Tancheng Group Co., Ltd 10-Q for FY2025 Q2
Tancheng Group Co., Ltd. (QSJC)
About this 10-Q
Tancheng Group Co., Ltd filed this 10-Q on August 14, 2025, covering the quarter ended June 30, 2025 (FY2025 Q2).
Headline figures
Quarter ended June 30, 2025, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $19.1K
- up 7726.6% from $244 a year earlier
- Net loss
- $85.16K
- compared with a net loss of $93.16K a year earlier
- Diluted EPS
- -$0.02
- compared with -$0.02 a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
For the quarterly period ended:
For the transition period from _____________ to _____________
Commission File Number:
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
(Address of principal executive offices, Zip Code)
(+
(Registrant’s telephone number, including area code)
N/A
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
| None | N/A | N/A |
Indicate by check mark whether the registrant
(1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements
for the past 90 days.
Indicate by check mark whether the registrant
has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§
232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
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.
| Large accelerated filer ☐ | Accelerated filer ☐ | |
| Smaller reporting company | ||
| Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant
is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No
The number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: shares as of August 14th, 2025.
TABLE OF CONTENTS
| 2 |
PART I
FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
TANCHENG GROUP CO., LTD.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In U.S. Dollars, except share data or otherwise stated)
AS OF JUNE 30, 2025 (UNAUDITED) AND DECEMBER 31, 2024 (AUDITED)
| June 30, 2025 | December 31, 2024 | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Other receivables | ||||||||
| Inventories | ||||||||
| Advance to suppliers | ||||||||
| Total current assets | ||||||||
| Non-current assets: | ||||||||
| Motor vehicle | ||||||||
| Total non-current assets | ||||||||
| Total assets | $ | $ | ||||||
| LIABILITIES AND DEFICIT | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | $ | ||||||
| Other payables and accruals | ||||||||
| Advance from customers | ||||||||
| Amounts due to related parties | ||||||||
| Total current liabilities | ||||||||
| Total liabilities | ||||||||
| COMMITMENTS AND CONTINGENCIES | ||||||||
| DEFICIT | ||||||||
| Share capital ( shares of Common Stock, par value $ per share, authorized, of which shares are issued and outstanding as of June 30, 2025 and December 31, 2024) | ||||||||
| Additional paid in capital | ||||||||
| Foreign currency translation reserves | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total deficit | ( | ) | ( | ) | ||||
| Total liabilities and deficit | $ | $ | ||||||
The accompanying notes are an integral part of the condensed consolidated financial statements.
| 3 |
TANCHENG GROUP CO., LTD.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(In U.S. Dollars, except share data or otherwise stated)
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2025 AND 2024 (UNAUDITED)
| Three months ended June 30, | Six months ended June 30, | |||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| REVENUE | $ | $ | $ | $ | ||||||||||||
| COST OF REVENUE | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| GROSS PROFIT (LOSS) | ( | ) | ||||||||||||||
| Selling and marketing expenses | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| General and administrative expenses | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Total operating expenses | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| LOSS FROM OPERATIONS | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| OTHER INCOME | ||||||||||||||||
| LOSS BEFORE INCOME TAXES | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| INCOME TAXES | ||||||||||||||||
| NET LOSS | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Foreign currency translation differences | $ | ( | ) | $ | $ | ( | ) | $ | ||||||||
| TOTAL COMPREHENSIVE LOSS | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Loss per share: | ||||||||||||||||
| Basic and Diluted | $ | ) | $ | ) | $ | ) | $ | ) | ||||||||
| Weighted average number of shares used in computation: | ||||||||||||||||
| Basic and Diluted | ||||||||||||||||
The accompanying notes are an integral part of the condensed consolidated financial statements.
| 4 |
TANCHENG GROUP CO., LTD.
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN DEFICIT
(In U.S. Dollars, except share data or otherwise stated)
FOR THE SIX MONTHS ENDED JUNE 30, 2025 AND 2024 (UNAUDITED)
| Common Stock | Additional Paid in | Foreign Currency Translation | Accumulated | Total | ||||||||||||||||||||
| Shares | Amount | Capital | Reserve | Deficit | Deficit | |||||||||||||||||||
| Balance at January 1, 2024 | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||
| Net loss for the period | – | ( | ) | ( | ) | |||||||||||||||||||
| Other comprehensive income | – | |||||||||||||||||||||||
| Balance at June 30, 2024 | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||
| Balance at January 1, 2025 | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||
| Net loss for the period | – | ( | ) | ( | ) | |||||||||||||||||||
| Other comprehensive loss | – | ( | ) | ( | ) | |||||||||||||||||||
| Balance at June 30, 2025 | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||
The accompanying notes are an integral part of the condensed consolidated financial statements.
| 5 |
TANCHENG GROUP CO., LTD.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In U.S. Dollars, except share data or otherwise stated)
FOR THE SIX MONTHS ENDED JUNE 30, 2025 AND 2024 (UNAUDITED)
| Six months ended June 30, | ||||||||
| 2025 | 2024 | |||||||
| Cash flows from operating activities: | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Adjustment for: | ||||||||
| Depreciation | ||||||||
| Changes in operating assets and liabilities: | ||||||||
| Other receivables | ( | ) | ||||||
| Inventories | ( | ) | ( | ) | ||||
| Advance to suppliers | ( | ) | ||||||
| Accounts payable | ( | ) | ( | ) | ||||
| Other payables and accruals | ( | ) | ( | ) | ||||
| Advance from customers | ( | ) | ||||||
| Cash used in operating activities | ( | ) | ( | ) | ||||
| Cash flows from financing activities: | ||||||||
| Amounts due to related parties | ||||||||
| Cash provided by financing activities | ||||||||
| Effect of exchange rate changes on cash and cash equivalents | ( | ) | ||||||
| Net decrease in cash and cash equivalents | ( | ) | ( | ) | ||||
| Cash and cash equivalents at the beginning of the year | ||||||||
| Cash and cash equivalents at the end of the period | $ | $ | ||||||
The accompanying notes are an integral part of the condensed consolidated financial statements.
| 6 |
TANCHENG GROUP CO., LTD.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2025 and 2024 (UNAUDITED)
| 1. | DESCRIPTION OF BUSINESS |
TANCHENG GROUP CO., LTD. (“Company”), formerly named Bigeon Corp. (“Bigeon”) was incorporated on June 19, 2018 under the laws of Nevada.
