TIANCI INTERNATIONAL, INC. Form 10-K
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_____________________
FORM 10-K
FOR THE FISCAL YEAR ENDED JULY 31, 2025
For the transition period from _____ to _____
Commission File No. 001-42591
TIANCI INTERNATIONAL, INC.
(Exact Name of Registrant as Specified in its Charter)
Unit 1109, Lippo Sun Plaza, 28 Canton Road, Tsim Sha Tsui,
Kowloon, Hong Kong999077
(Address of Principal Executive Offices)
Registrant’s Telephone Number: 852-26621800
Securities Registered Pursuant to Section 12(b)
of the Act:
Title of Each Class Trading Symbol Name of Each Exchange on Which Registered
Common Stock, $0.0001 par value CIIT Nasdaq Capital Market
Securities Registered Pursuant to Section 12(g)
of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer,
as defined in Rule 406 of the Securities Act. Yes ☐ No ☒
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 ☐
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Sections 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes ☒ 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 (§232.405 of this chapter) during the
preceding 12 months (or for such shorter period that the registrant was required to submit such files.) Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated
filer, an accelerated filer, a non-accelerated filer, a smaller reporting company. or an emerging growth company. See the definitions
of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging
growth company” in Rule 12b-2 of the Exchange Act. (Check One)
Large accelerated Filer ☐ Accelerated Filer ☐
Non-accelerated Filer ☒ Smaller reporting company ☒
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant
has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant
to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant has filed a report on
and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section
404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.
☐
If securities are registered pursuant to Section 12(b) of the Act,
indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to
previously issued financial statements. ☐
Indicate by check mark whether any of those error corrections are restatements
that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during
the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate by check mark whether the registrant is a shell company (as
defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
As of January 31, 2025 (the last business day of the most recently
completed second fiscal quarter) the aggregate market value of the common stock held by non-affiliates was $25,394,128.
As of October 3, 2025, there were 16,531,803 shares of common stock
outstanding.
DOCUMENTS INCORPORATED BY REFERENCE: None
FORWARD-LOOKING STATEMENTS: NO ASSURANCES INTENDED
This Annual Report contains certain forward-looking
statements regarding Tianci International, Inc., its business and financial prospects. All statements that address events or developments
that we expect or anticipate will occur in the future are forward-looking statements. These statements represent Management’s best
estimate of what will happen. Nevertheless, there are numerous risks and uncertainties that could cause our actual results to differ dramatically
from the results suggested in this Report, including the contingencies described in this Report under Item 1A titled “Risk Factors”.
Because these and other risks may cause the Company’s
actual results to differ from those anticipated by Management, the reader should not place undue reliance on any forward-looking statements
that appear in this Report.
PART 1
Item 1. Business
The Share Exchange
On March 6, 2023 Tianci International, Inc. (“Tianci”),
which had previously been a shell corporation with no business operations, completed a share exchange with RQS Capital Limited (“RQS
Capital”), in which RQS Capital transferred all of the issued and outstanding capital stock of RQS United Group Limited (“RQS
United”) to Tianci, and Tianci issued to RQS Capital 1,500,000 shares of its common stock and paid a cash price of $350,000
(the “Share Exchange”).
RQS United is a holding company incorporated in the Republic of Seychelles.
RQS United has no operations other than holding 90% of the share capital of its subsidiary, Roshing International Co., Limited, a company
organized under the laws of Hong Kong (“Roshing”). Shufang Gao and Ying Deng, who are officers and members
of Tianci’s Board of Directors are also officers and directors of Roshing. Ying Deng owns the 10% of Roshing that is not owned by
RQS United.
The Share Exchange was accounted for as a “reverse acquisition”
effected as a recapitalization, wherein RQS United was considered the acquirer for accounting and financial reporting purposes. The
assets and liabilities of the acquired entity have been brought forward at their book value and no goodwill has been recognized on Tianci’s
financial statements.
Overview
The Company, through
Roshing, provides global logistics services, encompassing booking and transportation arrangement and related logistics solutions. As a
logistics shipping operator, Roshing focuses on ocean freight forwarding services, including container shipping and bulk goods shipping
service.
Roshing’s customized
logistics solutions are tailored to meet the diverse needs of its customers. For its 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 cargo
space to its customers (cargo owners or cargo agents). For its bulk goods shipping service, Roshing issues fixture notes to customers
and 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.
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 CEO 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.
We are also launching global mineral trade business and currently accumulating a high-grade inventory of industrial metals. We intend
to integrate the distribution of ore with our existing shipping operations to provide end-to-end supply chain solutions for metallurgical
and steelmaking customers. Roshing’s business is primarily carried out in Hong Kong and other locations in the Asia-Pacific region.
