UNITED
STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM
(Mark One)
For
the quarterly period ended
OR
For the transition period from ________ to _________
Commission
File Number:
(Exact name of registrant as specified in its charter)
(State
or Other Jurisdiction of Incorporation or Organization) |
(I.R.S. Employer Identification No.) | |
(Address of Principal Executive Offices) | (Zip Code) |
(Registrants telephone number, including area code)
n/a | n/a |
(Former Name, former address and former fiscal year, if changed since last report)
Securities registered under Section 12(b) of the Exchange Act: None
Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
Indicate
by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule
405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant
was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of large accelerated filer, accelerated filer, non-accelerated filer, smaller reporting company, and emerging growth company in Rule 12b-2 of the Exchange Act.
Large accelerated filer | ☐ | Accelerated filer | ☐ |
☒ | Smaller reporting company | ||
Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
As of June _, 2023, there were shares of common stock, $0.001 par value per share, outstanding.
PART I – FINANCIAL INFORMATION
Item 1. Financial Statements.
CLANCY CORP.
INDEX TO FINANCIAL STATEMENTS
-2-
CLANCY CORP. |
CONSOLIDATED BALANCE SHEETS |
As of April 30, 2023 (Unaudited) | As of July 31, 2022 | |||||||
ASSETS | ||||||||
CURRENT ASSETS | ||||||||
Cash and equivalents | $ | $ | ||||||
Prepaid expenses | ||||||||
Business advances | ||||||||
Total current assets | ||||||||
NONCURRENT ASSETS | ||||||||
Deposit - rent | ||||||||
Right of use asset, net | ||||||||
Total noncurrent assets | ||||||||
TOTAL ASSETS | $ | $ | ||||||
LIABILITIES AND STOCKHOLDERS EQUITY (DEFICIT) | ||||||||
CURRENT LIABILITIES | ||||||||
Accounts payable | ||||||||
Advance from related party | ||||||||
Operating lease liability | ||||||||
Total current liabilities | ||||||||
Operating lease liability, non-current | ||||||||
TOTAL LIABILITIES | ||||||||
COMMITMENTS AND CONTINGENCIES | ||||||||
STOCKHOLDERS EQUITY (DEFICIT) | ||||||||
Common stock, $ | par value; authorized shares; shares issued and outstanding at July 31, 2022 and April 30, 2023||||||||
Additional paid-in capital | ||||||||
Accumulated other comprehensive income | ||||||||
Accumulated deficit | ( | ) | ( | ) | ||||
TOTAL EQUITY (DEFICIT) | ( | ) | ( | ) | ||||
TOTAL LIABILITIES AND EQUITY (DEFICIT) | $ | $ |
See accompanying notes to the consolidated financial statements.
F-1
CLANCY CORP.
CONSOLIDATED
STATEMENTS OF OPERATIONS
for the three months and nine months ended April 30, 2023 and 2022
(unaudited)
THREE MONTHS ENDED APRIL 30, | NINE MONTHS ENDED APRIL 30, | |||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||
Revenues | $ | $ | $ | $ | ||||||||||||
Revenues - related party | ||||||||||||||||
Total Revenues | ||||||||||||||||
Cost of revenues | ||||||||||||||||
Gross loss | ||||||||||||||||
Operating expenses | ||||||||||||||||
Research and development expense-software | ||||||||||||||||
General and administrative | ||||||||||||||||
Total operating expenses | ||||||||||||||||
Loss from operations | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
Non-operating income | ||||||||||||||||
Interest income | ||||||||||||||||
Total non-operating loss, net | ||||||||||||||||
Loss before income tax | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
Income tax expense | ||||||||||||||||
Net loss | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
Other comprehensive item | ||||||||||||||||
Foreign currency translation fain (loss) | ||||||||||||||||
Comprehensive loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
Basic weighted average shares outstanding | ||||||||||||||||
Basic net loss per share | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) |
See accompanying notes to the consolidated financial statements
F-2
CLANCY CORP. |
CONSOLIDATED STATEMENTS OF CASH FLOWS |
(UNAUDITED) |
NINE MONTHS ENDED APRIL 30, | ||||||||
2023 | 2022 | |||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
Net loss | $ | ( | ) | $ | ( | ) | ||
Lease expense | ||||||||
(Increase) decrease in assets and liabilities: | ||||||||
Accounts receivable | ||||||||
Prepaid expense | ( | ) | ||||||
Accounts payable | ( | ) | ||||||
Advances from customers | ||||||||
Net cash used in operating activities | ( | ) | ( | ) | ||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
Proceeds from shares issued for equity financing | ||||||||
Changes in due to related party | ||||||||
Net cash provided by financing activities | ||||||||
EFFECT OF EXCHANGE RATE CHANGE ON CASH AND EQUIVALENTS | ( | ) | ( | ) | ||||
NET CHANGE IN CASH AND EQUIVALENTS | ( | ) | ||||||
CASH AND EQUIVALENTS, BEGINNING OF PERIOD | ||||||||
CASH AND EQUIVALENTS, END OF PERIOD | $ | $ | ||||||
Supplemental cash flow data: | ||||||||
Income tax paid | $ | $ | ||||||
Interest paid | $ | $ | ||||||
Supplemental Disclosure of Non-cash lease activities: | ||||||||
Recognition of right of use asset | $ | $ | ||||||
Recognition of lease liability | $ | $ |
See accompanying notes to financial statements.