Qiansui International Group Limited (“Qiansui International”) was incorporated in the Cayman Islands on June 7, 2022. Qiansui (Hong Kong) Holdings Limited (“Qiansui HK”) was incorporated on July 21, 2022 in the Hong Kong SAR. Qiansui HK wholly owns Shanxi Qiansui Tancheng Culture Consulting Co., Ltd. (“Qiansui Consulting”) which was established on December 12, 2022 in the People’s Republic of China (the “PRC”). Qiansui Consulting is a wholly owned foreign entity under PRC law. Qiansui Consulting wholly owns Shanxi Qiansui Tancheng Culture Media Co., Ltd. (“Qiansui Media”), which was established on June 14, 2017 in the PRC. Qiansui Consulting acquired Qiansui Media on December 28, 2022. Qiansui HK and Qiansui Consulting are intermediary holding companies. Qiansui International conducts its operations through Qiansui Media.
The Company operates through its wholly-owned PRC subsidiary Qiansui Media and the principal activity is the sale of self-designed ornament and adornment products in the PRC.
| 2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
(a) Basis of Presentation and Going Concern
The accompanying condensed consolidated financial statements include the balances and results of operations of the Company have been prepared pursuant to the rules and regulations of the U.S. Securities and Exchanges Commission (“SEC”) and in conformity with generally accepted accounting principles in the U.S. (“US GAAP”).
The accompanying condensed consolidated financial statements are presented on the basis that the Company is a going concern. The going concern assumption contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.
The Company incurred net loss of $
| - | The Company will obtain financial support from the related parties. | |
| - | Since 2024, management has strategically focused on selling high-margin product, resulting in improved gross profit and operating cash flows. Management anticipates that this trend will continue to enhance overall profitability, positively impacting the Company’s financial health by generating sustainable operating cash flows and supporting future growth. |
The board of directors believes the Company has adequate financial resources to continue in operational existence for at least 12 months from the date of the release of these condensed consolidated financial statements. Accordingly, the going concern basis of accounting continues to be used in preparing the condensed consolidated financial statements for the six months ended June 30, 2025.
| 7 |
(b) Economic and Political Risks
The Company’s operations are conducted in the PRC. Accordingly, the Company’s business, financial condition and results of operations may be influenced by the political, economic and legal environment in the PRC, and by the general state of the PRC economy.
The Company’s operations in the PRC are subject to special considerations and significant risks not typically associated with companies in North America and Western Europe. These include risks associated with, among others, the political, economic and legal environment and foreign currency exchange. The Company’s results may be adversely affected by changes in the political and social conditions in the PRC, and by changes in government policies with respect to laws and regulations, anti-inflationary measures, currency conversion, remittances abroad, and rates and methods of taxation.
(c) Use of Estimates
The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, related disclosures of contingent liabilities at the balance sheet date, and revenue and expenses in the financial statements and accompanying notes. Significant accounting estimates reflected in the Company’s condensed consolidated financial statements include economic lives and impairment of property, plant and equipment and allowance for doubtful accounts. Actual results could differ from those estimates and such differences could affect the results of operations reported in future periods.
(d) Cash and Cash Equivalents
The Company considers all highly liquid investments
purchased with original maturities of three months or less to be cash equivalents. All cash and cash equivalents relate to cash on hand
and cash deposited in bank accounts in mainland China at June 30, 2025 and December 31, 2024. Cash balance in bank accounts in mainland
China are insured by the People’s Bank of China Financial Stability Department (“FSD”) where there is a RMB500,000 deposit
insurance limit for a legal entity’s aggregated balance at each bank. As a result, the amounts not covered by FSD were $ and
$
The Renminbi is not freely convertible into foreign currencies. Under the PRC Foreign Exchange Control Regulations and Administration of Settlement, Sales and Payment of Foreign Exchange Regulations, the Company is permitted to exchange Renminbi for foreign currencies through banks that are authorized to conduct foreign exchange business.
(e) Motor Vehicle
The Company has one motor vehicle, which is stated at cost less accumulated depreciation and accumulated impairment losses. Cost represents the purchase price of the motor vehicle and other costs incurred to bring the motor vehicle into its existing use. Gains or losses on disposals are reflected as gain or loss in the period of disposal. All ordinary repair and maintenance costs are expensed as incurred.
Depreciation of the motor vehicle is provided
using the straight-line method over the estimated useful lives of
(f) Revenue Recognition
The Company’s revenue recognition policy is compliant with ASC 606, Revenue from Contracts with Customers that revenue is recognized when a customer obtains control of promised goods and is recognized in an amount that reflects the consideration that the Company expects to receive in exchange for those goods. In addition, the standard requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The amount of revenue that is recorded reflects the consideration that the Company expects to receive in exchange for those goods. The Company applies the following five-step model in order to determine this amount:
| (i) | identification of the goods and services in the contract; | |
| (ii) | determination of whether the goods and services are performance obligations, including whether they are distinct in the context of the contract; | |
| (iii) | measurement of the transaction price, including the constraint on variable consideration; | |
| (iv) | allocation of the transaction price to the performance obligations; and | |
| (v) | recognition of revenue when (or as) the Company satisfies each performance obligation. |
| 8 |
The Company only applies the five-step model to contracts when it is probable that the Company will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. Once a contract is determined to be within the scope of ASC 606 at contract inception, the Company reviews the contract to determine which performance obligations the Company must deliver and which of these performance obligations are distinct. The Company recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when the performance obligation is satisfied or as it is satisfied. Generally, the Company’s performance obligations are transferred to customers at a point in time, typically upon delivery or service being rendered.
Contract liabilities consist of advance from customers
related to cash received from customers for the future transfer of goods to customers. The balance of advance from customers represents
unfulfilled performance obligations in the sales agreement, i.e. products that have not yet been delivered. Once the related products
have been delivered, the amount in the advance from customers account is shifted to a revenue account. As of June 30, 2025 and December
31, 2024, the balance of advance from customers was $
For all reporting periods, the Company has not disclosed the value of unsatisfied performance obligations for all product revenue contracts with an original expected length of one year or less, which is an optional exemption that is permitted under the adopted rules.
(g) Foreign Currency Translation
The Company’s reporting currency is the U.S. dollar and the functional currency is the Chinese Renminbi (“RMB”). All assets and liabilities are translated at exchange rates at the balance sheet date and revenue and expenses are translated at the average exchange rates for the reporting period and equity is translated at historical exchange rates. Any translation adjustments resulting are not included in determining net income but are included in foreign exchange adjustments to other comprehensive income, a component of equity.
Transactions in currencies other than the functional currencies during the year are converted into the applicable functional currencies at the applicable rates of exchange prevailing at the dates of the transactions. Exchange gains and losses are recognized in the statements of operations.
