2017 Securities
Sale and Change in Control
On January 4,
2017, the Company issued 490,520 shares of our common stock to certain purchasers in accordance with the terms and conditions of
a Securities Purchase Agreement (the “Private Placement SPA”), at price of $0.20 per share for an aggregate purchase
price of $98,104. The shares sold in the private placement were issued in reliance on an exemption from registration under the
Securities Act of 1933, as amended, pursuant to Section 4(2) thereof. The proceeds were used for working capital purposes.
On August 3, 2017,
Tianci, ShiFang Wan (“SFW”), Chuah Su Mei, and the Chuah Su Chen executed a Stock Purchase Agreement (the “Stock
Purchase Agreement”), pursuant to which SFW sold to Chuah Su Chen and Chuah Su Mei an aggregate of 4,397,837 shares of Common
Stock, or approximately 87% of the issued and outstanding Common Stock, at a purchase price of $350,000. The acquisition consummated
on August 15, 2017, and 2,000,000 shares of the Company’s common stock were purchased by Chuah Su Chen using her own personal
funds. Upon consummation, the sole executive officer and director of Tianci resigned from all of her positions with Tianci, and
Chuah Su Mei, Chuah Su Chen and Yeow Yuen Kai were appointed to serve in as executive officers and directors of the Corporation.
NOTE 2 –
GOING CONCERN
As of April 30,2020,
the Company had $3,968 in cash held in trust. The Company had incurred a net loss of $52,336 for the nine months ended April 30,
2020.
The Company’s cash balance and revenues
generated are not currently sufficient and cannot be projected to cover operating expenses for the next twelve months from the
date of this report. These matters raise substantial doubt about the Company’s ability to continue as a going concern. Management’s
plans include attempting to improve its business profitability, its ability to generate sufficient cash flow from its operations
to meet its operating needs on a timely basis, obtain additional working capital funds through equity and debt financing arrangements,
and restructure on-going operations to eliminate inefficiencies to raise cash balance in order to meet its anticipated cash requirements
for the next twelve months from the date of this report. However, there can be no assurance that these plans and arrangements will
be sufficient to fund the Company’s ongoing capital expenditures, working capital, and other requirements. Management intends
to make every effort to identify and develop sources of funds. The outcome of these matters cannot be predicted at this time. There
can be no assurance that any additional financings will be available to the Company on satisfactory terms and conditions, if at
all.
The ability of the Company to continue
as a going concern is dependent upon its ability to raise additional capital and continue profitable operations. The accompanying
unaudited condensed financial statements do not include any adjustments that might result from the outcome of this uncertainty.
NOTE 3 –
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of
Presentation
The interim financial
information referred to above has been prepared and presented in conformity with accounting principles generally accepted in the
United States applicable to interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X.
The interim financial information has been prepared on a basis consistent with prior interim periods and years and includes all
disclosures that are necessary and required by applicable laws and regulations. This report on Form 10-Q should be read in conjunction
with the Company’s financial statements and notes thereto included in the Company’s Form 10-K for the fiscal year ended
July 31, 2019 filed on October 10, 2019.
The unaudited
condensed financial statements and notes are presented in accordance with accounting principles generally accepted in the United
States of America (GAAP) and are presented in U.S. dollars. These interim financial
statements include all adjustments that, in the opinion of management, are necessary in order to make the financial statements
not misleading.
Results of the
nine months ended April 30, 2020 are not necessarily indicative of the results that may be expected for the year ended July 31,
2020 and any other future periods.
Use of Estimates
The preparation
of financial statements in conformity with accounting principles generally accepted in the United States of America requires management
to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets
and liabilities at the date of the financial statements. The estimates and judgments will also affect the reported amounts for
certain revenues and expenses during the reporting period. Actual results could differ from these good faith estimates and judgments.
Cash and Cash Equivalents
Cash and cash
equivalents include cash on hand, cash in trust, and all highly liquid debt instruments with original maturities of three months
or less. The Company had $3,968 in cash and cash equivalents as of April 30, 2020 and July 31, 2019.
Fair Value Measurements
As
defined in ASC 820” Fair Value Measurements,” fair value is the price that would be received to sell an asset or paid
to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). The Company
utilizes market data or assumptions that market participants would use in pricing the asset or liability, including assumptions
about risk and the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market corroborated,
or generally unobservable. The Company classifies fair value balances based on the observability of those inputs. ASC 820 establishes
a fair value hierarchy that prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority to unadjusted
quoted prices in active markets for identical assets or liabilities (level 1 measurement) and the lowest priority to unobservable
inputs (level 3 measurement).
The
Company's financial instruments consist of cash, prepaid expense, accounts payable, and due to related parties. The
carrying amounts of these financial instruments approximate fair value due to either length of maturity or interest rates that
approximate prevailing rates unless otherwise disclosed in these financial statements.
Revenue Recognition
The
Company has yet to generate revenues from operations. The Company will recognize revenue when delivery of goods or completion of
services has occurred provided there is persuasive evidence of an agreement exists, acceptance has been approved by its customers,
the fee is fixed or determinable based on the completion of stated terms and conditions, and collection of any related receivable
is reasonably assured.
Income Taxes
Income taxes are
accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences
attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective
tax bases and operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax
rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.
The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes
the enactment date. A valuation allowance is recorded to reduce the Company’s deferred tax assets to the amount that is more
likely than not to be realized.
Basic and
Diluted Earnings (Loss) Per Share
Basic earning
(loss) per share is calculated by dividing the Company’s net loss applicable to common shareholders by the weighted average
number of common shares during the period. Diluted earnings per share is calculated by dividing the Company’s net loss available
to common shareholders by the diluted weighted average number of shares outstanding during the year. The diluted weighted average
number of shares outstanding is the basic weighted number of shares adjusted for any potentially dilutive debt or equity. There
are no such common stock equivalents outstanding as of April 30, 2020 and July 31, 2019.
Recent Accounting
Pronouncements
Management
has considered all recent accounting pronouncements issued and their potential effect on our financial statements. The Company's
management believes that these recent pronouncements will not have a material effect on the Company's unaudited condensed financial
statements.
NOTE 4 –
DUE TO RELATED PARTIES
During the nine
months ended April 30, 2020 and 2019, a shareholder of the Company advanced $46,769 and $79,925 for working capital purpose, respectively.
As of April 30,
2020, and July 31, 2019, the Company owed $232,474 and $185,705, respectively, to a shareholder of the Company. This loan is non-interest
bearing and due on demand.
NOTE 5 –
SUBSEQUENT EVENTS
The Company has
evaluated subsequent events through the date which the financial statements were available to be issued. All subsequent events
requiring recognition as of April 30, 2020 have been incorporated into these financial statements and there are no subsequent events
that require disclosure in accordance with FASB ASC Topic 855, “Subsequent Events.”
|
Item 2.
|
Management's Discussion and Analysis of Financial Condition and Results of Operations
|
FORWARD-LOOKING STATEMENTS
This quarterly report
contains forward-looking statements. These statements 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 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. Although we believe that the expectations reflected in
the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements.
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.
Our unaudited financial
statements are prepared in accordance with United States Generally Accepted Accounting Principles. The following discussion should
be read in conjunction with our financial statements and the related notes that appear elsewhere in this quarterly report. The
following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could
differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to such differences
include, but are not limited to, those discussed below and elsewhere in this quarterly report.
Our unaudited condensed
financial statements are stated in United States Dollars and are prepared in accordance with Generally Accepted Accounting Principles
of the United States of America (the U.S. GAAP).
Overview
We are currently a
“shell company” with no meaningful assets or operations other than our efforts to identify and merge with an operating
company.
We were incorporated
in the State of Nevada on June 13, 2012. Our current business office is located at No. 45-2, Jalan USJ 21/10, Subang Jaya 47640,
Selangor Darul Ehsan, Malaysia. Our telephone number is +6012 697 1115. We do not have a corporate website.
We were initially an
exploration stage company under the name of Freedom Petroleum Inc. (changed to Steampunk Wizards, Inc., effective on July 2, 2015)
that originally intended to engage in the exploration and development of oil and gas properties. In April 2015, after reviewing
the markets with investor appetite and management's duties to its shareholders, the Company determined to discontinue its oil and
gas operation. We then began exploring opportunities in the computer gaming and application industry.
We engaged in computer
game development until October 13, 2016, when control of our company changed pursuant to a share purchase agreement and a spin-off
agreement. On October 26, 2016, our corporate name was changed from “Steampunk Wizards, Inc.” to "Tianci International,
Inc." The name change was effected on November 27, 2016, in connection with the merger of us into our then subsidiary, Tianci
International Inc.
Effective April 6,
2017, we effectuated a 1-for-40 reverse stock split (the “2017 Reverse Stock Split”) of our issued and outstanding
shares of common stock, $0.0001 par value, whereby 49,854,280 outstanding shares were exchanged for 1,246,357 shares of our common
stock. Common share amounts and per share amounts in these accompanying financial statements and notes have been retroactively
adjusted to reflect this reverse stock split.
On
August 3, 2017, we entered into a Stock Purchase Agreement (the “SPA”) with Shifang Wan (the “Seller”),
the record holder of 4,397,837 common shares, or approximately 87.00% of the issued and outstanding of Common Stock of the Company,
and Chuah Su Chen and Chuah Su Mei (collectively, the “Purchasers”, and together with the Company and the Seller, the
“Parties”). Pursuant to the SPA, the Seller sold to the Purchasers and the Purchasers acquired from the Sellers the
Shares for a total gross purchase price of Three Hundred Fifty Thousand Dollars ($350,000). The acquisition was consummated on
August 15, 2017. The Purchasers used personal funds to acquire the Shares.
Upon
the consummation of the sale, Ms. Cuilian Cai resigned from her positions as director, Chief Executive Officer and Chief Financial
Officer of the Company. Her resignation was not due to any dispute or disagreement with the Company on any matter relating to the
Company's operations, policies or practices. The following individuals were also appointed to serve in the positions set forth
next to their names below:
|
Name
|
Position
|
|
Chuah Su Chen
|
Director, Chief Financial Officer and Secretary
|
|
Chuah Su Mei
|
Director, Chief Executive Officer and President
|
|
Yeow Yuen Kai
|
Director and Chief Technology Officer
|
Jerry Ooi was
appointed to serve as a director effective August 30, 2017. Mr. Kai resigned from his position as the Chief Technology Officer
effective September 20, 2017, and his position on our Board effective August 31, 2019.
We are in active discussions
with an operating business affiliated with our executive officers regarding potential acquisition. There is no assurance that we
will be able to successfully acquire such company or any company in the near future.
Limited Operating History; Need
for Additional Capital
We have had limited
operations and have been issued a "going concern" opinion by our auditor, based upon our reliance on the sale of our
common stock and loans from a related party, as the sole source of funds for our future operations.
There
is no historical financial information about us upon which to base an evaluation of our performance. We have not generated any
revenues from operations. We cannot guarantee we will be successful in our business operations. Our business is subject to risks
inherent in the establishment of a new business enterprise, including limited capital resources, possible delays in the launching
of our games and market or wider economic downturns. We do not believe we have sufficient funds to operate our business for the
next 12 months.
We
have no assurance that future financing will be available to us on acceptable terms, or at all. If financing is not available on
satisfactory terms, we may be unable to continue, develop or expand our operations. Equity financing could result in additional
dilution to existing shareholders. If we are unable to raise additional capital to maintain our operations in the future, we may
be unable to carry out our full business plan or we may be forced to cease operations.