F-3
CLANCY
CORP.
STATEMENT OF CHANGES IN SHAREHOLDERS DEFICIT
For the three months and nine months ended April 30, 2023
Accumulated | ||||||||||||||||||||||||
Additional | Other | |||||||||||||||||||||||
Common Stock | Paid in | Comprehensive | Accumulated | |||||||||||||||||||||
Shares | Amount | Capital | Loss | Deficit | Total | |||||||||||||||||||
Balance July 31, 2022 | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||
Net Loss | — | ( | ) | ( | ) | |||||||||||||||||||
Currency Translation Adjustment | — | |||||||||||||||||||||||
Balance October 31, 2022 | ( | ) | ( | ) | ||||||||||||||||||||
Net Loss | — | ( | ) | ( | ) | |||||||||||||||||||
Balance, January 31, 2023 | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||
Currency translation | — | |||||||||||||||||||||||
Net Loss | — | ( | ) | ( | ) | |||||||||||||||||||
Balance, April 30, 2023 | $ | $ | $ | $ | ( | ) | $ | ( | ) |
For the three and nine months ended April 30, 2022
Accumulated | ||||||||||||||||||||||||
Additional | Other | |||||||||||||||||||||||
Common Stock | Paid in | Comprehensive | Accumulated | |||||||||||||||||||||
Shares | Amount | Capital | Loss | Deficit | Total | |||||||||||||||||||
Balance July 31, 2021 | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||||||||||||
Net Loss | — | ( | ) | ( | ) | |||||||||||||||||||
Currency Translation Adjustment | — | ( | ) | ( | ) | |||||||||||||||||||
Balance October 31, 2021 | ( | ) | ( | ) | ( | ) | ||||||||||||||||||
Net Loss | — | ( | ) | ( | ) | |||||||||||||||||||
Currency translation | — | ( | ) | ( | ) | |||||||||||||||||||
Balance, January 31, 2022 | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||||||||||||
Currency translation | — | |||||||||||||||||||||||
Net Loss | ( | ) | ( | ) | ||||||||||||||||||||
Balance, April 30, 2022 | $ | $ | $ | $ | ( | ) | $ | ( | ) |
See accompanying notes to the consolidated financial statements
F-4
CLANCY
CORP.
NOTES TO THE FINANCIAL STATEMENTS
April 30, 2023 (Unaudited) and July 31, 2022
NOTE 1 – ORGANIZATION AND NATURE OF BUSINESS
Clancy Corp. (Company) was incorporated on March 22, 2016 under the laws of the State of Nevada, USA.
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 April 30, 2023.
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. Beginning in May 2021, the Company terminated its IT services and 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.
NOTE 2 – GOING CONCERN
The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. For the three and nine months ended April 30, 2023, the Company incurred loss, an accumulated deficit and experienced negative cash flow from operations. These conditions raise substantial doubt about the Companys 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 major stockholder, Chief Executive Officer and sole director of Company, verbally has agreed to provide continued financial support to the Company.
The Companys 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 Companys activities since Shanghai Clancy has no activities and Beijing Clancy operations are limited to Beijing, PRC. The impact on the Companys result of operation and the financial statements was immaterial as of April 30, 2023.
F-5
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.