The exchange rates utilized as follows:
| Schedule of exchange rates | ||||||||
| June 30, 2025 | June 30, 2024 | |||||||
| Period-end RMB exchange rate | ||||||||
| Annual average RMB exchange rate | ||||||||
No representation is made that the RMB amounts could have been, or could be, converted into U.S. dollars at the rates used in translation.
(h) Foreign Currency Risk
The RMB is not a freely convertible currency. The State Administration for Foreign Exchange, under the authority of the People’s Bank of China, controls the conversion of the RMB into other currencies. The value of the RMB is subject to changes in central government policies and to international economic and political developments affecting supply and demand in the China Foreign Exchange Trading System market. All the Company’s cash and cash equivalents are in RMB.
(i) Fair Value
Fair value is the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Company considers the principal or most advantageous market in which it would transact, and it considers assumptions that market participants would use when valuing the asset or liability. Authoritative literature provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The level in the hierarchy within which the fair value measurement in its entirety falls is based upon the lowest level of input that is significant to the fair value measurement as follows:
| 9 |
Level 1
Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.
Level 2
Level 2 applies to assets or liabilities for which there are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by observable market data.
Level 3
Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities.
(j) Fair Value of Financial Instruments
The Company’s financial instruments consist primarily of cash and cash equivalents, other receivables, accounts payable, and other payables and accruals. The carrying amounts of these balances approximate their fair values due to the short-term maturities of these instruments.
(k) Income Taxes
Income tax expense comprises current and deferred taxation and is recognized in profit or loss except to the extent that it relates to items recognized directly in other comprehensive income or equity, in which case it is recognized directly in other comprehensive income or equity. Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at the reporting date and any adjustment to tax payable with respect to previous periods.
The Company accounts for income taxes using the asset and liability approach. Under this method, deferred tax assets and liabilities are determined based on the difference between the financial reporting and tax basis of assets and liabilities, net of operating loss carry forwards and credits, by applying enacted tax rates that will be in effect for the period in which the differences are expected to reverse. The effect on deferred taxes of a change in tax rates is recognized in the statements of operations in the period of change.
The Company accounts for uncertain tax positions by reporting liability for unrecognized tax benefits resulting from uncertain tax positions taken or expected to be taken in a tax return. Tax benefits are recognized from uncertain tax positions when the Company believes that it is more likely than not that the tax position will be sustained on examination by the tax authorities based on the technical merits of the position. The Company recognizes interest and penalties if any, related to unrecognized tax benefits in income tax expenses.
(l) Comprehensive Income or Loss
Comprehensive income or loss includes net income and foreign currency translation adjustments. Comprehensive income or loss is reported in the statements of comprehensive income or loss.
(m) Concentration of Credit Risk
Financial instruments that potentially expose
the Company to a significant concentration of credit risk consist primarily of cash and cash equivalents and other receivables. As of
June 30, 2025 and December 31, 2024, substantially all of the Company’s cash and cash equivalents were deposited with financial
institutions with high-credit ratings and quality. During the three and six months ended June 30, 2025, revenue amounting to $
| 10 |
Details of customer who accounted for 10% or more of the Company’s total revenue for the three and six months ended June 30, 2025 and 2024 are as follows:
| Schedule of revenue concentration | ||||||||||||||||
| For the three months ended June 30, | ||||||||||||||||
| 2025 | 2024 | |||||||||||||||
| Amount | % of total revenue | Amount | % of total revenue | |||||||||||||
| Customer A | $ | $ | ||||||||||||||
| Customer B | ||||||||||||||||
| Customer D | ||||||||||||||||
| Customer E | ||||||||||||||||
| Customer F | ||||||||||||||||
| $ | $ | |||||||||||||||
| For the six months ended June 30, | ||||||||||||||||
| 2025 | 2024 | |||||||||||||||
| Amount | % of total revenue | Amount | % of total revenue | |||||||||||||
| Customer A | $ | $ | ||||||||||||||
| Customer B | ||||||||||||||||
| Customer C | ||||||||||||||||
| Customer D | ||||||||||||||||
| $ | $ | |||||||||||||||
Details of supplier who accounted for 10% or more of the Company’s total purchase for the three and six months ended June 30, 2025 and 2024 are as follows:
| Schedule of purchase concentration | ||||||||||||||||
| For the three months ended June 30, | ||||||||||||||||
| 2025 | 2024 | |||||||||||||||
| Amount | % of total purchase | Amount | % of total purchase | |||||||||||||
| Supplier A | $ | $ | ||||||||||||||
| For the six months ended June 30, | ||||||||||||||||
| 2025 | 2024 | |||||||||||||||
| Amount | % of total purchase | Amount | % of total purchase | |||||||||||||
| Supplier A | $ | $ | ||||||||||||||
(n) Recent Accounting Pronouncements
In October 2021, the FASB issued ASU No. 2021-08, “Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers” (“ASU 2021-08”). This ASU requires entities to apply Topic 606 to recognize and measure contract assets and contract liabilities in a business combination. The amendments improve comparability after the business combination by providing consistent recognition and measurement guidance for revenue contracts with customers acquired in a business combination and revenue contracts with customers not acquired in a business combination. The amendments are effective for the Company beginning after December 15, 2023, and are applied prospectively to business combinations that occur after the effective date. The adoption of this guidance did not have a material impact on the Company’s condensed consolidated financial statements.
| 11 |
In November 2023, the Financial Accounting Standards Board (“FASB”) issued ASU 2023-07, Improvements to Reportable Segment Disclosures (Topic 280). This ASU updates reportable segment disclosure requirements by requiring disclosures of significant reportable segment expenses that are regularly provided to the Chief Operating Decision Maker (“CODM”) and included within each reported measure of a segment’s profit or loss. This ASU also requires disclosure of the title and position of the individual identified as the CODM and an explanation of how the CODM uses the reported measures of a segment’s profit or loss in assessing segment performance and deciding how to allocate resources. The ASU is effective for annual periods beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2023. The Company adopted ASU 2023-07 as of January 1, 2024. The adoption of this guidance did not have a material impact on the Company’s condensed consolidated financial statements.
In December 2023, the FASB issued ASU 2023-09, “Improvements to Income Tax Disclosures” which is intended to simplify various aspects related to accounting for income taxes. ASU 2023-09 removes certain exceptions to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application. The amendments in ASU 2023-09 are effective for public business entities for fiscal years beginning after December 15, 2024, including interim periods therein. Early adoption of the standard is permitted, including adoption in interim or annual periods for which financial statements have not yet been issued. The Company is currently evaluating the adoption of this guidance whether or not a material impact on the Company’s condensed consolidated financial statements.
