10-K
1
tianci_10k-073120.htm
FORM 10-K
Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION
13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended July 31,
2020
[ ] TRANSITION REPORT PURSUANT
TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _____to _____
COMMISSION FILE NUMBER 333-184061
TIANCI INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
Selangor Darul Ehsan, Malaysia
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including
area code +6012 697 1115
Securities registered under Section 12(b)
of the Act:
Title of each Class Trading Symbol Name of each exchange on which registered
N/A N/A N/A
Securities registered under Section 12(g)
of the Act: NONE.
Indicate by check mark if the registrant
is a well-known seasoned issuer, as defined by Rule 405 of the Securities Act. Yes [ ] No [X]
Indicate by check mark if the registrant
is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes [ ] No [X]
Indicate by check mark whether the registrant
(1) has filed all reports required to be filed by Section 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. Yes [X] No [ ]
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 (§229.405
of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Yes [X] No [ ]
Indicate by check mark whether the registrant
is a large accelerated filer, an accelerated filer, a non-accelerated filer, 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.
Large accelerated filer [ ] Accelerated filer [ ]
Indicate by check mark whether the registrant
is a shell company (as defined in Rule 12b-2 of the Act). Yes [X] No [ ]
State the aggregate market value of the
voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was sold,
or the average bid and asked price of such common equity, as of the last business day of the registrant’s most recently completed
second fiscal quarter: $403,224 as of January 31, 2020, based on a price of $1.60, being the last price at which
the registrant sold shares of its common stock prior to that date.
Indicate the number of shares outstanding
of each of the registrant’s classes of common stock, as of the latest practicable date. As of September 28, 2020, the Registrant
had 2,450,148 shares of common stock outstanding.
TABLE OF CONTENTS
TITLE PAGE
PART I
Item 1. Business 1
Item 1A. Risk Factors 5
Item 1B. Unresolved Staff Comments 5
Item 2. Properties 5
Item 3. Legal Proceedings 5
Item 4. Mine Safety Disclosures 5
PART II
Item 6. Selected Financial Data 7
Item 7A. Quantitative and Qualitative Disclosures About Market Risk 11
Item 8. Financial Statements and Supplementary Data 11
Item 9A. Controls and Procedures 12
Item 9B. Other Information 13
PART III
Item 10. Directors, Executive Officers and Corporate Governance 14
Item 11. Executive Compensation 17
Item 14. Principal Accounting Fees and Services 22
PART IV
Item 15. Exhibits, Financial Statement Schedules 23
i
CAUTIONARY NOTE REGARDING FORWARD-LOOKING
STATEMENTS
Except for historical
information, this annual report contains forward-looking statements. Such forward-looking statements involve risks and uncertainties,
including, among other things, statements regarding our business strategy, future revenues and anticipated costs and expenses.
Such forward-looking statements include, among others, those statements including the words “expects,” “anticipates,”
“intends,” “believes” and similar language. Our actual results may differ significantly from those projected
in the forward-looking statements. Factors that might cause or contribute to such differences include, but are not limited to,
those discussed in the sections “Business” and “Management’s Discussion and Analysis of Financial Condition
and Results of Operations.” You should carefully review the risks described in this Annual Report on Form 10-K and in other
documents we file from time to time with the Securities and Exchange Commission. You are cautioned not to place undue reliance
on the forward-looking statements, which speak only as of the date of this report. We undertake no obligation to publicly release
any revisions to the forward-looking statements or reflect events or circumstances after the date of this document.
Although we believe
that the expectations reflected in these forward-looking statements are based on reasonable assumptions, there are a number of
risks and uncertainties that could cause actual results to differ materially from such forward-looking statements.
All references in this
Form 10-K to “Company”, “Tianci”, “we,” “us” or “our” mean Tianci International,
Inc. (formerly known as “Steampunk Wizard, Inc.”), unless otherwise indicated.
ii
PART I
Item 1. Business
Corporate Overview
We are currently a
“shell company” with no meaningful assets or operations other than our efforts to identify and merge with an operating
company.
