The accompanying consolidated financial statements have been prepared assuming
that the Company will continue as a going concern. Although
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
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
-5- Table of ContentsCLANCY CORP. NOTES TO THE FINANCIAL STATEMENTSJanuary 31, 2021 (Unaudited) andJuly 31, 2020
NOTE 3 - BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Fiscal year end
The Company's year-end is
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. Because of short maturity of these investments, the carrying amounts approximate their fair values.
Concentration of Credit Risk
The Company is exposed to credit risk in the normal course of business,
primarily related to cash and cash equivalents. Balances at financial
institutions and state-owned banks within the PRC are covered by insurance up to
-6- Table of ContentsCLANCY CORP. NOTES TO THE FINANCIAL STATEMENTSJanuary 31, 2021 (Unaudited) andJuly 31, 2020
NOTE 3 - BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Leases
The Company determines if an arrangement is a lease at inception. Operating leases are included in operating lease right-of-use ("ROU") assets and operating lease liabilities in the consolidated balance sheets. Finance leases are included in finance lease ROU assets and finance lease liabilities in 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
The Company has elected not to recognize operating lease ROU assets and liabilities arising from short-term leases.
Advance from Customers - Contract Liability
On
One of the service maintenance agreements is with a company that is controlled
by a supervising officer of
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 six and three months ended
-7- Table of ContentsCLANCY CORP. NOTES TO THE FINANCIAL STATEMENTSJanuary 31, 2021 (Unaudited) andJuly 31, 2020
NOTE 3 - BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Foreign Currency Translation and Comprehensive Income (Loss)
The Company's functional currency is the Renminbi ("RMB"). For financial reporting purposes, RMB were translated into United States Dollars ("USD" or "$") as the reporting currency. Assets and liabilities are translated at the exchange rate in effect at the balance sheet date. Revenues and expenses are translated at the average rate of exchange prevailing during the reporting period. Translation adjustments arising from the use of different exchange rates from period to period are included as a component of stockholders' equity as "Accumulated other comprehensive income." Gains and losses resulting from foreign currency transactions are included in income. There was no significant fluctuation in the exchange rate for the conversion of RMB to USD after the balance sheet date.
The Company follows FASB ASC Topic 220, "Comprehensive Income." Comprehensive income is comprised of net income and all changes to the statements of stockholders' equity, except those due to investments by stockholders, changes in paid-in capital and distributions to stockholders.
The exchange rates used to translate amounts in RMB to USD for the purposes of preparing the consolidated financial statements were as follows:
January 31, 2021 January 31, 2020 Period end USD: RMB exchange rate 6.4709 6.8876 Average USD: RMB exchange rate 6.6807 7.0221 Financial Instrument
The carrying value of the Company's short-term financial instruments, such as prepaid expenses, security deposit, 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, "Compensation - Stock Compensation", which requires that share-based payment transactions with employees be measured based on the grant-date fair value of the equity instrument issued and recognized as compensation expense over the requisite service period. To date, the Company has not adopted a stock option plan and has not granted any stock options.
Recently Adopted Accounting Pronouncements
As of
Recently Issued Accounting Pronouncements Not Yet Adopted
As ofJanuary 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. -8- Table of ContentsCLANCY CORP. NOTES TO THE FINANCIAL STATEMENTSJanuary 31, 2021 (Unaudited) andJuly 31, 2020
NOTE 4 - OPERATING LEASE RIGHT-OF- USE ASSETS
As of
NOTE 5 - LEASE LIABILITIES- OPERATING LEASE
Future minimum lease payments under the operating lease as of
12 months endedJanuary 31, 2022 $ 75,543 12 months endedJanuary 31, 2023 64,203 Total Lease payments 139,746 Less Imputed Interest (11,561 )Net Lease liability$ 128,184
NOTE 6 - RELATED PARTY TRANSACTIONS
As of
NOTE 7 - RESEARCH AND DEVELOPMENT EXPENSE
As of
NOTE 8 - ADVANCE FROM CUSTOMERS - CONTRACT LIABILITY
As of
NOTE 9 - SHARES ISSUED FOR EQUITY FINANCING
In
NOTE 10 - INCOME TAXES
Income tax expense was
As of
There is no income tax benefit for the losses for the six and three months ended
-9- Table of Contents
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
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 respect to an investment in the Company. These
risks include but are not limited to, those factors discussed in our Annual
Report on Form 10-K for the fiscal year ended
? We have incurred significant losses and expect to incur future losses; ? Our current financial condition and immediate need for capital; ? Potential significant dilution resulting from the issuance of new securities for any funding, debt conversion or any business combination; and ? We are a "penny stock" company. Description of Business
Effective
On
? The forward split of the Company's issued and outstanding common stock,$0.001 par value, on thirty (30) post-split shares for a one (1) pre-split share basis applicable to stockholders of record as ofJanuary 2, 2020 , and ? The increase of the Company's authorized shares of common stock,$0.001 par value, from 75,000,000 to 345,000,000. -10- Table of Contents
The Corporate Actions were adopted by written consent of our sole Director, Mr.
Gaoyang Liu, on
On
In connection with the transaction,
On
? The reverse split of our issued and outstanding common stock,$0.001 par value, on thirty (30) pre-split shares to one (1) post-split share basis. Fractional shares resulting from the action will be rounded up to the nearest whole share.
The above corporate action was adopted by written consent of our sole Director
on
On
On
Results of Operations
While we commenced limited operations during the first fiscal quarter of this year, at the present time, the Company still is considered a shell company as defined in Rule 504 of the Act. One of our principal business objective for the next 12 months and beyond such time will be to achieve meaningful business operations. Alternatively, if we are unable to successfully develop our business, we may seek a combination with a business rather than immediate, short-term earnings. The Company will not restrict our potential candidate target companies to any specific business, industry or geographical location and, thus, may acquire any type of business.
-11- Table of Contents
Comparison of three months ended
Revenues
For the three months ended
Cost of Revenues
For the three months ended
Operating Expenses
For the three months ended
Net Loss
For the three months ended
Comparison of six months ended
Revenues
For the six months ended
Cost of Revenues
For the six months ended
Operating Expenses
For the six months ended
-12- Table of Contents Net Loss
For the six months ended
Liquidity and Capital Resource
The Company had
As of
The Company can provide no assurances that it can continue to satisfy its cash requirements for at least the next twelve months.
The following is a summary of the Company's cash flows from operating and
financing activities for the six months ended
Six Month Ended Six Month EndedJanuary 31, 2021 January 31, 2020
326,368 39,457 Effects of Exchange rate Changes on Cash 2,800 - Net Change in Cash$ 244,674 $ 12,378 Operating Activities
During the six months ended
Financing Activities
During the six months ended
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.
-13- Table of Contents
Off-Balance Sheet Arrangements
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.
-14- Table of Contents
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
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 respect to an investment in the Company. These
risks include but are not limited to, those factors discussed in our Annual
Report on Form 10-K for the fiscal year ended
? We have incurred significant losses and expect to incur future losses; ? Our current financial condition and immediate need for capital; ? Potential significant dilution resulting from the issuance of new securities for any funding, debt conversion or any business combination; and ? We are a "penny stock" company. Description of Business
Effective
-15- Table of Contents
On
? The forward split of the Company's issued and outstanding common stock,$0.001 par value, on thirty (30) post-split shares for a one (1) pre-split share basis applicable to stockholders of record as ofJanuary 2, 2020 , and ? The increase of the Company's authorized shares of common stock,$0.001 par value, from 75,000,000 to 345,000,000.
The Corporate Actions were adopted by written consent of our sole Director, Mr.
Gaoyang Liu, on
On
In connection with the transaction,
On
? The reverse split of our issued and outstanding common stock,$0.001 par value, on thirty (30) pre-split shares to one (1) post-split share basis. Fractional shares resulting from the action will be rounded up to the nearest whole share.
The above corporate action was adopted by written consent of our sole Director
on
On
On
On
-16- Table of Contents Results of Operations
While we commenced limited operations during the first quarter of the current fiscal 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.
Three Month and Six Month Periods Ended
Revenues
Revenues principally consists of system maintenances service for customers.
Revenue was
Cost of Revenue
Cost of Revenue consists of salaries and benefits of IT technicians. Cost of
revenue was
Operating Expenses.
Operating expenses principally consist of lease expense, general and
administrative expense, and research and development expense. Operating expense
was
Net Loss.
The Company had a net loss of
Cash and Cash Equivalents
The Company considers all highly liquid investments with the original maturities
of three months or less to be cash equivalents. The Company had
-17- Table of Contents
Liquidity and Capital Resource
The Company had
As of
The Company can provide no assurances that it can continue to satisfy 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 six months ended
Six Month Ended Six Month Ended January 31, 2020 January 31, 2020 Total Net Cash Used by Operating Activities$ (86,290 ) $ (27,079 ) Total Net Cash Provided by Financing Activities 326,142 39,457 Effects of Exchange rate Changes on Cash 6,440 - Net Change in Cash$ 246,292 $ 12,378 Operating Activities
During the six months ended
Financing Activities
During the six months ended
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.
-18- Table of Contents
Off-Balance Sheet Arrangements
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.
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