 

 

 

SECTION 10. No Advisory or Fiduciary Responsibility. The Company hereby acknowledges that the Underwriters are acting solely as underwriters in connection with the Offering. The Company further acknowledges that the Underwriters are acting pursuant to a contractual relationship created solely by this Agreement entered into on an arm’s-length basis and in no event do the parties intend that the Underwriters act or be responsible as a fiduciary to the Company, its management, shareholders, creditors or any other person in connection with any activity that the Underwriters may undertake or have undertaken in furtherance of the Offering, either before or after the date hereof. The Underwriters hereby expressly disclaim any fiduciary or similar obligations to the Company, either in connection with the transactions contemplated by this Agreement or any matters leading up to such transactions, and the Company hereby confirms its understanding and agreement to that effect. The Company hereby further confirms its understanding that no Underwriter has assumed an advisory or fiduciary responsibility in favor of the Company with respect to the Offering contemplated hereby or the process leading thereto, including, without limitation, any negotiation related to the pricing of the Offered Securities; and the Company has consulted its own legal and financial advisors to the extent it has deemed appropriate in connection with this Agreement and the Offering. The Company and the Underwriters agree that they are each responsible for making their own independent judgments with respect to any such transactions, and that any opinions or views expressed by the Underwriters to the Company regarding such transactions, including but not limited to any opinions or views with respect to the price or market for the Company’s securities, do not constitute advice or recommendations to the Company. The Company hereby waives and releases, to the fullest extent permitted by law, any claims that the Company may have against the Underwriters with respect to any breach or alleged breach of any fiduciary or similar duty to the Company in connection with the transactions contemplated by this Agreement or any matters leading up to such transactions.

 

SECTION 11. Underwriter Default.

 

(a) If any Underwriter or Underwriters shall default in its or their obligation to purchase Firm Shares, and if the Firm Shares with respect to which such default relates (the “Default Securities”) do not (after giving effect to arrangements, if any, made by the Representative pursuant to subsection (b) below) exceed in the aggregate ten percent (10%) of the number of Firm Shares, each non-defaulting Underwriter, acting severally and not jointly, agrees to purchase from the Company that number of Default Securities that bears the same proportion to the total number of Default Securities then being purchased as the number of Firm Shares set forth opposite the name of such Underwriter on Schedule A hereto bears to the aggregate number of Firm Shares set forth opposite the names of the non-defaulting Underwriters; subject, however, to such adjustments to eliminate fractional shares as the Representative in its sole discretion shall make.

 

(b) In the event that the aggregate number of Default Securities exceeds ten percent (10%) of the number of Firm Shares, the Representative may in its discretion arrange for itself or for another party or parties (including any non-defaulting Underwriter or Underwriters who so agree) to purchase the Default Securities on the terms contained herein. In the event that within five (5) calendar days after such a default the Representative does not arrange for the purchase of the Default Securities as provided in this Section 11, this Agreement shall thereupon terminate, without liability on the part of the Company with respect thereto (except in each case as provided in Sections 4, 8, 9, 11 and 12) or the Underwriters, but nothing in this Agreement shall relieve a defaulting Underwriter or Underwriters of their liability, if any, to the other Underwriters and the Company for damages occasioned by its or their default hereunder.

 

(c) In the event that any Default Securities are to be purchased by the non-defaulting Underwriters, or are to be purchased by another party or parties as aforesaid, the Representative or the Company shall have the right to postpone the Closing Date for a period, not exceeding five (5) Business Days, in order to effect whatever changes may thereby be necessary in the Registration Statement or the Prospectus or in any other documents and arrangements, and the Company agrees to file promptly any amendment or supplement to the Registration Statement or the Prospectus which, in the reasonable opinion of Underwriters’ counsel, may be necessary or advisable. The term “Underwriter” as used in this Agreement shall include any party substituted under this Section 11 with like effect as if it had originally been a party to this Agreement with respect to such Default Securities.

 

SECTION 12. Representations and Indemnities to Survive Delivery; Third Party Beneficiaries. The respective indemnities, agreements, representations, warranties and other statements of the Company, of its officers, and of the Underwriters set forth in or made pursuant to this Agreement will remain in full force and effect, regardless of any investigation made by or on behalf of the Underwriters or the Company or any of its or their partners, officers or directors or any controlling person, as the case may be, and will survive delivery of and payment for the Offered Securities sold hereunder and any termination of this Agreement.

 

 

 

 

SECTION 13. Notices. All communications hereunder shall be in writing and shall be mailed, hand delivered, emailed or telecopied and confirmed to the parties hereto as follows:

If to the Underwriters:

 

Benjamin Securities, Inc.

3 West Garden Street, Suite 407

Pensacola, FL 32502

Attn: Michael Coyne, Head of Capital Markets

Email: mcoyne@benjaminsecurities.com

With a copy (which shall not constitute notice) to:

 

K&L Gates LLP

1 Park Plaza, Twelfth Floor

Irvine, California 92614

Attn: Michael A. Hedge, Esq.

Email: michael.hedge@klgates.com

 

If to the Company:

 

Tianci International, Inc.

Unit B,10/F., Ritz Plaza, No.122 Austin Road, Tsim Sha Tsui

Kowloon, Hong Kong 999077

Attn: [•]

Email: [•]

With a copy (which shall not constitute notice) to:

 

Kaufman & Canoles P.C.

Two James Center, 14th Floor

1021 East Cary Street

Richmond, Virginia 23219

Attn: Anthony W. Basch, Esq.

Email: awbasch@kaufcan.com

 

Any party hereto may change the address for receipt of communications by giving written notice to the others.

 

SECTION 14. Successors. This Agreement will inure to the benefit of and be binding upon the parties hereto and to the benefit of the employees, officers and directors and controlling persons referred to in Section 8, and in each case their respective successors, and no other person will have any right or obligation hereunder. The term “successors” shall not include any purchaser of the Offered Securities as such merely by reason of such purchase.

 

 

 

 

SECTION 15. Partial Unenforceability. The invalidity or unenforceability of any Section, paragraph or provision of this Agreement shall not affect the validity or enforceability of any other Section, paragraph, or provision hereof. If any Section, paragraph, or provision of this Agreement is for any reason determined to be invalid or unenforceable, there shall be deemed to be made such minor changes (and only such minor changes) as are necessary to make it valid and enforceable.

 

SECTION 16. Governing Law; Submission to Jurisdiction;

 

Trial by Jury. This Agreement shall be governed by and construed and enforced in accordance with the internal laws of the State of New York, without giving effect to the choice of law or conflict of laws principles thereof.

 

Any action, proceeding or claim against it arising out of, or relating in any way to this Agreement shall be brought and enforced in the New York Supreme Court, County of New York, or in the United States District Court for the Southern District of New York (each, a “New York Court”), and irrevocably submits to such jurisdiction, which jurisdiction shall be exclusive. The Company hereby waives any objection to such exclusive jurisdiction and that such courts represent an inconvenient forum. Any process or summons to be served upon the Company may be served by transmitting a copy thereof by registered or certified mail, return receipt requested, postage prepaid, addressed to it at the address set forth in Section 13 hereof. Such mailing shall be deemed personal service and shall be legal and binding upon the Company in any action, proceeding or claim. The Company and the Underwriters agree that the prevailing party(ies) in any such action shall be entitled to recover from the other party(ies) all its reasonable attorneys’ fees and expenses relating to such action or proceeding and/or incurred in connection with the preparation therefor as determined in a final judgment by a court of competent jurisdiction. The Company and the Underwriters hereby irrevocably waive, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating to this Agreement or the transactions contemplated hereby.

 

SECTION 17. Enforceability of Judgment. The Company agrees that any final judgment against the Company for a fixed or readily calculable sum of money rendered by a New York Court having jurisdiction under its own domestic laws in respect of any suit, action or proceeding against the Company based upon this Agreement or any transaction contemplated herein and therein would be recognized and enforced, without re-examination or review of the merits of the underlying dispute by the courts of Nevada, Seychelles or Hong Kong, or the cause of action in respect of which the original judgment was given or re-litigation of the matters adjudicated upon, by an action commenced on the foreign judgment debt in the courts of Nevada, Seychelles or Hong Kong, provided that (i) with respect to in the courts of Nevada, Seychelles or Hong Kong (a) such New York Court had proper jurisdiction over the parties subject to such judgment; (b) such judgment was not obtained in a manner and is not of a kind the enforcement of which is contrary to natural justice or the public policy of Nevada, Seychelles or Hong Kong; (c) such judgment was not obtained by fraud; (d) such judgment is not in respect of taxes, a fine or a penalty; (e) such judgement is final, no new admissible evidence relevant to the action is submitted prior to the rendering of the judgment by the courts of Nevada, Seychelles or Hong Kong; and (f) there is due compliance with the correct procedures under the laws of Nevada, Seychelles or Hong Kong, and (ii) with respect to courts of Seychelles or Hong Kong, (A) adequate service of process has been effected and the defendant has had a reasonable opportunity to be heard, (B) such judgments or the enforcement thereof are not contrary to the law, public policy, security or sovereignty of Seychelles or Hong Kong, (C) such judgments were not obtained by fraudulent means and do not conflict with any other valid judgment in the same matter between the same parties and (D) an action between the same parties in the same matter is not pending in any Seychelles or Hong Kong court at the time the lawsuit is instituted in a foreign court, (E) Seychelles or Hong Kong has international treaties or the principle of reciprocity providing for the reciprocal recognition and enforcement of judgments of such New York Courts and such judgment has been reviewed by the courts of Seychelles or Hong Kong pursuant to such treaties or the principle of reciprocity, and (F) such judgment is a final and legally effective judgment rendered by the New York Court. The Company is not aware of any reason why the enforcement in the courts of Nevada, Seychelles or Hong Kong of such a New York Court judgment would be, as of the date hereof, contrary to natural justice of the public policy of Nevada, Seychelles or Hong Kong.

 

 

 

 

SECTION 18. General Provisions. This Agreement constitutes the entire agreement of the parties to this Agreement and supersedes all prior written or oral and all contemporaneous oral agreements, understandings, and negotiations with respect to the Offering. This Agreement may be executed in two or more counterparts, each one of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. This Agreement may not be amended or modified unless in writing by all the parties hereto, and no condition herein (express or implied) may be waived unless waived in writing by each party whom the condition is meant to benefit. The section headings herein are for the convenience of the parties only and shall not affect the construction or interpretation of this Agreement.

 

Each of the parties hereto acknowledges that it is a sophisticated businessperson who was adequately represented by counsel during negotiations regarding the provisions hereof, including, without limitation, the indemnification and contribution provisions of Section 8, and is fully informed regarding said provisions. Each of the parties hereto further acknowledges that the provisions of Section 8 hereto fairly allocate the risks in light of the ability of the parties to investigate the Company, its affairs and its business in order to assure that adequate disclosure has been made in the Registration Statement, any preliminary prospectus and the Prospectus (and any amendments and supplements thereto), as required by the Securities Act and the Exchange Act.

 

The respective indemnities, contribution agreements, representations, warranties and other statements of the Company and the Underwriters set forth in or made pursuant to this Agreement shall remain operative and in full force and effect, regardless of (i) any investigation, or statement as to the results thereof, made by or on behalf of the Underwriters, the officers or employees of the Underwriters, any person controlling any of the Underwriters, the Company, the officers or employees of the Company, or any person controlling the Company, (ii) acceptance of the Offered Securities and payment for them as contemplated hereby and (iii) termination of this Agreement.

 

[Signature Page Follows]

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

If the foregoing is in accordance with your understanding of our agreement, kindly sign and return to the Company the enclosed copies hereof, whereupon this instrument, along with all counterparts hereof, shall become a binding agreement in accordance with its terms.

 

	Very truly yours,
	Tianci International, Inc.
	By:
			Name:
			Title:

 

The foregoing Underwriting Agreement is hereby confirmed and accepted by the Underwriters as of the date first above written.

 

	For itself and on behalf of the several
	Underwriters listed on Schedule A hereto
	BENJAMIN SECURITIES, INC.
	By:
			Name:
			Title:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SCHEDULE A

 

 

Underwriter		Number of Firm Shares
Benjamin Securities, Inc.			[•]
Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SCHEDULE B

Issuer Free Writing Prospectus(es)

 

 

[•]

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SCHEDULE C

Pricing Information

 

 

Number of Firm Shares: [•]

 

Number of Additional Shares: [•]

 

Public Offering Price per Firm Share: $[•]

 

Public Offering Price per Additional Share: $[•]

 

Underwriting Discount per one Share: 7% per Firm Share (or $[•] per share)

 

Underwriting Discount per one Share: 7% per Additional Share (or $[•] per share)

 

Non-accountable expense allowance per Firm Share: 1% per share (or $[•] per share)

 

Non-accountable expense allowance per Additional Share: 1% per share (or $[•] per share

 

Proceeds to Company per one Firm Share (before expenses): $[•]

 

Proceeds to Company per one Additional Share (before expenses): $[•]

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SCHEDULE D

Lock-Up Parties

 

 

Name

[•]

[•]

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SCHEDULE E

Subsidiaries

 

 

Subsidiaries		Place of Incorporation
[•]		[•]

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SCHEDULE F

Testing-the-Waters Communications

 

 

[•]

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EXHIBIT A

 

Form of Lock-up Agreement

 

[●], 2024

 

Benjamin Securities, Inc.

