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 July 31, 2020, filed with the
Securities and Exchange Commission ("Commission") on November 12, 2020. More
broadly, these factors include, but are not limited to:
? 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
Clancy Corp. (the "Company") was incorporated under the laws of the State of
Nevada on March 22, 2016.
Effective June 28, 2019 ("Effective Date"), a change of control occurred with
respect to the Company. Pursuant to the terms of Stock Purchase Agreement,
Gaoyang Liu purchased 2,000,000 shares of Company issued and outstanding common
stock from Iryna Kologrim, the then sole officer, director, and majority
shareholder of the Company. The 2,000,000 shares represented 64.4% of the shares
of outstanding common stock of the Company. In connection with the transaction,
Mr. Liu became the sole officer and director of the Company and Ms. Kologrim
resigned in all capacities with respect to the Company. In addition, as of the
Effective Date, the Company assigned all of the assets to Ms. Kologrim and she
waived all liabilities, including any outstanding loans, and claims against the
Company. In connection with the change of control, the Company ceased its
business operation and is now a "shell company" as defined under Rule 405
promulgated under the Securities Act of 1933, as amended (the "Act"). Prior to
such time, the Company produced and sold organic soaps.
On January 15, 2020, the Company filed a Certificate of Amendment to Articles of
Incorporation with the Nevada Secretary of State (the "Amendment") which
effectuated the following corporate actions ("Corporate Actions"):
? 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 of January 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 January 2, 2020, and the sole Director recommended the Corporate
Actions be presented to our shareholders for approval. On January 3, 2020, Mr.
Liu, the Company's majority stockholder, holding 64.4% of the company's
outstanding voting securities executed written consent approving the Corporate
Actions. For purposes of the forward stock split described above, the sole
Director also set January 2, 2020 as the record date of such action.
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On March 31, 2020, a change of control occurred with respect to the Company.
Pursuant to a Stock Purchase Agreement entered into by and among the Clancy
Corp. ("Company"), Gaoyang Liu ("Seller"), and Xiangying Meng ("Buyer") (the
"Purchase Agreement"), Seller assigned, transferred and conveyed to
Buyer 60,000,000 shares of common stock of Company ("Common Stock"), which
represents 64.4% of the total issued and outstanding shares of the Company, for
the sum of $285,000. In addition, Seller assigned his rights and interest to
outstanding loans made by Seller to the Company in the amount of $55,609 for the
face value of such loans. As a result of the transaction, Mr. Meng owned
67,500,000 shares of common stock of the Company or 72.5% of the issued and
outstanding shares of common stock of the Company.
In connection with the transaction, Mr. Liu, the then sole officer and director
of the Company resigned in all officer and director capacities from the Company
and Mr. Meng was appointed Chief Executive Officer and Chief Financial Officer
of the Company. In addition, Mr. Meng was appointed the sole director of the
Company.
On July 6, 2020, the Nevada Secretary of State approved the Company's
Certificate of Amendment to Articles of Incorporation which effectuated the
following corporate action ("Corporate Action"):
? 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 June 11, 2020, and the sole Director recommended the corporate action be
presented to our shareholders for approval. For purposes of the reverse stock
split described above, the sole Director also set June 12, 2020 as the record
date of such action. On June 12, 2020, our majority stockholder, holding 91.885%
of our outstanding voting securities, executed written consent in lieu of a
shareholder meeting approving the corporate action.
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, 2020.
On April 24, 2020, Shanghai Clancy registered Beijing Clancy Information
Technology Co., Ltd. (Beijing Clancy) in Beijing as a wholly-owned subsidiary.
Beijing Clancy had no business activity from inception through April 30, 2020.
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.
Comparison of three months ended April 30, 2021 and 2020
Revenues
For the three months ended April 30, 2021 and 2020, the company had revenues of
$15,050 and 0, respectively. The revenues are from our IT related business
conducted through Beijing Clancy. We ceased that business as of April 30, 202.
Beginning in May 2021, the Company re-focused its business operations to
business consulting services to small and median sized businesses. Management
believes their prior business experience will enable them to assist small and
medium sized companies improve their operating efficiencies. The Company will
charge its clients based on their performance. Management believes the new
business model will reduce internal overhead costs and potentially provide a
larger market for its services.
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Cost of Revenues
For the three months ended April 30, 2021 and 2020, the Company had cost of
revenues $67,687 and 0, respectively. Cost of revenues includes salaries and
benefits of IT technicians. The increase in cost of revenues is due to the
commencement of our technology driven business in the report period of this
current fiscal year. We did not have any business operations during the same
period of the last fiscal year.
Operating Expenses
For the three months ended April 30, 2021, the Company had total operating
expenses of $22,618, consisting of $16,481 in lease expense, $6,137 in general
and administrative expenses. These amounts compare with total operating expenses
of $26,977 consisting of lease expense of $1,454 and general and administrative
expense of $25,523 recorded in the three months ended April 30, 2020. The
decrease of $4,359 was due to the decrease in general and administrative
expense.
Net Loss
For the three months ended April 30, 2021 and 2020, the Company had a net loss
of $75,257 and $26,977, respectively, for the reasons discussed above, mainly
the increase of the cost of revenues.
Comparison of nine months ended April 30, 2021 and 2020
Revenues
For the nine months ended April 30, 2021 and 2020, the company had revenues of
$44,688 and 0, respectively. The revenues are from our technology related
business conducted through Beijing Clancy. As mentioned above, we ceased that
business as of April 30, 2021. Beginning in May 2021, the Company re-focused its
business operations to business consulting services to small and median sized
businesses. Management believes their prior business experience will enable them
to assist small and medium sized companies improve their operating efficiencies.
The Company will charge its clients based on their performance. Management
believes the new business model will reduce internal overhead costs and
potentially provide a larger market for its services.
Cost of Revenues
For the nine months ended April 30, 2021 and 2020, the Company had cost of
revenues $142,548 and $0, respectively. Cost of revenues includes salaries and
benefits of IT technicians. The increase in cost of revenues is due to the
commencement of our technology driven business in the report period of this
current fiscal year. We did not have any business operations during the same
period of the last fiscal year.
Operating Expenses
For the nine months ended April 30, 2021, the Company had total operating
expenses of $125,844, consisting of $49,392 in lease expense, $35,828 in general
and administrative expenses and $40,624 in research and development expense.
These amounts compare with total operating expenses of $56,819 consisting of
lease expense of $4,216, and general and administrative expense of $52,603
recorded in the nine months ended April 30, 2020. The increase of $69,025 was
due to increased research and develop costs associated with our recent business
developments, along with increased lease expense from the three-year lease which
we entered into in May 2020.
Net Loss
For the nine months ended April 30, 2021 and 2020, the Company had a net loss of
$223,475 and $56,819, respectively, for the reasons discussed above.
Liquidity and Capital Resource
The Company had $204,517 and $21,821, respectively, in cash and cash equivalents
as of April 30, 2021 and July 31, 2020.
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As of April 30, 2021 and July 31, 2020, the Company had working capital deficit
of $83,451 and $177,989, respectively. The decrease in working capital deficit
was due to increased revenues and an equity financing of $300,000 was completed
for the current period.
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 nine months ended April 30, 2021 and 2020:
Nine Month Ended Nine Month Ended
April 30, 2021 April 30, 2020Net Cash Used in Operating Activities $ (147,007 ) $ (52,016 )
Net Cash Provided by Financing Activities
327,987 54,457
Effects of Exchange rate Changes on Cash 1,716 2,441
Net Change in Cash $ 182,696 $ 2,441
Operating Activities
During the nine months ended April 30, 2021, the Company had a net loss of
$223,475 and after adjusting for lease expense, decreased cash payment on
prepaid expenses and decreased payment on accounts payable, a net cash used in
operating activities of $147,007 was recorded. By comparison, during the nine
months period ended April 30, 2020, the Company incurred net cash used in
operating activities of $52,016, which was mainly from net loss of $56,819.
Financing Activities
During the nine months ended April 30, 2021, the Company had cash provided by
financing activities of $327,987, which was mainly consisted of shares issued
from an equity financing for $300,000, and increased due to a related party
(also the Company's major shareholder) of $27,987. By comparison, during the
nine months ended April 30, 2020, the Company had $54,457 increase from due to a
related party, which is also the Company's major shareholder.
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 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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