UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_____________________
FORM
(Mark One)
| ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. | |
| FOR THE FISCAL YEAR ENDED | |
| TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
| For the transition period from _____ to _____ |
Commission File No.
| (Exact Name of Registrant as Specified in its Charter) | |||
| (State or Other Jurisdiction of incorporation or organization) | (I.R.S. Employer I.D. No.) | ||
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| (Address of Principal Executive Offices) | |||
| Registrant’s Telephone Number: |
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Securities Registered Pursuant to Section 12(b) of the Act:
| Title of Each Class | Trading Symbol | Name of Each Exchange on Which Registered |
| None | None | Not Applicable |
Securities Registered Pursuant to Section 12(g) of the Act:
Indicate by check mark if the registrant is a well-known seasoned
issuer, as defined in Rule 406 of the Securities Act. Yes ☐
Indicate by check mark if the registrant is not required to file reports
pursuant to Section 13 or Section 15(d) of the Act.
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Sections 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically
every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the
preceding 12 months (or for such shorter period that the registrant was required to submit such files.)
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 ☐ |
| Smaller reporting company | |
| Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant
has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial
reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or
issued its audit report.
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate by check mark whether the registrant is a shell company (as
defined in Rule 12b-2 of the Exchange Act). Yes
As of January 31. 2023 (the last business day of the most recently
completed second fiscal quarter) the aggregate market value of the common stock held by non-affiliates was $
As of October 20, 2023, there were shares of common stock outstanding.
DOCUMENTS INCORPORATED BY REFERENCE: None
FORWARD-LOOKING STATEMENTS: NO ASSURANCES INTENDED
This Annual Report contains certain forward-looking statements regarding Tianci International, Inc., its business and financial prospects. All statements that address events or developments that we expect or anticipate will occur in the future are forward-looking statements. These statements represent Management’s best estimate of what will happen. Nevertheless, there are numerous risks and uncertainties that could cause our actual results to differ dramatically from the results suggested in this Report, including the contingencies described in this Report under Item 1A titled "Risk Factors".
Because these and other risks may cause the Company’s actual results to differ from those anticipated by Management, the reader should not place undue reliance on any forward-looking statements that appear in this Report.
PART 1
Item 1. Business
The Share Exchange
On March 6, 2023 Tianci International, Inc. ("Tianci"), which had previously been a shell corporation with no business operations, completed a share exchange with RQS Capital Limited (“RQS Capital”), in which RQS Capital transferred all of the issued and outstanding capital stock of RQS United Group Limited (“RQS United”) to Tianci, and Tianci issued to RQS Capital 1,500,000 shares of its common stock and paid a cash price of $350,000 (the “Share Exchange”).
RQS United is a holding company incorporated in the Republic of Seychelles. RQS United has no operations other than holding 90% of the outstanding share capital of its subsidiary, Roshing International Co., Ltd., a company organized under the laws of Hong Kong (“Roshing”). Shufang Gao and Ying Deng, who are officers and members of Tianci's Board of Directors are also officers and directors of Roshing. Ying Deng owns the 10% of Roshing that is not owned by RQS United.
The Share Exchange has been accounted for as a “reverse acquisition” effected as a recapitalization, wherein RQS United was considered the acquirer for accounting and financial reporting purposes. The assets and liabilities of the acquired entity have been brought forward at their book value and no goodwill has been recognized on Tianci’s financial statements.
The Business of Roshing
Roshing was incorporated on June 22, 2011 and is engaged in the sale of components of electronic devices, development of software and websites, technical consulting, and providing maintenance support on customized software. Roshing’s business is primarily carried out in Hong Kong, although we realize a substantial portion of our software development and related services revenue in Singapore.
To date, Roshing has carried on operations in five categories:
a. Electronic Device Hardware Components Product Sales
Roshing distributes hardware components to manufacturers of electronic devices. Roshing’s product line includes high performance computer chips, Wi-Fi modules, Bluetooth modules, 4G network modules, LED screens, and touch screens. Roshing markets off-the-shelf products, which it ships directly from the manufacturer to Roshing’s customer.
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b. Software and Website Development Services
Roshing develops customized freight shipping and related logistic software and websites. The software helps wholesalers, ecommerce retailers, and freight forwarders to manage complex workflows and improve work efficiency by enabling shipping workflow management, sea shipping container management, ecommerce inventory and shipping management, and logistics data analysis.
c. Technical Consulting and Training 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. Services are generally carried out on a per-time fixed rate basis.
d. Software Maintenance and Business Promotion Services
Roshing provides software maintenance service to keep customer’s software up to date. Roshing also 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.
e. Business Consulting Services
Roshing assists business enterprises in preparing applications for immigration and non-immigration visas. Roshing performs background checks and cash analysis, then assists the client in preparing the visa application(s). The Company charges a flat fee for these services.
Moving forward, by leveraging the professional experience and market resources of the senior management team, Roshing is expected to provide a wide variety of shipping & freight forward services, including sea freight forwarding, air freight forwarding, trucking, and warehousing.
Marketing
Roshing markets its hardware products directly to the electronic device industry and markets its software directly to wholesalers. In each case, the primary method of marketing is participation by our engineering staff in events such as expos, seminars and industry association meetings that are focused on our target markets. We present Roshing as a valuable assistant to the customer, with the goal of developing a long-term relationship with repeat orders. As a result of this strategic focus, almost 96% of our sales during fiscal year 2022 were made to just five customers, and 52% of our sales during fiscal year 2023 were made to two customers.
Vendors
Roshing distributes electronic components manufactured by a variety of vendors. There is no vendor that, were our relationship to terminate, we could not adequately replace promptly.
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Roshing employs two software engineers and a logistics project manager, who are together dedicated to fulfillment of the software development contracts entered by Roshing. When the flow of software development contracts exceeds the production capacities of those three employees, Roshing subcontracts to third party developers that it has tested for competence.
The core software package that Roshing markets to wholesalers was designed under an Entrusted Custom Development Protocol signed by Roshing and Vendor A. The Protocol provides for Vendor A’s continued involvement in Roshing’s marketing of software, detailing the terms under which Roshing may engage Vendor A to develop specific applications of the software package for customers of Roshing.
Competition
Roshing competes in all of its market operations with a large number of competitors, big and small. Roshing competes based on the quality of its services and attention to the needs of its customers. Specifically, we focus on the following factors to capture customer preference:
| · | Commitment to product and service quality, development, and innovation. | |
| Our emphasis on highly customized software solutions and high-quality hardware products attaches an aura of quality to our market presence. | ||
| · | Comprehensive and high standard product range. | |
| We offer a wide range of high quality and sophisticated hardware component products. | ||
| · | Special focus on logistic industry | |
| Our software-related services provide a comprehensive solution for customers in the logistic industry. |
Employees
Roshing has eight employees in addition to its directors: Shufang Gao and Ying Deng. Two employees are focused on marketing and administration; the remaining six are engineers or project managers. Roshing believes its relations with its employees are good.
Our Plan for the Future
Our plan is to rely on the following key factors to enable the growth of our business.
| · | Our ability to retain and increase customers |
Our ability to increase our revenues and our profitability will depend on our ability to retain our existing customers as well as to continue to increase our customer base and revenue per customer. To achieve this, we strive to increase our marketing efforts and to enhance the quality and capabilities of our software solutions. Currently we have customers in Hong Kong and Singapore, and we expect to continue expanding our business to other countries of the Asia-Pacific region.
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| · | Investment in talent |
We believe that a core element of the competitiveness of our business is talent. To retain existing and attract potential customers, we will continue to rely on our people and their knowledge and experience in the industry. We intend to acquire top talent to keep pace with the growth of our target industries and continue to offer cutting-edge hardware and software solutions.
| · | Our ability to pursue strategic opportunities for growth |
To enhance Roshing’s capabilities, we intend to pursue strategic acquisitions and make investments in select technologies and businesses, particularly in industries with which our senior management has experience. We believe that a solid acquisition and investment strategy will be critical for us to accelerate our growth and strengthen our competitive position in the future.
Item 1A. Risk Factors
Investing in our common stock involves risk. You should carefully consider the risks described below together with all of the other information contained in this Report, including the financial statements and the related notes, before deciding whether to purchase any shares of our common stock. If any of the following risks is realized, our business, financial condition or operating results could materially suffer. In that event, the trading price of our common stock could decline and you may lose all or part of your investment.
I. RISKS RELATED TO OUR BUSINESS
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. 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 related to the evolving effects of the COVID-19 pandemic and those 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 will not be successful.
The revenue generated to date by our business has come from a small number of customers. During the year ended July 31, 2022, five customers were responsible for over 95% 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 multiply our revenue many-fold. To accomplish that, we must dramatically expand our customer base. If we fail to multiply our customers, Tianci’s stock will have no significant value.
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.
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We 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.
We do not maintain fire, theft, product liability or other insurance of any kind. We 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.
II. RISKS RELATED TO DOING BUSINESS IN HONG KONG
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.
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 a few of our clients are PRC corporations. At the present time, we are not materially affected by recent statements by the Chinese 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 PRC 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 Chinese government to which we are subject may change rapidly and with little advance notice to us or our shareholders. 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 China with little advance notice, including cracking down on illegal activities in the securities market, enhancing supervision over 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. 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 an 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 China-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.
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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 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 shareholders and service any debt we may incur. If our 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 PRC 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 measured 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 is exclusively in charge of its internal affairs and external relations, 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.
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III. RISKS RELATED TO AN INVESTMENT IN OUR COMMON STOCK
Even if a market for our common stock develops, the stock price is nevertheless likely to be volatile. You may have difficulty obtaining a price for your shares that you consider reasonable.
Although Tianci’s common stock is listed for trading on the OTC Pink Market maintained by OTC Markets, the market for the common stock is very thin, with only occasional trades at prices that increase or decrease significantly and suddenly. Therefore, if an investor wants to sell shares, there may be no buyer available, or the price offered may be less than the actual value of the shares. Unless and until significant daily volume occurs in the trading market for our shares, the price of the common stock will be affected by many factors that are beyond our control and may not be directly related to our operating performance. As a result of these factors, you cannot be assured that when you are ready to sell your shares, the market price will accurately reflect the value of your shares or that you will be able to obtain a reasonable price for your shares.
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 holding company owns securities with 68% 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, shareholders would be subject to decisions made by management and the majority shareholder.
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 and have a material adverse effect on our earnings.
Our Board of Directors is authorized to issue up to 100,000,000 shares of common stock and up to 20,000,000 shares of undesignated preferred stock. Our Board of Directors has the authority to issue additional shares of common stock without consent of any of our stockholders. 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 shareholders.
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 licensing additional brands, 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.
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Because we will be subject to “penny stock” rules, the level of trading activity in our stock may be reduced.
Until we are able to secure a listing for our common stock on a national securities exchange, it is likely that our common stock will be classified as a “penny stock”. Penny stocks generally are equity securities with a price of less than $5.00 (other than securities registered on some national securities exchanges). Broker-dealer practices in connection with transactions in “penny stocks” are regulated by penny stock rules adopted by the Securities and Exchange Commission. The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document that provides information about penny stocks and the nature and level of risks in the penny stock market. The broker-dealer also must provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction, and, if the broker-dealer is the sole market maker, the broker-dealer must disclose this fact and the broker-dealer’s presumed control over the market, and monthly account statements showing the market value of each penny stock held in the customer’s account. In addition, broker-dealers who sell these securities to persons other than established customers and “accredited investors” must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s written agreement to the transaction. Consequently, these requirements may have the effect of reducing the level of trading activity, if any, in the secondary market for a security subject to the penny stock rules. If a trading market does develop for our common stock, these regulations will likely be applicable, and investors in our common stock may find it difficult to sell their shares.
FINRA sales practice requirements may limit a stockholder’s ability to buy and sell our stock.
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, FINRA believes that there is a high probability that speculative low-priced securities will not be suitable for at least some customers. FINRA requirements make it more difficult for broker-dealers to recommend that their customers buy our common stock, which may have the effect of reducing the level of trading activity in our common stock. As a result, fewer broker-dealers may be willing to make a market in our common stock, reducing a stockholder’s ability to resell shares of our common stock.
Item 1B. Unresolved Staff Comments
Not applicable.
Item 1B. Cybersecurity
Not applicable.
Item 2. Properties
The executive offices of Roshing are located in Hong Kong at 2/F No. 18, Area 2, So Kuwn Wat Village, Tuen Mun Hong Kong. Roshing leases the offices for a monthly rent of HKD 3,000 (@ U.S.$386). The lease terminates on January 12, 2025.
Roshing also utilized office space in Shenzhen, China located at Building 8, 26/F, Suite 2605A, Qianhai Zhuoyue Jinrong Center (Phase 1) Unit 2, Guiwan Area, Nanshan District, Shenzhen. Roshing used the space under a sublease that will terminate on August 31, 2024. The monthly rental (from $1,827 to $2,014) is paid by Shufang Gao and Ying Deng, members of Tianci’s Board of Directors and directors of Roshing, as a contribution to the capital of RQS Limited. The sublease was terminated on May 31, 2023.
Management believes the real property leased by Roshing will be adequate for its operations for the foreseeable future.
Item 3. Legal Proceedings
Neither Tianci International nor any of its subsidiaries is party to material pending legal proceedings, other than ordinary routine litigation incidental to the product distribution business.
Item 4. Mine Safety Disclosures.
Not Applicable.
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PART II
Item 5. Market For Registrant’s Common Equity, Related Stockholder Matters And Issuer Purchases Of Equity Securities.
(a) Market Information
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.
(b) Shareholders
Our shareholders list contains the names of 111 stockholders of record of the Company’s Common Stock.
(c) Dividends
Any future decisions regarding dividends will be made by our board of directors. We currently intend to retain and use any future earnings for the development and expansion of our business and do not anticipate paying any cash dividends in the foreseeable future. Our board of directors has complete discretion on whether to pay dividends, subject to the approval of our stockholders. Even if our board of directors decides to pay dividends, the form, frequency and amount will depend upon our future operations and earnings, capital requirements and surplus, general financial condition, contractual restrictions and other factors that the board of directors may deem relevant.
(d) Securities Authorized for Issuance Under Equity Compensation Plans
The Company had no securities authorized for issuance under equity compensation plans as of July 31, 2023.
(e) Sale of Unregistered Securities
The Company did not make any sale of unregistered securities during the 4th quarter of fiscal year 2023.
(f) Repurchase of Equity Securities
The Company did not repurchase any shares of its common stock during the 4th quarter of fiscal year 2023.
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| Item 7. | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
Overview
On March 3, 2023, Tianci acquired ownership of RQS United Group Limited, a company organized under the laws of the Republic of Seychelles (“RQS United”), pursuant to the Share Exchange Agreement dated March 3, 2023 among the Company, RQS United and RQS Capital Limited, the prior owner of RQS Limited.
RQS United is a holding company incorporated in the Republic of Seychelles. RQS United has no operations other than holding 90% of the outstanding share capital of its subsidiary, Roshing International Co., Ltd., a company organized under the laws of Hong Kong (“Roshing”). Roshing was incorporated on June 22, 2011 and is engaged in the sale of components of electronic devices, development of software and websites, technical consulting, and providing maintenance support on customized software. Roshing started also providing immigration-related consulting services in the most recent quarter. Moving forward, by leveraging the professional experience and market resources of the senior management team, Roshing is expected to provide a wide variety of freight forward services, including sea freight forwarding, air freight forwarding, trucking, warehousing, and custom clearance services. Roshing’s business is primarily carried out in Hong Kong, although we realize a substantial portion of our software development revenue in Singapore.
Results of Operations
Comparison of the year ended July 31, 2023 and 2022
| For the year ended July 31, | ||||||||||||||||
| 2023 | 2022 | Change | Change Percentage | |||||||||||||
| Revenues | 452,409 | 752,839 | (300,430 | ) | -40% | |||||||||||
| Cost of Revenues | 456,494 | 478,521 | (22,027 | ) | -5% | |||||||||||
| Gross (loss) income | (4,085 | ) | 274,318 | (278,403 | ) | -101% | ||||||||||
| Selling and marketing | 54,169 | 4,912 | 49,257 | 1003% | ||||||||||||
| General and administrative | 285,740 | 77,590 | 208,150 | 268% | ||||||||||||
| (Loss) income from operations | (343,994 | ) | 191,816 | (535,810 | ) | -279% | ||||||||||
| Provision for income taxes | 12,095 | 31,650 | (19,555 | ) | -62% | |||||||||||
| Net (loss) income | (356,089 | ) | 160,166 | (516,255 | ) | -322% | ||||||||||
| Less: net (loss) income attributable to non-controlling interest | (14,879 | ) | 16,017 | (30,896 | ) | -193% | ||||||||||
| Net (loss) income attributable to Tianci | (341,210 | ) | 144,149 | (485,359 | ) | -337% | ||||||||||
Revenues
During the year ended July 31, 2023, our revenue decreased by $300,430, or approximately 40%, to $452,409 for the year ended July 31, 2023 from $752,839 for the year ended July 31, 2022. We experienced decline in both product and service revenues in 2023 due to diminishing market demand and our reduction in marketing expenses. We expect our revenue to grow after we add freight forward services to our lines of business.
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Our revenues from our revenue categories are summarized as follows:
| For the Year Ended July 31, | ||||||||
| 2023 | 2022 | |||||||
| Product Revenues | $ | 294,880 | $ | 500,500 | ||||
| Service Revenues | $ | 157,529 | $ | 252,339 | ||||
| $ | 452,409 | $ | 752,839 | |||||
Cost of Revenues
Total cost of revenues decreased by $22,027, or approximately 5%, to $456,494 for the year ended July 31, 2023 as compared to $478,521 for the year ended July 31, 2022. Our cost of revenues from our revenue categories are summarized as follows:
| For the Year Ended July 31, | ||||||||
| 2023 | 2022 | |||||||
| Cost of Product | $ | 227,660 | $ | 336,644 | ||||
| Cost of Service | $ | 228,834 | $ | 141,877 | ||||
| $ | 456,494 | $ | 478,521 | |||||
The year-to-year decrease in our cost of revenues is primarily attributable to the decrease in our revenue. Thus, our cost of revenues from hardware product sales decreased to $227,660 for the year ended July 31, 2023, from $336,644 for the year ended July 31, 2022, as we experienced a 41% decrease in hardware product sales.
Nevertheless, overall cost of revenue fell only 5%, while overall revenue fell by 40%. The disparity occurred because our cost of revenues from software related services increased by $86,957 to $228,834 for the year ended July 31, 2023, from $141,877 for the year ended July 31, 2022. The increase in cost of revenues from software related services resulted from our grant of common stock as an incentive to our internal software developers. We recorded the $144,000 fair value of the shares as a cost of services.
Gross Profit
We had a gross loss of $4,085 for the year ended July 31, 2023 compared to a gross profit of $274,318 for the year July 31, 2022, which was primarily due to the reduction in revenue without a corresponding reduction in our overall cost of revenues, as discussed above.
The gross profit margin of hardware products decrease by 9.9% to 22.8% for the year ended July 31, 2023, from 32.7% for the year ended July 31, 2022, which was primarily due to rising raw material cost and increasing market competition, which put downward pressure on our pricing. Our software related services resulted in a 45.3 % gross loss for the year ended July 31, 2023, again primarily due to the stock-based compensation issued to our developers.
| 12 |
Operating Expenses
There was significant change in our total operating expenses, which were $339,909 and $82,502 for the year ended July 31, 2023, and 2022, respectively. Our operating expenses primarily include payroll expenses, advertising and rent. The increase was partially due to the stock compensation valued at $66,000 that we issued to the selling and general administrative personnel for their continued service after the reverse merger. The professional fees and other costs incurred in connection with the Share Exchange in March 2023 also increased our operating expenses for fiscal year 2023.
Income tax expense
Our income tax expense amounted to $ 12,095 and $ 31,650 for the year ended July 31, 2023, and 2022, respectively. The change was mainly due to the decrease in profits subject to taxation in Hong Kong.
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 July 31, 2023, our working capital deficit was $(284,543), our cash amounted to $256,342, our current assets were $312,226 and our current liabilities were $596,768. To date, we have financed our operations primarily through capital contributions and advances from shareholders. At July 31, 2023 we owed $276,077 to related parties (See Note 3 of the interim financial statement) and $240,800 to officers for compensation under their employment agreements.
We believe our liquidity and working capital will be sufficient to sustain our business operation for the next twelve months. We may, however, need additional cash resources in the future if there are changes in business conditions or other developments or if the company finds and wishes to pursue opportunities for investment, acquisition, capital expenditure, or similar actions.
We are planning to enter the shipping & freight forwarding services in 2023, which may require significant capital expenditure for developing the business. If we determined that our cash requirements exceed the amount of cash and cash equivalents we have on hand at the time, we may seek to issue equity or debt securities or obtain credit facilities. The issuance and sale of additional equity may result in dilution to our shareholders. The incurrence of indebtedness would result in increased fixed obligations and could result in operating covenants that would restrict our operations. Our obligation to bear credit risk for certain financing transactions we facilitate may also strain our operating cash flow. We cannot assure you that financing will be available in amounts or on terms acceptable to us, if at all.
The following summarizes the key components of our cash flows for the year ended July 31, 2023 and 2022.
| For the year ended | ||||||||
| July 31, | ||||||||
| 2023 | 2022 | |||||||
| Net cash provided by (used in) operating activities | $ | 324,581 | $ | (84,161 | ) | |||
| Net cash used in investing activities | – | – | ||||||
| Net cash provided by (used in) financing activities | (89,476 | ) | 85,148 | |||||
| Net change in cash and restricted cash | $ | 235,105 | $ | 987 | ||||
| 13 |
Operating activities
Despite our net loss of $356,089, net cash was provided by operating activities for the year ended July 31, 2023 primarily because our accounts receivable decreased by $737,663 during the period, as we made efforts on the collection process. The decrease was offset by a decrease of $447,292 in our accounts payable balance attributable to payment to our vendors. In addition, our operating loss of $356,089 included $210,000 in various noncash items.
Net cash was used in operating activities for the year ended July 31, 2022 primarily because our accounts receivable increased by $737,620 during the year, as we offer long payment terms to our customers, typically 6 months after delivery of service or products. Nevertheless, cash used in operations during the fiscal year was only $84,161, as we increased our accounts payable balance by $444,944 attributable to long payment terms from our vendors, recorded net income of $160,166, and increased deferred income tax expense, inventory, and income taxes payable for a total amount of $ 48,349.
Investing activities
The company has no investing activities for the years ended July 31, 2023 and 2022.
Financing activities
Net cash used in financing activities for the year ended July 31, 2023 was $89,476, which was primarily attributable to our repayment of a working capital advance by a related party in the amount of $341,885. Cash outflow was offset by the $31,490 in working capital advance from related parties, $84,503 in operating expenses that were paid directly by shareholders, the payments of Shenzhen China rent by related parties amounting to $16,580, the receipt of a subscription receivable of $50,000, and a capital contribution of $65,650.
Net cash provided by financing activities for the year ended July 31, 2022, was primarily attributable to a working capital advance from a related party amounting to $2,007, the operating expenses that are paid directly by shareholders amounting to $77,375, and the payments of Shenzhen China rent by related parities amounting to $20,046. Cash inflow was offset by repayment of a working capital advance to related party in the amount of $14,280.
Impact of the COVID-19 Pandemic
The global outbreak of COVID-19 and resulting health crisis has caused, and continues to cause, significant and widespread disruptions to the Hong Kong and global economies, financial and consumer markets. We believe, however, that the COVID-19 outbreak has had very limited impact on our business.
During the course of the COVID-19 pandemic, public health officials and other governmental authorities have imposed and may impose new mitigation measures, regulations and requirements to address the spread of COVID-19. Public health officials and other governmental authorities also have imposed directives and may impose additional directives that could require changes in our business practices. The scope and duration of these mitigation measures and directives continue to evolve throughout the course of the COVID-19 pandemic. Depending on the future course of COVID-19 and further outbreaks, we may experience restrictions and temporary closures of our offices.
| 14 |
Although we have continued to serve our clients and operate our business throughout the COVID-19 pandemic, there can be no assurance that future events will not have an effect on our business, results of operations or financial condition because the extent and duration of the health crisis remains uncertain. Future adverse developments in connection with the COVID-19 crisis, including further outbreaks and new strains or variants of COVID-19, evolving international, federal, state and local restrictions and safety regulations in response to COVID-19, changes in consumer behavior and health concerns, the pace of economic activity in the wake of COVID-19, or other similar issues could adversely affect our business, results of operations or financial condition in the future, or our financial results and business performance in future periods.
We continue to actively manage the impact of the COVID-19 crisis as we face continued uncertainty regarding the impact COVID-19 will have on our financial operations in the near and long term. The need for, or timing of, any future actions in response to COVID-19 is largely dependent on the mitigation of the spread of the virus along with the adoption and continued effectiveness of vaccines, status of government orders, directives and guidelines, recovery of the business environment, global supply chain conditions, economic conditions, and consumer demand for our products and services, all of which are highly uncertain.
Critical Accounting 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, 2023, there was no accounting estimate we made that was subject to a high degree of uncertainty and was critical to our results.
Recently Issued Accounting Pronouncements
The Company 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, statements of operations and comprehensive income and statements of cash flows.
Item 7a Quantitative And Qualitative Disclosures About Market Risk.
Not Applicable.
| 15 |
Item 8. Financial Statements
INDEX TO FINANCIAL STATEMENTS
| 16 |
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
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 sheets of Tianci International, Inc. (the “Company”) as of July 31, 2023 and July 31, 2022 and the related consolidated statements of operations, changes in stockholders’ equity, and cash flows for the years 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 July 31, 2022, and the results of its operations and cash flows for the years then ended in conformity with accounting principles generally accepted in the United States.
Explanatory Paragraph Regarding Going Concern
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the consolidated financial statements, the Company’s present financial situation raises substantial doubt about its ability to continue as a going concern. Management’s plans in regard do this matter are also described in 1. These financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Basis for 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 audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits 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 audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence 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 audits provide 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.
October 20, 2023
PCAOB ID #
We have served as the Company’s auditor since 2023.
| F-1 |
TIANCI INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(EXPRESSED IN UNITED STATES DOLLARS)
| July 31, | July 31, | |||||||
| 2023 | 2022 | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash | $ | $ | ||||||
| Accounts receivable | ||||||||
| Prepaid expense | ||||||||
| Due from related party | ||||||||
| Total current assets | ||||||||
| Other assets: | ||||||||
| Lease security deposit | ||||||||
| Right-of-use asset | ||||||||
| Total non-current assets | ||||||||
| TOTAL ASSETS | $ | $ | ||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | $ | ||||||
| Income taxes payable | ||||||||
| Due to related parties | ||||||||
| Lease liability - current | ||||||||
| Advances from customers | ||||||||
| Accrued liabilities and other payables | ||||||||
| Total current liabilities | ||||||||
| Lease liability - noncurrent | ||||||||
| Total liabilities | ||||||||
| Commitments and contingencies | ||||||||
| Stockholders’ equity (deficit): | ||||||||
| Series A Preferred stock, $ par value; shares authorized; and shares issued and outstanding as of July 31, 2023 and 2022, respectively | ||||||||
| Undesignated preferred stock, $ par value; shares authorized; shares issued and outstanding | ||||||||
| Common stock, $ par value, shares authorized; and shares issued and outstanding as of July 31, 2023 and 2022, respectively* | ||||||||
| Subscription receivable | ( | ) | ||||||
| Additional paid-in capital | ||||||||
| Retained earnings (accumulated deficit) | ( | ) | ||||||
| Total stockholders' equity (deficit) attributable to TIANCI INTERNATIONAL, INC. | ( | ) | ||||||
| Non-controlling interest | ( | ) | ||||||
| Total stockholders’ equity (deficit) | ( | ) | ||||||
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | $ | ||||||
| * |
The accompanying notes are an integral part of these consolidated financial statements.
| F-2 |
TIANCI INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(EXPRESSED IN UNITED STATES DOLLARS)
| For the year ended July 31, | ||||||||
| 2023 | 2022 | |||||||
| OPERATING REVENUES | ||||||||
| Products | $ | $ | ||||||
| Services | ||||||||
| Total Operating Revenues | ||||||||
| COST OF REVENUES | ||||||||
| Products | ||||||||
| Services (including stock-based compensation of $ | ||||||||
| Total Cost of Revenues | ||||||||
| Gross profit (loss) | ( | ) | ||||||
| Operating expenses: | ||||||||
| Selling and marketing (including stock-based compensation of $ | ||||||||
| General and administrative (including stock-based compensation of $ | ||||||||
| Total operating expenses | ||||||||
| (Loss) income from operations | ( | ) | ||||||
| Other income (expense) | ||||||||
| (Loss) income before provision for (benefit from) income taxes | ( | ) | ||||||
| Provision for income taxes | ||||||||
| Net (loss) income | ( | ) | ||||||
| Net (loss) income attributable to non-controlling interest | ||||||||
| Net (loss) income attributable to TIANCI INTERNATIONAL, INC. | $ | ( | ) | $ | ||||
| Weighted average number of common shares* | ||||||||
| Basic and diluted | ||||||||
| Earnings (loss) per common share attributable to TIANCI INTERNATIONAL, INC.* | ||||||||
| Basic and diluted | $ | ) | $ | |||||
| Weighted average number of preferred shares* | ||||||||
| Basic and diluted | ||||||||
| Earnings (loss) per preferred share attributable to TIANCI INTERNATIONAL, INC.* | ||||||||
| Basic and diluted | $ | ) | $ | |||||
| * |
The accompanying notes are an integral part of these consolidated financial statements.
| F-3 |
TIANCI INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
FOR THE YEARS ENDED JULY 31, 2023 AND 2022
(EXPRESSED IN UNITED STATES DOLLARS)
| Preferred Stock | Preferred Stock amount* | Common stock* | Common stock amount* | Subscription receivable* | Additional Paid-in Capital | (Accumulated Deficit) Retained Earnings | Noncontrolling interest | Total | ||||||||||||||||||||||||||||
| Balance at July 31, 2021 | $ | $ | $ | ( | ) | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||||||||||||||||||||
| Payments of Shenzhen China rent by related parties (Note 3) | – | – | ||||||||||||||||||||||||||||||||||
| Net income | – | – | ||||||||||||||||||||||||||||||||||
| Balance at July 31, 2022 | $ | $ | $ | ( | ) | $ | $ | $ | $ | |||||||||||||||||||||||||||
| RQS United subscription receivable | – | – | ||||||||||||||||||||||||||||||||||
| Capital contribution | – | – | ||||||||||||||||||||||||||||||||||
| Payments of Shenzhen China rent by related parties (Note 3) | – | – | ||||||||||||||||||||||||||||||||||
| Stock compensation issued | – | |||||||||||||||||||||||||||||||||||
| Reverse merger adjustment | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||
| Net (loss) | – | – | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||
| Balance at July 31, 2023 | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||||||||||||||||||||||
| * |
The accompanying notes are an integral part of these consolidated financial statements.
| F-4 |
TIANCI INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(EXPRESSED IN UNITED STATES DOLLARS)
| For the year ended July 31, | ||||||||
| 2023 | 2022 | |||||||
| Cash flows from operating activities: | ||||||||
| Net (loss) income | $ | ( | ) | $ | ||||
| Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities: | ||||||||
| Deferred income tax benefit | ||||||||
| Stock compensation issued | ||||||||
| Change in operating assets and liabilities: | ||||||||
| Accounts receivable | ( | ) | ||||||
| Inventory | ||||||||
| Prepaid expense | ||||||||
| Advance from customers | ||||||||
| Accounts payable | ( | ) | ||||||
| Income taxes payable | ||||||||
| Accrued liabilities and other payables | ||||||||
| Net cash (used in) provided by operating activities | ( | ) | ||||||
| Cash flows from financing activities: | ||||||||
| Cash received in connection with reverse acquisition | ||||||||
| Subscription receivable collected | ||||||||
| Capital contribution received | ||||||||
| Working capital advance from related party | ||||||||
| Repayment of working capital advance from related party | ( | ) | ( | ) | ||||
| Operating expenses directly paid by shareholders | ||||||||
| Payments of Shenzhen China rent by related parties | ||||||||
| Net cash (used in) provided by financing activities | ( | ) | ||||||
| Net increase in cash | ||||||||
| Cash, beginning | ||||||||
| Cash, ending | $ | $ | ||||||
| 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 | $ | $ | ||||||
| Noncash assets (liabilities) received in connection with reverse acquisition: | ||||||||
| Prepaid expense and other current assets | $ | $ | ||||||
| Accounts payable | ( | ) | ||||||
| Due to related parties | ( | ) | ||||||
| Accrued liabilities and other payables | ( | ) | ||||||
| Net | $ | ( | ) | $ | ||||
The accompanying notes are an integral part of these consolidated financial statements.
| F-5 |
TIANCI INTERNATIONAL, INC.
Notes To Consolidated Financial Statements
For the years ended July 31, 2023 and 2022
NOTE 1 – NATURE OF BUSINESS AND ORGANIZATION
Tianci International,
Inc. (the “Company”, “Tianci”) was incorporated under the laws of the State of Nevada as Freedom Petroleum, Inc.
on June 13, 2012. In May 2015, the Company changed its name to Steampunk Wizards, Inc. and on November 9, 2016, the Company changed its
name to Tianci International, Inc. The Company is a holding company. As of July 31, 2023, the Company had one operating subsidiary, Roshing
International Co., Ltd. (“Roshing”). The Company owns
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
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.
RQS United is a holding company incorporated on November 4, 2022 in the Republic of Seychelles. RQS United has no substantive operations other than holding 90% of the outstanding share capital of its subsidiary, Roshing, which was incorporated on June 22, 2011 in Hong Kong and is principally engaged in sales of electronic device hardware components, development of software and websites, technical consulting, and maintenance support on customized software. Roshing’s business is primarily carried out in Hong Kong and China.
Prior to the Share Exchange, the Company 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.
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 $
| F-6 |
TIANCI INTERNATIONAL, INC.
Notes To Consolidated Financial Statements
For the years ended July 31, 2023 and 2022
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, 2023 and 2022,
| F-7 |
TIANCI INTERNATIONAL, INC.
Notes To Consolidated Financial Statements
For the years ended July 31, 2023 and 2022
Fair Value Measurements
The accounting standard regarding fair value of financial instruments and related fair value measurements defines financial instruments and requires disclosure of the fair value of financial instruments held by the Company.
The accounting standard defines fair value, establishes as a three-level valuation hierarchy for disclosures of fair value measurement and enhances disclosure requirements for fair value measures. The three levels are defined as follow:
| · | 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:
| F-8 |
TIANCI INTERNATIONAL, INC.
Notes To Consolidated Financial Statements
For the years ended July 31, 2023 and 2022
a. Electronic Device Hardware Components Products Sales
The Company is a distributor of electronic device hardware components and generates revenue through resale of these components. The Company’s products include high performance computer chips, Wi-Fi modules, Bluetooth modules, 4G network modules, LED screens, and touch screens. In accordance with ASC 606, Revenue Recognition: Principal Agent Consideration, an entity is a principal if it controls the specified good or service before that good or service is transferred to a customer. Otherwise, the entity is an agent in the transaction. The Company evaluates three indicators of control in accordance with ASC 606: 1) For hardware sales, the Company is the most visible entity to customers and assumes fulfillment risk and risks related to the acceptability of products, including addressing customer complaints directly and handling of product returns or refunds directly. 2) The Company is exposed to inventory risk before transfer of control to customers 3) The Company determines the resale price of hardware products. After evaluating the above circumstances, the Company considers itself the principal of these arrangements and records hardware sales revenue on a gross basis.