As the Representative of the Underwriters of the Company

3 West Garden Street, Suite 407

Pensacola, FL 32502

 

Ladies and Gentlemen:

 

The undersigned understands that Benjamin Securities, Inc., the representative of the underwriters (the “Underwriters”), proposes to enter into an underwriting agreement (the “Underwriting Agreement”), with Tianci International, Inc., a Nevada company (the “Company”), in connection with the public offering (the “Offering”) of the Company’s common stock, par value $0.0001 per share (the “Shares”).

 

To induce the Underwriter to continue its efforts in connection with the Offering, the undersigned hereby agrees that, without the prior written consent of the Underwriter, the undersigned will not, during the period commencing on the date hereof and ending one hundred eighty (180) days after the date of the final prospectus associated with the Offering (the “Lock-Up Period”), (1) offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, lend, or otherwise transfer or dispose of, directly or indirectly, any Shares or any securities convertible into or exercisable or exchangeable for the Shares (collectively, the “Lock-Up Securities”); (2) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of the Lock-Up Securities, whether any such transaction described in clause (1) or (2) above is to be settled by delivery of the Lock-Up Securities, in cash or otherwise; or (3) publicly disclose the intention to do any of the foregoing. The foregoing sentence shall not apply to (a) transactions relating to the Shares or other securities acquired in open market transactions after the completion of the Offering; (b) transfers of the Lock-Up Securities as a bona fide gift, by will or intestacy or to a family member or trust for the benefit of a family member (for purposes of this Lock-up Agreement, “family member” means any relationship by blood, marriage or adoption, not more remote than first cousin); provided that in the case of any transfer or distribution pursuant to clause (b), each donee or distributee shall sign and deliver a lock-up letter substantially in the form of this Lock-up Agreement; (c) transfers of Lock-Up Securities to a charity or educational institution; (d) if the undersigned, directly or indirectly, controls a corporation, partnership, limited liability company or other business entity, any transfers of Lock-Up Securities to any shareholder, partner or member of, or owner of similar equity interests in, the undersigned, as the case may be; (e) if the undersigned is a trust, to a trustee or beneficiary of the trust; provided that in the case of any transfer pursuant to the foregoing clauses (b), (c) or (d), (i) any such transfer shall not involve a disposition for value, (ii) each transferee shall sign and deliver to the Underwriter a Lock-up Agreement substantially in the form of this Lock-up Agreement, (iii) no filing under Sections 13 or 16(a) of the U.S. Securities Exchange Act of 1934, as amended (the “Exchange Act”) or other filing or public announcement shall be required or shall be voluntarily made; (f) the receipt by the undersigned from the Company of common stock upon the vesting of restricted share awards or share units or upon the exercise of options to purchase the Company’s common stock issued under an equity incentive plan of the Company or an employment arrangement described in the Pricing Prospectus (as defined in the Underwriting Agreement) (the “Plan Shares”) or the transfer of common stock or any securities convertible into common stock to the Company upon a vesting event of the Company’s securities or upon the exercise of options to purchase the Company’s securities, in each case on a “cashless” or “net exercise” basis or to cover tax obligations of the undersigned in connection with such vesting or exercise, but only to the extent such right expires during the Lock-up Period, provided that no filing under Sections 13 or 16(a) of the Exchange Act or other public announcement shall be required or shall be voluntarily made within ninety (90) days after the date of the Underwriting Agreement, and after such ninetieth (90th) day, if the undersigned is required to file a report under Section 13 or Section 16(a) of the Exchange Act reporting a reduction in beneficial ownership of common stock during the Lock-Up Period, the undersigned shall include a statement in such schedule or report to the effect that the purpose of such transfer was to cover tax withholding obligations of the undersigned in connection with such vesting or exercise and, provided further, that the Plan Shares shall be subject to the terms of this Lock-up Agreement; (g) the establishment of a trading plan pursuant to Rule 10b5-1 under the Exchange Act for the transfer of Lock-Up Securities, provided that (i) such plan does not provide for the transfer of Lock-Up Securities during the Lock-Up Period and (ii) no public announcement or filing under the Exchange Act will be voluntarily made by or on behalf of the undersigned or the Company regarding the establishment of such plan; and (h) the transfer of Lock-Up Securities that occurs by operation of law, such as pursuant to a qualified domestic order or in connection with a divorce settlement, provided that the transferee agrees to sign and deliver a Lock-up Agreement substantially in the form of this Lock-up Agreement for the balance of the Lock-Up Period, and provided further, that any filing under Sections 13 or 16(a) of the Exchange Act that is required to be made during the Lock-Up Period as a result of such transfer shall include a statement that such transfer has occurred by operation of law (collectively, “Permitted Transfers”). In addition, the undersigned agrees that, without the prior written consent of the Underwriter, it will not, during the Lock-Up Period, make any demand for or exercise any right with respect to, the registration of any Shares or any security convertible into or exercisable or exchangeable for Shares. The undersigned also agrees and consents to the entry of stop transfer instructions with the Company’s transfer agent against the transfer of the undersigned’s Lock-Up Securities except in compliance with the foregoing restrictions.

 

 

 

 

No provision in this Lock-up Agreement shall be deemed to restrict or prohibit (i) the adoption of an equity incentive plan and the grant of awards or equity pursuant to any equity incentive plan, and the filing of a registration statement on Form S-8; provided, however, that any sales by parties to this Lock-up Agreement shall be subject to this Lock-up Agreement, (ii) the issuance of common stock in connection with the exercise of outstanding warrants of the Company; provided that this Lock-up Agreement shall apply to any of the undersigned’s shares issued upon such exercise, or (iii) the issuance of securities in connection with an acquisition or a strategic relationship which may include the sale or equity securities; provided, that none of such shares shall be saleable in the public market until the expiration of the one hundred eighty (180) day period described above.

 

If the undersigned is an officer or director of the Company, (i) the undersigned agrees that the foregoing restrictions shall be equally applicable to any securities that the undersigned may purchase in the Offering; and (ii) the Underwriter agrees that, at least three (3) business days before the effective date of any release or waiver of the foregoing restrictions in connection with a transfer of Lock-Up Securities, the Underwriter will notify the Company of the impending release or waiver. Any release or waiver granted by the Underwriter hereunder to any such officer or director shall only be effective two (2) business days after the release or waiver. The provisions of this paragraph will not apply if (a) the release or waiver is effected solely to permit a transfer of Lock-Up Securities not for consideration or in connection with any other Permitted Transfer and (b) the transferee has agreed in writing to be bound by the same terms described in this Lock-up Agreement to the extent and for the duration that such terms remain in effect at the time of such transfer.

 

The undersigned understands that the Company and the Underwriter are relying upon this Lock-up Agreement in proceeding toward consummation of the Offering. The undersigned further understands that this Lock-up Agreement is irrevocable and shall be binding upon the undersigned’s heirs, legal representatives, successors, and assigns.

 

The undersigned understands that, if (i) the Underwriting Agreement is not executed by November 18, 2025, (ii) the Company notifies the Underwriter in writing that it does not intend to proceed with the Offering or (iii) the Underwriting Agreement (other than the provisions thereof which survive termination) shall terminate or be terminated prior to payment for and delivery of the Shares to be sold thereunder, the undersigned shall be released from all obligations under this letter agreement.

 

Whether or not the Offering actually occurs depends on a number of factors, including market conditions. Any Offering will only be made pursuant to the Underwriting Agreement, the terms of which are subject to negotiation between the Company and the Underwriters. The undersigned acknowledges that no assurances are given by the Company or the Underwriter that any Offering will be consummated. This Lock-up Agreement shall be governed by, and construed in accordance with, the internal laws of the State of New York.

 

[Signature Page Follows]

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

	Very truly yours,
	(Signature)

 

	Address:
	Email:
	Date:

 

 

 

 

 

 

Exhibit 5.1

 

 

 

December 10, 2024

 

Board of Directors

Tianci International Inc.

Unit B,10/F., Ritz Plaza, No.122 Austin Road, Tsim Sha Tsui

Kowloon, Hong Kong 999077

 

Re:

Tianci International Inc. – Registration Statement on Form S-1

 

Ladies and Gentlemen:

 

We have acted as special Nevada counsel to Tianci International Inc., a Nevada corporation (the “Company”), in connection with the Registration Statement on Form S-1 (File No. 333-280089), as amended, (the “Registration Statement”) as filed on even date herewith by the Company with the Securities and Exchange Commission (“Commission”) under the Securities Act of 1933, as amended (the “Securities Act”) for a public offering (the “Offering”). The Registration Statement relates to (i) the public offering of an aggregate of 2,170,000 shares (the “Shares”) of the Company’s common stock, par value $0.0001 per share in the Offering pursuant to an underwriting agreement dated [ ], 2024 (the “Underwriting Agreement”) between the Company and Benjamin Securities, Inc. as representative of the underwriters of the Offering (the “Underwriters”), (ii) an additional amount up to 325,500, or 15% of the total shares, of the Company’s common stock pursuant to an over-allotment option in favor of the Underwriters, as described in the Underwriting Agreement (the “Over-Allotment Shares”), and (iii) to the offer for sale of up to 3,260,000 shares of the Company’s common stock by the selling stockholders named in the Registration Statement (the “Resale Shares”).

 

As counsel to the Company, we have examined such matters of fact and questions of law as we have considered appropriate for purposes of rendering this opinion. With your consent, we have relied upon certificates and other assurances of officers of the Company and others (including government officials) as to factual matters without having independently verified such factual matters. We are opining herein as to the Nevada Revised Statutes, and we express no opinion with respect to the applicability thereto, or the effect thereon, of the laws of any other jurisdiction or, in the case of Nevada, any other laws, or as to any matters of municipal law or the laws of any local agencies within any state.

 

Based upon such examination, it is our opinion that (i) the Shares have been duly authorized by all requisite corporate action on the part of the Company and upon their issuance, delivery and payment therefor in the manner contemplated by the Registration Statement will be validly issued, fully paid and non-assessable, (ii) the Over-Allotment Shares, if issued upon exercise of the over-allotment option against payment therefor in accordance with the terms of the Underwriting Agreement, will be validly issued, fully paid and non-assessable, and (iii) the Resale Shares are duly and validly issued, fully paid and non-assessable

 

No opinion is expressed herein as to any matter pertaining to the contents of the Registration Statement.  In connection with this opinion, we have relied on oral or written statements and representations of officers or other representatives of the Company and others (including government officials).  Our knowledge of the Company and its legal and other affairs is limited by the scope of our engagement, which scope includes the delivery of this opinion letter. We do not represent the Company with respect to all legal matters or issues. The Company may employ other independent counsel and, may handle certain matters and issues without the assistance of independent counsel.

 

This opinion is given as of the date hereof.  We assume no obligation to advise you of changes that may hereafter be brought to our attention.

 

We consent to the inclusion of this opinion as an exhibit to the Registration Statement and further consent to all references to us under the caption “Legal Matters” in the prospectus constituting a part of the Registration Statement. In giving this consent, we do not admit that we are in the category of persons whose consent is required under Section 7 of the Securities Act or the rules and regulations of the Commission. 

 

Very truly yours,

 

/s/ PARSONS BEHLE & LATIMER

PARSONS BEHLE & LATIMER

 

 

Exhibit 8.1

 

Kaufman & Canoles, P.C. Two James Center, 14th Floor 1021 E. Cary St. Richmond, VA 23219     T (804) 771.5700 F (804) 771.5777   kaufCAN.com

 

 

December 10, 2024

 

 

Ladies and Gentlemen:

 

We have acted as counsel as to matters of United States federal laws, including tax law, to Tianci International, Inc., a Nevada company (the “Company”), in connection with the preparation and filing of the Company’s registration statement on Form S-1 (Registration No. 333-280089) and all amendments thereto (as amended, the “Registration Statement”), as originally filed with the Securities and Exchange Commission (the “Commission”) on June 10, 2024.

 

We have examined the Registration Statement and such other documents, certificates and records, and have reviewed such questions of law, as we have considered necessary and appropriate for the purposes of our opinion set forth below.

