Company: QSJC
Filing Date: 2025-11-14
Form Type: 10-Q
Source: 0001683168-25-008383
Chunk: 56

Company: TANCHENG GROUP CO., LTD.
Filing Date: 2025-11-14
Form: 10-Q
Item: Part I, Item 8
Chunk 56
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 used in operating activities was $(376,322)
for the nine months ended September 30, 2025. The difference between our net loss of $(279,060) and net cash outflows from operating activities
was due to the adjustment of non-cash depreciation of a motor vehicle in the amount of $19,978 and the cash used in operating assets and
liabilities in an aggregate amount of $(117,240).

The cash used in operating assets and liabilities
was mainly attributable to (i) an increase in inventories of $(26,625) due to more purchase was made during the nine months ended September
30, 2025 to maintain sufficient inventories level for future sales; (ii) a decrease in accounts payables of $(61,935) due to our timely
payment to settle our vendors’ balance upon the receipt of inventories; and (iii) an increase in advance from customers of $22,108
due to more sales order received during the period end that was undelivered.

Financing Activities

Net cash generated from financing activities was $298,904
for the nine months ended September 30, 2025, which was attributable to the funds from related parties to support our business operations.

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: