Tianci International, Inc.

Previous wording

Roshing currently does not own or operate any transportation assets. By leveraging our senior management’s expertise in the global logistics industry and adopting an asset-light strategy at the early stage, Roshing has seen a significant growth in logistics revenue during year ended July 31, 2024. Shufang Gao, our Chief Executive Officer previously worked for a globally renowned shipping conglomerate, with over 20 years of management experience. His expertise spans shipping operation management, and logistics transportation. Leveraging this experience, he has provided the Company with the managerial framework to expand its global logistics business, as well as access to relevant customer and supplier resources in the shipping industry. Roshing’s business is primarily carried out in Hong Kong and other locations in the Asia-Pacific region, mainly in Japan, South Korea, Vietnam. Roshing’s logistics services also include the shipment of goods to African countries.

Current wording

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

Previous wording

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

Current wording

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

Previous wording

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

Current wording

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

Previous wording

For the three months ended October 31, 2024 and 2023

Current wording

During the three and six months ended January 31, 2025, our revenue decreased to $2,079,203 for the three months ended January 31, 2025 from $2,894,128 for the three months ended January 31, 2024 and increased to $5,060,143 for the six months ended January 31, 2025 from $4,220,776 for the six months ended January 31, 2024. The decrease in the second quarter was primarily attributable to decreasing order size from a major Vietnamese customer. However, we managed to grow our logistics business by 20% in the six months ended January 31, 2025 as compared to same period in 2024. And we believe the decline in the second quarter is temporary.

Previous wording

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

Current wording

Our cost of revenues from global logistics services represented 99.8% and 96.5% of total cost of revenues during the three and six months ended January 31, 2025, respectively. Cost of global logistics services primarily include the cargo space charged by direct ocean carriers, freight forwarders and ancillary logistics services fees.

Previous wording

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

Current wording

Our gross profits from our each of revenue category are summarized as follows:

Previous wording

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

Current wording

There was a decrease in operating expenses in the three months ended January 31, 2025 as compared to same period in the last year, and an increase in operating expenses in the six months ended January 31, 2025, as compared to the same period in the last year. Our operating expenses primarily include payroll expenses, commissions, advertising, rent and professional fees relating to our obligations as a public company. There was an increase in our general and administrative expenses, from $136,721 and $255,426 in the three and six months ended January 31, 2024 to $171,211 and $431,604 in the three months and six months ended January 31, 2025. The increase in general and administrative expenses was primarily attributable to increasing payroll expenses necessitated by the expansion of our growing logistics operations. The increase in general and administrative expenses was partially offset by a decrease in selling and marketing expenses as we tried to operate with less dependence on brokers for business development and cut commission expenses.

Previous wording

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

Current wording

Our income tax expense amounted to $4,702 and $6,891 for the three and six months ended January 31, 2025, compared to $(7,141) and $11,972 for the three and six months ended January 31, 2024, respectively. The change was due to the decrease in operating income generated by Roshing during this period.

Previous wording

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

Current wording

As a result of the foregoing, we incurred a net loss of $110,971 and $202,919 for the three and six months ended January 31, 2025. As the Company owns only 90% of its operating subsidiary, Roshing, 10% of the net income realized by Roshing was attributed to the minority interest. Therefore, the net loss for the three and six months ended January 31, 2025 attributable to the shareholders of the Company was $113,351 and $206,407, respectively. In comparison, during the three and six months ended January 31, 2024, the Company incurred a net loss of $100,714 and $94,602.

Previous wording

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

Current wording

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 January 31, 2025, we had working capital of $585,435, as our cash amounted to $180,554, our current assets were $775,104 and our current liabilities were $189,669. To date, we have financed our operations primarily through capital contributions and advances from shareholders and by private placement of securities. At January 31, 2025 we owed $2,271 to related parties (See Note 3 to the financial statements).

Previous wording

We started providing logistics services during the quarter ended October 31, 2023. Although the business grew rapidly during the fiscal year ended July 31, 2024, we may require significant capital expenditure in order to obtain additional market share. If we determine that our cash requirements exceed the amount of cash and cash equivalents we have on hand at the time, we may seek to issue equity or debt securities or obtain credit facilities. The issuance and sale of additional equity may result in dilution to our shareholders. The incurrence of indebtedness would result in increased fixed obligations and could result in operating covenants that would restrict our operations. Our obligation to bear credit risk for certain financing transactions we facilitate may also strain our operating cash flow. We cannot assure you that financing will be in place or on terms acceptable to us, if at all.

Current wording

We started providing shipping & freight forwarding services in 2023. Although the business grew quickly, we may require significant capital expenditure, such as acquiring transportation assets, for developing our position in the market. If we determine 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.

Previous wording

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

Current wording

The following table summarizes the key components of our cash flows for the six months ended January 31, 2025 and 2024.

Previous wording

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

Current wording

Net cash of $158,450 used in operating activities for the six months ended January 31, 2025 was primarily the result of net loss of $202,919, an increase of $23,249 in prepaid expense during the period to our service vendor and a increase of $45,029 in the payment of our profit tax in Hong Kong. with the change was partially offset by a $112,747 increase in accrued liabilities.

Previous wording

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

Current wording

Net cash of $109,822 provided by operating activities for the six months ended January 31, 2024 was primarily the result of net income of $94,602 and an increase of $89,040 in accrued liabilities, partially offset by an increase of $86,513 in accounts receivable during the period.

Previous wording

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

Current wording

The company has no investing activities during the three and six month periods ended January 31, 2025 and 2024.

Previous wording

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

Current wording

Net cash used in financing activities for the six months ended January 31, 2025 was $74,125. This was attributable to the payment of professional fees incurred in relation to a public offering of the Company’s securities.

Previous wording

In connection with the preparation of our financial statements for the three months ended October 31, 2024, there was one accounting estimate we made that was subject to a high degree of uncertainty and was critical to our results. This was the accrual as “deferred offering costs” of amounts we have paid to professionals and others for services rendered and to be rendered in connection with a public offering of the Company’s securities. We will realize the value of these assets (and offset them against proceeds of the offering) only if the offering is placed successfully. We have accrued the payments as assets because we anticipate a successful offering. If, however, the offering fails to close, we will be required to amortize the asset as an expense.

Current wording

In connection with the preparation of our financial statements for the six months ended January 31, 2025, there was one accounting estimate we made that was subject to a high degree of uncertainty and was critical to our results. This was the accrual as “deferred offering costs” of amounts we have paid to professionals and others for services rendered and to be rendered in connection with a public offering of the Company’s securities. We will realize the value of these assets (and offset them against proceeds of the offering) only if the offering is placed successfully. We have accrued the payments as assets because we anticipate a successful offering. If, however, the offering fails to close, we will be required to amortize the asset as an expense immediately with no offsetting capital contribution.