In March 2024, the FASB issued ASU 2024-01, “Compensation — Stock Compensation (Topic 718) — Scope Application of Profits Interest and Similar Awards” (“ASU 2024-01”), which intends to improve clarity and operability without changing the existing guidance. ASU 2024-01 provides an illustrative example intended to demonstrate how entities that account for profits interest and similar awards would determine whether a profits interest award should be accounted for in accordance with Topic 718. Entities can apply the guidance either retrospectively to all prior periods presented in the financial statements or prospectively to profits interest and similar awards granted or modified on or after the date of adoption. ASU 2024-01 is effective for annual periods beginning after December 15, 2024, and interim periods within those annual periods. Early adoption is permitted for both interim and annual financial statements that have not yet been issued or made available for issuance. The Company is currently evaluating the adoption of this guidance whether or not a material impact on the Company’s condensed consolidated financial statements.
In March 2024, the FASB issued ASU 2024-02, “Codification Improvements — Amendments to Remove References to the Concept Statements” (“ASU 2024-02”). ASU 2024-02 contains amendments to the FASB Accounting Standards Codification that remove references to various FASB Concepts Statements. In most instances, the references are extraneous and not required to understand or apply the guidance. In other instances, the references were used in prior Statements to provide guidance in certain topical areas. ASU 2024-02 is effective for fiscal years beginning after December 15, 2024. Early adoption is permitted. The Company is currently evaluating the adoption of this guidance whether or not a material impact on the Company’s condensed consolidated financial statements.
The Company has considered all other recently issued accounting pronouncements and does not believe the adoption of such pronouncements will have a material impact on its condensed consolidated financial statements.
| 3. | INVENTORIES |
| Schedule of inventories | ||||||||
| June 30, 2025 | December 31, 2024 | |||||||
| Ornament and adornment products | $ | $ | ||||||
| 4. | MOTOR VEHICLE |
| Schedule of motor vehicle | ||||||||
| June 30, 2025 | December 31, 2024 | |||||||
| Motor vehicle | $ | $ | ||||||
| Less: Accumulated depreciation | ( | ) | ( | ) | ||||
| Net book value | $ | $ | ||||||
Depreciation expense recorded for this motor vehicle
for the three and six months ended June 30, 2025 and 2024 was $
| 12 |
| 5. | INCOME TAXES |
(a) Enterprise Income Tax (“EIT”)
Tancheng Group Co., Ltd. was incorporated in the
State of Nevada. Tancheng Group Co., Ltd. is an U.S. entity and is subject to the United States federal income tax. No provision for income
taxes in the United States has been made as Tancheng Group Co., Ltd. had
Qiansui International was incorporated in the Cayman Islands. Under the current tax laws of Cayman Islands, Qiansui International is not subject to taxation.
Qiansui HK was incorporated in Hong Kong and is
subject to an income tax rate of
Qiansui Consulting and Qiansui Media were incorporated
in the PRC and they are subject to profits tax rate at
The Company operates its business through a subsidiary incorporated in the PRC which is subject to a corporate income tax rate of 25%. A reconciliation of the effective tax rates from 25% statutory tax rates for the three and six months ended June 30, 2025 and 2024 is as follows:
| Schedule of reconciliation of tax expense | ||||||||
| For the three months ended June 30, | ||||||||
| 2025 | 2024 | |||||||
| Loss before tax | $ | ( | ) | $ | ( | ) | ||
| PRC statutory income tax rate | ||||||||
| Provision for income taxes | ( | ) | ( | ) | ||||
| Non-taxable income | ||||||||
| Non-deductible expenses | ||||||||
| Change in valuation allowance | ||||||||
| Tax effect on tax losses expired | ||||||||
| Income tax expense | $ | $ | ||||||
| For the six months ended June 30, | ||||||||
| 2025 | 2024 | |||||||
| Loss before tax | $ | ( | ) | $ | ( | ) | ||
| PRC statutory income tax rate | ||||||||
| Provision for income taxes | ( | ) | ( | ) | ||||
| Non-taxable income | ||||||||
| Non-deductible expenses | ||||||||
| Change in valuation allowance | ||||||||
| Tax effect on tax losses expired | ||||||||
| Income tax expense | $ | $ | ||||||
The full realization of the tax benefit associated with the losses carried forward depends predominantly upon the Company’s ability to generate taxable income during the carry-forward period.
| 13 |
In assessing the realization of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. A valuation allowance is provided for deferred tax assets if it is more likely than not that these items will either expire before the Company is able to realize their benefits or that future deductibility is uncertain.
As of June 30, 2025 and December 31, 2024, the
Company’s deferred tax assets solely represent the tax loss carried forward using the PRC statutory rate of
(b) Value Added Tax (“VAT”)
The Company was subject to the normal VAT rate
of
| 6. | RELATED PARTIES TRANSACTIONS |
The table below sets forth the related parties and their relationships with the Company as of June 30, 2025 and December 31, 2024:
| Name of related parties | Relationship with the Company | |
| Yu Yang (“Mr. Yang”) | Controlling shareholder | |
| Jiaocheng Xinmu Trade Co., Ltd | Controlled by Mr. Yang | |
| All Weather (Hainan) Network Sports Co., Ltd | Controlled by Mr. Yang | |
| Taiyuan Tuohang Logistics Co., Ltd | Controlled by Mr. Yang | |
| Shanxi Xiliu Catering Management Co., Ltd | Controlled by Mr. Yang |
The related party balances and transactions are as follows:
Amounts due to related parties:
| Schedule of amounts due to related parties | ||||||||||
| June 30, 2025 | December 31, 2024 | |||||||||
| Yu Yang | (a) | $ | $ | |||||||
| Jiaocheng Xinmu Trade Co., Ltd | (b) | |||||||||
| Taiyuan Tuohang Logistics Co., Ltd | (c) | |||||||||
| $ | $ | |||||||||
| (a) | |
| (b) | |
| (c) |
| 14 |
Related party transactions:
During the three and six months ended June 30,
2025 and 2024, there were expenses paid on behalf by the related parties as described above. In addition, during the three and six months
ended June 30, 2025, the Company sold products to All Weather (Hainan) Network Sports Co., Ltd in aggregate amounts of $
| 7. | EQUITY |
Authorized Shares
As of June 30, 2025 and December 31, 2024, the Company has authorized ordinary shares, par value $ per share.
Ordinary Shares
As of June 30, 2025 and December 31, 2024, the Company’s outstanding number of ordinary shares was .
The Company did t issue any shares during the three and six months ended June 30, 2025 and 2024.
| 8. | RESERVES |
(a) Legal reserve
Pursuant to the laws applicable to the PRC’s Foreign Investment Enterprises, the Company must make appropriations from after-tax profit to non-distributable reserve funds. Subject to certain cumulative limits, the general reserve requires annual appropriations of 10% of after-tax profits as determined under the PRC laws and regulations at each year-end until the balance reaches 50% of the PRC entity registered capital; the other reserve appropriations are at the Company’s discretion. These reserves can only be used for specific purposes of enterprise expansion and are not distributable as cash dividends. As of June 30, 2025 and December 31, 2024, the paid-up statutory reserve was $.
(b) Currency translation reserve
The currency translation reserve represents translation differences arising from the translation of foreign currency financial statements into the Company’s reporting currency.
9. SEGMENT INFORMATION
The Company operates in Mainland China. Due to the integrated structure of the Company’s business, the Company’s chief operating decision maker (“CODM”) is the Chief Executive Officer. The Company determined it has one reportable segment, as the CODM regularly reviews operations and financial performance on an aggregate basis at a consolidated level for the purposes of allocating resources and to make business decisions.
The following table provides information about the Company’s segment:
| Schedule of segment information | ||||||||
| For the three months ended June 30, | ||||||||
| 2025 | 2024 | |||||||
| Segment revenue | $ | $ | ||||||
| Less: | ||||||||
| Cost of inventories | ( | ) | ( | ) | ||||
| Salaries and related costs | ( | ) | ( | ) | ||||
| Depreciation | ( | ) | ( | ) | ||||
| Legal and professional fees | ( | ) | ( | ) | ||||
| Other segment items | ( | ) | ( | ) | ||||
| Segment loss | ( | ) | ( | ) | ||||
| Reconciliation: | ||||||||
| Other operating expenses | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| 15 |
| For the six months ended June 30, | ||||||||
| 2025 | 2024 | |||||||
| Segment revenue | $ | $ | ||||||
| Less: | ||||||||
| Cost of inventories | ( | ) | ( | ) | ||||
| Salaries and related costs | ( | ) | ( | ) | ||||
| Depreciation | ( | ) | ( | ) | ||||
| Legal and professional fees | ( | ) | ( | ) | ||||
| Other segment items | ( | ) | ( | ) | ||||
| Segment loss | ( | ) | ( | ) | ||||
| Reconciliation: | ||||||||
| Other operating expenses | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| 10. | COMMITMENTS AND CONTINGENCIES |
As of June 30, 2025, the Company did
| 11. | SUBSEQUENT EVENTS |
The Company has evaluated subsequent events from June 30, 2025 to the date of the release of these condensed consolidated financial statements and has determined that there are no items to disclose.
| 16 |
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following management’s discussion and analysis should be read in conjunction with our financial statements and the notes thereto and the other financial information appearing elsewhere in this report. Our financial statements are prepared in U.S. dollars and in accordance with U.S. GAAP.
Cautionary Note Regarding Forward-Looking Statements
This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Because they discuss future events or conditions, forward-looking statements may include words such as “anticipate,” “believe,” “estimate,” “intend,” “could,” “should,” “would,” “may,” “seek,” “plan,” “might,” “will,” “pursue,” “expect,” “predict,” “project,” “goals,” “strategy,” “future,” “likely,” “forecast,” “potential,” “continue,” negatives thereof or similar references to future periods. Examples of forward-looking statements include, among others, statements we make regarding business strategies, macro-economic and sector-specific trends, future cash flows, financing plans, plans and objectives of management and any other statements which are not statements of historical facts.
Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on our current beliefs, expectations and assumptions regarding the future of our business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of our control. Our actual future results and financial condition may differ materially from those indicated in the forward-looking statements. Therefore, you should not put undue reliance on any of these forward-looking statements. The forward-looking statements made in this report speak only as of the date hereof and we disclaim any obligation, except as required by law, to provide updates, revisions or amendments to any forward-looking statements to reflect changes in our expectations or future events.
Unless otherwise indicated by the context, references to the “Company, “we,” “us,” “our” in this report are to Tancheng Group Co., Ltd., a Nevada corporation, and its consolidated subsidiaries.
Overview
Tancheng Group Co., Ltd. (formerly Bigeon), or Tancheng Group, was incorporated under the laws of Nevada on June 19, 2018. It remained a shell company until the completion of acquiring Qiansui International Group Limited, a Cayman Islands exempted company (“Qiansui International”), and Qiansui International’s subsidiaries on March 20, 2023, pursuant to a contribution agreement (the “Contribution Agreement”) entered into by and among Tancheng Group, and holders of 100% of the outstanding ordinary shares of Qiansui International who also held 79.9% of Tancheng Group’s outstanding common stock then (the “Contributors”). In accordance with the Contribution Agreement, the Contributors contributed all of their interests in Qiansui International to Tancheng Group (the “Contribution”).
Qiansui International was incorporated in the Cayman Islands on June 7, 2022. Qiansui (Hong Kong) Holdings Limited (“Qiansui HK”) was incorporated on July 21, 2022 in the Hong Kong SAR. Qiansui HK wholly owns Shanxi Qiansui Tancheng Culture Consulting Co., Ltd. (“Qiansui Consulting”) which was established on December 12, 2022 in the PRC. Qiansui Consulting is a wholly owned foreign entity, or WFOE, under PRC law. Qiansui Consulting wholly owns Shanxi Qiansui Tancheng Culture Media Co., Ltd. (“Qiansui Media”), which was established on June 14, 2017 in the PRC. Qiansui Consulting acquired Qiansui Media on December 28, 2022. Qiansui HK and Qiansui Consulting are intermediary holding companies. Qiansui International conducts its operations through Qiansui Media.
Following the consummation of the Contribution, our Company, through its wholly owned PRC subsidiary Qiansui Media, has been engaged in the business of selling ornament and adornment products related to “Jue Cheng” culture and creating cultural tourism programs. Located in close proximity to PangQuanGou National Nature Reserve in Jiaocheng County, Shanxi Province, China, Qiansui Media has leveraged the rich heritage of “Jue Cheng” culture to develop innovative peripheral cultural products and large-scale recreational tourism projects.
| 17 |
Results of Operations
Comparison for The Three Months Ended June 30, 2025 and 2024
The following table sets forth key components of our results of operations during the three months ended March 31, 2025 and 2024.
| 2025 | 2024 | Increase/ Decrease | ||||||||||
| Revenue | $ | 19,097 | $ | 244 | $ | 18,853 | ||||||
| Cost of revenue | (15,660 | ) | (2,101 | ) | (13,559 | ) | ||||||
| Gross profit (loss) | 3,437 | (1,857 | ) | 5,294 | ||||||||
| Selling and marketing expenses | (6,836 | ) | (6,764 | ) | (72 | ) | ||||||
| General and administrative expenses | (81,760 | ) | (84,545 | ) | 2,785 | |||||||
| Loss from operations | (85,159 | ) | (93,166 | ) | 8,007 | |||||||
| Other income | 2 | 3 | (1 | ) | ||||||||
| Net loss | $ | (85,157 | ) | $ | (93,163 | ) | $ | 8,006 | ||||
Revenue
We generated $19,097 in revenue for the three months ended June 30, 2025 compared to $244 for the three months ended June 30, 2024, representing an increase in revenue of $18,853 or 7,726.6% compared to the three months ended June 30, 2024. The increase was mainly due to the increase in the quantity of ornament and adornment products sold during the three months ended June 30, 2025. Since 2024, we have been experiencing intensified competition, resulting in increased price sensitivity among our customers. We are redefining and adjusting our business strategy to gain a competitive advantage in the market.
Cost of Revenue
Cost of revenue was $15,660 for the three months ended June 30, 2025 compared to $2,101 for the three months ended June 30, 2024. Cost of revenue mainly consists of the cost of products sold and labor costs. The increase in cost of revenue by $13,559 or 645.4% was mainly due to an increase in the volume of products sold, as reflected in the increase in revenue.
Gross profit
Gross profit for the three months ended June 30, 2025 was $3,437 compared with a gross loss of $(1,857) for the three months ended June 30, 2024. As a percentage of revenue, our gross margin increased from a gross loss of (761.1)% for the three months ended June 30, 2024 to a gross profit of 18.0% for the three months ended June 30, 2025, primarily because the increase in revenue was able to cover the fixed overhead costs included in cost of revenue.
Operating Expenses
General and administrative expenses
By far the most significant component of our operating expenses for both the three months ended June 30, 2025 and 2024 was general and administrative expenses in the amount of $81,760 and $84,545, respectively. The decrease of $2,785 or 3.3% was mainly due to our success in maintaining our cost structure.
| 18 |
Net Loss
We reported a net loss of $85,157 for the three months ended June 30, 2025 compared to a net loss of $93,163 for the three months ended June 30, 2024. Although we operated at a loss, we expect to see a positive trend in our future results.
Comparison for The Six Months Ended June 30, 2025 and 2024
The following table sets forth key components of our results of operations during the six months ended March 31, 2025 and 2024.
| 2025 | 2024 | Increase/ Decrease | ||||||||||
| Revenue | $ | 163,830 | $ | 157,135 | $ | 6,695 | ||||||
| Cost of revenue | (120,881 | ) | (117,519 | ) | (3,362 | ) | ||||||
| Gross profit | 42,949 | 39,616 | 3,333 | |||||||||
| Selling and marketing expenses | (13,479 | ) | (13,586 | ) | 107 | |||||||
| General and administrative expenses | (236,866 | ) | (227,093 | ) | (9,773 | ) | ||||||
| Loss from operations | (207,396 | ) | (201,063 | ) | (6,333 | ) | ||||||
| Other income | 32 | 108 | (76 | ) | ||||||||
| Net loss | $ | (207,364 | ) | $ | (200,955 | ) | $ | (6,409 | ) | |||
Revenue
We generated $163,830 in revenue for the six months ended June 30, 2025 compared to $157,135 for the six months ended June 30, 2024, representing an increase in revenue of $6,695 or 4.3% compared to the first half of year 2024. The increase was mainly due to the increase in the quantity of ornament and adornment products sold during the six months ended June 30, 2025. Since 2024, we have been experiencing intensified competition, resulting in increased price sensitivity among our customers. We are redefining and adjusting our business strategy to gain a competitive advantage in the market.
Cost of Revenue
Cost of revenue was $120,881 for the six months ended June 30, 2025 compared to $117,519 for the six months ended June 30, 2025. Cost of revenue mainly consists of the cost of products sold and labor costs. The increase in cost of revenue by $3,362 or 2.9% was in line with the increase in revenue.
Gross profit
Gross profit for the six months ended June 30, 2025 was $42,949 compared with $39,616 for the six months ended June 30, 2024. As a percentage of revenue, our gross margin slightly increased from a gross profit of 25.2% for the first half of year 2024 to 26.2% for first half of year 2025, primarily because of the increase in the cost of revenue was less than the increase in revenue.
Operating Expenses
General and administrative expenses
By far the most significant component of our operating expenses for both the six months ended June 30, 2025 and 2024 was general and administrative expenses in the amount of $236,866 and $227,093, respectively. The increase of $9,773 or 4.3% was mainly due to our success in maintaining our cost structure.
| 19 |
Net Loss
We reported a net loss of $207,364 for the six months ended June 30, 2025 compared to a net loss of $200,955 for the six months ended June 30, 2024. Although we operated at a loss, we expect to see a positive trend in our future results.
Liquidity and Capital Resources
| June 30, 2025 | December 31, 2024 | |||||||
| Working capital: | ||||||||
| Total current assets | $ | 1,448,924 | $ | 1,479,137 | ||||
| Total current liabilities | (3,215,977 | ) | (3,030,046 | ) | ||||
| Working capital deficiency | $ | (1,767,053 | ) | $ | (1,550,909 | ) | ||
Our principal sources of liquidity and capital resources have been, and are expected to continue to be, cash flow from operations and cash advances from related parties. Our principal uses of cash have been, and we expect will continue to be, for working capital to support a reasonable increase in our scale of operations.
Management has estimated our cash flow from future operations and available support from related parties and has concluded that we have, or will have access to, sufficient financial resources to meet our financial obligations as and when they fall due in the coming twelve months. There can be no assurances, however, that any of the financial resources we may be contemplating as being available to us in the future will, in fact, be available to us on acceptable terms, if at all. We believe there will be sufficient funds to run our operations for the next 12 months.
As of June 30, 2025, we had cash and cash equivalents of $17,444. The following table provides detailed information about our net cash flows for the six months ended June 30, 2025 and 2024:
| For the six months ended June 30, | ||||||||
| 2025 | 2024 | |||||||
| Cash flows: | ||||||||
| Net cash used in operating activities | $ | (276,693 | ) | $ | (537,784 | ) | ||
| Net cash provided by financing activities | 192,617 | 156,647 | ||||||
| Effect of exchange rate changes on cash and cash equivalents | 867 | (6,490 | ) | |||||
| Net decrease in cash and cash equivalents | (83,209 | ) | (387,627 | ) | ||||
| Cash and cash equivalents at the beginning of the year | 100,653 | 412,154 | ||||||
| Cash and cash equivalents at the end of the period | $ | 17,444 | $ | 24,527 | ||||
Operating Activities
Net cash used in operating activities was $(276,693) for the six months ended June 30, 2025. The difference between our net loss of $(207,364) and net cash outflows from operating activities was due to the adjustment of non-cash depreciation of a motor vehicle in the amount of $13,260 and the cash used in operating assets and liabilities in an aggregate amount of $(82,589).
