CIIT Tianci International Inc (PK)

Table of Contents

 

As filed with the Securities and Exchange Commission on June 10, 2024.

 

Registration No. 333-[*]

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM S-1

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

 

TIANCI INTERNATIONAL, INC.

(Exact name of registrant as specified in its charter)

 

Nevada		4731		45-5540446
(State or jurisdiction of		(Primary Standard Industrial		(I.R.S. Employer
incorporation or organization)		Classification Code Number)		Identification No.)

 

Unit B,10/F., Ritz Plaza, No.122 Austin Road, Tsim Sha Tsui,

Kowloon, Hong Kong 999077

Tel: 852-22510781

(Address, including zip code, and telephone number, including area code of registrant’s principal executive offices)

 

Northwest Registered Agent, LLC.

401 Ryland Street, Suite 200-A

Reno, NV, 89502, USA

Tel: 509-768-2249

(Name, address, including zip code, and telephone number, including area code, of agent for service)

 

Copies to:

 

Anthony W. Basch, Esq. Alexander W. Powell Jr., Esq. Kaufman & Canoles P.C. Two James Center, 14th Floor 1021 East Cary Street Richmond, Virginia 23219 Tel: +1 (804) 771-5700

Michael A. Hedge, Esq. Hillary O’Rourke, Esq. K&L Gates LLP 1 Park Plaza, Twelfth Floor Irvine, California 92614 Telephone: (949) 253-090

 

Approximate date of commencement of proposed sale to the public: As soon as practicable and from time to time after this Registration Statement is declared effective.

 

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933 check the following box. ☒

 

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

 

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

 

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

 

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. ☐

 

The registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, or until this Registration Statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to Section 8(a), may determine.

 

 

 

 

EXPLANATORY NOTE

 

This registration statement contains two prospectuses, as set forth below.

 

	·	Public Offering Prospectus. A prospectus to be used for the public offering (the “Public Offering Prospectus”) of up to [●] shares of common stock, par value $0.0001 per share, of Tianci International, Inc. (the “Company”), with such shares to be sold in a firm commitment underwritten offering through the underwriter named on the cover page of the Public Offering Prospectus.
	·	Resale Prospectus. A prospectus to be used for the resale by the selling stockholders (the “Selling Stockholders” set forth in the section of the resale prospectus (the “Resale Prospectus”) entitled “Selling Stockholders” of an aggregate of [●] shares of common stock.

 

The Resale Prospectus is substantively identical to the Public Offering Prospectus, except for the following principal points:

 

	·	they contain different outside and inside front covers and back covers;
	·	they contain different “Offering” sections in the “Prospectus Summary” section beginning on page 1;
	·	they contain different “Use of Proceeds” sections on page 43;
	·	the “Capitalization” and “Dilution” sections from the Public Offering Prospectus are deleted from the Resale Prospectus;
	·	a “Selling Stockholders” section is included in the Resale Prospectus;
	·	the “Underwriting” section from the Public Offering Prospectus is deleted from the Resale Prospectus and a “Selling Stockholder Plan of Distribution” is inserted in its place in the Resale Prospectus; and
	·	the “Legal Matters” section in the Resale Prospectus on page R-18 deletes the reference to counsel for the underwriter.

 

The Company has included in this registration statement a set of alternate pages after the back cover page of the Public Offering Prospectus (the “Alternate Pages”) to reflect the foregoing differences in the Resale Prospectus as compared to the Public Offering Prospectus. The Public Offering Prospectus will exclude the Alternate Pages and will be used for public offering by the Company. The Resale Prospectus will be substantively identical to the Public Offering Prospectus except for the addition or substitution of the Alternate Pages, and such other changes as may be necessary to clarify references to the public offering or the resale offering and will be used for the resale offering by the Selling Stockholders.

 

 

 

 

THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES AND IS NOT SOLICITING AN OFFER TO BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.

 

SUBJECT TO COMPLETION, DATED JUNE 10, 2024

 

PRELIMINARY PROSPECTUS

 

 

TIANCI INTERNATIONAL, INC.

 

[●] shares of common stock

 

We are offering to sell [●] shares of our common stock, $0.0001 par value per share, in a firm commitment underwritten offering (the “Underwritten Offering”). We currently estimate that the public offering price will be between $[●] and $[●] per share.

 

Our common stock is currently traded on the OTC Pink Market under the symbol “CIIT.” On [●], the last reported sale price for our common stock was $[●] per share.

 

We intend to apply to list our common stock on the Nasdaq Capital Market under the symbol “CIIT”. No assurance can be given that our application will be approved or that the trading prices of our common stock on the OTC Pink Market will be indicative of the prices of our common stock if our common stock were traded on the Nasdaq Capital Market. If our application is not approved, the offering will not be completed. The offering (including both “Underwritten Offering” and “Resale Offering” as defined below) is contingent upon final approval of the listing of our common stock on the Nasdaq Capital Market.

 

The offering price of our shares of common stock in the Underwritten Offering will be determined between the underwriter and us at the time of pricing, considering our historical performance and capital structure, prevailing market conditions, and overall assessment of our business, and may be at a discount to the current market price. Therefore, the recent market price of our common stock and the public offering price of the common stock used throughout this prospectus may not be indicative of the actual public offering price for the shares of common stock.

 

 

 

 

INVESTING IN OUR COMMON STOCK IS SPECULATIVE AND INVOLVES A HIGH DEGREE OF RISK. BEFORE MAKING ANY INVESTMENT DECISION, YOU SHOULD CAREFULLY REVIEW AND CONSIDER ALL THE INFORMATION IN THIS PROSPECTUS, INCLUDING THE RISKS AND UNCERTAINTIES DESCRIBED UNDER “RISK FACTORS” BEGINNING ON PAGE 17.

 

Tianci International, Inc. is a holding company incorporated under the laws of the State of Nevada with operations conducted by our subsidiary based in Hong Kong. This is an offering of the common stock of the Nevada holding company, which does not conduct operations. You are not investing in Roshing International Co., Limited, the Hong Kong operating company, and may never hold equity in our Hong Kong operating subsidiary. Our structure involves unique risks to investors. See “Risk Factors — Risks Related to Doing Business in Hong Kong” Unless the context provides otherwise, references in this registration statement to “we,” “us,” “our company,” “our,” “the Company” and “Tianci” refers to Tianci International, Inc., “Tianci Seychelles” refers to Tianci Group Holding Limited, a limited company organized under the laws of Seychelles and a wholly owned subsidiary of Tianci, “RQS United” refers RQS United Group Limited, a company organized under the laws of the Republic of Seychelles and a wholly owned subsidiary of Tianci. “Roshing” refers to Roshing International Co., Limited, a company organized under the laws of Hong Kong. See “Commonly Used Defined Terms” on page vii herein. Investors would be purchasing interests in Tianci International, Inc., a Nevada company.

 

We have established controls and procedures for cash flows within our organization. Our management team manages and supervises the transfers of funds among Tianci and its subsidiaries under the Cash Flow Management Policy, an internal policy adopted by Tianci. Under this policy, Tianci focuses on revenue management, cost control, working capital management, implementing financial strategies, and fulfilling compliance reporting duties. Our management team closely monitors cash transfers within our organization and prepares monthly reports and annual budget plans. Each transfer of cash between Tianci, and its subsidiaries is also subject to internal reporting and approval processes by reference to such policy. In addition, cash transfers between Tianci, its subsidiaries, or investors shall follow the applicable Hong Kong laws and regulations. See also “Prospectus Summary—Cash Flows through Our Organization.”

 

We and our subsidiaries face various legal and operational risks and uncertainties associated with being based, or having all our operations, in Hong Kong. Our subsidiary, Roshing, is headquartered in Hong Kong with no operations in mainland China. Since only few of Roshing’s customers are mainland China residents, we and our subsidiaries should not become subject to certain laws of the People’s Republic of China (“China” or the “PRC”) and related regulations as they continue to evolve, and we and our subsidiaries will not face uncertainties as to whether and how the recent PRC government statements and regulatory developments, such as those relating to data and cyberspace security, and anti-monopoly concerns, would not apply to us and our subsidiaries.

 

We are aware that PRC government may intervene or influence the Hong Kong operations of an offshore holding company, such as those of our subsidiaries, at any time. These risks, together with uncertainties in the legal system of Mainland China and the interpretation and enforcement of PRC laws, regulations, and policies, could hinder our ability to offer or continue to offer the common stock, result in a material adverse change to Roshing’s business operations, and damage our reputation, which could cause the common stock to significantly decline in value or become worthless. For a detailed description of risks relating to the potential impact of PRC laws and regulations on Roshing’s business operations, see “Risk Factors — All our operations are in Hong Kong. However, due to the long arm provisions under the current PRC laws and regulations, the Chinese government may exercise significant oversight and discretion over the conduct of our business and may intervene in or influence our operations at any time, which could result in a material change in our operations and/or the value of our common stock.”

 

If we decide to pay dividends on any of our common stock in the future, as a holding company, we will be dependent on receipt of funds from our subsidiaries. Under the current practice of the Inland Revenue Department of Hong Kong, no tax is payable in Hong Kong in respect of dividends paid by our Hong Kong subsidiary. There are no restrictions or limitation under the laws of Hong Kong imposed on the conversion of HKD into foreign currencies and the remittance of currencies out of Hong Kong. See “Risk Factors - RISKS RELATED TO DOING BUSINESS IN HONG KONG - We will rely on dividends and other distributions on equity paid by our Hong Kong subsidiary to fund any cash and financing requirements we may have. In the future, the PRC government may impose restrictions on our ability to transfer funds out of Hong Kong to fund operations or for other use outside of Hong Kong. Any limitation on the ability of our subsidiary to make payments to us could have a material adverse effect on our ability to conduct our business and might materially decrease the value of our common stock.” On page 11 of this prospectus for more information.

 

 

 

 

On December 16, 2021, the Public Company Accounting Oversight Board (United States) (the “PCAOB”) issued a report on its determinations that it is unable to inspect or investigate completely PCAOB-registered public accounting firms headquartered in Mainland China and in Hong Kong because of positions taken by PRC and Hong Kong authorities in those jurisdictions. The PCAOB has made such designations as mandated under the Holding Foreign Companies Accountable Act, or the HFCA Act. Our auditor, Michael T. Studer CPA P.C., headquartered in Freeport, New York, has been inspected by the PCAOB on a regular basis, and it is not subject to the determinations announced by the PCAOB on December 16, 2021. If the PCAOB determines in the future that it cannot inspect or fully investigate our auditor at such future time, trading in our common stock would be prohibited under the HFCA Act. On August 26, 2022, the SEC issued a statement announcing that the PCAOB signed a Statement of Protocol (“SOP”) with the China Securities Regulatory Commission, or CSRC, and the Ministry of Finance of the People’s Republic of China governing inspections and investigations of audit firms based in Mainland China and Hong Kong, jointly agreeing on the need for a framework. On December 15, 2022, the PCAOB announced that it has secured complete access to inspect and investigate registered public accounting firms headquartered in Mainland China and Hong Kong and voted to vacate the previous Determination Report to the contrary. On December 29, 2022, the Accelerating Holding Foreign Companies Accountable Act was enacted, which amended the HFCA Act by requiring the SEC to prohibit an issuer’s securities from trading on any U.S. stock exchanges if its auditor is not subject to PCAOB inspections for two consecutive years instead of three, thus reducing the time before our securities may be prohibited from trading or delisted. The PCAOB is continuing to demand complete access in Mainland China and Hong Kong moving forward and is already making plans to resume regular inspections in early 2023 and beyond, as well as to continue pursuing ongoing investigations and initiate new investigations as needed. The PCAOB has indicated that it will act immediately to consider the need to issue new determinations with the HFCA Act if needed. If the PCAOB in the future again determines that it is unable to inspect and investigate completely auditors in Mainland China and Hong Kong, then the companies audited by those auditors would be subject to a trading prohibition on U.S. markets pursuant to the HFCA Act and/or the AHFCAA. These recent developments could also add uncertainties to this Underwritten Offering and we cannot assure you that the NASDAQ Capital Market or regulatory authorities would not apply additional or more stringent criteria to us after considering the effectiveness of our auditor’s audit procedures and quality control procedures, adequacy of personnel and training, or sufficiency of resources, geographic reach or experience as it relates to the audit of our financial statements. See “Risk Factors—Risks Related to Doing Business in Hong Kong—Recent joint statement by the SEC and the Public Company Accounting Oversight Board (United States), or the PCAOB, proposed rule changes submitted by Nasdaq, and the newly enacted Holding Foreign Companies Accountable Act all call for additional and more stringent criteria to be applied to emerging market companies upon assessing the qualification of their auditors, especially the non-U.S. auditors who are not inspected by the PCAOB. These developments could add uncertainties to the trading of our common stock on U.S. stock exchanges, including the possibility that our securities can be delisted if the PCAOB cannot inspect or fully investigate our auditor.”

 

For a detailed description of risks related to doing business in Hong Kong, see “Risk Factors — Risks Related to Doing Business in Hong Kong.”

 

Following the completion of this Underwritten Offering, our largest stockholder will beneficially own approximately [●]% of the aggregate voting power of our outstanding common stock. As such, we will be deemed a “controlled company” within the meaning of the Nasdaq listing standards. However, we do not intend to avail ourselves of the corporate governance exemptions afforded to a “controlled company” under the Nasdaq listing standards.

 

			Per Share				Total
Public offering price		$	–			$	–
Underwriting discounts and commissions(1)		$	–			$	–
Proceeds to us before expenses		$	–			$	–

 

(1)

We have agreed to pay the underwriter a discount equal to 7.0% of the gross proceeds of the Underwritten Offering, which does not include a non-accountable expense allowance equal to 1.0% of the gross proceeds of the Underwritten Offering payable to Prime Number Capital, LLC, or the underwriter. We have also agreed to issue, on the closing date of the Underwritten Offering, warrants, to the underwriter, in an amount equal to 5.0% of the aggregate number of shares sold by us in the Underwritten Offering, including any shares issued pursuant to exercise of the underwriter’s over-allotment option. For a description of the compensation to be received by the underwriter, see “Underwriting” on page 98.

 

 

 

 

This Underwritten Offering is being conducted on a firm commitment basis. The underwriter is obligated to take and pay for all of the shares of common stock if any such shares of common stock are taken. We have granted the underwriter an option for a period of 45 days after the closing of the Underwritten Offering to purchase up to [●] shares of common stock, or 15% of the total shares of common stock to be offered by us pursuant to the Underwritten Offering (excluding common stock subject to this option), solely for the purpose of covering over-allotments, at the public offering price less the underwriting discounts. If the underwriter exercises the option in full, and assuming an offering price of US$[●] per share of common stock, which is the midpoint of the range set forth on the cover page of this prospectus, the total gross proceeds to us, before underwriting discounts, commissions and expenses, will be $[●].

 

The underwriter expects to deliver the common stock against payment as set forth under “Underwriting,” on or about [●], 2024 through the book-entry facilities of The Depository Trust Company.

 

Neither the U.S. Securities and Exchange Commission nor any state securities commission nor any other regulatory body has approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.

 

 

 

 

Prospectus dated___________, 2024

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TABLE OF CONTENTS

 

 

	Page
PROSPECTUS SUMMARY	1
CORPORATE HISTORY AND STRUCTURE	3
THE OFFERING	14
SUMMARY CONSOLIDATED FINANCIAL DATA	15
RISK FACTORS	17
A CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS	42
USE OF PROCEEDS	43
DIVIDEND POLICY	43
MARKET PRICE	44
CAPITALIZATION	44
DILUTION	45
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	46
DESCRIPTION OF BUSINESS	56
INDUSTRY AND MARKET OPPORTUNITIES	65
REGULATIONS	76
MANAGEMENT	82
EXECUTIVE COMPENSATION	87
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS	89
DESCRIPTION OF CAPITAL STOCK	90
PRINCIPAL STOCKHOLDERS	96
MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES TO NON-U.S. HOLDERS	97
SHARES ELIGIBLE FOR FUTURE SALE	101
UNDERWRITING	102
LEGAL MATTERS	112
EXPERTS	112
WHERE YOU CAN FIND MORE INFORMATION	112
INDEX TO FINANCIAL STATEMENTS	F-1

 

You should rely only on the information contained in this prospectus. We have not, and the underwriter has not, authorized anyone to provide you with information different from what is contained in this prospectus or in any related free writing prospectus. If anyone provides you with different or inconsistent information, you should not rely on it. We are not, and the underwriter is not, making an offer to sell securities in any jurisdiction where the offer or sale is not permitted. The information contained in this prospectus is accurate only as of the date on the front of this prospectus, regardless of the time of delivery of this prospectus or any sale of the securities. Our subsidiaries’ business, and our financial condition, results of operations and prospects may have changed since that date.

 

For investors outside of the United States of America (the “United States” or the “U.S.”): Neither we nor the underwriter have done anything that would permit the Underwritten Offering or possession or distribution of this prospectus or any filed free-writing prospectus in any jurisdiction, other than the United States, where action for that purpose is required. Persons outside of the United States who come into possession of this prospectus or any filed free writing prospectus must inform themselves about, and observe any restrictions relating to, the offering of our common stock and the distribution of this prospectus or any filed free writing prospectus outside of the United States.

 

 

 

 

Commonly Used Defined Terms

 

Unless otherwise indicated or the context requires otherwise, references in this registration statement to:

 

	·	“China,” “Chinese,” or the “PRC” are to the People’s Republic of China, including the special administrative regions of Hong Kong and Macau, and, for the purposes of this prospectus only, excluding Taiwan;
	·	“Mainland China” is to the mainland of the People’s Republic of China; excluding Taiwan and the special administrative regions of Hong Kong and Macau for the purposes of this prospectus only;
	·	“PRC laws and regulations” or “PRC laws” are to the laws and regulations of Mainland China;
	·	Unless the context provides otherwise, “registrant,” “we,” “us,” “our company,” “our,” “the Company” and “Tianci” is to Tianci International, Inc., a Nevada company; and when describing the financial results of Tianci International, Inc., also includes its subsidiaries;
	·	“Seychelles” refers to the Republic of Seychelles;
	·	“Tianci Seychelles” refers to Tianci Group Holding Limited, a limited company organized under the laws of Seychelles and a wholly owned subsidiary of Tianci;
	·	“RQS United” refers to RQS United Group Limited, a company organized under the laws of the Republic of Seychelles and a wholly owned subsidiary of Tianci;
	·	“RQS Capital” refers to RQS Capital Limited, Company incorporated in British Virgin Islands.
	·	“Roshing” refers to Roshing International Co., Limited, a company organized under the laws of Hong Kong and a subsidiary of RQS United. RQS United holds 90% of the share capital of its subsidiary, Roshing;
	·	“Shares,” “shares” or “shares of common stock” are to the shares of common stock of Tianci International, Inc., with par value of $0.0001 per share;
	·	All references to “Renminbi,” “RMB” or “Chinese Yuan” are to the legal currency of Mainland China;
	·	All references to “HKD” “HK$” and “Hong Kong dollars” are to the legal currency of Hong Kong;
	·	All references to “U.S. dollars,” “dollars,” “USD” or “$” are to the legal currency of the United States; and
	·	“Website” is to our website at www.tianci-ciit.com.

 

We do not have any material operations of our own and we are a holding company with operations conducted in Hong Kong through our subsidiary, Roshing International Co., Limited, primarily using Hong Kong dollars, the currency of Hong Kong, or U.S. dollars. Our consolidated financial statements are presented in U.S. dollars. In this prospectus, we refer to assets, obligations, commitments and liabilities in our consolidated financial statements in U.S. dollars. These dollar references are based on the exchange rate of Hong Kong dollars to U.S. dollars, determined as of a specific date or for a specific period. Changes in the exchange rate will affect the amount of our obligations and the value of our assets in terms of U.S. dollars which may result in an increase or decrease in the amount of our obligations (expressed in U.S. dollars) and the value of our assets, including accounts receivable (expressed in U.S. dollars).

 

 

 

 

Numerical figures included in this registration statement have been subject to rounding adjustments. Accordingly, numerical figures shown as totals in various tables may not be arithmetic aggregations of the figures that precede them.

 

For the sake of clarity, this registration statement follows the English naming convention of first name followed by last name, regardless of whether an individual’s name is Chinese or English.

 

We have relied on statistics provided by a variety of publicly available sources regarding expectations of growth of global logistics industry. We did not, directly or indirectly, sponsor or participate in the publication of such materials, and these materials are not incorporated in this registration statement other than to the extent specifically cited herein. We have sought to provide current information in this registration statement and believe that the statistics provided in this registration statement remain up-to-date and reliable, and these materials are not incorporated in this registration statement other than to the extent specifically cited in this registration statement.

 

TRADEMARKS

 

All trademarks, service marks and trade names included in this prospectus are the property of their respective owners.

 

MARKET DATA

 

We are responsible for the disclosure in this prospectus. This prospectus incorporates industry data sourced from market research, publicly accessible information and industry publications. While we have not directly commissioned or funded these sources, we believe the information obtained from them to be reliable. Nonetheless, we assume responsibility for the accuracy and completeness of all information presented in this prospectus, including data derived from third-party sources. This includes the information provided through active hyperlinks to external reports and publications. We obtained the industry, market and competitive position data used throughout this prospectus from our own internal estimates and research, as well as from independent market research, industry and general publications and surveys, governmental agencies and publicly available information in addition to research, surveys and studies conducted by third parties. Internal estimates are derived from publicly available information released by industry analysts and third-party sources, our internal research and our industry experience, and are based on assumptions made by us based on such data and our knowledge of our industry and market, which we believe to be reasonable. In some cases, we do not expressly refer to the sources from which this data is derived. In that regard, when we refer to one or more sources of this type of data in any paragraph, you should assume that other data of this type appearing in the same paragraph is derived from the same sources, unless otherwise expressly stated or the context otherwise requires. In addition, while we believe the industry, market and competitive position data included in this prospectus is reliable and based on reasonable assumptions, such data involve risks and uncertainties and are subject to change based on various factors, including those discussed in “Risk Factors.” These and other factors could cause results to differ materially from those expressed in the estimates made by third parties or by us.

 

 

 

 

PROSPECTUS SUMMARY

 

This summary highlights certain information contained elsewhere in this prospectus. You should read the entire prospectus carefully, including our financial statements and related notes, and especially the “Risk Factors” beginning on page 17. All references to “we,” “us,” “our,” “Company” or similar terms used in this prospectus refer to Tianci International, Inc. a Nevada corporation. Unless otherwise indicated, the term “fiscal year” refers to our fiscal year ending July 31. Unless otherwise indicated, the term “common stock” refers to shares of CIIT’s common stock.

 

Overview

 

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

 

As a logistics shipping operator, Roshing focuses on ocean freight forwarding services, including container shipping and bulk goods shipping service.

 

For the container shipping, Roshing charters cargo space from shipping suppliers (such as shipowners, non-vessel operating common carriers) and sub-charters that space to its customers (cargo owners, cargo agents). For bulk goods shipping, Roshing issues fixture notes to customers, and then arranges the booking of ships and signing charter contracts with suppliers (such as shipowners). Roshing 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 during the six months ended January 31, 2024. Shufang Gao, our Chief Executive Officer previously worked for a globally renowned shipping conglomerate, with over 20 years of management experience. His expertise spans shipping operation management, and logistics transportation. Leveraging this experience, he has provided the Company with the managerial framework to expand its global logistics business, as well as access to relevant customer and supplier resources in the shipping industry. Roshing’s business is primarily carried out in Hong Kong and other locations in the Asia-Pacific region, mainly in Japan, South Korea, Vietnam. Roshing’s logistics services also include the shipment of goods to African countries.

 

Roshing also generates 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 the following services to our customers.

 

Global Logistics Services

 

Our global logistics services accounted for the vast majority of our revenue for the six months ended January 31, 2024. These services encompass ocean shipping operations and related logistics solutions. Roshing focuses on ocean freight forwarding services, including container shipping and bulk goods shipping. Roshing customizes its logistics solutions to meet the diverse needs of our customers, including the optimization of shipping routes and the utilization of vessels with different tonnages.

 

Roshing derives revenues by entering into agreements that are generally comprised of a single performance obligation to ship freight either by container ships or by bulk cargo vessels. The most significant drivers of changes in Roshing’s global logistics service revenue and related transportation expenses are cargo volume, weight and sea route.

 

 

 

 

 

Our Service Process

 

Roshing has long-term and close relationships with ocean shipping suppliers. When a customer makes an inquiry to Roshing, it is 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 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 and 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 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 an appropriate container ship 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. Firstly, 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, Roshing’s collaboration with direct shipping suppliers ensures 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 Roshing as a competitive player in the industry.

 

Other Products & Services

 

	·	Electronic Device Hardware: Roshing is a distributor of hardware components for electronic devices and generates revenue from reselling these components. It is not engaged in product development or direct manufacturing of hardware. The main products include Wi-Fi modules, Bluetooth modules, 4G network modules, LED screens and touch screens. Roshing’s main customers are non-Hong Kong traders, direct traders of hardware components, companies engaged in the assembly and sale of finished products and private label entities seeking electronic component procurement and light customization.
	·	Software Technical Services: Roshing provides technical consulting and training services to help customers, generally its existing customers, to better understand and properly use its customized software and related hardware. Roshing also provides software maintenance services to keep customers’ software up to date and assists customers in promoting their businesses with ongoing marketing support.
	·	Business Consulting Services: Roshing provides business consulting services to help customers apply for immigration and non-immigration visas. Roshing is responsible for performing background checks, assessment, and preparing related application paperwork.

 

Our Market Opportunities

 

The shipping industry holds significant potential, as indicated by BIMCO’s projections of substantial growth in ship supply and deliveries through 2025. With an expected increase of 9.1% in 2024 and 4.1% in 2025, and a fleet growth of 14.9% by 2025, we believe that the industry is poised for expansion. Cargo volumes are anticipated to grow steadily at a rate of 3-4% annually during this period. Moreover, the global economy is forecasted to experience moderate growth, with the IMF estimating rates of 3.1% in 2024 and 3.2% in 2025.

 

In the bulk cargo market, strong demand is being driven by factors such as heightened demand from China and export restrictions from Indonesia. We believe that the container shipping sector will also see opportunities. Disruptions like the 40-day blockade in the Red Sea in January 2024 have led to notable increases in freight rates. Additionally, ongoing container capacity shortages in China, which is expected to persist from the onset of the Chinese Spring Festival in 2024, could further elevate freight rates, offering potential benefits to shipowners.

 

 

 

 

Our Mission

 

Creating Value

 

As a global logistics enterprise, our primary mission is to provide customers with efficient, reliable, and safe shipping services that create value.

 

Promoting Global Trade & Connectivity

 

As an important component of global trade, we believe that global logistics enterprises have a mission to promote the development and connectivity of global trade and promote the prosperity and development of the global economy by facilitating cross-border operations for businesses. We are committed to cultivating a robust global network, both online and offline. The online part involves connecting with customers and suppliers through social media platforms. The offline part includes acquiring potential customers through exhibitions, recommendations, and other direct interactions.

 

Undertaking Social Responsibility

 

We believe that shipping companies also need to be socially responsible, pay attention to environmental protection, social welfare, promote sustainable development, and contribute to the prosperity and development of society.

 

We strive to optimize shipping routes and transportation plans to reduce energy consumption and emissions. Moreover, we intend to encourage our supply chain partners to adopt greener transportation and packaging methods, contributing to the sustainability of the entire industry. We also seek to actively participate in environmental projects and initiatives and collaborate with government and non-governmental organizations to focus on environmental protection.

 

CORPORATE HISTORY AND STRUCTURE

 

The following diagram illustrates our corporate structure as of the date of the prospectus. Tianci, as the ultimate holding company, owns 100% of the equity interests in RQS United and Tianci Seychelles, and indirectly, holds 90% of the equity interests in Roshing.

 

 

 

 

 

 

For details of our principal stockholders’ ownership, please refer to the beneficial ownership table in the section captioned “Principal Stockholders.”

 

Roshing International Co., Limited History Before Share Exchange

 

On June 22, 2011, Roshing International Co., Limited (“Roshing”) was incorporated in Hong Kong with a share capital of HKD 100,000 divided into 100,000 shares. Ying Deng was the registered shareholder of the said 100,000 shares.

 

RQS United Group Limited History

 

On November 4, 2022, RQS United Group Limited (“RQS United”) was incorporated in the Republic of Seychelles as an international business company 100% owned by RQS Capital Limited with 50,000 shares.

 

On January 16, 2023, RQS United was allotted 900,000 shares of Roshing.

 

RQS United holds 90% of the share capital of Roshing, while Ying Deng holds 10% of the share capital of Roshing.

 

RQS Capital Limited History

 

On July 05, 2022, RQS Capital Limited was incorporated in British Virgin Islands authorized with 50,000 shares 100% owned by Ying Deng (“RQS Capital”).