Going Concern
Our
financial statements have been prepared on a going concern basis which assumes the Company will be able to realize its assets and
discharge its liabilities in the normal course of business for the foreseeable future. As of April 30, 2020, the Company had working
capital deficit of $229,214 and has incurred losses since its inception resulting in an accumulated deficit of $1,356,765. Further
losses are anticipated in the development of the business, raising substantial doubt about the Company’s ability to continue
as a going concern. The financial statements do not include any adjustment that might result from the outcome of this uncertainty.
The
ability to continue as a going concern is dependent upon the Company generating profitable operations in the future and/or to obtain
the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come
due. Management intends to finance operating costs over the next twelve months with loans from directors and/or private placements
of common stock.
Results of
Operations
The following table
provides selected financial data about our company as of April 30, 2020 and July 31, 2019 and
for the nine months ended April 30, 2020 and 2019.
Balance Sheet
Data
|
|
|
April 30,
|
|
|
July 31,
|
|
|
|
|
|
|
|
2020
|
|
|
2019
|
|
|
Change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
|
|
$
|
3,968
|
|
|
$
|
3,968
|
|
|
$
|
–
|
|
|
Total assets
|
|
$
|
6,968
|
|
|
$
|
15,998
|
|
|
$
|
(9,030
|
)
|
|
Total liabilities
|
|
$
|
236,182
|
|
|
$
|
192,876
|
|
|
$
|
43,306
|
|
|
Stockholders' deficit
|
|
$
|
229,214
|
|
|
$
|
176,878
|
|
|
$
|
52,336
|
|
Summary
Income Statement Data
Three
Months Ended April 30, 2020, Compared to Three Months Ended April 30, 2019
|
|
|
Three Months Ended
|
|
|
|
|
|
|
|
April 30,
|
|
|
|
|
|
|
|
2020
|
|
|
2019
|
|
|
Change
|
|
|
Net Revenue
|
|
$
|
–
|
|
|
$
|
–
|
|
|
$
|
–
|
|
|
Total Operating Expenses
|
|
|
15,081
|
|
|
|
18,662
|
|
|
|
(3,581
|
)
|
|
Loss from Operations
|
|
|
15,081
|
|
|
|
18,662
|
|
|
|
(3,581
|
)
|
|
Net Loss
|
|
$
|
15,081
|
|
|
$
|
18,662
|
|
|
$
|
(3,581
|
)
|
Revenue.
During the three months ended April 30, 2020, and 2019, we did not generate any revenues.
Operating
Expenses. Operating expenses were $15,081 and $18,662 for the three months ended April 30, 2020 and 2019, respectively.
Operating expenses mainly consisted of professional fees and office and miscellaneous expenses. The decrease in operating expenses
resulted primarily from the decrease in professional fees. We expect our operating
expenses to increase once we identify and consummate the acquisition of an operating company.
Loss from
Operations. For the three months ended April 30, 2020, and 2019, we incurred
a loss from operations of $15,081 and $18,662, respectively. The decrease in loss from operations was attributable to the decrease
in our professional fees.
Net Loss.
For the three months ended April 30, 2020, and 2019, we incurred a net loss of $15,081 and $18,662, respectively. The decrease
in net loss was primarily attributable to the decrease in our professional fees.
Nine
Months Ended April 30, 2020, Compared to Nine Months Ended April 30, 2019
|
|
|
Nine Months Ended
|
|
|
|
|
|
|
|
April 30,
|
|
|
|
|
|
|
|
2020
|
|
|
2019
|
|
|
Change
|
|
|
Net Revenue
|
|
$
|
–
|
|
|
$
|
–
|
|
|
$
|
–
|
|
|
Total Operating Expenses
|
|
|
52,336
|
|
|
|
78,753
|
|
|
|
(26,417
|
)
|
|
Loss from Operations
|
|
|
52,336
|
|
|
|
78,753
|
|
|
|
(26,417
|
)
|
|
Net Loss
|
|
$
|
52,336
|
|
|
$
|
78,753
|
|
|
$
|
(26,417
|
)
|
Revenue.
