CIIT · Tianci International, Inc.

Performance Summary

Tianci International reported a net loss of $417,124 for the quarter ended January 31, 2026 (Q2 FY2026), representing a significant deterioration from the $110,971 net loss in the same quarter of the prior year. Total operating revenues increased 86.9% to $3,884,684, primarily driven by the new mineral sales business line which contributed $1,315,855. However, cost of revenues increased 89.8% to $3,794,374, resulting in a gross profit of only $90,310 (2.3% margin). Operating expenses surged 172.5% to $507,434, with general and administrative expenses accounting for $462,264 of this total. The company ended the quarter with $723,101 in cash, down from $2,405,352 at the beginning of the period, after using $1,682,251 in cash from operating activities.

Revenue Analysis

Revenue growth was driven by diversification into new business lines. Global logistics services, the core business, generated $2,531,360 (65.2% of total revenue), representing 22.3% growth from the prior-year quarter. The newly launched mineral sales business contributed $1,315,855 (33.9% of total revenue), with no comparable revenue in the prior year. Other revenue, consisting primarily of business consulting services, increased to $37,469 from $9,120. Geographically, 54.5% of revenue came from Hong Kong ($2,117,818), 34.4% from China ($1,335,066), 10.4% from Singapore ($403,194), and 0.7% from Japan ($28,606). Customer concentration remains high, with two customers accounting for 58.5% of total revenues for the six months ended January 31, 2026.

Margins & Profitability

The company's gross margin declined to 2.3% from 3.8% in the prior-year quarter, as cost increases outpaced revenue growth. The gross profit of $90,310 was insufficient to cover operating expenses of $507,434, resulting in an operating loss of $417,124 and an operating margin of -10.7%. The significant increase in general and administrative expenses (from $171,211 to $462,264) included $84,300 in management compensation expenses for the quarter. Selling and marketing expenses also increased from $15,036 to $45,170. The net loss attributable to Tianci International was $399,898 after accounting for a $17,226 loss attributable to non-controlling interest.

Cash Flow & Balance Sheet

The company used $1,682,251 in cash from operating activities during the six months ended January 31, 2026, primarily due to the net loss of $685,998 and increases in accounts receivable ($561,754), prepayment and other current assets ($357,662), and inventory ($13,190). Cash decreased from $2,405,352 to $723,101 during the period. Total assets were $2,690,261, with current assets of $2,579,157 including cash ($723,101), accounts receivable ($561,753), prepayment and other current assets ($777,767), and inventory ($516,536). Total liabilities were only $101,342, resulting in stockholders' equity of $2,588,919. The company had no debt beyond operating lease liabilities of $93,647.

Outlook

The filing does not provide specific forward-looking guidance or management projections. However, management disclosed material weaknesses in internal controls over financial reporting, including inadequate segregation of duties and lack of formal policies for reviewing significant accounting transactions. The company utilizes a third-party independent contractor for financial statement preparation. Management stated it will continue to monitor and evaluate the effectiveness of internal controls and implement enhancements as funds allow. A subsequent event disclosed that on February 18, 2026, the board approved an amendment to increase authorized common shares to 2,000,000,000. The company faces risks including customer concentration, vendor concentration, and credit risk on uninsured Hong Kong bank deposits.