We were incorporated
in the State of Nevada on June 13, 2012. Our current business office is located at No. 45-2, Jalan USJ 21/10, Subang Jaya 47640,
Selangor Darul Ehsan, Malaysia. Our telephone number is +6012 697 1115.
We were initially an
exploration stage company under the name of Freedom Petroleum Inc. (changed to Steampunk Wizards, Inc., effective on July 2, 2015)
that originally intended to engage in the exploration and development of oil and gas properties. In April 2015, after reviewing
the markets with investor appetite and management's duties to its shareholders, the Company determined to discontinue its oil and
gas operation. We then began exploring opportunities in the computer gaming and application industry.
We engaged in computer
game development until October 13, 2016, when control of our company changed pursuant to a share purchase agreement and a spin-off
agreement. On October 26, 2016, our corporate name was changed from “Steampunk Wizards, Inc.” to "Tianci International,
Inc." The name change was effected on November 27, 2016, in connection with the merger of us into our then subsidiary, Tianci
International Inc.
Effective April 6,
2017, we effectuated a 1-for-40 reverse stock split (the “2017 Reverse Stock Split”) of our issued and outstanding
shares of common stock, $0.0001 par value, whereby 49,854,280 outstanding shares were exchanged for 1,246,357 shares of our common
stock. Common share amounts and per share amounts in these accompanying financial statements and notes have been retroactively
adjusted to reflect this reverse stock split.
On
August 3, 2017, we entered into a Stock Purchase Agreement (the “SPA”) with Shifang Wan (the “Seller”),
the record holder of 4,397,837 common shares, or approximately 87.00% of the issued and outstanding of Common Stock of the Company,
and Chuah Su Chen and Chuah Su Mei (collectively, the “Purchasers”, and together with the Company and the Seller, the
“Parties”). Pursuant to the SPA, the Seller sold to the Purchasers and the Purchasers acquired from the Sellers the
Shares for a total gross purchase price of Three Hundred Fifty Thousand Dollars ($350,000). The acquisition was consummated on
August 15, 2017. The Purchasers used personal funds to acquire the Shares.
Upon
the consummation of the sale, Ms. Cuilian Cai resigned from her positions as director, Chief Executive Officer and Chief Financial
Officer of the Company. Her resignation was not due to any dispute or disagreement with the Company on any matter relating to the
Company's operations, policies or practices. The following individuals were also appointed to serve in the positions set forth
next to their names below:
Name Position
Chuah Su Chen Director, Chief Financial Officer and Secretary
Chuah Su Mei Director, Chief Executive Officer and President
Yeow Yuen Kai Director and Chief Technology Officer
Jerry Ooi was
appointed to serve as a director effective August 30, 2017. Mr. Kai resigned from his position as the Chief Technology Officer
effective September 20, 2017, and his position on our Board effective August 31, 2019.
Current Business
Our principal business
is to achieve long-term growth potential through a combination with a business rather than immediate, short-term earnings. Based
on proposed business activities, we are a “blank check” company. We intend to comply with the periodic reporting requirements
of the Exchange Act for so long as it is subject to those requirements.
As of the date of this
Annual Report, we have not entered into any binding agreement with any party regarding acquisition opportunities for us. We hope
to continue to engage in discussions with other operating businesses affiliated with our executive officers regarding potential
acquisition opportunities. There is no assurance that any nonbinding term sheet will result into a definitive purchase transaction
nor can we assure you that we will be able to successfully acquire such company or any company in the near future.
The analysis of new
business opportunities will be undertaken by or under the supervision of the Company’s officers. We have unrestricted flexibility
in seeking, analyzing and participating in potential business opportunities. In its efforts to analyze potential acquisition targets,
we will consider the following kinds of factors:
• The extent to which the business opportunity can be advanced;
• Other relevant factors.
In applying the foregoing
criteria, no one of which will be controlling, management will attempt to analyze all factors and circumstances and make a determination
based upon reasonable investigative measures and available data. Potentially available acquisition opportunities may occur in many
different industries, and at various stages of development, all of which will make the task of comparative investigation and analysis
of such business opportunities extremely difficult and complex. We may not discover or adequately evaluate adverse facts about
the business to be acquired. In evaluating a prospective business combination, we will conduct as extensive a due diligence review
of potential targets as possible given the lack of information that may be available regarding private companies, our limited personnel
and financial resources.