Fiscal year end
The Companys year-end 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. 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. A portion of the
Companys cash and cash equivalents are deposited with Industrial and Commercial Bank of China Limited and Pingan Bank in the PRC,
which is not insured or otherwise protected. The Company had deposits of $
F-6
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 Companys right to use an underlying asset for the lease term and lease liabilities represent the Companys obligation to make lease payments arising from the lease. Operating lease and finance lease ROU assets and liabilities recognized at April 30, 2023 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.
The Company has elected not to recognize operating lease ROU assets and liabilities arising from short-term leases.
Reporting Currency and Translation
The financial statements of the Companys 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 Companys 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 Companys reporting currency are partially responsible for some of the periodic changes in the consolidated financial statements. Assets and liabilities of the Companys foreign operations are translated into U.S. dollars at the spot rate in effect at the applicable reporting date. Revenues and expenses of the Companys 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 six months period ended April 30, 2023 and 2022 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 translate amounts in RMB to USD for the purposes of preparing the consolidated financial statements were as follows:
April 30, 2023 | April 30, 2022 | |||||||
Period end USD: RMB exchange rate | ||||||||
Average USD: RMB exchange rate |
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 and nine months ended April 30, 2023 and 2022, there were potentially dilutive equity instruments issued or outstanding.
F-7
Financial Instrument
The carrying value of the Companys 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 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 April 30, 2023 and for the period then ended, there were no recently adopted accounting standards that had a material effect on the Companys financial statements.
Recently Issued Accounting Pronouncements Not Yet Adopted
As of April 30, 2023, there was no recently issued accounting standards adopted which would have a material effect on the Companys consolidated financial statements.
NOTE 4 - OPERATING LEASE RIGHT-OF-USE ASSETS
As
of April 30, 2023, the total operating lease Right of Use assets were $
NOTE 5 - LEASE LIABILITIES- OPERATING LEASE
Future minimum lease payments under the operating lease as of April 30, 2023 are:
12 months ended April 30, 2024 | $ | |||
12 months ended April 30, 2025 | ||||
Total Lease payments | ||||
Less Imputed Interest | ||||
Net Lease liability | $ |
F-8
NOTE 6 - RELATED PARTY TRANSACTIONS
The
Companys major shareholder has orally agreed to loan funds to the Company for its operations on an as needed basis. For the nine
months ended April 30, 2023 and 2022, the major shareholder loaned the Company $
As
of April 30, 2023 and July 31, 2022, the balance owing the major shareholder was $
NOTE 7 - RESEARCH AND DEVELOPMENT EXPENSE
The
Company incurred significant expenses in research and development (R&D). For the three months ended April 30, 2023 and 2022, the
R&D expenses were $
NOTE 8 - INCOME TAXES
Income
tax expense was $
As
of April 30, 2023, the Company had
There is no income tax benefit for the losses for the three and nine months ended April 30, 2023 and 2022, 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
Item 2. Managements 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 Companys 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, 2022, filed with the Securities and Exchange Commission (Commission) on October 31, 2022. 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 January 31, 2023.
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 of 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-
Comparison of Three and Nine Month Periods ended April 30, 2023 and 2022
Revenues
For the three months and nine months ended April 30, 2023 and 2022, the Company had no revenues.
Cost of Revenues
For both the three months and nine months ended April 30, 2023 and 2022, the Company had no cost of goods sold as we did not have any revenues for the respective periods.
Operating Expenses
For the three months ended April 30, 2023, the Company had total operating expenses of $78,005, consisting of $11,943 in research and development (R&D) expense, $66,052 in general and administrative expenses. These amounts compare with total operating expenses of $90,853 consisting of $63,745 in R&D expense and $27, 108 in general and administrative expense for the three months ended April 30, 2022. The decrease for the current quarter was due to a substantial reduction in R&D expenses.
For the nine months ended April 30, 2023, the Company had total operating expenses of $241,049, consisting of $53,477 in R&D expense, $187,618 in general and administrative expenses. These amounts compare with total operating expenses of $300,466 consisting of $204,246 in R&D expense and $96,240 in general and administrative expense for the three months ended April 30, 2022. The decrease for the current period was due to the decrease in R&D expense.
Net Loss
For the nine months ended April 30, 2023 and 2022, the Company had a net loss of $241,005 and $300,411, respectively, for the reasons discussed above.
For the three months ended April 30, 2023 and 2022, the Company had a net loss of $77,987 and $90,844, respectively, for the reasons discussed above.
Liquidity and Capital Resource
The Company had $23,944 and $19,511, respectively, in cash and cash equivalents as of April 30, 2023 and July 31, 2022.
As of April 30, 2023 and July 31, 2022, the Company had working capital deficit of $749,853 and $561,224, 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-
The following is a summary of the Companys cash flows from operating and financing activities for the nine months ended JanuApril 30, 2023 and 2022:
Nine Month Ended | Nine Month Ended | |||||||
April 30, 2023 | April 30, 2022 | |||||||
Net Cash Used in Operating Activities | $ | (195,606 | ) | $ | (258,622 | ) | ||
Net Cash Provided by Financing Activities | 200,552 | 240,208 | ||||||
Effects of Exchange rate Changes on Cash | (463) | (581) | ||||||
Net Change in Cash | $ | 4,483 | $ | (18,934 | ) |
Operating Activities
During the nine months ended April 30, 2023, the Company had a net loss of $241,055 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 $195,606 was recorded. By comparison, during the nine months period ended April 30, 2022, the Company incurred net cash used in operating activities of $258,622, which was mainly from net loss of $300,411 for the period.
Financing Activities
During the nine months ended April 30, 2023, the Company had cash provided by financing activities of $200,552, which were loans from a related party (the Companys sole officer and major shareholder). By comparison, during the nine months ended April 30, 2022, the Company had cash provided by financing activities of $240,208, which were loans from a related party (the Companys sole officer and 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 Companys 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.
Item 3. Quantitative and Qualitative Disclosures about Market Risk.
As a smaller reporting company as defined by Item 10 of Regulation S-K, the Company is not required to provide information required by this Item.
Item 4. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
In connection with the preparation of this quarterly report, an evaluation was carried out by the Companys management, with the participation of the principal executive officer and the principal financial officer, of the effectiveness of the Companys disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act (Exchange Act) as of April 30, 2023. Disclosure controls and procedures are designed to ensure that information required to be disclosed in reports filed or submitted under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the Commissions rules and forms, and that such information is accumulated and communicated to management, including the principal executive officer and the principal financial officer, to allow timely decisions regarding required disclosures.
Based on that evaluation, the Companys management concluded, as of the end of the period covered by this report, that the Companys disclosure controls and procedures were not effective in recording, processing, summarizing, and reporting information required to be disclosed, within the time periods specified in the Commissions rules and forms, and that such information was not accumulated and communicated to management, including the principal executive officer and the principal financial officer, to allow timely decisions regarding required disclosures.
-5-
Managements Report on Internal Control over Financial Reporting
Change in Internal Control over Financial Reporting
During the quarter ended April 30, 2023, there has been no changes in internal control over financial reporting that has materially affected or is reasonably likely to materially affect our internal control over financial reporting.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
There are presently no material pending legal proceedings to which the Company, any executive officer, any owner of record or beneficially of more than five percent of any class of voting securities is a party or as to which any of its property is subject, and no such proceedings are known to the Company to be threatened or contemplated against it.
Item 1A. Risk Factors.
As a smaller reporting company as defined by Item 10 of Regulation S-K, the Company is not required to provide information required by this Item.
Item 2. Unregistered Sale of Equity Securities and Use of Proceeds.
None.
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Mine Safety Disclosures.
Not applicable to our Company.
Item 5. Other Information.
None
Item 6. Exhibits.
Exhibit | Description | |
31.1 | Certification of the Companys Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002* | |
32.1 | Certification of the Companys Principal Executive Officer and Principal Financial pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002+ | |
101.INS | XBRL INSTANCE DOCUMENT* | |
101.SCH | XBRL TAXONOMY EXTENSION SCHEMA DOCUMENT* | |
101.CAL | XBRL TAXONOMY CALCULATION LINKBASE DOCUMENT* | |
101.DEF | XBRL TAXONOMY DEFINITION LINKBASE DOCUMENT* | |
101.LAB | XBRL TAXONOMY LABEL LINKBASE DOCUMENT* | |
101.PRE | XBRL TAXONOMY PRESENTATION LINKBASE DOCUMENT* |
+ In accordance with SEC Release 33-8238, Exhibit 32.1 is being furnished and not filed.
