Tianci International, Inc.

Current report

Item 1A. Risk Factors

Current report

RISK FACTORS

Current report

Risks Related to Mineral Products Trading Business

Current report

Our mineral trading business depends on third-party suppliers and local mine operators, and disruptions in the availability, quality or cost of mineral ore could materially adversely affect our business and results of operations.

Current report

Our mineral trading business relies on third-party mineral suppliers, local mine operators and other sourcing partners for the procurement of chromium ore, manganese ore and related mineral products. We do not control the mining operations of these third parties and cannot assure that they will continue to produce or supply mineral products in sufficient quantities, at consistent quality levels, or on commercially acceptable terms. Our mineral sourcing activities are subject to various risks, including interruptions in mining operations, equipment failures, labor shortages, power outages, adverse weather conditions, local community disruptions, changes in mining regulations, and restrictions on mineral production or exports. In addition, certain of our purchase arrangements may be short-term in nature and may not contain minimum supply commitments, exposing us to fluctuations in product availability and procurement costs. Any significant reduction in mineral supply, deterioration in ore quality, increase in procurement prices, or failure by suppliers to fulfill their contractual obligations could impair our ability to satisfy customer orders, increase our operating costs, and adversely affect our revenue and profitability. Although we seek to maintain relationships with multiple suppliers, there can be no assurance that alternative sources of supply will be available on a timely basis or at comparable prices. Any prolonged disruption in our mineral sourcing activities could have a material adverse effect on our business, financial condition and results of operations.

Current report

Our mineral trading business depends on a limited number of customers and offtake counterparties, and the loss of significant customers or their failure to fulfill purchase obligations could adversely affect our revenue and cash flows.

Current report

A substantial portion of our mineral trading revenue may be derived from sales to a limited number of smelters, trading companies, industrial customers and other offtake counterparties. As our mineral trading business continues to develop, we may experience customer concentration and dependence on a relatively small number of significant purchase arrangements. Our sales and offtake agreements may be subject to termination, modification or renegotiation under certain circumstances, and customers may reduce purchase volumes, delay acceptance of shipments, dispute product quality or quantity, request price concessions, or fail to make payments when due. In addition, fluctuations in demand for chromium and manganese products, changes in customers' production requirements, and adverse developments in the metallurgical and steelmaking industries may reduce demand for our mineral products. Because we generally purchase mineral products for resale, a customer's failure to perform its purchase obligations could leave us holding inventory that must be resold to alternative buyers, potentially at less favorable prices. Delays in customer payments could also adversely affect our working capital and ability to finance additional mineral purchases. If we are unable to maintain relationships with existing customers, attract new customers, diversify our customer base, or enforce our contractual rights against defaulting counterparties, our business, financial condition, results of operations and cash flows could be materially adversely affected.

Current report

Fluctuations in mineral commodity prices and changes in market demand could reduce our trading margins and result in inventory losses.

Current report

The market prices of chromium ore, manganese ore and other mineral products are subject to significant fluctuations resulting from changes in global supply and demand, industrial production levels, steelmaking activity, energy costs, exchange rates, trade policies, tariffs, export restrictions and general economic conditions. These factors are largely beyond our control and may cause substantial volatility in the purchase and resale prices of the mineral products we trade. Our mineral trading business generally involves purchasing mineral products from suppliers and subsequently reselling them to customers. As a result, we may be exposed to changes in market prices between the time we acquire inventory and the time we complete a sale. A decline in market prices during this period could reduce our expected gross margins, require us to sell inventory at a loss, or result in inventory write-downs. Conversely, a significant increase in procurement prices may adversely affect our profitability if we are unable to pass those increases on to customers. The mineral trading industry is also highly competitive, and we compete with established international commodity traders, regional mining companies, mineral suppliers and other trading intermediaries. Some competitors may have greater financial resources, more established supplier relationships, lower procurement costs or greater access to transportation infrastructure. We cannot assure that we will be able to maintain favorable procurement prices, achieve anticipated trading margins, or respond effectively to changes in market conditions. Significant or prolonged adverse movements in mineral commodity prices could materially adversely affect our revenue, profitability, inventory values and cash flows.

Current report

Differences in mineral quality, assay results and shipment weights may result in disputes, settlement adjustments and financial losses.

Current report

Mineral products traded by us are subject to contractual specifications relating to mineral grade, chemical composition, moisture content, impurities, weight and other quality characteristics. The quality and quantity of mineral products may vary depending on the source of the materials, mining and processing methods, storage conditions, transportation and handling procedures. Our mineral trading transactions may involve independent inspections, sampling, laboratory assays and weight verification procedures. Differences between preliminary measurements and final inspection results, including variations in moisture content or shipment weight, may result in adjustments to the final settlement amount. In addition, disagreements between suppliers, customers and independent inspection agencies regarding product specifications, sampling procedures or measurement results may give rise to commercial disputes. If mineral products delivered to customers fail to meet contractual specifications, customers may seek price adjustments, reject shipments, delay acceptance or payment, or pursue contractual remedies. We may also experience difficulties recovering corresponding losses from suppliers, particularly where contractual terms, inspection results or liability allocations differ between our purchase and sales arrangements. Any material quality discrepancy, weight adjustment, inspection dispute or failure to resolve claims in a timely manner could increase our operating costs, delay cash collections, reduce trading margins, damage customer relationships and materially adversely affect our business, financial condition and results of operations.

Current report

Our mineral trading operations are subject to transportation, storage and cross-border logistics risks that could delay deliveries and increase costs.

Current report

Our mineral trading business involves the procurement, storage, handling and transportation of bulk mineral products across multiple jurisdictions. The transportation of mineral ore from mining regions to ports and ultimately to customers may require the coordination of road and rail transportation providers, warehousing operators, port authorities, customs brokers, shipping companies and other third-party service providers. Our operations may be adversely affected by inadequate transportation infrastructure, road or rail disruptions, port congestion, vessel shortages, cargo handling delays, customs clearance issues, adverse weather conditions, theft, loss or damage of cargo, and changes in freight rates or transportation regulations. Certain mineral-producing regions in which we source products may have limited transportation infrastructure or experience logistical bottlenecks, which could increase delivery times and costs. Depending on the applicable contractual delivery terms, we may bear the risk of loss or damage to mineral products during some or all stages of transportation. Delays or disruptions could result in additional storage charges, demurrage, contractual penalties, shipment cancellations, or claims from customers. We may not always be able to recover such costs or losses from transportation providers, suppliers or insurers. Although we seek to leverage our existing logistics capabilities to support our mineral trading activities, we remain dependent on third-party transportation and infrastructure providers. Any significant interruption in the movement or delivery of mineral products could impair our ability to fulfill customer orders, increase operating costs and materially adversely affect our business, financial condition and results of operations.

Current report

Our mineral sourcing and trading activities are subject to complex and changing mining, export, customs, tax and environmental regulations, and noncompliance or regulatory changes could disrupt our operations.

Current report

Our mineral sourcing and trading activities are conducted across international markets and are subject to various laws, regulations and governmental requirements relating to mining rights, mineral procurement, export permits, customs clearance, taxation, royalties, environmental protection, transportation and cross-border trade. In particular, mineral sourcing activities in Zimbabwe and other Southern African markets may be affected by changes in local mining regulations, mineral export policies, licensing requirements, export duties, foreign exchange controls and government enforcement practices. Regulatory authorities may impose new restrictions on mineral exports, modify permit requirements, increase taxes or royalties, or adopt measures affecting the production, processing, storage or transportation of mineral products. Although we primarily engage in mineral sourcing and trading rather than directly conducting mining operations, our business may be affected by the compliance practices of third-party suppliers and mine operators. We may also face risks relating to the validity of mining rights, mineral ownership, licensing deficiencies, title disputes, or failures by suppliers and other counterparties to comply with applicable legal and regulatory requirements. Any failure by us or our business partners to obtain or maintain required permits, comply with applicable regulations, or adapt to changes in regulatory requirements could result in shipment delays, penalties, confiscation of goods, increased compliance costs, suspension of business activities, or restrictions on our ability to procure and export mineral products. Such developments could materially adversely affect our mineral trading operations, financial condition, results of operations and future growth prospects.

Previous report

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

Previous report

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

Previous report

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

Previous report

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

Previous report

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

Previous report

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

Previous report

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

Previous report

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

Previous report

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

Previous report

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

Previous report

Shufang Gao, the Chief Executive Officer of Tianci, through his 60% holding in RQS Capital, together with common stock owned by himself, controls securities with 57.7% of the voting power in Tianci. As a result, Mr. Gao will have the ability to:

Previous report

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

Previous report

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

Current report — wording carried from elsewhere

On April 24, 2024, Tianci sold 80,000 shares of Series B Preferred Stock to RQS Capital. The shares were sold for a cash payment of $80,000. In November 2024, the Company issued 114,285 (post-split) shares of its common stock to RQS Capital. The shares were issued upon RQS Capital’s exercise of its right to convert 80,000 shares of Tianci’s Series B Preferred Stock into 114,285 shares of common stock.

Previous report — wording carried elsewhere

On April 24, 2024, Tianci sold 80,000 shares of Series B Preferred Stock to RQS Capital. The shares were sold for a cash payment of $80,000. Each share of Series B Preferred Stock may be converted by the holder of the share into 100 shares of common stock, subject to equitable adjustment of the conversion rate. As of the date of this Report, none of the shares of Series B Preferred Stock have been converted.