Hardware sales contracts are on a fixed price basis with no separate sales rebate, discount, or other incentive. Revenue is recognized at a point in time when the Company has delivered products that have been accepted by its customer with no future obligations. The Company generally permits returns of products due to product failure; however, returns are historically insignificant.
b. Software and Website Development Services
The Company generates revenue by developing customized freight shipping and related logistic software and websites, which are generally on a fixed-priced basis. The software helps wholesalers, ecommerce retailers, and freight shipping providers to manage complex workflows and improve work efficiency. The Company generally has no enforceable right to payment for performance completed to date and is only entitled to payment after software is fully developed, delivered, tested, and accepted by the customer. As a result, revenues from software development contracts are recognized at a point in time when services are fully rendered, and written acceptances have been received from customers.
c. Technical Consulting and Training Services
The Company provides technical consulting and training services to help customers, generally its existing customers, to better understand and properly use its customized software and related hardware. Services are generally carried out on a per-time fixed rate basis. Revenue is recognized at a point in time when service is rendered and the customer confirms the completion of consulting or training.
d. Software Maintenance and Business Promotion Services
The Company provides software maintenance service to keep customer’s software up to date and assists customers in promoting business with ongoing marketing support. The Company charges a flat rate for a fixed duration on a subscription basis, generally 12 months. Revenue is recognized ratably each month over the contract period.
| F-9 |
TIANCI INTERNATIONAL, INC.
Notes To Consolidated Financial Statements
For the years ended July 31, 2023 and 2022
e. Business Consulting Services
The Company provides business consulting services to help customers apply for immigration and non-immigration visas. The Company is responsible for performing background checks, case analysis, and preparing related application paper works. The Company charges a flat fee for the visa application services. Revenue is recognized at a point in time when an application is submitted with proper authorities.
Cost of revenues
For hardware products sales, the cost of revenue consists primarily of the costs of hardware products sold.
For software related services, the cost of revenue consists primarily of costs paid to outsourced service providers and compensation expenses paid the Company’s software engineers.
Advertising costs
Advertising
costs amounted to $
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 $
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.
| F-10 |
TIANCI INTERNATIONAL, INC.
Notes To Consolidated Financial Statements
For the years ended July 31, 2023 and 2022
Lease terms used to calculate the present value of lease payments generally do not include any options to extend, renew, or terminate the lease, as the Company does not have reasonable certainty at lease inception that these options will be exercised. The Company generally considers the economic life of its operating lease ROU assets to be comparable to the useful life of similar owned assets. The Company has elected the short-term lease exception; therefore, operating lease ROU assets and liabilities do not include leases with a lease term of twelve months or less. Lease expense is recognized on a straight-line basis over the lease term.
The Company reviews the impairment of its ROU assets consistent with the approach applied for its other long-lived assets. The Company reviews the recoverability of its long-lived assets when events or changes in circumstances occur that indicate that the carrying value of the asset may not be recoverable. The assessment of possible impairment is based on its ability to recover the carrying value of the asset from the expected undiscounted future pre-tax cash flows of the related operations.
Income taxes
The Company accounts for current income taxes in accordance with the laws of the relevant tax authorities. The charge for taxation is based on the results for the fiscal year as adjusted for items which are non-taxable or non-deductible. It is calculated using tax rates that have been enacted or substantively enacted by the balance sheet date.
Deferred taxes are accounted for 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 expense in the period incurred.
The Hong Kong tax returns filed for 2016 and subsequent years are subject to examination by the applicable tax authorities.
The US tax returns filed for 2019 and subsequent years are subject to examination by the applicable tax authorities.
The Company computes earnings (loss) per share (“EPS”) in accordance with FASB ASC 260, “Earnings per Share”. ASC 260 requires companies to present basic and diluted EPS. Basic EPS is measured as net income (loss) divided by the weighted average ordinary shares outstanding for the period. Diluted EPS presents the diluted effect on a per share basis of the potential ordinary shares (e.g., convertible securities, options and warrants) as if they had been converted at the beginning of the periods presented, or issuance date, if later. Potential ordinary shares that have an anti-dilutive effect (i.e., those that increase income per share or decrease loss per share) are excluded from the calculation of diluted EPS. For the years ended July 31, 2023 and 2022, there were dilutive shares outstanding.
| F-11 |
TIANCI INTERNATIONAL, INC.
Notes To Consolidated Financial Statements
For the years ended July 31, 2023 and 2022
Noncontrolling Interests
The Company’s
noncontrolling interest represents the minority shareholder’s
Related parties
Parties, which can be a corporation, other business entity, or an individual, are considered to be related if one party has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operating decisions. Parties are also considered to be related if they are subject to common control or common significant influence.
Recently issued accounting pronouncements
The Company considers the applicability and impact of all accounting standards updates (“ASUs”). Management periodically reviews new accounting standards that are issued. Under the Jumpstart Our Business Startups Act of 2012, as amended (the “JOBS Act”), the Company meets the definition of an emerging growth company and has elected the extended transition period for complying with new or revised accounting standards, which delays the adoption of these accounting standards until they would apply to private companies.
In May 2019, the FASB issued ASU 2019-05, which is an update to ASU Update No. 2016-13, Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which introduced the expected credit losses methodology for the measurement of credit losses on financial assets measured at amortized cost basis, replacing the previous incurred loss methodology. The amendments in Update 2016-13 added Topic 326, Financial Instruments — Credit Losses, and made several consequential amendments to the Codification. Update 2016-13 also modified the accounting for available-for-sale debt securities, which must be individually assessed for credit losses when fair value is less than the amortized cost basis, in accordance with Subtopic 326-30, Financial Instruments — Credit Losses — Available-for-Sale Debt Securities. The amendments in this Update provide an option to irrevocably elect the fair value option for certain financial assets previously measured at amortized cost basis. In November 2019, the FASB issued ASU No. 2019-10, which updates the effective date of ASU No. 2016-13 for private companies, not-for-profit organizations and certain smaller reporting companies. The new effective date for these preparers is for fiscal years beginning after December 15, 2022. ASU 2019-05 is effective for the Company for annual and interim reporting periods beginning August 1, 2023 as the Company is qualified as an emerging growth company. The adoption of this standard on August 1, 2023 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.
| F-12 |
TIANCI INTERNATIONAL, INC.
Notes To Consolidated Financial Statements
For the years ended July 31, 2023 and 2022
In October 2020, the FASB issued ASU 2020-08, “Codification Improvements to Subtopic 310-20, Receivables — Nonrefundable Fees and Other Costs”. The amendments in this Update represent changes to clarify the Codification. The amendments make the Codification easier to understand and easier to apply by eliminating inconsistencies and providing clarifications. ASU 2020-08 is effective for the Company for annual and interim reporting periods beginning August 1, 2021. All entities should apply the amendments in this Update on a prospective basis as of the beginning of the period of adoption for existing or newly purchased callable debt securities. These amendments do not change the effective dates for Update 2017-08. The adoption of this standard on August 1, 2021 did not have a material impact on the Company’s 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 – RELATED PARTIES BALANCES AND TRANSACTIONS
Due from related party consists of:
Due from
related party represents a receivable of $
Due to related parties consist of:
| Transaction | July 31, | July 31, | ||||||||||
| Name | Relationship | Nature | 2023 | 2022 | ||||||||
| Zhigang Pei | Chairman of the Board | Working capital advances and operating expenses paid on behalf of the Company | $ | $ | ||||||||
| RQS Capital | 68% shareholder | Company cash collection due to RQS Capital | ||||||||||
| Ying Deng | RQS Capital 30% owner and Roshing’s 10% owner | Working capital advances and operating expense paid on behalf of the Company | ||||||||||
| TOTAL | $ | $ | ||||||||||
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 six 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 year ended July 31, 2023, we accrued management compensation expenses of $. These amounts are included in “general and administrative expenses” in the accompanying consolidated statement of operations.
| F-13 |
TIANCI INTERNATIONAL, INC.
Notes To Consolidated Financial Statements
For the years ended July 31, 2023 and 2022
Office space sharing agreement with related parties
On
August 28, 2021, Roshing entered into an office space sharing agreement with Shufang Gao,
NOTE 4 – STOCKHOLDERS EQUITY
On
January 26, 2023 the Company filed with the Nevada Secretary of State a Certificate of Amendment of Articles of Incorporation (the
“Amendment”). The Amendment amended Article 3 of the Company’s Articles of Incorporation to provide that the
authorized capital stock of the Company will be
The following table sets forth information, as of July 31, 2023, regarding the classes of capital stock that are authorized by the Articles of Incorporation of Tianci International, Inc.
| Class | Shares Authorized | Shares Outstanding | ||||||
| Common Stock, $.0001 par value | ||||||||
| Series A Preferred Stock, $.0001 par value | ||||||||
| Undesignated Preferred Stock, $.0001 par value | ||||||||
Series A Preferred Stock
Each share of Series A Preferred Stock may be converted by the holder of the share into 100 shares of common stock, subject to equitable adjustment of the conversion rate. Each holder of Series A Preferred Stock will have voting rights equal to the holder of the number of shares of common stock into which the Series A Preferred Stock is convertible. Upon liquidation of the Company, each holder of Series A Preferred Stock will be entitled to receive, out of the net assets of the Company, $0.01 per share, then to share in the distribution on an as-converted basis.
Undesignated Preferred Stock
The Board of Directors has the authority, without shareholder approval, to amend the Company’s Articles of Incorporation to divide the class of undesignated Preferred Stock into series, and to determine the relative rights and preferences of the shares of each series, including (i) voting power, (ii) the rate of dividend, (iii) the price at which, and the terms and conditions on which, the shares may be redeemed, (iv) the amount payable upon the shares in the event of liquidation, (v) any sinking fund provision for the redemption or purchase of the shares, and (vi) the terms and conditions on which the shares may be converted to shares of another series or class, if the shares of any series are issued with the privilege of conversion.
| F-14 |
TIANCI INTERNATIONAL, INC.
Notes To Consolidated Financial Statements
For the years ended July 31, 2023 and 2022
Issuances of Preferred Stock and Common Stock
On January
27, 2023, Tianci sold shares of its Series A Preferred Stock to RQS Capital for $
On March
1, 2023, Tianci sold a total of shares of its common stock to 13 non-US persons at a price of $ per share
or $
On March 6, 2023, Tianci issued shares of its common stock to RQS Capital pursuant to the Share Exchange Agreement dated March 3, 2023 (see Note 1 above).
Also
on March 6, 2023 pursuant to the Share Exchange Agreement dated March 3, 2023, Tianci issued a total of shares
of its common stock to nine employees or affiliates of Roshing to induce continued services to Roshing. For the year ended July 31,
2023, the Company accounted for this issuance by expensing the $
NOTE 5 – INCOME TAXES
Income Taxes
Seychelles
RQS United is incorporated in Seychelles and is not subject to tax on income generated outside of Seychelles under the current law. In addition, upon payment of dividends, no withholding tax is imposed under current law.
Hong Kong
Roshing is
incorporated in Hong Kong and is subject to Hong Kong Profits Tax on the taxable income as reported in its statutory
financial statements adjusted in accordance with relevant Hong Kong tax laws. The applicable tax rate is
For the year ended July
31, 2023, the loss before provision for income taxes of $(
Significant components of the provision for income taxes are as follows:
| Year ended | ||||||||
| July 31, 2023 | July 31, 2022 | |||||||
| Current Hong Kong | $ | $ | ||||||
| Deferred Hong Kong | ||||||||
| Provision (benefit) for income taxes | $ | $ | ||||||
| F-15 |
TIANCI INTERNATIONAL, INC.
Notes To Consolidated Financial Statements
For the years ended July 31, 2023 and 2022
The following table reconciles the Hong Kong statutory rates to the Company’s Hong Kong effective tax rate:
| For the year ended July 31, 2023 | For the year ended July 31, 2022 | |||||||
| Hong Kong statutory income tax rate | ||||||||
| Non deductible stock compensation expense | - | |||||||
| Effective tax rate | - | |||||||
For United States
income tax purposes, Tianci has a net operating loss carry forward of approximately $
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, 2023 and 2022, the Company did not have any significant unrecognized uncertain tax positions.
As of July 31, 2023, tax years 2020 and forward generally remain open for examination for United States Federal and State tax purposes and tax years 2017 and forward generally remain open for examination for foreign tax purposes.
NOTE 6 — CONCENTRATION OF RISK
Credit risk
Financial
instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash held in
banks. The cash balance in each financial institution in the United States is insured by the FDIC up to $
Customer concentration risk
For the
year ended July 31, 2023, two customers accounted for
For the
year ended July 31, 2022, five customers accounted for
As of
July 31, 2023, no customer accounted for over
| F-16 |
TIANCI INTERNATIONAL, INC.
Notes To Consolidated Financial Statements
For the years ended July 31, 2023 and 2022
Vendor concentration risk
For
the year ended July 31, 2023, two vendors accounted for
As of
July 31, 2023, no vendor accounted for over
NOTE 7— COMMITMENTS AND CONTINGENCIES
Lease commitments
On
January 1, 2021, Roshing entered into an operating lease agreement for office space in Hong Kong with a third party. The
agreement had a term of two years and provided for monthly rent of HKD
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.
As of July
31, 2023, the Company’s operating lease had a remaining lease term of approximately
Rent expenses
were $
The total future minimum lease payments under the non-cancellable operating lease as of July 31, 2023 are as follows:
| Year ending July 31, | Minimum lease payments | |||
| 2024 | $ | |||
| 2025 | ||||
| Total lease payments | ||||
| Less: Interest | ( | |||
| Present value of lease liabilities | $ | |||
| F-17 |
TIANCI INTERNATIONAL, INC.
Notes To Consolidated Financial Statements
For the years ended July 31, 2023 and 2022
Future amortization of the Company’s ROU asset is presented below:
| Year ending July 31, | ||||
| 2024 | ||||
| 2025 | ||||
| Total | $ | |||
Contingencies
From time to time, the Company may be a party to legal proceedings, as well as certain asserted and un-asserted claims.
NOTE 8 — ENTERPRISE WIDE DISCLOSURE
The Company follows ASC 280, Segment Reporting, which requires companies to disclose segment data based on how management makes decisions about allocating resources to each segment and evaluates their performances. The Company’s chief operating decision-makers (i.e., the Company’s chief executive officer and his direct assistants, including the Company’s chief financial officer) review financial information presented on a consolidated basis, accompanied by disaggregated information about revenues, cost of revenues, and gross profit by business lines and by regions (primarily in Hong Kong and Singapore) for purposes of allocating resources and evaluating financial performance. There are no segment managers who are held accountable for operations, operating results and plans for levels or components below the consolidated unit level. Based on qualitative and quantitative criteria established by ASC 280, the Company considers itself to be operating within one reportable segment.
Disaggregated information of revenues by business lines are as follows:
For the year ended July 31, | ||||||||
| 2023 | 2022 | |||||||
| Electronic Device Hardware Components Sales | $ | $ | ||||||
| Software and Website Development Services | ||||||||
| Technical Consulting and Training Services | ||||||||
| Software Maintenance and Business Promotion Services | ||||||||
| Business Consulting Services | ||||||||
| Total revenues | $ | $ | ||||||
| F-18 |
TIANCI INTERNATIONAL, INC.
Notes To Consolidated Financial Statements
For the years ended July 31, 2023 and 2022
Disaggregated information of revenues by regions are as follows:
For the year ended July 31, | ||||||||
| 2023 | 2022 | |||||||
| Hong Kong | $ | $ | ||||||
| Singapore | ||||||||
| Total revenues | $ | $ | ||||||
NOTE 9 — CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY (Unaudited)
The Company performed a test on the restricted net assets of its consolidated subsidiaries in accordance with Rule 4-08(e)(3) of Regulation S-X promulgated by the SEC, “General Notes to Financial Statements” and concluded that it was applicable and the Company is required to disclose the required financial statement information for the parent company.
The subsidiaries did not pay any dividends to the parent during the periods presented. For the purpose of presenting parent only financial information, the Company records its investment in its subsidiaries under the equity method of accounting. Such investments are presented on the separate parent only balance sheets as “investment in subsidiaries” and the income (loss) of the subsidiaries is presented as “share of income (loss) of subsidiaries.” Certain information and footnote disclosures generally included in financial statements prepared in accordance with U.S. GAAP have been condensed or are not required.
PARENT COMPANY BALANCE SHEET
| July 31, | ||||
| 2023 | ||||
| (Unaudited) | ||||
| ASSETS | ||||
| Cash | $ | |||
| Prepaid expense | ||||
| Receivable from subsidiaries | ||||
| Investment in subsidiaries | ||||
| Total Assets | $ | |||
| LIABILITIES | ||||
| Accounts payable and accrued liabilities | $ | |||
| Due to related parties | ||||
| Total Liabilities | ||||
| Stockholders’ equity | ||||
| Series A Preferred stock, $ par value; shares authorized; shares issued and outstanding as of July 31, 2023 | ||||
| Undesignated preferred stock, $ par value; shares authorized; shares issued and outstanding | ||||
| Common stock, $par value, shares authorized; shares issued and outstanding as of July 31, 2023 | ||||
| Additional paid-in capital | ||||
| Accumulated deficit | ( | ) | ||
| Total stockholders’ equity | ( | ) | ||
| Total Liabilities and Stockholders’ Equity | $ | |||
| F-19 |
TIANCI INTERNATIONAL, INC.