 

In rendering our opinions set forth below, we have assumed the authenticity of all documents submitted to us as originals, the genuineness of all signatures and the conformity to authentic originals of all documents submitted to us as copies. We have also assumed the legal capacity for all purposes relevant hereto of all natural persons and, with respect to all parties to agreements or instruments relevant hereto other than the Company, that such parties had the requisite power and authority (corporate or otherwise) to execute, deliver and perform such agreements or instruments, that such agreements or instruments have been duly authorized by all requisite action (corporate or otherwise), executed and delivered by such parties and that such agreements or instruments are the valid, binding and enforceable obligations of such parties. As to questions of fact material to our opinion, we have relied upon factual statements and factual representations of officers of the Company.

 

Based upon and subject to the limitations, qualifications, exceptions and assumptions set forth herein, we are of the opinion that:

 

The statements made in the Registration Statement, under the caption “MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES TO NON-U.S. HOLDERS,” to the extent such statements relate to matters of United States tax law, represent our opinion. This opinion is given under Item 601 of Regulation S-K, as our opinion regarding tax matters. All such statements are based upon laws and relevant interpretations thereof in effect as of the date of the prospectus, all of which are subject to change. Further, there can be no assurance that the Internal Revenue Service or a court will not take a contrary position.

 

Our opinions expressed above are limited to the tax laws of the United States. We assume no obligation to revise or supplement this letter in the event of any changes in law or fact arising after the date hereof; provided, however, that our opinions set forth in the Registration Statement will be revised, if needed to remain accurate in all material respects as of the effective date of the Registration Statement.

 

We consent to the filing of this opinion as an exhibit to the Registration Statement, and we further consent to the use of our name in the Registration Statement and the prospectus that forms a part thereof. In giving these consents, we do not thereby admit that we are within the category of persons whose consent is required under Section 7 of the Securities Act of 1933, as amended or the Rules and Regulations of the Securities and Exchange Commission.

 

 

	Very truly yours,
	/s/ KAUFMAN & CANOLES, P.C.
	KAUFMAN & CANOLES, P.C.

 

Exhibit 23.1

 

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

  

We hereby consent to the inclusion in this Amendment No.5 to Form S-1 Registration Statement of Tianci International, Inc. of our report dated October 20, 2023 relating to the consolidated financial statements of Tianci International, Inc. for the year ended July 31, 2023 included in this Amendment.

 

We also consent to the reference to the Firm under the heading “Experts” in such Amendment.

 

 

/s/ Michael T. Studer CPA P.C.

Michael T. Studer CPA P.C.

Freeport, New York

 

December 10, 2024

Exhibit 23.2

 

 

 

 

To Whom It May Concern:

 

We hereby consent to the use incorporation by reference in the Prospectus constituting a part of this Registration Statement of our report dated October 22, 2024, relating to the consolidated financial statements of Tianci International, Inc., which are contained incorporated by reference in that Prospectus and of our report dated October 22, 2024, which is contained in Part II of the Registration Statement.

 

We also consent to the reference to us under the caption “Experts” in the Prospectus.

 

Very truly yours,

 

/s/ Bush & Associates CPA LLC

 

Bush & Associates CPA LLC (PCAOB 6797)

Henderson, Nevada

December 10, 2024

 

 

 

179 N. Gibson Rd., Henderson, NV 89014 ● 702.703.5979 ● www.bushandassociatescpas.com

Exhibit 99.4

 

 

 

TIANCI INTERNATIONAL, INC.

 

Unit B,10/F., Ritz Plaza

No.122 Austin Road, Tsim Sha Tsui

Kowloon, Hong Kong

 

Date: December 10, 2024

 

Re:	Legal Opinion on Certain Hong Kong Legal Matters

 

Dear Sirs or Madams,

 

We are qualified lawyers of the Hong Kong Special Administrative Region of the People’s Republic of China (“Hong Kong”) and as such are qualified to issue this opinion on the laws and regulations of Hong Kong effective as of the date hereof.

 

We were engaged as a legal adviser on matters of the laws of Hong Kong by TIANCI INTERNATIONAL, INC. (the “Company”, together with its subsidiaries, the “Group”), a company incorporated under the laws of the State of Nevada, in connection with the Company’s registration statement on Form S-1 (File No. 333-280089), including all amendments or supplements thereto (the “Registration Statement”), filed by the Company with the United States of America (the “United States” or the “U.S.”) Securities and Exchange Commission under the U.S. Securities Act of 1933 (as amended) in relation to the Company’s (a) proposed public offering (the “Offering”) of up to 2,170,000 shares of common stock (the “Shares”), par value US$0.0001 per Share, of the Company; (b) proposed resale of 3,260,000 Shares by certain existing shareholders of the Company; and (c) proposed listing of its Shares on the Nasdaq Capital Market.

 

A.

Documents and assumptions

 

In rendering this opinion, we have carried out review and examined copies of the Registration Statement, and other documents as we have considered necessary for the purpose of rendering this opinion (collectively, the “Reviewed Documents”). Where certain facts were not independently established and verified by us, we have relied upon certificates or statements issued or made by, among others, appropriate representatives of the Company. In rendering this opinion, we have assumed without independent investigation that (the “Assumptions”):

 

(i)

all signatures, seals and chops are genuine, each signature on behalf of a party thereto is that of a person duly authorized by such party to execute the same, the Reviewed Documents submitted to us as originals are authentic, and all documents submitted to us as certified or photostatic copies or facsimile or electronic copies conform to the originals;

 

(ii)

each of the parties to the Reviewed Documents, (a) if a legal person or other entity, is duly organized and is validly existing in good standing under the laws of its jurisdiction of organization and/or incorporation; or (b) if an individual, has full capacity for civil conduct; each of them, has full power and authority to execute, deliver and perform its/her/his obligations under such documents to which it is a party in accordance with the laws of its jurisdiction of organization or incorporation or the laws that it/she/he is subject to;

 

(iii)

the Reviewed Documents remain in full force and effect on the date of this opinion and have not been revoked, amended or supplemented, and no amendments, revisions, supplements, modifications or other changes have been made, and no revocation or termination has occurred, with respect to any of such Reviewed Documents after they were submitted to us for the purposes of this legal opinion;

 

 

 

 

(i)

the laws of jurisdictions other than Hong Kong which may be applicable to the execution, delivery, performance or enforcement of the Reviewed Documents are complied with; and

 

(ii)

all Reviewed Documents that have been provided to us and all factual statements made to us by the Company for the purpose of this opinion are true, accurate, correct, complete and not misleading in any respect. There is no information which has been omitted to be disclosed to us which could materially affect this opinion;

 

(iii)

where applicable, the agreements in the Reviewed Documents constitute valid and legally binding obligations of each of the parties thereto and are enforceable under all applicable laws;

 

(iv)

where applicable, the agreements in the the Reviewed Documents have been entered into for bona fide purposes and there has been no bad faith, fraud, misrepresentation, coercion, duress or undue influence or breach of trust on the part of any of the parties to the relevant agreements and their respective directors, employees, agents and advisers; and

 

(v)

to the extent that the Registration Statement purports to describe Roshing International Co., Limited’s business activities in Hong Kong, such descriptions are true, accurate, correct and complete.

 

Opinions

 

Subject to the Assumptions, Qualifications and limitations set forth herein and subject to any matters not disclosed to us, and having regard to such considerations of the laws of Hong Kong in force as at the date of this opinion as we consider relevant, we are of the opinion that:

 

(i)

the description of Hong Kong laws and the Hong Kong legal matters relating to the Company’s business activities in Hong Kong with respect to the regulations set forth in the Registration Statement on the cover page and under the captions “Prospectus Summary”, “Risk Factors – Risks Related to Doing Business in Hong Kong”, “Regulations – Regulations Related to our Business Operation in Hong Kong”, and “Corporate History and Structure” in each case insofar as such statements purport to describe or summarize the Hong Kong laws and legal matters relating the Company’s business activities in Hong Kong with respect to the regulations, correctly and fairly summarizes and describes the matters referred to therein as at the date hereof, are true and accurate in all material respects, and fairly present and summarize in all material respects the Hong Kong legal matters stated therein as at the date hereof; and

 

(ii)

nothing has been omitted from such description which would make the same misleading in any material aspect.

 

C. Qualifications

 

Our opinion expressed above is subject to the following qualifications (“Qualifications”):

 

(i)

our opinion is limited to the laws of Hong Kong of general application, being in force at, and based upon facts and circumstances in existence at 8:00 a.m. Hong Kong time on the date hereof and given on the basis that they will be governed by and construed in accordance with the Hong Kong law. We have made no investigation of, and do not express or imply any views on, the laws of any jurisdiction other than Hong Kong or as to factual matters. We have assumed that there is nothing in the laws of any other jurisdiction which affects our opinion. Without prejudice to the generality of the preceding sentences, our opinion is not intended to constitute, nor should it be construed as, advice regarding the securities laws or any other laws of the United States or any State thereof and we express no opinion as to the jurisdiction of any court of the United States or any State thereof;

 

 

 

  

(ii)

the laws of Hong Kong referred to herein are laws and regulations publicly available and currently in force on the date hereof and there is no guarantee that any of such laws and regulations, or the interpretation or enforcement thereof, will not be changed, amended or revoked in the future with or without retrospective effect. Our opinion is given on the basis that we have no obligation to notify any addressee of this opinion of any change in Hong Kong laws or its application after the date of this opinion;

 

(iii)

our opinion is subject to (a) applicable bankruptcy, insolvency, liquidation, fraudulent transfer, reorganization, moratorium or similar laws in the Hong Kong affecting creditors’ rights generally, and (b) possible judicial or administrative actions or any Hong Kong laws affecting creditors’ rights;

 

(iv)

our opinion is subject to the effects of (a) certain legal or statutory principles affecting the enforceability of contractual rights generally under the concepts of public interest, social ethics, national security, good faith, fair dealing, and applicable statutes of limitation; (b) any circumstance in connection with formulation, execution or performance of any legal documents that would be deemed materially mistaken, clearly unconscionable, fraudulent, coercionary or concealing illegal intentions with a lawful form; (c) judicial discretion with respect to the availability of specific performance, injunctive relief, remedies or defences, or calculation of damages; and (d) the discretion of any competent Hong Kong legislative, administrative or judicial bodies in exercising their authority in Hong Kong;

 

(v)

this opinion is issued based on our understanding of the laws of Hong Kong, which refers to the common law, principles of equity and laws and regulations constituted or evidenced by documents available to the public generally. The interpretation, implementation and application of the specific requirements under the laws of Hong Kong are subject to the final discretion of competent Hong Kong legislative, administrative and judicial authorities, and there can be no assurance that the government agencies will ultimately take a view that is not contrary to our opinion stated above;

 

(vi)

this opinion is based solely on the description of the business and activities of the Group set out in the Registration Statement and we express no opinion on the accuracy and completeness thereon. Without prejudice to the preceding, we may rely, as to matters of fact, to the extent we deem proper, on certificates and confirmations of responsible officers of the Company and public searches carried in Hong Kong;

 

(vii)

as used in this opinion, the expression “to our best knowledge” or similar language with reference to matters of fact refers to the current actual knowledge of the solicitors of this firm who have worked on matters for the Company in connection with the Offering and the transactions contemplated thereunder. We have not undertaken any independent investigation to determine the existence or absence of any fact, and no inference as to our knowledge of the existence or absence of any fact should be drawn from our representation of the Company or the rendering of this opinion;

 

(viii)

nothing in this opinion shall be construed as an opinion that the Registration Statement complies with any legal or regulatory requirement as to its contents and we express no view as to whether any or all of the members of the Group have been or will be in compliance with any or all of the laws of Hong Kong;

 

(ix)

we expressly disclaim any of our liabilities in any part of the Registration Statement other than the description of Hong Kong laws as referred to in section B of this opinion;

 

(x)

this opinion is intended to be used in the context which is specifically referred to herein; each paragraph shall be construed as a whole and no part shall be extracted and referred to independently; and

 

(xi)

this opinion is strictly limited to the matters stated herein and no opinion is implied or may be inferred beyond the matters expressly stated herein. We express no opinion as to the past, present or future financial performance, good standing or the business prospect of the Group. The opinion expressed herein is rendered only as of the date hereof, and we assume no responsibility to advise you of facts, circumstances, events or developments that hereafter may be brought to our attention and that may alter, affect or modify the opinion expressed herein.

 

 

 

 

 

D. Observations

 

(i)

On July 1, 1997, Hong Kong became the Hong Kong Special Administrative Region (the “HKSAR”) of the People’s Republic of China (the “PRC”). On April 4, 1990, the National People’s Congress (the “NPC”) of the PRC adopted the Basic Law of the HKSAR (the “Basic Law”). Under Article 8 of the Basic Law, the laws of Hong Kong in force at June 30, 1997 (that is, the common law, rules of equity, ordinances, subordinate legislation and customary law) shall be maintained, except for any that contravene the Basic Law and subject to any amendment by the legislature of the HKSAR. Under Article 160 of the Basic Law, the laws of Hong Kong in force at June 30, 1997 shall be adopted as laws of the HKSAR unless they are declared by the Standing Committee of the NPC (the “Standing Committee”) to be in contravention of the Basic Law and, if any laws are later discovered to be in contravention of the Basic Law, they shall be amended or cease to have force in accordance with the procedure prescribed by the Basic Law.