 

On September 29, 2022, Ying Deng transferred 30,000 shares to Shufang Gao, 2,500 shares to Zhu Weiyu and 2,500 shares to Bo Ye respectively.

 

On January 06, 2023, Zhu Weiyu transferred 2,500 shares to Bo Ye. By this time, RQS Capital was owned by Ying Deng (30%), Shufang Gao (60%) and Bo Ye (10%) respectively.

 

Tianci History before Share Exchange

 

On June 13, 2012, Freedom Petroleum Inc. was incorporated under the laws of the State of Nevada.

 

On July 02, 2015, Freedom Petroleum, Inc. changed its name from Freedom Petroleum to Steampunk Wizards, Inc.(“Steampunk”).

 

On October 26, 2016, Steampunk completed a reverse merger, with Steampunk as the public shell company. Tianci merged with and into Steampunk. This transaction was carried out in accordance with the terms set forth in the Merger Agreement which took effective On November 9, 2016, and on the same day, Steampunk changed its name to Tianci International, Inc.

 

On August 3, 2017, Tianci 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 Tianci, and Chuah Su Chen and Chuah Su Mei (collectively, the “Purchasers”, and together with Tianci 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.

 

Effective August 6, 2021, Tianci, Chuah Su Mei, Tianci’s former Chief Executive Officer, President and Director, and Silver Glory Group Limited, entered into a Stock Purchase Agreement (the “Stock Purchase Agreement”) pursuant to which Chuah Su Mei agreed to sell to Silver Glory Group Limited all 1,793,000 shares of common stock of Tianci held by her (the “Sale Shares”) for cash consideration of Five Hundred Twenty Five Thousand Dollars ($525,000) (the “Transaction”). The Sale Shares represent approximately 73.18% of the issued and outstanding common stock of Tianci. The sale of the Sale Shares consummated on August 26, 2021.

 

 

 

 

Upon the closing of the Transaction, on August 26, 2021, each of Chuah Su Chen, Chuah Su Mei, and Jerry Ooi, constituting all current directors and officers of Tianci at that time, resigned from his or her positions with Tianci. Each of the foregoing former officers and directors also forgave all amounts due to them from Tianci in connection with the closing of the Transaction.

 

On January 26, 2023, Tianci filed with the Nevada Secretary of State a Certificate of Amendment of Articles of Incorporation (the “Amendment”). The Amendment amended Article 3 of the Articles of Incorporation to provide that the authorized capital stock of the Tianci will be 120,080,000 shares of capital stock consisting of 100,000,000 shares of common stock, $0.0001 par value, 80,000 shares of Series A Preferred Stock, $0.0001 par value, and 20,000,000 shares of undesignated preferred stock, $0.0001 par value.

 

Each share of Series A Preferred Stock may be converted by the holder of the share into 100 shares of common stock, subject to equitable adjustment of the conversion rate. The holder of Series A Preferred Stock will have voting rights equal to the holder of the number of shares of common stock into which the Series A Preferred Stock is convertible. Upon liquidation of Tianci, each holder of Series A Preferred Stock will be entitled to receive, out of the net assets of Tianci, $0.01 per share, then to share in the distribution on an as-converted basis.

 

On January 27, 2023, Tianci sold 80,000 shares of Series A Preferred Stock to RQS Capital. The shares were sold for a cash payment of $24,000, which was contributed to Tianci International, Inc.’s capital on behalf of RQS Capital by members of its management. The Series A Preferred Stock purchased by RQS Capital held 76.55% of the aggregate voting power of Tianci.

 

On February 13, 2023, Tianci Group Holding Limited (“Tianci Seychelles”) was incorporated in the Republic of Seychelles as an international business company 100% owned by Tianci. with 100,000 shares, with no operation.

 

On March 1, 2023, Tianci entered into agreements to sell a total of 1,253,333 shares of its common stock to 13 investors for a price of U.S.$0.30 per share (i.e. an aggregate price of U.S.$376,000). The shares were issued in a private offering to investors that were acquiring the shares each for his or her own account. The offering, therefore, was exempt from registration under the Securities Act of 1933 pursuant to Section 4(a)(2) of the Securities Act. The sale was also exempt from registration pursuant to Rule 902(1)(i) of Regulation S, as the purchasers were non-U.S. persons and Rule 903 was complied with.

 

Share Exchange

 

On March 3, 2023, we acquired RQS United, pursuant to the Share Exchange Agreement dated March 3, 2023, entered into among Tianci, RQS United and RQS Capital, the prior owner of RQS United.

 

Prior to the Share Exchange, Tianci was a shell company as defined in Rule 12b-2 under the Exchange Act. As a result of the transactions under the Exchange Agreement, Tianci ceased to be a shell company.

 

RQS United is a holding company incorporated in the Republic of Seychelles. RQS United has no operation other than holding 90% of the share capital of its subsidiary, Roshing.

 

Tianci History after Share Exchange.

 

On January 19, 2024, Tianci issued 8,000,000 shares of its common stock to RQS Capital. The shares were issued upon RQS Capital’s exercise of its right to convert 80,000 shares of Tianci’s Series A Preferred Stock into 8,000,000 shares of common stock. As of the date of the prospectus, there are no Series A Preferred Stock outstanding. Upon completion of the conversion, RQS Capital owned 9,500,000 shares of Tianci’s common stock, representing 66.2% of the 14,348,590 shares outstanding. Shufang Gao, the Chief Executive Officer, is also the Chairman of RQS Capital.

 

On January 22, 2024, Tianci sold an aggregate of 433,213 shares of its common stock to nine investors for an aggregate price of $433,213 or $1.00 per share. The shares were issued in a private offering to investors who were acquiring the shares each for his own account. The offering, therefore, was exempt from registration under the Securities Act of 1933 pursuant to Section 4(a)(2) of the Securities Act. The sale was also exempt from registration pursuant to Rule 902(1)(i) of Regulation S, as the purchasers were non-U.S. persons and Rule 903 was complied with. There was no underwriter for the offering.

 

 

 

 

 

On February 28, 2024, RQS Capital transferred 2,540,000 shares of Tianci to Carson (BVI) Limited (730,000 shares), Cobalt Capital Holding Limited (650,000 shares), Elysium Capital Holding Limited (610,000 shares), and Global View Capital Limited (550,000 shares) respectively.

 

On April 24, 2024, Tianci sold 80,000 shares of Series B Preferred Stock to RQS Capital. The shares were sold for a cash payment of $80,000. The shares were issued in a private offering to an investor that was acquiring the shares for its own account. Shufang Gao, Tianci’s Chief Executive Officer, is the majority shareholder and Chairman of RQS Capital. With the addition of the Series B Preferred Stock purchased by RQS Capital to its prior holding of 6,960,000 shares of common stock, RQS Capital held 65.67% of the aggregate voting power of Tianci.

 

On April 24, 2024, Tianci filed with the Nevada Secretary of State a Certificate of Designation of 80,000 shares of Series B Preferred Stock. Each share of Series B Preferred Stock may be converted by the holder of the share into 100 shares of common stock, subject to equitable adjustment of the conversion rate. The holder of Series B Preferred Stock will have voting rights equal to the holder of the number of shares of common stock into which the Series B Preferred Stock is convertible. Upon liquidation of Tianci, each holder of Series B Preferred Stock will be entitled to receive, out of the net assets of Tianci, $0.01 per share, then to share in the distribution on an as-converted basis.

 

On May 2, 2024, RQS Capital transferred 720,000 shares of Tianci to Broadness (BVI) Limited and transferred 69,638 shares of Tianci to one individual.

 

On May 31, 2024, RQS Capital transferred 70,000 shares of Tianci to one individual.

 

Listing on OTC Pink Market

 

The Company’s common stock is quoted on the OTC Pink Market under the symbol “CIIT”. The quotations reported on the OTC Pink Market reflect inter-dealer prices without retail markup, markdown or commissions, and may not necessarily represent actual transactions.

 

The Company’s common stock is thinly traded. The quoted bid and asked prices for the common stock vary significantly from week to week. An investor holding shares of the Company’s common stock may find it difficult to sell the shares and may find it impossible to sell more than a small number of shares at the quoted bid price.

 

Listing on the Nasdaq Capital Market

 

Our common stock is currently quoted on the OTC Pink Market under the symbol “CIIT.” In connection with this Underwritten Offering, we intend to apply to list our common stock on the Nasdaq Capital Market (“Nasdaq”) under the symbol “CIIT.” If our listing application is approved, we expect to list our common stock on Nasdaq in connection with the Underwritten Offering, at which point our common stock will cease to be traded on the OTC Pink Market. No assurance can be given that our listing application will be approved. Nasdaq listing requirements include, among other things, a stock price threshold. As a result, prior to effectiveness, we will need to take the necessary steps to meet Nasdaq listing requirements, which may include, but not be limited to, effectuating a reverse split of our common stock. If our application is not approved, the offering will not be completed. The offering is contingent upon final approval of the listing of our common stock on the Nasdaq Capital Market.

 

Corporate Information

 

We are incorporated under the laws of the State of Nevada. Our principal executive offices are located at Unit B,10/F., Ritz Plaza, No.122 Austin Road, Tsim Sha Tsui, Kowloon, Hong Kong. Our telephone number is 852-22510781. Our website is www.tianci-ciit.com. Information contained in, or that can be accessed through, our website is not incorporated by reference into this registration statement, and you should not consider information on our website to be part of this registration statement. Our agent for service of process in the United States is Northwest Registered Agent, LLC.

 

 

 

 

Information Regarding our Capitalization

 

As of January 31, 2024 and the date of this prospectus, we had 14,781,803 shares of common stock issued and outstanding. Additional information regarding our issued and outstanding securities may be found under “Description of Capital Stock.”

 

Unless otherwise specifically stated, information throughout this prospectus does not assume the exercise of outstanding options or warrants to purchase shares of our common stock.

 

Implications of Being a Smaller Reporting Company

 

We are a “smaller reporting company” as defined in Rule 12b-2 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and have elected to take advantage of certain of the scaled disclosure available for smaller reporting companies. We will remain a smaller reporting company until the end of the fiscal year in which (1) we have a public common equity float of more than $250 million, or (2) we have annual revenues for the most recently completed fiscal year of more than $100 million and a public common equity float or public float of more than $700 million. We also would not be eligible for status as a smaller reporting company if we become an investment company, an asset-backed issuer or a majority-owned subsidiary of a parent company that is not a smaller reporting company.

 

We have elected to take advantage of certain of the reduced disclosure obligations in the registration statement of which this prospectus is a part and may elect to take advantage of other reduced reporting requirements in future filings. As a result, the information that we provide to our stockholders may be different from what you might receive from other public reporting companies in which you hold equity interests.

 

Implications of Being a Controlled Company

 

Shufang Gao, our Chief Executive Officer, has voting control over approximately 62.11% of the aggregate voting power of the Company. Therefore, we currently meet the definition of a “controlled company” under the corporate governance standards for Nasdaq listed companies and for so long as we remain a controlled company under this definition, we are eligible to utilize certain exemptions from the corporate governance requirements of Nasdaq. Upon the closing of this Underwritten Offering, Shufang Gao will own approximately [●]% of the voting power of our outstanding voting stock.

 

As long as Shufang Gao owns at least 50% of the voting power of our Company, we will be a “controlled company” as defined under the Nasdaq rules.

 

For so long as we are a controlled company under that definition, we are permitted to rely on certain exemptions from corporate governance rules, including:

 

	·	an exemption from the rule that a majority of our Board must be independent directors;
	·	an exemption from the rule that the compensation of our chief executive officer must be determined or recommended solely by independent directors; and
	·	an exemption from the rule that our director nominees must be selected or recommended solely by independent directors.

 

Although we do not intend to rely on the “controlled company” exemption under Nasdaq listing rules, we could elect to rely on this exemption in the future. If we elect to rely on the “controlled company” exemption, a majority of the members of our Board might not be independent directors and our nominating and corporate governance and compensation committees might not consist entirely of independent directors.

 

As a result, you will not have the same protection afforded to stockholders of companies that are subject to these corporate governance requirements.

 

Our Resale Offering

 

Certain of our Stockholders will be selling through the Resale Prospectus a total of [●] shares of common stock. We will not receive any proceeds from the sales by the Selling Stockholders of the securities set forth in the Resale Prospectus.

 

 

 

 

The Resale Prospectus is substantively identical to the Public Offering Prospectus, except for the following principal points:

 

	·	they contain different outside and inside front covers and back covers;
	·	they contain different “Resale Offering” sections in the “Prospectus Summary” section beginning on page [●];
	·	the “Capitalization” and “Dilution” sections from the Public Offering Prospectus are deleted from the Resale Prospectus;
	·	a “Selling Stockholders” section is included in the Resale Prospectus;
	·	the “Underwriting” section from the Public Offering Prospectus is deleted from the Resale Prospectus and a “Selling Shareholder Plan of Distribution” is inserted in its place in the Resale Prospectus; and
	·	the “Legal Matters” section in the Resale Prospectus on page R-18 deletes the reference to counsel for the underwriter.

 

Summary Risk Factors

 

Our business is subject to a number of risks. You should be aware of these risks before making an investment decision. These risks are discussed more fully in the section of this prospectus titled “Risk Factors,” which begins on page 17 of this prospectus. These risks include, among others, that:

 

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. See “Risk Factors - 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.” on page 17.
	·	Any reduction in international commerce or disruption in global trade may adversely impact our business and operating results. See “Risk Factors - Any reduction in international commerce or disruption in global trade may adversely impact our business and operating results.” on page 17.
	·	Failure to compete in our highly competitive industry could harm our business. See “Risk Factors - Our industry is highly competitive, and failure to compete or respond to customer requirements could damage our business and results of operations.” on page 18.
	·	Uncertainty in customer shipments or carrier rates could impact on our margins and results. See “Risk Factors - Difficulty in forecasting timing or volumes of customer shipments or rate changes by carriers could adversely impact our margins and operating results.” on page 18.
	·	Climate change and related measures could harm our business and finances. See “Risk Factors - Climate change, including measures to address climate change, could adversely impact our business and financial results.” on page 18.

 

 

 

 

	·	Roshing faces risks from shipment contents, quality or health issues, and inherent logistics dangers like injury, product damage, and transport incidents. See “Risk Factors - 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.” on page 19.
	·	Roshing faces risks from contracts with shipping suppliers. See “Risk Factors - Roshing is subject to potential risks arising from contractual obligations with shipping suppliers.” on page 19.
	·	Roshing faces risks from evolving customer needs and contracts, risking financial losses, legal liabilities, and reputational damage if not managed carefully. See “Risk Factors - 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.” on page 20.
	·	Our revenues, operating income, and cash flows may fluctuate due to uncertainty and potential volatility in cargo space and container load demand and supply. See “Risk Factors - 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.” on page 20.
	·	Seasonality and the impact of weather and other catastrophic events adversely affect Roshing’s operations and profitability. See “Risk Factors - Seasonality and the impact of weather and other catastrophic events adversely affect Roshing’s operations and profitability.” on page 21.

 

Risks Related to Other Products & Services

 

	·	Roshing heavily relies on a few suppliers. See “Risk Factors - Roshing has a great dependence on a limited number of suppliers and the loss of their manufacturing capability could materially impact on its operations.” on page 21.
	·	Defects in Roshing’s hardware products or quality control failures in distribution could hinder sales and lead to product liability claims and costly litigation. See “Risk Factors - 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.” on page 21.
	·	The software and website development market are highly competitive. See “Risk Factors - The software and website development market are highly competitive.” on page 22.
	·	Roshing’s software and website may not perform in line with customer specifications or expectations. See “Risk Factors - Roshing’s software and website may not perform in line with customer specifications or expectations.” on page 22.
	·	If Roshing does not update its products and services, they may become outdated and unable to compete. See “Risk Factors - 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.” on page 23.
	·	Roshing may not be able to continue to recruit, train and retain dedicated and qualified consultants. See “Risk Factors - Roshing may not be able to continue to recruit, train and retain dedicated and qualified consultants who are essential to the success of our business and the effective delivery of policy and business advisory services to our individual and corporate clients.” on page 23.
	·	A decline in the market for individual clients could have a material adverse effect on our its business. See “Risk Factors - A decline in the market for individual clients of our Roshing’s business enterprise consulting services and corporate business consulting could have a material adverse effect on our its business, prospects, financial condition and results of operations.” on page 23.

 

General Business Risks

 

	·	We have a limited operating history. See “Risk Factors - We have a limited operating history and face significant challenges and will incur substantial expenses as we build our capabilities.” on page 23.
	·	We are currently dependent on a small group of customers for most of our revenue. See “Risk Factors - 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 may not be successful.” on page 24.

 

 

 

 

	·	COVID-19 may adversely impact our business and operating results. See “Risk Factors - 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.” on page 24.
	·	Our business could be negatively affected by rising inflation and interest rates. See “Risk Factors - Our business could be negatively affected by rising inflation and interest rates.” on page 24.
	·	If we are unable to hire, retain or motivate qualified personnel, consultants, independent contractors, and advisors, we may not be able to grow effectively. See “Risk Factors - If we are unable to hire, retain or motivate qualified personnel, consultants, independent contractors, and advisors, we may not be able to grow effectively.” on page 25.
	·	We do not maintain sufficient insurance for our business. See “Risk Factors - 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.” on page 25.
	·	Our operating history may not be indicative of our future growth or financial results. See “Risk Factors - Our operating history may not be indicative of our future growth or financial results and we may not be able to sustain our historical growth rates.” on page 25.
	·	Meeting public company regulations is costly and resource-intensive; lacking proper internal controls could harm financial reporting and disclosure, impacting operations and reputation. See “Risk Factors - We incur significant costs and demands upon management and accounting and finance resources as a result of complying with the laws and regulations affecting public companies; if we fail to maintain proper and effective internal controls, our ability to produce accurate and timely financial statements and otherwise make timely and accurate public disclosure could be impaired, which could harm our operating results, our ability to operate our business and our reputation.” on page 25.
	·	We may fail to make necessary acquisitions or investments or enter desirable strategic alliances. See “Risk Factors - We may fail to make necessary acquisitions or investments or enter desirable strategic alliances, and we may not be able to achieve the anticipated benefits from such acquisitions, investments or strategic alliances.” on page 26.
	·	We may not be able to prevent others from unauthorized use of our intellectual property. See “Risk Factors - We may not be able to prevent others from unauthorized use of our intellectual property, which could harm our business and competitive position.” on page 27.
	·	We are a“smaller reporting company” under the Securities Exchange Act. See “Risk Factors - We are a“smaller reporting company” under Rule 12b-2 of the Securities Exchange Act of 1934, and we cannot be certain if the scaled disclosure requirements applicable to smaller reporting companies will make our common stock less attractive to investors and make it more difficult to raise capital as and when we need it.” on page 27.
	·	Anti-takeover provisions contained in our bylaws and articles of incorporation as well as provisions of Nevada law, could impair a takeover attempt. See “Risk Factors - Anti-takeover provisions contained in our bylaws and articles of incorporation as well as provisions of Nevada law, could impair a takeover attempt.” on page 27.
	·	Any damage to the reputation and recognition of our brand names, may materially and adversely affect our business operations and prospects. See “Risk Factors - Any damage to the reputation and recognition of our brand names, including negative publicity against us, our services, operations and our directors, senior management and business partners may materially and adversely affect our business operations and prospects.” on page 28.
	·	We may from time to time be subject to claims, disputes, lawsuits and other legal and administrative proceedings. See “Risk Factors - We may from time to time be subject to claims, disputes, lawsuits and other legal and administrative proceedings.” on page 28.
	·	We may engage in transactions that present conflicts of interest. See “Risk Factors - We may engage in transactions that present conflicts of interest.” on page 28.
	·	We face rising labor costs in Hong Kong and risks from non-compliance with employment and labor protection laws. See “Risk Factors - Increases in labor costs in Hong Kong and non-compliance with laws and regulations relating to employment and labor protection may adversely affect the business of Roshing and our results of operations.” on page 33.
	·	We may adjust our business strategies and models. See “Risk Factors - We may adjust our business strategies and models in response to changing market conditions, competitive pressures, or regulatory changes. However, there is no guarantee that these adjustments will be successful, and they may not achieve the desired results, potentially impacting our performance and financial results.” on page 29.

 

 

 

 

RISKS RELATED TO DOING BUSINESS IN HONG KONG

 

	·	The Chinese government may exercise significant oversight and discretion over the conduct of our business and may intervene in or influence our operations. See “Risk Factors - All our operations are in Hong Kong. However, due to the long arm provisions under the current PRC laws and regulations, the Chinese government may exercise significant oversight and discretion over the conduct of our business and may intervene in or influence our operations at any time, which could result in a material change in our operations and/or the value of our common stock.” on page 29.
	·	We will rely on dividends and other distributions on equity paid by our Hong Kong subsidiary to fund any cash and financing requirements we may have. See “Risk Factors - We will rely on dividends and other distributions on equity paid by our Hong Kong subsidiary to fund any cash and financing requirements we may have. In the future, the PRC government may impose restrictions on our ability to transfer funds out of Hong Kong to fund operations or for other use outside of Hong Kong. Any limitation on the ability of our subsidiary to make payments to us could have a material adverse effect on our ability to conduct our business and might materially decrease the value of our common stock.” on page 30.
	·	Changes in international trade policies, trade disputes, barriers to trade, or the emergence of a trade war may dampen growth in Hong Kong, Mainland China and other markets where the majority of our clients reside. See “Risk Factors - Changes in international trade policies, trade disputes, barriers to trade, or the emergence of a trade war may dampen growth in Hong Kong, Mainland China and other markets where the majority of our clients reside.” on page 30.
	·	The “Hong Kong National Security Law” could impact our Hong Kong subsidiary. See “Risk Factors - The enactment of Law of the PRC on Safeguarding National Security in the Hong Kong Special Administrative Region (the “Hong Kong National Security Law”) could impact our Hong Kong subsidiary.” on page 31.
	·	There are political risks associated with conducting business in Hong Kong. See “Risk Factors - There are political risks associated with conducting business in Hong Kong.” on page 31.
	·	New regulatory changes may impact our common stock trading on U.S. exchanges and risk delisting if our auditor remains uninspected by the PCAOB. See “Risk Factors - Recent joint statement by the SEC and the Public Company Accounting Oversight Board (United States), or the PCAOB, proposed rule changes submitted by Nasdaq, and the newly enacted Holding Foreign Companies Accountable Act all call for additional and more stringent criteria to be applied to emerging market companies upon assessing the qualification of their auditors, especially the non-U.S. auditors who are not inspected by the PCAOB. These developments could add uncertainties to the trading of our common stock on U.S. stock exchanges, including the possibility that our securities can be delisted if the PCAOB cannot inspect or fully investigate our auditor.” on page 32.
	·	You may incur additional costs and procedural obstacles in effecting the service of legal process. See “Risk Factors - You may incur additional costs and procedural obstacles in effecting service of legal process, enforcing foreign judgments or bringing actions in Hong Kong against us or its management named in the prospectus based on Hong Kong laws.” on page 34.

 

RISKS RELATED TO TAXATION

 

	·	Non-compliance with tax obligations may adversely affect our business and operation results. See “Risk Factors - Non-compliance with tax obligations may adversely affect our business and operation results.” on page 34.
	·	A change in tax laws in any country in which we operate might adversely affect us. See “Risk Factors - A change in tax laws in any country in which we operate or loss of a major tax dispute or a successful tax challenge to our operating structure, intercompany pricing policies or the taxable presence of our subsidiaries in certain countries could adversely affect us.” on page 35.
	·	An investment in this Underwritten Offering may involve adverse U.S. federal income tax consequences. See “Risk Factors - An investment in this Underwritten Offering may involve adverse U.S. federal income tax consequences.” on page 35.

 

 

 

 

RISKS RELATED TO OUR COMMON STOCK AND THIS UNDERWRITTEN OFFERING

 

	·	Our common stock is currently quoted on the OTC Pink Market. See “Risk Factors - Our common stock is currently quoted on the OTC Pink Market, which may have an unfavorable impact on our stock price and liquidity.” on page 35.
	·	There can be no assurances that an active trading market may develop for our common stock, or if developed, be maintained. See “Risk Factors - There can be no assurances that an active trading market may develop for our common stock, or if developed, be maintained.” on page 36.
	·	An active, liquid, and orderly market for our common stock may not develop. See “Risk Factors - An active, liquid, and orderly market for our common stock may not develop.” on page 36.
	·	Our common stock is subject to the “penny stock” rules of the SEC. See “Risk Factors - Our common stock is subject to the “penny stock” rules of the SEC and the trading market in the securities is limited, which makes transactions in the stock cumbersome and may reduce the value of an investment in the stock.” on page 36.
	·	The FINRA sales practice requirements may also limit a stockholder’s ability to buy and sell our common stock. See “Risk Factors - The Financial Industry Regulatory Authority (“FINRA”) sales practice requirements may also limit a stockholder’s ability to buy and sell our common stock.” on page 37.
	·	Our articles of incorporation allow for our board to create a new series of preferred stock without further approval by our Stockholders. See “Risk Factors - Our articles of incorporation allow for our board to create a new series of preferred stock without further approval by our Stockholders, which could adversely affect the rights of the holders of our common stock.” on page 37.
	·	The trading price of our common stock is likely to be volatile. See “Risk Factors - The trading price of our common stock is likely to be volatile, which could result in substantial losses to investors.” on page 38.
	·	Short sellers of our stock may be manipulative and may drive down the market price of our common stock. See “Risk Factors - Short sellers of our stock may be manipulative and may drive down the market price of our common stock.” on page 38.
	·	We have considerable discretion as to the use of the net proceeds from this Underwritten Offering and we may use these proceeds in ways with which you may not agree. See “Risk Factors - We have considerable discretion as to the use of the net proceeds from this Underwritten Offering and we may use these proceeds in ways with which you may not agree.” on page 39.
	·	The sale or availability for sale of substantial amounts of our common stock could adversely affect their market price. See “Risk Factors - The sale or availability for sale of substantial amounts of our common stock could adversely affect their market price.” on page 39.
	·	As we do not expect to pay dividends in the foreseeable future, you must rely on a price appreciation of our common stock for return on your investment. See “Risk Factors - As we do not expect to pay dividends in the foreseeable future, you must rely on a price appreciation of our common stock for return on your investment.” on page 39.
	·	Our CEO beneficially owns the majority of our outstanding stock. See “Risk Factors - Our CEO beneficially owns the majority of our outstanding stock and, accordingly, will have control over stockholder matters, the Company’s business and management.” on page 39.
	·	The sale of securities by us in any equity or debt financing could result in dilution to our existing Stockholders. See “Risk Factors - The sale of securities by us in any equity or debt financing could result in dilution to our existing Stockholders.” on page 40.
	·	If you purchase our common stock in the offering, you will incur immediate and substantial dilution. See “Risk Factors - If you purchase our common stock in the offering, you will incur immediate and substantial dilution in the book value of your shares.” on page 40.
	·	A significant portion of our shares of common stock are restricted from immediate resale but may be sold into the market in the near future. See “Risk Factors - A significant portion of our shares of common stock are restricted from immediate resale but may be sold into the market in the near future. This could cause the market price of our common stock to drop significantly, even if our business is doing well.” on page 40.
	·	If our common stock is listed on Nasdaq, we may not be able to satisfy the continued listing requirements of Nasdaq to maintain a listing of our common stock. See “Risk Factors - If our common stock is listed on Nasdaq, we may not be able to satisfy the continued listing requirements of Nasdaq to maintain a listing of our common stock.” on page 41.
	·	We may require additional capital to support growth. See “Risk Factors - We may require additional capital to support growth, and such capital might not be available on terms acceptable to us, if at all. This could hamper our growth and adversely affect our business.” on page 41.

 

 

 

 

Cash Flows through Our Organization

 

Tianci International, Inc. is a holding company without operations of its own. We conduct our all operations through our Hong Kong subsidiary, Roshing. As a result, Tianci’s ability to pay dividends depends upon dividends paid by Roshing. If our existing subsidiaries or any newly formed ones incur debt on their own behalf in the future, the instruments governing their debt may restrict their ability to pay dividends to Tianci. Under the current practice of the Inland Revenue Department of Hong Kong, no tax is payable in Hong Kong in respect of dividends paid by Roshing. The PRC laws and regulations do not currently have any material impact on transfers of cash from Roshing to Tianci or from Tianci to Roshing. The statutory reserve funds and the discretionary funds are not distributable as cash dividends. See “Regulations related to Hong Kong Taxation -Tax on dividends” on page 80.

 

We have established controls and procedures for cash flows within our organization. Our management team is the special task force that manages and supervises the transfers of funds among Tianci and its subsidiaries under the Cash Flow Management Policy, an internal policy adopted by Tianci. Under this policy, Tianci focuses on revenue management, cost control, working capital management, implementing financial strategies, and fulfilling compliance reporting duties. Our management team closely monitors and manages cash transfers within our organization by preparing monthly reports and annual budget plans. Each transfer of cash between Tianci, and a subsidiary is also subject to internal report and approval process by reference to such policy. Each transfer of cash between Tianci, RQS Capital, and a subsidiary or branch is also subject to an internal report and approval process by reference to such policy. In addition, cash transfers between Tianci, its subsidiaries, or investors shall follow the applicable Hong Kong laws and regulations.