We are strategically extending our services to other continents.
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.
Our Services
Our operations, conducted through
Roshing, include providing the following services to our customers.
I. Global Logistics Services
Our global logistics
services provided through Roshing accounted for the vast majority of our revenue for the years ended July 31, 2025 and 2024. These services
encompass shipping operations and related logistics solutions. Roshing customizes its logistics solutions to meet the diverse needs of
its customers, including the optimization of shipping routes and the utilization of vessels with different tonnages. As a global logistics
enterprise, depending on the type of cargo, Roshing provides container shipping and bulk goods shipping services. Container shipping is
generally for small merchandise which can be palletized and fit into a container. Bulk goods shipping is generally for bulk commodities,
such as lumber, steel, construction materials, chemicals, and agricultural products.
a. Container shipping
Roshing’s container shipping service includes:
ii. Financial Management:
iii. Risk Management:
Implementing strategies to identify, assess, and mitigate risks associated with cargo transportation.
b. Bulk goods shipping
Roshing’s bulk goods shipping service includes:
ii. Fixture Note and Quotation Management
vi. Financial Management
Our General Logistics Service Process
Roshing has a long-term and close cooperation
with ocean shipping suppliers, including the signing of charter contracts, and service contracts. When a customer makes an inquiry to
Roshing, we are usually able to offer competitive quotes and customize shipping solutions quickly.
Roshing begins by thoroughly evaluating the customer’s
logistics needs, including the type of goods being shipped, the destination, and the required transportation time. Based on this information,
Roshing designs an optimal transportation plan tailored to the customer’s specific requirements. This plan includes selecting the
most efficient shipping routes, determining the appropriate container or bulk cargo vessel size and type, and considering any special
handling or regulatory compliance requirements. Roshing then enters into a written contract with the customer for ocean shipping that
can best meet the customer’s needs. This includes selecting a shipment method that aligns with the customer’s timeline and
cargo specifications.
Roshing works with each customer to develop a
cost-effective plan and service terms to meet the client’s specific needs. This involves detailed discussions to ensure that both
parties have a clear understanding of expectations, costs, and responsibilities. Roshing will assign cargo space from the appropriate
container or bulk cargo vessel based on the volume and weight of the shipment, minimize shipping costs, select the shortest route to save
on freight, and choose the port closest to the customer’s destination.
Throughout the entire shipping process, Roshing
maintains close oversight to ensure the safety and timely arrival of goods at the destination port. This involves real-time tracking and
monitoring of the shipment, handling any unforeseen issues that may arise, and providing regular updates to the customer. By doing so,
Roshing ensures that the goods are transported safely and arrive within the agreed timeframe, meeting all customer expectations.
We believe that Roshing stands out in the global
logistics landscape because of its core strengths. First, Roshing’s management’s extensive network and industry relationships
empower us with access to a wide customer base, enabling tailored solutions for an array of logistics requirements. Additionally, our
collaboration with direct shipping suppliers ensures competitive rates and transparent service delivery. Moreover, Roshing’s expertise
in route optimization enables us to efficiently manage logistics routes and secure favorable terms for its clients. These strengths collectively
position us as a competitive player in the industry.
1. Container shipping process
Roshing has a large network of international container
shipping resources to provide customers with flexible booking services and personalized logistics solutions to meet the different needs
of customers.
a. Long-term cooperation service agreements
b. Customer source and inquiry quotation
c. Contract signing and fee collection
· Roshing issues an invoice and debit note to the customer for fee collection.
d. Container freight payment
e. Transportation arrangements
f. Follow up work
2. Bulk goods shipping process
Roshing’s bulk shipping operator services
encompass a broad range of bulk merchandise, including steel, building materials, and engineering materials. Roshing provides customized
maritime logistics solutions for customers. At present, Roshing’s main bulk shipping route covers Japan, South Korea and Vietnam.