 

(ii)

On February 23, 1997, the Standing Committee adopted a decision (the “Decision”) on the treatment of laws previously in force in Hong Kong. Under paragraph 1 of the Decision, the Standing Committee decided (as translated by us) that “the laws previously in force in Hong Kong, which include the common law, rules of equity, ordinances, subsidiary legislation and customary law, except for those which contravene the Basic Law, are to be adopted as the laws of the HKSAR”. Under paragraph 2 of the Decision, the Standing Committee decided that the ordinances and subsidiary legislation set out in Annex 1 to the Decision “which are in contravention of the Basic Law’ are not to be adopted as the laws of the HKSAR. One of the ordinances set out in that Annex is the Application of English Law” Ordinance (Chapter 88 of the Laws of Hong Kong) (the “English Law Ordinance”). The English Law Ordinance applied the common law and rules of equity of England to Hong Kong. We have assumed in giving this opinion that the effect of paragraph 2 of the Decision, insofar as it relates to the English Law Ordinance, is to repeal the English Law Ordinance prospectively and that the common law and rules of equity of England which applied in Hong Kong on June 30, 1997 continue to apply, subject to their subsequent independent development which will rest primarily with the courts of the HKSAR which are empowered by the Basic Law to refer to precedents of other common law jurisdictions when adjudicating cases.

 

This opinion is delivered solely for the purpose of and in connection with the Registration Statement publicly filed with the U.S. Securities and Exchange Commission on the date of this opinion and shall not be used for any other purpose without our prior written consent.

 

We hereby consent to the use of this opinion in, and the filing hereof as an exhibit to, the Registration Statement, and to the reference to our name in such Registration Statement. In giving such consent, we do not thereby admit that we come within the category of persons whose consent is required under Section 7 of the U.S. Securities Act of 1933, as amended, or the regulations promulgated thereunder. Except with our prior written consent or consented herein, this opinion is not to be transmitted or disclosed to or used or relied upon by any other person or used or relied upon by the Company for any other purpose and it may not be filed with any governmental agency or authority or quoted in any public document, save that to the extent required by any law or regulation or court order or in connection with any judicial proceeding or in seeking to establish any defence in any legal or regulatory proceeding or investigation relating to the matters set out herein.

 

Yours faithfully,

Han Kun Law Offices LLP

 

 

 

 

 

 

 

 

 

 

Exhibit 99.5

 

 

 

5F, Building 36, Xutian Tec-Park, Binhu District, Wuxi, Jiangsu, P.R.China.

Tel: (0510) 8355 3777 Fax: (0510) 8355 3777

 

 

December 10, 2024

 

To: TIANCI INTERNATIONAL, INC. (the “Company”)

 

Unit B,10/F., Ritz Plaza,

No.122 Austin Road, Tsim Sha Tsui,

Kowloon, Hong Kong

 

 

Dear Sirs or Madams,

 

We are lawyers qualified in the People’s Republic of China (the “PRC” or “China”, which, for the purposes of this opinion only, does not include the Hong Kong Special Administrative Region, the Macau Special Administrative Region or Taiwan) and as such are qualified to issue this opinion on the laws and regulations of the PRC currently in effect and publicly available as of the date hereof (the “PRC Laws”).

 

We are acting as the PRC legal counsel to the Company as set forth in the Company’s registration statement on Form S-1 (File No.: 333-280089), including all amendments or supplements thereto (the “Registration Statement”), filed with the Securities and Exchange Commission under the U.S. Securities Act of 1933 (as amended) in relation to the proposed offering (the “Offering”) of the common stock of the Company and the Company’s proposed listing of the common stock on the Nasdaq Capital Market.

 

A. Assumptions

 

In rendering this opinion, we have examined copies of the Registration Statement and certain factual statements provided by the Company (collectively the “Documents”) as we have considered necessary or advisable for the purpose of rendering this opinion. Where certain facts were not independently established and verified by us, we have relied upon certificates or statements issued or made by the relevant PRC governmental agencies and appropriate representatives of the Company. In giving this opinion, we have made the following assumptions (where applicable) without further enquiry (the “Assumptions”):

 

(1) all signatures, seals and chops are genuine, each signature on behalf of a party thereto is that of a person duly authorized by such party to execute the same, all Documents submitted to us as originals are authentic, and all Documents submitted to us as certified or photostatic copies conform to the originals;

 

(2) each of the parties to the Documents, (i) if a legal person or other entity, is duly organized and is validly existing in good standing under the laws of its jurisdiction of organization and/or incorporation, (ii) if an individual, has full capacity for civil conduct; each of them has full power and authority to execute, deliver and perform its, her or his obligations under the Documents to which it, she or he is a party in accordance with the laws of its jurisdiction of organization and/or the laws that it, she or he is subject to;

 

(3) the Documents presented to us remain in full force and effect on the date of this opinion and have not been revoked, amended or supplemented, and no amendments, revisions, supplements, modifications or other changes have been made, and no revocation or termination has occurred, with respect to any of the Documents after they were submitted to us for the purposes of this opinion;

 

 

 

 

(4) all requested Documents have been provided to us and all factual statements made to us by the Company in connection with this opinion, including but not limited to the statements set forth in the Documents, are true, correct and complete;

 

(5) the laws of jurisdictions other than the PRC which may be applicable to the execution, delivery, performance or enforcement of the Documents are complied with;

 

(6) all requested Documents have been provided to us and all factual statements made to us by the Company in connection with this opinion, including but not limited to the statements set forth in the Documents, are true, correct and complete;

 

(7) all explanations and interpretations provided by government officials duly reflect the official position of the relevant PRC governmental agencies and are complete, true and correct;

 

(8) each of the Documents is legal, valid, binding and enforceable in accordance with their respective governing laws in any and all respects;

 

(9) all consents, licenses, permits, approvals, exemptions or authorizations required by, and all required registrations or filings with, any governmental authority or regulatory body of any jurisdiction other than the PRC in connection with the transactions contemplated under the Registration Statement and the Documents have been obtained or made, and are in full force and effect as of the date thereof;

 

(10) all governmental authorizations and other official statements and documentation obtained by the Company from any PRC governmental agency have been obtained by lawful means in due course, and the Documents provided to us conform with those documents submitted to the PRC governmental agencies for such purposes;

 

(11) none of the underwriter(s) (i) has or will have a domicile or permanent establishment in the PRC, or, if an underwriter has or will have a domicile or permanent establishment in the PRC, there is no effective connection between the income received by the underwriter in connection with the Offering and such domicile or permanent establishment, or (ii) has or will provide any securities or futures investment consultancy services in the PRC in connection with the Offering, directly or through its employees; and

 

(12) no activity relating to the offer, issuance or sale of the common stock has been or will be conducted by the Company directly or indirectly within the PRC.

 

B. Definitions

 

In addition to the terms defined in the context of this opinion, the following capitalized terms used in this opinion shall have the meanings ascribed to them as follows.

 

CAC	means the Cyberspace Administration of China.
CSRC	means the China Securities Regulatory Commission.
PRC Laws	means all applicable national, provincial and local laws, regulations, rules, notices, orders, decrees and judicial interpretations of the PRC currently in effect and publicly available on the date of this opinion.

 

 

 

 

C. Opinions

 

As confirmed by the Company, as of the date of this opinion, (i) the Company is a Nevada company and its only operating subsidiary, Roshing International Co., Limited (“Roshing”), is a Hong Kong company and is headquartered in Hong Kong, neither entity has operations in Mainland China; (ii) the Company does not, directly or indirectly, own or control any entity or subsidiary in Mainland China, nor does the Company controlled by any Mainland Chinese company or individual directly or indirectly; (iii) the Company does not have or intend to set up any subsidiary or enter into any contractual arrangements to establish a variable interest entity structure with any entity in Mainland China; (iv) only few of Roshing’s customers are Mainland China residents, which contributed 5.2% and 0.4% of the Company’s revenue for the years ended July 31, 2023 and 2024, respectively and there are no customers from Mainland China for the three months ended October 31, 2024; (v) the majority of the Company’s senior managers in charge of the Company’s business operation and management are Hong Kong nationals and domiciled in Hong Kong; and (vi) all of Roshing’s employees are Hong Kong residents. (collectively, “Company’s Confirmation”).

 

Based on the Company’s Confirmation, the Assumptions and subject to the Qualifications (as defined below), except as disclosed in the Registration Statement, as of the date hereof, we are of the opinion that:

 

(1) The Company and its subsidiaries are not required to obtain any permission or approval from the Mainland China authorities for consummating this Offering, including but not limited to the CSRC, to operate Roshing’s business or to list its securities on the U.S. exchanges and offer securities, including but not limited to issuing its common stock to foreign investors.

 

(2) The Company and its subsidiaries are not subject to the cybersecurity review by the CAC over data security and its Offering.

 

Our opinions expressed above are subject to the following qualifications (where appliable) (the “Qualifications”):

 

(1) Our opinions are limited to the PRC laws of general application on the date hereof. We have made no investigation of, and do not express or imply any views on, the laws of any jurisdiction other than the PRC, and we have assumed that no such other laws would affect our opinions expressed above.

 

(2) PRC laws referred to herein are laws and regulations publicly available and currently in force on the date hereof and there is no guarantee that any of such laws and regulations, or the interpretation or enforcement thereof, will not be changed, amended, or revoked in the future with or without retrospective effect.

 

(3) Our opinions are subject to the effects of (i) certain legal or statutory principles affecting the enforceability of contractual rights generally under the concepts of public interests, social ethics, national security, good faith, fair dealing, and applicable statutes of limitation; (ii) any circumstance in connection with the formulation, execution or performance of any legal documents that would be deemed materially mistaken, clearly unconscionable, fraudulent, coercionary or concealing illegal intentions with a lawful form; (iii) judicial discretion with respect to the availability of specific performance, injunctive relief, remedies or defenses, or the calculation of damages; and (iv) the discretion of any competent PRC legislative, administrative or judicial bodies in exercising their authority in the PRC.

 

(4) This opinion is issued based on our understanding of the explicit provisions under PRC laws currently in effect. For matters not explicitly provided for under PRC laws, the interpretation, implementation and application of the specific requirements under PRC laws, as well as their application to and effect on the legality, binding effect and enforceability of certain contracts, are subject to the final discretion of competent PRC legislative, administrative and judicial authorities. There are substantial uncertainties regarding the interpretation and application of PRC Laws and future PRC laws and regulations, especially along with the involving, new promulgations and retroactive implement (as stipulated thereunder if any) of the PRC Laws, and there can be no assurance that any governmental agency will not take a view that is contrary to or otherwise different from our opinions stated herein in the future.

 

 

 

 

(5) The term “enforceable” or “enforceability” as used in this opinion means that the obligations assumed by the relevant obligors under the relevant Documents are of a type which the courts of the PRC may enforce. It does not mean that those obligations will necessarily be enforced in all circumstances in accordance with their respective terms and/or additional terms that may be imposed by the courts. We may rely, as to matters of fact (but not as to legal conclusions), to the extent we deem proper, on certificates and confirmations of responsible officers of the Company and the PRC governmental agencies.

 

(6) We have not undertaken any independent investigation, search or other verification action to determine the existence or absence of any fact or to prepare this opinion, and no inference as to our knowledge of the existence or absence of any fact should be drawn from our representation of the Company or the rendering of this opinion.

 

(7) This opinion is intended to be used in the context which is specifically referred to herein; each paragraph shall be construed as a whole and no part shall be extracted and referred to independently.

 

This opinion is strictly limited to the matters stated herein and no opinion is implied or may be inferred beyond the matters expressly stated herein. The opinions expressed herein are rendered only as of the date hereof, and we assume no responsibility to advise you of facts, circumstances, events or developments that hereafter may be brought to our attention and that may alter, affect or modify the opinion expressed herein.

 

This opinion is given for the benefit of the addressee hereof in connection with this Offering. Without our express prior written consent, neither this opinion nor our opinions herein may be disclosed to or relied upon by any person other than the addressee, except where such disclosure is required to be made by applicable law or is requested by any court, regulatory or governmental authority, in each case on a non-reliance basis and with a prior written notice provided to us.

 

We hereby consent to the use of this opinion in, and the filing hereof as an exhibit to, the Registration Statement, and to the reference to our name in such Registration Statement. In giving such consent, we do not thereby admit that we come within the category of the persons whose consent is required under Section 7 of the U.S. Securities Act of 1933, as amended, or the regulations promulgated thereunder.