 

 

 

 

 

 

 

 

 

SUMMARY CONSOLIDATED FINANCIAL DATA

 

The following summary consolidated financial statements for the three and six months ended on January 31, 2024, and 2023, as well as summary consolidated financial statements for the years ended July 31, 2023 and 2022 are derived from our unaudited interim consolidated financial statements, and audited consolidated financial statements included elsewhere in this prospectus. Our consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and have been consistently applied. The consolidated financial statements include the accounts of the Company, and its subsidiaries. All intercompany transactions and balances between the Company, and its subsidiaries are eliminated upon consolidation.

 

Our historical results for any period are not necessarily indicative of results to be expected for any future period. You should read the following summary financial information in conjunction with the consolidated financial statements and related notes and the information under “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included elsewhere in this prospectus.

 

The following table presents our summary consolidated statements of operations for the three and six months ended on January 31, 2024 and 2023, and for the years ended July 31, 2023 and 2022.

 

		For the three months ended January 31,
		2024				2023
Revenues		$	2,894,128			$	98,730
Cost of Revenues			2,555,024				78,800
Gross profit			339,104				19,930
Selling and marketing			133,763				6,001
General and administrative			136,721				19,202
(Loss) income from operations			68,620				(5,273	)
Provision for income taxes			7,141				(224	)
Net (loss) income			100,714				(5,497	)
Less: net (loss) income attributable to non-controlling interest			19,581				(550	)
Net (loss) income attributable to Tianci			81,133				(4,947	)

 

 

		For the six months ended January 31,
		2024				2023
Revenues		$	4,220,776			$	223,100
Cost of Revenues			3,647,895				187,355
Gross profit			572,881				35,745
Selling and marketing			235,834				8,160
General and administrative			255,426				34,214
(Loss) income from operations			81,621				(6,629	)
Provision for income taxes			(11,972	)			–
Net (loss) income			94,602				(6,629	)
Less: net (loss) income attributable to non-controlling interest			29,253				(663	)
Net (loss) income attributable to Tianci			65,349				(5,966	)

 

 

 

 

		For the year ended July 31,
		2023				2022
Revenues		$	452,409			$	752,839
Cost of Revenues			456,494				478,521
Gross (loss) income			(4,085	)			274,318
Selling and marketing			54,169				4,912
General and administrative			285,740				77,590
(Loss) income from operations			(343,994	)			191,816
Provision for income taxes			12,095				31,650
Net (loss) income			(356,089	)			160,166
Less: net (loss) income attributable to non-controlling interest			(14,879	)			16,017
Net (loss) income attributable to Tianci			(341,210	)			144,149

 

The following is a summary of consolidated financial data as of January 31, 2024, July 31, 2023 and 2022 and for the six months ended January 31, 2024 and 2023 and for the years ended July 31, 2023 and 2022.

 

		January 31				July 31				July 31
		2024				2023				2022
			(Unaudited)
Current assets		$	886,140			$	312,226			$	758,900
Total non-current assets			1,656				7,978				1,439
Total assets		$	887,796			$	320,204			$	760,339
Total liabilities		$	193,504			$	598,836			$	655,580

 

 

		For the six months ended
		January 31,
		2024				2023
Net cash provided by operating activities		$	109,822			$	217,000
Net cash used in investing activities			–				–
Net cash provided by (used in) financing activities			433,213				(63,305	)
Net change in cash and restricted cash		$	543,035			$	153,695

 

		For the year ended
		July 31,
		2023				2022
Net cash provided by (used in) operating activities		$	324,581			$	(84,161	)
Net cash used in investing activities			–				–
Net cash provided by (used in) financing activities			(89,476	)			85,148
Net change in cash and restricted cash		$	235,105			$	987

  

Our historical results for any period are not necessarily indicative of results to be expected for any future period. You should read the following summary financial information in conjunction with the consolidated financial statements and related notes and the information under “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included elsewhere in this prospectus.

 

 

 

 

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 prospectus, 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;
	·	changes and uncertainties in governmental policies and inter-governmental disputes, which could result in increased tariff rates, quota restrictions, trade barriers and other types of restrictions;

 

 

 

 

	·	changes in and application of international and domestic customs, trade and security regulations;
	·	wars, strikes, civil unrest, acts of terrorism, and other conflicts;
	·	changes in labor and other costs, including the impacts of inflation;
	·	increased global concerns regarding working conditions and environmental sustainability;
	·	changes in consumer attitudes regarding goods made in countries other than their own;
	·	changes in availability of credit; and
	·	changes in the price and readily available quantities of oil and other petroleum-related products.

 

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 involve 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 the facilitate 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 79.

 

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 on 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 14 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, 2022, five customers were responsible for over 95% of our revenue. During the year ended July 31, 2023, two customers were responsible for over 52% 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.

 

The Company and its subsidiaries do not maintain fire, theft, product liability or property insurance of any kind. The company and its subsidiaries bear the economic risk with respect to loss of or damage or destruction to our property and to the interruption of our business, as well as liability to third parties for damage or destruction to them or their property that may be caused by our personnel or products. Such liability could be substantial and the occurrence of such loss or liability may have a material adverse effect on our business, financial condition and prospects.

 

Our operating history may not be indicative of our future growth or financial results and we may not be able to sustain our historical growth rates.

 

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

 

We incur significant costs and demands upon management and accounting and finance resources as a result of complying with the laws and regulations affecting public companies. If we fail to maintain proper and effective internal controls, our ability to produce accurate and timely financial statements and otherwise make timely and accurate public disclosure could be impaired, which could harm our operating results, our ability to operate our business and our reputation.

 

Our management is responsible for establishing and maintaining a system of disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act) that is designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to the issuer’s management, including its principal executive officer or officers and principal financial officer or officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

 

 

 

 

An evaluation was conducted under the supervision and with the participation of our management of the effectiveness of the design and operation of our disclosure controls and procedures as of January 31, 2024. Based on that evaluation, our management concluded that our disclosure controls and procedures were not effective as of such date to ensure that information required to be disclosed in the reports that we file or submit under the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms as a result of the following material weaknesses:

 

	·	Because of the Company’s limited resources, there are limited controls over information processing.
	·	There is an inadequate segregation of duties consistent with control objectives. The Company’s management is limited in number, resulting in a situation where limitations on segregation of duties exist. In order to remedy this situation, we would need to hire additional staff to provide greater segregation of duties. Currently, it is not feasible to hire additional staff to obtain optimal segregation of duties. Management will reassess this matter in the following year to determine whether improvement in segregation of duty is feasible.
	·	The Company does not have a sitting audit committee financial expert, and thus the Company lacks the board oversight role within the financial reporting process.
	·	There is a lack of formal policies and procedures necessary to adequately review significant accounting transactions. The Company utilizes a third-party independent contractor for the preparation of its financial statements. Although the financial statements and footnotes are reviewed by our management, we do not have a formal policy to review significant accounting transactions and the accounting treatment of such transactions. The third-party independent contractor is not involved in the day to day operations of the Company and may not be provided information from management on a timely basis to allow for adequate reporting/consideration of certain transactions.

 

As of the date of this prospectus, we have established an audit committee with a designated financial expert. We maintain board oversight of the financial reporting process and has implemented internal policies to review significant accounting transactions, including The Review Policy for Related Party Transactions. Our management will continue to monitor and evaluate the effectiveness of our internal controls and procedures and our internal controls over financial reporting on an ongoing basis and is committed to taking further action and implementing additional enhancements or improvements, as necessary and as funds allow.

 

If our internal control over financial reporting or our disclosure controls are not effective, we may be unable to issue our financial statements in a timely manner, we may be unable to obtain the required audit or review of our financial statements by our independent registered public accounting firm in a timely manner or we may be otherwise unable to comply with the periodic reporting requirements of the SEC, our common stock intended to be listed on Nasdaq could be suspended or terminated and our share price could materially suffer. In addition, we or members of our management could be subject to investigation and sanction by the SEC and other regulatory authorities and to shareholder lawsuits, which could impose significant additional costs on us and divert management attention.

 

We may fail to make necessary acquisitions or investments or enter desirable strategic alliances, and we may not be able to achieve the anticipated benefits from such acquisitions, investments or strategic alliances.

 

Our strategy for long-term growth, productivity and profitability depends in part on our ability to make prudent   decisions to make strategic acquisitions or investments or enter desirable alliances and to realize the benefits we expect when we make those investments or acquisitions. We may evaluate and consider strategic acquisitions and investments or enter strategic alliances to develop new services or solutions, with an aim to enhance our competitive position and achieve long-term growth, productivity and profitability. However, we cannot assure you that we will make prudent decisions on such acquisitions, investments, strategic alliances at all times. In addition, investments or acquisitions involve numerous risks, including (i) potential failure to achieve the expected benefits of the integration or acquisition, (ii) difficulties in, and the cost of, integrating operations, technologies, services and personnel, (iii) potential write-offs of acquired assets or investments and (iv) downward effect on our operating results. These transactions will also divert management’s time and resources from our normal course of operations, and we may have to incur unexpected liabilities or expenses. Strategic alliances with third parties could also subject us to a number of risks, including risks associated with potential leakage of proprietary information, non-performance by the counterparty and an increase in expenses incurred in establishing new strategic alliances, any of which may materially and adversely affect our business.

 

If we cannot successfully execute or effectively operate, integrate, leverage and grow the acquired businesses or strategic alliances, our financial results and reputation may be materially and adversely affected. While we expect our future acquisitions, investments or strategic alliances to further enhance our value propositions to customers and improve our long-term profitability, there can be no assurance that we will realize our expectations within the time frame we envisage, if at all, or that we can continue to support the values we allocate to these acquired, invested or alliance businesses, including their goodwill or other intangible assets.

 

 

 

 

We may not be able to prevent others from unauthorized use of our intellectual property, which could harm our business and competitive position.

 

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

 

We are a “smaller reporting company” under Rule 12b-2 of the Securities Exchange Act of 1934, and we cannot be certain if the scaled disclosure requirements applicable to smaller reporting companies will make our common stock less attractive to investors and make it more difficult to raise capital as and when we need it.

  

We may continue to be a smaller reporting company. We may take advantage of certain of the scaled disclosures available to smaller reporting companies and will be able to take advantage of these scaled disclosures for so long as (a) the market value of our common stock held by non-affiliates is equal to or less than $250 million as of the last business day of the most recently completed second fiscal quarter, and (b) our annual revenues is equal to or less than $100 million during the most recently completed fiscal year and the market value of our common stock held by non-affiliates is equal to or less than $700 million as of the last business day of the most recently completed second fiscal quarter.

 

We cannot predict if investors will find our common stock less attractive because we may rely on these exemptions. If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock and our stock price may be more volatile. In addition, taking advantage of reduced disclosure obligations may make the comparison of our financial statements with other public companies difficult or impossible. If investors are unable to compare our business with other companies in our industry, we may not be able to raise additional capital as and when we need it, which may materially and adversely affect our financial condition and results of operations.

 

Anti-takeover provisions contained in our bylaws and articles of incorporation as well as provisions of Nevada law, could impair a takeover attempt.

 

Our bylaws, amended articles of incorporation and Nevada law contain provisions which could have the effect of rendering more difficult, delaying or preventing an acquisition deemed undesirable by our board of directors. Our corporate governance documents include provisions:

 

	·	limiting the liability of, and providing indemnification to, our directors and officers;
	·	limiting the ability of our stockholders to call and bring business before special meetings;
	·	controlling the procedures for the conduct and scheduling of board of directors and stockholder meetings;
	·	providing our board of directors with the express power to postpone previously scheduled annual meetings;
	·	the removal of directors only upon vote or written consent of stockholders representing not less than two-thirds (2/3) of the issued and outstanding capital stock entitled to voting power; and
	·	The approval to adopt a new bylaw upon a majority vote of stockholders. The Board shall have the power to amend, alter, change, or repeal any provision contained in the bylaws of incorporation.

 

These provisions, alone or together, could delay or prevent hostile takeovers and changes in control or changes in our management.

 

The Nevada Revised Statutes (“NRS”) Sections 78.411 through 78.444, regulate business combinations with interested stockholders. The NRS defines an interested stockholder as a beneficial owner (directly or indirectly) of 10% or more of the voting power of the outstanding shares of the corporation. Pursuant to NRS Sections 78.411 through 78.444, combinations with an interested stockholder remain prohibited for two years after the person became an interested stockholder unless (i) the transaction is approved by the board of directors or the holders of a majority of the outstanding shares not beneficially owned by the interested party, or (ii) the interested stockholder satisfies certain fair value requirements. NRS 78.434 permits a Nevada corporation to opt out of the statute with appropriate provisions in its articles of incorporation.

 

 

 

 

NRS Sections 78.378 through 78.3793 regulates the acquisition of a controlling interest in an issuing corporation. An issuing corporation is defined as a Nevada corporation with 200 or more stockholders of record, of which at least 100 stockholders have addresses of record in Nevada and does business in Nevada directly or through an affiliated corporation. NRS Section 78.379 provides that an acquiring person and those acting in association with an acquiring person obtain only such voting rights in the control shares as are conferred by a resolution of the stockholders of the corporation, approved at a special or annual meeting of the stockholders. Stockholders who vote against the voting rights have dissenters’ rights in the event that the stockholders approve voting rights. NRS Section 78.378 provides that a Nevada corporation’s articles of incorporation or bylaws may provide that these sections do not apply to the corporation.

 

Any damage to the reputation and recognition of our brand names, including negative publicity against us, our services, operations and our directors, senior management and business partners may materially and adversely affect our business operations and prospects.  

 

We believe our brand image and corporate reputation will play an increasingly important role in enhancing our competitiveness and maintaining business growth. Many factors, some of which are beyond our control, may negatively impact our brand image and corporate reputation if not properly managed. These factors include our ability to provide superior solutions and services to our customers, successfully conduct marketing and promotional activities, manage relationship with and among our customers and business partners, and manage complaints and events of negative publicity, maintain positive perception of our Company, our peers and supply chain solution industry in general. Any actual or perceived deterioration of our service quality, which is based on an array of factors including customer satisfaction, rate of complaint or rate of incident, could subject us to damages such as loss of important customers. Any negative publicity against us, our solutions and services, operations, directors, senior management, employees, business partners or our peers could adversely affect customer perception of our brand, cause damages to our corporate reputation and result in decreased demand for our solutions and services. If we are unable to promote our brand image and protect our corporate reputation, we may not be able to maintain and grow our customer base, and our business and growth prospects may be adversely affected.

 

We may from time to time be subject to claims, disputes, lawsuits and other legal and administrative proceedings.

 

We and our management may be subject to claims, disputes, lawsuits, investigations and other legal and administrative proceedings incidental to the conduct of our business from time to time. We are currently not party to any legal or arbitration proceedings, including those relating to bankruptcy, receivership or similar proceedings and those involving any third party, which may have, or have had in the recent past, material adverse effects on our financial position or profitability. Any claims against us or our management, with or without merit, could be time-consuming and costly to defend or litigate, divert our management’s attention and resources or harm our brand equity. Claims arising out of actual or alleged violations of law, breach of contract or torts could be asserted against us by customers, business partners, suppliers, competitors, employees or governmental entities in investigations and legal proceedings. These claims could be asserted under a variety of laws, including but not limited to intellectual property laws, labor and employment laws, securities laws, tort laws, contract laws, property laws, and employee benefit laws. If a lawsuit or governmental proceeding against us is successful, we may be required to pay substantial damages or fines. We may also lose, or be limited in, the rights to offer some of our services. As a result, the scope of our services could be reduced, which could adversely affect our ability to attract new customers, harm our reputation and have a material adverse effect on our business, financial condition and results of operations. Even if we are successful in our attempt to defend ourselves in legal and administrative actions or to assert our rights under various laws, enforcing our rights against the various parties involved may be expensive, time-consuming, and ultimately futile.

 

We may engage in transactions that present conflicts of interest.

 

The Company’s officers and directors may enter into agreements with the Company from time to time which may not be equivalent to similar transactions entered into with an independent third party. A conflict of interest arises whenever a person has an interest on both sides of a transaction. While we believe that it will take prudent steps to ensure that all transactions between the Company and any officer or director is fair, reasonable, and no more than the amount it would otherwise pay to a third party in an “arms-length” transaction, there can be no assurance that any transaction will meet these requirements in every instance.

 

 

 

 

We may adjust our business strategies and models in response to changing market conditions, competitive pressures, or regulatory changes. However, there is no guarantee that these adjustments will be successful, and they may not achieve the desired results, potentially impacting our performance and financial results.

 

As changes in our business environment occur, we may adjust our business strategies to meet these changes, or we may otherwise decide to restructure our operations or businesses or assets. In addition, external events such as shifts in demographics, alterations in consumer behavior, fluctuations in macroeconomic conditions, and amendments to laws, regulations, and government policies governing international trade and commerce may impair the value of our assets and increase our costs. When these changes or events occur, we may incur costs to modify our business strategy to respond to those market dynamics and satisfactorily meet customers’ demands. To meet customer demand and implement our strategies and expansion plan, we may shift to a Vessel-Operating Common Carrier. This shift aims to achieve cost efficiency by reducing transportation costs, as owning and operating vessels can decrease dependency on third-party shipping companies, potentially lowering transportation costs over time. Additionally, operating our own vessels can also provide a competitive advantage over companies that rely on third-party carriers. However, this transition may result in significant expenses for the purchase of vessels and related infrastructure necessary for our business growth. Such initiatives and enhancements may require substantial capital expenditures. If we are unable to successfully implement our business strategies and effectively respond to changes in market dynamics, our future financial results will suffer. Furthermore, we have incurred, and may continue to incur, increased operating expenses in connection with certain changes to our business strategies.

 

Risks Related to Doing Business in Hong Kong

 

All our operations are in Hong Kong. However, due to the long arm provisions under the current PRC laws and regulations, the Chinese government may exercise significant oversight and discretion over the conduct of our business and may intervene in or influence our operations at any time, which could result in a material change in our operations and/or the value of our common stock.

 

Tianci is a holding company and we conduct our operation through our operating subsidiary Roshing in Hong Kong. Our operations are primarily located in Hong Kong and few of our clients are Mainland China residents. At the present time, we are not materially affected by recent statements by the Chinese Government indicating an intent to exert more oversight and control over offerings that are conducted overseas and/or foreign investment in China-based issuers. However, due to long arm provisions under the current PRC laws and regulations, there remains regulatory uncertainty with respect to the implementation of Chinese law in Hong Kong. The PRC government may choose to exercise significant oversight and discretion, and the policies, regulations, rules, and the enforcement of laws of the Chinese government to which we are subject may change rapidly and with little advance notice to us or our stockholders. These laws and regulations may be interpreted and applied inconsistently by different agencies or authorities, and inconsistently with our current policies and practices. New laws, regulations, and other government directives in the PRC may also be costly to comply with.

 

We are aware that recently the PRC government initiated a series of regulatory actions and statements to regulate business operations in certain areas in Mainland China with little advance notice, including cracking down on illegal activities in the securities market, enhancing supervision over China-based companies listed overseas using variable interest entity structure, adopting new measures to extend the scope of cybersecurity reviews, and expanding the efforts in anti-monopoly enforcement. Since these statements and regulatory actions are new, it is highly uncertain how soon legislative or administrative regulation making bodies will respond and what existing or new laws or regulations or detailed implementations and interpretations will be modified or promulgated, if any, and the potential impact such modified or new laws and regulations will have on our daily business operation, the ability to accept foreign investments and list on a U.S. or other foreign exchange.

 

China’s government may intervene or influence our operations at any time or may exert more control over offerings conducted overseas and foreign investment, which may result in a material change in our operations and/or the value of our common stock. The promulgation of new laws or regulations, or the new interpretation of existing laws and regulations, in each case that restrict or otherwise unfavorably impact the ability or way we conduct our business and could require us to change certain aspects of our business to ensure compliance, which could decrease demand for our services, reduce revenues, increase costs, require us to obtain more licenses, permits, approvals or certificates, or subject us to additional liabilities. To the extent any new or more stringent measures are required to be implemented, our business, financial condition and results of operations could be adversely affected as well as materially decrease the value of our common stock.

 

 

 

 

We will rely on dividends and other distributions on equity paid by our Hong Kong subsidiary to fund any cash and financing requirements we may have. In the future, the PRC government may impose restrictions on our ability to transfer funds out of Hong Kong to fund operations or for other use outside of Hong Kong. Any limitation on the ability of our subsidiary to make payments to us could have a material adverse effect on our ability to conduct our business and might materially decrease the value of our common stock.

 

We are a holding company incorporated in the United States, and we rely on dividends and other distributions on equity paid by our subsidiary in Hong Kong for our cash and financing requirements, including the funds necessary to pay dividends and other cash distributions to our stockholders and service any debt we may incur. If our subsidiary incurs debt on its own behalf in the future, the instruments governing the debt may restrict its ability to pay dividends or make other distributions to us.

 

Under the current practice of the Inland Revenue Department of Hong Kong, no tax is payable in Hong Kong in respect of dividends paid by Roshing. The PRC laws and regulations do not currently have any material impact on transfers of cash from Roshing to Tianci or from Tianci to Roshing. However, the Chinese government may, in the future, impose restrictions or limitations on our ability to transfer money out of Hong Kong, to distribute earnings and pay dividends to and from the other entities within our organization, or to reinvest in our business outside of Hong Kong. Such restrictions and limitations, if imposed in the future, may delay or hinder the expansion of our business to outside of Hong Kong and may affect our ability to receive funds from our operating subsidiary in Hong Kong. The promulgation of new laws or regulations, or the new interpretation of existing laws and regulations, in each case, that restrict or otherwise unfavorably impact the ability or way we conduct our business, could require us to change certain aspects of our business to ensure compliance, which could decrease demand for our services, reduce revenues, increase costs, require us to obtain more licenses, permits, approvals or certificates, or subject us to additional liabilities. To the extent any new or more stringent measures are implemented, our business, financial condition and results of operations could be adversely affected and such measured could materially decrease the value of our common stock.

 

Changes in international trade policies, trade disputes, barriers to trade, or the emergence of a trade war may dampen growth in Hong Kong, China and other markets where the majority of our clients reside.

 

Political events, international trade disputes, and other business interruptions could harm or disrupt international commerce and the global economy, and could have a material adverse effect on us and our customers, service providers, and other partners. International trade disputes could result in tariffs and other protectionist measures which may materially and adversely affect our business.

 

Tariffs could increase the cost of the goods and products which could affect customers’ investment decisions. In addition, political uncertainty surrounding international trade disputes and the potential of the escalation to a trade war could have a negative effect on customer confidence, which could materially and adversely affect our business. We may also have access to fewer business opportunities, and our operations may be negatively impacted as a result. In addition, the current and future actions or escalations by either the United States or China that affect trade relations may cause global economic turmoil and potentially have a negative impact on our markets, our business, or our results of operations, as well as the financial condition of our customers, and we cannot provide any assurances as to whether such actions will occur or the form that they may take.

 

Under the Basic Law of the Hong Kong Special Administrative Region of the People’s Republic of China, Hong Kong has a high degree of autonomy and executive, legislative and independent judicial powers, including that of final adjudication under the principle of “one country, two systems”, while the government of the PRC is responsible for its foreign affairs and defense. As a separate customs territory, Hong Kong maintains and develops relations with foreign states and regions. However, based on recent political development, the U.S. State Department has indicated that the United States no longer considers Hong Kong to have significant autonomy from China. Hong Kong’s preferential trade status was removed by the United States government and the United States may impose the same tariffs and other trade restrictions on exports from Hong Kong that it places on goods from Mainland China. These and other recent actions may represent an escalation in political and trade tensions involving the U.S, China and Hong Kong, which could potentially harm our business.

 

 

 

 

The enactment of Law of the PRC on Safeguarding National Security in the Hong Kong Special Administrative Region (the “Hong Kong National Security Law”) could impact our Hong Kong subsidiary.

 

On June 30, 2020, the Standing Committee of the PRC National People’s Congress adopted the Hong Kong National Security Law. This law defines the duties and government bodies of the Hong Kong National Security Law for safeguarding national security and four categories of offences — secession, subversion, terrorist activities, and collusion with a foreign or overseas force to endanger national security — and their corresponding penalties. On July 14, 2020, the former U.S. President Donald Trump signed the Hong Kong Autonomy Act (the “HKAA”) into law, authorizing the U.S. administration to impose blocking sanctions against individuals and entities who are determined to have materially contributed to the erosion of Hong Kong’s autonomy. On August 7, 2020, the U.S. government imposed HKAA-authorized sanctions on eleven individuals, including former and current Hong Kong chief executives Carrie Lam and John Lee. On October 14, 2020, the U.S. State Department submitted to relevant committees of Congress the report required under HKAA, identifying persons materially contributing to “the failure of the Government of China to meet its obligations under the Joint Declaration or the Basic Law.” The HKAA further authorizes secondary sanctions, including the imposition of blocking sanctions, against foreign financial institutions that knowingly conduct a significant transaction with foreign persons sanctioned under this authority. The imposition of sanctions may directly affect the foreign financial institutions as well as any third parties or customers dealing with any foreign financial institution that is targeted. It is difficult to predict the full impact of the Hong Kong National Security Law and HKAA on Hong Kong and companies located in Hong Kong. If our Hong Kong subsidiary is determined to be in violation of the Hong Kong National Security Law or the HKAA by competent authorities, our business operations, financial position and results of operations could be materially and adversely affected.

 

There are political risks associated with conducting business in Hong Kong.

 

Substantially all our operations are based in Hong Kong. Accordingly, our business operations and financial condition will be affected by the political and legal developments in Hong Kong. During the period covered by the financial information included in this prospectus, we derive substantially all of our revenue from operations in Hong Kong. Any adverse economic, social and/or political conditions, material social unrest, strike, riot, civil disturbance or disobedience, as well as significant natural disasters, may adversely affect our business operations. Hong Kong is a special administrative region of the PRC and the basic policies of the PRC regarding Hong Kong are reflected in the Basic Law, namely, Hong Kong’s constitutional document, which provides Hong Kong with a high degree of autonomy and executive, legislative and independent judicial powers, including that of final adjudication under the principle of “one country, two systems”. However, there is no assurance that there will not be any changes in the economic, political and legal environment in Hong Kong in the future. Since a substantial part of our operations is based in Hong Kong, any change of such political arrangements may pose an immediate threat to the stability of the economy in Hong Kong, thereby directly and adversely affecting our results of operations and financial position.

 

If the PRC attempts to alter its agreement to allow Hong Kong to function autonomously, this could potentially impact Hong Kong’s common law legal system and may in turn bring about uncertainty in, for example, the enforcement of our contractual rights. This could, in turn, materially and adversely affect our business and operations. Additionally, intellectual property rights and confidentiality protections in Hong Kong may not be as effective as in the United States or other countries. Accordingly, we cannot predict the effect of future developments in the Hong Kong legal system, including the promulgation of new laws, changes to existing laws or the interpretation or enforcement thereof, or the preemption of local regulations by national laws. These uncertainties could limit the legal protections available to us, including our ability to enforce our agreements with our customers.

 

Our revenue is susceptible to the ongoing incidents or factors which affect the stability of the social, economic and political conditions in Hong Kong. Any drastic events may adversely affect our business operations. Such adverse events may include changes in economic conditions and regulatory environment, social and/or political conditions, civil disturbance or disobedience, as well as significant natural disasters. Given the relatively small geographical size of Hong Kong, any of such incidents may have a widespread effect on our business operations, which could in turn adversely and materially affect our business, results of operations and financial condition. It is difficult to predict the full impact of the HKAA on Hong Kong and companies with operations in Hong Kong like us. Furthermore, legislative or administrative actions in respect of China-U.S. relations could cause investor uncertainty for affected issuers, including us, and the market price of our shares could be adversely affected.

 

 

 

 

Recent joint statement by the SEC and the Public Company Accounting Oversight Board (United States), or the PCAOB, proposed rule changes submitted by Nasdaq, and the newly enacted Holding Foreign Companies Accountable Act all call for additional and more stringent criteria to be applied to emerging market companies upon assessing the qualification of their auditors, especially the non-U.S. auditors who are not inspected by the PCAOB. These developments could add uncertainties to the trading of our common stock on U.S. stock exchanges, including the possibility that our securities can be delisted if the PCAOB cannot inspect or fully investigate our auditor.

 

On April 21, 2020, the SEC Chairman and PCAOB Chairman, along with other senior SEC staff, released a joint statement highlighting the risks associated with investing in companies based in or have substantial operations in emerging markets including China. The joint statement emphasized the risks associated with lack of access for the PCAOB to inspect auditors and audit work papers in China and higher risks of fraud in emerging markets.