We expect that our
due diligence will encompass, among other things, meetings with the target business’s incumbent management and inspection
of its facilities, as necessary, as well as a review of financial and other information, which is made available to us. This due
diligence review will be conducted either by our management or by unaffiliated third parties we may engage. Our lack of funds and
the lack of full-time management will likely make it impracticable to conduct a complete and exhaustive investigation and analysis
of a target business before we consummate a business combination. Management decisions, therefore, will likely be made without
detailed feasibility studies, independent analysis, market surveys and the like which, if we had more funds available to us, would
be desirable. We will be particularly dependent in making decisions upon information provided by the promoters, owners, sponsors
or others associated with the target business seeking our participation.
The time and costs
required to select and evaluate a target business and to structure and complete a business combination cannot presently be ascertained
with any degree of certainty. Any costs incurred with respect to the indemnification and evaluation of a prospective business combination
that is not ultimately completed will result in a loss to us.
Additionally, we are
in a highly competitive market for a small number of business opportunities, which could reduce the likelihood of consummating
a successful business combination. We are, and will continue to be, an insignificant participant in the business of seeking mergers
with, joint ventures with and acquisitions of small private and public entities. A large number of established and well-financed
entities, including small public companies and venture capital firms, are active in mergers and acquisitions of companies that
may be desirable target candidates for us. Nearly all these entities have significantly greater financial resources, technical
expertise and managerial capabilities than we do; consequently, we will be at a competitive disadvantage in identifying possible
business opportunities and successfully completing a business combination. These competitive factors may reduce the likelihood
of our identifying and consummating a successful business combination.
Historical Activities
2014 Securities
Sale
In January 2014, we
were a party to a securities purchase agreement (the "2014 SPA") by and among ourselves, certain of our shareholders
(the "Selling Shareholders") owning an aggregate of 27,000,000 shares (before the 2017 Reverse Stock Split) (approximately
51.7%) of our common stock (the "Sold Stock") and Anton Lin ("Lin"). Pursuant to the 2014 SPA, Lin purchased
the Sold Stock for $27,000 (the "Purchase Price") from the Selling Shareholders in a private sale transaction (the "Private
Sale"). The Selling Shareholders were our former sole officer and director: Thomas Hynes ("Hynes") and corporate
secretary: Nina Bijedic ("Bijedic"). Pursuant to the 2014 SPA, Hynes and Bijedic submitted their resignations from all
positions held with us; prior to the closing of the Private Sale, our Board of Directors appointed Lin as our sole director and
Chief Executive Officer, which appointment took effect immediately following the close of the Private Sale. Following the Private
Sale, a change in control occurred since Lin gained control of almost 52% of our outstanding common stock.
2015 Share Exchange
On July 15, 2015, we
entered into a share exchange agreement (the “Exchange Agreement”) with Steampunk Wizards Ltd., a company incorporated
pursuant to the laws of Malta (“Malta Co.”), Lin, being the owner of record of 11,451,541 common shares (before the
2017 Reverse Stock Split) of the Company and the persons listed thereof (the “Shareholders”), being the owners of record
of all of the issued share capital of Malta Co. (the “Steampunk Stock”). Pursuant to the Exchange Agreement, upon surrender
by the Shareholders and the cancellation by Malta Co. of the certificates evidencing the Steampunk Stock as registered in the name
of each Shareholder, and pursuant to the registration of us in the register of members maintained by Malta Co. as the new holder
of the Steampunk Stock and the issuance of the certificates evidencing the aforementioned registration of the Steampunk Stock in
the name of us, on August 21, 2015, we issued 4,812,209 shares (the “New Shares”) (before the 2017 Reverse Stock Split)
(subject to adjustment for fractionalized shares as set forth below) of our common to the Shareholders (or their designees), and
Lin caused 10,096,229 shares (before the 2017 Reverse Stock Split) of our common stock that he owned (the “Lin Stock,”
together with the New Shares, the “Acquisition Stock”) to be transferred to the Shareholders (or their designees),
which collectively represented 55% of the issued and outstanding common stock of us immediately after the Closing, in exchange
for the Steampunk Stock, representing 100% of the issued share capital of Malta Co. As a result of the exchange of the Steampunk
Stock for the Acquisition Stock (the “Share Exchange”), Malta Co. became a wholly owned subsidiary (the “Subsidiary”)
of us and there was a change of control of us following the closing. The Shareholders of Malta Co. owned approximately 55% of our
issued and outstanding common stock. There were no warrants, options or other equity instruments issued in connection with the
Exchange Agreement.
Malta Co. was incorporated
in 2014 to acquire the intellectual property (IP) related to an unfinished game called “Tangled Tut.” Making full use
of the team’s experience and diverse talent set, the company built the first mobile game with 3D printable rewards embedded
and the associated IP and server technology.
Through Malta Co, we
became an independent games development and technology company that specialized in developing enchanting games and gaming technology
where the real and virtual worlds blur. We launched a mobile casual game called Bungee Mummy – Challenges, designed
primarily for smartphones and tablets (supporting both Android and IOS), in late August of 2015.
On January 29, 2016,
Lin resigned from his CEO and sole director positions with Tianci, and Mr. Joshua O’Cock became our CEO, CFO, Secretary and
Director.
2016 Securities
Sale and Spin-Off
On October 13, 2016,
we entered into a spin-off agreement (the “Spin-Off Agreement”) with Malta Co. and Praefidi Holdings Limited (the “Buyer”),
an entity organized under the laws of Malta that was owned by Brendon Grunewald. Pursuant to the Spin-Off Agreement, the Buyer
received all of the issued and outstanding capital stock of Malta Co. and we received $2,000 as purchase price. The Buyer became
the sole equity owner of Malta Co. and we had no further interest in Malta Co.
On October 13, 2016,
shareholders who owned in the aggregate 18,071,445 shares (the “2016 Shares”) (before the 2017 Reverse Stock Split)
of our common stock, representing approximately 65.1% of all our issued and outstanding common stock at the time, entered into
a Share Purchase Agreement (the “Change of Control SP”) with certain purchasers listed therein pursuant to which the
purchasers acquired the 2016 Shares for an aggregate purchase price of $150,000. In connection with the sale, a change in
control occurred, and Mr. Joshua O’Cock, our former President, Chief Executive Officer, Chief Financial Officer, Treasurer,
Secretary and sole director, resigned from all of his director and officer positions with us.
Simultaneously with
the closing, Cuilian Cai, was appointed as a director and Chief Executive Officer and Chief Financial Officer of Tianci.
Effective November
7, 2016, we changed our name from Steampunk Wizards, Inc. to Tianci International, Inc.
On January 4, 2017,
we issued 19,532,820 shares of our common stock (before the 2017 Reverse Stock Split) to certain purchasers in accordance with
the terms and conditions of a Securities Purchase Agreement (the “Private Placement SPA”), at price of $0.005 per share
for an aggregate purchase price of $98,104. The shares sold in the private placement were issued in reliance on an exemption from
registration under the Securities Act of 1933, as amended, pursuant to Section 4(2) thereof. The proceeds were used for working
capital purposes.
2017 Securities
Sale and Change in Control
On August 3, 2017,
Tianci, ShiFang Wan (“SFW”), Chuah Su Mei, and Chuah Su Chen executed a Stock Purchase Agreement (the “Stock
Purchase Agreement”), pursuant to which SFW sold to the Chuah Su Chen and Chuah Su Mei an aggregate of 4,397,837 shares of
Common Stock, or approximately 87% of the issued and outstanding Common Stock, at a purchase price of $350,000. The acquisition
consummated on August 15, 2017, and 2,000,000 shares of the Company’s common stock were purchased by Chuah Su Chen using
her own personal funds. Upon consummation, the former sole executive officer and director of Tianci resigned from all of her positions
with Tianci, and Chuah Su Mei, Chuah Su Chen and Yeow Yuen Kai were appointed to serve in the positions set forth next to their
names below:
Name Position
Chuah Su Chen Director, Secretary and Chief Financial Officer
Chuah Su Mei Director, Chief Executive Officer and President
Yeow Yuen Kai Director and Chief Technology Officer
Chuah Su Chen and Chuah Su Mei are siblings.