 

Yours faithfully,
/s/ Jiangsu Junjin Law Firm
Jiangsu Junjin Law Firm

 

 

 

 

 

 

 

 

 

v3.24.3

Cover	3 Months Ended
	Oct. 31, 2024
Cover [Abstract]
Document Type	S-1/A
Amendment Flag	true
Amendment Description	Edits and new financials
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2024
Entity Registrant Name	TIANCI INTERNATIONAL, INC.
Entity Central Index Key	0001557798
Entity Tax Identification Number	45-5540446
Entity Incorporation, State or Country Code	NV
Entity Address, Address Line One	Unit B,10/F., Ritz Plaza
Entity Address, Address Line Two	No.122 Austin Road
Entity Address, Address Line Three	Tsim Sha Tsui
Entity Address, City or Town	Kowloon
Entity Address, Postal Zip Code	999077
City Area Code	852
Local Phone Number	22510781
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false

v3.24.3

UNAUDITED INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($)	Oct. 31, 2024	Jul. 31, 2024
Current assets:
Cash	$ 323,793	$ 413,129
Prepaid expense	1,040	1,820
Deferred offering costs	569,481	495,356
Total current assets	894,314	910,305
Other assets:
Lease security deposit	1,656	1,656
Total non-current assets	1,656	1,656
TOTAL ASSETS	895,970	911,961
Current liabilities:
Income taxes payable	64,393	62,204
Due to related parties	2,271	2,271
Accrued liabilities and other payables	131,244	57,476
Total current liabilities	197,908	121,951
Total liabilities	197,908	121,951
Commitments and contingencies
Stockholders’ equity (deficit):
Common stock, $0.0001 par value, 100,000,000 shares authorized; 14,781,803 shares issued and outstanding as of October 31, 2024 and July 31, 2024	1,478	1,478
Additional paid-in capital	962,416	962,416
Accumulated deficit	(315,127)	(222,071)
Total stockholders' equity attributable to TIANCI INTERNATIONAL, INC.	648,775	741,831
Non-controlling interest	49,287	48,179
Total stockholders’ equity	698,062	790,010
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	895,970	911,961
Series A Preferred Stock [Member]
Stockholders’ equity (deficit):
Preferred stock value	0	0
Series B Preferred Stock [Member]
Stockholders’ equity (deficit):
Preferred stock value	8	8
Undesignated Preferred Stock [Member]
Stockholders’ equity (deficit):
Preferred stock value	$ 0	$ 0

v3.24.3

UNAUDITED INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Oct. 31, 2024	Jul. 31, 2024
Preferred stock, par value	$ 0.0001	$ 0.0001
Preferred stock, shares authorized	20,000,000	20,000,000
Common stock, par value	$ 0.0001	$ 0.0001
Common stock, shares authorized	100,000,000	100,000,000
Common stock, shares issued	14,781,803	14,781,803
Common stock, shares outstanding	14,781,803	14,781,803
Series A Preferred Stock [Member]
Preferred stock, par value	$ 0.0001	$ 0.0001
Preferred stock, shares authorized	80,000	80,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Series B Preferred Stock [Member]
Preferred stock, par value	$ 0.0001	$ 0.0001
Preferred stock, shares authorized	80,000	80,000
Preferred stock, shares issued	80,000	80,000
Preferred stock, shares outstanding	80,000	80,000
Undesignated Preferred Stock [Member]
Preferred stock, par value	$ 0.0001	$ 0.0001
Preferred stock, shares authorized	19,920,000	19,920,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0

v3.24.3

UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($)		3 Months Ended
		Oct. 31, 2024	Oct. 31, 2023
OPERATING REVENUES
Total Operating Revenues		$ 2,980,940	$ 1,326,648
COST OF REVENUES
Total Cost of Revenues		2,752,509	1,092,871
Gross profit		228,431	233,777
Operating expenses:
Selling and marketing		85,188	102,071
General and administrative		260,393	118,705
Total operating expenses		345,581	220,776
Income (loss) from operations		(117,150)	13,001
Other income net		27,391	0
Income (loss) before provision for income taxes		(89,759)	13,001
Provision for income taxes		2,189	19,113
Net (loss)		(91,948)	(6,112)
Less: net income attributable to non-controlling interest		1,108	9,672
Net (loss) attributable to TIANCI INTERNATIONAL, INC.		(93,056)	(15,784)
Global Logistics Services [Member]
OPERATING REVENUES
Total Operating Revenues		2,759,693	1,181,720
COST OF REVENUES
Total Cost of Revenues		2,590,865	1,029,970
Other Revenue [Member]
OPERATING REVENUES
Total Operating Revenues		221,247	144,928
COST OF REVENUES
Total Cost of Revenues		$ 161,644	$ 62,901
Common Shares [Member]
Weighted average number of common shares*
Weighted average number of shares, basic	[1]	14,781,803	5,903,481
Weighted average number of shares, diluted	[1]	14,781,803	5,903,481
(Loss) per common share attributable to TIANCI INTERNATIONAL, INC.*
Loss per preferred share B attributable to TIANCI INTERNATIONAL, INC., basic	[1]	$ (0.01)	$ (0.00)
Loss per preferred share B attributable to TIANCI INTERNATIONAL, INC., diluted	[1]	$ (0.01)	$ (0.00)
Preferred Shares A [Member]
Weighted average number of common shares*
Weighted average number of shares, basic	[1]	0	80,000
Weighted average number of shares, diluted	[1]	0	80,000
(Loss) per common share attributable to TIANCI INTERNATIONAL, INC.*
Loss per preferred share B attributable to TIANCI INTERNATIONAL, INC., basic	[1]	$ 0	$ (0.20)
Loss per preferred share B attributable to TIANCI INTERNATIONAL, INC., diluted	[1]	$ 0	$ (0.20)
Preferred Shares B [Member]
Weighted average number of common shares*
Weighted average number of shares, basic	[1]	80,000	0
Weighted average number of shares, diluted	[1]	80,000	0
(Loss) per common share attributable to TIANCI INTERNATIONAL, INC.*
Loss per preferred share B attributable to TIANCI INTERNATIONAL, INC., basic	[1]	$ (1.16)	$ 0
Loss per preferred share B attributable to TIANCI INTERNATIONAL, INC., diluted	[1]	$ (1.16)	$ 0
[1] Shares are presented on a retroactive basis to reflect the reorganization on March 3, 2023

v3.24.3

UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY - USD ($)	Preferred Stock Series A [Member]	Preferred Stock Series B [Member]	Common Stock [Member]	Subscription Receivable [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	Noncontrolling Interest [Member]	Total
Beginning balance, value at Jul. 31, 2023	$ 8		$ 590	$ 0	$ 4,982	$ (276,521)	$ (7,691)	$ (278,632)
Beginning balance, shares at Jul. 31, 2023	80,000		5,903,481
Net loss						(15,784)	9,672	(6,112)
Ending balance, value at Oct. 31, 2023	$ 8		$ 590	0	4,982	(292,305)	1,981	(284,744)
Ending balance, shares at Oct. 31, 2023	80,000		5,903,481
Beginning balance, value at Jul. 31, 2024	$ 0	$ 8	$ 1,478	0	962,416	(222,071)	48,179	790,010
Beginning balance, shares at Jul. 31, 2024	0	80,000	14,781,803
Net loss						(93,056)	1,108	(91,948)
Ending balance, value at Oct. 31, 2024	$ 0	$ 8	$ 1,478	$ 0	$ 962,416	$ (315,127)	$ 49,287	$ 698,062
Ending balance, shares at Oct. 31, 2024	0	80,000	14,781,803

v3.24.3

UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)	3 Months Ended
	Oct. 31, 2024	Oct. 31, 2023
Cash flows from operating activities:
Net income (loss)	$ (91,948)	$ (6,112)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Amortization of operating lease right-of-use asset	0	356
Change in operating assets and liabilities:
Accounts receivable	0	(195,629)
Prepaid expense	780	750
Lease security deposit	0	(114)
Due from related party	0	(33)
Advances from customers	0	(29,070)
Accounts payable	0	195,232
Income taxes payable	2,189	19,113
Operating lease liabilities	0	(356)
Accrued liabilities and other payables	73,768	140,354
Net cash (used in) provided by operating activities	(15,211)	124,491
Cash flows from financing activities:
Deferred offering costs incurred	(74,125)	0
Net cash (used in) financing activities	(74,125)	0
Net (decrease) increase in cash	(89,336)	124,491
Cash, beginning	413,129	256,342
Cash, ending	323,793	380,833
Cash paid during the period for:
Interest	0	0
Income taxes	0	0
Non-Cash Activities:
Early termination of right-of-use assets and lease liabilities	$ 0	$ 6,080

v3.24.3

Pay vs Performance Disclosure - USD ($)	3 Months Ended
	Oct. 31, 2024	Oct. 31, 2023
Pay vs Performance Disclosure [Table]
Net Income (Loss)	$ (93,056)	$ (15,784)

v3.24.3

NATURE OF BUSINESS AND ORGANIZATION	3 Months Ended
	Oct. 31, 2024
Organization, Consolidation and Presentation of Financial Statements [Abstract]
NATURE OF BUSINESS AND ORGANIZATION	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 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.   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 4% of its revenue for the nine months ended July 31, 2024 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.

v3.24.3

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	3 Months Ended
	Oct. 31, 2024
Accounting Policies [Abstract]
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	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 three months ended October 31, 2024 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 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 October 31, 2024 and July 31, 2024, 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:   · 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.   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 destination port and accepted by its customers. The Company does not have significant variable consideration in its contracts. Taxes assessed concurrently with a specific revenue-producing transaction that are collected by the 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.   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.   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 months ended October 31, 2024 and 2023, respectively. Advertising costs are expensed as incurred and included in selling and marketing expenses.   Operating leases   Effective August 1, 2022, the Company adopted FASB ASU 2016-02, “Leases” (Topic 842), and elected the practical expedients that does not require the Company to reassess: (1) whether any expired or existing contracts are, or contain, leases, (2) lease classification for any expired or existing leases and (3) initial direct costs for any expired or existing leases. For lease terms of twelve months or less, a lessee is permitted to make an accounting policy election not to recognize lease assets and liabilities. The Company also adopted the practical expedient that allows lessees to treat the lease and non-lease components of a lease as a single lease component. Upon adoption of ASU 2016-02 effective August 1, 2022, the Company recognized a $8,704 right of use (“ROU”) asset and operating lease liabilities in January 2023 based on the present value of the future minimum rental payments of leases, using an incremental borrowing rate of 5%.   The Company determines if a contract contains a lease at inception. US GAAP requires that the Company’s leases be evaluated and classified as operating or finance leases for financial reporting purposes. The classification evaluation begins at the commencement date and the lease term used in the evaluation includes the non-cancellable period for which the Company has the right to use the underlying asset, together with renewal option periods when the exercise of the renewal option is reasonably certain and failure to exercise such option would result in an economic penalty. All of the Company’s real estate leases are classified as operating leases.   Lease payments for an operating lease transitioning to ASC 842 using the effective date are based on future payments at the transition date and on the present value of lease payments over the remaining lease term. Since the implicit rate for the Company’s leases is not readily determinable, the Company uses its incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments. The incremental borrowing rate is the rate of interest that the Company would have to pay to borrow, on a collateralized basis, an amount equal to the lease payments, in a similar economic environment and over a similar term.   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% likely of being realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. Penalties and interest incurred related to underpayment of income tax for uncertain tax positions are classified as income tax expenses in the period incurred.   During the year ended July 31, 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 year ended July 31, 2024. During the three months ended October 31, 2024, the Company received a refund $24,953 from the IRS for the penalty previously charged. The refund is included in other income in the statements of operations for the three months ended October 31, 2024.   The Hong Kong tax returns filed for 2019 and subsequent years are subject to examination by the applicable tax authorities.   The US tax returns filed for 2021 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 shares of common stock outstanding for the period. Diluted EPS presents the diluted effect on a per share basis of the potential shares of 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 shares of common stock that have an anti-dilutive effect (i.e., those that increase income per share or decrease loss per share) are excluded from the calculation of diluted EPS. As of October 31, 2024 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.   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 a smaller reporting company. The adoption of this standard on August 1, 2023 has not had and is not expected to have a material impact on the Company’s future consolidated financial statements.   In December 2019, the FASB issued ASU 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes”. 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 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 consolidated Financial Statements.