 

On May 18, 2020, Nasdaq filed three proposals with the SEC to (1) apply minimum offering size requirement for companies primarily operating in “Restrictive Market,” (2) adopt a new requirement relating to the qualification of management or board of director for Restrictive Market companies, and (3) apply additional and more stringent criteria to an applicant or listed company based on the qualifications of the Company’s auditor.

 

On June 4, 2020, the U.S. President issued a memorandum ordering the President’s working group on financial markets to submit a report to the President within 60 days of the date of the memorandum that should include recommendations for actions that can be taken by the executive branch and by the SEC or PCAOB to enforce U.S. regulatory requirements on Chinese companies listed on U.S. stock exchanges and their audit firms. However, it remains unclear what further actions, if any, the U.S. executive branch, the SEC, and PCAOB will take to address the problem.

 

On August 6, 2020, the President’s working group released a report recommending that the SEC take steps to implement the five recommendations outlined in the report. In particular, to address companies from jurisdictions that do not provide the PCAOB with sufficient access to fulfill its statutory mandate, the President’s working group recommended enhanced listing standards on U.S. stock exchanges. This would require, as a condition to initial and continued exchange listing, PCAOB access to the work papers of the principal audit firm for the audit of the listed company. Companies unable to satisfy this standard as a result of governmental restrictions on access to audit work papers and practices in their jurisdiction may satisfy this standard by providing a co-audit from an audit firm with comparable resources and experience where the PCAOB determines it has sufficient access to audit work papers and practices to conduct an appropriate inspection of the co-audit firm. The report permits the new listing standards to provide for a transition period until January 1, 2022, for listed companies, but would apply immediately to new listings once the necessary rulemakings and/or standard-setting are effective.

 

On August 10, 2020, the SEC announced that the SEC Chairman had directed the SEC staff to prepare proposals in response to the report of the President’s working group, and that the SEC was soliciting public comments and information with respect to the development of these proposals.

 

On May 20, 2020, the U.S. Senate passed the Holding Foreign Companies Accountable Act, or the Act. The Act was approved by the U.S. House of Representatives on December 2, 2020. On December 18, 2020, the Act was signed into public law by the President of the United States. In essence, the Act requires the SEC to prohibit foreign companies from listing securities on U.S. securities exchanges if a company retains a foreign accounting firm that cannot be inspected by the PCAOB for three consecutive years, beginning in 2021. On March 24, 2021, the SEC announced that it had adopted interim final amendments to implement congressionally mandated submission and disclosure requirements of the Act. The interim final amendments will apply to registrants that the SEC identifies as having filed an annual report on Forms 10-K, 20-F, 40-F or N-CSR with an audit report issued by a registered public accounting firm that is located in a foreign jurisdiction and that the PCAOB has determined it is unable to inspect or investigate completely because of a position taken by an authority in that jurisdiction.

 

On June 22, 2021, the U.S. Senate passed the Accelerating Holding Foreign Companies Accountable Act and on December 29, 2022 the Accelerating Holding Foreign Companies Accountable Act was enacted, which amended the HFCA Act by requiring the SEC to prohibit an issuer’s securities from trading on any U.S. stock exchanges if its auditor is not subject to PCAOB inspections for two consecutive years instead of three, thus reducing the time before our securities may be prohibited from trading or delisted.

 

 

 

 

On December 2, 2021, the SEC adopted amendments to finalize rules implementing the submission and disclosure requirements in the HFCA Act. The rules apply to registrants that the SEC identifies as having filed an annual report with an audit report issued by a registered public accounting firm that is located in a foreign jurisdiction and that the PCAOB is unable to inspect or investigate completely because of a position taken by an authority in a foreign jurisdiction.

 

On December 16, 2021, the PCAOB issued a report on its determinations that it is unable to inspect or investigate completely PCAOB-registered public accounting firms headquartered in China and in Hong Kong because of positions taken by PRC and Hong Kong authorities in those jurisdictions. The PCAOB has made such designations as mandated under the HFCA Act. Pursuant to each annual determination by the PCAOB, the SEC will, on an annual basis, identify issuers that have used non-inspected audit firms and thus are at risk of such suspensions in the future.

  

On August 26, 2022, the SEC issued a statement announcing that the PCAOB signed a Statement of Protocol (“SOP”) with the China Securities Regulatory Commission, or CSRC, and the Ministry of Finance of the People’s Republic of China governing inspections and investigations of audit firms based in China and Hong Kong, jointly agreeing on the need for a framework.

 

On December 15, 2022, the PCAOB announced that it has secured complete access to inspect and investigate registered public accounting firms headquartered in Mainland China and Hong Kong and voted to vacate the previous Determination Report to the contrary.

 

Our auditor, Michael T. Studer CPA P.C., the independent registered public accounting firm that issues the audit report, as an auditor of companies that are traded publicly in the United States and a firm registered with the PCAOB, is subject to laws in the United States, pursuant to which the PCAOB conducts regular inspections to assess its compliance with the applicable professional standards. Our auditor is headquartered in Freeport, New York and has been inspected by the PCAOB on a regular basis.

 

The PCAOB is continuing to demand complete access in Mainland China and Hong Kong moving forward and is already making plans to resume regular inspections in early 2023 and beyond, as well as to continue pursuing ongoing investigations and initiate new investigations as needed. The PCAOB has indicated that it will act immediately to consider the need to issue new determinations with the HFCA Act if needed. If the PCAOB in the future again determines that it is unable to inspect and investigate completely auditors in Mainland China and Hong Kong, then the companies audited by those auditors would be subject to a trading prohibition on U.S. markets pursuant to the HFCA Act and/or the AHFCAA. These recent developments could also add uncertainties to this Underwritten Offering, and we cannot assure you that the NASDAQ Capital Market or regulatory authorities would not apply additional or more stringent criteria to us after considering the effectiveness of our auditor’s audit procedures and quality control procedures, adequacy of personnel and training, or sufficiency of resources, geographic reach or experience as it relates to the audit of our financial statements.

 

Increases in labor costs in Hong Kong and non-compliance with laws and regulations relating to employment and labor protection may adversely affect the business of Roshing and our results of operations.

 

The economy in Hong Kong has experienced increases in inflation and labor costs in recent years. As a result, average wages in Hong Kong are expected to continue to increase. We expect that Roshing’s labor costs, including wages and employee benefits, will continue to increase. Unless Roshing is able to control its labor costs or pass on these increased labor costs to its customers by increasing service fees, our financial condition and operating results may be adversely affected.

 

 

 

 

In addition, where Roshing employs any employees, it is required by Hong Kong laws and regulations to maintain various statutory employee benefits, including mandatory provident fund scheme and work-related injury insurance, to provide statutorily required paid sick leave, annual leave and maternity leave, and make severance payments or long service payments. See “Regulations — Regulations Related to our Business Operation in Hong Kong — Regulations related to employment and labor protection” for details. The relevant government agencies may examine whether an employer has complied with such requirements, and those employers who fail to comply commit a criminal offence and may be subject to fines and/or imprisonment. For example, under the Employees’ Compensation Ordinance (Chapter 282 of the Laws of Hong Kong), an employer who fails to comply with the ordinance to secure an insurance cover commits an offence and is liable on conviction upon indictment to a maximum fine of HK$100,000 (approximately US$13,000) and imprisonment for two years. Under the Mandatory Provident Fund Schemes Ordinance (Chapter 485 of the Laws of Hong Kong), an employer who, without reasonable excuse, fails to enroll employees in an MPF scheme pursuant to the ordinance commits an offence and is liable on conviction to a fine of HK$350,000 (approximately US$45,000) and to imprisonment for three years. Therefore, failure to comply with applicable laws and regulations concerning employment and labor protection by Roshing may result in material and adverse effect on Roshing’s business, our financial condition and operating results. As of the date of this prospectus, we believe that Roshing is in compliance with applicable Hong Kong laws and regulations concerning employment and labor protection in all material respects.  

 

You may incur additional costs and procedural obstacles in effecting service of legal process, enforcing foreign judgments or bringing actions in Hong Kong against us or its management named in the prospectus based on Hong Kong laws.

 

Currently, all of our operations are conducted outside the United States, and all of our assets are located outside the United States. Some of our directors and officers are Hong Kong nationals or residents. You may incur additional costs and procedural obstacles in effecting service of legal process, enforcing foreign judgments or bringing actions in Hong Kong against us or its management named in the prospectus. If you want to enforce a judgment of the United States in Hong Kong, it must be a final judgment conclusive upon the merits of the claim, for a liquidated amount in a civil matter and not in respect of taxes, fines, penalties, or similar charges, the proceedings in which the judgment was obtained were not contrary to natural justice, and the enforcement of the judgment is not contrary to public policy of Hong Kong. Such a judgment must be for a fixed sum and must also come from a “competent” court as determined by the private international law rules applied by the Hong Kong courts.

 

Risks Related to Taxation

 

Non-compliance with tax obligations may adversely affect our business and operation results.

 

On June 5, 2023, the United States Internal Revenue Service (“IRS”) issued a notice letter imposing penalties for failure to provide information concerning certain foreign-owned U.S. Corporations for the tax period ending July 31, 2021, totaling $25,000. We promptly submitted a request for penalty abatement within 30 days of receiving the notice, asserting that the late filing was not due to willful neglect. However, as of now, we have not received any final decision from the IRS regarding their intended course of action. The total amount due now stands at $26,426.55, inclusive of accrued interest and penalties calculated up to February 26, 2022. On April 25, 2024, the Company paid the total amount of $26,854.68 to IRS by check.

 

On March 11, 2024, the Company received a new notice letter with the IRS issued a notice imposing penalties for failure to file form 5471 under Internal Revenue Code Section 6038. The penalty amounts due by April 1, 2024, is $20,000. On April 22, 2024, the Company received another notice from IRS of the intent of levy the company’s property or rights to property for the Company’s failure to pay the penalty. The total penalty due now stands at $20,184.43, inclusive of accrued interest and penalties calculated up to April 22, 2024. On April 22, 2024, we promptly submitted a request for penalty abatement within 30 days of receiving the notice, asserting that the late filing was not due to willful neglect.

 

On May 10, 2024, the company paid USD 20184.43 by check to IRS for the tax period ending July 31, 2023.

 

 

 

 

All late filings were due to two main factors: a) the impact of the epidemic, resulting in our failure to report in a timely manner and subsequent payment of fines. We have settled the fines, but we require details regarding the date, amount, and reasons for any new penalties arising from delayed tax payments. b) The change of ownership in August 2021 led to numerous unresolved matters, compounded by various obstacles encountered during the pandemic.

 

Up to May 10, 2024, we have successfully filed tax returns for the years 2020 to 2022 and have duly remitted the two fines along with accrued interest via check. The amount owed, encompassing principal and interest, was ascertained and settled upon the submission of the prospectus. In our future operations, we will aim to pay taxes on time and as required. However, we cannot guarantee that the Company won’t make tax payment errors in the future, which could affect our operations.

 

A change in tax laws in any country in which we operate or loss of a major tax dispute or a successful tax challenge to our operating structure, intercompany pricing policies or the taxable presence of our subsidiaries in certain countries could adversely affect us.

 

Tax laws, treaties and regulations are highly complex and subject to interpretation. Consequently, we and our subsidiaries are subject to changing laws, treaties and regulations in and between the countries in which we operate. Our tax expense is based on our interpretation of the tax laws in effect at the time the expense was incurred. A change in tax laws, treaties or regulations, or in the interpretation thereof, could result in a materially higher tax expense or a higher effective tax rate on our earnings.

 

In addition, if any tax authority successfully challenges positions we may take in tax filings, our operational structure, intercompany pricing policies, the taxable presence of our subsidiaries in certain countries or any other situation, or if the terms of certain income tax treaties are interpreted in a manner that is adverse to our structure, or if we lose a material tax dispute in any country, our effective tax rate on our worldwide earnings could increase substantially and our earnings and cash flows from operations could be materially adversely affected.

 

An investment in this Underwritten Offering may involve adverse U.S. federal income tax consequences.

 

An investment in this Underwritten Offering may involve adverse U.S. federal income tax consequences. For instance, there is a risk that an investor’s entitlement to receive payments in excess of the investor’s initial tax basis in our common stock upon exercise of the investor’s conversion right or upon our liquidation of the trust account will result in constructive income to the investor, which could affect the timing and character of income recognition and result in U.S. federal income tax liability to the investor without the investor’s receipt of cash from us. We have also not sought a ruling from the Internal Revenue Service, or IRS, as to any U.S. federal income tax consequences described in this prospectus. The IRS may disagree with the descriptions of U.S. federal income tax consequences described herein, and its determination may be upheld by a court. Any such determination could subject an investor or our company to adverse U.S. federal income tax consequences that would be different than those described in this prospectus. Accordingly, each prospective investor is urged to consult a tax advisor with respect to the specific tax consequences of the acquisition, ownership and disposition of our securities, including the applicability and effect of state, local, or foreign tax laws, as well as U.S. federal tax laws.

 

Risks Related to Our Common Stock and this Underwritten Offering

 

Our common stock is currently quoted on the OTC Pink Market, which may have an unfavorable impact on our stock price and liquidity.

 

Our common stock is currently quoted on the OTC Pink Market. The quotation of our shares on the OTC Pink Market may result in a less liquid market available for existing and potential stockholders to trade shares of our common stock, could depress the trading price of our common stock and could have a long-term adverse impact on our ability to raise capital in the future. When fewer shares of a security are being traded on the OTC Pink Market, volatility of prices may increase and price movement may outpace the ability to deliver accurate quote information. Due to lower trading volumes in shares of our common stock, there may be a lower likelihood that orders for shares of our common stock will be executed, and current prices may differ significantly from the price that was quoted at the time of entry of the order.

 

 

 

 

There can be no assurances that an active trading market may develop for our common stock, or if developed, be maintained.

 

We intend to apply to list our common stock on the Nasdaq Capital Market. No assurance can be given that our application will be approved or that the trading prices of our common stock on the OTC Pink Market will be indicative of the prices of our common stock if our common stock were traded on the Nasdaq Capital Market. If our application is not approved, the Underwritten Offering will not be completed. This offering is contingent upon final approval of the listing of our common stock on the Nasdaq Capital Market.

 

Our common stock has traded on the OTC Pink Market since February 9, 2022. The average trading volume in our common stock has been historically low, with little or no trading at all on some days. As a result, an investor may find it difficult to dispose of, or to obtain accurate quotations of the price of, our common stock. Accordingly, investors must assume they may have to bear the economic risk of an investment in our common stock for an indefinite period of time. There can be no assurance that a more active market for the common stock will develop, or if one should develop, there is no assurance that it will be maintained. This severely limits the liquidity of our common stock and would likely have a material adverse effect on the market price of our common stock and on our ability to raise additional capital.

 

An active, liquid, and orderly market for our common stock may not develop.

 

Our common stock is expected to trade on Nasdaq a day after the effective date of the registration statement of which this prospectus forms a part. The trading market for our common stock will depend in part on the research and reports that securities or industry analysts publish about us or our business. Several analysts may cover our stock. If one or more of those analysts downgrade our stock or publish inaccurate or unfavorable research about our business, our stock price would likely decline. If one or more of these analysts cease coverage of our Company or fail to publish reports on us regularly, demand for our stock could decrease, which might cause our stock price and trading volume to decline. An active trading market for our common stock may never develop or be sustained. If an active market for our common stock does not continue to develop or is not sustained, it may be difficult for investors to sell their shares of common stock without depressing the market price and investors may not be able to sell their securities at all. An inactive market may also impair our ability to raise capital by selling our securities and may impair our ability to acquire other businesses, applications, or technologies using our securities as consideration, which, in turn, could materially adversely affect our business and the market prices of your shares of common stock.

 

Our common stock is subject to the “penny stock” rules of the SEC and the trading market in the securities is limited, which makes transactions in the stock cumbersome and may reduce the value of an investment in the stock.

 

The SEC has adopted Rule 15g-9 which establishes the definition of a “penny stock,” for the purposes relevant to us, as any equity security that has a market price of less than $5.00 per share or with an exercise price of less than $5.00 per share, subject to certain exceptions. For any transaction involving a penny stock, unless exempt, the rules require:

 

	·	that a broker or dealer approve a person’s account for transactions in penny stocks; and
	·	the broker or dealer receives from the investor a written agreement to the transaction, setting forth the identity and quantity of the penny stock to be purchased.

 

In order to approve a person’s account for transactions in penny stocks, the broker or dealer must:

 

	·	obtain financial information and investment experience objectives of the person; and
	·	make a reasonable determination that the transactions in penny stocks are suitable for that person and the person has sufficient knowledge and experience in financial matters to be capable of evaluating the risks of transactions in penny stocks.

 

 

 

 

The broker or dealer must also deliver, prior to any transaction in a penny stock, a disclosure schedule prescribed by the SEC relating to the penny stock market, which, in highlight form sets forth:

 

	·	the basis on which the broker or dealer made the suitability determination; and
	·	that the broker or dealer received a signed, written agreement from the investor prior to the transaction.

 

Generally, brokers may be less willing to execute transactions in securities subject to the “penny stock” rules. This may make it more difficult for investors to dispose of common stock and cause a decline in the market value of stock.

 

Disclosure also has to be made about the risks of investing in penny stocks in both public offerings and in secondary trading and about the commissions payable to both the broker-dealer and the registered underwriter, current quotations for the securities and the rights and remedies available to an investor in cases of fraud in penny stock transactions. Finally, monthly statements have to be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stocks.

 

The Financial Industry Regulatory Authority (“FINRA”) sales practice requirements may also limit a stockholder’s ability to buy and sell our common stock.

 

In addition to the “penny stock” rules described above, FINRA has adopted rules that require that in recommending an investment to a customer, a broker-dealer must have reasonable grounds for believing that the investment is suitable for that customer. Prior to recommending speculative low-priced securities to their non-institutional customers, broker-dealers must make reasonable efforts to obtain information about the customer’s financial status, tax status, investment objectives and other information. Under interpretations of these rules, the FINRA believes that there is a high probability that speculative low-priced securities will not be suitable for at least some customers. The FINRA requirements make it more difficult for broker-dealers to recommend that their customers buy our common stock, which may limit your ability to buy and sell our common stock and have an adverse effect on the market for shares of our common stock.

 

Our articles of incorporation allow for our board to create a new series of preferred stock without further approval by our Stockholders, which could adversely affect the rights of the holders of our common stock.

 

Our board of directors has the authority to fix and determine the relative rights and preferences of preferred stock. Our board of directors has the authority to issue up 80,000 shares of Series A Preferred Stock and 20,000,000 shares of undesignated preferred stock. The Board of Directors has the authority, without stockholder approval, to amend the Company’s Articles of Incorporation to divide the class of undesignated Preferred Stock into series, and to determine the relative rights and preferences of the shares of each series, including (i) voting power, (ii) the rate of dividend, (iii) the price at which, and the terms and conditions on which, the shares may be redeemed, (iv) the amount payable upon the shares in the event of liquidation, (v) any sinking fund provision for the redemption or purchase of the shares, and (vi) the terms and conditions on which the shares may be converted to shares of another series or class, if the shares of any series are issued with the privilege of conversion, which could decrease the relative voting power of our common stock or result in dilution to our existing Stockholders.

 

On January 27, 2023, Tianci sold 80,000 shares of its Series A Preferred Stock to RQS Capital for $24,000 cash. On January 19, 2024, the Company issued 8,000,000 shares of its common stock to RQS Capital. The shares were issued upon RQS Capital’s exercise of its right to convert 80,000 shares of Tianci’s Series A Preferred Stock into 8,000,000 shares of common stock.

 

 

 

 

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

 

Although we have no present intention to issue any additional shares of preferred stock or to create any additional series of preferred stock, we may issue such shares in the future.

 

The trading price of our common stock is likely to be volatile, which could result in substantial losses to investors.

 

The trading price of our common stock is likely to be volatile and could fluctuate widely due to factors beyond our control. This may happen because of broad market and industry factors, including the performance and fluctuation of the market prices of other companies with business operations located outside of the United States that have listed their securities in the United States. In addition to market and industry factors, the price and trading volume for our common stock may be highly volatile for factors specific to our own operations, including the following:

 

	·	variations in our revenues, earnings and cash flow;
	·	announcements of new investments, acquisitions, strategic partnerships or joint ventures by us or our competitors;
	·	announcements of new offerings, solutions and expansions by us or our competitors;
	·	detrimental adverse publicity about us, our brand, our services or our industry;
	·	additions or departures of key personnel; and
	·	potential litigation or regulatory investigations.

 

Any of these factors may result in large and sudden changes in the volume and price at which our common stock will trade.

 

In the past, stockholders of public companies have often brought securities class action suits against those companies following periods of instability in the market price of their securities. If we were involved in a class action suit, it could divert a significant amount of our management’s attention and other resources from our business and operations and require us to incur significant expenses to defend the suit, which could harm our results of operations. Any such class action suit, whether or not successful, could harm our reputation and restrict our ability to raise capital in the future. In addition, if a claim is successfully made against us, we may be required to pay significant damages, which could have a material adverse effect on our financial condition and results of operations.

 

Short sellers of our stock may be manipulative and may drive down the market price of our common stock.

 

Short selling is the practice of selling securities that the seller does not own but rather has borrowed or intends to borrow from a third party with the intention of buying identical securities at a later date to return them to the lender. A short seller hopes to profit from a decline in the value of the securities between the sale of the borrowed securities and the purchase of the replacement shares, as the short seller expects to pay less in that purchase than it received in the sale. As it is therefore in the short seller’s interest for the price of the stock to decline, some short sellers publish, or arrange for the publication of, opinions or characterizations regarding the relevant issuer, its business prospects and similar matters calculated to or which may create negative market momentum, which may permit them to obtain profits for themselves as a result of selling the stock short. Issuers whose securities have historically had limited trading volumes and/or have been susceptible to relatively high volatility levels can be particularly vulnerable to such short seller attacks.

 

The publication of any such commentary regarding us by a short seller may bring about a temporary, or possibly long term, decline in the market price of our common stock. No assurances can be made that we will not become a target of such commentary and declines in the market price of our common stock will not occur in the future, in connection with such commentary by short sellers or otherwise.

 

 

 

 

We have considerable discretion as to the use of the net proceeds from this Underwritten Offering and we may use these proceeds in ways with which you may not agree.

 

We intend to use the proceeds from this Underwritten Offering primarily to enhance and expand our business operations and for general corporate purposes. However, we have considerable discretion in the application of the proceeds. You will not have the opportunity, as part of your investment decision, to assess whether the proceeds are being used appropriately. You must rely on the judgment of our management regarding the application of the net proceeds of this Underwritten Offering. The net proceeds may be used for corporate or other purposes with which you do not agree or that do not improve our profitability or increase our share price. The net proceeds from this Underwritten Offering may also be placed in investments that do not produce income or that lose value.

 

Our expected use of net proceeds from the Underwritten Offering represents our current intentions based upon our present plans and business condition. As of the date of this prospectus, we cannot predict with certainty all of the particular uses for the net proceeds to be received upon the completion of the Underwritten Offering. The amounts and timing of our actual use of the net proceeds will vary depending on numerous factors, including the amount of cash used in our operations, which can be highly uncertain, subject to substantial risks and can often change. Our management will have broad discretion in the application of the net proceeds, and investors will be relying on our judgment regarding the application of the net proceeds of the Underwritten Offering.

 

The sale or availability for sale of substantial amounts of our common stock could adversely affect their market price.

 

Sales of substantial amounts of our common stock in the public market, or the perception that these sales could occur, could adversely affect the market price of our common stock and could materially impair our ability to raise capital through equity offerings in the future. Shares held by our existing stockholders may be sold in the public market in the future subject to the restrictions in Rule 144 and Rule 701 under the Securities. As of January 31, 2024 and the date of this prospectus, we have 14,781,803 shares of common stock issued and outstanding. We cannot predict what effect, if any, market sales of securities held by our significant stockholders or any other stockholder or the availability of these securities for future sale will have on the market price of our common stock.

 

As we do not expect to pay dividends in the foreseeable future, you must rely on a price appreciation of our common stock for return on your investment.

 

We currently intend to retain most, if not all, of our available funds and any future earnings to fund the development and growth of our business. As a result, we do not expect to pay any cash dividends in the foreseeable future. Therefore, you should not rely on an investment in our common stock as a source for any future dividend income.

 

Our board of directors has complete discretion as to whether to distribute dividends. Even if our board of directors decides to declare and pay dividends, the timing, amount and form of future dividends, if any, will depend on our future results of operations and cash flow, our capital requirements and surplus, the amount of distributions, if any, received by us from our subsidiaries, our financial condition, contractual restrictions and other factors deemed relevant by our board of directors. Accordingly, the return on your investment in our common stock will likely depend entirely upon any future price appreciation of our common stock. There is no guarantee that our common stock will appreciate in value, or even maintain the price at which you purchased the common stock. You may not realize a return on your investment in our common stock and you may even lose your entire investment in our common stock.

 

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

 

Shufang Gao, the Chief Executive Officer of Tianci, through his 60% holding in RQS Capital, which has 61.89% of the voting power, together with common stock owned by himself, controls securities with 62.11% of the voting power in Tianci. As a result, Mr. Gao will have the ability to:

 

	·	Elect or defeat the election of our directors;
	·	Amend or prevent amendment of our articles of incorporation or bylaws;
	·	Effect or prevent a merger, sale of assets or other corporate transaction; and
	·	Affect the outcome of any other matter submitted to the Stockholders for vote.

 

 

 

 

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

 

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

 

The sale of securities by us in any equity or debt financing could result in dilution to our existing Stockholders.

 

Our Board of Directors is authorized to issue up to 100,000,000 shares of common stock and up to 20,000,000 shares of undesignated preferred stock. Of which approximately [●] will remain available for issuance after the Underwritten Offering, including (i) awards reserved for issuance under the 2024 Equity Incentive Plan; (ii) shares issuable upon the exercise of the underwriter’s over-allotment option. Our Board of Directors will continue to have the authority to issue additional shares of common stock without consent of any of our stockholders, unless stockholder’s approval is required under law or, if our common stock is listed on Nasdaq, under Nasdaq Rule 5635, which among other things, requires stockholder approval for change of control transactions where a stockholder acquires 20% of a Nasdaq-listed company’s common stock or securities convertible into common stock, calculated on a post-transaction basis. If our management determines to issue shares of our common stock from the large pool of authorized but unissued shares for any purpose in the future and is not required to obtain stockholder approval, your ownership position would be diluted without your further ability to vote on that transaction. In addition, our Articles of Incorporation provide that the Board can designate the voting rights, liquidation rights, dividend rights and other rights of holders of the preferred stock. The Board, therefore, could use the Preferred Stock to give an investor group disproportionate voting rights or priority over the common stock in the allocation of benefits from the operations of Roshing, including preferential dividends. The Board could also use the Preferred Stock to create a poison pill to prevent a takeover of Tianci that might be considered beneficial by the common stockholders.

 

Any sale of common stock by us in a future private placement offering could result in dilution to the existing Stockholders as a direct result of our issuance of additional shares of our capital stock. In addition, our business strategy may include expansion through internal growth by acquiring complementary businesses, acquiring, or establishing strategic relationships with targeted customers and suppliers. In order to do so, or to finance the cost of our other activities, we may issue additional equity securities that could dilute our Stockholders’ stock ownership. We may also assume additional debt and incur impairment losses related to goodwill and other tangible assets, and this could negatively impact our earnings and results of operations.

 

If you purchase our common stock in this offering, you will incur immediate and substantial dilution in the book value of your shares.

 

Investors purchasing our common stock in this offering will pay a price per share that substantially exceeds the pro forma as adjusted net tangible book value per share. As a result, investors purchasing shares in this offering will incur immediate dilution of $ [●] per share, representing the difference between our assumed public offering price of $ [●] per share (the midpoint of the price range set forth on the cover page of this prospectus) and our pro forma as adjusted net tangible book value of $ [●] per share as of [●]. For more information on the dilution you may experience as a result of investing in this offering, see “Dilution.”

 

A significant portion of our shares of common stock are restricted from immediate resale but may be sold into the market in the near future. This could cause the market price of our common stock to drop significantly, even if our business is doing well.

 

The sales of a substantial number of our shares of common stock in the public market could occur at any time. These sales, or the perception in the market that these sales may occur, could result in a decrease in the market price of our common stock. Immediately after this offering, we will have [●] outstanding shares of common stock, based on the number of 14,781,803 shares of common stock outstanding as of January 31, 2024 and as of the date of the prospectus, assuming no exercise of the underwriter’s over-allotment option. This includes the shares that we are selling in this offering, which may be resold in the public market immediately without restriction, unless purchased by our affiliates or existing stockholders. Of that amount, 14,529,788 shares of common stock are currently restricted as a result of securities laws and/or lock-up agreements but will be able to be sold after the closing of this offering, subject to securities laws and/or lock-up agreements. If held by one of our affiliates, the resale of those securities will be subject to volume limitations under Rule 144 of the Securities Act. See “Shares Eligible for Future Sale.”