To ensure that its customers receive customized shipping plans, Roshing closely follows shipping industry development trends, analyzes
the characteristics of its customer’s goods, the port of destination, and timing requirements. Roshing also constantly optimizes
the route layout to improve transportation efficiency and ensure that the goods arrive at the destination safely and on time.
a. Customer development
b. Customer inquiry and quotation
c. Contract signing and payments
d. Supplier’s selecting and chartering
e. Transportation arrangement and payment
i. Most of Roshing’s bulk cargo
logistics are carried out on a Free In and Out (“FIO”), which means that the shipper is responsible for loading the cargo
onto the vessel, the shipowner is responsible for the transport and the consignee is responsible for the unloading process. The FIO process
for international shipping includes:
ii. Customs clearance, delivery of
goods, and delivery of shipping documents are usually completed by agencies in different ports. In most shipping scenarios, the consignment
arrangement is made by the consensual shipping supplier. In some transport scenarios, Roshing directly assigns the agency for customers.
iii. Transportation Fee payment: Roshing
usually pays the transportation fee to the shipping supplier in 3-4 days. If there are other fees, such as processing fees, port fees,
commission, agency fees and other related fees, the fees are settled according to the customer’s contract with Roshing.
f. Follow up service
i. File Organizing
Transportation records: After the shipping
process, Roshing will organize and keep all documents and records generated during transportation for record.
ii. Customer Feedback
Customer feedback: Roshing pays great
attention to its customer experience. It collects customer feedback on transportation services and addresses any problems or complaints
that may arise.
Global Logistics Business Strengths
Competition
Roshing’s container shipping operation faces
competition from global and regional shipping companies such as Maersk, Mediterranean Shipping Company (MSC), and CMA CGM Group. These
companies offer extensive networks and comprehensive services, including advanced tracking technology, competitive pricing, and strong
customer service capabilities. Additionally, logistics companies like DHL and FedEx also provide integrated transportation solutions,
including container shipping.
To maintain competitiveness, Roshing focuses on
providing high-quality customized services, leveraging expertise, and maintaining strong relationships with customers through dedicated
support and tailored solutions.
Roshing’s bulk shipping operation services
compete with major bulk shipping companies such as Oldendorff Carriers, Pacific Basin, and Star Bulk Carriers. These companies typically
have large fleets and extensive global networks, enabling them to offer competitive pricing and reliable services. Additionally, they
may have long-term relationships with major industry players and ports, enhancing their operational efficiency.
To compete effectively, Roshing emphasizes efficient
operational management, strong collaboration and coordination with stakeholders, and transparent financial management. By offering personalized
customer service and flexible chartering options, Roshing strives to stand out in the market and build long-term customer loyalty.
Our Growth Strategies
Our growth plan includes a continued focus on
the global logistics service as our primary business segment. We intend to use a portion of the proceeds from our recent public offering
to scale up our shipping operations, including chartering additional vessels. We believe that the expansion of shipping operations will
allow us to provide more cost-effective shipping options to our clients, particularly those with large load needs. Or strategies for growth
include:
II. Other Product & Services
Our People and Culture
The following table sets forth the number of our
full time employees by function as of July 31, 2025, July 31, 2024 and July 31, 2023:
Senior Management 7 7 3
Human Resources and Administration 1 1 1
Sales and Marketing 4 2 2
Procurement 0 0 1
Insurance
We participate in employee social security plans
for our full-time employees.
Intellectual Property
As of the date of this Report, we have two domain
names: roshing.com and tianci-ciit.com. We do not own or have rights to any other IP, such as patents, copyrights and trademarks.
Environmental Matters
We strictly comply with laws and regulations relating
to environmental protection in Hong Kong since our main operation is in Hong Kong. It has not had a material adverse effect upon our capital
expenditures, earnings, and we do not anticipate any material adverse effects in the future based on the nature of our future operations.
We do not have any relevant records of being penalized for violating environmental protection regulations.
* * * * *
Item 1A. Risk Factors
RISK FACTORS
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.
RISKS RELATED TO OUR
BUSINESS
Risks Related to the
Global Logistics Services
Geopolitical conditions,
such as political instability or conflict, terrorist attacks and international hostilities can affect the Maritime transportation industry,
which could adversely affect our business.
We conduct most of our
operations outside of the United States and our business, results of operations, cash flows, financial condition and ability to pay dividends,
if any, in the future may be adversely affected by changing economic, political and government conditions in the countries and regions
where we operate. Moreover, we operate in a sector of the economy that has been and is likely to continue to be adversely impacted by
the effects of geopolitical developments, including political instability or conflict, terrorist attacks or international hostilities.
Currently, the world
economy faces a number of challenges, including tensions between the United States and China, new and continuing turmoil and hostilities
in Russia, Ukraine, the Middle and other geographic areas and countries, continuing economic weakness in the European Union and slowing
growth in China and the continuing threat of terrorist attacks around the world.
Trade barriers to protect
domestic industries against foreign imports depress shipping demand. Protectionist developments, such as the imposition of trade tariffs
or the perception they may occur, may have a material adverse effect on global economic conditions, and may significantly reduce global
trade. Moreover, increasing trade protectionism may cause an increase in (a) the cost of goods exported from regions globally, (b) the
length of time required to transport goods and (c) the risks associated with exporting goods. Such increases may significantly affect
the quantity of goods to be shipped, shipping time schedules, voyage costs and other associated costs, which could have an adverse
impact on our charterers’ business, operating results and financial condition and could thereby affect their ability to make timely
charter hire payments to us and to renew and increase the number of their time charters with us. This could have a material adverse effect
on our business, financial condition and operating results. Further, protectionist policies in any country could impact global markets,
including foreign exchange and securities markets. Any resulting changes in currency exchange rates, tariffs, treaties and other regulatory
matters could in turn adversely impact our business, results of operations, financial condition and cash flows.
Any reduction in
international commerce or disruption in global trade may adversely impact our business and operating results.
The Company
primarily provides services to customers engaged in international commerce. Everything that affects international trade has the potential
to expand or contract our primary markets and adversely impact our operating results. For example, international trade is influenced by:
· currency exchange rates and currency control regulations;
· interest rate fluctuations;
· wars, strikes, civil unrest, acts of terrorism, and other conflicts;
· changes in labor and other costs, including the impacts of inflation;
· changes in availability of credit; and
Our
industry is highly competitive, and failure to compete or respond to customer requirements could damage our business and the results of
operations.
The global
logistics services industry is intensely competitive and is expected to remain so for the foreseeable future. There are a large number
of companies competing in one or more segments of the industry, but the number of firms with a global network that offer a full complement
of logistics services is more limited. Nevertheless, many of these competitors have significantly more resources than the Company and
may pursue acquisition opportunities and are developing new technologies to gain competitive advantages. Depending on the location of
the shipper and the importer, we must compete against niche players, larger entities including carriers, and emerging technology companies.
The primary competitive factors are price and quality of service. Many larger customers utilize the services of multiple logistics providers.
Customers regularly solicit bids from competitors in order to improve service and to secure favorable pricing and contractual terms such
as: longer payment terms; flexible-price arrangements; and performance penalties. Increased competition and competitors’ acceptance
of expanded contractual terms coupled with customers’ dissatisfaction with elevated rates, scarce capacity, and extended transit
times could result in loss of business, reduced revenues, reduced margins, higher operating costs or loss of market share, any of which
would damage our results of operations, cash flows and financial condition.
Difficulty
in forecasting timing or volumes of customer shipments or rate changes by carriers could adversely impact our margins and operating results.
We are not
aware of any accurate means of forecasting short-term customer requirements. However, long-term customer satisfaction depends upon our
ability to meet these unpredictable short-term customer requirements. Personnel costs, one of our larger costs, are always less flexible
in the very near term as we must staff to meet uncertain demand. As a result, short-term operating results could be disproportionately
affected.
The timing
of our revenues is, to a large degree, impacted by factors out of our control, such as a sudden change in consumer demand for goods, changes
in trade tariffs, product launches and/or manufacturing production delays. Additionally, many customers ship a significant portion of
their goods at or near the end of a quarter, and therefore, we may not learn of a shortfall in revenues until late in a quarter. To the
extent that a shortfall in revenues or earnings was not expected by securities analysts or investors, any such shortfall from levels predicted
by securities analysts or investors could have an immediate and adverse effect on the trading price of our stock.
Volatile
market conditions can create situations where rate increases charged by carriers and other service providers are implemented with little
or no advance notice. We often cannot pass these rate increases on to our customers in the same time frame, if at all. As a result, our
yields and margins can be negatively impacted.
Climate
change, including measures to address climate change, could adversely impact our business and financial results.
The long-term
effects of climate change are difficult to predict and may be widespread. The impacts of climate change may include physical risks (such
as rising sea levels, which could affect port operations or frequency and severity of extreme weather conditions, which could disrupt
our operations and damage cargo and our facilities), compliance costs and transition risks (such as increased regulation and taxation
to support carbon emissions reduction investments), shifts in customer demands (such as customers requiring more fuel efficient transportation
modes or transparency to carbon emissions in their supply chains) and customer contractual requirements around environmental initiatives
and other adverse effects. Our non-asset model gives us flexibility and an ability to change locations, modes, and carriers based on evolving
operating conditions. However, such impacts may disrupt our operations by adversely affecting our ability to procure services that meet
regulatory or customer requirements, depending on the availability of sufficient appropriate logistics solutions.
In addition,
the increasing concern over climate change has resulted and may continue to result in more regulations relating to climate change, including
regulating greenhouse gas emissions, restrictions on modes of transportation, alternative energy policies and sustainability initiatives,
such as the FuelEU Maritime initiative or the EU Emissions Trading System. If Hong Kong imposes more stringent restrictions and requirements
than our current legal or regulatory obligations, we may experience disruptions in, or increases in the costs associated with delivering
our services, which may negatively affect our operating our results of operations, cash flows and financial condition.
