Company: QSJC
Filing Date: 2025-05-13
Form Type: 10-Q
Source: 0001683168-25-003492
Chunk: 3

Company: TANCHENG GROUP CO., LTD.
Filing Date: 2025-05-13
Form: 10-Q
Item: Part I, Item 2
Chunk 3
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 in the decrease in revenue.

Gross profit

Gross profit for the three months ended March
31, 2025 was $39,512 compared with $41,676 for the three months ended March 31, 2024. As a percentage of revenue, our gross margin slightly
increased from 26.4% for the first quarter 2024 to 27.3% for the first quarter 2025, primarily because the decrease in the cost of revenue
was greater than the reduction in revenue.

 18 

Operating Expenses

General and administrative expenses

By far the most significant component of our operating
expenses for both the three months ended March 31, 2025 and 2024 was general and administrative expenses in the amount of $155,106 and
$142,751, respectively. The increase of $12,355 or 8.7% was mainly due to price inflation. In the first quarter 2025, we had successfully
maintained our cost structure.

Net Loss

We reported a net loss of $122,207 for the three
months ended March 31, 2025 compared to a net loss of $107,792 for the three months ended March 31, 2024. Although we operated at a loss,
we expect to see a positive trend in our future results.

Liquidity and Capital Resources

    March 31, 2025  
    December 31, 2024 
  
    Working capital: 

    Total current assets 
    $1,409,125  
    $1,479,137 
  
    Total current liabilities 
     (3,081,624) 
     (3,030,046)
  
    Working capital deficiency 
    $(1,672,499) 
    $(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