 

 

 

 

If our common stock is listed on Nasdaq, we may not be able to satisfy the continued listing requirements of Nasdaq to maintain a listing of our common stock.

 

If our common stock is listed on Nasdaq, we must meet certain financial and liquidity criteria to maintain such listing. If we violate the maintenance requirements for continued listing of our common stock, our common stock may be delisted. In addition, our Board may determine that the cost of maintaining our listing on a national securities exchange outweighs the benefits of such listing. A delisting of our common stock from Nasdaq may materially impair our Stockholders’ ability to buy and sell our common stock and could have an adverse effect on the market price of, and the efficiency of the trading market for, our common stock. In addition, the delisting of our common stock could significantly impair our ability to raise capital. In addition, if we are unable to uplist our common stock to Nasdaq, our common stock will continue to trade on the OTC Pink Market, which is generally considered less liquid and more volatile than the Nasdaq Capital Market.

 

We may require additional capital to support growth, and such capital might not be available on terms acceptable to us, if at all. This could hamper our growth and adversely affect our business.

 

We intend to continue to make investments to support our business growth and may require additional funds, beyond those generated by the offering, to respond to business challenges, including the need to enhance our products and services, improve our operating infrastructure or acquire complementary businesses and technologies. Accordingly, we may need to engage in public or private equity, equity-linked or debt financing to secure additional funds. If we raise additional funds through future issuances of equity or convertible debt securities, our existing stockholders could suffer significant dilution, and any new equity securities we issue could have rights, preferences and privileges superior to those of holders of our common stock. Any debt financing that we secure in the future could involve restrictive covenants relating to our capital raising activities and other financial and operational matters, including the ability to pay dividends. This may make it more difficult for us to obtain additional capital and to pursue business opportunities, including potential acquisitions. We may not be able to obtain additional financing on terms favorable to us, if at all. If we are unable to obtain adequate financing on terms satisfactory to us when we require it, our ability to continue to support our business growth and respond to business challenges could be significantly impaired, and our business could be adversely affected.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

A CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

 

This prospectus contains forward-looking statements which relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as “may”, “should”, “expects”, “plans”, “anticipates”, “believes”, “estimates”, “predicts”, “potential” or “continue” or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including the risks in the section entitled “Risk Factors,” that may cause our or our industry’s actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements.

 

While these forward-looking statements, and any assumptions upon which they are based, are made in good faith and reflect our current judgment regarding the direction of our business, actual results will almost always vary, sometimes materially, from any estimates, predictions, projections, assumptions or other future performance suggested herein. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.

 

In addition to these assumptions and matters discussed elsewhere herein, important factors that, in our view, could cause actual results to differ materially from those discussed in the forward-looking statements include the following:

 

	·	future general dry bulk shipping market conditions, including fluctuations in charter rates;
	·	our future operating or financial results;
	·	our ability to procure or have access to financing, our liquidity and the adequacy of cash flows for our operations;
	·	changes in our operating expenses, including bunker prices, dry docking and insurance costs;
	·	our ability to meet requirements for additional capital and financing to grow our business;
	·	planned or pending acquisitions, business strategy and expected capital spending or operating expenses, including dry-docking, surveys, upgrades and insurance costs;
	·	changes in governmental rules and regulations or actions taken by regulatory authorities;
	·	our expectations regarding the availability of vessel acquisitions and our ability to complete acquisition transactions as planned;
	·	potential conflicts of interest involving members of our board of directors, or the Board, and senior management;
	·	potential liability from pending or future litigation;
	·	potential exposure or loss from investment in derivative instruments;
	·	forecasts of our ability to make cash distributions on our common units or any increases in our cash distributions;
	·	our ability to make additional borrowings and to access debt and equity markets;
	·	the strength of world economies;
	·	fluctuations in interest rates and foreign exchange rates;
	·	changes in seaborne and other transportation;
	·	general domestic and international political conditions;
	·	our business strategy and other plans and objectives for future operations;
	·	termination dates and extensions of charters; and
	·	potential disruption of shipping routes due to accidents or political events.

 

Any forward-looking statements contained herein are made only as of the date of this prospectus, and we undertake no obligation to update any forward-looking statement or statements to reflect events or circumstances after the date on which such statement is made or to reflect the occurrence of unanticipated events. New factors emerge from time to time, and it is not possible for us to predict all or any of these factors. Further, we cannot assess the impact of each such factor on our business or the extent to which any factor, or combination of factors, may cause actual results to be materially different from those contained in any forward-looking statement.

 

 

 

 

USE OF PROCEEDS

 

We estimate that we will receive net proceeds from this Underwritten Offering of approximately $[●], or approximately $[●] if the underwriter exercises their option to purchase additional shares in full, after deducting underwriting discounts and commissions, non-accountable expense allowance, and estimated offering expenses payable by us.

 

Each $1.00 increase (decrease) in the assumed public offering price of $[●] per share (the midpoint of the price range set forth on the cover page of this prospectus) would increase (decrease) the net proceeds to us from the Underwritten Offering by $[●], assuming that the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same, and after deducting the underwriting discounts and commissions, non-accountable expense allowance and estimated offering expenses payable by us. An increase (decrease) of 1.0 million in the number of shares we are offering would increase (decrease) the net proceeds to us from the Underwritten Offering by $[●], assuming the assumed public offering price remains the same, and after deducting the underwriting discounts and commissions, non-accountable expense allowance, and estimated offering expenses payable by us.

 

We plan to use the net proceeds of this Underwritten Offering as follows:

 

		Amount				Percent
USE OF PROCEEDS
Logistics promotion and marketing		$	–				40%
Working capital and general corporate purposes			–				40%
Recruitment of talented personnel			–				20%
TOTAL APPLICATION OF NET PROCEEDS		$	–				100.00%

 

The foregoing represents our current intention to use and allocate the net proceeds of the Underwritten Offering based upon our present plans and business conditions. The actual allocation of proceeds realized from the Underwritten Offering will depend upon our operating revenues and cash position and our working capital requirements and may change.

 

Our management, however, will have broad discretion in the way that we use the net proceeds of the Underwritten Offering. Pending the final application of the net proceeds of the Underwritten Offering, we intend to use the net proceeds of the Underwritten Offering primarily to enhance and expand our business operations and for general corporate purposes. See “Risk Factors—Risks Related to Our Common Stock— We have considerable discretion as to the use of the net proceeds from this Underwritten Offering and we may use these proceeds in ways with which you may not agree.” On page 39.

 

DIVIDEND POLICY

 

We do not anticipate declaring or paying, in the foreseeable future, any cash dividends on our capital stock. We intend to retain all available funds and future earnings, if any, to fund the development and expansion of our business. Any future determination regarding the declaration and payment of dividends, if any, will be at the discretion of our board of directors and will depend on then-existing conditions, including our financial condition, operating results, contractual restrictions, capital requirements, business prospects and other factors our board of directors may deem relevant. See also “Risk Factors— Risks Related to Our Common Stock— As we do not expect to pay dividends in the foreseeable future, you must rely on a price appreciation of our common stock for return on your investment.”

 

 

 

 

MARKET PRICE

 

Market Information

 

Shares of our common stock are quoted on the OTC Pink Market under the symbol “CIIT.” Such quotations reflect inter-dealer prices, without retail mark-up, mark-down, or commission and do not necessarily represent actual transactions.

 

The last reported sales price of our common stock which trades under the symbol “CIIT” on the OTC Pink Market on [●], was $[●].

 

Holders

 

As of January 31, 2024, there were 132 stockholders of record of our common stock. As of the date of this prospectus, there were 132 stockholders of record of our common stock.

 

CAPITALIZATION

 

The following table sets forth our capitalization as of January 31, 2024:

 

	(1)	On an actual basis; and
	(2)	on a pro forma as-adjusted basis, to give effect to the issuance and sale of [●] shares of common stock by us in the Underwritten Offering at an assumed public offering price of $[●] per share, the midpoint of the estimated public offering price range set forth on the cover page of this prospectus, after deducting the estimated underwriting discounts and commissions, non-accountable expense allowance and estimated offering expenses, assuming the underwriter’s over-allotment option has not been exercised.

 

 

 

 

The pro forma as adjusted information below is illustrative only and our capitalization following the completion of the Underwritten Offering is subject to adjustment based on the public offering price of our common stock. You should read this table in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and related notes included elsewhere in this prospectus.

 

		January 31, 2024
		Actual					Pro forma as adjusted (Over-allotment option not exercised)(1)
			$
Total long-term debt			–				[_]
Common Stock, par value $0.0001 per share, 100,000,000 shares authorized; 14,781,803 shares issued and outstanding; [_] shares issued and outstanding pro forma			1,478				[_]
Additional paid-in capital			882,424				[_]
Accumulated deficit			(211,172	)			[_]
Total stockholders’ equity attributable to the Company			672,730				[_]
Total capitalization			672,730				[_]

 

(1)

Reflects the sale of shares of common stock in the Underwritten Offering at an assumed public offering price of $[●] per share (the midpoint of the price range set forth on the cover page of this prospectus), and after deducting the estimated underwriting discounts and commissions, non-accountable expense allowance, and estimated offering expenses payable by us, assuming the underwriter’s over-allotment option has not been exercised. Additional paid-in capital reflects the net proceeds we expect to receive, after deducting the underwriting discounts and commissions, non-accountable expense allowance, and estimated offering expenses payable by us. We estimate that such net proceeds will be approximately $[●] assuming the underwriter has not exercised the over-allotment option. The as adjusted total stockholders’ equity of $[●] is the sum of the net proceeds of $[●] and the actual equity of $[●].

 

Each $1.00 increase (decrease) in the assumed public offering price of $ [●] per share (the midpoint of the price range set forth on the cover page of this prospectus) would increase (decrease) the pro forma as adjusted amount of total capitalization by $ [●], assuming that the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same, and after deducting underwriting discounts and commissions, non-accountable expense allowance and estimated offering expenses payable by us. An increase (decrease) of 1.0 million in the number of shares offered by us, as set forth on the cover page of this prospectus, would increase (decrease) the pro forma as adjusted amount of total capitalization by $ [●], assuming no change in the assumed public offering price per share as set forth on the cover page of this prospectus.

 

DILUTION

 

If you invest in our common stock, your interest will be diluted immediately to the extent of the difference between the public offering price per share you will pay in this Underwritten Offering and the adjusted net tangible book value per share of our common stock after this Underwritten Offering.

 

The historical net tangible book value of our common stock as of January 31, 2024 was approximately $672,370, or $0.05 per share, based upon 14,781,803 shares of common stock outstanding on such date. Historical net tangible book value per share represents the amount of our total tangible assets reduced by the amount of our total liabilities, divided by the total number of shares of common stock outstanding.

 

 

 

 

After giving effect to the Underwritten Offering, our adjusted net tangible book value of our common stock will be $[●] per share. Adjusted net tangible book value per share represents adjusted net tangible book value divided by the total number of shares outstanding after giving effect to the sale of the shares in this Underwritten Offering at the assumed public offering price of $[●] per share (the midpoint of the price range set forth on the cover page of this prospectus), after deducting underwriting discounts and commissions, non-accountable expense allowance, and other estimated offering expenses payable by us. This represents an immediate decrease in as adjusted net tangible book value of $[●] per share to existing Stockholders and an immediate dilution of $[●] per share to investors purchasing shares of common stock in the Underwritten Offering at the assumed public offering price.

 

The following table illustrates this dilution on a per share basis to new investors:

 

Assumed public offering price per share		$	–
Pro forma net tangible book value per share as of [●]		$	–
Increase in net tangible book value per share attributable to this Underwritten Offering		$	–
As adjusted net tangible book value per share after giving effect to this Underwritten Offering		$	–
Dilution in net tangible book value per share to purchasers in this Underwritten Offering		$	–

 

Each $1.00 increase (decrease) in the assumed public offering price of $ [●]per share (the midpoint of the price range set forth on the cover page of this prospectus) would increase (decrease) our pro forma as adjusted net tangible book value as of [●] after the Underwritten Offering by approximately $ [●] per ordinary, and would increase (decrease) dilution to new investors by $ [●] per share, assuming that the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same, and after deducting the underwriting discounts and commissions, non-accountable expense allowance and estimated offering expenses payable by us. An increase (decrease) of 1.0 million shares in the number of shares we are offering would increase (decrease) our pro forma as adjusted net tangible book value as of after the Underwritten Offering by approximately $ [●] per share, and would increase (decrease) dilution to new investors by approximately $ [●] per share, assuming the assumed public offering price per share, as set forth on the cover page of this prospectus remains the same, and after deducting the estimate underwriting discounts and commissions, non-accountable expense allowance and estimated offering expenses payable by us. The pro forma as adjusted information is illustrative only, and we will adjust this information based on the actual public offering price and other terms of the Underwritten Offering determined at pricing.

 

If the underwriter’s over-allotment option is exercised in full, our adjusted net tangible book value following the Underwritten Offering will be $ [●] per share, and the dilution to investors purchasing shares of common stock in the Underwritten Offering will be $ [●] per share.

 

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

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

 

 

 

 

Overview

 

On June 13, 2012, Freedom Petroleum Inc. was incorporated under the laws of the State of Nevada

 

On July 02, 2015, Freedom Petroleum, Inc. changed its name from Freedom Petroleum to Steampunk Wizards, Inc.(“Steampunk”).

 

On October 26, 2016, Steampunk completed a reverse merger, with Steampunk as the public shell company. Tianci merged with and into Steampunk. This transaction was carried out in accordance with the terms set forth in the Merger Agreement which took effective On November 9, 2016, and on the same day, Steampunk changed its name to Tianci International, Inc.

 

On August 3, 2017, Tianci 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 Tianci, and Chuah Su Chen and Chuah Su Mei (collectively, the “Purchasers”, and together with Tianci 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.

 

On March 3, 2023, Tianci acquired ownership of RQS United, pursuant to the Share Exchange Agreement dated March 3, 2023 among the Company, RQS United and RQS Capital, the prior owner of RQS United.

 

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”). Roshing was incorporated on June 22, 2011 and is primarily engaged in in logistics solutions, including shipping operation management. We also generate a small portion of our revenue from our non-core businesses that we carry on from Roshing, including software development services, consulting services, and the sale of electronic parts.

 

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

 

As a global logistics enterprise, Roshing focuses on ocean freight forwarding services, including container shipping and bulk goods shipping service.

 

For the container shipping, Roshing charters cargo space from shipping suppliers (such as shipowners, non-vessel operating common carriers) and then sub-charters that space to its customers (cargo owners, cargo agents). For bulk goods shipping, Roshing issues fixture notes to customers and then arranges the booking of ships, signing of charter parties with suppliers (such as shipowners). Roshing tailors a 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 during the six months ended January 31, 2024. Shufang Gao, our Chief Executive Officer previously worked for a globally renowned shipping conglomerate, with over 20 years of management experience. His expertise spans shipping operation management, and logistics transportation. Leveraging this experience, he has provided the Company with the managerial framework to expand its global logistics business, as well as access to relevant customer and supplier resources in the shipping industry. Roshing’s business is primarily carried out in Hong Kong and other locations in the Asia-Pacific region, mainly in Japan, South Korea, Vietnam. Roshing’s logistics services also include the shipment of goods to African countries.

 

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

 

 

 

 

Key factors that affect operating results

 

Our performance of operations and financial conditions have been, and are expected to continue to be, affected by a number of factors which are set forth below.

 

Economic Conditions in Hong Kong

 

We are a Nevada company with operations conducted by our subsidiary Roshing, which is based in Hong Kong. Accordingly, if Hong Kong experiences any adverse economic, political or regulatory conditions due to events beyond our control, such as local economic downturn, natural disasters, contagious disease outbreaks, terrorist attacks, or if the government adopts regulations that place restrictions or burdens on us or on our industry in general, our business, financial condition, results of operations and prospects may be materially and adversely affected.

 

International Trade Environment

 

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

 

Our Ability to Source Cargo Space from Vendors on a Cost-Efficient Manner

 

A significant portion of our cost of revenue is the fee that we paid to our vendors. As a result, our results of operation depend on our ability to source vendors in a cost-efficient manner by obtaining a favorable price and effectively control the cost.

 

Results of Operations

 

For the three and six months ended January 31, 2024 and 2023

 

		For the three months ended January 31,
		2024				2023				Change				Change Percentage
Revenues		$	2,894,128			$	98,730			$	2,795,398				2,831%
Cost of Revenues			2,555,024				78,800				2,476,224				3,142%
Gross profit			339,104				19,930				319,174				1,601%
Selling and marketing			133,763				6,001				127,762				2,129%
General and administrative			136,721				19,202				117,519				612%
(Loss) income from operations			68,620				(5,273	)			73,893				(1,401%	)
Provision for income taxes			7,141				(224	)			7,365				(3,288%	)
Net (loss) income			100,714				(5,497	)			106,211				(1,932%	)
Less: net (loss) income attributable to non-controlling interest			19,581				(550	)			20,131				(3,660%	)
Net (loss) income attributable to Tianci			81,133				(4,947	)			86,080				(1,740%	)

 

 

 

 

		For the six months ended January 31,
		2024				2023				Change				Change Percentage
Revenues		$	4,220,776			$	223,100			$	3,997,676				1792%
Cost of Revenues			3,647,895				187,355				3,460,540				1847%
Gross profit			572,881				35,745				537,136				1503%
Selling and marketing			235,834				8,160				227,674				2790%
General and administrative			255,426				34,214				221,212				647%
(Loss) income from operations			81,621				(6,629	)			88,250				(1331%	)
Provision for income taxes			(11,972	)			–				(19,337	)			–
Net (loss) income			94,602				(6,629	)			101,231				(1527%	)
Less: net (loss) income attributable to non-controlling interest			29,253				(663	)			29,916				(4512%	)
Net (loss) income attributable to Tianci			65,349				(5,966	)			71,315				(1195%	)

 

Revenues

 

During the three and six months ended January 31, 2024, our revenue increased significantly: to $2,894,128 for the three months ended January 31, 2024 from $98,730 for the three months ended January 31, 2023 and to $4,220,776 for the six months ended January 31, 2024 from $223,100 for the six months ended January 31, 2023. The increase was mainly attributable to the launch and growth of our global logistics service revenue, which contributed 97% of our revenue in the quarter ended January 31, 2024 and 95% of our revenue during the six months ended January 31, 2024.

 

Our revenues from our revenue streams are categorized as follows:

 

		For the Three Months Ended January 31,								For the Six Months Ended January 31,
		2024				2023				2024				2023
Global Logistics Service Revenue		$	2,819,056			$	–			$	4,000,776			$	–
Product Revenue			43,479				75,686				103,381				179,880
Other Service Revenue			31,593				23,044				116,619				43,220
Total		$	2,894,128			$	98,730			$	4,220,776			$	223,100

 

 

 

 

Cost of Revenues

 

Total cost of revenues increased from $78,800 to $2,555,024 for the three months ended January 31, 2024 and from $187,355 to $3,647,895 for the six months ended January 31, 2024. The increase was attributable to the growth of our global logistics services.

 

Our cost of revenues from our revenue categories are summarized as follows:

 

		For the Three Months Ended January 31,								For the Six Months Ended January 31,
		2024				2023				2024				2023
Cost of Global Logistics Service		$	2,504,764			$	–			$	3,534,734			$	–
Cost of Product			37,080				65,910				87,088				139,110
Cost of Other Service			13,180				12,890				26,073				48,245
Total		$	2,555,024			$	78,800			$	3,647,895			$	187,355

 

Our cost of revenues from global logistics services represented 98% and 97% of total cost of revenues during the three and six months ended January 31, 2024, respectively. We did not have any cost of global logistics service in the same period in 2023 as this is a new business sector. Cost of global logistics services primarily include the cargo space charged by direct ocean carriers, freight forwarders and ancillary logistics services fees.

 

Our cost of revenues from hardware product sales decreased by 44% and 37% for the three- and six-month periods ended January 31, 2024, respectively, reflecting the reduction in our revenue from hardware product sales.

 

Gross Profit

 

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

 

Margins

 

		For the Three Months Ended January 31,								For the Six Months Ended January 31,
		2024				2023				2024				2023
Global Logistics Service
Gross Profit Margin		$	314,292			$	–			$	466,042			$	–
Gross Profit Margin			11.1%				–				11.6%				–
Hardware Product Sales
Gross Profit Margin		$	6,399			$	9,776			$	16,293			$	40,770
Gross Profit Percentage			14.7%				12.3%				15.8%				22.7%
Other Services
Gross Profit Margin		$	18,413			$	10,154			$	90,546			$	-5,025
Gross Profit Percentage			58.3%				44.1%				77.64%				-11.6%
Total
Gross Profit Margin		$	339,104			$	19,930			$	572,881			$	35,745
Gross Profit Percentage			11.7%				20.2%				13.6%				16%

 

 

 

 

Our gross profit increased by $319,174 to $339,104 for the three months and by $537,136 to $572,881 during the three and six months ended January 31, 2024, respectively. The increase in gross profit was primarily due to the launch and growth of our global logistics service, as discussed above. For the three and six months ended January 31, 2024, our overall gross profit margin was 11.7% and 13.6%, respectively, a reduction from gross margins of 20.2% and 16.0% during the three and six months ended January 31, 2023. Our overall gross margins fell because the gross margins from our global logistics service were 11.1% and 11.6% during the three and six months ended January 31, 2024. We anticipate that the gross margin realized from logistics services is likely to increase in the future as demand picks up post-pandemic with relatively stable global logistics supply.

 

Operating Expenses

 

With the significant increase in our operations came a significant increase in our total operating expenses, which were $270,484 and $491,260 for the three and six months ended January 31, 2024, compared to $25,203 and $42,374 for the three and six months ended January 31, 2023, respectively. Our operating expenses primarily include payroll expenses, commissions, advertising, rent and professional fees relating to our obligations as a public company. The increase was mainly due to the increasing commission expense we paid to agents for referring global logistics customers, and professional fees for compliance services.

 

Income tax expense

 

Our income tax expenses amounted to $7,141 and $11,972 for the three and six months ended January 31, 2024, compared to $0 and $ (224) for the three and six months ended January 31, 2023, respectively. The change was due to the increase in revenue realized during the recent six-month period.

 

Net Income

 

The Company realized net income of $100,714 and $94,602 for the three months and six months ended January 31, 2024. However, since the Company owns only 90% of its operating subsidiary, Roshing, 10% of net income generated by Roshing was attributed to the minority interest. As a result, the net income for the three and six months ended January 31, 2024, attributable to the stockholders of Tianci International was $81,133 and $65,349, respectively. In comparison, during the three and six months ended January 31, 2023, the Company incurred net losses of $5,497 and $6,629 respectively. We believe our pivot to the logistics market gives our stockholders an opportunity to benefit from the opportunity presented by this market as the global economy recovers from the pandemic.

 

For the Years ended July 31, 2023 and 2022

 

		For the year ended July 31,
		2023				2022				Change				Change Percentage
Revenues		$	452,409			$	752,839			$	(300,430	)			-40%
Cost of Revenues			456,494				478,521				(22,027	)			-5%
Gross (loss) income			(4,085	)			274,318				(278,403	)			-101%
Selling and marketing			54,169				4,912				49,257				1003%
General and administrative			285,740				77,590				208,150				268%
(Loss) income from operations			(343,994	)			191,816				(535,810	)			-279%
Provision for income taxes			12,095				31,650				(19,555	)			-62%
Net (loss) income			(356,089	)			160,166				(516,255	)			-322%
Less: net (loss) income attributable to non-controlling interest			(14,879	)			16,017				(30,896	)			-193%
Net (loss) income attributable to Tianci			(341,210	)			144,149				(485,359	)			-337%

 

 

 

 

Revenues

 

During the year ended July 31, 2023, our revenue decreased by $300,430, or approximately 40%, to $452,409 for the year ended July 31, 2023 from $752,839 for the year ended July 31, 2022. We experienced decline in both product and service revenues in 2023 due to diminishing market demand and our reduction in marketing expenses. We expect our revenue to grow after we add logistics services to our lines of business.

 

Our revenues from our revenue categories are summarized as follows:

 

		For the Year Ended July 31,
		2023				2022
Product Revenues		$	294,880			$	500,500
Service Revenues (non-logistics)			157,529				252,339
		$	452,409			$	752,839

 

Cost of Revenues

 

Total cost of revenues decreased by $22,027, or approximately 5%, to $456,494 for the year ended July 31, 2023 as compared to $478,521 for the year ended July 31, 2022. Our cost of revenues from our revenue categories are summarized as follows:

 

		For the Year Ended July 31,
		2023				2022
Cost of Product		$	227,660			$	336,644
Cost of Service (non-logistics)			228,834				141,877
		$	456,494			$	478,521

 

The year-to-year decrease in our cost of revenues is primarily attributable to the decrease in our revenue. Thus, our cost of revenues from hardware product sales decreased to $227,660 for the year ended July 31, 2023, from $336,644 for the year ended July 31, 2022, as we experienced a 41% decrease in hardware product sales.

 

Nevertheless, overall cost of revenue fell only 5%, while overall revenue fell by 40%. The disparity occurred because our cost of revenues from software related services increased by $86,957 to $228,834 for the year ended July 31, 2023, from $141,877 for the year ended July 31, 2022. The increase in the cost of revenues from software related services resulted from our grant of common stock as an incentive to our internal software developers. We recorded the $144,000 fair value of the shares as a cost of services.

 

Gross Profit

  

We had a gross loss of $4,085 for the year ended July 31, 2023, compared to a gross profit of $274,318 for the year July 31, 2022, which was primarily due to the reduction in revenue without a corresponding reduction in our overall cost of revenues, as discussed above.

 

The gross profit margin of hardware products decreases by 9.9% to 22.8% for the year ended July 31, 2023, from 32.7% for the year ended July 31, 2022, which was primarily due to rising raw material cost and increasing market competition, which put downward pressure on our pricing. Our software related services resulted in a 45.3 % gross loss for the year ended July 31, 2023, again primarily due to the stock-based compensation issued to our developers.

 

 

 

 

Operating Expenses

 

There was significant change in our total operating expenses, which were $339,909 and $82,502 for the year ended July 31, 2023, and 2022, respectively. Our operating expenses primarily include payroll expenses, advertising and rent. The increase was partially due to the stock compensation valued at $66,000 that we issued to the selling and general administrative personnel for their continued service after the reverse merger. The professional fees and other costs incurred in connection with the Share Exchange in March 2023 also increased our operating expenses for fiscal year 2023.

 

Income tax expense

 

Our income tax expense amounted to $ 12,095 and $ 31,650 for the year ended July 31, 2023, and 2022, respectively. The change was mainly due to the decrease in profits subject to taxation in Hong Kong.

 

Liquidity and Capital Resources

 

In assessing our liquidity, we monitor and analyze our cash on-hand and our operating expenditure commitments. Our liquidity needs are to meet our working capital requirements and operating expenses obligations. As of January 31, 2024, we had working capital of $692,636, as our cash amounted to $799,377, our current assets were $886,140 and our current liabilities were $193,504. To date, we have financed our operations primarily through capital contributions and advances from stockholders and by private placement of our securities. At January 31, 2024 we owed $30,215 to related parties.

 

We believe that our liquidity and working capital will be sufficient to sustain our business operation for the next twelve months. We may, however, need additional cash resources in the future if there are changes in business conditions or other developments or if the Company finds and wishes to pursue opportunities for investment, acquisition, capital expenditure, or similar actions.

 

We started providing global logistics services during the first fiscal quarter ended October 31, 2023. Although the business grew fast during its first six months, we cannot assure you if the growth is able to be sustained. In addition, we may require significant capital expenditure for developing our position in the market, including charter size. If we determine that our cash requirements exceed the amount of cash and cash equivalents we have on hand at the time, we may seek to issue additional equity or debt securities or obtain credit facilities. The issuance and sale of additional equity may result in dilution to our stockholders. The incurrence of indebtedness would result in increased fixed obligations and could result in operating covenants that would restrict our operations. Our obligation to bear credit risk for certain financing transactions we facilitate may also strain our operating cash flow. We cannot assure you that financing will be available in amounts or on terms acceptable to us, if at all.

 

The following table summarizes the key components of our cash flows for the six months ended January 31, 2024 and 2023, and for the year ended July 31, 2023 and 2022.

 

		For the six months ended
		January 31,
		2024				2023
Net cash provided by operating activities		$	109,822			$	217,000
Net cash used in investing activities			–				–
Net cash provided by (used in) financing activities			433,213				(63,305	)
Net change in cash and restricted cash		$	543,035			$	153,695

 

		For the year ended
		July 31,
		2023				2022
Net cash provided by (used in) operating activities		$	324,581			$	(84,161	)
Net cash used in investing activities			–				–
Net cash provided by (used in) financing activities			(89,476	)			85,148
Net change in cash and restricted cash		$	235,105			$	987

 

 

 

 

Operating activities

 

Net cash of $109,822 provided by operating activities for the six months ended January 31, 2024, was primarily the result of net income of $94,602. While an increase of $ 86,513 in accounts receivable during the period served to reduce the cash provided by our operations, we offset that item with a $89,040 increase in accrued liabilities.

 

Net cash of $217,000 provided by operating activities for the six months ended January 31, 2023, was primarily the result of an decrease in accounts receivable of $540,914, which was partially offset by the decrease of $325,062 in accounts payable.

 

Despite our net loss of $356,089, net cash was provided by operating activities for the year ended July 31, 2023 primarily because our accounts receivable decreased by $737,663 during the period, as we made efforts on the collection process. The decrease was offset by a decrease of $447,292 in our accounts payable balance attributable to payment to our vendors. In addition, our operating loss of $356,089 included $210,000 in various noncash items.

 

Net cash was used in operating activities for the year ended July 31, 2022 primarily because our accounts receivable increased by $737,620 during the year, as we offer long payment terms to our customers, typically 6 months after delivery of service or products. Nevertheless, cash used in operations during the fiscal year was only $84,161, as we increased our accounts payable balance by $444,944 attributable to long payment terms from our vendors, recorded net income of $160,166, and increased deferred income tax expense, inventory, and income taxes payable for a total amount of $ 48,349.

 

Investing activities

 

The Company has no investing activities during either of the six-month periods ended January 31, 2024 and 2023.

 

The company has no investing activities for the years ended July 31, 2023 and 2022.

 

Financing activities

 

Net cash provided by financing activities for the six months ended January 31, 2024, was $433,213. This was attributable to proceeds received from private offering of common stock in that amount.

   

Net cash of $63,305 used in financing activities during the six months ended January 31, 2023, was primarily attributable to our repayment of a working capital loan of $296,884 during that period. Other than existing cash resources, the funds used to repay the loan were derived from a capital contribution received amounting to $65,650, collection of a subscription receivable amounting to $50,000, and a working capital advance from a related party amounting to $61,490. Our cash balance was also aided by reason of the direct payment of operating expenses by shareholders amounting to $47,360, and the payments of rent for our premises in Shenzhen China by related parties amounting to $9,079.

 

Net cash used in financing activities for the year ended July 31, 2023 was $89,476, which was primarily attributable to our repayment of a working capital advance by a related party in the amount of $341,885. Cash outflow was offset by the $31,490 in working capital advance from related parties, $84,503 in operating expenses that were paid directly by shareholders, the payments of Shenzhen China rent by related parties amounting to $16,580, the receipt of a subscription receivable of $50,000, and a capital contribution of $65,650.

 

 

 

 

 

Net cash provided by financing activities for the year ended July 31, 2022, was primarily attributable to a working capital advance from a related party amounting to $2,007, the operating expenses that are paid directly by shareholders amounting to $77,375, and the payments of Shenzhen China rent by related parities amounting to $20,046. Cash inflow was offset by repayment of a working capital advance to related party in the amount of $14,280.

 

Contractual Obligations and Commitments

 

We had no contractual obligations and commitments during any of the periods presented other than the Lease Commitment disclosed in Note 7 “Contractual Obligations and Commitments” of the Company’s consolidated financial statements.

 

Critical Accounting Estimates

 

Our financial statements and accompanying notes have been prepared in accordance with U.S. GAAP. The preparation of these financial statements and accompanying notes requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis of making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources.

 

In connection with the preparation of our financial statements for the three and six months ended January 31, 2024, there was no accounting estimate we made that was subject to a high degree of uncertainty and was critical to our results.

 

Recently Issued Accounting Pronouncements

 

The Company considers the applicability and impact of all accounting standards updates (“ASUs”). Management periodically reviews new accounting standards that are issued. The Company does not believe that any recently issued but not yet effective accounting standards, if currently adopted, would have a material effect on the Company’s consolidated balance sheets, statements of operations and comprehensive income and statements of cash flows.

 

 

 

 

 

 

 

 

DESCRIPTION OF BUSINESS

 

Overview

 

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

 

As a logistics shipping operator, Roshing focuses on ocean freight forwarding services, including container shipping and bulk goods shipping service.

 

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

 

Roshing currently does not own or operate any transportation assets. By leveraging our senior management’s expertise in the global logistics industry and adopting an asset-light strategy at the early stage, Roshing has seen a significant growth in logistics revenue during the six months ended January 31, 2024. 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. Roshing’s business is primarily carried out in Hong Kong and other locations in the Asia-Pacific region, mainly in Japan, South Korea, Vietnam. Roshing’s logistics services also include the shipment of goods to African countries.

 

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

 

Our Mission

 

Creating Value

 

As a global logistics enterprise, our primary mission is to provide customers with efficient, reliable, and safe shipping services that create value.

 

Promoting Global Trade & Connectivity

 

As an important component of global trade, global logistics enterprises also have a mission to promote the development and connectivity of global trade, and promote the prosperity and development of the global economy, by facilitating cross-border operations for businesses. We are committed to cultivating a robust global network, both online and offline. The online part involves connecting with customers and suppliers through social media platforms. The offline part includes acquiring potential customer through exhibitions, recommendations, and other direct interactions.

 

 

 

 

Undertaking Social Responsibility

 

We believe that shipping companies also need to be socially responsible, pay attention to environmental protection, social welfare, promote sustainable development and contribute to the prosperity and development of society.

 

We strive to optimize shipping routes and transportation plans to reduce energy consumption and emissions. Moreover, we will encourage our supply chain partners to adopt greener transportation and packaging methods, contributing to the sustainability of the entire industry. We also seek to actively participate in environmental projects and initiatives and collaborate with government and non-governmental organizations to focus on environmental protection.

 

Our Services

 

Our operations conducted through Roshing include the following services to our customers.

 

1. Global Logistics Services

 

Our global logistics services provided through Roshing accounted for the vast majority of our revenue for the six months ended January 31, 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, we provide 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:

 

i. Customer Service and Support

 

	·	Customer Consultation: Implementing strategies to identify, assess, and mitigate risks associated with cargo transportation.
	·	Customized Solutions: Implementing strategies to identify, assess, and mitigate risks associated with cargo transportation.

 

ii. Contract and Quotation Management

 

	·	Transport Contracts: Implementing strategies to identify, assess, and mitigate risks associated with cargo transportation.
	·	Quotation Services : Providing quotes to customers based on the number of containers, size of containers, routes, shipping dates and various other factors.

 

iii. Financial Management

 

	·	Cost Management: Managing and optimizing the costs associated with cargo transportation.
	·	Billing and Collection : Handling the billing process and ensuring the timely collection of payments.

 

iv. 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:

 

i. Customer Service and Communication

 

Providing ongoing support and clear communication to customers throughout the shipping process, addressing any queries or issues promptly.

 

ii. Fixture Note and Quotation Management

 

	·	Fixture Note: Managing and maintaining transport contracts to ensure clear and effective agreements for bulk shipping.
	·	Quotation Services: Offering detailed quotations for bulk shipping services, helping customers understand and proposing plans for budget control.

 

iii. Chartering: Arranging the chartering of bulk cargo vessels including negotiating terms and conditions.

 

iv. Ship Operations Management

 

Overseeing and supervising the day-to-day operations of the ships involved in bulk cargo transportation.

 

v. Cooperation and Coordination

 

Facilitating collaboration and coordination between various stakeholders involved in the shipping process, such as port authorities, cargo handlers, and other service providers.

 

vii Financial Management

 

	·	Cost Management: Monitoring and optimizing the costs associated with bulk cargo transportation to ensure efficiency and cost-effectiveness.
	·	Billing and Collection: Handling the billing processes and ensuring timely collection of payments.

 

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

 

·

Roshing has a long-term cooperation agreement with container suppliers which grants it priority for container space and preferential prices.

 

b. Customer source and inquiry quotation

 

	·	Current container shipping logistics customers of Roshing mainly come from the direct business contacts of the Company’s management. Roshing’s customers are mainly cargo owners, cargo agents, international trade companies and large commodity buyers. At present, the main cargo types of container shipping include: auto parts, electronics and electrical products, clothing and shoes, small consumer products, etc. The primary routes are from Asia to Africa, America, Europe and Australia.
	·	Customer Inquiry: The customer usually makes an inquiry to Roshing based on the product name, category, quantity, volume, weight, departure port, destination port, arrival time or delivery time of the goods.
	·	Quotation: Roshing generates shipping quotes for its clients based on the size, type and quantity of containers, the customer’s date, shipping providers and route needs.

 

c. Contract signing and fee collection

 

	·	The customer places a confirmation order with Roshing, usually in the form of booking order which includes route, shipper, consignee, name of vessel, loading port, discharge port, container type, container quantity, cargo quantity, cargo description, gross weight and other information.
	·	Roshing issues an invoice and debit note to the customer for fee collection.

 

d. Container freight payment

 

	·	Roshing notifies the supplier (shipowner, ship carrier, non-vessel operating common carriers and freight forwarder) to confirm the booking information, and the supplier issues an invoice to Roshing for payment.
	·	Roshing makes payment to the supplier and ensures that the supplier completes the shipment according to the agreed upon terms.

 

e. Transportation arrangements

 

	·	The customer is responsible for loading goods, container trailers, customs declaration, purchase of insurance and delivery of containers to the container yard at the loading port prior to the shipping cutoff date.
	·	After the customer completes the customs declaration and releases the products, the shipowner loads the containers onto the vessel and ships them to the designated port of destination according to the selected route. During this period, Roshing notifies the shipowner or the freight forwarder to issue a sea waybill or proforma to the customer detailing the condition that the freight has been received.
	·	After discharging the goods at the destination port, the shipowner will notify the local freight forwarder designated by the customer to complete the customs clearance of the goods and land transportation of the containers to their destination.

 

 

 

 

f. Follow up work

 

·

Roshing oversees the shipment process to ensure it meets the customer’s satisfaction.

 

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

 

	·	The management and business teams of Roshing promote its services, develop customers and obtain cooperation opportunities through customer visits and direct sales.
	·	Roshing gets referrals from customers and agents. Roshing then pays a sales commission to the referring customers and agents.

 

 

 

 

b. Customer inquiry and quotation

 

	·	Inquiry: The customer puts forward the shipping requirements to Roshing, including the goods to be transported, the type and quantity of the goods, the characteristics of the goods, the transportation time, the destination port, any special arrangements and other needs.
	·	Customized quotation: Roshing carries out pre-quotation work based on customer needs, such as shipping route supply resource inquiry and shipping demand matching. Roshing then confirms the shipping plan and cost quote with the customer.

 

c. Contract signing and payments

 

	·	Contract signing: Roshing usually enters a fixture note with the customer, which contains the details of the specifications, quantities, transit times, prices, pricing methods, and others.
	·	Payment: Roshing calculates the sea freight according to the fixture note and issues an invoice to the customer for the sea freight payment.

 

d. Supplier’s selecting and chartering

 

	·	When selecting shipping supplier, Roshing considers the cargo characteristics, ship characteristics, cargo type & quantity, transportation requirements and shipment date.
	·	When signing a fixture note with its customer, Roshing will sign a fixture note with the shipping supplier as well. The shipping suppliers are usually shipowners or ship carriers.

 

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:

 

	·	Merchandise packing, land transportation, warehousing, port operation, customs clearance, loading operation and other work shall be completed by the cargo owner or its agency.
	·	Usually after the goods are loaded on board, the agency obtains the captain’s receipt and issues the bill of landing.
	·	Roshing’s responsibilities include ocean transportation of the goods from the time the goods are loaded onboard, onboard storage management, transportation process, sea navigation planning and adjustment, risk management, until the arrival of the goods at the destination port, and cargo unloading operations. Roshing’s obligation of carriage is completed when the merchandise is unloaded from the ship.

 

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 be 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.

 

Other Product & Services

 

	·	Electronic Device Hardware: Roshing is a distributor of hardware components for electronic devices and generates revenue from reselling these components and is not involved in product development and manufacturing. The main products include Wi-Fi modules, Bluetooth modules, 4G network modules, LED screens and touch screens, and software technical services. Roshing’s main customers are oversea traders, direct traders of hardware components, companies engaged in the assembly and sale of finished products and private label entities seeking electronic component procurement with light customization.
	·	Software Technical Services: Roshing provides technical consulting and training services to help customers, generally its existing customers, to better understand and properly use its customized software and related hardware. Roshing also provides software maintenance service to keep customer’s software up to date and assists customers in promoting business with ongoing marketing support.
	·	Business Consulting Services: Roshing provides business consulting services to help customers apply for immigration and non-immigration visas. The Company is responsible for performing background checks, assessment, and preparing related application paper works.

 

 

 

 

INDUSTRY AND MARKET OPPORTUNITIES

 

Logistics Market

 

The classification of the logistics service providers in the global logistics industry

 

 

Global logistics includes: Air Transport Logistics, Land Transport Logistics, Marine Transport Logistics, Terminal Operator etc.. Among them, the Marine Transport Logistics is usually divided into shipping owner (holding ship assets) and shipping operator (not holding ship assets). The shipping operator includes Container Shipping Operator/ Bulk Shipping Operator/ Liquid Shipping Operator/ Others Shipping Operator. The main business of Roshing belongs to Container Shipping Operator and Bulk Shipping Operator categories.

 

Shipping operators, such as Roshing, play a key role in the global logistics industry. Their efficient operation management and services not only ensure the safety and punctual delivery of goods, but also play an important role in optimizing the logistics efficiency of global trade.

 

We believe the outlook for the shipping industry is strong. According to BIMCO (BIMCO is the world’s largest international shipping association, with over 2,000 members in more than 130 countries, representing 62% of the world’s tonnage.), ship supply is expected to grow on average 9.1% in 2024 and 4.1% in 2025. Ship deliveries are expected to hit a new record high in 2024, beating the record set in 2023. The fleet is expected to grow 14.9% between the end of 2023 and the end of 2025. Cargo volumes are expected to grow 3-4% in both 2024 and 2025.

 

 

 

 

Macro Economy Growth

 

According to the International Monetary Fund’s (IMF) estimates, the global economy should grow 3.1% in 2024 and 3.2% in 2025, slightly higher than the 3.0% estimated for 2023, indicating a modest but positive trend in global economic expansion. In our primary area of operations in East and Southeast Asia, the growth is expected to be 4.0% in 2024 and 3.8% in 2025.

 

 

According to BIMCO: Iron ore shipments are estimated to grow 2.5% from 2023 to 2025. BIMCO estimates that iron ore shipments will grow by 1-2% in 2024 and 0.5-1.5% in 2025. They will benefit from a 1.7% and 1.2% increase in global steel demand in 2024 and 2025 respectively as forecast by the World Steel Association.

 

 

 

 

Strong demand in the bulk cargo market

 

We believe that there is strong demand in the bulk cargo market and challenges and opportunities in the container shipping industry. The global bulk carrier market is driven by factors such as increased demand from China and export bans from Indonesia. Container carriers profited from disruptions in the Red Sea, with some routes experiencing skyrocketing freight rates.

 

In mid-January 2024, a 40-day blockade in the Red Sea resulted in multiple detours of vessels from Africa, absorbing about 6% of global capacity. As a result, spot container freight rates on some routes almost doubled, with freight rates from China to Northern Europe rising by 237% since December 1st, according to the Shanghai Containerized Freight Index (SCFI). Additionally, it is forecasted that container capacity shortages in China will persist from the start of the Chinese Spring Festival in 2024, which may take months to resolve. With vessel supply remaining lower for an extended period, freight rates have been driven up, enabling shipowners to profit from prolonged disruptions in global trade.

 

Other Products & Services Market

 

Electronic Device Hardware Components Products Sales & Software Technology Consulting Services

 

The market for hardware components of electronic devices, including Wi-Fi modules, Bluetooth modules, 4G network modules, LED screens and touch screens, and other electronic components is highly competitive. The software technology services market is also a highly competitive market.

 

We believe that obtaining a competitive advantage in the electronic device hardware components products and software technology services markets requires the following:

 

Customization needs of existing customers: As the market continues to segment, we believe that the electronic product market has entered a period of highly integrated hardware and software. Some existing customers, as well as those requiring small-batch customization or product testing, have a certain demand for small and medium-sized batch customized hardware construction; software debugging and cooperation services.

 

Additionally, in a competitive market, we believe that cost control is crucial for the survival and growth of enterprises. Faced with customized demand orders, enterprises are trying to minimize expenses by optimizing supplier selection, refining supply management practices, and exploring avenues for collaboration with customers.

 

Business Consulting Services

 

At the end of 2023, in line with the continuous adjustment of the Talent Admission & Employment Policy in Hong Kong, such as talent scheme and other employment opportunities, we expect that the talent introduction consulting business may be revised after the second half of 2024, and the consulting services for Mainland Chinese residents may shrink or end. Predictably, providing some consulting services for local enterprises will be a major part of our consulting business.

 

At the same time, as an important business and financial center in Asia, Hong Kong has also attracted many companies to set up branches or expand operations there. This growth has provided a broad market space for local enterprises to serve. At the same time, we also take advantage of Hong Kong’s localization to provide some Hong Kong enterprises with corporate management, business services, administrative affairs consulting and other services. It is expected that this consulting business will evolve into a long-term service, fueled by the growing base of local corporate clients in Hong Kong, offering ample room for expansion.

 

 

 

 

Our Strengths

 

	·	We have a comprehensive service portfolio and can provide customers with a range of solutions.
	·	We focus on the customer demand and ensure our services are efficient.
	·	We maintain a strong global presence with extensive networks of shipping companies and customers (such as e-commerce companies, commodity trading companies, and manufacturers)
	·	We have a founder-led management team with strong operational track records and capital market backgrounds.

 

Global Logistics Business Strengths

 

	·	Specialized Services: We boast a professional team that uses its collective experience and connections to provide clients with tailored, efficient, and reliable global logistics solutions. 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 for expanding its global logistics business, as well as access to relevant customer and supplier resources in the shipping industry. Based on our collective knowledge and experience, we are able to tailor our services according to the needs of our customers’ needs, including route optimization, vessel selection, port logistics scheduling, and stringent cost management.
	·	Regional Network: With the collective experience of our team, we have cultivated a network of valuable partnerships, particularly in our core regions of Japan, South Korea, and Vietnam. By focusing our efforts on these regions, we are able to offer tailored solutions that leverage our deep understanding of local regulations and market dynamics. This allows us to provide efficient and cost-effective services to our clients, facilitating logistics operations across borders. Our collaborative approach and dedication make us a trusted partner for businesses seeking reliable logistics solutions in the global marketplace.
	·	Stable Transport Capacity and Reserved Space: We maintain enduring and strong relationships   with major shipping suppliers, allowing us to secure vessel space in advance and ensure reliable and timely delivery of clients’ goods. This stability in transport capacity is particularly beneficial for clients with recurring shipping needs.

 

Other Products & Services Strengths

 

Electronic and Hardware Products Trading & Software Technology Services Strengths

 

	·	Integration capability: Hardware trading and software technology services, as the cornerstone of our company for a long time, we are good at integrating different resources and stakeholders, including suppliers and distributors, with our own team’s customer service experience to provide services.
	·	Cost optimization: Through careful management and process optimization, we help our customers to minimize the cost of procurement phase, especially controlling the cost of some customized and small batch orders.

 

 

 

 

Business Consulting Services Strengths

 

	·	Professional expertise and experience: Our consulting team consists of experienced senior consultants and senior personnel with expertise in navigating the talent admission and employment schemes in Hong Kong.
	·	Tailored solutions: We give priority to planning solutions based on the characteristics, needs and goals of each corporate client.
	·	Objectivity: As an independent third-party consultant, we provide an objective and impartial perspective on the policy issues and business consulting issues of our clients and provide unbiased advice and solutions.
	·	Comprehensive project management ability: Members of our consulting department are good at customer project management and can cooperate with corporate clients to carry out medium and long-term enterprise management, business services, administrative affairs consulting and other related services, so as to achieve the expected consulting results for clients.

 

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 this Underwritten 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.

 

Not only have we increased the size of our shipping business, we intend to continue to grow our shipping operation business by expanding global routes in addition to focusing on maritime shipping in the Asian region.

 

	·	Global logistics Network Expansion and Collaborative Partnerships: We aim to broaden our global presence to South America and Africa and forge strategic alliances with regional partners to ensure that we remain agile and responsive to the dynamic demand of the market.
	·	Risk Management and Compliance Adherence: We intend to maintain compliance with pertinent international and local regulations as a priority to mitigate associated risks. Additionally, we have designated a risk management strategy to effectively address and mitigate potential risk issues, ensuring that we operate in accordance with regulatory requirements and maintain the highest standards of corporate governance.
	·	Environmental Responsibility and Sustainable Practices: We are committed to environmental responsibility and sustainable practices, and as such, we plan to prioritize environmentally friendly ship cooperation. Through the optimization of transportation routes and the reduction of carbon emissions, we aim to further demonstrate our dedication to sustainability and contribute to a greener future.
	·	Continuous Training and Development: We intend to prioritize continuous training and development for our team members to uphold professionalism and ensure their skills remain aligned with industry advancements.

 

 

 

 

Global Logistics Business

 

Market Positioning and Route Optimization

 

	·	Precise Target Market Positioning: Based on the actual situation and requirements of the Company and our clients, we select the main segments of the shipping market to focus on, such as bulk cargo or containers, and provide customized services tailored to different market demands.
	·	Optimization of Route Layout: Dynamically adjust shipping routes based on global trade flows and customer demands, increase or optimize the allocation of capacity on key routes and improve route coverage and timeliness.

 

Capacity Management and Cooperative Alliances

 

	·	Reasonable Allocation of Capacity Resources: Develop plans for chartering based on market demand and supply trends, to optimize the allocation of capacity resources.
	·	Strengthen Cooperation and Alliances: Actively establish close cooperative relationships with other shipping companies, shipping agents, ports, logistics providers, etc., to reduce costs and improve efficiency through resource sharing and mutual benefit.

 

Service Innovation and Quality Enhancement

 

Strict Control of Service Quality: Strengthen internal management, improve employee quality, ensure that service quality and safety levels meet international standards, and build a good corporate image.

 

Sustainable Development

 

Formulation of Sustainable Development Strategies: Integrate environmental protection concepts into the Company’s long-term development plans and achieve sustainable development goals through measures such as optimizing routes and reducing emissions.

 

Risk Management and Response Mechanisms

 

Establishment of Sound Risk Management Systems: Establish sound risk warning and prevention mechanisms for various risks faced by the shipping market, such as freight rate fluctuations, exchange rate changes, and policy adjustments.

 

Formulation of Flexible Response Strategies: Timely formulate or adjust operational strategies based on market changes and policy adjustments to ensure stable business development.

 

Other Products & Services

 

1. Electronic Device Hardware Components Products Sales & software technology Consulting services

 

	·	Both electronic device hardware and software technology services are facing strong competition and new challenges. Our strategy is to:
	·	Cooperate with customers to complete personalized customized products;
	·	Continuously optimize suppliers’ purchasing costs, such as continuously control suppliers’ preferential prices, yield and quality;
	·	Maintain interaction and contact with existing customers to gain customer relationship and business opportunities.

 

 

 

 

2. Business Consulting Services

 

Our personal and corporate services business plan can be further refined by considering the following strategies:

 

a. Technological Innovation and Digital Transformation

 

Introducing Advanced Technology: With the advancement of technology, consider incorporating advanced technologies such as artificial intelligence and big data analytics to optimize personal consulting and enterprise services. For example, leveraging AI technology to automate certain document tasks to improve processing efficiency.

 

Digital transformation: Strengthen the Company’s digital transformation by establishing an online service platform so that customers can easily access information and submit their consultation needs. Through online channels, the Company can provide services such as online consultation and progress tracking.

 

b. Deepening Cooperation and Alliances

 

Establishing agency cooperation with law firms, accounting firms, financial institutions, real estate agencies, overseas study agencies and other related industries, and obtain some new customer channels through customer recommendation and introduction mechanism.

 

Joining industry associations and alliances: actively participate in and join relevant industry associations and alliances and enhance the Company’s industry influence and competitiveness through sharing resources, information and experience.

 

c. Customer Experience and Relationship Management

 

Enhancing Customer Experience: Continuously optimize the customer service process, emphasizing detail and personalized service to ensure customers have a good experience throughout the consulting process and enterprise service process.

 

Customer Relationship Management: Establish a comprehensive customer relationship management system, regularly communicate with customers, understand their feedback and changing needs, and adjust service strategies promptly.

 

d. Risk Management and Compliance

 

Strengthen risk management: Establish comprehensive risk management mechanisms for potential risk points in the process of individual customer consultation and enterprise service to ensure the steady development of business.

 

Maintain compliance: closely monitor changes in relevant policies and laws and regulations in Hong Kong and internationally to ensure that the Company’s business always complies with legal requirements and avoids compliance risks.

 

 

 

 

Our Growth Plan

 

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 this Underwritten 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.

 

Not only have we increased the size of our shipping business, we intend to continue to grow our shipping operation business by expanding global routes in addition to focusing on maritime shipping in the Asian region. Our growth plan includes:

 

Growth plan for container shipping operator service

 

a. Increase the number of container shipping customers

 

	·	Expand direct customers: Increase customer development activities by the Company’s management and business team.
	·	Our goal is to increase the number of container shipping customers by approximately 50% annually.

 

b. Increase industry acquisition

	·	Acquire a container operator: We hope to identify and acquire an appropriate container shipping operating company with annual revenue of more than $10 million, that has experience operating routes in South America and Africa, a good reputation in the market and long-term customer relationships.
	·	Increase the Dry Bulk and Container business of subsidiaries outside Hong Kong: We hope to expand our operations outside Hong Kong to include new dry bulk markets, particularly in South America and Africa. We also hope to increase coverage of major global trade routes, enhancing market diversification and risk resilience.

 

We hope to expand the scale of the charter fleet to support increased operations and market reach.

 

Growth plan of Bulk shipping operator service

 

a. Increase the number of bulk shipping customers

 

	·	Online: Increase contact with customers via Internet/communication. Offline: Establish contact with new customers by participating in exhibitions and increasing channel agent cooperation.
	·	Expand direct customers: Increase customer development activities by the Company’s management and business team.
	·	Our goal is to increase the number of bulk shipping customers by approximately 30% annually.

 

 

 

 

b. Increase the number of ship charters and freight capacity

 

·

We hope to increase the number of ship charters from our current monthly transport of bulk and general cargo of 2-3 ships with a volume of about 4,000-10,000 tons to 4-5 ships per month by 2025, with an approximate volume of about 8000-15,000 tons.

 

iii. Increase the number of routes

 

·

At present, Asia is our primary area of operation. We seek to expand our area of operations and increase the number of routes to South America and Africa in the future.

 

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.

 

Marketing and Promotion Activities

 

For the six months ended January 31, 2024, Roshing maintains its marketing and sales team in its corporate office with four employees.   Roshing implements the following strategies when engaging in marketing and customer acquisition:

 

	·	Market positioning: Roshing targets specific customer demographics, analyzes market segments and the needs of its target customers, and identifies high-value customer segments. For example, in the shipping/logistics sector its potential clients include import/export companies, manufacturing enterprises, e-commerce platforms, and distributors for large logistics companies. In the electronic device hardware trading sector, its clients are typically medium-sized non-Hong Kong traders and direct hardware and finished product sales brands. In the consulting services sector, its target groups encompass companies with software technology needs, business owners with domestic and international operations requirements, and clients seeking cross-border business consulting services.
	·	Marketing mix strategies: Roshing develops comprehensive marketing mix strategies, encompassing product, pricing, and distribution strategies. This involves offering a diverse range of services to meet varying customer needs, devising reasonable pricing strategies based on customer demands and market competition, and establishing diverse sales channels including direct and agent sales.

 

 

 

 

	·	Customer relationship management: Roshing establishes robust customer relationship management systems through regular customer communication and satisfaction surveys to understand customer needs and feedback. This enables us to adjust service strategies promptly, thereby enhancing customer satisfaction and loyalty.
	·	Industry resources: Roshing conducts interviews and business introductions targeting potential customers leveraging the industry resources and customer base accumulated by its management and teams.
	·	Digital transformation: Roshing leverages technologies such as big data and customer management systems for customer data analysis, enabling precision marketing through online channels like social media and e-commerce platforms. This facilitates the expansion of its customer base and enhances marketing effectiveness.

 

For consulting service clients, Roshing’s future plans include increasing customer acquisition through social media, community marketing, website content, and participation in thematic exhibitions.

 

Customers

 

For the six months ended January 31, 2024, two customers accounted for 68.4% and 16.9% of the Company’s total revenues. Both of them belong to the logistics business section. For the six months ended January 31, 2023, four customers accounted for 23.3% 26.9%, 16.2% and 13.4% of the Company’s total revenues.

 

Roshing’s customer structure varies according to its various business sectors.