Roshing faces risks
associated with the contents of shipments and inventories handled through its logistics services, including real or perceived quality
or health issues with the products that are handled through Roshing’s logistics services, and risks inherent in the logistics industry,
including personal injury, product damage, and transportation-related incidents.
The logistics
services Roshing provides are subject to accident risks, including ship collisions, cargo damage, and cargo loss. Such events can result
in significant financial costs, legal liability, and reputational damage. In addition, Roshing’s logistics service involves handling
a large volume of bulk merchandise and containers, through cargo and freights operated by third-party shipping suppliers across Roshing’s
logistics services, and face challenges with respect to the protection and examination of these bulk merchandise and containers. Bulk
merchandise and containers in its network may be delayed, stolen, damaged or lost during delivery for various reasons, and we may be perceived
or found liable for such incidents. Unsafe items, such as flammables and explosives, toxic or corrosive items and radioactive materials,
may damage other bulk merchandise and containers in shipping process, harm the personnel and facilities of the third-party shipping suppliers,
or even injure the recipients. Furthermore, if Roshing fails to prevent prohibited or restricted items from entering into its network
and if it participates in facilitating transportation and delivery of such items unknowingly, Roshing may be subject to administrative
or even criminal penalties, and if any personal injury or property damage is concurrently caused, it may also be liable for civil compensation.
The logistics
services for delivery of bulk merchandise and containers also involve inherent risks associated with transportation safety. From time
to time, the vessels and personnel of its third-party shipping suppliers may be involved in transportation and cargo accidents, and the
bulk merchandise and containers carried by them may be lost or damaged.
Roshing
is also subject to worker health and safety laws and regulations that may expose us to costs and liabilities, potentially affecting its
results of operations, competitive position, and financial condition adversely. These laws and regulations are stringent and comprehensive,
governing the health and safety of Roshing’s and workers of third-party shipping suppliers during operations. For further details,
please refer to the section titled “Regulations related to employment and labor protection” beginning on page 83.
Any of the
foregoing could disrupt Roshing’s logistics services, cause us to incur substantial expenses and divert the time and attention of
our management. Roshing may face claims and incur significant liabilities if found liable or partially liable for any injuries, damages
or losses. Any uninsured or underinsured loss could negatively influence our business and financial condition. Governmental authorities
may also impose significant fines on us or require us to adopt costly preventive measures. Furthermore, if Roshing’s logistics services
are perceived to be insecure or unsafe by its customers, its business volume may be significantly reduced, and our business, financial
condition and results of operations may be materially and adversely affected.
Roshing is subject to potential risks
arising from contractual obligations with shipping suppliers.
Roshing’s
contractual obligations with shipping suppliers encompass precise terms and conditions. Should either party fail to uphold these provisions,
it may result in legal disputes, financial penalties, and interruptions in service. These breaches, whether initiated by us or the shipping
suppliers, pose potential risks to the continuity and efficiency of Roshing’s operations. Adhering to the terms outlined in these
agreements is important to maintaining positive relationships with Roshing’s partners and ensuring the operation of Roshing’s
shipping activities and logistics services.
Roshing faces risks from changing customer
logistics needs, contractual obligations, and failure to meet customer requirements, which could lead to financial losses, legal liabilities,
and damage to Roshing’s reputation if not managed proactively.
Roshing’s
customers’ logistics needs are subject to constant change, influenced by market trends, technological advancements, and shifts in
consumer behavior. Failure to adapt to these evolving demands could lead to significant business losses. Moreover, Roshing’s contractual
obligations entail meeting specific performance standards, and any failure to do so may result in liability claims, financial setbacks,
and damage to its reputation. Ensuring the fulfillment of all customer requirements, including adherence to delivery schedules, maintenance
of cargo conditions, and compliance with regulatory standards, is paramount. Any lapses in meeting these requirements could not only result
in lost business opportunities but also expose us to potential legal liabilities. Therefore, proactive measures to address these customer-related
risks are essential for maintaining Roshing’s competitive edge and safeguarding its operations.
Our revenues, operating income and cash
flows are likely to fluctuate and are subject to uncertainty and potential volatility in demand and supply for cargo space and container
loads from time to time.