v3.24.3

PUBLIC OFFERING AND DEFERRED OFFERING COSTS	3 Months Ended
	Oct. 31, 2024
Public Offering And Deferred Offering Costs
PUBLIC OFFERING AND DEFERRED OFFERING COSTS	NOTE 3 – PUBLIC OFFERING AND DEFERRED OFFERING COSTS   On March 14, 2024, the Company executed an agreement with Prime Number Capital LLC (“Prime”) for Prime to act as the Company’s Lead Underwriter on a “firm commitment” basis in connection with a public offering of shares of the Company’s common stock. The agreement provides for compensation to Prime of, among other things, (1) Underwriter’s Commission equal to 7.0% of Gross Proceeds, (2) Non-accountable Expenses equal to 1.0% of Gross Proceeds, (3) Underwriter’s warrants equal to 5.0% of the shares issued in the offering, and (4) a cash advance of $100,000 offsetable against the Underwriter’s Commission (of which the Company paid $50,000 to Prime on March 14, 2024). Prime’s obligation to initiate the offering is subject to satisfaction of several conditions, and there is no assurance that the offering will occur.   As of October 31, 2024, deferred offering costs relating to the public offering consist of: Schedule of deferred offering costs relating to the public offering     Cash advance to Prime   $ 100,000   Attorney fees     452,356   Accountant fees     49,125   Total   $ 569,481     Upon closing of the public offering, the deferred offering costs will be offset against the proceeds from the public offering and included as part of the total public offering stock issuance costs.

v3.24.3

RELATED PARTIES BALANCES AND TRANSACTIONS	3 Months Ended
	Oct. 31, 2024
Related Party Transactions [Abstract]
RELATED PARTIES BALANCES AND TRANSACTIONS	NOTE 4 – RELATED PARTIES BALANCES AND TRANSACTIONS   Due to related parties consists of: Schedule of due to related parties                         Transaction   October 31,   July 31, Name   Relationship   Nature   2024   2024 RQS Capital   61.89% shareholder   Company cash collection due to RQS Capital   $ 2,271     $ 2,271   TOTAL           $ 2,271     $ 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 October 31, 2024 and 2023, the Company incurred management compensation expenses of $56,400 and $60,000, respectively. These amounts are included in “general and administrative expenses” in the accompanying consolidated statements of operations.

v3.24.3

STOCKHOLDERS EQUITY	3 Months Ended
	Oct. 31, 2024
Equity [Abstract]
STOCKHOLDERS EQUITY	NOTE 5 – 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 October 31, 2024, regarding the classes of capital stock that are authorized by the Articles of Incorporation of Tianci International, Inc. Schedule of classes of capital stock                 October 31, 2024 Class   Shares Authorized   Shares Outstanding Common Stock, $.0001 par value     100,000,000       14,781,803   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.   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) in satisfaction of the Company’s liability to them 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.

v3.24.3

INCOME TAXES	3 Months Ended
	Oct. 31, 2024
Income Tax Disclosure [Abstract]
INCOME TAXES	NOTE 6 – 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 three months ended October 31, 2024 and 2023 amounted to $2,189 and $19,113, respectively.   For the three months ended October 31, 2024, the loss before provision for income taxes of $89,759, consisted of United States source loss of $(103,024) and Hong Kong source income of $11,076. For the three months ended October 31, 2023, the income before provision for income taxes of $13,001 consisted of United States source loss of $(102,833) and Hong Kong source income of $115,834.   Significant components of the provision for income taxes are as follows: Schedule of components of the provision for income taxes             For the three months ended     October 31, 2024   October 31, 2023           Current Hong Kong   $ 2,189     $ 19,113   Deferred Hong Kong     –       –   Provision for income taxes   $ 2,189     $ 19,113     The following table reconciles the Hong Kong statutory rates to the Company’s Hong Kong effective tax rate: Schedule of Hong Kong effective tax rate             For the three months ended     October 31, 2024   October 31, 2023           Hong Kong statutory income tax rate     16.50%       16.50%   Effective tax rate     16.50%       16.50%     For United States income tax purposes, Tianci has a net operating loss carryforward of approximately $1,519,000 at October 31, 2024. Management has not determined that it is more likely than not that this carryforward will be realized and thus the Company maintained a 100% valuation allowance for the deferred tax asset relating to the United States net operating loss carryforward. Current United States income tax law limits the amount of loss available to offset against future taxable income when a substantial change in ownership occurs.   Uncertain tax positions   The Company evaluates each uncertain tax position (including the potential application of interest and penalties) based on the technical merits, and measures the unrecognized benefits associated with the tax positions. As of October 31, 2024 and July 31, 2024, the Company did not have any significant unrecognized uncertain tax positions.   As of July 31, 2024, tax years 2021 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.

v3.24.3

CONCENTRATION OF RISK	3 Months Ended
	Oct. 31, 2024
Risks and Uncertainties [Abstract]
CONCENTRATION OF RISK	NOTE 7 — CONCENTRATION OF RISK   Credit risk   Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash held in banks. The cash balance in each financial institution in the United States is insured by the FDIC up to $250,000. As of October 31, 2024, no United States account balance exceeded $250,000. The Hong Kong Deposit Protection Board pays compensation up to a limit of HKD 500,000 (approximately US$64,000) if the bank with which an individual/company holds its eligible deposit fails. As of October 31, 2024, a cash balance of $ 228,644 was maintained at a financial institution in Hong Kong of which approximately $158,000 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 three months ended October 31, 2024, two customers accounted for 56.5%, and 19.7% of the Company’s total revenues.   For the three months ended October 31, 2023, two customers accounted for 61.2% and 13.1% of the Company’s total revenues.   As of October 31, 2024 and July 31, 2024, no customer accounted for over 10% of the Company’s total accounts receivable.   Vendor concentration risk   For the year ended July 31, 2024, three vendors accounted for 59.0%, 20.6% and 1.3% of the Company’s total purchases. For the three months ended October 31, 2023, two vendors accounted for 65.9% and 13.7% of the Company’s total purchases. As of October 31, 2024 and July 31, 2024, no vendor accounted for over 10% of the Company’s total accounts payable.

v3.24.3

COMMITMENTS AND CONTINGENCIES	3 Months Ended
	Oct. 31, 2024
Commitments and Contingencies Disclosure [Abstract]
COMMITMENTS AND CONTINGENCIES	NOTE 8— COMMITMENTS AND CONTINGENCIES   Lease commitments   On January 1, 2021, Roshing entered into an operating lease agreement for office space in Hong Kong with a third party. The agreement had a term of two years and provided for monthly rent of HKD 2,800 (approximately $360). On January 13, 2023, the Company entered a new operating lease agreement for office space in Hong Kong with a third party for two years with monthly rent of HKD 3,000 (approximately $382). Upon adoption of ASU 2016-02 effective August 1, 2022, the Company recognized a $8,704 right of use (“ROU”) asset and operating lease liabilities in January 2023 based on the present value of the future minimum rental payments of leases, using an incremental borrowing rate of 5%. The Company’s lease agreement does not contain any material residual value guarantees or material restrictive covenants. The lease does not contain an option to extend at the time of expiration. The lease was early terminated in September 2023 which resulted in a derecognition of $6,080 right of use (“ROU”) asset and operating lease liabilities in August 2023.   In September 2023, the Company entered into a one-year office rental service agreement with a monthly lease payment of approximately $828 (HKD 6,500). In September 2024, the Company further renewed the lease for one year with a monthly lease payment of approximately $847 (HKD 6,650).   Rent expenses were $2,522 and $3,184 for the three months ended October 31, 2024 and 2023, respectively.   Contingencies   From time to time, the Company may be a party to legal proceedings, as well as certain asserted and un-asserted claims. The Company was not involved in any material legal proceedings nor asserted claims as of October 31, 2024.

v3.24.3

ENTERPRISE-WIDE DISCLOSURE	3 Months Ended
	Oct. 31, 2024
Segment Reporting [Abstract]
ENTERPRISE-WIDE DISCLOSURE	NOTE 9 — ENTERPRISE-WIDE DISCLOSURE   The Company follows ASC 280, Segment Reporting, which requires companies to disclose segment data based on how management makes decisions about allocating resources to each segment and evaluates their performances. The Company’s chief operating decision-makers (i.e., the Company’s chief executive officer and his direct assistants, including the Company’s chief financial officer) review financial information presented on a consolidated basis, accompanied by disaggregated information about revenues, cost of revenues, and gross profit by business lines and by regions (Hong Kong, Vietnam, Japan and Singapore) for purposes of allocating resources and evaluating financial performance. There are no segment managers who are held accountable for operations, operating results and plans for levels or components below the consolidated unit level. Based on qualitative and quantitative criteria established by ASC 280, the Company considers itself to be operating within one reportable segment.   Disaggregated information of revenues by business lines are as follows: Schedule of disaggregated information of revenues by business lines             For the three months ended     October 31,     2024   2023       Electronic Device Hardware Components Sales   $ –     $ 59,902   Software and Website Development Services     –       19,230   Software Maintenance and Business Promotion Services     –       15,263   Business Consulting Services     221,247       50,533   Global Logistics Services     2,759,693       1,181,720   Total revenues   $ 2,980,940     $ 1,326,648     Disaggregated information of revenues by regions are as follows: Schedule of disaggregated information of revenues by regions             For the three months ended     October 31,     2024   2023       Hong Kong   $ 2,576,170     $ 1,051,017   Vietnam     166,770       173,531   Japan     238,000       100,850   Singapore     –       1,250   Total revenues   $ 2,980,940     $ 1,326,648

v3.24.3

CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY (Unaudited)	3 Months Ended
	Oct. 31, 2024
Condensed Financial Information Disclosure [Abstract]
CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY (Unaudited)	NOTE 10 — CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY (Unaudited)   The Company performed a test on the restricted net assets of its consolidated subsidiaries in accordance with Rule 4-08(e)(3) of Regulation S-X promulgated by the SEC, “General Notes to Financial Statements” and concluded that it was applicable and the Company is required to disclose the required financial statement information for the parent company.   The subsidiaries did not pay any dividends to the parent during the periods presented. For the purpose of presenting parent only financial information, the Company records its investment in its subsidiaries under the equity method of accounting. Such investments are presented on the separate parent only balance sheets as “investment in subsidiaries” and the income (loss) of the subsidiaries is presented as “share of income (loss) of subsidiaries.” Certain information and footnote disclosures generally included in financial statements prepared in accordance with U.S. GAAP have been condensed or are not required.   PARENT COMPANY BALANCE SHEET Schedule of balance sheet             October 31,   July 31,     2024   2024           ASSETS                 Cash   $ 94,651     $ 14,621   Prepaid expense     1,040       1,820   Investment in subsidiaries     665,755       781,661   Total Assets   $ 761,446     $ 798,102                     LIABILITIES                 Accounts payable and other accrued liabilities     110,400       54,000   Payable to subsidiaries     512,416       312,416   Due to related parties     2,271       2,271   Total Liabilities   $ 112,671     $ 56,271                     Stockholders’ Equity                 Series A Preferred stock, $0.0001 par value; 80,000 shares authorized; no shares issued and outstanding as of October 31, 2024 and July 31, 2024     –       –   Series B Preferred stock, $0.0001 par value; 80,000 shares authorized; 80,000 shares issued and outstanding as of October 31, 2024 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; 14,781,803 shares issued and outstanding as of October 31, 2024 and July 31, 2024     1,478       1,478   Additional paid-in capital     962,416       962,416   Accumulated deficit     (315,127 )     (222,071 ) Total Stockholders’ Equity     648,775       741,831                     Total Liabilities and Stockholders’ Equity   $ 761,446     $ 798,102     PARENT COMPANY STATEMENT OF OPERATIONS Schedule of statement of operations                     For the three months ended October 31,     2024   2023           EXPENSE:                 General and administrative   $ (130,415 )   $ (102,833 )                   OTHER INCOME                 Gain from investment in subsidiaries     9,968       87,049   Other income net     27,391       –   Total other income     37,359       87,049                     Net (loss)   $ (93,056 )   $ (15,784 )   PARENT COMPANY STATEMENT OF CASH FLOWS Schedule of statement of cash flow                     For the three months ended October 31,     2024   2023           Cash flows from operating activities:                 Net (loss)   $ (93,056 )   $ (15,784 ) Adjustments to reconcile net income to net cash provided by operating activities:                 Share of (gain) from investment in subsidiaries     (9,968 )     (87,049 ) Change in operating assets and liabilities:                 Prepaid expense and other assets     780       750   Accounts payable and other accrued liabilities     56,399       59,352   Net cash (used in) operating activities     (45,845 )     (42,731 )                   Cash flows from financing activities:                 Operating proceeds from subsidiaries     200,000           Deferred offering costs incurred     (74,125 )     –   Net cash provided by financing activities     125,875       –                     Net (decrease) increase in cash and cash equivalents     80,030       (42,731 ) Cash and cash equivalents at beginning     14,621       66,553   Cash and cash equivalents at ending   $ 94,651     $ 23,822

v3.24.3

SUBSEQUENT EVENTS	3 Months Ended
	Oct. 31, 2024
Subsequent Events [Abstract]
SUBSEQUENT EVENTS	NOTE 11 — 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.

v3.24.3

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)	3 Months Ended
	Oct. 31, 2024
Accounting Policies [Abstract]
Basis of Presentation	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 three months ended October 31, 2024 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	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	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	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   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 United States and Hong Kong.
Accounts receivable, net	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 October 31, 2024 and July 31, 2024, no allowance for doubtful accounts was deemed necessary.
Fair Value Measurements	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:   · 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.
Revenue recognition	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 destination port and accepted by its customers. The Company does not have significant variable consideration in its contracts. Taxes assessed concurrently with a specific revenue-producing transaction that are collected by the 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.   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.   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	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   Advertising costs amounted to $0 for the three months ended October 31, 2024 and 2023, respectively. Advertising costs are expensed as incurred and included in selling and marketing expenses.
Operating leases	Operating leases   Effective August 1, 2022, the Company adopted FASB ASU 2016-02, “Leases” (Topic 842), and elected the practical expedients that does not require the Company to reassess: (1) whether any expired or existing contracts are, or contain, leases, (2) lease classification for any expired or existing leases and (3) initial direct costs for any expired or existing leases. For lease terms of twelve months or less, a lessee is permitted to make an accounting policy election not to recognize lease assets and liabilities. The Company also adopted the practical expedient that allows lessees to treat the lease and non-lease components of a lease as a single lease component. Upon adoption of ASU 2016-02 effective August 1, 2022, the Company recognized a $8,704 right of use (“ROU”) asset and operating lease liabilities in January 2023 based on the present value of the future minimum rental payments of leases, using an incremental borrowing rate of 5%.   The Company determines if a contract contains a lease at inception. US GAAP requires that the Company’s leases be evaluated and classified as operating or finance leases for financial reporting purposes. The classification evaluation begins at the commencement date and the lease term used in the evaluation includes the non-cancellable period for which the Company has the right to use the underlying asset, together with renewal option periods when the exercise of the renewal option is reasonably certain and failure to exercise such option would result in an economic penalty. All of the Company’s real estate leases are classified as operating leases.   Lease payments for an operating lease transitioning to ASC 842 using the effective date are based on future payments at the transition date and on the present value of lease payments over the remaining lease term. Since the implicit rate for the Company’s leases is not readily determinable, the Company uses its incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments. The incremental borrowing rate is the rate of interest that the Company would have to pay to borrow, on a collateralized basis, an amount equal to the lease payments, in a similar economic environment and over a similar term.   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	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% likely of being realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. Penalties and interest incurred related to underpayment of income tax for uncertain tax positions are classified as income tax expenses in the period incurred.   During the year ended July 31, 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 year ended July 31, 2024. During the three months ended October 31, 2024, the Company received a refund $24,953 from the IRS for the penalty previously charged. The refund is included in other income in the statements of operations for the three months ended October 31, 2024.   The Hong Kong tax returns filed for 2019 and subsequent years are subject to examination by the applicable tax authorities.   The US tax returns filed for 2021 and subsequent years are subject to examination by the applicable tax authorities.
Earnings (loss) per share	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 shares of common stock outstanding for the period. Diluted EPS presents the diluted effect on a per share basis of the potential shares of 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 shares of common stock that have an anti-dilutive effect (i.e., those that increase income per share or decrease loss per share) are excluded from the calculation of diluted EPS. As of October 31, 2024 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	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	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	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.   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 a smaller reporting company. The adoption of this standard on August 1, 2023 has not had and is not expected to have a material impact on the Company’s future consolidated financial statements.   In December 2019, the FASB issued ASU 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes”. 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 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 consolidated Financial Statements.

v3.24.3

PUBLIC OFFERING AND DEFERRED OFFERING COSTS (Tables)	3 Months Ended
	Oct. 31, 2024
Public Offering And Deferred Offering Costs
Schedule of deferred offering costs relating to the public offering	Schedule of deferred offering costs relating to the public offering     Cash advance to Prime   $ 100,000   Attorney fees     452,356   Accountant fees     49,125   Total   $ 569,481

v3.24.3

RELATED PARTIES BALANCES AND TRANSACTIONS (Tables)	3 Months Ended
	Oct. 31, 2024
Related Party Transactions [Abstract]
Schedule of due to related parties	Schedule of due to related parties                         Transaction   October 31,   July 31, Name   Relationship   Nature   2024   2024 RQS Capital   61.89% shareholder   Company cash collection due to RQS Capital   $ 2,271     $ 2,271   TOTAL           $ 2,271     $ 2,271

v3.24.3

STOCKHOLDERS EQUITY (Tables)	3 Months Ended
	Oct. 31, 2024
Equity [Abstract]
Schedule of classes of capital stock	Schedule of classes of capital stock                 October 31, 2024 Class   Shares Authorized   Shares Outstanding Common Stock, $.0001 par value     100,000,000       14,781,803   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       –

v3.24.3

INCOME TAXES (Tables)	3 Months Ended
	Oct. 31, 2024
Income Tax Disclosure [Abstract]
Schedule of components of the provision for income taxes	Schedule of components of the provision for income taxes             For the three months ended     October 31, 2024   October 31, 2023           Current Hong Kong   $ 2,189     $ 19,113   Deferred Hong Kong     –       –   Provision for income taxes   $ 2,189     $ 19,113
Schedule of Hong Kong effective tax rate	Schedule of Hong Kong effective tax rate             For the three months ended     October 31, 2024   October 31, 2023           Hong Kong statutory income tax rate     16.50%       16.50%   Effective tax rate     16.50%       16.50%

v3.24.3

ENTERPRISE-WIDE DISCLOSURE (Tables)	3 Months Ended
	Oct. 31, 2024
Segment Reporting [Abstract]
Schedule of disaggregated information of revenues by business lines	Schedule of disaggregated information of revenues by business lines             For the three months ended     October 31,     2024   2023       Electronic Device Hardware Components Sales   $ –     $ 59,902   Software and Website Development Services     –       19,230   Software Maintenance and Business Promotion Services     –       15,263   Business Consulting Services     221,247       50,533   Global Logistics Services     2,759,693       1,181,720   Total revenues   $ 2,980,940     $ 1,326,648
Schedule of disaggregated information of revenues by regions	Schedule of disaggregated information of revenues by regions             For the three months ended     October 31,     2024   2023       Hong Kong   $ 2,576,170     $ 1,051,017   Vietnam     166,770       173,531   Japan     238,000       100,850   Singapore     –       1,250   Total revenues   $ 2,980,940     $ 1,326,648

v3.24.3

CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY (Unaudited) (Tables)	3 Months Ended
	Oct. 31, 2024
Condensed Financial Information Disclosure [Abstract]
Schedule of balance sheet	Schedule of balance sheet             October 31,   July 31,     2024   2024           ASSETS                 Cash   $ 94,651     $ 14,621   Prepaid expense     1,040       1,820   Investment in subsidiaries     665,755       781,661   Total Assets   $ 761,446     $ 798,102                     LIABILITIES                 Accounts payable and other accrued liabilities     110,400       54,000   Payable to subsidiaries     512,416       312,416   Due to related parties     2,271       2,271   Total Liabilities   $ 112,671     $ 56,271                     Stockholders’ Equity                 Series A Preferred stock, $0.0001 par value; 80,000 shares authorized; no shares issued and outstanding as of October 31, 2024 and July 31, 2024     –       –   Series B Preferred stock, $0.0001 par value; 80,000 shares authorized; 80,000 shares issued and outstanding as of October 31, 2024 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; 14,781,803 shares issued and outstanding as of October 31, 2024 and July 31, 2024     1,478       1,478   Additional paid-in capital     962,416       962,416   Accumulated deficit     (315,127 )     (222,071 ) Total Stockholders’ Equity     648,775       741,831                     Total Liabilities and Stockholders’ Equity   $ 761,446     $ 798,102
Schedule of statement of operations	Schedule of statement of operations                     For the three months ended October 31,     2024   2023           EXPENSE:                 General and administrative   $ (130,415 )   $ (102,833 )                   OTHER INCOME                 Gain from investment in subsidiaries     9,968       87,049   Other income net     27,391       –   Total other income     37,359       87,049                     Net (loss)   $ (93,056 )   $ (15,784 )
Schedule of statement of cash flow	Schedule of statement of cash flow                     For the three months ended October 31,     2024   2023           Cash flows from operating activities:                 Net (loss)   $ (93,056 )   $ (15,784 ) Adjustments to reconcile net income to net cash provided by operating activities:                 Share of (gain) from investment in subsidiaries     (9,968 )     (87,049 ) Change in operating assets and liabilities:                 Prepaid expense and other assets     780       750   Accounts payable and other accrued liabilities     56,399       59,352   Net cash (used in) operating activities     (45,845 )     (42,731 )                   Cash flows from financing activities:                 Operating proceeds from subsidiaries     200,000           Deferred offering costs incurred     (74,125 )     –   Net cash provided by financing activities     125,875       –                     Net (decrease) increase in cash and cash equivalents     80,030       (42,731 ) Cash and cash equivalents at beginning     14,621       66,553   Cash and cash equivalents at ending   $ 94,651     $ 23,822

v3.24.3

NATURE OF BUSINESS AND ORGANIZATION (Details Narrative)	Oct. 31, 2024
RQS [Member]
Equity percentage	90.00%

v3.24.3

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($)	1 Months Ended	3 Months Ended		12 Months Ended
	Aug. 31, 2023	Oct. 31, 2024	Oct. 31, 2023	Jul. 31, 2024	Aug. 02, 2022
Allowance for doubtful accounts		$ 0		$ 0
Advertising costs		0	$ 0
Right of use asset recognized					$ 8,704
Borrowing rate					5.00%
Decrease in operating lease liabilities		0	$ (356)
IRS penalty amount				$ 47,030
IRS penalty refund amount		$ 24,953
RQS [Member]
Ownership interest		10.00%
Series B And Series A Preferred Stock [Member]
Conversion rate of preferred to common stock		100
Convertible Series B Preferred Stock [Member]
Antidilutive shares				8,000,000
Hong Kong Office Facility [Member]
Decrease in operating lease liabilities	$ 6,080

v3.24.3

PUBLIC OFFERING AND DEFERRED OFFERING COSTS (Details) - USD ($)	Oct. 31, 2024	Jul. 31, 2024
Public Offering And Deferred Offering Costs
Cash advance to Prime	$ 100,000
Attorney fees	452,356
Accountant fees	49,125
Total	$ 569,481	$ 495,356

v3.24.3

PUBLIC OFFERING AND DEFERRED OFFERING COSTS (Details Narrative)	3 Months Ended
	Oct. 31, 2024
Public Offering And Deferred Offering Costs
Deferred compensation agreement	The agreement provides for compensation to Prime of, among other things, (1) Underwriter’s Commission equal to 7.0% of Gross Proceeds, (2) Non-accountable Expenses equal to 1.0% of Gross Proceeds, (3) Underwriter’s warrants equal to 5.0% of the shares issued in the offering, and (4) a cash advance of $100,000 offsetable against the Underwriter’s Commission (of which the Company paid $50,000 to Prime on March 14, 2024).

v3.24.3

RELATED PARTIES BALANCES AND TRANSACTIONS (Details) - USD ($)	Oct. 31, 2024	Jul. 31, 2024
Related Party Transaction [Line Items]
TOTAL	$ 2,271	$ 2,271
RQS Capital [Member]
Related Party Transaction [Line Items]
TOTAL	$ 2,271	$ 2,271

v3.24.3

RELATED PARTIES BALANCES AND TRANSACTIONS (Details Narrative) - USD ($)	3 Months Ended
	Oct. 31, 2024	Oct. 31, 2023
Related Party Transactions [Abstract]
Management compensation expenses	$ 56,400	$ 60,000

v3.24.3

STOCKHOLDERS EQUITY (Details) - shares	Oct. 31, 2024	Jul. 31, 2024
Class of Stock [Line Items]
Common stock, shares authorized	100,000,000	100,000,000
Common stock, shares outstanding	14,781,803	14,781,803
Preferred stock, shares authorized	20,000,000	20,000,000
Series A Preferred Stock [Member]
Class of Stock [Line Items]
Preferred stock, shares authorized	80,000	80,000
Preferred stock, shares outstanding	0	0
Series B Preferred Stock [Member]
Class of Stock [Line Items]
Preferred stock, shares authorized	80,000	80,000
Preferred stock, shares outstanding	80,000	80,000
Undesignated Preferred Stock [Member]
Class of Stock [Line Items]
Preferred stock, shares authorized	19,920,000	19,920,000
Preferred stock, shares outstanding	0	0

v3.24.3

STOCKHOLDERS EQUITY (Details Narrative) - USD ($)	Apr. 24, 2024	Jan. 24, 2024	Jan. 19, 2024	Oct. 31, 2024	Jul. 31, 2024
Class of Stock [Line Items]
Capital units, authorized				120,080,000
Common stock, shares authorized				100,000,000	100,000,000
Common stock, par value				$ 0.0001	$ 0.0001
Preferred stock, shares authorized				20,000,000	20,000,000
Preferred stock, par value				$ 0.0001	$ 0.0001
Five Present Or Former Members Of The Board [Member]
Class of Stock [Line Items]
Sold of aggregate common stock			445,109
Proceeds from issuance of common stock			$ 445,109
Nine Investors [Member]
Class of Stock [Line Items]
Sold of aggregate common stock		433,213
Proceeds from issuance of common stock		$ 433,213
Series A Preferred Stock [Member]
Class of Stock [Line Items]
Preferred stock, shares authorized				80,000	80,000
Preferred stock, par value				$ 0.0001	$ 0.0001
Stock converted, shares converted			80,000
Series A Preferred Stock [Member] | RQS Capital [Member]
Class of Stock [Line Items]
Stock converted, shares converted			80,000
Series B Preferred Stock [Member]
Class of Stock [Line Items]
Preferred stock, shares authorized				80,000	80,000
Preferred stock, par value				$ 0.0001	$ 0.0001
Series B Preferred Stock [Member] | RQS Capital [Member]
Class of Stock [Line Items]
Number of shares sold	80,000
Number of shares sold, value	$ 80,000
Common Stock [Member]
Class of Stock [Line Items]
Stock converted, shares issued			8,000,000
Common Stock [Member] | RQS Capital [Member]
Class of Stock [Line Items]
Stock converted, shares issued			8,000,000

v3.24.3

INCOME TAXES (Details - Schedule of components of income tax expense) - USD ($)	3 Months Ended
	Oct. 31, 2024	Oct. 31, 2023
Income Tax Disclosure [Abstract]
Current Hong Kong	$ 2,189	$ 19,113
Deferred Hong Kong	0	0
Provision for income taxes	$ 2,189	$ 19,113

v3.24.3

INCOME TAXES (Details - Schedule of effective income tax reconciliation)	3 Months Ended
	Oct. 31, 2024	Oct. 31, 2023
Income Tax Disclosure [Abstract]
Hong Kong statutory income tax rate	16.50%	16.50%
Effective tax rate	16.50%	16.50%

v3.24.3

INCOME TAXES (Details Narrative) - USD ($)	3 Months Ended		12 Months Ended
	Oct. 31, 2024	Oct. 31, 2023	Oct. 31, 2024
Description of tax law in Hong Kong			Incorporated companies pay 8.25% tax on the first $2 million of profits and 16.5% on the remainder.
Income tax expenses (benefit)	$ 2,189	$ 19,113
Income (loss) before provision for income taxes	89,759	13,001
Net (loss)	(91,948)	(6,112)
Net operating loss carry forward	1,519,000		$ 1,519,000
HONG KONG
Income tax expenses (benefit)	2,189	19,113
Net (loss)	11,076	115,834
UNITED STATES
Net (loss)	$ (103,024)	$ (102,833)

v3.24.3

CONCENTRATION OF RISK (Details Narrative)	3 Months Ended		12 Months Ended
	Oct. 31, 2024 USD ($)	Oct. 31, 2023	Jul. 31, 2024	Oct. 31, 2024 HKD ($)
Concentration Risk [Line Items]
Insured FDIC	$ 250,000
Compensation amount	$ 64,000			$ 500,000
Revenue Benchmark [Member] | Customer Concentration Risk [Member] | Customer One [Member]
Concentration Risk [Line Items]
Concentration risk percentage	56.50%	61.20%
Revenue Benchmark [Member] | Customer Concentration Risk [Member] | Customer Two [Member]
Concentration Risk [Line Items]
Concentration risk percentage	19.70%	13.10%
Accounts Receivable [Member] | Customer Concentration Risk [Member] | No Customers [Member]
Concentration Risk [Line Items]
Concentration Risk, Customer	As of October 31, 2024 and July 31, 2024, no customer accounted for over 10% of the Company’s total accounts receivable.		As of October 31, 2024 and July 31, 2024, no customer accounted for over 10% of the Company’s total accounts receivable.
Total Purchases [Member] | Customer Concentration Risk [Member] | Vendor One [Member]
Concentration Risk [Line Items]
Concentration risk percentage	59.00%	65.90%
Total Purchases [Member] | Customer Concentration Risk [Member] | Vendor Two [Member]
Concentration Risk [Line Items]
Concentration risk percentage	20.60%	13.70%
Total Purchases [Member] | Customer Concentration Risk [Member] | Vendor Three [Member]
Concentration Risk [Line Items]
Concentration risk percentage	1.30%
Accounts Payable [Member] | Customer Concentration Risk [Member] | No Customers [Member]
Concentration Risk [Line Items]
Concentration Risk, Customer	As of October 31, 2024 and July 31, 2024, no vendor accounted for over 10% of the Company’s total accounts payable.		As of October 31, 2024 and July 31, 2024, no vendor accounted for over 10% of the Company’s total accounts payable.
HONG KONG
Concentration Risk [Line Items]
Cash balance	$ 228,644
Credit risk	$ 158,000

v3.24.3

COMMITMENTS AND CONTINGENCIES (Details Narrative)					1 Months Ended					3 Months Ended
	Jan. 13, 2023 USD ($)	Jan. 13, 2023 HKD ($)	Jan. 01, 2021 USD ($)	Jan. 01, 2021 HKD ($)	Sep. 30, 2024 USD ($)	Sep. 30, 2024 HKD ($)	Sep. 30, 2023 USD ($)	Sep. 30, 2023 HKD ($)	Aug. 31, 2023 USD ($)	Oct. 31, 2024 USD ($)	Oct. 31, 2023 USD ($)	Aug. 02, 2022 USD ($)
Other Commitments [Line Items]
Rent expenses										$ 2,522	$ 3,184
Right-of-use asset recognized												$ 8,704
Incremental borrowing rate												5.00%
Decrease in operating lease liabilities										$ 0	$ (356)
Hong Kong Office Facility [Member]
Other Commitments [Line Items]
Decrease in operating lease liabilities									$ 6,080
Office Space Sharing Agreement [Member]
Other Commitments [Line Items]
Right-of-use asset recognized												$ 8,704
Monthly [Member]
Other Commitments [Line Items]
Rent expenses	$ 382	$ 3,000	$ 360	$ 2,800	$ 847	$ 6,650	$ 828	$ 6,500

v3.24.3

ENTERPRISE-WIDE DISCLOSURE (Details - Revenues by business) - USD ($)	3 Months Ended
	Oct. 31, 2024	Oct. 31, 2023
Revenue from External Customer [Line Items]
Total revenues	$ 2,980,940	$ 1,326,648
Electronic Device Hardware Components Sales [Member]
Revenue from External Customer [Line Items]
Total revenues	0	59,902
Software And Website Development Services [Member]
Revenue from External Customer [Line Items]
Total revenues	0	19,230
Software Maintenance And Business Promotion Services [Member]
Revenue from External Customer [Line Items]
Total revenues	0	15,263
Business Consulting Services [Member]
Revenue from External Customer [Line Items]
Total revenues	221,247	50,533
Global Logistics Services [Member]
Revenue from External Customer [Line Items]
Total revenues	$ 2,759,693	$ 1,181,720

v3.24.3

ENTERPRISE-WIDE DISCLOSURE (Details - Revenue by regions) - USD ($)	3 Months Ended
	Oct. 31, 2024	Oct. 31, 2023
Revenues from External Customers and Long-Lived Assets [Line Items]
Total revenues	$ 2,980,940	$ 1,326,648
HONG KONG
Revenues from External Customers and Long-Lived Assets [Line Items]
Total revenues	2,576,170	1,051,017
VIET NAM
Revenues from External Customers and Long-Lived Assets [Line Items]
Total revenues	166,770	173,531
JAPAN
Revenues from External Customers and Long-Lived Assets [Line Items]
Total revenues	238,000	100,850
SINGAPORE
Revenues from External Customers and Long-Lived Assets [Line Items]
Total revenues	$ 0	$ 1,250

v3.24.3

CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY (Unaudited) (Details - Balance sheets) - USD ($)	Oct. 31, 2024	Jul. 31, 2024
ASSETS
Cash	$ 323,793	$ 413,129
Total Assets	895,970	911,961
LIABILITIES
Total Liabilities	$ 197,908	$ 121,951
Stockholders’ Equity
Preferred stock, par value	$ 0.0001	$ 0.0001
Preferred stock, shares authorized	20,000,000	20,000,000
Common stock, $0.0001 par value, 100,000,000 shares authorized; 14,781,803 shares issued and outstanding as of October 31, 2024 and July 31, 2024	$ 1,478	$ 1,478
Common stock, par value	$ 0.0001	$ 0.0001
Common stock, shares authorized	100,000,000	100,000,000
Common stock, shares issued	14,781,803	14,781,803
Common stock, shares outstanding	14,781,803	14,781,803
Additional paid-in capital	$ 962,416	$ 962,416
Accumulated deficit	(315,127)	(222,071)
Total Stockholders’ Equity	648,775	741,831
Total Liabilities and Stockholders’ Equity	$ 895,970	$ 911,961
Series A Preferred Stock [Member]
Stockholders’ Equity
Preferred stock, par value	$ 0.0001	$ 0.0001
Preferred stock, shares authorized	80,000	80,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Preferred stock value	$ 0	$ 0
Series B Preferred Stock [Member]
Stockholders’ Equity
Preferred stock, par value	$ 0.0001	$ 0.0001
Preferred stock, shares authorized	80,000	80,000
Preferred stock, shares issued	80,000	80,000
Preferred stock, shares outstanding	80,000	80,000
Preferred stock value	$ 8	$ 8
Undesignated Preferred Stock [Member]
Stockholders’ Equity
Preferred stock, par value	$ 0.0001	$ 0.0001
Preferred stock, shares authorized	19,920,000	19,920,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Preferred stock value	$ 0	$ 0
Consolidated Entities [Member]
ASSETS
Cash	94,651	14,621
Prepaid expense	1,040	1,820
Investment in subsidiaries	665,755	781,661
Total Assets	761,446	798,102
LIABILITIES
Accounts payable and other accrued liabilities	110,400	54,000
Payable to subsidiaries	512,416	312,416
Due to related parties	2,271	2,271
Total Liabilities	112,671	56,271
Stockholders’ Equity
Common stock, $0.0001 par value, 100,000,000 shares authorized; 14,781,803 shares issued and outstanding as of October 31, 2024 and July 31, 2024	1,478	1,478
Additional paid-in capital	962,416	962,416
Accumulated deficit	(315,127)	(222,071)
Total Stockholders’ Equity	648,775	741,831
Total Liabilities and Stockholders’ Equity	$ 761,446	$ 798,102

v3.24.3

CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY (Unaudited) (Details - Statements of operations) - USD ($)	3 Months Ended
	Oct. 31, 2024	Oct. 31, 2023
EXPENSE:
General and administrative	$ 260,393	$ 118,705
OTHER INCOME
Other income net	27,391	0
Net (loss)	(93,056)	(15,784)
Consolidated Entities [Member]
EXPENSE:
General and administrative	(130,415)	(102,833)
OTHER INCOME
Gain from investment in subsidiaries	(9,968)	(87,049)
Other income net	27,391	0
Total other income	37,359	87,049
Net (loss)	$ (93,056)	$ (15,784)

v3.24.3

CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY (Unaudited) (Details - Statements of cash flows) - USD ($)	3 Months Ended
	Oct. 31, 2024	Oct. 31, 2023
Cash flows from operating activities:
Net (loss)	$ (93,056)	$ (15,784)
Change in operating assets and liabilities:
Prepaid expense and other assets	780	750
Net cash (used in) operating activities	(15,211)	124,491
Cash flows from financing activities:
Net cash provided by financing activities	(74,125)	0
Net (decrease) increase in cash and cash equivalents	(89,336)	124,491
Consolidated Entities [Member]
Cash flows from operating activities:
Net (loss)	(93,056)	(15,784)
Adjustments to reconcile net income to net cash provided by operating activities:
Share of (gain) from investment in subsidiaries	(9,968)	(87,049)
Change in operating assets and liabilities:
Prepaid expense and other assets	(780)	(750)
Accounts payable and other accrued liabilities	56,399	59,352
Net cash (used in) operating activities	(45,845)	(42,731)
Cash flows from financing activities:
Operating proceeds from subsidiaries	200,000
Deferred offering costs incurred	(74,125)	0
Net cash provided by financing activities	125,875	0
Net (decrease) increase in cash and cash equivalents	80,030	(42,731)
Cash and cash equivalents at beginning	14,621	66,553
Cash and cash equivalents at ending	$ 94,651	$ 23,822

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