 

Global Logistics Business

 

Roshing’s customer structure in the shipping and logistics business is highly diversified and encompasses various entities:

 

	·	Cargo Owners: These are businesses or individuals requiring the transportation of goods. They may need to charter vessels for transporting their cargo.
	·	Cargo Agents: These agents are engaged by diverse cargo owners to implement logistics solutions and often have significant booking demands.
	·	Logistics Companies: Regular patrons of shipping companies, these firms offer cargo transportation services to clients. They collaborate with shipping companies to tailor shipping solutions, coordinating shipping schedules and alternative routes to meet transportation needs effectively.
	·	Ship Brokers: Serving as intermediaries between shipowners and carriers, ship brokers work with shipping companies to arrange vessel leases and transportation services.

 

Other Product & Services

 

Electronic Device Hardware Components Products Sales & Software Technology Consulting Services 

 

Roshing’s customer structure includes non-Hong Kong traders, direct traders of hardware components, companies engaged in the assembly and sale of finished products, and private label entities seeking electronic component procurement and small volume customization.

 

 

 

 

 

Business Consulting Services  

 

Roshing’s client mix includes individual clients seeking policy advice in Hong Kong, and enterprises requiring local business services in Hong Kong and consulting services for cross-border business operations.

 

Seasonality

 

Roshing’s container shipments are influenced by seasonal factors, with February to April being off-peak seasons, and June to October being peak seasons. Dry bulk cargo is not subject to seasonal limitations and depends primarily on customer orders. The container logistics business is subject to seasonal influences, primarily manifested in the seasonality of international shipping, which is mainly reflected in seasonal fluctuations in cargo transportation volume. For example, 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. This seasonal variation has a significant impact on shipping companies’ capacity allocation, route scheduling, and pricing strategies.

 

Roshing has implemented strategies to address seasonal influences. Seasonal fluctuations can lead to unstable vessel utilization rates, with possible capacity surplus during off-peak seasons and potential capacity constraints during peak seasons. Shipping companies can balance the effects of seasonal fluctuations by the number of chartered vessels, optimizing route layouts, signing long-term transportation contracts, and employing pricing strategies (such as off-peak discounts).

 

Our People and Culture

 

As of January 31, 2024, we had a total of 14 full time employees, and 1 part time employee. As of July 31, 2023, we had a total of 10 full time employees, and 1 part-time employee. As of July 31, 2022, we had a total of 11 full time employees, and 1 part-time employee. The following table sets forth the number of our employees by function as of January 31, 2024, July 31, 2023 and July 31, 2022:

 

Function		As of January 31, 2024		As of July 31, 2023		As of July 31, 2022
Senior Management		5		3		5
Human Resources and Administration		1		1		1
Finance		1		1		1
Sales and Marketing		5		3		2
Procurement		1		1		1
Technical		2		2		2
TOTAL		15		11		12

 

Real Property

 

Our principal executive office is located at Unit B, 10/F., Ritz Plaza, No.122 Austin Road, Tsim Sha Tsui, Kowloon, Hong Kong, overing a total area of approximately 200 square feet. The premises are provided by a third-party pursuant to an office rental service agreement and the service term expires in September 2024. After that, we intend to renew the service term. The office meets the office space needs of all of our business segments.

 

 

 

 

 

Insurance

 

We participate in employee social security plans for our full-time employees.

 

Intellectual Property

 

As of the date of this prospectus, 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.

 

Legal Proceedings

 

From time to time, we may become involved in legal proceedings or be subject to claims arising in the ordinary course of our business. We are not presently a party to any legal proceedings that, if determined adversely to us, would individually or taken together have a material adverse effect on our business, results of operations, financial condition or cash flows. Regardless of the outcome, litigation and other legal proceedings can have an adverse impact on us because of defense and settlement costs, diversion of management resources, reputation damage and other factors.

 

REGULATIONS

 

Regulations Related to our Business Operation in Hong Kong

 

Roshing is Tianci’s subsidiary established in Hong Kong through which Tianci conducts its operations. As at the date of this prospectus, there was no statutory or mandatory licensing and qualification system in Hong Kong governing the global logistics services, electronic device hardware components products sales, technical service of the software and website development and business consulting services provided by Roshing.

 

Below sets out a summary of certain aspects of the Hong Kong laws and regulations which are relevant to our operation and business.

 

Business Registration Ordinance (Chapter 310 of the Laws of Hong Kong)

 

The Business Registration Ordinance requires every person carrying on any business to make an application to the Commissioner of Inland Revenue in the prescribed manner for the registration of that business within one month after the commencement of business. The Commissioner of Inland Revenue must register each business for which a business registration application is made and as soon as practicable after the prescribed business registration fee and levy are paid and issue a business registration certificate or branch registration certificate for the relevant business or the relevant branch, as the case may be. Any person who fails to apply for business registration shall be guilty of an offence and shall be liable to a fine of HK$5,000 and to imprisonment for 1 year.

 

 

 

 

Personal Data (Privacy) Ordinance (Chapter 486 of the Laws of Hong Kong), or the PDPO

 

The PDPO imposes a statutory duty on data users to comply with the requirements of the six data protection principles (the “Data Protection Principles”) contained in Schedule 1 to the PDPO. The PDPO provides that a data user shall not do an act, or engage in a practice, that contravenes a Data Protection Principle unless the act or practice, as the case may be, is required or permitted under the PDPO. The six Data Protection Principles are:

 

	·	Principle 1—purpose and manner of collection of personal data;
	·	Principle 2—accuracy and duration of retention of personal data;
	·	Principle 3—use of personal data;
	·	Principle 4—security of personal data;
	·	Principle 5—information to be generally available; and
	·	Principle 6—access to personal data.

 

Non-compliance with a Data Protection Principle may lead to a complaint to the Privacy Commissioner for Personal Data (the “Privacy Commissioner”). The Privacy Commissioner may serve an enforcement notice to direct the data user to remedy the contravention and/ or instigate prosecution actions. A data user who contravenes an enforcement notice commits an offense which may lead to a fine and imprisonment.

 

The PDPO also gives data subjects certain rights, inter alia:

 

	·	the right to be informed by a data user whether the data user holds personal data of which the individual is the data subject;
	·	if the data user holds such data, to be supplied with a copy of such data; and
	·	the right to request correction of any data they consider to be inaccurate.

 

The PDPO criminalizes, including but not limited to, the misuse or inappropriate use of personal data in direct marketing activities, non-compliance with a data access request and the unauthorized disclosure of personal data obtained without the relevant data user’s consent. An individual who suffers damage, including injured feelings, by reason of a contravention of the PDPO in relation to his or her personal data, may seek compensation from the data user concerned.

 

Tortious Duty Under Common Law

 

Apart from contractual liability, under common law, services providers also owe a duty of care to customers and may be liable for damage resulting from defects in services caused by their negligent acts or for any fraudulent misrepresentation made in the provision of services. Any person who undertakes to provide a service and who negligently performs his work and causes damage to another person or property, will also attract civil liability.

 

 

 

 

Trade Description Ordinance (Chapter 362 of the Laws of Hong Kong), or the TDO

 

The TDO aims to protect customers against unfair trade practices by regulating businesses to sell products and services in a truthful manner. It prohibits false trade descriptions in respect of services supplied in the course of trade.

 

Section 7A of the TDO provides that a trader who applies a false trade description to a service supplied or offered to be supplied to a consumer or supplies or offers to supply to a consumer a service to which a false trade description is applied, commits an offence.

 

Sections 13E, 13F, 13G, 13H and 13I of the TDO provide that a trader who engages in relation to a consumer in a commercial practice that (a) is a misleading omission; or (b) is aggressive; (c) constitutes bait advertising; (d) constitutes a bait and switch; or (e) constitutes wrongly accepting payment for a product, commits an offence.

 

A person who commits an offence under sections 7A, 13E, 13F, 13G, 13H or 13I shall be subject, on conviction on indictment, to a fine of HK$500,000 and to imprisonment for five years, and on summary conviction, to a fine at HK$100,000 and to imprisonment for two years.

 

Trade Marks Ordinance (Chapter 559 of the Laws of Hong Kong), or the TMO

 

The TMO provides for the registration of trademarks, the use of registered trademarks and connected matters. Hong Kong provides territorial protection for trademarks. Therefore, trademarks registered in other countries or regions are not automatically entitled to protection in Hong Kong. In order to enjoy protection by the laws of Hong Kong, trademarks must be registered with the Trade Marks Registry of the Intellectual Property Department under the Trade Marks Ordinance and the Trade Marks Rules (Chapter 559A of the Laws of Hong Kong).

 

According to section 10 of the TMO, a registered trademark is a property right acquired through due registration under such ordinance. The owner of a registered trademark is entitled to the rights provided by the ordinance.

 

By virtue of section 14 of the TMO, the owner of a registered trademark is conferred exclusive rights in the trademark. The rights of the owner in respect of the registered trademark come into existence from the date of the registration of the trademark. According to section 48 of such ordinance, the registration date is the filing date of the application for registration.

 

Subject to the exceptions in section 19 to section 21 of the TMO, any use of the trademark by third parties without the consent of the owner is an infringement of the trademark. Conducts which amount to infringement of the registered trademark are further specified in section 18 of the same ordinance.

 

Copyright Ordinance (Chapter 528 of the Laws of Hong Kong)

 

Pursuant to the Copyright Ordinance, a person may incur civil liability for ’’secondary infringement’’ if that person possesses, sells, distributes or deals with a copy of a work which is, and which he knows or has reason to believe to be, an infringing copy of the work for the purposes of or in the course of any trade or business without the consent of the copyright owner.

 

 

 

 

The Supply of Services (Implied Terms) Ordinance (Chapter 457 of the Laws of Hong Kong), or the SOSO

 

The SOSO which aims to consolidate and amend the law with respect to the terms to be implied in contracts for the supply of services (including a contract for the supply of a service whether or not goods are also transferred or to be transferred, or bailed or to be bailed by way of hire under the contract) provides that:

 

	(a)	where the supplier is acting in the course of a business, there is an implied term that the supplier will carry out the service with reasonable care and skill; and
	(b)	where the supplier is acting in the course of a business, the time for service to be carried out is not fixed by the contract, is not left to be fixed in a manner agreed by the contract or is not determined by the course of dealing between the parties, there is an implied term that the supplier will carry out the service within a reasonable time.

 

Where a supplier is dealing with a party to a contract for supply of service who deals as a consumer, the supplier cannot, by reference to any contract term, exclude or restrict any liability of his arising under the contract by virtue of the SOSO. Otherwise, where any right, duty or liability would arise under a contract for the supply of a service by virtue of the SOSO, it may (subject to the Control of Exemption Clauses Ordinance (Chapter 71 of the Laws of Hong Kong)) be negatived or varied by express agreement, or by the course of dealing between the parties, or by such usage as binds both parties to the contract.

 

The Control of Exemption Clauses Ordinance (Chapter 71 of the Laws of Hong Kong), or the CECO

 

The CECO, which aims to limit the extent to which civil liability for breach of contract, or for negligence or other breach of duty, can be avoided by means of contract terms and otherwise, among others, provides that:

 

	(a)	under section 7, a person cannot by reference to any contract term or to a notice given to persons generally or to particular persons exclude or restrict his liability for death or personal injury resulting from negligence and in the case of other loss or damage, a person cannot exclude or restrict his liability for negligence except in so far as the term or notice satisfies the requirement of reasonableness.
	(b)	under section 8, as between contracting parties where one of them deals as consumer or on the other’s written standard terms of business, as against that party, the other cannot by reference to any contract term (i) when himself in breach of contract, exclude or restrict any liability of his in respect of the breach, or (ii) claim to be entitled to render a contractual performance substantially different from that which was reasonably expected of him, or (iii) claim to be entitled in respect of the whole or any part of his contractual obligation, to render no performance at all, except in so far as the contract term satisfies the requirement of reasonableness.
	(c)	under section 9, a person dealing as a consumer cannot by reference to any contract term be made to indemnify another person (whether a party to the contract or not) in respect of liability that may be incurred by the other for negligence or breach of contract, except in so far as the contract term satisfies the requirement of reasonableness; and
	(d)	under section 11, as against a person dealing as consumer, the liability for breach of the obligations arising under sections 15, 16 and 17 of the Sales of Goods Ordinance (Chapter 26 of the Laws of Hong Kong) cannot be excluded or restricted by reference to any contract term, and as against person dealing otherwise than as consumer, the liability arising under sections 15, 16 and 17 of the Sales of Goods Ordinance can be excluded or restricted by reference to a contract term, but only in so far as the terms satisfy the requirement of reasonableness.

 

Sections 7, 8 and 9 of the CECO do not apply to, among others, any contract so far as it relates to the creation or transfer of a right or interest in any patent, trademark, copyright, registered design, technical or commercial information or other intellectual property, or relates to the termination of any such right or interest.

 

In relation to a contract term, the requirement of reasonableness for the purpose of the CECO is satisfied only if the court or arbitrator determines that the term was a fair and reasonable one to be included having regarded to the circumstances which were, or ought reasonably to have been, known to or in the contemplation of the parties when the contract was made.

 

 

 

 

Regulations related to employment and labor protection

 

Employment Ordinance (Chapter 57 of the Laws of Hong Kong), or the EO

 

The EO is an ordinance enacted for, amongst other things, the protection of the wages of employees and the regulation of the general conditions of employment and employment agencies. Under the EO, an employee is generally entitled to, amongst other things, notice of termination of his or her employment contract; payment in lieu of notice; maternity protection in the case of a pregnant employee; not less than one rest day in every period of seven days; severance payments or long service payments; sickness allowance; statutory holidays or alternative holidays; and paid annual leave depending on the period of employment.

 

Employees’ Compensation Ordinance (Chapter 282 of the Laws of Hong Kong), or the ECO

 

The ECO is an ordinance enacted for the purpose of providing for the payment of compensation to employees injured in the course of employment.

 

The ECO establishes a no-fault and non-contributory employee compensation system for work injuries and lays down the rights and obligations of employers and employees in respect of injuries or death caused by accidents arising out of and in the course of employment, or by prescribed occupational diseases.

 

As stipulated by the ECO, no employer shall employ any employee in any employment unless there is in force in relation to such employee a policy of insurance issued by an insurer for an amount not less than the applicable amount specified in the Fourth Schedule of the ECO in respect of the liability of the employer. According to the Fourth Schedule of the ECO, the insured amount shall be not less than HKD100,000,000 (approximately $13,000,000) per event if a company has no more than 200 employees. Any employer who contravenes this requirement commits a criminal offence and is liable on conviction to a fine and imprisonment. An employer who has taken out an insurance policy under the ECO is required to display a prescribed notice of insurance in a conspicuous place on each of its premises where any employee is employed.

 

Mandatory Provident Fund Schemes Ordinance (Chapter 485 of the Laws of Hong Kong), or the MPFSO

 

The MPFSO is an ordinance enacted for the purposes of providing for the establishment of non-governmental mandatory provident fund schemes, or the MPF Schemes. The MPFSO requires every employer of an employee of 18 years of age or above but under 65 years of age to take all practical steps to ensure the employee becomes a member of a registered MPF Scheme within the first 60 days of employment. Subject to the minimum and maximum relevant income levels, it is mandatory for both employers and their employees to contribute 5% of the employee’s relevant income to the MPF Scheme. Any employer who contravenes the requirement of enrolling eligible employees in a registered MPF Scheme or the requirement of paying mandatory contributions to the MPF Schemes commits a criminal offence and is liable on conviction to a fine and imprisonment.

 

Minimum Wage Ordinance (Chapter 608 of the Laws of Hong Kong), or the MWO

 

The MWO provides a prescribed minimum hourly wage rate (currently at HK$40 per hour) during the wage period for every employee engaged under a contract of employment under the EO. Any provision of the employment contract which purports to extinguish or reduce the right, benefit or protection conferred on the employee by the MWO is void.

 

Failure to pay minimum wage amounts to a breach of the wage provisions under EO. An employer who willfully and without reasonable excuse fails to pay wages to an employee when it becomes due commits a criminal offence and is liable on conviction to a fine and imprisonment.

 

 

 

 

Occupational Safety and Health Ordinance (Chapter 509 of the Laws of Hong Kong), or the OSHO

 

The OSHO aims to ensure the safety and health of employees when they are at work. Under the OSHO, an employer must ensure the safety and health of his workplace by (i) providing and maintaining plant and work systems that are safe and without risks to health, (ii) making arrangement for ensuring safety and health in connection with the use, handling, storage or transport of plant or substances, (iii) providing all necessary information, instruction, training and supervision for ensuring safety and health, (iv) providing and maintaining safe access to and egress from the workplace, and (v) providing and maintaining a safe and healthy work environment. An employer who fails to comply with the above may be liable on conviction to a fine and imprisonment, if he did so intentionally, knowingly or recklessly.

 

Occupational Safety and Health Regulation (Chapter 509A of the Laws of Hong Kong)

 

The Occupational Safety and Health Regulation (Chapter 509A of the Laws of Hong Kong) further sets out basic requirements for accident prevention, fire precaution, workplace environment control, hygiene at workplaces, first aid, as well as what employers and employees are expected to do in manual handling operations.

 

Occupiers Liability Ordinance (Chapter 314 of the Laws of Hong Kong)

 

The Occupiers Liability Ordinance regulates the obligations of a person occupying or having control of premises on injury resulting to persons or damage caused to goods or other property lawfully on the land. The Occupiers Liability Ordinance imposes a common duty of care on an occupier of premises to take such care as in all the circumstances of the case is reasonable to see that the visitors will be reasonably safe in using the premises for the purposes for which he is invited or permitted by the occupier to be there.

 

For the risk factor concerning regulations related to employment and labor protection, please see “Risk Factors — Risks Related to Doing Business in Hong Kong — Increases in labor costs in Hong Kong and non-compliance with laws and regulations relating to employment and labor protection may adversely affect the business of Roshing and our results of operations.”

 

Regulations related to Hong Kong Taxation

 

Inland Revenue Ordinance (Chapter 112 of the Laws of Hong Kong)

 

Under the Inland Revenue Ordinance, where an employer commences to employ in Hong Kong an individual who is or is likely to be chargeable to tax, or any married person, the employer shall give a written notice to the Commissioner of Inland Revenue not later than three months after the date of commencement of such employment. Where an employer ceases or is about to cease to employ in Hong Kong an individual who is or is likely to be chargeable to tax, or any married person, the employer shall give a written notice to the Commissioner of Inland Revenue not later than one month before such individual ceases to be employed in Hong Kong, provided that a shorter notice may be accepted if deemed reasonable.

 

Tax on dividends

 

Based on the current practice of the Inland Revenue Department of Hong Kong, no tax is payable in Hong Kong in respect of dividends paid by Roshing.

 

 

 

 

Capital gains and profits tax

 

The Inland Revenue Ordinance provides, among other things, that profits tax shall be charged on every person carrying on a trade, profession or business in Hong Kong in respect of his or her assessable profits arising in or derived from Hong Kong. Roshing is currently subject to the two-tiered profits tax regime according to Hong Kong tax rules and regulations.

 

The two-tier profits tax rates system of Hong Kong became effective since the assessment year 2018/2019. Under the two-tier profit tax rates regime, the profits tax rate for the first HKD2 million (approximately US$260,000) of assessable profits of a corporation will be subject to the lowered tax rate, 8.25%, while the remaining assessable profits will be subject to the legacy tax rate, 16.5%.

 

No tax is imposed in Hong Kong in respect of capital gains from the sale of shares. However, trading gains from the sale of shares by persons carrying on a trade, profession or business in Hong Kong, where such gains are derived from or arise in Hong Kong, will be subject to Hong Kong profits tax.

 

Stamp Duty Ordinance (Chapter 117 of the Laws of Hong Kong)

 

Under the Stamp Duty Ordinance (Chapter 117 of the Laws of Hong Kong), a total of 0.2% of the higher of the consideration for or market value of the shares is currently payable on a typical sale and purchase transaction of Hong Kong shares. In addition, a fixed duty of HKD5 is currently payable on any instrument of transfer of Hong Kong shares. If no stamp duty is paid on or before the due date, a penalty of up to ten times the duty payable may be imposed.

 

Estate duty

 

Hong Kong estate duty was abolished effective from February 11, 2006. No Hong Kong estate duty is payable by Roshing’s stockholders in relation to the shares owned by them upon death.

 

MANAGEMENT

 

Directors, Executive Officers and Corporate Governance

 

The following table sets forth certain information regarding our current executive officers and directors as of the date of this prospectus. Unless otherwise stated, the business address for our executive officers and directors is that of our principal executive offices located at Unit B,10/F., Ritz Plaza, No.122 Austin Road, Tsim Sha Tsui, Kowloon, Hong Kong.

 

Name		Age		Position(s)
Shufang Gao		55		Director, Chief Executive Officer
Wei Fang		52		Director, Chief Financial Officer
Ying Deng		41		Director, Vice President
Yee Man Yung		31		Independent Director
Fan Liu		45		Independent Director
Juan Chang		45		Independent Director
Guilin Zhang		67		Independent Director

 

 

 

 

Directors hold office until the annual meeting of Tianci’s Stockholders and the election and qualification of their successors. Officers hold office, subject to removal at any time by the Board, until the meeting of directors immediately following the annual meeting of Stockholders and until their successors are appointed and qualified.

 

Shufang Gao has worked as CEO of Hong Kong listed groups, president of domestic capital companies, and vice president of Chinese A-share listed companies. He is familiar with the Chinese A-share capital market and the Hong Kong capital market, and has experience in the strategic development of listed companies. Mr. Gao joined Tianci on August 26, 2021, as a member of our Board and became Chief Executive Officer on January 27, 2023. He also served as Chief Financial Officer from April 2023 until his resignation on January 22, 2024. On the same day, he was appointed Chairman of the Board. From October 2020 to August 2021, Mr. Gao served as the Vice President and Director of Sichuan Jinding Group. Prior to that, he was the Vice Chairman of Luoyang Yongning Nonferrous Technology Co., Ltd. from August 2019 to September 2020. From April 2018 to July 2019, Mr. Gao served as the Vice President of Tibet Huayu Mining Co., Ltd., an A-share listed company. He was the Chief Executive Officer of Haotian Development Group Co., Ltd. (Hong Kong Main Board Listed Company 00474) from August 2016 to September 2017. From August 2012 to August 2016, Mr. Gao served as the President of Haihua Group Holdings Co., Ltd., an international container leasing company. Mr. Gao received his Bachelor of Management Degree from Dalian University of Technology in 1999. He received his Master’s Degree in Finance and Accounting from the Chinese University of Hong Kong in 2008. Mr. Gao brings to the Board his international experience in the operation and governance of listed companies.

 

Wei Fang has over ten years of experience in the securities and investment industry. He joined Tianci on August 27, 2021 as a member of the Board and was appointed Chief Financial Officer of Tianci on January 23, 2024. Mr. Fang served as the Partner of Tiger Securities and the CEO of Tiger Securities International in Hong Kong from May 2018 to July 2019. From January 2017 to April 2018, Mr. Fang served as the CEO of Haotian International Securities in Hong Kong. Mr. Fang was the Head of High Net Worth Individual, Corporate Client and ICBC Global Wealth Management Center of ICBC International in Hong Kong from October 2014 to December 2016. Mr. Fang earned a Bachelor’s degree in Economics from Anhui University of Finance and Economics in 1994. Mr. Fang obtained his Master of Business Administration Degree from South Georgia University in 2004. Mr. Fang brings to the Board his deep experience in the securities and investment industry.

 

Ying Deng has over fifteen years of experience in corporate finance, asset management and banking. Ms. Deng became Vice President of Tianci and was appointed to Tianci’s Board in January 2023. She has been employed by RQS Capital Limited since September 2022 as a Director responsible for business development and financial planning. Since July 2017 Ms. Deng has been employed as Director and Chief Executive Officer by Shenzhen Dandelion Club Investment Development Co., Ltd., where she is responsible for project due diligence and investment management. Since June 2011 Ms. Deng has been employed as a Director by Roshing International Co., Limited, where she is responsible for strategic planning and daily operations. In 2020 Ms. Deng was awarded a Master’s Degree in Business Administration by Nankai University. She earned a Bachelor’s Degree from Jinan University in 2006. Ms. Deng brings to the Board her extensive experience in business administration.

 

Yee Man Yung has more than 5 years of experience as a human resources manager for both Hong Kong and NASDAQ listed companies. She also has two years’ experience as an assistant to board members. Ms. Yung joined Tianci on 26 August, 2021 as an independent director of our Board. Since 2020 she has served as Human Resources Manager for Link-Asia International Med-Tech Group Limited. Form 2018 to 2019 Ms. Yung was employed as Account Manager by Tiger Brokers (HK) Global Limited. Ms. Yung earned a Master’s degree in Corporate Communication from University of Leeds in 2017. Ms. Yung is currently pursuing an MBA Degree at the University of South Australia. Ms. Yung brings to the Board her human resources and public company experience as an independent director.

   

Fan Liu joined Tianci on August 26, 2021 as an independent director of our Board. Prior to joining us, Mr. Liu was the Vice President of China Regenerative Medicine International Limited from September 2014 to October 2017. From July 2009 to August 2014, Mr. Liu was the Investment Director of Tian Huan Investment Company. He was a financial analyst at Founder Securities (SSE:601901) from May 2007 to June 2009. Mr. Liu received his B.A. in Engineering from Nanjing Tech University in 2001 and his Master of Economics from Concordia University, Canada in 2006. He brings to the Board his experience and knowledge of investments and mergers and acquisitions of companies in Hong Kong and China.

 

 

 

 

Juan Chang joined Tianci in January 2024 as an independent director of our Board. She has over 20 years of expertise in financial management and corporate leadership. From 2003 to 2009, Ms. Chang served as a settlement supervisor and financial manager at Suning.com, a Shenzhen Company, overseeing supplier accounts, accounts receivable and taking management duty. Since 2010, she held the position of Deputy General Manager and Chief Financial Officer at Suning Easy Buy Limited in Hong Kong, where her responsibilities included achieving the Company’s business performance, financial management and risk control, asset management, financial statement issuance, and annual audit. In 2021 to 2023, she acted as the Director of Suning Financial Limited in Hong Kong, overseeing daily management and internal control supervision of the Hong Kong Suning Financial MSO license business. Since June 2023, Ms. Chang has been serving as the Financial Director of Suning.com South Region, responsible for financial management and supervision of companies in Guangzhou, Shenzhen, Wuhan, Haikou, Nanning, Zhongshan, and Hong Kong. Ms.Juan Chang obtained her Bachelor of Management degree from Xi’an University of Finance and Economics in July 2003. In 2013 to 2015, She pursued further education, completing an MBA from Chinese University of Hong Kong.

 

Guilin Zhang has a strong background in the maritime and shipping industries, with over 30 years of experience. Mr. Zhang recently joined Tianci in January 2024 as an independent director of our Board. His career started at Singapore IMC Shipping, where he worked as a Senior Executive in the Fleet Management Department from 1994 to 1997. Later, he became the General Manager of China Region at Wah Shun Shipping Co., Ltd. and Best Power Holdings (HK) Limited, overseeing ship chartering and iron ore trading until 2002. He then held key roles as Vice President at North China Shipping Holdings Ltd. and General Manager at Continental Minerals Co., Ltd. until 2011. From 2012 to 2023, he ventured into entrepreneurship, establishing Guochuang International Holdings Co., Ltd. and GC Resources Co., Ltd., where he now serves as Executive Director and CEO. Throughout his career, Mr. Zhang has shown exceptional expertise in fleet management, trading, and strategic development, making him an excellent fit for the role of independent director. Mr. Zhang Graduated from Dalian Maritime University with a Bachelor of Engineering degree in 1981.

 

Family Relationships

 

There are no family relationships among any of our officers or directors.

 

Involvement in Certain Legal Proceedings

 

To the best of our knowledge, none of our directors or executive officers has, during the past ten years, been involved in any legal proceedings described in subparagraph (f) of Item 401 of Regulation S-K.

 

Qualification

 

There is currently no shareholding qualification for directors, although a shareholding qualification for directors may be fixed by our stockholders by ordinary resolution.

 

Corporate Governance

 

Board Committees

 

We have established three committees under the board of directors: an audit committee, a compensation committee and a nominating and corporate governance committee (the “Committee”). We have adopted a charter for each of the three committees. Each committee’s members and functions are described below.

 

 

 

 

The business and affairs of the company are managed under the direction of our Board. We have conducted Board meetings regularly since inception. Each of our directors has attended all meetings either in person, via telephone conference, or through written consent for special meetings. In addition to the contact information in this prospectus, the Board has adopted procedures for communication with the officers and directors as the date hereof. Each stockholder will be given specific information on how he/she can direct communications to the officers and directors of the Company at our annual stockholders’ meetings. All communications from stockholders are relayed to the members of the Board.

 

Audit Committee. Our audit committee consists of Juan Chang, Fan Liu and Yee Man Yung. Juan Chang is the chairperson of the audit committee. We have determined that Juan Chang, Fan Liu and Yee Man Yung each satisfy the “independence” requirements of Nasdaq Listing Rule 5605(a)(2) and meets the independence standards under Rule 10A-3 under the Exchange Act. We have determined that Ms. Chen qualifies as an “audit committee financial expert.” The audit committee oversees our accounting and financial reporting processes and the audits of the financial statements of our company. The audit committee is responsible for, among other things: (a) monitoring and reviewing: i) The integrity of the Company’s financial reports and other financial information provided by the Company to the public or any governmental body; ii) The Company’s compliance with applicable legal and regulatory requirements; iii) The qualifications and independence of the Company’s independent auditing firm and iv) the performance of the Company’s independent auditors and the Company’s Internal audit function; (b) selecting and terminating the Company’s independent auditors; (c) conducting any investigation appropriate to fulfilling its responsibilities, and it shall have the authority to communicate directly with the independent audit firm and any employee of the Company; (d) preparing and publish an annual Committee report as required by the SEC to be included in the Company’s annual proxy statement; (e) approving in advance all audit and permissible non-audit services to be performed by the independent auditors; (f) discussing with management the Company’s risk assessment and risk management policies.;(g) retaining outside counsel, experts and other advisors as the Committee may deem appropriate in its sole discretion; and (h) setting policies for the hiring of employees or former employees of the Company’s independent auditor. The Audit Committee shall consist of three or more directors, who shall be appointed annually and subject to removal at any time, by the Board. No member of the Audit Committee shall receive directly any compensation from the Company other than his or her directors’ fees and benefits.

 

Compensation Committee. Our compensation committee consists of Fan Liu, Juan Chang and Guilin Zhang. Fan Liu is the chairperson of our compensation committee. We have determined that Fan Liu, Juan Chang and Guilin Zhang each are “independent,” as such term is defined for directors and compensation committee members in the listing standards of the NASDAQ Stock Market LLC. Additionally, each qualify as “non-employee directors” for purposes of Rule 16b-3 under the Securities Exchange Act of 1934 and as “outside directors” for purposes of Section 162(m) of the Internal Revenue Code. The Committee has been established to: (a) have all the powers of administration under all of the Company’s employee benefit plans, including any stock compensation plans, bonus plans, retirement plans, stock purchase plans, and medical, dental and other insurance plan; (b) assist the Board in seeing that a proper system of long-term and short-term compensation is in place to provide performance oriented incentives to attract and retain management, and that compensation plans are appropriate and competitive and properly reflect the objectives and performance of management and the Company; (c) have the sole authority to retain, at the Company’s expense, and terminate any compensation consultant to be used to assist in the evaluation of director or executive compensation and shall have sole authority to approve the consultant’s fees and other retention terms, The Committee shall also have the authority to obtain advice and assistance from legal, accounting or other advisors at the Company’s expense; (d) evaluate the Company’s Chief Executive Officer and set his or her remuneration package; and (e) review and assess the adequacy of this Charter annually and recommend any proposed changes to the Board for approval. The Committee shall consist of three or more directors, who shall be appointed annually and subject to removal at any time, by the Board.

 

Nominating and Corporate Governance Committee. Our nominating and corporate governance committee consists of Juan Chang and Fan Liu. Yee Man Yung is the chairperson of our nominating and corporate governance committee. We have determined that each of Yee Man Yung, Juan Chang and Fan Liu qualify as “independent” as that term is defined by Nasdaq Listing Rule 5605(a)(2). The Committee is responsible for: (a) assisting the Board in identifying individuals qualified to become Board members and recommending to the Board the director nominees for each annual meeting of stockholders; (b) recommending to the Board Corporate Governance Principles applicable to the Company; (c) leading the Board in its annual review of the performance of the Board and its committees; (d) recommending to the Board director nominees for each committee; (e) developing criteria for selection of members of the Board and its committees and reviewing with the Board, on an annual basis, the requisite skills and characteristics of new Board members as well as the composition of the Board as a whole; (f) recommending individuals qualified to become Board members to the Board; (g) reviewing and re-assessing the adequacy of this Charter and the Company’s Corporate Governance Principles annually and recommend any proposed changes to the Board for approval. The Committee shall be comprised of no less than three directors, the exact number to be determined by the Board of Directors.

 

 

 

 

Director Independence

 

The Board of Directors has determined that Juan Chang, Fan Liu, Guilin Zhang and Yee Man Yung and are independent directors, as the term “independent” is defined by the Rule 5605(a)(2) of the Listing Rules of the Nasdaq Stock Market and Rule 10A-3 under the Exchange Act.

 

Term of Office

 

Our directors hold office until the next annual meeting of stockholders of the Company and until their successors have been elected and qualified. Our officers are elected by the board of directors and serve at the discretion of the board of directors.

 

The members of the committees shall be appointed and removed by the Board on the recommendation of the nominating and corporate governance committee. The members of the committees shall designate a chairman.

 

Compensation of Directors

 

Tianci currently maintains six director retainer agreements with its directors. The agreements have terms of 3 years and each provide for monthly compensation in amounts ranging from $1,300 per month to $3,800 per month.

 

EXECUTIVE COMPENSATION

 

Tianci International, Inc.

 

Tianci has paid no compensation to any officer or director during the past three fiscal years or any subsequent period. Unpaid compensation has been accrued pursuant to the Employment Agreements described below, totaling an aggregate of $240,800 as of July 31, 2023.

 

RQS United Group Limited

 

RQS United did not pay compensation to any officer or director for services in those roles during its past three fiscal years.

 

Roshing International Co., Limited

 

Roshing pays Ying Deng, its Manager, and Shufang Gao, its CEO, a salary of HKD 20,000 and HKD 30,000 per month respectively.

 

 

 

 

 

 

Employment Agreements with Key Executives

 

Employment Agreements

 

On August 27, 2021, we entered into employment agreements with each of Shufang Gao and Wei Fang and on January 27, 2023, we entered into an employment agreement with Ying Deng (collectively, the “Employment Agreements”), whereby each individual agreed to serve as an Executive Director for monthly compensation equal to U.S. $3,800. Each Employment Agreement expires after three years, unless earlier terminated by death, resignation or removal.

 

We are entitled to terminate the each Employment Agreement for “cause” without notice or remuneration (unless otherwise required by law) if: (i) the executive is convicted or pleads guilty to a felony or to an act of fraud, misappropriation or embezzlement; (ii) the executive has been grossly negligent or acted dishonestly to the detriment of the Company; (iii) the executive has engaged in actions amounting to willful misconduct or failed to perform his duties hereunder and such failure continues after the executive is afforded a reasonable opportunity to cure such failure; or (iv) the executive violates the provisions relating to confidentiality, non-competition and non-solicitation of the Employment Agreement. Upon a termination for “cause,” the executive shall not be entitled to any severance or other benefits under the Employment Agreement but shall be entitled to receive accrued base salary.

 

If the Employment Agreement is terminated due to the executive’s death or disability, the executive shall be entitled to receive accrued base salary.

 

If the Employment Agreement is terminated by the Company without “cause”, the executive will receive a lump sum payment equal to 12 months of base salary, a lump sum cash payment equal to a pro-rated amount of his/her target annual bonus for the year immediately preceding the termination, payment of premiums for continued health benefits under the Company’s health plans for 12 months following termination, and immediate vesting of 100% of the then-unvested portion of any outstanding equity awards held by the executive, if any.

 

If the Employment Agreement is terminated due to a change in control, the executive will receive a lump sum payment equal to 12 months of base salary, a lump sum cash payment equal to a pro-rated amount of his/her target annual bonus for the year immediately preceding the termination, and immediate vesting of 100% of the then-unvested portion of any outstanding equity awards held by the executive.

 

If the Employment Agreement is terminated by the executive due to (1) a material reduction in the executive’s authority, duties and responsibilities, or (2) a material reduction in the executive’s annual salary, the executive will receive a lump sum payment equal to 12 months of base salary.

 

Retainer Agreements  

 

We also maintain six director retainer agreements with our officers and directors. The agreements have terms of 3 years and each provides for monthly compensation in amounts ranging from $1,300 per month to $3,800 per month.

 

For the three and six months ended January 31, 2024, we accrued management compensation expenses of $60,000 and $120,000, respectively. These amounts are included in “general and administrative expenses” in the accompanying consolidated statement of operations. 

 

 

 

 

Stock Incentive Plan

 

Overview

 

On April 25, 2024, the Board and majority stockholder adopted the Tianci International, Inc. 2024 Equity Incentive Plan (the “2024 Plan”). The Plan provides for the grant of the following types of stock awards: (a) incentive stock options, (b) stock appreciation rights, (c) restricted stock, (d) restricted stock unit and deferred stock units and (e) performance shares. The Plan is intended to enable the Company and its affiliated companies to recruit and retain highly qualified personnel, to provide those personnel with an incentive for productivity and to provide those personnel with an opportunity to share in the growth and value of the Company. The Company reserved 7,000,000 shares of common stock issuable upon the grant of awards under the Plan. As of the date of this prospectus, we have not issued any shares of common stock to our employees, any directors, consultants or any other individuals under the Plan.

 

Plan Administration

 

The Plan will be administered by the Committee. The Committee will have full authority to grant Awards under this Plan. In particular, subject to the terms of the Plan, the Committee will have the authority: (a) to select the Persons to whom Awards may from time to time be granted hereunder; (b) to determine the type of Award to be granted to any Person hereunder; (c) to determine the number of Shares, if any, to be covered by each Award; (d) to establish the terms and conditions of each Award Agreement; (e) to adopt, alter and repeal such administrative rules, guidelines and practices governing the Plan as it, from time to time, deems advisable; 5 (f) to interpret the terms and provisions of the Plan and any Award issued under the Plan (and any Award Agreement); (g) to correct any defect, supply any omission or reconcile any inconsistency in the Plan or in any Award Agreement in the manner and to the extent it deems necessary to carry out the intent of the Plan; and (h) to otherwise supervise the administration of the Plan. All decisions made by the Committee pursuant to the provisions of the Plan will be final and binding on all persons, including the Company and Participants. No Director will be liable for any good faith determination, act or omission in connection with the Plan or any award.

 

Eligibility

 

Employees, Directors, consultants, and other individuals who provide services to the Company or its Affiliates are eligible to be granted Awards under the Plan; provided, however, that only employees of the Company, its Parent or a Subsidiary are eligible to be granted Incentive Stock Options.

 

Employee Pension, Profit Sharing or other Retirement Plans

 

We do not have a defined benefit, pension plan, profit sharing or other retirement plan, although we may adopt one or more of such plans in the future.

 

 

 

 

CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

 

The following are summaries of certain provisions of our related party agreements and are qualified in their entirety by reference to all of the provisions of such agreements. Because these descriptions are only summaries of the applicable agreements, they do not necessarily contain all of the information that you may find useful. We, therefore, urge you to review the agreements in their entirety. Copies of the forms of the agreements have been filed as exhibits to the registration statement of which this prospectus is a part, . 

 

Due from related party consists of:

 

Due from related party represents a receivable of $54,167 from RQS Capital on July 31, 2023. The receivable, which was non-interest bearing and due on demand, was collected by the Company in December 2023.

 

Due to related parties consist of:

				Transaction		January 31,				July 31,
Name		Relationship		Nature		2024				2023
Zhigang Pei*		Former Chairman of the Board		Working capital advances and operating expenses paid on behalf of the Company		$	–			$	220,909
RQS Capital		68% shareholder		Company cash collection due to RQS Capital			2,132				2,132
Ying Deng**		RQS Capital 30% owner and Roshing’s 10% owner		Working capital advances and operating expense paid on behalf of the Company			28,083				53,036
TOTAL						$	30,215			$	276,077

___________________

*	$220,909 of this liability was converted to 220,909 shares of common stock on January 19, 2024.

 

**	$24,953 of this liability was forgiven in November 2023.

 

These liabilities are unsecured, non-interest bearing, and due on demand.

 

 

Employment agreements with officers and director retainer agreements

 

Tianci currently maintains two employment agreements and six director retainer agreements with its officers and directors. The agreements have terms of 3 years and each provide for monthly compensation in amounts ranging from $1,300 per month to $3,800 per month.

 

For the year ended July 31, 2023, we accrued management compensation expenses of $120,000. These amounts are included in “general and administrative expenses” in the accompanying consolidated statement of operations. For the three and six months ended January 31, 2024, we accrued management compensation expenses of $60,000 and $120,000, respectively. These amounts are included in “general and administrative expenses” in the accompanying consolidated statement of operations.

 

 

 

 

Office space sharing agreement with related parties

 

On August 28, 2021, Roshing entered into an office space sharing agreement with Shufang Gao, 60% owner of RQS Capital, and Ying Deng, 30% owner of RQS Capital, for office space in Shenzhen, China. The agreement provided for Gao and Deng, sub lessees under a separate office space sharing agreement relating to the use of the premises from August 28, 2021, to August 31, 2024, to pay monthly rent to the lessee ranging from RMB 12,320 (approximately $1,726) to RMB 13,583 (approximately $1,903) on behalf of Roshing. The rent expenses paid by Gao and Deng were billed directly to Gao and Deng by the Lessee and the sublease is between Gao and Deng and the Lessee. The Company has no obligation, directly or indirectly, to reimburse or otherwise compensate Gao and Deng for paying these expenses. For the three months ended January 31, 2024 and 2023, the Company has accounted for this agreement by charging general and administrative expenses for $0 and $5,560, respectively, and crediting additional paid-in capital for $0 and $5,560, respectively. For the six months ended January 31, 2024 and 2023, the Company has accounted for this agreement by charging general and administrative expenses for $0 and $9,079, respectively, and crediting additional paid-in capital for $0 and $9,079, respectively. The office sharing agreement was terminated on May 31, 2023 when Roshing moved all of its operations to its office in Hong Kong.”

 

Related Party Transactions

 

On January 27, 2023, Tianci sold 80,000 shares of Series A Preferred Stock to RQS Capital. The shares were sold for a cash payment of $24,000, which was contributed to Tianci’s capital on behalf of RQS Capital by members of its management. Shufang Gao, a member of Tianci’s Board of Directors, is the principal owner of RQS Capital.

 

As of July 31, 2023, Roshing was indebted to Zhigang Pei in the amount of $220,909 and to Ying Deng in the amount of $53,035, representing amounts they have advanced to fund Roshing’s operations. The loans are not interest-bearing and are due on demand.

 

On January 19, 2024, the Company sold an aggregate of 445,109 shares of its common stock to five present or former members of the Company’s Board of Directors for an aggregate price of $445,109 or $1.00 per share. The purchasers included Zhigang Pei, who received 220,909 shares in settlement of a loan by Mr. Pei to the Company in the amount of $220,909, and five present or former members of the Company’s Board of Directors, who received an aggregate of 224,200 shares (Zhigang Pei – 110,200 shares; Wei Fang – 64,600 shares; Fan Liu – 22,100 shares, Jimmy Weiyu Zhu – 5,200 shares; and Yee Man Yung - 22,100 shares) in satisfaction of the Company’s liability to them for unpaid compensation.

 

On April 24, 2024, the Company sold 80,000 shares of Series B Preferred Stock to RQS Capital Limited. The shares were sold for a cash payment of $80,000. Each share of Series B Preferred Stock may be converted by the holder of the share into 100 shares of common stock, subject to equitable adjustment of the conversion rate. The holder of Series B Preferred Stock will have voting rights equal to the holder of the number of shares of common stock into which the Series B Preferred Stock is convertible. 

 

Except as described above, there have been no transactions since August 1, 2022, or any currently proposed transaction, in which Tianci, RQS United or Roshing was or are to be a participant and the amount involved exceeded or exceeds the lesser of $120,000 or one percent of the average of the total assets of Tianci at year-end for the last two completed fiscal years, and in which any related person had or will have a direct or indirect material interest.

 

Review, approval or ratification of transactions with related persons

 

We have adopted “The Review Policy for Related Party Transaction”, which has the purpose of ensuring transactions with the Company and its affiliates are consistent with the principles of fair dealing and to minimize the potential conflicts of interest and moral hazard. The policy encompasses procedures related to review, disclosure requirements, conflict resolution, and approval of penalties for violations.

 

 

 

 

DESCRIPTION OF CAPITAL STOCK

 

The following description of our securities is only a summary and is qualified in its entirety by reference to the actual terms and provisions of the capital stock contained in our Articles of Incorporation and our Bylaws.

 

General

 

We are authorized to issue common stock and preferred stock. The total number of shares of stock which we are authorized to issue is 120,080,000 shares of capital stock consisting of 100,000,000 shares of common stock, $0.0001 par value, 80,000 shares of Series A Preferred Stock, $0.0001 par value per share, 20,000,000 shares of undesignated preferred stock (“Undesignated Preferred Stock”), $0.0001 par value per share. As of the date of this prospectus, 80,000 shares of Undesignated Preferred Stock have been established and designated as Series B Preferred stock. We will have [●] shares of common stock outstanding immediately after the closing of this offering.

 

Description of Common Stock

 

We are authorized to issue 100,000,000 shares of common stock at a par value of $0.0001 per share, and as of January 31, 2024 and the date of this prospectus, we had 14,781,803 shares of common stock issued and outstanding.

 

Voting Rights. Each share of our common stock entitles its holder to one vote per share on all matters to be voted or consented upon by the stockholders.

 

Dividend Rights. Subject to limitations under the Nevada Revised Statutes, holders of our common stock are entitled to receive ratably such dividends or other distributions, if any, as may be declared by our Board out of funds legally available therefor.

 

Liquidation Rights. In the event of liquidation, dissolution or winding up of our business, the holders of our common stock are entitled to share ratably in the assets available for distribution after the payment of all of our debts and other liabilities.

 

Other Matters. The holders of our common stock have no subscription, redemption or conversion privileges; in addition, such common stock does not entitle its holders to pre-emptive rights. All of the outstanding shares of our common stock are fully paid and non-assessable.

 

As of the date of this prospectus, there are no outstanding stock options.

 

Description of Preferred Stock

 

Our Certificate of Incorporation authorizes 80,000 shares of Series A Preferred Stock, $0.0001 par value per share, and 20,000,000 shares of undesignated preferred stock, $0.0001 par value per share. As of the date of this prospectus, 80,000 shares of undesignated preferred stock have been established and designated as Series B Preferred Stock.

 

The issuance of preferred stock could adversely affect, among other things, the voting power of holders of common stock and the likelihood that stockholders will receive dividend payments and payments upon our liquidation, dissolution or winding up. The issuance of preferred stock could also have the effect of delaying, deferring or preventing a change in control of us.

 

The Board of Directors shall have authority, without stockholder approval, to amend the Tianci’s Articles of Incorporation to divide the class of Preferred Stock into series, and to determine the relative rights and preferences of the shares of each series, including (i) voting power, (ii) the rate of dividend, (iii) the price at which, and the terms and conditions on which, the shares may be redeemed, (iv) the amount payable upon the shares in the event of liquidation, (v) any sinking fund provision for the redemption or purchase of the shares, and (vi) the terms and conditions on which the shares may be converted to shares of another series or class, if the shares of any series are issued with the privilege of conversion.

 

 

 

 

Series A Preferred Stock

 

On January 26, 2023, we issued 80,000 shares of Series A Preferred Stock. Each share of Series A Preferred Stock may be converted by the holder of the share into 100 shares of common stock, subject to equitable adjustment of the conversion rate. Each holder of Series A Preferred Stock will have voting rights equal to the holder of the number of shares of common stock into which the Series A Preferred Stock is convertible. Upon liquidation of the Company, each holder of Series A Preferred Stock will be entitled to receive, out of the net assets of the Company, $0.01 per share, then to share in the distribution on an as-converted basis.

 

The following is a summary of the terms of the Series A Preferred Stock, which is qualified in its entirety the Supplement to Item 3: Authorized Stock of Attachment to Certificate of Amendment of Articles of Incorporation, which was filed as Exhibit 10-a to our Current Report on Form 8-K filed with the SEC on January 26, 2023 and which is incorporated into this prospectus by reference.

 

Liquidation

 

Upon the liquidation, dissolution and winding up of the Corporation, the holder of each share of the Series A Preferred Stock shall be entitled to receive out of the net assets of the Corporation, before any amount shall be paid to the holders of any other class of stock, the sum of One Cent ($0.01) per share, after which the Holders of Series A Preferred Stock shall share in the distribution with the holders of the common stock on a pari passu basis, except that in determining the appropriate distribution of available cash among the stockholders, each share of Series A Preferred Stock shall be deemed to have been converted into the number of shares of the Corporation’s common stock into which that holder’s Series A Preferred Stock could be converted on the record date for the distribution.

 

Voting

 

Each share of Series A Preferred Stock shall entitle the holder thereof to cast on all matters submitted to a vote of the stockholders of the Corporation that number of votes which equals the number of shares of Common Stock into which such holder's shares of Series A Preferred Stock are convertible on the record date for the stockholder action.

 

Conversion

 

Any shares of Series A Preferred Stock may, at any time, at the option of the holder, be converted into fully paid and nonassessable shares of common stock (a “Conversion”). The number of shares of common stock to which a holder of Series A Preferred Stock shall be entitled upon a Conversion shall be the product obtained by multiplying the number of shares of Series A Preferred Stock being converted by one hundred (100).

 

Consolidation, Merger, etc. In case the Corporation shall enter into any consolidation, merger, reorganization, or other transaction in which the shares of Common Stock are exchanged for or changed into other stock or securities, cash and/or any other property, then in any such case the Conversion Rights of Series A Preferred Stock shall at the same time be modified such that upon Conversion of a share of Series A Preferred Stock the holder shall receive the product of the Adjustment Number times the aggregate amount of stock, securities, cash and/or any other property (payable in kind), as the case may be, into which or for which each share of common stock is changed or exchanged.

 

Adjustment for Reclassification, Exchange and Substitution. At any time or times the Common Stock issuable upon the conversion of the Series A Preferred Stock is changed into the same or a different number of shares of any class or classes of the Corporation’s stock, whether by recapitalization, combination, consolidation, reverse stock split, reclassification or otherwise, the Adjustment Number shall be changed proportionately to the change in the number of shares of common stock resulting from the recapitalization, reclassification or other change.

 

Fractional Shares. The Corporation shall not, nor shall it cause its transfer agent to, issue any fraction of a share of common stock upon any conversion. If the issuance would result in the issuance of a fraction of a share of common stock, the Corporation shall round, or cause the Transfer Agent to round, such fraction of a share of common stock up to the nearest whole share.

 

 

 

 

Dividend Payable in Shares of Stock

 

In the event the Corporation shall at any time declare or pay any dividend on common stock payable in shares of common stock, then the Adjustment Number in effect immediately prior to such event shall be adjusted by multiplying such Adjustment Number by a fraction, the numerator of which is the number of shares of common stock outstanding immediately after such event and the denominator of which is the number of shares of common stock that were outstanding immediately prior to such event

 

As of the date of this prospectus, all shares of Series A Preferred Stock have been converted into 8,000,000 shares of common stock, and no shares of Series A Preferred Stock are outstanding.

 

Series B Preferred Stock

 

On April 24, 2024, we issued 80,000 shares of Series B Preferred Stock, all of which were convertible at any time, by the holder of the share into 100 shares of common stock, subject to equitable adjustment of the conversion rate. The holder of Series B Preferred Stock will have voting rights equal to the holder of the number of shares of common stock into which the Series B Preferred Stock is convertible. Upon liquidation of the Company, each holder of Series B Preferred Stock will be entitled to receive, out of the net assets of the Company, $0.01 per share, then to share in the distribution on an as-converted basis.

 

The following is a summary of the terms of the Series B Preferred Stock, which is qualified in its entirety by Exhibit A to Certificate of Designation Establishing Series B Preferred Stock, which was filed as Exhibit 10-a to our Current Report on Form 8-K filed with the SEC on April 24, 2024 and which is incorporated into this prospectus by reference.

 

Liquidation

 

Upon the liquidation, dissolution and winding up of the Corporation, the holder of each share of the Series B Preferred Stock shall be entitled to receive out of the net assets of the Corporation, before any amount shall be paid to the holders of any other class of stock, the sum of One Cent ($0.01) per share, after which the Holders of Series B Preferred Stock shall share in the distribution with the holders of the common stock on a pari passu basis, except that in determining the appropriate distribution of available cash among the stockholders, each share of Series B Preferred Stock shall be deemed to have been converted into the number of shares of the Corporation’s common stock into which that holder’s Series B Preferred Stock could be converted on the record date for the distribution.

 

Voting

 

Each share of Series B Preferred Stock shall entitle the holder thereof to cast on all matters submitted to a vote of the stockholders of the Corporation that number of votes which equals the number of shares of Common Stock into which such holder's shares of Series B Preferred Stock are convertible on the record date for the stockholder action.

 

Conversion

 

Any shares of Series B Preferred Stock may, at any time, at the option of the holder, be converted into fully paid and nonassessable shares of common stock (a “Conversion”). The number of shares of common stock to which a holder of Series B Preferred Stock shall be entitled upon a Conversion shall be the product obtained by multiplying the number of shares of Series B Preferred Stock being converted by one hundred (100).

 

Consolidation, Merger, etc. In case the Corporation shall enter into any consolidation, merger, reorganization, or other transaction in which the shares of Common Stock are exchanged for or changed into other stock or securities, cash and/or any other property, then in any such case the Conversion Rights of Series B Preferred Stock shall at the same time be modified such that upon Conversion of a share of Series B Preferred Stock the holder shall receive the product of the Adjustment Number times the aggregate amount of stock, securities, cash and/or any other property (payable in kind), as the case may be, into which or for which each share of common stock is changed or exchanged.

 

 

 

 

Adjustment for Reclassification, Exchange and Substitution. At any time or times the Common Stock issuable upon the conversion of the Series A Preferred Stock is changed into the same or a different number of shares of any class or classes of the Corporation’s stock, whether by recapitalization, combination, consolidation, reverse stock split, reclassification or otherwise, the Adjustment Number shall be changed proportionately to the change in the number of shares of common stock resulting from the recapitalization, reclassification or other change.

 

Fractional Shares. The Corporation shall not, nor shall it cause its transfer agent to, issue any fraction of a share of common stock upon any conversion. If the issuance would result in the issuance of a fraction of a share of common stock, the Corporation shall round, or cause the Transfer Agent to round, such fraction of a share of common stock up to the nearest whole share.

 

Dividend Payable in Shares of Stock

 

In the event the Corporation shall at any time declare or pay any dividend on common stock payable in shares of common stock, then the Adjustment Number in effect immediately prior to such event shall be adjusted by multiplying such Adjustment Number by a fraction, the numerator of which is the number of shares of common stock outstanding immediately after such event and the denominator of which is the number of shares of common stock that were outstanding immediately prior to such event.

 

As of the date of this prospectus, 80,000 shares of Series B Preferred Stock are outstanding and are convertible into an aggregate of 8,000,000 shares of common stock, and none have been converted into common stock.

 

Undesignated Preferred Stock

 

The Board of Directors shall have authority, without stockholder approval and by resolution of the Board of Directors, to amend the Corporation's Articles of Incorporation to divide the class of Preferred Stock into series, to designate each such series by a distinguishing letter, number or title so as to distinguish the shares thereof from the shares of all other series and classes, and to fix and determine the relative rights and preferences of the shares of each series so established, including (a) voting power, (b) the rate of dividend, (c) the price at which, and the terms and conditions on which, the shares may be redeemed, (iv) the amount payable upon the shares in the event of liquidation, (d) any sinking fund provision for the redemption or purchase of the shares, and (e) the terms and conditions on which the shares may be converted to shares of another series or class, if the shares of any series are issued with the privilege of conversion.

 

Warrants

 

As of the date of this prospectus, there are no outstanding warrants to purchase any shares of our common stock or preferred stock.

 

Underwriter’s warrants

 

The registration statement of which this prospectus is a part also registers for sale common stock underlying the underwriter’s warrants, which warrants are a portion of the underwriting compensation payable to the underwriter in connection with this Underwritten Offering. The underwriter’s warrants, once issued at closing of the Underwritten Offering, will be exercisable, in whole or in part, commencing on a date which is one hundred eighty (180) days after the commencement of sales of the Underwritten Offering until the fifth anniversary of the commencement of sales of Underwritten Offering at an exercise price equal to 120% of the public offering price of our common stock sold in this Underwritten Offering. Please see “Underwriting—Underwriter’s warrants” for more information.

 

 

 

 

Nevada Business Combination Statutes

 

The “business combination” provisions of Sections 78.411 to 78.444, inclusive, of the Nevada Revised Statutes, (the “NRS”), generally prohibit a Nevada corporation with at least 200 stockholders of record from engaging in various “combination” transactions with any interested stockholder for a period of two years after the date of the transaction in which the person became an interested stockholder, unless the transaction is approved by the Board prior to the date the interested stockholder obtained such status or the combination is approved by the Board and thereafter is approved at a meeting of the stockholders by the af