Roshing charters cargo space and container loads
from shipping suppliers based on a certain volume and then sub-charters that space to our customers under an order contract. Roshing obtains
cargo space and container loads through direct booking and block space arrangements. Pursuant to the block space agreements, it is committed
to paying for the agreed cargo space and container loads irrespective of whether it could fully utilize the allotted space. In the event
it cannot fully utilize the cargo space and container loads it sourced (i.e. the actual customers’ demand for the cargo space and
container loads is less than the amount of cargo space and container loads it sourced), Roshing has to sell excess cargo space and container
loads. Roshing, however, cannot assure that there will not be instances where, for example, due to (a) departure timetable of the vessel;
(b) popularity of the route; or (c) seasonality factors, it is unable to fully consolidate/co-load all the excess cargo space and container
loads it purchased from our suppliers. In case Roshing cannot fully utilize the cargo space and container loads it obtained from its suppliers,
Roshing may have to bear the costs of all the excess cargo space and container loads it purchased and its business and results of operations
could be adversely affected.
In the event of shortfall of the cargo space and
container loads to meet customers’ demand (i.e. the actual customers’ demand for the cargo space and container loads are higher
than the amount that Roshing has), Roshing has to source the cargo space and container loads from its suppliers at the prevailing market
rates. Since cargo space and container loads offered by Roshing’s suppliers through direct booking is normally on a first-come-first-served
basis, with no formal agreement for guaranteed supply of cargo space and container loads, there is no assurance that Roshing will be able
to source sufficient cargo space and container loads to meet its customers’ demand within the expected timeframe and at favorable
price. As a result of the shortfall of cargo space and container loads, its reputation and therefore its business, sales performance and
results of operations will be adversely affected.
In result, we may experience fluctuations in our
revenues and cost structure and the resulting operating income and cash flows and expect that this will continue to occur in the future.
We may experience fluctuations in our financial results, including revenues, operating income and earnings per share, for reasons that
may include: (i) the types and complexity, number, size, timing and duration of client engagements; (ii) the timing of revenue recognition
under U.S. GAAP; (iii) the utilization of revenue-generating professionals, including the ability to adjust staffing levels up or down
to accommodate the business and prospects of the applicable segment and practice; (iv) the geographic locations of our clients or the
locations where services are rendered; (v) the length of billing and collection cycles and changes in amounts that may become uncollectible;
(vi) changes in the frequency and complexity of government regulatory and enforcement activities; (vii) business and asset acquisitions;
(viii) fluctuations in the exchange rates of various currencies against the U.S. dollar; (ix) fee adjustments upon the renewal of expired
service contracts or acceptance of new clients due to the adjusted scope per our refined business strategy; and (x) economic factors beyond
our control.
The results of different segments and practices
may be affected differently by the above factors. The positive effects of certain events or factors on certain segments and practices
may not be sufficient to overcome the negative effects of those same events or factors on other parts of our business. In addition, our
mix of practice offerings adds complexity to the task of predicting revenues and results of operations and managing our staffing levels
and expenditures across changing business cycles and economic environments.
Our results are influenced by seasonal and similar
factors. Although we evaluate our annual guidance at the end of each quarter and adjust it as necessary, unforeseen future volatility
can lead to significant deviations from our guidance. This may occur even if our guidance encompasses a range of potential outcomes and
has been updated to consider operating results.
Seasonality and the impact of weather and
other catastrophic events adversely affect Roshing’s operations and profitability.
Roshing’s operation is influenced by seasonal
factors, with February to April being off-peak seasons, and June to October being peak seasons. Roshing’s operation is affected
by the winter season because inclement weather impedes operations, and some shippers reduce their shipments during winter. In addition,
in the lead-up to major holidays such as Christmas and Chinese Spring Festival, increased consumer demand often leads to a short-term
surge in cargo transportation volume. Conversely, in the later stages of holidays and traditional off-peak seasons, cargo transportation
volume may significantly decrease. At the same time, operating expenses increase due to, among other things, a decline in fuel efficiency
because of engine idling and harsh weather that creates higher accident frequency, increased claims and higher equipment repair expenditures.
Roshing also may suffers from weather-related or other events, such as tornadoes, hurricanes, blizzards, ice storms, floods, fires, earthquakes
and explosions, which may disrupt fuel supplies, increase fuel costs, disrupt freight shipments or routes, affect regional economies,
destroy its assets or the assets of its customers or otherwise adversely affect the business or financial condition of Roshing’s
customers, any of which developments could adversely affect its results or make its results more volatile.
Risk Related to Other Products & Services
Roshing has a great dependence on a limited number of suppliers
and the loss of their manufacturing capability could materially impact its operations.
Roshing is a distributor of hardware components
for electronic devices and generates revenue from reselling these components and is not engaged in innovative product development and
direct manufacturing business. Roshing markets off-the-shelf products, which ships directly from the manufacturer to Roshing’s customer.
