NOTE 2 – MANAGEMENT PLANS

0
The accompanying consolidated financial statements have been prepared assuming
that the Company will continue as a going concern. Although Beijing Clancy
started business operation and had generated revenue for the three months ended
October 31, 2021, the Company incurred loss, an accumulated deficit and
experienced negative cash flow from operations. These conditions raise
substantial doubt about the Company's ability to continue as a going concern.
The consolidated financial statements do not include any adjustments that might
result from the outcome of this uncertainty.



Mr. Meng, the majority shareholder, chief executive officer and sole director of the Company, has verbally agreed to provide continued financial support to the Company.

The Company's business objective for the next twelve month and beyond such time
will be to expand business operations and increase revenue. The Company will
focus on product management, digital marketing, refined user operations,
performance optimization, after-sales service, etc. to provide customers with
more convenient and high- quality service experience.



The Covid-19 pandemic presents novel challenges and a chaotic business
environment globally. The duration and intensity of the impact of the Covid-19
to business entities differ geographically. Covid-19 has a limited impact on the
Company's activities since Shanghai Clancy has no activities and Beijing Clancy
operations are limited to Beijing, PRC. The impact on the Company's result of
operation and the financial statements was immaterial as of October 31, 2021.



NOTE 3 – BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES



Basis of Presentation



The consolidated financial statements and related notes have been prepared in
accordance with accounting principles generally accepted in the United States of
America ("US GAAP") and include the accounts of Clancy Corp. and its wholly
owned subsidiaries. All material intercompany balances and transactions have
been eliminated in consolidation.

                                      F-5

  Table of Contents

Fiscal year end


The end of the Company’s financial year is July 31.


Use of Estimates



The preparation of financial statements in conformity with generally accepted
accounting principles 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 the financial statements and the
reported amount of revenues and expenses during the reporting period. Actual
results could differ from those estimates.



Income Taxes



Income taxes are computed using the asset and liability method. Under the asset
and liability method, deferred income tax assets and liabilities are determined
based on the differences between the financial reporting and tax bases of assets
and liabilities and are measured using the currently enacted tax rates and laws.
A valuation allowance is provided for the amount of deferred tax assets that,
based on available evidence, are not expected to be realized.



Revenue Recognition



The Company recognizes revenue in accordance with ASC 606, Revenue from
Contracts. The core principle of ASC 606 is that an entity recognizes revenue to
depict the transfer of promised goods or services to customers in an amount that
reflects the consideration to which the entity expects to be entitled in
exchange for those goods or services. An entity recognizes revenue in accordance
with that core principle by applying the following steps: Step 1: Identify the
contract(s) with a customer Step 2: Identify the performance obligations in the
contract Step 3: Determine the transaction price Step 4: Allocate the
transaction price to the performance obligations in the contract Step 5:
Recognize revenue when (or as) the entity satisfies a performance obligation.



Cash and Cash Equivalents


Cash and cash equivalents consist of all cash balances and highly liquid investments with original maturities of three months or less. Due to the short maturity of these investments, the carrying values ​​approximate their fair value.



Concentration of Credit Risk



The Company is exposed to credit risk in the normal course of business,
primarily related to cash and cash equivalents. A portion of the Company's cash
and cash equivalents are deposited with Industrial and Commercial Bank of China
Limited in the PRC, which is not insured or otherwise protected. The Company had
deposits of $23,693 as of October 31, 2021. The Company has not experienced any
losses in such accounts in the PRC.



Leases


The Company determines if an agreement is an early lease. Operating leases are included in the assets of the right to use operating leases (“ROU”) and operating lease debts in the consolidated balance sheets. Finance leases are included in ROU finance lease assets and finance lease liabilities on the consolidated balance sheets.

ROU assets represent the Company's right to use an underlying asset for the
lease term and lease liabilities represent the Company's obligation to make
lease payments arising from the lease. Operating lease and finance lease ROU
assets and liabilities recognized at October 31, 2021 based on the present value
of lease payments over the lease term discounted using the rate implicit in the
lease. In cases where the implicit rate is not readily determinable, the Company
uses its incremental borrowing rate based on the information available at
commencement date in determining the present value of lease payments. Lease
expense for lease payments is recognized on a straight-line basis over the
lease
term.

                                      F-6

  Table of Contents

The Company has elected not to recognize the assets and liabilities of the operating lease ROU arising from short-term leases.

Currency of declaration and conversion

The financial statements of the Company's foreign subsidiaries are measured
using the local currency, Renminbi ("RMB"), as the functional currency; whereas
the functional currency of Clancy Corp. and reporting currency of the Company is
the United States dollar ("USD" or "$").



The Company has operations in China where the local currency of RMB is used to
prepare the consolidated financial statements which are translated into the
Company's reporting currency, U.S. dollars. The local currency of RMB is the
functional currency for the operations outside the United States. Changes in the
exchange rates between this currency and the Company's reporting currency, are
partially responsible for some of the periodic changes in the consolidated
financial statements. Assets and liabilities of the Company's foreign operations
are translated into U.S. dollars at the spot rate in effect at the applicable
reporting date. Revenues and expenses of the Company's foreign operations are
translated at the average exchange rate during the applicable period. The
resulting unrealized cumulative translation adjustment is recorded as a
component of accumulated other comprehensive income (loss) in stockholders'
deficit. Realized and unrealized transaction gains and losses generated by
transactions denominated in a currency different from the functional currency of
the applicable entity are recorded in general and administrative expense in the
period in which they occur. For the three months period ended October 31, 2021
and 2020 there were no realized or unrealized transaction gains and losses
generated by transactions denominated in a currency different from the
functional currency of the applicable entities.



The exchange rates used to convert RMB amounts to USD for the purposes of preparing the consolidated financial statements were as follows:


Schedule of exchange rates

                                     October 31,       October 31,
                                        2021              2020
Period end USD: RMB exchange rate            6.39              6.69
Average USD: RMB exchange rate               6.45              6.83




Foreign Operations



All of the Company's operations and assets are located in Beijing China. The
Company may be adversely affected by possible political or economic events in
this country. The effect of these factors cannot be accurately predicted.



Basic Income (Loss) Per Share



The Company computes income (loss) per share in accordance with FASB ASC
260 "Earnings per Share". Basic income (loss) per share is computed by dividing
net income (loss) available to common stockholders by the weighted average
number of outstanding common shares during the period. Diluted income (loss) per
share gives effect to all dilutive potential common shares outstanding during
the period. Dilutive loss per share excludes all potential common shares if
their effect is anti-dilutive. In the three months ended October 31, 2021 and
2020, there were no potentially dilutive equity instruments issued or
outstanding.



Comprehensive Income



The Company follows Financial Accounting Standards Board Accounting Standards
Codification ("FASB ASC") 220, "Comprehensive Income," in reporting
comprehensive income. Comprehensive income is a more inclusive financial
reporting methodology that includes disclosure of certain financial information
that historically has not been recognized in the calculation of net income. The
Company has one item of other comprehensive loss, consisting of a currency
translation adjustment of $1,195 for the three months ended October 31, 2021
compared to $1,824 for the three months ended October 31, 2020.

                                      F-7

  Table of Contents

Financial Instrument


The carrying value of the Company's short-term financial instruments, such as
accounts payable and advances, approximates their fair values because of their
short maturities.



Stock-Based Compensation


Stock-based compensation is accounted for at fair value in accordance with ASC
Topic 718. To date, the Company has not adopted a stock option plan and has
not
granted any stock options.


Recently adopted accounting position papers

From October 31, 2021 and for the period then ended, no recently adopted accounting standard had a material impact on the Company’s financial statements.

Recently published accounting position papers not yet adopted



As of October 31, 2021, there was no recently issued accounting standards not
yet adopted which would have a material effect on the Company's consolidated
financial statements.


NOTE 4 – RIGHT OF USE GOODS UNDER OPERATIONAL LEASE

From October 31, 2021, the total assets of the right to use operating leases were
$ 97,260. The total operating lease cost was $ 16,508 and $ 15, 437for the three-month period ended October 31, 2021 and 2020.

NOTE 5 – LEASE LIABILITIES – OPERATIONAL LEASE

Future minimum payments under the operating lease from October 31, 2021
are:

Schedule of future minimum lease payments

12 months ended October 31, 2021   $ 81,147
12 months ended October 31, 2022          -
12 months ended October 31, 2023          -
Total Lease payments                 81,147
Less Imputed Interest                (4,358 )
Net Lease liability                $ 76,789



NOTE 6 – TRANSACTIONS BETWEEN RELATED PARTIES



The Company's major shareholder has orally agreed to loan funds to the Company
for its operations on an as needed basis. For the three months ended October 31,
2021, the major shareholder loaned the Company $41,017 and for the three months
ended October 31, 2020, the Company paid back to the major shareholder $57,206.



From October 31, 2021 and July 31, 2021, the balance due to a related party was $ 265,529 and $ 222,738, respectively. The loan was interest free and unsecured and had no stated repayment terms.

NOTE 7 – RESEARCH AND DEVELOPMENT COSTS



The Company incurred significant expenses in research and development (R&D). For
the three months ended October 31, 2021 and 2020, the R&D expenses were $70,481
and $39,531, respectively.

                                      F-8

  Table of Contents

NOTE 8 - INCOME TAXES


The income tax expense was $ 0 for the three months ended October 31, 2021 and 2020.

From July 31, 2021, the Company did not have any unrecognized tax benefits and, therefore, the Company did not recognize any interest or penalties during the three months ended October 31, 2021 related to unrecognized tax benefits. There was no regularization for uncertain tax positions in the October 31, 2021.



There is no income tax benefit for the losses for the three months ended October
31, 2021 and 2020, since management has determined that the realization of the
net tax deferred asset is not assured and has created a valuation allowance for
the entire amount of such benefits.



NOTE 9 - SUBSEQUENT EVENTS



Management has evaluated subsequent events through the date of filing the
financial statements with the Securities and Exchange Commission, the date the
financial statements were available to be issued. Management is not aware of any
reportable events that occurred subsequent to the balance sheet date up to
the
date of filing this report.

                                      F-9

  Table of Contents

Point 2. Discussion and analysis by management of the financial situation and operating results



Forward-Looking Statements



Certain statements made in this quarterly report on Form 10-Q are
"forward-looking statements" in regard to the plans and objectives of management
for future operations. Such statements involve known and unknown risks,
uncertainties and other factors that may cause actual results, performance or
achievements of the registrant to be materially different from any future
results, performance or achievements expressed or implied by such
forward-looking statements. The forward-looking statements included herein are
based on current expectations that involve numerous risks and uncertainties. The
Company's plans and objectives are based, in part, on assumptions involving the
continued expansion of business. Assumptions relating to the foregoing involve
judgments with respect to, among other things, future economic, competitive and
market conditions and future business decisions, all of which are difficult or
impossible to predict accurately and many of which are beyond the control of the
Company. Although the Company believes its assumptions underlying the
forward-looking statements are reasonable, any of the assumptions could prove
inaccurate and, therefore, there can be no assurance the forward-looking
statements included in this quarterly report will prove to be accurate. In light
of the significant uncertainties inherent in the forward-looking statements
included herein, the inclusion of such information should not be regarded as a
representation by the registrant or any other person that the objectives and
plans of the registrant will be achieved.



Substantial risks exist with regard to an investment in the Company. These risks include, but are not limited to, the factors discussed in our annual report on Form 10-K for the year ended. July 31, 2021, deposited with the
Security and Trade Commission (“Commission”) on November 12, 2021. More generally, these factors include, but are not limited to:

 ? We have incurred significant losses and expect to incur future losses;

? Our current financial situation and our immediate need for capital;

? Potential significant dilution resulting from the issuance of new securities

for any financing, debt conversion or any business combination; and

? We are a “penny stock” company.



Description of Business



Clancy Corp. ("the Company") was incorporated on March 22, 2016 under the laws
of the State of Nevada, USA. The Company initially was formed for the purpose of
producing and selling handcrafted soaps.



On April 13, 2020, the Company registered Shanghai Clancy Enterprise Management
Co., Ltd. (Shanghai Clancy) as a wholly foreign-owned entity and as a wholly
owned subsidiary in Shanghai, China. Shanghai Clancy had no business activity
from inception through October 31, 2021.



At April 24, 2020, Shanghai Clancy registered Beijing Clancy Information Technology Co., Ltd. (Beijing Clancy) at Beijing as a wholly owned and second tier subsidiary of the Company.



From August 1, 2020 to April 30, 2021, the Company business centered on
providing IT services to a small number of clients. In May 2021, the Company
ceased its IT services and re-focused its operations to provide marketing
services to small and median sized businesses. Clancy is now a product marketing
consulting firm that provides product marketing consulting services to clients.
The Company will develop marketing programs and strategies in line with customer
needs. Our marketing programs will provide clients with detailed analysis on the
market data in their industry, including historical data. We also will assist
clients expand their marketing communication channels including but not limited
to advertisements in the business journals, electronical communication tools
such as WeChat marketing programs, etc. We charge an agreed upon fee based on
technical difficulties and the marketing reach of the programs.

                                      -3-

  Table of Contents

Results of Operations


While we commenced limited operations during the first fiscal quarter last year,
at the present time, the Company still is considered a shell company as defined
in Rule 504 of the Act. One of our principal business objective for the next 12
months and beyond such time will be to achieve meaningful business operations.
Alternatively, if we are unable to successfully develop our business, we may
seek a combination with a business rather than immediate, short-term earnings.
The Company will not restrict our potential candidate target companies to any
specific business, industry or geographical location and, thus, may acquire
any
type of business.



Revenues



For the three months ended October 31, 2021 and 2020, the company had revenues
of $0 and 14,516, respectively. As mentioned above, we ceased our IT business in
May 2021, and we have embarked on a new business model of providing marketing
services to clients. We did not receive any revenues from our new business model
during the current three month period. The revenues for the 2020 period were
from our technology related business conducted through our WOFE, Shanghai Clancy
and its subsidiary, Beijing Clancy, which business has now ceased.



Cost of Goods Sold



For the three month ended October 31, 2021 and 2020, the Company had cost of
goods sold $0 and 19,255, respectively. Cost of goods sold includes salaries and
benefits of IT technicians. The decrease in cost of goods sold is due to the
termination of our IT business which ceased in May 2021. We did not have any
cost of goods sold for our new business operations during the same period of the
three months ended October 31, 2021.



Operating Expenses



For the three months ended October 31, 2021, the Company had total operating
expenses of $106,200, consisting of $16,642 in lease expense, $19,077 in general
and administrative expenses and $70,481 in research and development expense.
These amounts compare with total operating expenses of $64,785, consisting of
lease expense of $15,437 and general and administrative expense of $9,817
recorded in the three months ended October 31, 2020. The increase of $41,415 was
due in large part to research and develop costs associated with our recent
business developments.



Net Loss


For the three months ended October 31, 2021 and 2020, the Company recorded a net loss of $ 106,195 and $ 69,524, respectively, for the reasons mentioned above.

Liquidity and capital resources

The Company had $ 8,812 and $ 54,375, respectively in cash and cash equivalents at October 31, 2021 and July 31, 2021.

From October 31, 2021 and July 31, 2021, the Company had a working capital deficit of $ 349,814 and $ 256,136, respectively. The increase in the working capital deficit is explained by the net loss for the current period.

The Company cannot guarantee that it will be able to continue to meet its cash requirements for at least the next twelve months.

The following is a summary of the Company’s cash flows from operating and financing activities for the quarter ended. October 31, 2021 and 2020:


                                                                  Three Month                Three
                                                                     Ended                Month Ended
                                                                October 31, 2021        October 31, 2020
Total Net Cash Used by Operating Activities                    $          (86,710 )    $          (14,230 )
Total Net Cash Provided by Financing Activities                            41,017                  26,142

Effects of Exchange rate Changes on Cash                                   
  129                     740
Net Change in Cash                                             $          (45,564 )    $           12,652


                                      -4-

  Table of Contents

Operating Activities



During the three month ended October 31, 2021, the Company had a net loss of
$106,195 and after adjusting for lease expense, research and development
expense, prepaid expense and increase in accounts payable, a net cash used in
operating activities of $86,710 was recorded. By comparison, during the three
month period ended October 31, 2020, the Company had a net loss of $69,524 and
after adjusting for lease expense, research and development expense, prepaid
expense and increase in accounts payable, the Company incurred net cash used in
operating activities of $14,230.



Financing Activities



During the three months ended October 31, 2021, the Company received $41,017 in
advances from the Company's major shareholder, which resulted in $41,017 in
total net cash provided by financing activities for the period. By comparison,
during the three months ended October 31, 2020, the Company repaid $57,206 in
advances from the Company's majority shareholder offset by $83,348 in advances
received from loans to two non-affiliates, which resulted in $26,142 in total
net cash provided by financing activities for the period.



Our financial statements reflect the fact that we do not have enough revenue to
cover expenses. We are at present under-capitalized. The Company is dependent
upon the receipt of capital investment or other financing to fund its ongoing
operations and to execute its business plan of seeking a combination with a
private operating company. In addition, the Company is dependent upon certain
related parties to provide continued funding and capital resources. If continued
funding and capital resources are unavailable at reasonable terms, the Company
may not be able to implement its plan of operations.



Off-balance sheet provisions



The Company does not have any off-balance sheet arrangements that have or are
reasonably likely to have a current or future effect on the Company's financial
condition, changes in financial condition, revenues or expenses, results of
operations, liquidity, capital expenditures or capital resources that is
material to investors.



Contractual Obligations



None.

© Edgar online, source Previews


Source link

Share.

Comments are closed.