Effective August
30, 2017, Jerry Ooi was appointed to serve as a Director of Tianci until his successor(s) shall be duly elected or appointed, unless
he resigns, is removed from office or is otherwise disqualified from serving as a director of Tianci. Mr. Kai resigned from his
position as the Chief Technology Officer effective September 20, 2017, and his position as our director effective August 31, 2019.
2020
Cancellation of Securities
In
August 2020, Chuah Su Chen cancelled all shares of common stock held by her and Chuah Su Mei cancelled 604,837 shares of common
stock held by her. As a result, Chuah Su Chen does not hold any shares of common stock of the Company and Chuah Su Mei holds 1,793,000
shares. The executive officers elected to cancel their shares to increase the number of shares available for future prospective
corporate transactions including financings and acquisitions.
Employees. As
of the date of this Annual Report, we did not have any employees. We expect to hire employees after the acquisition of an operating
business.
Item 1A. Risk Factors
As a “smaller
reporting company,” we are not required to provide the information required by this Item.
Item 1B. Unresolved
Staff Comments
None.
Item 2. Properties
We do not own any property.
We currently do not have a lease for the office space we are using in Malaysia. Our executive officer, Chuah Su Chen, has allowed
us to use the space at no costs.
Item 3. Legal Proceedings
From time to time,
we may be involved in litigation relating to claims arising out of our operations in the normal course of business. We are not
aware of any pending or threatened legal proceeding that, if determined in a manner adverse to us, could have a material adverse
effect on our business and operations.
Item 4. Mine Safety Disclosures
Not applicable.
PART II
Item 5. Market for Registrant’s Common
Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
Market Information
Our company's common
stock is quoted on the OTCQB under the symbol "CIIT". Our stock did not begin trading until March 15, 2013. There is
currently no established public trading market for our common stock, and there can be no assurance that we will be able to establish
or maintain such public trading market for our securities in the future, if ever.
The following table
sets forth the quarterly high and low closing bid prices for the common stock for the past two fiscal years. The prices set forth
below represent inter-dealer quotations, without retail markup, markdown or commission and may not be reflective of actual transactions.
High Low
On September 28, 2020, the closing bid price
of the common stock was $0.56.
Holders
As of September 28,
2020, there were 88 stockholders of record and an aggregate of 2,450,148 shares of our common stock were issued and
outstanding. Our common shares are issued in registered form. The transfer agent of our company's common stock is Action Stock
Transfer Corporation at 2469 E Fort Union Blvd, Suite 214, Salt Lake City, UT 84121.
Description of Securities
The authorized capital
stock of our company consists of 100,000,000 of common stock, at $0.0001 par value, and 20,000,000 shares of preferred stock, at
$0.0001 par value.
Dividend Policy
We have not paid any
cash dividends on our common stock and have no present intention of paying any dividends on the shares of our common stock. Our
current policy is to retain earnings, if any, for use in our operations and in the development of our business. Our future dividend
policy will be determined from time to time by our board of directors.
Equity Compensation Plan Information
We do not have in effect
any compensation plans under which our equity securities are authorized for issuance and we do not have any outstanding stock options.
Recent Sales of Unregistered Securities
None.
Purchase of Equity Securities by the
Issuer and Affiliated Purchasers
We did not purchase any of our shares of
common stock or other securities during our fourth quarter of our fiscal year ended July 31, 2020.
Item 6. Selected Financial
Data
As a “smaller
reporting company,” we are not required to provide the information required by this Item.
Item 7. Management’s
Discussion and Analysis of Financial Condition and Results of Operations
The following discussion
should be read in conjunction with our audited financial statements and the related notes that appear elsewhere in this annual
report. The following discussion contains forward-looking statements based upon current expectations that involve risks and uncertainties,
such as our plans, objectives, expectations and intentions. Actual results and the timing of events could differ materially from
those anticipated in these forward-looking statements as a result of a number of factors, including those set forth under the Item
1A. Risk Factors, Cautionary Notice Regarding Forward-Looking Statements and Business sections in this Form 10-K. We use
words such as “anticipate,” “estimate,” “plan,” “project,” “continuing,”
“ongoing,” “expect,” “believe,” “intend,” “may,” “will,”
“should,” “could,” and similar expressions to identify forward-looking statements.
Our audited financial
statements are stated in United States Dollars and are prepared in accordance with Generally Accepted Accounting Principles of
the United States of America (the U.S. GAAP).
Overview
We are currently a
“shell company” with no meaningful assets or operations other than our efforts to identify and merge with an operating
company.
We were incorporated
in the State of Nevada on June 13, 2012. Our current business office is located at No. 45-2, Jalan USJ 21/10, Subang Jaya 47640,
Selangor Darul Ehsan, Malaysia. Our telephone number is +6012 697 1115.
We were initially an
exploration stage company under the name of Freedom Petroleum Inc. (changed to Steampunk Wizards, Inc., effective on July 2, 2015)
that originally intended to engage in the exploration and development of oil and gas properties. In April 2015, after reviewing
the markets with investor appetite and management's duties to its shareholders, the Company determined to discontinue its oil and
gas operation. We then began exploring opportunities in the computer gaming and application industry.
We engaged in computer
game development until October 13, 2016, when control of our company changed pursuant to a share purchase agreement and a spin-off
agreement. On October 26, 2016, our corporate name was changed from “Steampunk Wizards, Inc.” to "Tianci International,
Inc." The name change was effected on November 27, 2016, pursuant to Nevada Revised Statutes Section 92A.180 in connection
with the merger of us into our then subsidiary, Tianci International Inc.
On
August 3, 2017, we entered into a Stock Purchase Agreement (the “SPA”) with Shifang Wan (the “Seller”),
the record holder of 4,397,837 common shares, or approximately 87.00% of the issued and outstanding of Common Stock of the Company,
and Chuah Su Chen and Chuah Su Mei (collectively, the “Purchasers”, and together with the Company and the Seller, the
“Parties”). Pursuant to the SPA, the Seller sold to the Purchasers and the Purchasers acquired from the Sellers the
Shares for a total gross purchase price of Three Hundred Fifty Thousand Dollars ($350,000). The acquisition was consummated on
August 15, 2017. The Purchasers used personal funds to acquire the Shares.
Upon
the consummation of the sale, Ms. Cuilian Cai resigned from her positions as director, Chief Executive Officer and Chief Financial
Officer of the Company. Her resignation was not due to any dispute or disagreement with the Company on any matter relating to the
Company's operations, policies or practices. The following individuals were also appointed to serve in the positions set forth
next to their names below:
Name Position
Chuah Su Chen Director, Chief Financial Officer and Secretary
Chuah Su Mei Director, Chief Executive Officer and President
Yeow Yuen Kai Director and Chief Technology Officer
Jerry Ooi was
appointed to serve as a director effective August 30, 2017. Mr. Kai resigned from his position as the Chief Technology Officer
effective September 20, 2017, and his position as our director effective August 31, 2019.
We are in active discussions
with an operating business affiliated with our executive officers regarding potential acquisition. There is no assurance that we
will be able to successfully acquire such company or any company in the near future.
Limited Operating History; Need
for Additional Capital
We have had limited
operations and have been issued a "going concern" opinion by our auditor, based upon our reliance on the sale of our
common stock and loans from a related party, as the sole source of funds for our future operations.
There
is no historical financial information about us upon which to base an evaluation of our performance. We have not generated any
revenues from operations. We cannot guarantee we will be successful in our business operations. Our business is subject to risks
inherent in the establishment of a new business enterprise, including limited capital resources, possible delays in the launching
of our games and market or wider economic downturns. We do not believe we have sufficient funds to operate our business for the
next 12 months.