Notes To Consolidated Financial Statements
For the years ended July 31, 2023 and 2022
PARENT COMPANY STATEMENT OF OPERATIONS
| From March 3, 2023 to July 31, 2023 | ||||
| (Unaudited) | ||||
| EXPENSES: | ||||
| General and administrative | $ | |||
| Loss from investment in subsidiaries | ||||
| Total expenses | ||||
| Net Loss | $ | ( | ) | |
PARENT COMPANY STATEMENT OF CASH FLOWS
| From March 3, 2023 to July 31, 2023 | ||||
| (Unaudited) | ||||
| Cash flows from operating activities: | ||||
| Net loss | $ | ( | ) | |
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||
| Share of loss from investment in subsidiaries | ||||
| Change in operating assets and liabilities: | ||||
| Prepaid expense | ||||
| Accounts payable and accrued liabilities | ||||
| Net cash (used in) operating activities | ( | ) | ||
| Cash flows from financing activities: | ||||
| Repayment of working capital advance from related party | ( | ) | ||
| Operating expenses directly paid for subsidiary | ( | ) | ||
| Common Stock issued to Roshing employees and affiliates for services rendered | ||||
| Net cash provided by financing activities | ||||
| Net increase in cash and cash equivalents | ||||
| Cash and cash equivalents at March 3, 2023 | ||||
| Cash and cash equivalents at July 31, 2023 | $ | |||
| F-20 |
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
Not Applicable.
Item 9A. Controls and Procedures
Evaluation of Disclosure Controls and Procedures.
We maintain “disclosure controls and procedures,” as such term is defined in Rule 13a-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”), that are designed to ensure that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer ("CEO")/Chief Financial Officer ("CFO"), as appropriate, to allow timely decisions regarding required disclosure. We conducted an evaluation, under the supervision and with the participation of our CEO/CFO of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this report pursuant to Rule 13a-15 of the Exchange Act. Based on this evaluation and the existence of the material weaknesses discussed below in “Management's Report on Internal Control over Financial Reporting,” our management, including our CEO/CFO concluded that our disclosure controls and procedures were not effective at the reasonable assurance level as of the end of the period covered by this Report.
Changes in Internal Controls.
There was no change in internal control over financial reporting (as defined in Rule 13a-15(f) promulgated under the Securities Exchange Act or 1934) identified in connection with the evaluation described in the preceding paragraph that occurred during Tianci International, Inc.'s fourth fiscal quarter that has materially affected or is reasonably likely to materially affect Tianci International, Inc.'s internal control over financial reporting.
Management’s Report on Internal Control over Financial Reporting
Management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rule 13a-15(f) under the Securities Exchange Act of 1934. We have assessed the effectiveness of those internal controls as of July 31, 2023 using the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) Internal Control – Integrated Framework (1992) as a basis for our assessment.
Because of inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies and procedures may deteriorate. All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation.
| 17 |
A material weakness in internal controls is a deficiency in internal control, or combination of control deficiencies, that adversely affects the Company’s ability to initiate, authorize, record, process, or report external financial data reliably in accordance with accounting principles generally accepted in the United States of America such that there is more than a remote likelihood that a material misstatement of the Company’s annual or interim financial statements that is more than inconsequential will not be prevented or detected. In the course of making our assessment of the effectiveness of internal controls over financial reporting, we identified three material weaknesses in our internal control over financial reporting. These material weaknesses consisted of:
| · | Because of the Company’s limited resources, there are limited controls over information processing. | |
| · | There is an inadequate segregation of duties consistent with control objectives. Our Company’s management is limited in number, resulting in a situation where limitations on segregation of duties exist. In order to remedy this situation, we would need to hire additional staff to provide greater segregation of duties. Currently, it is not feasible to hire additional staff to obtain optimal segregation of duties. Management will reassess this matter in the following year to determine whether improvement in segregation of duty is feasible. | |
| · | The Company does not have a sitting audit committee financial expert, and thus the Company lacks the board oversight role within the financial reporting process. | |
| · | There is a lack of formal policies and procedures necessary to adequately review significant accounting transactions. The Company utilizes a third-party independent contractor for the preparation of its financial statements. Although the financial statements and footnotes are reviewed by our management, we do not have a formal policy to review significant accounting transactions and the accounting treatment of such transactions. The third-party independent contractor is not involved in the day to day operations of the Company and may not be provided information from management on a timely basis to allow for adequate reporting/consideration of certain transactions. |
Management does not believe that the current level of the Company’s operations warrants a remediation of the weaknesses identified in this assessment. However, because of the above condition, management’s assessment is that the Company’s internal controls over financial reporting were not effective as of July 31, 2023.
This annual report does not include an attestation report of the Company’s registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by the Company’s registered public accounting firm pursuant to rules of the Securities and Exchange Commission that permit the Company to provide only management’s report in this annual report.
| Item 9B | Other Information |
Not applicable.
| Item 9C | Disclosure Regarding Foreign Jurisdictions that Prevent Inspections. |
Not applicable.
| 18 |
PART III
| Item 10. | Directors, Executive Officers and Corporate Governance |
The names of our current officers, directors and key employees, as well as certain information about them, are set forth below:
| Name | Age | Position with Tianci | Director Since |
| Zhigang Pei | 50 | Chairman of the Board | 2021 |
| Shufang Gao | 53 | Director, Chief Executive Officer, Chief Financial Officer | 2021 |
| Ying Deng | 39 | Director, Vice President | 2023 |
| David Wei Fang | 50 | Director | 2021 |
| Jack Fan Liu | 43 | Director | 2021 |
| Yee Man Yung | 29 | Director | 2021 |
| Bo Ye | 41 | Corporate Secretary | -- |
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.
Information concerning the directors, officers and key employees of Tianci follows:
Zhigang Pei joined Tianci on August 26, 2021 as Chief Executive Officer, Chief Financial Officer, Secretary, and a member of the Board. Mr. Pei resigned from his position as CEO in January 2023 and from his position as CFO in April 2023. Mr. Pei has served as the Executive Director of Anyang Xinrun Investment Co., Ltd. since November 2009. He has also served as the Executive Director and General Manager of Henan Ziwei Real Estate Development Co., Ltd., and Henan Anyang Dahua Commercial and Trading Plaza Development Co., Ltd. since 2015. Mr. Pei graduated from No.2 Middle School Anyang City in 1989. Mr. Pei brings to the Board his deep experience in the real estate and investment industries.
Shufang Gao has worked as CEO of Hong Kong listed groups, president of domestic capital companies, and vice president of A-share listed companies. He is familiar with the 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 was appointed Chief Executive Officer in January 2023. 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 Masters 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.
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., Ltd., where she is responsible for strategic planning and daily operations. In 2020 Ms. Deng was awarded a Masters 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.
| 19 |
David Wei Fang has over ten years of experience in the securities and investment industry. He joined Tianci on August 26, 2021 as an executive member of the Board. 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.
Jack Fan Liu joined Tianci on August 26, 2021 as a member 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.
Yung Yee Man 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 a member of our Board. Since 2020 she has served as Human Resources Manager for Link-Asia International Med-Tech Group Limited. Form 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.
Bo Ye joined Tianci as Corporate Secretary in January 2023. Since 2014 Mr. Ye has been employed as Director and Chief Executive Officer by Shenzhen Ouyu Technology Co., Ltd. Since 2018 Mr. Ye has also been employed as Director and Vice President of Shenzhen Renqisheng Investment Development. Mr. Ye was awarded a Bachelor of Arts Degree by Jinan University in 2006.
Family Relationships
There are no family relationships among any of our officers or directors.
Corporate Governance
Board Committees
We presently do not have an audit committee, compensation committee or nominating committee or committee performing similar functions, as our management believes that until this point it has been premature at the early stage of our management and business development to form an audit, compensation or nominating committee. Until these committees are established, these decisions will continue to be made by our Board of Directors.
Director Independence
The Board of Directors has determined that Jack Fan Liu and Yung Yee Man are independent directors, as the term "independent" is defined by the rules of the NYSE American.
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Code of Ethics
Tianci has not adopted a formal code of ethics applicable to its executive officers. The Board of Directors has determined that Tianci’s financial operations are not sufficiently complex to warrant adoption of a formal code of ethics.
Section 16(a) Beneficial Ownership Reporting Compliance
Not applicable.
Item 11. 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 July 31, 2023.
RQS United, Inc.
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., Ltd.
Roshing pays Ying Deng, its Manager, and Mr. Shufang Gao, the CEO a salary of 2,000 HKD per month (USD $258).
Employment Agreements
On August 27, 2021, we entered into an Employment Agreement with each of Zhigang Pei, 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 a 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.
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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.
Grants of Plan-Based Awards
During the past three fiscal years, there were no grants of plan-based awards to our named executive officers by Tianci, RQS United or Roshing.
Option Exercises and Stock Vested
During the past three fiscal years, there were no option exercises or vesting of stock awards by our named executive officers.
Outstanding Equity Awards at Fiscal Year End
During the past three fiscal years, none of our executive officers received any equity awards, including, options, restricted stock or other equity incentives, from either Tianci, RQS United or Roshing.
Compensation of Directors
On August 27, 2021, each of our two independent directors Jack Fan Liu and Yee ManYung, entered into a Director Retainer Agreement agreeing to serve on our Board of Directors for monthly compensation of U.S.$1,300. The Director Retainer Agreements contain normal and customary terms including provisions relating to indemnification and confidentiality.
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Item 12. Security Ownership of Certain Beneficial Owners and Management
The following table sets forth information with respect to the securities holdings of (i) Tianci’s officers and directors, and (ii) all persons which, pursuant to filings with the SEC and our stock transfer records, we have reason to believe may be deemed the beneficial owner of more than five percent (5%) of any class of Tianci's voting stock. The securities "beneficially owned" by an individual are determined in accordance with the definition of "beneficial ownership" set forth in the regulations promulgated under the Exchange Act 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. This table has been prepared based on 80,000 shares of Series A Preferred Stock and 5,903,481 shares of Common Stock outstanding as of the date of filing of this Report. Unless otherwise specified, the address of each of the persons set forth below is in care of Tianci, 20 Holbeche Road, Arndell Park, NSW 2148 Australia.
| Common Stock | Series A Preferred | ||||
Name of Beneficial Owner |
Amount and Nature of Beneficial Ownership(1) |
Percentage of Class |
Amount and Nature of Beneficial Ownership(1) |
Percentage of Class |
Total Voting Power |
| Zhigang Pei | 1,793,000(2) | 40.4% | -- | -- | 12.9% |
| Shufang Gao | 1,500,000(3)(4) | 25.4% | 80,000(3) | 100% | 68.3% |
| David Wei Fang | -- | -- | -- | -- | -- |
| Yee Man Yung | -- | -- | -- | -- | -- |
| Jack Fan Liu | -- | -- | -- | -- | -- |
| Ying Deng | 1,500,000(3)(4) | 25.4% | 80,000(3) | 100% | 68.3% |
| All officers and directors as a group (7 persons) | 1,500,000 | 25.4% | 80,000(3) | 100% | 68.3% |
| RQS Capital Limited | 1,500,000(4) | 25.4% | 80,000 | 100% | 68.3% |
______________________________
| (1) | Ownership is of record and beneficial unless otherwise noted. | |
| (2) | Owned of record by Silver Glory Group Limited, of which Zhigang Pei is the beneficial owner. | |
| (3) | All shares of common stock and Series A Preferred Stock attributed to Shufang Gao or Ying Deng are owned of record by RQS Capital Limited. Shufang Gao is Chairman of RQS Capital Limited; Ying Deng is a Director of RQS Capital Limited. | |
| (4) | Does not include 8,000,000 shares of common stock issuable upon conversion of 80,000 shares of Series A Preferred Stock. |
Item 13. Certain Relationships and Related Transactions and Director Independence
Related Party Transactions
On January 27, 2023 Tianci sold 80,000 shares of Series A Preferred Stock to RQS Capital Limited. The shares were sold for a cash payment of $24,000, which was contributed to Tianci’s capital on behalf of RQS Capital Limited by members of its management. Shufang Gao, a member of Tianci’s Board of Directors, is the principal owner of RQS Capital.
See the description in Item 1 above regarding the Share Exchange between Tianci and RQS Capital Limited on March 6, 2023.
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.
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.
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Review, approval or ratification of transactions with related persons
We do not have any special committee, policy or procedure related to the review, approval or ratification of related party transactions.
Director Independence
The Board of Directors has determined that Jack Fan Liu and Yee ManYung are the only members of our Board of Directors who are independent, as “independent” is defined in the rules of the NYSE American.
Item 14. Principal Accountant Fees and Services
The Share Exchange between Tianci and RQS United described in Item 1 of this Report has been accounted for as a “reverse acquisition” effected as a recapitalization, wherein RQS United was considered the acquirer for accounting and financial reporting purposes. Accordingly, Michael T. Studer CPA P.C., which served as the independent auditor of the financial statements of RQS United for the year ended July 31, 2022, has audited the financial statements of Tianci for the years ended July 31, 2023 and 2022 that are included in this Report.
Audit Fees
Michael T. Studer CPA P.C. billed $30,000 in connection with the audit of the Company's financial statements for the year ended July 31, 2023. Michael T. Studer CPA P.C. billed $50,000 in connection with the audit of the Company's financial statements for the year ended July 31, 2022.
Audit-Related Fees
Michael T. Studer CPA P.C. did not bill the Company for any Audit-Related fees in fiscal 2023 or 2022.
Tax Fees
Michael T. Studer CPA P.C. did not bill the Company for professional services rendered for tax compliance, tax advice and tax planning in fiscal 2023. Michael T. Studer CPA P.C. did not bill the Company for any professional services rendered for tax compliance, tax advice and tax planning in fiscal 2022.
All Other Fees
Michael T. Studer CPA P.C. did not bill the Company for any other fees in fiscal 2023 or 2022.
It is the policy of the Company that all services, other than audit, review or attest services, must be pre-approved by the Board of Directors.
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Item 15. Exhibits and Financial Statement Schedules
Exhibits
| (1) | Filed as an exhibit to the Registration Statement on Form S-1 filed on September 24, 2012 and incorporated herein by reference. | |
| (2) | Filed as Appendix A to the Definitive Information Statement on Schedule 14C filed on June 11, 2015 and incorporated herein by reference. | |
| (3) | Filed as an exhibit to the Annual Report on Form 10-K for the year ended July 31, 2022 and incorporated herein by reference. |
| Item 16. | Form 10-K Summary |
None.
SUPPLEMENTAL INFORMATION TO BE FURNISHED WITH REPORTS FILED PURSUANT TO SECTION 15(d) OF THE ACT BY REGISTRANTS WHICH HAVE NOT REGISTERED SECURITIES PURSUANT TO SECTION 12 OF THE ACT.
Tianci International, Inc. did not send any annual report to security
holders covering the fiscal year ended July 31, 2023 nor did it send any form of proxy or proxy soliciting material.
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SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the Registrant has caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| TIANCI INTERNATIONAL, INC. | |
| Date: October 20, 2023 | /s/ Shufang Gao |
| By: Shufang Gao | |
| Title: Chief Executive, Financial and Accounting Officer |
In accordance with the Exchange Act, this Report has been signed below on October 20, 2023 by the following persons, on behalf of the Registrant and in the capacities and on the dates indicated.
/s/ Shufang Gao
Shufang Gao, Director,
Chief Executive Officer, Chief Financial Officer
/s/ Zhigang Pei
Zhigang Pei, Chairman of the Board
/s/ Ying Deng
Ying Deng, Director
/s/ David Wei Fang
David Wei Fang, Director
/s/ Jack Fan Liu
Jack Fan Liu, Director
/s/ Yee Man Yung
Yee Man Yung, Director
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Exhibit 10.4
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT (the “Agreement”), is entered into as of Jan 27th, 2023 (the “Effective Date”), by and between Tianci International Inc., a United States of America corporation (the “Company”), and Ying Deng, an individual (the “Executive”). Except with respect to the direct employment of the Executive by the Company, the term “Company” as used herein with respect to all obligations of the Executive hereunder shall be deemed to include the Company and all of its subsidiaries and affiliated entities (collectively, the “Group”).
RECITALS
A. The Company desires to employ the Executive as its Executive Director and Vice President to assure itself of the services of the Executive during the term of Employment (as defined below).Chief Executive Officer
B. The Executive desires to be employed by the Company as its Executive Director during the term of Employment and upon the terms and conditions of this Agreement.
AGREEMENT
The parties hereto agree as follows:
| 1. | POSITION |
The Executive hereby accepts a position of Executive Director (the “Employment”) of the Company.
| 2. | TERM |
Subject to the terms and conditions of this Agreement, the term of the Employment shall commence on the Effective Date and last for three (3) years, unless Executive’s earlier death, resignation or removal.
| 3. | DUTIES AND RESPONSIBILITIES |
| (a) |
The Executive’s duties at the Company will include all jobs assigned by the Company’s Board of the Executives (the “Board”). | |
| (b) |
The Executive shall devote all of his working time, attention and skills to the performance of his duties at the Company and shall faithfully and diligently serve the Company in accordance with this Agreement, the Certificate of Incorporation and Bylaws of the Company, as amended and restated from time to time (the “Charter Documents”), and the guidelines, policies and procedures of the Company approved from time to time by the Board. |
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| 4. | NO BREACH OF CONTRACT |
The Executive hereby represents to the Company that: (i) the execution and delivery of this Agreement by the Executive and the performance by the Executive of the Executive’s duties hereunder shall not constitute a breach of, or otherwise contravene, the terms of any other agreement or policy to which the Executive is a party or otherwise bound, except for agreements entered into by and between the Executive and any member of the Group pursuant to applicable law, if any; (ii) that the Executive has no information (including, without limitation, confidential information and trade secrets) relating to any other person or entity which would prevent, or be violated by, the Executive entering into this Agreement or carrying out his duties hereunder; (iii) that the Executive is not bound by any confidentiality, trade secret or similar agreement (other than this) with any other person or entity except for other member(s) of the Group, as the case may be.
| 5. | COMPENSATION AND BENEFITS |
| (a) |
Base Salary. The Executive’s base salary shall be USD3,800 per month, paid in accordance with the Company’s regular payroll practices, and such compensation is subject to annual review and adjustment by the Board. | |
| (b) | Bonus. The Executive shall be eligible for Bonuses determined by the Board. | |
| (c) |
Equity Incentives. To the extent the Company adopts and maintains a share incentive plan, the Executive will be eligible to participate in such plan pursuant to the terms thereof as determined by the Board. | |
| (d) |
Expenses. The Executive shall be entitled to reimbursement by the Company for all reasonable ordinary and necessary travel and other expenses incurred by the Executive in the performance of his duties under this Agreement; provided that he properly accounts for such expenses in accordance with the Company’s policies and procedures. |
| 6. | TERMINATION OF THE AGREEMENT |
| (a) | By the Company. |
(i) For Cause. The Company may terminate the Employment for cause, at any time, without notice or remuneration (unless notice or remuneration is specifically required by applicable law, in which case notice or remuneration will be provided in accordance with applicable law), if:
(1) the Executive is convicted or pleads guilty to a felony or to an act of fraud, misappropriation or embezzlement,
(2) the Executive has been grossly negligent or acted dishonestly to the detriment of the Company,
(3) 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
(4) the Executive violates Section 7 or 9 of this Agreement.
Upon termination for cause, the Executive shall be entitled to the amount of base salary earned and not paid prior to termination. However, the Executive will not be entitled to receive payment of any severance benefits or other amounts by reason of the termination, and the Executive’s right to all other benefits will terminate, except as required by any applicable law.
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(ii) For death and disability. The Company may also terminate the Employment, at any time, without notice or remuneration (unless notice or remuneration is specifically required by applicable law, in which case notice or remuneration will be provided in accordance with applicable law), if:
(1) the Executive has died, or
(2) the Executive has a disability which shall mean a physical or mental impairment which, as reasonably determined by the Board, renders the Executive unable to perform the essential functions of his employment with the Company, with or without reasonable accommodation, for more than 120 days in any 12-month period, unless a longer period is required by applicable law, in which case that longer period would apply.
Upon termination for death or disability, the Executive shall be entitled to the amount of base salary earned and not paid prior to termination. However, the Executive will not be entitled to receive payment of any severance benefits or other amounts by reason of the termination, and the Executive’s right to all other benefits will terminate, except as required by any applicable law.
(iii) Without Cause. The Company may terminate the Employment without cause, at any time, upon a prior written notice. Upon termination without cause, the Company shall provide the following severance payments and benefits to the Executive: (1) a lump sum cash payment equal to 12 months of the Executive’s base salary as of the date of such termination; (2) a lump sum cash payment equal to a pro-rated amount of his target annual bonus for the year immediately preceding the termination, if any; (3) payment of premiums for continued health benefits under the Company’s health plans for 12 months fo1lowing the termination, if any; and (4) immediate vesting of 100% of the then-unvested portion of any outstanding equity awards held by the Executive.
Upon termination without, the Executive shall be entitled to the amount of base salary earned and not paid prior to termination.
(iv) Change of Control Transaction. If the Company or its successor terminates the Employment upon a merger, consolidation, or transfer or sale of all or substantially all of the assets of the Company with or to any other individual(s) or entity (the “Change of Control Transaction”), the Executive shall be entitled to the following severance payments and benefits upon such termination: (1) a lump sum cash payment equal to 12 months of the Executive’s base salary at a rate equal to the greater of his/her annual salary in effect immediate1y prior to the termination, or his/her then current annua1 salary as of the date of such termination; (2) 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 (3) immediate vesting of 100% of the then-unvested portion of any outstanding equity awards held by the Executive.
| (b) |
By the Executive. The Executive may terminate the Employment at any time with a prior written notice to the Company, if (1) there is a material reduction in the Executive’s authority, duties and responsibilities, or (2) there is a material reduction in the Executive’s annual salary. Upon the Executive’s termination of the Employment due to either of the above reasons, the Company shall provide compensation to the Executive equivalent to 12 months of the Executive’s base salary that he is entitled to immediately prior to such termination. In addition, the Executive may resign prior to the expiration of the Agreement if such resignation is approved by the Board or an alternative arrangement with respect to the Employment is agreed to by the Board. | |
| (c) |
Notice of Termination. Any termination of the Executive’s employment under this Agreement shall be communicated by written notice of termination from the terminating party to the other party. |
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| 7. | CONFIDENTIALITY AND NON-DISCLOSURE |
| (a) |
Confidentiality and Non-disclosure. The Executive hereby agrees at all times during the term of the Employment and after his termination, to hold in the strictest confidence, and not to use, except for the benefit of the Company, or to disclose to any person, corporation or other entity without prior written consent of the Company, any Confidential Information. The Executive understands that “Confidential Information” means any proprietary or confidential information of the Company, its affiliates, or their respective clients, customers or partners, including, without limitation, technical data, trade secrets, research and development information, product plans, services, customer lists and customers, supplier lists and suppliers, software developments, inventions, processes, formulas, technology, designs, hardware configuration information, personnel information, marketing, finances, information about the suppliers, joint ventures, franchisees, distributors and other persons with whom the Company does business, information regarding the skills and compensation of other employees of the Company or other business information disclosed to the Executive by or obtained by the Executive from the Company, its affiliates, or their respective clients, customers or partners, either directly or indirectly, in writing, orally or otherwise, if specifically indicated to be confidential or reasonably expected to be confidential. Notwithstanding the foregoing, Confidential Information shall not include information that is generally available and known to the public through no fault of the Executive. | |
| (b) |
Company Property. The Executive understands that all documents (including computer records, facsimile and e-mail) and materials created, received or transmitted in connection with his work or using the facilities of the Company are property of the Company and subject to inspection by the Company at any time. Upon termination of the Executive’s employment with the Company (or at any other time when requested by the Company), the Executive will promptly deliver to the Company all documents and materials of any nature pertaining to his work with the Company and will provide written certification of his compliance with this Agreement. Under no circumstances will the Executive have, following his termination, in his possession any property of the Company, or any documents or materials or copies thereof containing any Confidential Information. | |
| (c) |
Former Employer Information. The Executive agrees that he has not and will not, during the term of his employment, (i) improperly use or disclose any proprietary information or trade secrets of any former employer or other person or entity with which the Executive has an agreement or duty to keep in confidence information acquired by Executive, if any, or (ii) bring into the premises of the Company any document or confidential or proprietary information belonging to such former employer, person or entity unless consented to in writing by such former employer, person or entity. The Executive will indemnify the Company and hold it harmless from and against all claims, liabilities, damages and expenses, including reasonable attorneys’ fees and costs of suit, arising out of or in connection with any violation of the foregoing. | |
| (d) |
Third Party Information. The Executive recognizes that the Company may have received, and in the future may receive, from third parties their confidential or proprietary information subject to a duty on the Company’s part to maintain the confidentiality of such information and to use it only for certain limited purposes. The Executive agrees that the Executive owes the Company and such third parties, during the Executive’s employment by the Company and thereafter, a duty to hold all such confidential or proprietary information in the strictest confidence and not to disclose it to any person or firm and to use it in a manner consistent with, and for the limited purposes permitted by, the Company’s agreement with such third party. |
This Section 7 shall survive the termination of this Agreement for any reason. In the event the Executive breaches this Section 7, the Company shall have right to seek remedies permissible under applicable law.
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| 8. | CONFLICTING EMPLOYMENT. |
The Executive hereby agrees that, during the term of his employment with the Company, he or she will not engage in any other employment, occupation, consulting or other business activity related to the business in which the Company is now involved or becomes involved during the term of the Executive’s employment, nor will the Executive engage in any other activities that conflict with his obligations to the Company without the prior written consent of the Company.
| 9. | NON-COMPETITION AND NON-SOLICITATION |
In consideration of the salary paid to the Executive by the Company and subject to applicable law, the Executive agrees that during the term of the Employment and for a period of one (1) year following the termination of the Employment for whatever reason:
| (a) |
The Executive will not approach clients, customers or contacts of the Company or other persons or entities introduced to the Executive in the Executive’s capacity as a representative of the Company for the purposes of doing business with such persons or entities which will harm the business relationship between the Company and such persons and/or entities; | |
| (b) |
The Executive will not assume employment with or provide services as a Executive or otherwise for any Competitor, or engage, whether as principal, partner, licensor or otherwise, in any Competitor; and | |
| (c) |
The Executive will not seek, directly or indirectly, by the offer of alternative employment or other inducement whatsoever, to solicit the services of any employee of the Company employed as at or after the date of such termination, or in the year preceding such termination. |
The provisions contained in Section 9 are considered reasonable by the Executive and the Company. In the event that any such provisions should be found to be void under applicable laws but would be valid if some part thereof was deleted or the period or area of application reduced, such provisions shall apply with such modification as may be necessary to make them valid and effective.
This Section 9 shall survive the termination of this Agreement for any reason. In the event the Executive breaches this Section 9, the Executive acknowledges that there will be no adequate remedy at law, and the Company shall be entitled to injunctive relief and/or a decree for specific performance, and such other relief as may be proper (including monetary damages if appropriate). In any event, the Company shall have right to seek all remedies permissible under applicable law.
| 10. | WITHHOLDING TAXES |
Notwithstanding anything else herein to the contrary, the Company may withhold (or cause there to be withheld, as the case may be) from any amounts otherwise due or payable under or pursuant to this Agreement such national, provincial, local or any other income, employment, or other taxes as may be required to be withheld pursuant to any applicable law or regulation.
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| 11. | ASSIGNMENT |
This Agreement is personal in its nature and neither of the parties hereto shall, without the consent of the other, assign or transfer this Agreement or any rights or obligations hereunder; provided, however, that (i) the Company may assign or transfer this Agreement or any rights or obligations hereunder to any member of the Group without such consent, and (ii) in the event of a Change of Control Transaction, this Agreement shall, subject to the provisions hereof, be binding upon and inure to the benefit of such successor and such successor shall discharge and perform all the promises, covenants, duties, and obligations of the Company hereunder.
| 12. | SEVERABILITY |
If any provision of this Agreement or the application thereof is held invalid, the invalidity shall not affect other provisions or applications of this Agreement which can be given effect without the invalid provisions or applications and to this end the provisions of this Agreement are declared to be severable.
| 13. | ENTIRE AGREEMENT |
This Agreement constitutes the entire agreement and understanding between the Executive and the Company regarding the terms of the Employment and supersedes all prior or contemporaneous oral or written agreements concerning such subject matter, including any prior agreements between the Executive and a member of the Group. The Executive acknowledges that he or she has not entered into this Agreement in reliance upon any representation, warranty or undertaking which is not set forth in this Agreement. Any amendment to this Agreement must be in writing and signed by the Executive and the Company.
| 14. | GOVERNING LAW; JURISDICTION |
This Agreement shall be governed by and construed in accordance with the laws of the United State of America.
| 15. | AMENDMENT |
This Agreement may not be amended, modified or changed (in whole or in part), except by a formal, definitive written agreement expressly referring to this Agreement, which agreement is executed by both of the parties hereto.
| 16. | WAIVER |
Neither the failure nor any delay on the part of a party to exercise any right, remedy, power or privilege under this Agreement shall operate as a waiver thereof, nor shall any single or partial exercise of any right, remedy, power or privilege preclude any other or further exercise of the same or of any right, remedy, power or privilege, nor shall any waiver of any right, remedy, power or privilege with respect to any occurrence be construed as a waiver of such right, remedy, power or privilege with respect to any other occurrence. No waiver shall be effective unless it is in writing and is signed by the party asserted to have granted such waiver.
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| 17. | NOTICES |
All notices, requests, demands and other communications required or permitted under this Agreement shall be in writing and shall be deemed to have been duly given and made if (i) delivered by hand, (ii) otherwise delivered against receipt therefor, or (iii) sent by a recognized courier with next-day or second-day delivery to the last known address of the other party.
| 18. | COUNTERPARTS |
This Agreement may be executed in any number of counterparts, each of which shall be deemed an original as against any party whose signature appears thereon, and all of which together shall constitute one and the same instrument. This Agreement shall become binding when one or more counterparts hereof, individually or taken together, shall bear the signatures of all of the parties reflected hereon as the signatories.
Photographic copies of such signed counterparts may be used in lieu of the originals for any purpose.
| 19. | NO INTERPRETATION AGAINST DRAFTER |
Each party recognizes that this Agreement is a legally binding contract and acknowledges that it, he or she has had the opportunity to consult with legal counsel of choice. In any construction of the terms of this Agreement, the same shall not be construed against either party on the basis of that party being the drafter of such terms.
[remainder of this page left intentionally blank]
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IN WITNESS WHEREOF, this Agreement has been executed as of the date first written above.
| Tianci International Inc. | ||
| By: | /s/ Shufang Gao | |
| Name: | Shufang Gao | |
| Title: | Chief Executive Officer | |
| Executive | ||
| By: | /s/ Ying Deng | |
| Name: | Ying Deng | |
| 8 |
EXHIBIT 21: SUBSIDIARIES OF THE COMPANY
| Organization | Jurisdiction of Organization |
| RQS United Group Limited | Republic of Seychelles |
| Roshing International Co., Ltd. | Hong Kong |
EXHIBIT 31.1: Rule 13a-14(a) Certification of Principal Executive and Financial Officer
I, Shufang Gao, certify that:
1. I have reviewed this annual report on Form 10-K of Tianci International, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal controls over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b) Designed such internal controls over financial reporting, or caused such internal controls over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
| Date: October 20, 2023 | /s/ Shufang Gao |
| Shufang Gao, Principal Executive and Financial Officer |
EXHIBIT 32.1: Rule 13a-14(b) Certification of Principal Executive and Financial Officer
The undersigned officer certifies that this report fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934, and that the information contained in the report fairly presents, in all material respects, the financial condition and results of operations of Tianci International, Inc.
A signed original of this written statement required by Section 906 of the Sarbanes-Oxley Act of 2002 has been provided to Tianci International, Inc. and will be retained by Tianci International, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.
| Date: October 20, 2023 | /s/ Shufang Gao |
| Shufang Gao, Principal Executive and Financial Officer |
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares |
Jul. 31, 2023 |
Jul. 31, 2022 |
|---|---|---|
| Common stock, par value | $ 0.0001 | $ 0.0001 |
| Common stock, shares authorized | 100,000,000 | 100,000,000 |
| Common stock, shares issued | 5,903,481 | 1,500,000 |
| Common stock, shares outstanding | 5,903,481 | 1,500,000 |
| 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 | 80,000 | 0 |
| Preferred stock, shares outstanding | 80,000 | 0 |
| Undesignated Preferred Stock [Member] | ||
| Preferred stock, par value | $ 0.0001 | $ 0.0001 |
| Preferred stock, shares authorized | 20,000,000 | 20,000,000 |
| Preferred stock, shares issued | 0 | 0 |
| Preferred stock, shares outstanding | 0 | 0 |
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) |
12 Months Ended | |
|---|---|---|
Jul. 31, 2023 |
Jul. 31, 2022 |
|
| OPERATING REVENUES | ||
| Total Operating Revenues | $ 452,409 | $ 752,839 |
| COST OF REVENUES | ||
| Total Cost of Revenues | 456,494 | 478,521 |
| Gross profit (loss) | (4,085) | 274,318 |
| Operating expenses: | ||
| Selling and marketing (including stock-based compensation of $36,000, $0, $36,000 and $0) | 54,169 | 4,912 |
| General and administrative (including stock-based compensation of $30,000, $0, $30,000 and $0) | 285,740 | 77,590 |
| Total operating expenses | 339,909 | 82,502 |
| (Loss) income from operations | (343,994) | 191,816 |
| Other income (expense) | 0 | 0 |
| (Loss) income before provision for (benefit from) income taxes | (343,994) | 191,816 |
| Provision for income taxes | 12,095 | 31,650 |
| Net (loss) income | (356,089) | 160,166 |
| Net (loss) income attributable to non-controlling interest | 14,879 | 16,017 |
| Net (loss) income attributable to TIANCI INTERNATIONAL, INC. | (341,210) | 144,149 |
| Product [Member] | ||
| OPERATING REVENUES | ||
| Total Operating Revenues | 294,880 | 500,500 |
| COST OF REVENUES | ||
| Total Cost of Revenues | 227,660 | 336,644 |
| Service [Member] | ||
| OPERATING REVENUES | ||
| Total Operating Revenues | 157,529 | 252,339 |
| COST OF REVENUES | ||
| Total Cost of Revenues | $ 228,834 | $ 141,877 |
CONSOLIDATED STATEMENTS OF OPERATIONS (Parenthetical) - USD ($) |
12 Months Ended | |||
|---|---|---|---|---|
Jul. 31, 2023 |
Jul. 31, 2022 |
|||
| Selling and Marketing Expense [Member] | ||||
| Selling and marketing expenses including stock based compensation | $ 36,000 | $ 0 | ||
| General and Administrative Expense [Member] | ||||
| General and administrative expenses including stock based compensation | 30,000 | 0 | ||
| Service [Member] | ||||
| Cost of revenue services including stock based compensation | $ 144,000 | $ 0 | ||
| Common Shares [Member] | ||||
| Weighted average number of shares, basic | [1] | 3,314,621 | 1,500,000 | |
| Weighted average number of shares, diluted | [1] | 3,314,621 | 1,500,000 | |
| Earnings (loss) per common share attributable to TIANCI INTERNATIONAL INC, basic | [1] | $ (0.10) | $ 0.10 | |
| Earnings (loss) per common share attributable to TIANCI INTERNATIONAL INC, diluted | [1] | $ (0.10) | $ 0.10 | |
| Preferred Shares [Member] | ||||
| Weighted average number of shares, basic | [1] | 40,659 | 0 | |
| Weighted average number of shares, diluted | [1] | 40,659 | 0 | |
| Earnings (loss) per common share attributable to TIANCI INTERNATIONAL INC, basic | [1] | $ (8.39) | $ 0 | |
| Earnings (loss) per common share attributable to TIANCI INTERNATIONAL INC, diluted | [1] | $ (8.39) | $ 0 | |
| ||||
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY - USD ($) |
Preferred Stock [Member] |
Common Stock [Member] |
Subscription Receivable [Member] |
[1] | Additional Paid-in Capital [Member] |
Retained Earnings [Member] |
Noncontrolling Interest [Member] |
Total |
||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Beginning balance, value at Jul. 31, 2021 | [1] | $ 150 | [1] | $ (50,000) | $ 62,686 | $ (79,460) | $ (8,829) | $ (75,453) | ||||
| Shares outstanding, beginning balance at Jul. 31, 2021 | 1,500,000 | [1] | ||||||||||
| Payments of Shenzhen China rent by related parties (Note 3) | [1] | [1] | 20,046 | 20,046 | ||||||||
| Net (loss) | [1] | [1] | 144,149 | 16,017 | 160,166 | |||||||
| Ending balance, value at Jul. 31, 2022 | [1] | $ 150 | [1] | (50,000) | 82,732 | 64,689 | 7,188 | 104,759 | ||||
| Shares outstanding, ending balance at Jul. 31, 2022 | 1,500,000 | [1] | ||||||||||
| RQS United subscription receivable | [1] | [1] | 50,000 | 50,000 | ||||||||
| Capital contribution | [1] | [1] | 65,650 | 65,650 | ||||||||
| Payments of Shenzhen China rent by related parties (Note 3) | [1] | [1] | 16,580 | 16,580 | ||||||||
| Stock compensation issued | [1] | $ 70 | [1] | 209,930 | 210,000 | |||||||
| Stock compensation issued, shares | [1] | 700,000 | ||||||||||
| Reverse merger adjustment | $ 8 | [1] | $ 370 | [1] | (369,910) | (369,532) | ||||||
| Reverse merger adjustment, shares | 80,000 | 3,703,481 | [1] | |||||||||
| Net (loss) | [1] | [1] | (341,210) | (14,879) | (356,089) | |||||||
| Ending balance, value at Jul. 31, 2023 | $ 8 | [1] | $ 590 | [1] | $ 4,982 | $ (276,521) | $ (7,691) | $ (278,632) | ||||
| Shares outstanding, ending balance at Jul. 31, 2023 | 80,000 | 5,903,481 | [1] | |||||||||
| ||||||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) |
12 Months Ended | |
|---|---|---|
Jul. 31, 2023 |
Jul. 31, 2022 |
|
| Cash flows from operating activities: | ||
| Net (loss) income | $ (356,089) | $ 160,166 |
| Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities: | ||
| Deferred income tax benefit | 0 | 17,447 |
| Stock compensation issued | 210,000 | 0 |
| Change in operating assets and liabilities: | ||
| Accounts receivable | 737,663 | (737,620) |
| Inventory | 16,700 | |
| Prepaid expense | 1,397 | 0 |
| Advance from customers | 29,070 | 0 |
| Accounts payable | (447,292) | 444,944 |
| Income taxes payable | 12,096 | 14,202 |
| Accrued liabilities and other payables | 137,736 | 0 |
| Net cash (used in) provided by operating activities | 324,581 | (84,161) |
| Cash flows from financing activities: | ||
| Cash received in connection with reverse acquisition | 4,186 | 0 |
| Subscription receivable collected | 50,000 | 0 |
| Capital contribution received | 65,650 | 0 |
| Working capital advance from related party | 31,490 | 2,007 |
| Repayment of working capital advance from related party | (341,885) | (14,280) |
| Operating expenses directly paid by shareholders | 84,503 | 77,375 |
| Payments of Shenzhen China rent by related parties | 16,580 | 20,046 |
| Net cash (used in) provided by financing activities | (89,476) | 85,148 |
| Net increase in cash | 235,105 | 987 |
| Cash, beginning | 21,237 | 20,250 |
| Cash, ending | 256,342 | 21,237 |
| Cash paid during the period for: | ||
| Interest | 0 | 0 |
| Income taxes | 0 | 0 |
| Non-Cash Activities: | ||
| Initial recognition of right-of-use assets and lease liabilities | 6,436 | 0 |
| Noncash assets (liabilities) received in connection with reverse acquisition: | ||
| Prepaid expense and other current assets | 3,250 | 0 |
| Accounts payable | (3,127) | 0 |
| Due to related parties | (253,041) | 0 |
| Accrued liabilities and other payables | (120,800) | 0 |
| Net | $ (373,718) | $ 0 |
NATURE OF BUSINESS AND ORGANIZATION |
12 Months Ended |
|---|---|
Jul. 31, 2023 | |
| Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
| NATURE OF BUSINESS AND ORGANIZATION | NOTE 1 – NATURE OF BUSINESS AND ORGANIZATION
Tianci International, Inc. (the “Company”, “Tianci”) was incorporated under the laws of the State of Nevada as Freedom Petroleum, Inc. on June 13, 2012. In May 2015, the Company changed its name to Steampunk Wizards, Inc. and on November 9, 2016, the Company changed its name to Tianci International, Inc. The Company is a holding company. As of July 31, 2023, the Company had one operating subsidiary, Roshing International Co., Ltd. (“Roshing”). The Company owns 90% of the capital stock of Roshing through RQS United, a wholly-owned subsidiary. The Company’s fiscal year end is July 31.
On February 13, 2023, the Company incorporated a wholly owned subsidiary Tianci Group Holding Limited in the Republic of Seychelles.
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., Ltd. (“Roshing”), which is engaged in the business of 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.
RQS United is a holding company incorporated on November 4, 2022 in the Republic of Seychelles. RQS United has no substantive operations other than holding 90% of the outstanding share capital of its subsidiary, Roshing, which was incorporated on June 22, 2011 in Hong Kong and is principally engaged in sales of electronic device hardware components, development of software and websites, technical consulting, and maintenance support on customized software. Roshing’s business is primarily carried out in Hong Kong and China.
Prior to the Share Exchange, the Company 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.
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 negative working capital of $284,542. For the years ended July 31, 2023 and 2022, the Company had total operating revenues of $452,409 and $752,839, respectively, and net income (loss) of $(356,089) and $160,166, respectively. These factors among others raise substantial doubt about the ability of the Company to continue as a going concern for a reasonable period of time. Management plans to seek debt and/or equity financing to operate until such time as the Company has established sufficient ongoing revenues to cover its costs. However, there is no assurance that management will be successful in accomplishing its plans. These financial statements do not include any adjustments relating to the recoverability and classification of assets or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
12 Months Ended | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jul. 31, 2023 | ||||||||||||||||
| Accounting Policies [Abstract] | ||||||||||||||||
| SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 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, 2023 and 2022, no allowance for doubtful accounts was deemed necessary.
Fair Value Measurements
The accounting standard regarding fair value of financial instruments and related fair value measurements defines financial instruments and requires disclosure of the fair value of financial instruments held by the Company.
The accounting standard defines fair value, establishes as a three-level valuation hierarchy for disclosures of fair value measurement and enhances disclosure requirements for fair value measures. The three levels are defined as follow:
Financial instruments included in current assets and current liabilities (such as cash, accounts receivable, due from related party accounts payable, and due to related parties) are reported in the consolidated balance sheets at cost, which approximates fair value because of the short period of time between the origination of such instruments and their expected realization.
Revenue recognition
The Company follows the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 606. This standard requires the use of a five-step model to recognize revenue from customer contracts. The five-step model requires that the Company (i) identifies the contract with the customer, (ii) identifies the performance obligations in the contract, (iii) determines the transaction price, including variable consideration to the extent that it is probable that a significant future reversal will not occur, (iv) allocates the transaction price to the respective performance obligations in the contract, and (v) recognizes revenue when (or as) the Company satisfies the performance obligations.
The Company records revenue net of sales taxes which are subsequently remitted to governmental authorities and are excluded from the transaction price.
The Company’s revenue recognition policies are as follows:
a. Electronic Device Hardware Components Products Sales
The Company is a distributor of electronic device hardware components and generates revenue through resale of these components. The Company’s products include high performance computer chips, Wi-Fi modules, Bluetooth modules, 4G network modules, LED screens, and touch screens. In accordance with ASC 606, Revenue Recognition: Principal Agent Consideration, an entity is a principal if it controls the specified good or service before that good or service is transferred to a customer. Otherwise, the entity is an agent in the transaction. The Company evaluates three indicators of control in accordance with ASC 606: 1) For hardware sales, the Company is the most visible entity to customers and assumes fulfillment risk and risks related to the acceptability of products, including addressing customer complaints directly and handling of product returns or refunds directly. 2) The Company is exposed to inventory risk before transfer of control to customers 3) The Company determines the resale price of hardware products. After evaluating the above circumstances, the Company considers itself the principal of these arrangements and records hardware sales revenue on a gross basis.
Hardware sales contracts are on a fixed price basis with no separate sales rebate, discount, or other incentive. Revenue is recognized at a point in time when the Company has delivered products that have been accepted by its customer with no future obligations. The Company generally permits returns of products due to product failure; however, returns are historically insignificant.
b. Software and Website Development Services
The Company generates revenue by developing customized freight shipping and related logistic software and websites, which are generally on a fixed-priced basis. The software helps wholesalers, ecommerce retailers, and freight shipping providers to manage complex workflows and improve work efficiency. The Company generally has no enforceable right to payment for performance completed to date and is only entitled to payment after software is fully developed, delivered, tested, and accepted by the customer. As a result, revenues from software development contracts are recognized at a point in time when services are fully rendered, and written acceptances have been received from customers.
c. Technical Consulting and Training Services
The Company provides technical consulting and training services to help customers, generally its existing customers, to better understand and properly use its customized software and related hardware. Services are generally carried out on a per-time fixed rate basis. Revenue is recognized at a point in time when service is rendered and the customer confirms the completion of consulting or training.
d. Software Maintenance and Business Promotion Services
The Company provides software maintenance service to keep customer’s software up to date and assists customers in promoting business with ongoing marketing support. The Company charges a flat rate for a fixed duration on a subscription basis, generally 12 months. Revenue is recognized ratably each month over the contract period.
e. Business Consulting Services
The Company provides business consulting services to help customers apply for immigration and non-immigration visas. The Company is responsible for performing background checks, case analysis, and preparing related application paper works. The Company charges a flat fee for the visa application services. Revenue is recognized at a point in time when an application is submitted with proper authorities.
Cost of revenues
For hardware products sales, the cost of revenue consists primarily of the costs of hardware products sold.
For software related services, the cost of revenue consists primarily of costs paid to outsourced service providers and compensation expenses paid the Company’s software engineers.
Advertising costs
Advertising costs amounted to $192 and $192 for the year ended July 31, 2023 and 2022, respectively. Advertising costs are expensed as incurred and included in selling and marketing expenses.
Operating leases
Effective August 1, 2022, the Company adopted FASB ASU 2016-02, “Leases” (Topic 842), and elected the practical expedients that does not require the Company to reassess: (1) whether any expired or existing contracts are, or contain, leases, (2) lease classification for any expired or existing leases and (3) initial direct costs for any expired or existing leases. For lease terms of twelve months or less, a lessee is permitted to make an accounting policy election not to recognize lease assets and liabilities. The Company also adopted the practical expedient that allows lessees to treat the lease and non-lease components of a lease as a single lease component. Upon adoption of ASU 2016-02 effective August 1, 2022, the Company recognized a $8,704 right of use (“ROU”) asset and operating lease liabilities in January 2023 based on the present value of the future minimum rental payments of leases, using an incremental borrowing rate of 5%.
The Company determines if a contract contains a lease at inception. US GAAP requires that the Company’s leases be evaluated and classified as operating or finance leases for financial reporting purposes. The classification evaluation begins at the commencement date and the lease term used in the evaluation includes the non-cancellable period for which the Company has the right to use the underlying asset, together with renewal option periods when the exercise of the renewal option is reasonably certain and failure to exercise such option would result in an economic penalty. All of the Company’s real estate leases are classified as operating leases.
Lease payments for an operating lease transitioning to ASC 842 using the effective date are based on future payments at the transition date and on the present value of lease payments over the remaining lease term. Since the implicit rate for the Company’s leases is not readily determinable, the Company uses its incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments. The incremental borrowing rate is the rate of interest that the Company would have to pay to borrow, on a collateralized basis, an amount equal to the lease payments, in a similar economic environment and over a similar term.
Lease terms used to calculate the present value of lease payments generally do not include any options to extend, renew, or terminate the lease, as the Company does not have reasonable certainty at lease inception that these options will be exercised. The Company generally considers the economic life of its operating lease ROU assets to be comparable to the useful life of similar owned assets. The Company has elected the short-term lease exception; therefore, operating lease ROU assets and liabilities do not include leases with a lease term of twelve months or less. Lease expense is recognized on a straight-line basis over the lease term.
The Company reviews the impairment of its ROU assets consistent with the approach applied for its other long-lived assets. The Company reviews the recoverability of its long-lived assets when events or changes in circumstances occur that indicate that the carrying value of the asset may not be recoverable. The assessment of possible impairment is based on its ability to recover the carrying value of the asset from the expected undiscounted future pre-tax cash flows of the related operations.
Income taxes
The Company accounts for current income taxes in accordance with the laws of the relevant tax authorities. The charge for taxation is based on the results for the fiscal year as adjusted for items which are non-taxable or non-deductible. It is calculated using tax rates that have been enacted or substantively enacted by the balance sheet date.
Deferred taxes are accounted for 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 expense in the period incurred.
The Hong Kong tax returns filed for 2016 and subsequent years are subject to examination by the applicable tax authorities.
The US tax returns filed for 2019 and subsequent years are subject to examination by the applicable tax authorities.
The Company computes earnings (loss) per share (“EPS”) in accordance with FASB ASC 260, “Earnings per Share”. ASC 260 requires companies to present basic and diluted EPS. Basic EPS is measured as net income (loss) divided by the weighted average ordinary shares outstanding for the period. Diluted EPS presents the diluted effect on a per share basis of the potential ordinary shares (e.g., convertible securities, options and warrants) as if they had been converted at the beginning of the periods presented, or issuance date, if later. Potential ordinary shares that have an anti-dilutive effect (i.e., those that increase income per share or decrease loss per share) are excluded from the calculation of diluted EPS. For the years ended July 31, 2023 and 2022, there were dilutive shares outstanding.
Noncontrolling Interests
The Company’s noncontrolling interest represents the minority shareholder’s 10% ownership interest in Roshing. The noncontrolling interest is presented in the consolidated balance sheets separately from stockholders’ equity attributable to Tianci. Noncontrolling interest in the results of Roshing are presented on the consolidated statements of operations as allocations of the total income or loss of Roshing for the years ended July 31, 2023 and 2022 between the noncontrolling interest holder and the shareholders of RQS United.
Related parties
Parties, which can be a corporation, other business entity, or an individual, are considered to be related if one party has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operating decisions. Parties are also considered to be related if they are subject to common control or common significant influence.
Recently issued accounting pronouncements
The Company considers the applicability and impact of all accounting standards updates (“ASUs”). Management periodically reviews new accounting standards that are issued. Under the Jumpstart Our Business Startups Act of 2012, as amended (the “JOBS Act”), the Company meets the definition of an emerging growth company and has elected the extended transition period for complying with new or revised accounting standards, which delays the adoption of these accounting standards until they would apply to private companies.
In May 2019, the FASB issued ASU 2019-05, which is an update to ASU Update No. 2016-13, Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which introduced the expected credit losses methodology for the measurement of credit losses on financial assets measured at amortized cost basis, replacing the previous incurred loss methodology. The amendments in Update 2016-13 added Topic 326, Financial Instruments — Credit Losses, and made several consequential amendments to the Codification. Update 2016-13 also modified the accounting for available-for-sale debt securities, which must be individually assessed for credit losses when fair value is less than the amortized cost basis, in accordance with Subtopic 326-30, Financial Instruments — Credit Losses — Available-for-Sale Debt Securities. The amendments in this Update provide an option to irrevocably elect the fair value option for certain financial assets previously measured at amortized cost basis. In November 2019, the FASB issued ASU No. 2019-10, which updates the effective date of ASU No. 2016-13 for private companies, not-for-profit organizations and certain smaller reporting companies. The new effective date for these preparers is for fiscal years beginning after December 15, 2022. ASU 2019-05 is effective for the Company for annual and interim reporting periods beginning August 1, 2023 as the Company is qualified as an emerging growth company. The adoption of this standard on August 1, 2023 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.
In October 2020, the FASB issued ASU 2020-08, “Codification Improvements to Subtopic 310-20, Receivables — Nonrefundable Fees and Other Costs”. The amendments in this Update represent changes to clarify the Codification. The amendments make the Codification easier to understand and easier to apply by eliminating inconsistencies and providing clarifications. ASU 2020-08 is effective for the Company for annual and interim reporting periods beginning August 1, 2021. All entities should apply the amendments in this Update on a prospective basis as of the beginning of the period of adoption for existing or newly purchased callable debt securities. These amendments do not change the effective dates for Update 2017-08. The adoption of this standard on August 1, 2021 did not have a material impact on the Company’s 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.
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RELATED PARTIES BALANCES AND TRANSACTIONS |
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| Related Party Transactions [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| RELATED PARTIES BALANCES AND TRANSACTIONS | NOTE 3 – RELATED PARTIES BALANCES AND TRANSACTIONS
Due from related party consists of:
Due from related party represents a receivable of $54,134 from RQS Capital, which was subsequently collected.
Due to related parties consist of:
These liabilities are unsecured, non-interest bearing, and due on demand.
Employment agreements with officers and director retainer agreements
Tianci currently maintains two employment agreements and six 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 year ended July 31, 2023, we accrued management compensation expenses of $. These amounts are included in “general and administrative expenses” in the accompanying consolidated statement of operations.
Office space sharing agreement with related parties
On August 28, 2021, Roshing entered into an office space sharing agreement with Shufang Gao, 60% owner of RQS Capital and Ying Deng, 30% owner of RQS Capital, for office space in Shenzhen, China. The agreement 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, 2023 and 2022, the Company has accounted for this agreement by charging general and administrative expenses for $16,580 and $20,046, respectively, and crediting additional paid-in capital for $16,580 and $20,046, respectively. The office sharing agreement was terminated on May 31, 2023 when Roshing moved all of its operations to its office in Hong Kong.