The cash used in operating assets and liabilities was mainly attributable to (i) an increase in inventories of $(32,178) due to more purchase was made during the first half of year 2025 to maintain sufficient inventories level for future sales and (ii) a decrease in accounts payables of $(61,663) due to our timely payment to settle our vendors’ balance upon the receipt of inventories.
Financing Activities
Net cash generated from financing activities was $192,617 for the six months ended June 30, 2025, which was attributable to the funds from related parties to support our business operations.
| 20 |
Inflation
Inflation and changing prices have not had a material effect on our business, and we do not expect that inflation or changing prices will materially affect our business in the foreseeable future. However, our management will closely monitor price changes in our industry and continually maintain effective cost control in operations.
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, revenue or expenses, results of operations, liquidity or capital expenditures or capital resources that is material to an investor in our securities.
Critical Accounting Policies and Estimates
Revenue Recognition
The Company’s revenue recognition policy is compliant with ASC 606, Revenue from Contracts with Customers that revenue is recognized when a customer obtains control of promised goods and is recognized in an amount that reflects the consideration that the Company expects to receive in exchange for those goods. In addition, the standard requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The amount of revenue that is recorded reflects the consideration that the Company expects to receive in exchange for those goods. The Company applies the following five-step model in order to determine this amount:
| (i) | identification of the goods and services in the contract; | |
| (ii) | determination of whether the goods and services are performance obligations, including whether they are distinct in the context of the contract; | |
| (iii) | measurement of the transaction price, including the constraint on variable consideration; | |
| (iv) | allocation of the transaction price to the performance obligations; and | |
| (v) | recognition of revenue when (or as) the Company satisfies each performance obligation. |
The Company only applies the five-step model to contracts when it is probable that the Company will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. Once a contract is determined to be within the scope of ASC 606 at contract inception, the Company reviews the contract to determine which performance obligations the Company must deliver and which of these performance obligations are distinct. The Company recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when the performance obligation is satisfied or as it is satisfied. Generally, the Company’s performance obligations are transferred to customers at a point in time, typically upon delivery or service being rendered.
Contract liabilities consist of advance from customers related to cash received from customers for the future transfer of goods to customers. The balance of advance from customers represents unfulfilled performance obligations in the sales agreement, i.e. products that have not yet been delivered. Once the related products have been delivered, the amount in the advance from customers account is shifted to a revenue account. As of June 30, 2025 and December 31, 2024, the balance of advance from customers was $58,628 and $51,237, respectively. For the three and six months ended June 30, 2025 and 2024, $nil, $nil, $51,237 and $142,889 of revenue recognized was included in the Company’s advance from customers’ balance as of December 31, 2024 and 2023, respectively.
For all reporting periods, the Company has not disclosed the value of unsatisfied performance obligations for all product revenue contracts with an original expected length of one year or less, which is an optional exemption that is permitted under the adopted rules.
For all reporting periods, the Company has not disclosed the value of unsatisfied performance obligations for all product revenue contracts with an original expected length of one year or less, which is an optional exemption that is permitted under the adopted rules.
| 21 |
Recent accounting pronouncements
In October 2021, the FASB issued ASU No. 2021-08, “Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers” (“ASU 2021-08”). This ASU requires entities to apply Topic 606 to recognize and measure contract assets and contract liabilities in a business combination. The amendments improve comparability after the business combination by providing consistent recognition and measurement guidance for revenue contracts with customers acquired in a business combination and revenue contracts with customers not acquired in a business combination. The amendments are effective for the Company beginning after December 15, 2023, and are applied prospectively to business combinations that occur after the effective date. The adoption of this guidance did not have a material impact on the Company’s condensed consolidated financial statements.
In November 2023, the Financial Accounting Standards Board (“FASB”) issued ASU 2023-07, Improvements to Reportable Segment Disclosures (Topic 280). This ASU updates reportable segment disclosure requirements by requiring disclosures of significant reportable segment expenses that are regularly provided to the Chief Operating Decision Maker (“CODM”) and included within each reported measure of a segment’s profit or loss. This ASU also requires disclosure of the title and position of the individual identified as the CODM and an explanation of how the CODM uses the reported measures of a segment’s profit or loss in assessing segment performance and deciding how to allocate resources. The ASU is effective for annual periods beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2023. The Company adopted ASU 2023-07 as of January 1, 2024. The adoption of this guidance did not have a material impact on the Company’s condensed consolidated financial statements.
In December 2023, the FASB issued ASU 2023-09, “Improvements to Income Tax Disclosures” which is intended to simplify various aspects related to accounting for income taxes. ASU 2023-09 removes certain exceptions to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application. The amendments in ASU 2023-09 are effective for public business entities for fiscal years beginning after December 15, 2024, including interim periods therein. Early adoption of the standard is permitted, including adoption in interim or annual periods for which financial statements have not yet been issued. The Company is currently evaluating the adoption of this guidance whether or not a material impact on the Company’s condensed consolidated financial statements.
In March 2024, the FASB issued ASU 2024-01, “Compensation — Stock Compensation (Topic 718) — Scope Application of Profits Interest and Similar Awards” (“ASU 2024-01”), which intends to improve clarity and operability without changing the existing guidance. ASU 2024-01 provides an illustrative example intended to demonstrate how entities that account for profits interest and similar awards would determine whether a profits interest award should be accounted for in accordance with Topic 718. Entities can apply the guidance either retrospectively to all prior periods presented in the financial statements or prospectively to profits interest and similar awards granted or modified on or after the date of adoption. ASU 2024-01 is effective for annual periods beginning after December 15, 2024, and interim periods within those annual periods. Early adoption is permitted for both interim and annual financial statements that have not yet been issued or made available for issuance. The Company is currently evaluating the adoption of this guidance whether or not a material impact on the Company’s condensed consolidated financial statements.
In March 2024, the FASB issued ASU 2024-02, “Codification Improvements — Amendments to Remove References to the Concept Statements” (“ASU 2024-02”). ASU 2024-02 contains amendments to the FASB Accounting Standards Codification that remove references to various FASB Concepts Statements. In most instances, the references are extraneous and not required to understand or apply the guidance. In other instances, the references were used in prior Statements to provide guidance in certain topical areas. ASU 2024-02 is effective for fiscal years beginning after December 15, 2024. Early adoption is permitted. The Company is currently evaluating the adoption of this guidance whether or not a material impact on the Company’s condensed consolidated financial statements.
The Company has considered all other recently issued accounting pronouncements and does not believe the adoption of such pronouncements will have a material impact on its condensed consolidated financial statements.
| 22 |
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
Not applicable.
ITEM 4. CONTROLS AND PROCEDURES.
Evaluation of Disclosure Controls and Procedures
Our management is responsible for establishing and maintaining a system of disclosure controls and procedures (as defined in Rule 13a-15(e)) under the Exchange Act) that is designed to ensure that information required to be disclosed by the Company in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time 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.
Pursuant to Rule 13a-15(b) under the Exchange Act, the Company carried out an evaluation with the participation of the Company’s management, including the Company’s chief executive officer (“CEO”) and the Company’s chief financial officer (“CFO”), of the effectiveness of the Company’s disclosure controls and procedures (as defined under Rule 13a-15(e) under the Exchange Act) as of June 30, 2025. Based upon that evaluation, the Company’s CEO and CFO concluded that the Company’s disclosure controls and procedures were not effective as of June 30, 2025 due to the Company’s limited internal resources and lack of ability to have multiple levels of transaction review.
Management is in the process of determining how best to change our current system and implement a more effective system to ensure that information required to be disclosed in the reports that we file or submit under the Exchange Act have been recorded, processed, summarized and reported accurately. Our management intends to develop procedures to address the current deficiencies to the extent possible given limitations in financial and manpower resources. While management is working on a plan, no assurance can be made at this point that the implementation of such controls and procedures will be completed in a timely manner or that they will be adequate once implemented.
Changes in Internal Control over Financial Reporting
Except for the matters described above, there were no changes in our internal controls over financial reporting during the quarter ended June 30, 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
| 23 |
PART II
OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
From time to time, we may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. We are currently not aware of any legal proceedings or claims that would require disclosure under Item 103 of Regulation S-K. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business.
ITEM 1A. RISK FACTORS.
As a smaller reporting company, we are not required to provide the information required by this Item.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.
There were no unregistered sales of equity securities or repurchase of common stock during the period covered by this report.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
None.
ITEM 4. MINE SAFETY DISCLOSURES.
Not applicable.
ITEM 5. OTHER INFORMATION.
During the quarter ended June 30, 2025, no director
or officer of the Company
ITEM 6. EXHIBITS.
The following exhibits are filed as part of this report or incorporated by reference:
| Exhibit No. | Description | |
| 31.1 | Certifications of Principal Executive Officer filed pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
| 31.2 | Certifications of Principal Financial Officer filed pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
| 32.1 | Certifications of Principal Executive Officer furnished pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |
| 32.2 | Certifications of Principal Financial Officer furnished pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |
| 101.INS | XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document | |
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document | |
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document | |
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document | |
| 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document | |
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document | |
| 104 | Cover Page Interactive Data File (the cover page XBRL tags are embedded within the iXBRL document). |
| 24 |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| TANCHENG GROUP CO., LTD. | ||
| (Registrant) | ||
| Dated: August 14th, 2025 | By: | /s/ Yu Yang |
| Yu Yang | ||
| Chief Executive Officer | ||
| 25 |
EXHIBIT 31.1
CERTIFICATIONS
I, Yu Yang, certify that:
| 1. | I have reviewed this quarterly report on Form 10-Q of TANCHENG GROUP CO., LTD.; |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
| 4. | I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
| a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
| b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
| c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
| d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
| 5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
| a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
| b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: August 14th, 2025
| /s/ Yu Yang | |
| Yu Yang | |
| Chief Executive Officer | |
| (Principal Executive Officer) |
EXHIBIT 31.2
CERTIFICATIONS
I, Caixia Zhang, certify that:
| 1. | I have reviewed this quarterly report on Form 10-Q of TANCHENG GROUP CO., LTD.; |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
| 4. | I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
| a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
| b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
| c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
| d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
| 5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
| a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
| b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: August 14th, 2025
| /s/ Caixia Zhang | |
| Caixia Zhang | |
| Chief Financial Officer | |
| (Principal Financial and Accounting Officer) |
EXHIBIT 32.1
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO SECTION 906
OF THE SARBANES-OXLEY ACT OF 2002
The undersigned, Yu Yang, the Chief Executive Officer of TANCHENG GROUP CO., LTD. (the “Company”), DOES HEREBY CERTIFY that:
1. The Company’s Quarterly Report on Form 10-Q for the period ended June 30, 2025 (the “Report”), fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934; and
2. Information contained in the Report fairly presents, in all material respects, the financial condition and results of operation of the Company.
IN WITNESS WHEREOF, the undersigned has executed this statement this 14th day of August, 2025.
| /s/ Yu Yang | |
| Yu Yang | |
| Chief Executive Officer | |
| (Principal Executive Officer) |
A signed original of this written statement required by Section 906 has been provided to TANCHENG GROUP CO., LTD. and will be retained by TANCHENG GROUP CO., LTD. and furnished to the Securities and Exchange Commission or its staff upon request.
The forgoing certification is being furnished to the Securities and Exchange Commission pursuant to § 18 U.S.C. Section 1350. It is not being filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and is not to be incorporated by reference into any filing of the Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing.
EXHIBIT 32.2
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO SECTION 906
OF THE SARBANES-OXLEY ACT OF 2002
The undersigned, Caixia Zhang, the Chief Financial Officer of TANCHENG GROUP CO., LTD. (the “Company”), DOES HEREBY CERTIFY that:
1. The Company’s Quarterly Report on Form 10-Q for the period ended June 30, 2025 (the “Report”), fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934; and
2. Information contained in the Report fairly presents, in all material respects, the financial condition and results of operation of the Company.
IN WITNESS WHEREOF, the undersigned has executed this statement this 14th day of August, 2025.
| /s/ Caixia Zhang | |
| Caixia Zhang | |
| Chief Financial Officer | |
| (Principal Financial and Accounting Officer) |
A signed original of this written statement required by Section 906 has been provided to TANCHENG GROUP CO., LTD. and will be retained by TANCHENG GROUP CO., LTD. and furnished to the Securities and Exchange Commission or its staff upon request.
The forgoing certification is being furnished to the Securities and Exchange Commission pursuant to § 18 U.S.C. Section 1350. It is not being filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and is not to be incorporated by reference into any filing of the Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing.