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, 2021, filed with the Securities and Exchange Commission
("Commission") on November 12, 2021. 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 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.
On April 24, 2020, Shanghai Clancy registered Beijing Clancy Information
Technology Co., Ltd. (Beijing Clancy) in Beijing as its wholly-owned subsidiary
and a 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.
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.
-3-
Table of Contents
Comparison of Three and Six Month Periods ended January 31, 2022 and 2021
Revenues
For the three months ended January 31, 2022 and 2021, the company had revenues
of $0 and $15,122, respectively. For the six months ended January 31, 2022 and
2021, the company had revenues of $0 and $29,638, respectively. The revenues for
both periods in 2021 were from our IT related business conducted through Beijing
Clancy. 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 and six month periods.
Cost of Revenues
For the three months ended January 31, 202 and 2021, the Company had cost of
revenues $0 and $55,606, respectively. For the six months ended January 31, 202
and 2021, the Company had cost of revenues $0 and $74,861, respectively. Cost of
revenues includes salaries and benefits of IT technicians. The decrease in cost
of goods sold is due to the termination of our IT business which, as mentioned,
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 and six months ended January 31,
2022.
Operating Expenses
For the three months ended January 31, 2022, the Company had total operating
expenses of $103,413, consisting of $70,020 in research and development ("R&D")
expense, $33,393 in general and administrative expenses. These amounts compare
with total operating expenses of $39,449 consisting of $0 in R&D expense and
$39,449 in general and administrative expense for the three months ended January
31, 2021. The increase of $63,964 was due to the increase in R&D expense.
For the six months ended January 31, 2022, the Company had total operating
expenses of $209,613, consisting of $140,501 in R&D expense, $69,112 in general
and administrative expenses. These amounts compare with total operating expenses
of $103,226 consisting of $39,531 in R&D expense and $63,695 in general and
administrative expense for the six months ended January 31, 2021. The increase
of $106,387 was due to the increase in R&D expense.
Net Loss
For the six months ended 31, 2022 and 2021, the Company had a net loss of
$209,566 and $148,414, respectively, for the reasons discussed above, mainly the
increase of the R&D expenses.
For the three months ended 31, 2022 and 2021, the Company had a net loss of
$103,371 and $79,898, respectively, for the reasons discussed above, mainly the
increase of the R&D expenses.
Liquidity and Capital Resource
The Company had $29,647 and $54,375, respectively, in cash and cash equivalents
as of January 31, 2022 and July 31, 2021.
As of January 31, 2022 and July 31, 2021, the Company had working capital
deficit of $439,466 and $256,136, respectively. The increase in working capital
deficit was due to increased operating expenses during the period.
The Company can provide no assurances that it can continue to satisfy its cash
requirements for at least the next twelve months.
-4-
Table of Contents
The following is a summary of the Company's cash flows from operating and
financing activities for the six months ended January 31, 2022 and 2021:
Six Month Ended Six Month Ended
January 31, 2022 January 31, 2021
Net Cash Used in Operating Activities $ (179,837 ) $ (84,494 )
Net Cash Provided by Financing Activities
154,628 326,368
Effects of Exchange rate Changes on Cash 481 2,800
Net Change in Cash $ (24,728 ) $ 244,674
Operating Activities
During the six months ended January 31, 2022, the Company had a net loss of
$209,566 and after adjusting for lease expense, increased cash amortization of
prepaid expenses and decreased payment on accounts payable, net cash used in
operating activities of $179,837 was recorded. By comparison, during the six
months period ended January 31, 2021, the Company incurred net cash used in
operating activities of $84,494, which was mainly from net loss of $209,566 for
the period.
Financing Activities
During the six months ended January 31, 2022, the Company had cash provided by
financing activities of $154,628, which were loans from a related party (the
Company's sole officer and major shareholder). By comparison, during the nine
months ended January 31, 2021, the Company had cash provided by financing
activities of $326,368, which mainly consisted of shares issued from an equity
financing for $300,000, and loans of $26,368 from the related party.
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 except as disclosed in the notes to the financial statements..
© Edgar Online, source Glimpses