During the nine months ended April 30, 2020, and 2019, we did not generate any revenues.
Operating
Expenses. Operating expenses were $52,336 and $78,753 for the nine months ended April 30, 2020 and 2019, respectively.
Operating expenses mainly consisted of professional fees and office and miscellaneous expenses. The decrease in operating expenses
resulted primarily from the decrease in professional fees. We expect our operating
expenses to increase once we identify and consummate the acquisition of an operating company.
Loss from
Operations. For the nine months ended April 30, 2020, and 2019, we incurred
a loss from operations of $52,336 and $78,753, respectively. The decrease in loss from operations was attributable to the decrease
in our professional fees.
Net Loss.
For the nine months ended April 30, 2020, and 2019, we incurred a net loss of $52,336 and $78,753, respectively. The decrease in
net loss was primarily attributable to the decrease in our professional fees.
Liquidity and
Capital Resources
Working Capital
|
|
|
April 30,
|
|
|
July 31,
|
|
|
|
|
|
|
|
2020
|
|
|
2019
|
|
|
Change
|
|
|
Current Assets
|
|
$
|
6,968
|
|
|
$
|
15,998
|
|
|
$
|
(9,030
|
)
|
|
Current Liabilities
|
|
|
236,182
|
|
|
|
192,876
|
|
|
|
43,306
|
|
|
Working Capital Deficit
|
|
$
|
(229,214
|
)
|
|
$
|
(176,878
|
)
|
|
$
|
(52,336
|
)
|
As
of April 30, 2020, we had a working capital deficit of $229,214 as compared to working capital deficit of $176,878
as of July 31, 2019. The increase in working capital deficit was mainly due to an increase in amounts due to related
parties, for the payment of operating expenses.
Cash Flows
|
|
|
Nine Months Ended
|
|
|
|
|
April 30,
|
|
|
|
|
2020
|
|
|
2019
|
|
|
Cash used in operating activities
|
|
$
|
(46,769
|
)
|
|
$
|
(77,957
|
)
|
|
Cash provided by investing activities
|
|
$
|
–
|
|
|
$
|
–
|
|
|
Cash provided by financing activities
|
|
$
|
46,769
|
|
|
$
|
79,925
|
|
Cash Flows
from Operating Activities
During
the nine months ended April 30, 2020, net cash used in operating activities was $46,769, compared to $77,957 for the nine months
ended April 30, 2019. The decrease in net cash used in operating
activities was mainly due to the decrease in net loss.
Cash Flows
from Investing Activities
During
the nine months ended April 30, 2020 and 2019, we had no cash flow from investing activities.
Cash Flows
from Financing Activities
During
the nine months ended April 30, 2020, net cash provided by financing activities was $46,769, compared to $79,925 for the nine months
ended April 30, 2019. The decrease in net cash provided by financing activities was mainly due to the decrease in proceeds from
related parties.
Off-Balance Sheet Arrangements
We
do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial
condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures, or capital
resources that is material to investors.
Critical Accounting
Policies
The preparation of
financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”)
requires estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses, and related
disclosures of contingent assets and liabilities in the financial statements and accompanying notes. The SEC has defined a company’s
critical accounting policies as the ones that are most important to the portrayal of the company’s financial condition and
results of operations, and which require the company to make its most difficult and subjective judgments, often as a result of
the need to make estimates of matters that are inherently uncertain. Based on this definition, we have not identified any additional
critical accounting policies and judgments. We also have other key accounting policies, which involve the use of estimates, judgments
and assumptions that are significant to understanding our results, which are described in Note 2 to our financial statements. Although
we believe that our estimates, assumptions and judgments are reasonable, they are based upon information presently available. Actual
results may differ significantly from these estimates under different assumptions, judgments or conditions.