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STOCKHOLDERS EQUITY |
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| Equity [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||
| STOCKHOLDERS EQUITY | NOTE 4 – STOCKHOLDERS EQUITY
On January 26, 2023 the Company filed with the Nevada Secretary of State a Certificate of Amendment of Articles of Incorporation (the “Amendment”). The Amendment amended Article 3 of the Company’s Articles of Incorporation to provide that the authorized capital stock of the Company will be 120,080,000 shares of capital stock consisting of shares of common stock, $ par value, shares of Series A Preferred Stock, $ par value, and shares of undesignated preferred stock, $ par value.
The following table sets forth information, as of July 31, 2023, regarding the classes of capital stock that are authorized by the Articles of Incorporation of Tianci International, Inc.
Series A Preferred Stock
Each share of Series A Preferred Stock may be converted by the holder of the share into 100 shares of common stock, subject to equitable adjustment of the conversion rate. Each holder of Series A Preferred Stock will have voting rights equal to the holder of the number of shares of common stock into which the Series A Preferred Stock is convertible. Upon liquidation of the Company, each holder of Series A Preferred Stock will be entitled to receive, out of the net assets of the Company, $0.01 per share, then to share in the distribution on an as-converted basis.
Undesignated Preferred Stock
The Board of Directors has the authority, without shareholder approval, to amend the Company’s Articles of Incorporation to divide the class of undesignated Preferred Stock into series, and to determine the relative rights and preferences of the shares of each series, including (i) voting power, (ii) the rate of dividend, (iii) the price at which, and the terms and conditions on which, the shares may be redeemed, (iv) the amount payable upon the shares in the event of liquidation, (v) any sinking fund provision for the redemption or purchase of the shares, and (vi) the terms and conditions on which the shares may be converted to shares of another series or class, if the shares of any series are issued with the privilege of conversion.
Issuances of Preferred Stock and Common Stock
On January 27, 2023, Tianci sold shares of its Series A Preferred Stock to RQS Capital for $24,000 cash.
On March 1, 2023, Tianci sold a total of shares of its common stock to 13 non-US persons at a price of $ per share or $376,000 total.
On March 6, 2023, Tianci issued shares of its common stock to RQS Capital pursuant to the Share Exchange Agreement dated March 3, 2023 (see Note 1 above).
Also on March 6, 2023 pursuant to the Share Exchange Agreement dated March 3, 2023, Tianci issued a total of shares of its common stock to nine employees or affiliates of Roshing to induce continued services to Roshing. For the year ended July 31, 2023, the Company accounted for this issuance by expensing the $210,000 estimated fair value of the shares of common stock to (1) cost of revenues-services ($144,000), (2) selling and marketing ($36,000), and (3) general and administrative ($30,000).
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INCOME TAXES |
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| Income Tax Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| INCOME TAXES | NOTE 5 – INCOME TAXES
Income Taxes
Seychelles
RQS United is incorporated in Seychelles and is not subject to tax on income generated outside of Seychelles under the current law. In addition, upon payment of dividends, no withholding tax is imposed under current law.
Hong Kong
Roshing is incorporated in Hong Kong and is subject to Hong Kong Profits Tax on the taxable income as reported in its statutory financial statements adjusted in accordance with relevant Hong Kong tax laws. The applicable tax rate is 16.5% in Hong Kong. Hong Kong income tax expenses for the years ended July 31, 2023 and 2022 amounted to $12,095 and $31,650, respectively.
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. For the year ended July 31, 2022, the income before provision for income taxes of $191,816 was all Hong Kong source income.
Significant components of the provision for income taxes are as follows:
The following table reconciles the Hong Kong statutory rates to the Company’s Hong Kong effective tax rate:
For United States income tax purposes, Tianci has a net operating loss carry forward of approximately $967,000 at July 31, 2023. Management has not determined that it is more likely than not that this carryforward will be realized and thus the Company maintained a 100% valuation allowance for the deferred tax asset relating to the United States net operating loss carryforward. Current United States income tax law limits the amount of loss available to offset against future taxable income when a substantial change in ownership occurs.
Uncertain tax positions
The Company evaluates each uncertain tax position (including the potential application of interest and penalties) based on the technical merits, and measures the unrecognized benefits associated with the tax positions. As of July 31, 2023 and 2022, the Company did not have any significant unrecognized uncertain tax positions.
As of July 31, 2023, tax years 2020 and forward generally remain open for examination for United States Federal and State tax purposes and tax years 2017 and forward generally remain open for examination for foreign tax purposes.
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CONCENTRATION OF RISK |
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| Risks and Uncertainties [Abstract] | |
| CONCENTRATION OF RISK | NOTE 6 — CONCENTRATION OF RISK
Credit risk
Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash held in banks. The cash balance in each financial institution in the United States is insured by the FDIC up to $250,000. As of July 31, 2023, no United States account balance exceeded $250,000. The Hong Kong Deposit Protection Board pays compensation up to a limit of HKD 500,000 (approximately US$64,000) if the bank with which an individual/company holds its eligible deposit fails. As of July 31, 2023, a cash balance of $189,768 was maintained at a financial institution in Hong Kong of which approximately $125,000 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 year ended July 31, 2023, two customers accounted for 40.9% and 11.5% of the Company’s total revenues.
For the year ended July 31, 2022, five customers accounted for 40.3%, 23.9%, 10.6%, 10.6% and 10.2% of the Company’s total revenues.
As of July 31, 2023, no customer accounted for over 10% of the Company’s total accounts receivable. As of July 31, 2022, five customers accounted for 41.1%, 24.4%, 10.8%, 10.8%, and 10.5% of the Company’s total accounts receivable.
Vendor concentration risk
For the year ended July 31, 2023, two vendors accounted for 76% and 16% of the Company’s total purchases. For the year ended July 31, 2022, four vendors accounted for 44.5%, 28.1% 16.6%, and 10.8% of the Company’s total purchases.
As of July 31, 2023, no vendor accounted for over 10% of the Company’s total accounts payable. As of July 31, 2022, four vendors accounted for 44.5%, 28.1%, 16.6%, and 10.8% of the Company’s total accounts payable.
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COMMITMENTS AND CONTINGENCIES |
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| Commitments and Contingencies Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| COMMITMENTS AND CONTINGENCIES | NOTE 7— COMMITMENTS AND CONTINGENCIES
Lease commitments
On January 1, 2021, Roshing entered into an operating lease agreement for office space in Hong Kong with a third party. The agreement had a term of two years and provided for monthly rent of HKD 2,800 (approximately $360). On January 13, 2023, the Company entered a new operating lease agreement for office space in Hong Kong with a third party for two years with monthly rent of HKD 3,000 (approximately $382). Upon adoption of ASU 2016-02 effective August 1, 2022, the Company recognized a $8,704 right of use (“ROU”) asset and operating lease liabilities in January 2023 based on the present value of the future minimum rental payments of leases, using an incremental borrowing rate of 5%.
The Company’s lease agreement does not contain any material residual value guarantees or material restrictive covenants. The lease does not contain an option to extend at the time of expiration.
As of July 31, 2023, the Company’s operating lease had a remaining lease term of approximately 1.50 years.
Rent expenses were $26,159 and $24,362 for the years ended July 31, 2023 and 2022, respectively.
The total future minimum lease payments under the non-cancellable operating lease as of July 31, 2023 are as follows:
Future amortization of the Company’s ROU asset is presented below:
Contingencies
From time to time, the Company may be a party to legal proceedings, as well as certain asserted and un-asserted claims.
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ENTERPRISE WIDE DISCLOSURE |
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| Segment Reporting [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| ENTERPRISE WIDE DISCLOSURE | NOTE 8 — ENTERPRISE WIDE DISCLOSURE
The Company follows ASC 280, Segment Reporting, which requires companies to disclose segment data based on how management makes decisions about allocating resources to each segment and evaluates their performances. The Company’s chief operating decision-makers (i.e., the Company’s chief executive officer and his direct assistants, including the Company’s chief financial officer) review financial information presented on a consolidated basis, accompanied by disaggregated information about revenues, cost of revenues, and gross profit by business lines and by regions (primarily in Hong Kong and Singapore) for purposes of allocating resources and evaluating financial performance. There are no segment managers who are held accountable for operations, operating results and plans for levels or components below the consolidated unit level. Based on qualitative and quantitative criteria established by ASC 280, the Company considers itself to be operating within one reportable segment.
Disaggregated information of revenues by business lines are as follows:
Disaggregated information of revenues by regions are as follows:
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CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY (Unaudited) |
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| Condensed Financial Information Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY (Unaudited) | NOTE 9 — CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY (Unaudited)
The Company performed a test on the restricted net assets of its consolidated subsidiaries in accordance with Rule 4-08(e)(3) of Regulation S-X promulgated by the SEC, “General Notes to Financial Statements” and concluded that it was applicable and the Company is required to disclose the required financial statement information for the parent company.
The subsidiaries did not pay any dividends to the parent during the periods presented. For the purpose of presenting parent only financial information, the Company records its investment in its subsidiaries under the equity method of accounting. Such investments are presented on the separate parent only balance sheets as “investment in subsidiaries” and the income (loss) of the subsidiaries is presented as “share of income (loss) of subsidiaries.” Certain information and footnote disclosures generally included in financial statements prepared in accordance with U.S. GAAP have been condensed or are not required.
PARENT COMPANY BALANCE SHEET
PARENT COMPANY STATEMENT OF OPERATIONS
PARENT COMPANY STATEMENT OF CASH FLOWS
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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) |
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| Accounting Policies [Abstract] | ||||||||||||||||
| Basis of Presentation | 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”).
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| 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.
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| 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.
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| 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.
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| 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.
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| 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 July 31, 2023 and 2022, no allowance for doubtful accounts was deemed necessary.
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| 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:
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.
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| 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. Electronic Device Hardware Components Products Sales
The Company is a distributor of electronic device hardware components and generates revenue through resale of these components. The Company’s products include high performance computer chips, Wi-Fi modules, Bluetooth modules, 4G network modules, LED screens, and touch screens. In accordance with ASC 606, Revenue Recognition: Principal Agent Consideration, an entity is a principal if it controls the specified good or service before that good or service is transferred to a customer. Otherwise, the entity is an agent in the transaction. The Company evaluates three indicators of control in accordance with ASC 606: 1) For hardware sales, the Company is the most visible entity to customers and assumes fulfillment risk and risks related to the acceptability of products, including addressing customer complaints directly and handling of product returns or refunds directly. 2) The Company is exposed to inventory risk before transfer of control to customers 3) The Company determines the resale price of hardware products. After evaluating the above circumstances, the Company considers itself the principal of these arrangements and records hardware sales revenue on a gross basis.
Hardware sales contracts are on a fixed price basis with no separate sales rebate, discount, or other incentive. Revenue is recognized at a point in time when the Company has delivered products that have been accepted by its customer with no future obligations. The Company generally permits returns of products due to product failure; however, returns are historically insignificant.
b. Software and Website Development Services
The Company generates revenue by developing customized freight shipping and related logistic software and websites, which are generally on a fixed-priced basis. The software helps wholesalers, ecommerce retailers, and freight shipping providers to manage complex workflows and improve work efficiency. The Company generally has no enforceable right to payment for performance completed to date and is only entitled to payment after software is fully developed, delivered, tested, and accepted by the customer. As a result, revenues from software development contracts are recognized at a point in time when services are fully rendered, and written acceptances have been received from customers.
c. Technical Consulting and Training Services
The Company provides technical consulting and training services to help customers, generally its existing customers, to better understand and properly use its customized software and related hardware. Services are generally carried out on a per-time fixed rate basis. Revenue is recognized at a point in time when service is rendered and the customer confirms the completion of consulting or training.
d. Software Maintenance and Business Promotion Services
The Company provides software maintenance service to keep customer’s software up to date and assists customers in promoting business with ongoing marketing support. The Company charges a flat rate for a fixed duration on a subscription basis, generally 12 months. Revenue is recognized ratably each month over the contract period.
e. Business Consulting Services
The Company provides business consulting services to help customers apply for immigration and non-immigration visas. The Company is responsible for performing background checks, case analysis, and preparing related application paper works. The Company charges a flat fee for the visa application services. Revenue is recognized at a point in time when an application is submitted with proper authorities.
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| Cost of revenues | Cost of revenues
For hardware products sales, the cost of revenue consists primarily of the costs of hardware products sold.
For software related services, the cost of revenue consists primarily of costs paid to outsourced service providers and compensation expenses paid the Company’s software engineers.
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| Advertising costs | Advertising costs
Advertising costs amounted to $192 and $192 for the year ended July 31, 2023 and 2022, respectively. Advertising costs are expensed as incurred and included in selling and marketing expenses.
|
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| 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.
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| 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 expense in the period incurred.
The Hong Kong tax returns filed for 2016 and subsequent years are subject to examination by the applicable tax authorities.
The US tax returns filed for 2019 and subsequent years are subject to examination by the applicable tax authorities.
|
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| Earnings (loss) per share |
The Company computes earnings (loss) per share (“EPS”) in accordance with FASB ASC 260, “Earnings per Share”. ASC 260 requires companies to present basic and diluted EPS. Basic EPS is measured as net income (loss) divided by the weighted average ordinary shares outstanding for the period. Diluted EPS presents the diluted effect on a per share basis of the potential ordinary shares (e.g., convertible securities, options and warrants) as if they had been converted at the beginning of the periods presented, or issuance date, if later. Potential ordinary shares that have an anti-dilutive effect (i.e., those that increase income per share or decrease loss per share) are excluded from the calculation of diluted EPS. For the years ended July 31, 2023 and 2022, there were dilutive shares outstanding.
|
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| 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 for the years ended July 31, 2023 and 2022 between the noncontrolling interest holder and the shareholders of RQS United.
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| 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.
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| 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. Under the Jumpstart Our Business Startups Act of 2012, as amended (the “JOBS Act”), the Company meets the definition of an emerging growth company and has elected the extended transition period for complying with new or revised accounting standards, which delays the adoption of these accounting standards until they would apply to private companies.
In May 2019, the FASB issued ASU 2019-05, which is an update to ASU Update No. 2016-13, Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which introduced the expected credit losses methodology for the measurement of credit losses on financial assets measured at amortized cost basis, replacing the previous incurred loss methodology. The amendments in Update 2016-13 added Topic 326, Financial Instruments — Credit Losses, and made several consequential amendments to the Codification. Update 2016-13 also modified the accounting for available-for-sale debt securities, which must be individually assessed for credit losses when fair value is less than the amortized cost basis, in accordance with Subtopic 326-30, Financial Instruments — Credit Losses — Available-for-Sale Debt Securities. The amendments in this Update provide an option to irrevocably elect the fair value option for certain financial assets previously measured at amortized cost basis. In November 2019, the FASB issued ASU No. 2019-10, which updates the effective date of ASU No. 2016-13 for private companies, not-for-profit organizations and certain smaller reporting companies. The new effective date for these preparers is for fiscal years beginning after December 15, 2022. ASU 2019-05 is effective for the Company for annual and interim reporting periods beginning August 1, 2023 as the Company is qualified as an emerging growth company. The adoption of this standard on August 1, 2023 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.
In October 2020, the FASB issued ASU 2020-08, “Codification Improvements to Subtopic 310-20, Receivables — Nonrefundable Fees and Other Costs”. The amendments in this Update represent changes to clarify the Codification. The amendments make the Codification easier to understand and easier to apply by eliminating inconsistencies and providing clarifications. ASU 2020-08 is effective for the Company for annual and interim reporting periods beginning August 1, 2021. All entities should apply the amendments in this Update on a prospective basis as of the beginning of the period of adoption for existing or newly purchased callable debt securities. These amendments do not change the effective dates for Update 2017-08. The adoption of this standard on August 1, 2021 did not have a material impact on the Company’s 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.
|
RELATED PARTIES BALANCES AND TRANSACTIONS (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jul. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Related Party Transactions [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of due to related parties |
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STOCKHOLDERS EQUITY (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||
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Jul. 31, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||
| Equity [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of capital stock authorized |
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INCOME TAXES (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jul. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of components of income tax expense |
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| Schedule of effective income tax reconciliation |
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COMMITMENTS AND CONTINGENCIES (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||
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Jul. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||
| Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||
| Schedule of operating lease payments |
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| Schedule of future amortization |
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ENTERPRISE WIDE DISCLOSURE (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jul. 31, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Segment Reporting [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of information of revenues by business |
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| Schedule of information of revenues by regions |
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CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY (Unaudited) (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jul. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Condensed Financial Information Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of balance sheets |
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| Schedule of statements of operations |
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| Schedule of statements of cash flows |
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NATURE OF BUSINESS AND ORGANIZATION (Details Narrative) - USD ($) |
12 Months Ended | ||
|---|---|---|---|
Mar. 06, 2023 |
Jul. 31, 2023 |
Jul. 31, 2022 |
|
| Plan of reorganization | 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. | ||
| Cash | $ 256,342 | $ 21,237 | |
| Working capital | 284,542 | ||
| Revenues | 452,409 | 752,839 | |
| Net Income (Loss), Including Portion Attributable to Noncontrolling Interest | $ (356,089) | $ 160,166 | |
| R Q S [Member] | |||
| Ownership percentage | 90.00% | ||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) |
12 Months Ended | ||
|---|---|---|---|
Jul. 31, 2023 |
Jul. 31, 2022 |
Aug. 02, 2022 |
|
| Accounts Receivable, Allowance for Credit Loss | $ 0 | ||
| Advertising costs | $ 192 | $ 192 | |
| Right of use asset | $ 8,704 | ||
| Borrowing rate | 5.00% | ||
| Antidilutive shares | 0 | 0 | |
| R Q S [Member] | |||
| Ownership interest | 10.00% | ||
RELATED PARTIES BALANCES AND TRANSACTIONS (Details) - USD ($) |
Jul. 31, 2023 |
Jul. 31, 2022 |
|---|---|---|
| Related Party Transaction [Line Items] | ||
| Due to related parties | $ 276,077 | $ 194,794 |
| Zhigang Pei [Member] | ||
| Related Party Transaction [Line Items] | ||
| Due to related parties | 220,909 | 0 |
| R Q S Capital [Member] | ||
| Related Party Transaction [Line Items] | ||
| Due to related parties | 2,132 | 0 |
| Ying Deng [Member] | ||
| Related Party Transaction [Line Items] | ||
| Due to related parties | $ 53,036 | $ 194,794 |
RELATED PARTIES BALANCES AND TRANSACTIONS (Details Narrative) - USD ($) |
12 Months Ended | ||
|---|---|---|---|
Aug. 28, 2021 |
Jul. 31, 2023 |
Jul. 31, 2022 |
|
| Related Party Transaction [Line Items] | |||
| Due from related party | $ 54,134 | $ 0 | |
| Compensation expenses | 120,000 | ||
| General and administrative expenses | 16,580 | 20,046 | |
| Additional paid-in capital | 16,580 | $ 20,046 | |
| R Q S Capital [Member] | |||
| Related Party Transaction [Line Items] | |||
| Due from related party | $ 54,134 | ||
| Shufang Gao [Member] | |||
| Related Party Transaction [Line Items] | |||
| Office space sharing related parties percentage | 60.00% | ||
| Ying Deng [Member] | |||
| Related Party Transaction [Line Items] | |||
| Office space sharing related parties percentage | 30.00% | ||
STOCKHOLDERS EQUITY (Details) - shares |
Jul. 31, 2023 |
Jul. 31, 2022 |
|---|---|---|
| Class of Stock [Line Items] | ||
| Common stock, shares authorized | 100,000,000 | 100,000,000 |
| Common stock, shares outstanding | 5,903,481 | 1,500,000 |
| Series A Preferred Stock [Member] | ||
| Class of Stock [Line Items] | ||
| Preferred stock, shares authorized | 80,000 | 80,000 |
| Preferred stock, shares outstanding | 80,000 | 0 |
| Undesignated Preferred Stock [Member] | ||
| Class of Stock [Line Items] | ||
| Preferred stock, shares authorized | 20,000,000 | 20,000,000 |
| Preferred stock, shares outstanding | 0 | 0 |
STOCKHOLDERS EQUITY (Details Narrative) - USD ($) |
12 Months Ended | ||||
|---|---|---|---|---|---|
Mar. 01, 2023 |
Jan. 27, 2023 |
Jul. 31, 2023 |
Jul. 31, 2022 |
Mar. 06, 2023 |
|
| Class of Stock [Line Items] | |||||
| Capital stock authorized | 120,080,000 | ||||
| Common stock, shares authorized | 100,000,000 | 100,000,000 | |||
| Common stock, par value | $ 0.0001 | $ 0.0001 | |||
| Shares issued | 1,500,000 | ||||
| Estimated fair value | $ 210,000 | ||||
| Number of share issued | 700,000 | ||||
| Cost of revenues | $ 456,494 | $ 478,521 | |||
| Selling and marketing | 36,000 | ||||
| General and administrative | 30,000 | ||||
| Services [Member] | |||||
| Class of Stock [Line Items] | |||||
| Cost of revenues | $ 144,000 | ||||
| Common Stock [Member] | |||||
| Class of Stock [Line Items] | |||||
| Number of shares sold | 1,253,333 | ||||
| Number of shares sold, value | $ 376,000 | ||||
| Sale of stock per share | $ 0.30 | ||||
| Shares issued | 700,000 | ||||
| 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 | |||
| Number of shares sold | 80,000 | ||||
| Number of shares sold, value | $ 24,000 | ||||
| Undesignated Preferred Stock [Member] | |||||
| Class of Stock [Line Items] | |||||
| Preferred stock, shares authorized | 20,000,000 | 20,000,000 | |||
| Preferred stock, par value | $ 0.0001 | $ 0.0001 | |||
INCOME TAXES (Details - Schedule of components of income tax expense) - USD ($) |
12 Months Ended | |
|---|---|---|
Jul. 31, 2023 |
Jul. 31, 2022 |
|
| Income Tax Disclosure [Abstract] | ||
| Current Hong Kong | $ 12,095 | $ 14,203 |
| Deferred Hong Kong | 0 | 17,447 |
| Provision (benefit) for income taxes | $ 12,095 | $ 31,650 |
INCOME TAXES (Details - Schedule of effective income tax reconciliation) |
12 Months Ended | |
|---|---|---|
Jul. 31, 2023 |
Jul. 31, 2022 |
|
| Income Tax Disclosure [Abstract] | ||
| Hong Kong statutory income tax rate | 16.50% | 16.50% |
| Non deductible stock compensation expense | (25.30%) | 0.00% |
| Effective tax rate | (8.80%) | 16.50% |
INCOME TAXES (Details Narrative) - USD ($) |
12 Months Ended | |
|---|---|---|
Jul. 31, 2023 |
Jul. 31, 2022 |
|
| Income tax rate | (8.80%) | 16.50% |
| Income tax expenses | $ 12,095 | $ 31,650 |
| (Loss) income before provision for (benefit from) income taxes | (343,994) | 191,816 |
| Net operating loss carry forward | $ 967,000 | |
| HONG KONG | ||
| Income tax rate | 16.50% | |
| Income tax expenses | $ 12,095 | $ 31,650 |
CONCENTRATION OF RISK (Details Narrative) |
12 Months Ended | ||
|---|---|---|---|
|
Jul. 31, 2023
USD ($)
|
Jul. 31, 2022 |
Jul. 31, 2023
HKD ($)
|
|
| Concentration Risk [Line Items] | |||
| Cash, FDIC Insured Amount | $ 250,000 | ||
| Compensating Balance, Amount | $ 64,000 | $ 500,000 | |
| Revenue Benchmark [Member] | Customer Concentration Risk [Member] | Customer One [Member] | |||
| Concentration Risk [Line Items] | |||
| Concentration risk percentage | 40.90% | 40.30% | |
| Revenue Benchmark [Member] | Customer Concentration Risk [Member] | Customer Two [Member] | |||
| Concentration Risk [Line Items] | |||
| Concentration risk percentage | 11.50% | 23.90% | |
| Revenue Benchmark [Member] | Customer Concentration Risk [Member] | Customer Three [Member] | |||
| Concentration Risk [Line Items] | |||
| Concentration risk percentage | 10.60% | ||
| Revenue Benchmark [Member] | Customer Concentration Risk [Member] | Customer Four [Member] | |||
| Concentration Risk [Line Items] | |||
| Concentration risk percentage | 10.60% | ||
| Revenue Benchmark [Member] | Customer Concentration Risk [Member] | Customer Five [Member] | |||
| Concentration Risk [Line Items] | |||
| Concentration risk percentage | 10.20% | ||
| Accounts Receivable [Member] | Customer Concentration Risk [Member] | Customer One [Member] | |||
| Concentration Risk [Line Items] | |||
| Concentration risk percentage | 10.00% | 41.10% | |
| Accounts Receivable [Member] | Customer Concentration Risk [Member] | Customer Two [Member] | |||
| Concentration Risk [Line Items] | |||
| Concentration risk percentage | 24.40% | ||
| Accounts Receivable [Member] | Customer Concentration Risk [Member] | Customer Three [Member] | |||
| Concentration Risk [Line Items] | |||
| Concentration risk percentage | 10.80% | ||
| Accounts Receivable [Member] | Customer Concentration Risk [Member] | Customer Four [Member] | |||
| Concentration Risk [Line Items] | |||
| Concentration risk percentage | 10.80% | ||
| Accounts Receivable [Member] | Customer Concentration Risk [Member] | Customer Five [Member] | |||
| Concentration Risk [Line Items] | |||
| Concentration risk percentage | 10.50% | ||
| Total Purchases [Member] | Customer Concentration Risk [Member] | Vendors One [Member] | |||
| Concentration Risk [Line Items] | |||
| Concentration risk percentage | 76.00% | 44.50% | |
| Total Purchases [Member] | Customer Concentration Risk [Member] | Vendors Two [Member] | |||
| Concentration Risk [Line Items] | |||
| Concentration risk percentage | 16.00% | 28.10% | |
| Total Purchases [Member] | Customer Concentration Risk [Member] | Vendors Three [Member] | |||
| Concentration Risk [Line Items] | |||
| Concentration risk percentage | 16.60% | ||
| Total Purchases [Member] | Customer Concentration Risk [Member] | Vendors Four [Member] | |||
| Concentration Risk [Line Items] | |||
| Concentration risk percentage | 10.80% | ||
| Accounts Payable [Member] | Customer Concentration Risk [Member] | Vendors One [Member] | |||
| Concentration Risk [Line Items] | |||
| Concentration risk percentage | 10.00% | 44.50% | |
| Accounts Payable [Member] | Customer Concentration Risk [Member] | Vendors Two [Member] | |||
| Concentration Risk [Line Items] | |||
| Concentration risk percentage | 28.10% | ||
| Accounts Payable [Member] | Customer Concentration Risk [Member] | Vendors Three [Member] | |||
| Concentration Risk [Line Items] | |||
| Concentration risk percentage | 16.60% | ||
| Accounts Payable [Member] | Customer Concentration Risk [Member] | Vendors Four [Member] | |||
| Concentration Risk [Line Items] | |||
| Concentration risk percentage | 10.80% | ||
| HONG KONG | |||
| Concentration Risk [Line Items] | |||
| [custom:CashBalance] | $ 189,768 | ||
| [custom:CreditRiskAmount] | $ 125,000 | ||
COMMITMENTS AND CONTINGENCIES (Details - Schedule of operating lease payments) - USD ($) |
Jul. 31, 2023 |
Jul. 31, 2022 |
|---|---|---|
| Present value of lease liabilities | $ 6,436 | $ 0 |
| Property Subject to Operating Lease [Member] | ||
| 2024 | 4,586 | |
| 2025 | 2,096 | |
| Total lease payments | 6,682 | |
| Less: Interest | (246) | |
| Present value of lease liabilities | $ 6,436 |
COMMITMENTS AND CONTINGENCIES (Details - Schedule of future amortization) - Right To Use Asset [Member] |
Jul. 31, 2023
USD ($)
|
|---|---|
| 2024 | $ 4,368 |
| 2025 | 2,068 |
| Total | $ 6,436 |
COMMITMENTS AND CONTINGENCIES (Details Narrative) |
12 Months Ended | ||||||
|---|---|---|---|---|---|---|---|
|
Jan. 13, 2023
USD ($)
|
Jan. 13, 2023
HKD ($)
|
Jan. 01, 2021
USD ($)
|
Jan. 01, 2021
HKD ($)
|
Jul. 31, 2023
USD ($)
|
Jul. 31, 2022
USD ($)
|
Aug. 02, 2022
USD ($)
|
|
| Commitments and Contingencies Disclosure [Abstract] | |||||||
| Rent expenses | $ 382 | $ 3,000 | $ 360 | $ 2,800 | $ 26,159 | $ 24,362 | |
| Right of use asset | $ 8,704 | ||||||
| Incremental borrowing rate | 5.00% | ||||||
| Weighted average remaining lease term | 1 year 6 months | ||||||
ENTERPRISE WIDE DISCLOSURE (Details - Revenues by business) - USD ($) |
12 Months Ended | |
|---|---|---|
Jul. 31, 2023 |
Jul. 31, 2022 |
|
| Revenue from External Customer [Line Items] | ||
| Revenues | $ 452,409 | $ 752,839 |
| Electronic Device Hardware Components Sales [Member] | ||
| Revenue from External Customer [Line Items] | ||
| Revenues | 294,880 | 500,500 |
| Software And Website Development Services [Member] | ||
| Revenue from External Customer [Line Items] | ||
| Revenues | 10,000 | 0 |
| Technical Consulting And Training Services [Member] | ||
| Revenue from External Customer [Line Items] | ||
| Revenues | 14,470 | 8,791 |
| Software Maintenance And Business Promotion Services [Member] | ||
| Revenue from External Customer [Line Items] | ||
| Revenues | 86,776 | 243,548 |
| Business Consulting Services [Member] | ||
| Revenue from External Customer [Line Items] | ||
| Revenues | $ 46,283 | $ 0 |
ENTERPRISE WIDE DISCLOSURE (Details - Revenue by regions) - USD ($) |
12 Months Ended | |
|---|---|---|
Jul. 31, 2023 |
Jul. 31, 2022 |
|
| Revenues from External Customers and Long-Lived Assets [Line Items] | ||
| Revenues | $ 452,409 | $ 752,839 |
| HONG KONG | ||
| Revenues from External Customers and Long-Lived Assets [Line Items] | ||
| Revenues | 395,633 | 595,719 |
| SINGAPORE | ||
| Revenues from External Customers and Long-Lived Assets [Line Items] | ||
| Revenues | $ 56,776 | $ 157,120 |
CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY (Details - Balance sheets) - USD ($) |
Jul. 31, 2023 |
Jul. 31, 2022 |
||
|---|---|---|---|---|
| ASSETS | ||||
| Cash | $ 256,342 | $ 21,237 | ||
| Total Assets | 320,204 | 760,339 | ||
| LIABILITIES | ||||
| Total Liabilities | 598,836 | 655,580 | ||
| Stockholders’ equity | ||||
| Common stock, $0.0001 par value, 100,000,000 shares authorized; 5,903,481 shares issued and outstanding as of July 31, | [1] | $ 590 | $ 150 | |
| Common Stock, Par or Stated Value Per Share | $ 0.0001 | $ 0.0001 | ||
| Common Stock, Shares Authorized | 100,000,000 | 100,000,000 | ||
| Common Stock, Shares, Outstanding | 5,903,481 | 1,500,000 | ||
| Additional paid-in capital | $ 4,982 | $ 82,732 | ||
| Accumulated deficit | (276,521) | 64,689 | ||
| Total stockholders’ equity | (270,941) | 97,571 | ||
| Total Liabilities and Stockholders’ Equity | $ 320,204 | $ 760,339 | ||
| 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 | 80,000 | 0 | ||
| Preferred stock, shares outstanding | 80,000 | 0 | ||
| Preferred stock value | $ 8 | $ 0 | ||
| Undesignated Preferred Stock [Member] | ||||
| Stockholders’ equity | ||||
| Preferred stock, par value | $ 0.0001 | $ 0.0001 | ||
| Preferred stock, shares authorized | 20,000,000 | 20,000,000 | ||
| Preferred stock, shares issued | 0 | 0 | ||
| Preferred stock, shares outstanding | 0 | 0 | ||
| Preferred stock value | $ 0 | $ 0 | ||
| Consolidated Entities [Member] | ||||
| ASSETS | ||||
| Cash | 66,553 | |||
| Prepaid expense | 1,750 | |||
| Receivable from subsidiaries | 29,487 | |||
| Investment in subsidiaries | 95,889 | |||
| Total Assets | 193,679 | |||
| LIABILITIES | ||||
| Accounts payable and accrued liabilities | 241,579 | |||
| Due to related parties | 223,041 | |||
| Total Liabilities | 464,620 | |||
| Stockholders’ equity | ||||
| Common stock, $0.0001 par value, 100,000,000 shares authorized; 5,903,481 shares issued and outstanding as of July 31, | 590 | |||
| Additional paid-in capital | 4,982 | |||
| Accumulated deficit | (276,521) | |||
| Total stockholders’ equity | (270,941) | |||
| Total Liabilities and Stockholders’ Equity | $ 193,679 | |||
| ||||
CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY (Details - Statements of Operations) - USD ($) |
5 Months Ended | 12 Months Ended | |
|---|---|---|---|
Jul. 31, 2023 |
Jul. 31, 2023 |
Jul. 31, 2022 |
|
| EXPENSES: | |||
| General and administrative | $ 285,740 | $ 77,590 | |
| Net Loss | $ (341,210) | $ 144,149 | |
| Consolidated Entities [Member] | |||
| EXPENSES: | |||
| General and administrative | $ 207,297 | ||
| Loss from investment in subsidiaries | 133,913 | ||
| Total expenses | 341,210 | ||
| Net Loss | $ (341,210) | ||
CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY (Details - Statements of cash flows) - USD ($) |
5 Months Ended | 12 Months Ended | |
|---|---|---|---|
Jul. 31, 2023 |
Jul. 31, 2023 |
Jul. 31, 2022 |
|
| Cash flows from operating activities: | |||
| Net loss | $ (341,210) | $ 144,149 | |
| Change in operating assets and liabilities: | |||
| Prepaid expense | 1,397 | 0 | |
| Net cash (used in) operating activities | 324,581 | (84,161) | |
| Cash flows from financing activities: | |||
| Repayment of working capital advance from related party | (341,885) | (14,280) | |
| Net cash provided by financing activities | (89,476) | 85,148 | |
| Net increase in cash and cash equivalents | 235,105 | $ 987 | |
| Consolidated Entities [Member] | |||
| Cash flows from operating activities: | |||
| Net loss | $ (341,210) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | |||
| Share of loss from investment in subsidiaries | 133,913 | ||
| Change in operating assets and liabilities: | |||
| Prepaid expense | 1,500 | ||
| Accounts payable and accrued liabilities | 117,651 | ||
| Net cash (used in) operating activities | (88,146) | ||
| Cash flows from financing activities: | |||
| Repayment of working capital advance from related party | (30,000) | ||
| Operating expenses directly paid for subsidiary | (29,487) | ||
| Common Stock issued to Roshing employees and affiliates for services rendered | 210,000 | ||
| Net cash provided by financing activities | 150,513 | ||
| Net increase in cash and cash equivalents | 62,367 | ||
| Cash and cash equivalents at March 3, 2023 | 4,186 | ||
| Cash and cash equivalents at July 31, 2023 | $ 66,553 | $ 66,553 | |