In the event that the supply of components or finished products is interrupted or relations with any of its principal vendors is terminated,
there could be increased costs and considerable delay in finding suitable replacement sources to manufacture the electronic device hardware
components products (“Hardware Products”). Its Hardware Products mostly are shipped from facilities located in Guangdong,
China. The shipment of these products from Mainland China exposes us to the possibility of product supply disruption and increased costs
in the event of changes in the economics condition of China.
Defects in the Hardware Products Roshing
sells or failures in quality control related to its distribution of products could impair its ability to sell its products or could result
in product liability claims, litigation and other significant events involving substantial costs.
The detection of significant
defects in Roshing’s Hardware Products or failures in its quality control procedures, including those of its suppliers, carries
several potential consequences. These include delays in bringing products to market, decreased sales, and challenges in gaining market
acceptance. Furthermore, such issues may lead to the diversion of its development resources and damage to its reputation, with potential
regulatory restrictions. Rectifying product defects can incur substantial costs, and identifying suitable remedies may prove difficult.
Moreover, errors or defects could result in financial damage to its customers, potentially leading to litigation. Product liability lawsuits,
regardless of the outcome, may entail significant time and expenses for defense. In the absence of product liability insurance and without
being named insured on its suppliers’ policies, Roshing faces the risk of being unable to cover claims or seek reimbursement from
suppliers, leaving us potentially exposed to financial liabilities.
The software and website development markets are highly competitive.
The management software and website development
industries are highly competitive. There are a number of larger companies, including computer manufacturers, computer service and software
companies that have greater operational, personnel and financial resources than we have. These companies currently offer and have the
technological ability to develop software products similar to those offered by us. These companies present a significant competitive challenge
to Roshing’s business. Because we do not have the same financial resources as these competitors, we may have a difficult time in
the future competing with these companies. We compete based on its fright shipping and logistics knowledge, products, service, price,
system functionality and performance and technological advances. Customized and special services according to customer needs, there is
technical weakness.
The industry in which Roshing operates has low
barriers to entry and is highly fragmented and very competitive. We anticipate that competition may intensify further as the freight software
industry matures and consolidates. Roshing’s key strength lies in providing tailored services to wholesalers, e-commerce retailers
and freight forwarders in market segments that share the value of Roshing’s technology. These services facilitate the management
of complex workflows and improve efficiency by enabling shipping workflow management, Marine container management, e-commerce inventory
and shipping management, and logistics data analytics. However, we cannot guarantee continuous improvement in technology and services.
Roshing’s software and website may not perform in line
with customer specifications or expectations.
Roshing’s freight
shipping and related logistic software and websites may not perform in line with customers’ expectations. Future customers may also
require customized specifications that Roshing is unable to deliver. Some of these target specifications, such as those dependent on battery
technology, are constrained by the pace of general technological advancement and the capabilities of its suppliers, which are largely
beyond its control.
Roshing’s software
and website may contain design or manufacturing defects that result in unsatisfactory performance or require repair. Roshing’s software
and website use a substantial amount of algorithms and software to operate. Software products are inherently complex and often contain
defects and errors, especially when first introduced. While Roshing have performed extensive internal testing on its software and website,
we have a limited frame of reference by which to evaluate the long-term performance of its software and website. There can be no assurance
that Roshing will be able to detect and fix any defects in its software and website before we sell products and services to customers.
If Roshing’s software
and website is defective or otherwise fails to perform as expected or in accordance with prescribed technical specifications and timetable,
its customers may experience accidents and suffer adverse publicity, revenue declines, ecommerce inventory disarray, breakdown of shipping
workflows, product liability claims, and significant additional expenses. These consequences could have a material adverse impact on its
business, financial condition, operating results, and prospects.
Additionally, Roshing’s software, along
with that of our third-party service provider, containing personal information of software customers, and others, could be breached, exposing
us to adverse publicity, costly government enforcement actions or private litigation, and expenses. Cyber criminals constantly devise
schemes to bypass IT security safeguards, and other retailers have experienced severe data breaches. Roshing may not anticipate all security
threats or implement preventive measures against them effectively. The costs to mitigate network security issues could be significant,
and while Roshing implemented security measures, addressing these issues may not always succeed. Unauthorized access to Roshing’s
networks or databases could result in theft, publication, deletion, modification, or blocking of sensitive information, adversely affecting
our business strategy, financial condition, or operations. While Roshing has not experienced cybersecurity incidents in the past three
years, we anticipate threats to persist and cannot assure such events will not occur or have material impacts on Roshing’s operations,
results of operations and financial condition in the future.
If Roshing does
not continually update its products and/or services, they may become obsolete and Roshing may not be able to compete with other companies.
Roshing cannot assure that it will be able to
keep pace with technological advances, or that its current suppliers will be able to keep pace with technological advances and as such,
its products and/or services may become obsolete. Roshing cannot assure you that competitors will not develop related or similar services
and offer them before Roshing does, or does so more successfully, or that they will not develop services and products more effective than
any that Roshing and/or its suppliers have or are intending to develop. In addition, although Roshing may be able to identify new suppliers
that can provide more effective services and products to be more competitive, Roshing may not be able to arrange satisfactory arrangements
in a timely manner, if at all. If that happens, its business, prospects, results of operations and financial condition will be materially
adversely affected.
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.
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.
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.
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.
General Business Risks
We have a limited operating history
and face significant challenges and will incur substantial expenses as we build our capabilities.
We have a limited operating
history and are subject to the risks inherent in a growing company, including, among other things, risks that we may not be able to hire
sufficient qualified personnel and establish operating controls and procedures. The company relies on few trained internal personnel as
the company only has 11 full time employees. As we build our own capabilities, we expect to encounter risks and uncertainties frequently
experienced by growing companies in new and rapidly evolving fields, including the risks and uncertainties described herein. If we are
unable to build our own capabilities, our operating and financial results could differ materially from our expectations, and our business
could suffer.
We are currently dependent on a small
group of customers for most of our revenue. If we cannot expand our customer base many-fold, our business growth will be challenged and
affected, resulting in adjustments to our business strategy.
As we have not achieved significant scale, we
had and expect to continue to have customer concentration. The revenue generated to date by our business has come from a small number
of customers. During the year ended July 31, 2025, two customers accounted for 68.9% of our revenue. During the year ended July 31, 2024,
three customers accounted for approximately 84% of our revenue. In order for Tianci to be viable as a public company, we must increase
our revenue. To accomplish that, we must expand our customer base. If we fail to multiply our customers, Tianci’s stock may have
no significant value. There are inherent risks whenever a large percentage of revenues are concentrated with a limited number of customers.
We are unable to predict the future level of demand for our services that will be generated by these customers. In addition, we cannot
assure that any of our customers in the future will not cease purchasing logistics services from us, or that our cooperating agents will
continue introducing clients to us. Should they favor logistics services from our competitors, significantly reduce orders, or seek price
reductions in the future, any such event could have a material adverse effect on our revenue, profitability, and results of operations.
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.
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.
Our business could be negatively affected by rising inflation
and interest rates.
Various macroeconomic factors could adversely
affect our business, financial condition and results of operations, including changes in inflation, interest rates and overall economic
conditions and uncertainties such as those resulting from the current and future conditions in the global financial markets.
For instance, recent inflationary environment
has negatively impacted us by slightly increasing (i) our labor costs, through higher wages, (ii) our borrowing costs, through higher
interest rates which we expect to continue to increase, and (iii) our other operating costs, such as through higher rates charged by our
service suppliers. Supply chain constraints have led to higher inflation, which if sustained, could have a negative impact on our operations.
To moderate effects of these increasing costs, we instituted proactive initiatives to optimize efficiencies in our daily operations. We
also replaced certain service suppliers with alternatives that offered more competitive rates while not compromising service quality.
In addition, we expect to modestly increase the rates we charge our customers in response to the inflationary environment should such
inflationary pressures further deteriorate in the near future. However, we cannot assure you that these measures we have taken or will
take will be effective, if at all, or that we will be able to effectively mitigate any inflationary pressures in the future. If inflation
or interest rates were to significantly increase, our business and the results of operations may be negatively affected.
Interest rates, liquidity of credit markets and
volatility of capital markets could also affect our business and results of operations as well as our ability to raise capital on favorable
terms, or at all.
If we are unable
to hire, retain or motivate qualified personnel, consultants, independent contractors, and advisors, we may not be able to grow effectively.
Our performance will
be largely dependent on the talents and efforts of highly skilled individuals that we attract to our company. Our future success depends
on our continuing ability to identify, hire, develop, motivate and retain highly qualified personnel for all areas of our organization:
technological as well as entrepreneurial. Competition for such qualified employees is intense. If we do not succeed in attracting competent
personnel or in retaining or motivating them, we may be unable to grow effectively. In addition, our future success depends largely on
our ability to retain key consultants and advisors. Our inability to retain their services could negatively impact our business and our
ability to execute our business strategy.
The Company and
its subsidiaries do not presently maintain fire, theft, product liability or any other property insurance, which leaves us with exposure
in the event of loss or damage to our properties or claims filed against us.