Tianci International, Inc.

Previous wording

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

Current wording

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

Previous wording

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

Current wording

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

Previous wording

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

Current wording

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

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 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.

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 and Vietnam. Roshing’s logistics services also include the shipment of goods to African countries.

Previous wording

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

Current wording

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

Previous wording

Comparison of the three months ended January 31, 2025 and 2024

Current wording

Comparison of the three months and nine months ended April 30, 2025 and 2024

Previous wording

As we pivoted to the logistics service business, our revenue streams for the three and six months ended January 31, 2025 and 2024 are categorized as follows. The logistics service revenue represented 99% and 95% of our total revenue respectively in the three and six months ended January 31, 2025, . We believe this trend will continue as we keep growing our logistics business line, and the proportion of our historical product and other services revenue is likely to keep decreasing.

Current wording

As we pivoted to the logistics service business, our revenue streams for the three and nine months ended April 30, 2025 and 2024 are categorized as follows: the logistics service revenue represented 98% and 96% of our total revenue in the three and nine months ended April 30, 2025, respectively. We believe this trend will continue as we keep growing our logistics business line, and the proportion of our historical product and other services revenue is likely to keep decreasing.

Previous 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.

Current wording

Our cost of revenues from global logistics services represented 99.8% and 97.5% of total cost of revenues during the three and nine months ended April 30, 2025, respectively. Cost of global logistics services primarily includes cargo space charged by direct ocean carriers, freight forwarders and ancillary logistics services fees.

Previous wording

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

Current wording

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

Previous wording

Our gross profit decreased from $339,104 to $79,978 for the three months and from $572,881 to $308,409 for the six months ended January 31, 2025, respectively. The decrease in gross profit was primarily attributable to a higher growth rate on logistics costs as compared to growth rate on logistics revenue. For the three and six months ended January 31, 2025, our overall gross profit margin was 3.9% and 6.1%, respectively, a reduction from gross margins of 11.7% and 13.6% during the three and six months ended January 31, 2024. We are currently adopting a customer-friendly pricing strategy to build up our market share quickly. As we continue to grow, we plan to further diverse our service region to include long-distance shipping lines, which generally produce higher profit margins as compared to short-distance shipping lines within East Asia.

Current wording

Our gross profit decreased from $244,707 to $57,983 for the three months and from $817,588 to $366,392 for the nine months ended April 30, 2025, respectively. The decrease in gross profit was primarily attributable to a higher growth rate on logistics costs as compared to the growth rate on logistics revenue as we continue to experience rising logistics costs while our service price remains relatively stable. For the three and nine months ended April 30, 2025, our overall gross profit margin was 2.98% and 5.23%, respectively, a reduction from gross margins of 12.61% and 13.27% during the three and nine months ended April 30, 2024. We are currently adopting a customer-friendly pricing strategy to build up our market share quickly. As we continue to grow, we plan to further diversify our service region to include long-distance shipping lines, which generally produce higher profit margins as compared to short-distance shipping lines within East Asia. Our negotiation power over service vendors would also grow as our business grows, and vice versa.

Previous 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.

Current wording

There was a significant increase in operating expenses in the three months and nine months ended April 30, 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 of $826,110 in our general and administrative expenses, from $134,473 for the three months ended April 30, 2024 to $960,583 in the three months ended April 30, 2025. There was an increase of $1,002,288 in our general and administrative expenses, from $389,899 for the nine months ended April 30, 2024 to $1,392,187 for the nine months ended April 30, 2025. The significant increase in general and administrative expenses was primarily attributable to 1) a charge of $166,667 as we entered into a merger & acquisition advisory service agreement with a service vendor for identifying qualified logistics service target companies; 2) a charge of $166,667 as we entered into a public relations service agreement with a service vendor to manage our public relations as a Nasdaq listed public company; 3) a one-time cash bonus of $200,000 to certain managements for successfully completing our initial public offering; 4) a representative warrant with a value of $158,412 that we issued to our underwriter upon completion of the initial public offering, the warrant having vested immediately and being exercisable in six months after issuance; and 5) an increase of $76,035 in accounting and audit related expenses. The increase in general and administrative expenses was partially offset by a decrease in selling and marketing expenses, which were $63,700 and $163,924 for the three months and nine months ended April 30, 2025, as compared to $91,950 and $163,924 for the same periods in last fiscal year. The reduction evidences our efforts to operate with less dependence on brokers for business development and to reduce commission-based expenses.

Previous 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.

Current wording

Our income tax benefit amounted to $6,891 and $nil for the three and nine months ended April 30, 2025, as compared to income tax expenses of $10,051 and $22,023 for the three and nine months ended April 30, 2024, respectively. The change was due to the loss we incurred this year as a result of increase in operating expenses.

Previous 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.

Current wording

As a result of the foregoing, we incurred net losses of $959,409 and $1,162,328 for the three and nine months ended April 30, 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 nine months ended April 30, 2025 attributable to the shareholders of the Company was $947,987 and $1,154,394, respectively. In comparison, during the three and nine months ended April 30, 2024, the Company incurred a net loss of $38,797 and a net income of $55,805.

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 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).

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 April 30, 2025, despite a net loss of $959,422 for the nine months then-ended, we had working capital of $4,509,290, which consisted primarily of cash in the amount of $3,630,884 that was a portion of the amount we received upon the completion of our initial public offering. To date, we have financed our operations primarily through capital contributions from shareholders, private placements of equity, and the public offering of common stock.

Previous 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.

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 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 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 six months ended January 31, 2025 and 2024.

Current wording

The following table summarizes the key components of our cash flows for the nine months ended April 30, 2025 and 2024.

Previous 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.

Current wording

Net cash of $2,000,182 used in operating activities for the nine months ended April 30, 2025 was primarily the result of net loss of $1,162,328, an increase of $166,752 in accounts receivable, an increase of $723,733 in prepaid expense, and a decrease of $51,920 in income taxes payable, a decrease of $53,861 on accrued liabilities following the payments from the Company, partially offset by a non-cash payment adjustment of $158,412 representing the value of the warrant issuance to our underwriter.

Previous wording

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

Current wording

The company had no investing activities during the three and nine month periods ended April 30, 2025 and 2024.

Previous 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.

Current wording

In connection with the preparation of our financial statements for the nine months ended April 30, 2025, there was no accounting estimate we made that was subject to a high degree of uncertainty and was critical to our results.