We
have no assurance that future financing will be available to us on acceptable terms, or at all. If financing is not available on
satisfactory terms, we may be unable to continue, develop or expand our operations. Equity financing could result in additional
dilution to existing shareholders. If we are unable to raise additional capital to maintain our operations in the future, we may
be unable to carry out our full business plan or we may be forced to cease operations.
Going Concern
Our
financial statements have been prepared on a going concern basis which assumes the Company will be able to realize its assets and
discharge its liabilities in the normal course of business for the foreseeable future. As of July 31, 2020, the Company had working
capital deficiency of $250,726 and has incurred losses since its inception resulting in an accumulated deficit of $1,378,277. Further
losses are anticipated in the development of the business, raising substantial doubt about the Company’s ability to continue
as a going concern. The financial statements do not include any adjustment that might result from the outcome of this uncertainty.
The
ability to continue as a going concern is dependent upon the Company generating profitable operations in the future and/or to obtain
the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come
due. Management intends to finance operating costs over the next twelve months with loans from directors and/or private placements
of common stock.
Results of Operations
The following tables
provide selected financial data about our company as of and for the years ended July 31, 2020 and 2019.
Balance Sheet Data
Summary Income Statement Data
For the Years Ended July 31,
Net Revenue $ – $ – $ –
Revenue.
During the fiscal years ended July 31, 2020 and 2019, we did not generate any revenues.
Operating
Expenses. Operating expenses were $73,848 and $88,023 for the years ended July 31, 2020 and 2019, respectively.
Operating expenses mainly consisted of professional fees and office and miscellaneous expenses. The decrease in operating expenses
resulted primarily from the decrease in office and miscellaneous expenses. We expect our operating expenses to increase once we
identify and consummate the acquisition of an operating company.
Loss from
Operations. For the years ended July 31, 2020, and 2019, we incurred a loss
from operations of $73,848 and $88,023, respectively. The decrease in loss from operations was attributable to the decrease in
our office and miscellaneous expenses.
Net Loss.
For the years ended July 31, 2020, and 2019, we incurred a net loss of $73,848 and $88,023, respectively. The decrease in net loss
was primarily attributable to the decrease in our office and miscellaneous expenses.
Liquidity and Capital Resources
Working Capital
As of July 31,
2020, we had working capital deficit of $250,726 as compared to working capital deficit of $176,878 as of July 31, 2019. The increase
in working capital deficit was mainly due to an increase in amounts due to related parties for the payment of operating expenses.
Cash Flows
For the Years Ended July 31,
Cash used in operating activities $ (73,230 ) $ (91,539 )
Cash provided by investing activities $ – $ –
Cash provided by financing activities $ 73,230 $ 93,507
Cash Flow from Operating Activities
During
the year ended July 31, 2020, net cash used in operating activities was $73,230, compared to $91,539 for the year ended July 31,
2019. The decrease in net cash used in operating activities was mainly due to the decrease in net loss.
Cash Flow from Investing Activities
During the years
ended July 31, 2020, and 2019, we had no cash flow from investing activities.
Cash Flow from Financing Activities
During the year
ended July 31, 2020, net cash provided by financing activities was $73,230, compared to $93,507 for the year ended July 31, 2019.
The decrease in net cash provided by financing activities was mainly due to the decrease in proceeds from related parties.
Off-Balance Sheet Arrangements
We do not have
any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition,
changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures, or capital resources
that is material to investors.
Critical Accounting Policies
The preparation of financial statements
in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) requires
estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses, and related disclosures
of contingent assets and liabilities in the financial statements and accompanying notes. The SEC has defined a company’s
critical accounting policies as the ones that are most important to the portrayal of the company’s financial condition and
results of operations, and which require the company to make its most difficult and subjective judgments, often as a result of
the need to make estimates of matters that are inherently uncertain. Based on this definition, we have not identified any additional
critical accounting policies and judgments. We also have other key accounting policies, which involve the use of estimates, judgments
and assumptions that are significant to understanding our results, which are described in Note 3 to our financial statements. Although
we believe that our estimates, assumptions and judgments are reasonable, they are based upon information presently available. Actual
results may differ significantly from these estimates under different assumptions, judgments or conditions.
Item 7A. Quantitative and Qualitative Disclosures
About Market Risk
As a “smaller
reporting company”, we are not required to provide the information required by this Item.
Item 8. Financial Statements and Supplementary
Data
TIANCI INTERNATIONAL,
INC.
FINANCIAL STATEMENTS
TABLE OF CONTENTS
PAGE
Report of Independent Registered Public Accounting Firm F-1
Statements of Operations for the years ended July 31, 2020 and 2019 F-3
Statements of Cash Flows for the years ended July 31, 2020 and 2019 F-5
Notes to Financial Statements F-6
REPORT OF INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Shareholders of
Tianci International, Inc.
Opinion on the Financial
Statements
We have audited the accompanying balance
sheets of Tianci International, Inc. (the “Company”) as of July 31, 2020 and 2019, the related statements of operations,
stockholders’ deficit, and cash flows for the years ended July 31, 2020 and 2019, and the related notes (collectively
referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all
material respects, the financial position of the Company at July 31, 2020 and 2019, and the results of its
operations and its cash flows for the years ended July 31, 2020 and 2019, in conformity with the U.S. generally accepted accounting
principles.
Consideration of the Company’s Ability to Continue
as a Going Concern
The accompanying financial statements have
been prepared assuming the Company will continue as a going concern. As described in Note 2 to the financial statements, the Company
has not yet established an ongoing source of revenues sufficient to cover its operating costs, which raises substantial doubt about
its ability to continue as a going concern. Management’s plans with regard to these matters are described in Note 2.
The accompanying 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 audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement, whether due to
error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control
over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial
reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial
reporting. Accordingly, we express no such opinion.
Our 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.
/s/ KCCW Accountancy Corp.
We have served as the Company’s
auditor since 2017.
Diamond Bar, California
September 24, 2020
KCCW
Accountancy Corp.
3333 South Brea Canyon Rd. #206, Diamond
Bar, CA 91765, USA
Tel: +1 909 348 7228 ● Fax:
+1 909 895 4155 ● info@kccwcpa.com
TIANCI INTERNATIONAL, INC.
BALANCE SHEETS
ASSETS
Current Assets
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current Liabilities
Commitments and Contingencies
STOCKHOLDERS' DEFICIT
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT $ 15,968 $ 15,998
The accompanying
notes are an integral part of these financial statements.
TIANCI INTERNATIONAL,
INC.
STATEMENTS OF
OPERATIONS
For the Years Ended
Revenues $ – $ –
Operating Expenses
Provision for income taxes – –
Basic and diluted loss per common share $ (0.01 ) $ (0.02 )
Basic and diluted weighted average common shares outstanding 5,046,699 5,054,985
The accompanying
notes are an integral part of these financial statements.
TIANCI INTERNATIONAL,
INC.
STATEMENTS OF
CHANGES IN STOCKHOLDERS’ DEFICIT
FOR YEARS ENDED
JULY 31, 2020 AND 2019
Common Stock Additional Total
Cancellation of common shares (303,267) (30) 30 – –
The accompanying
notes are an integral part of these financial statements
TIANCI INTERNATIONAL,
INC.
STATEMENTS OF
CASH FLOWS
For the Years Ended
CASH FLOWS FROM OPERATING ACTIVITIES
Adjustments to reconcile net loss to net cash used in operating activities:
Changes in operating assets and liabilities:
Decrease (increase) in prepaid expenses 30 (8,030 )
Increase in accounts payable 588 4,514
Net cash used in operating activities (73,230 ) (91,539 )
CASH FLOWS FROM FINANCING ACTIVITIES
Net cash provided by financing activities 73,230 93,507
Net change in cash – 1,968
Supplemental Cash Flow Disclosures
Cash paid for interest $ – $ –
Cash paid for income taxes $ – $ –
Non-cash financing and investing activities
Cancellation of common shares $ 30 $ –