* | Filed herewith. |
-6-
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
Date: June __, 2023 | CLANCY CORP. |
/s/ Xiangying Meng | |
Xiangying Meng | |
-7-
Exhibit 31.1
Certification of the Companys Principal Executive Officer and Principal Financial Officer
Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
and Securities and Exchange Commission Release 34-46427
I, Xiangying Meng, certify that:
1. | I have reviewed this report on Form 10-Q of Clancy Corp.; | ||
2. | Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report; | ||
3. | Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the small business issuer as of, and for, the periods present in this quarterly report; | ||
4. | As the registrants sole certifying officer, I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: | ||
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | ||
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | |
c) | Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | |
d) | Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an quarterly report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and | |
5. | As the registrants sole certifying officer, I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants board of directors (or persons performing the equivalent functions): | |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and | |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting. | |
Date: June __, 2023 |
|
/s/ Xiangying Meng | |
Xiangying Meng Chief
Executive Officer and Chief Financial Officer
|
Exhibit 32.1
Certification of Principal Executive Officer and Principal Financial Officer
Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002
In connection with the Quarterly Report of Clancy Corp. (the Company) on Form 10-Q for the period ended April 30, 2023 as filed with the Securities and Exchange Commission on the date hereof (the Report), I, Xiangying Meng, certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge and belief:
1. The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
Date: June __, 2023
/s/ Xiangying Meng | |
Xiangying Meng Chief
Executive Officer and Chief Financial Officer | |
CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - $ / shares |
Apr. 30, 2023 |
Jul. 31, 2022 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 345,000,000 | 345,000,000 |
Common stock, shares issued | 153,105,464 | 153,105,464 |
Common stock, shares outstanding | 153,105,464 | 153,105,464 |
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Apr. 30, 2023 |
Apr. 30, 2022 |
Apr. 30, 2023 |
Apr. 30, 2022 |
|
Income Statement [Abstract] | ||||
Revenues | ||||
Revenues - related party | ||||
Total Revenues | ||||
Cost of revenues | ||||
Gross loss | ||||
Operating expenses | ||||
Research and development expense-software | 11,943 | 63,745 | 53,477 | 204,246 |
General and administrative | 66,062 | 27,108 | 187,618 | 96,220 |
Total operating expenses | 78,005 | 90,853 | 241,095 | 300,466 |
Loss from operations | (78,005) | (90,853) | (241,095) | (300,466) |
Non-operating income | ||||
Interest income | 17 | 9 | 39 | 56 |
Total non-operating loss, net | 17 | 9 | 39 | 56 |
Loss before income tax | (77,987) | (90,844) | (241,055) | (300,411) |
Income tax expense | 0 | 0 | 0 | 0 |
Net loss | (77,987) | (90,844) | (241,055) | (300,411) |
Other comprehensive item | ||||
Foreign currency translation fain (loss) | 11,935 | 10,638 | 7,896 | 8,902 |
Comprehensive loss | $ (66,052) | $ (10,638) | $ (233,159) | $ (291,509) |
Basic weighted average shares outstanding | 153,105,464 | 153,105,464 | 153,105,464 | 153,105,464 |
Basic net loss per share | $ (0.00) | $ (0.00) | $ (0.00) | $ (0.00) |
STATEMENT OF CHANGES IN SHAREHOLDERS' DEFICIT (Unaudited) - USD ($) |
3 Months Ended | |||||
---|---|---|---|---|---|---|
Apr. 30, 2023 |
Jan. 31, 2023 |
Oct. 31, 2022 |
Apr. 30, 2022 |
Jan. 31, 2022 |
Oct. 31, 2021 |
|
Common Stock [Member] | ||||||
Statement [Line Items] | ||||||
Beginning balance, value | $ 153,105 | $ 153,105 | $ 153,105 | $ 153,105 | $ 153,105 | $ 153,105 |
Beginning balance, shares | 153,105,464 | 153,105,464 | 153,105,464 | 153,105,464 | 153,105,464 | 153,105,464 |
Net Loss | ||||||
Currency Translation Adjustment | ||||||
Currency translation | ||||||
Ending balance, value | $ 153,105 | $ 153,105 | $ 153,105 | $ 153,105 | $ 153,105 | $ 153,105 |
Ending balance, shares | 153,105,464 | 153,105,464 | 153,105,464 | 153,105,464 | 153,105,464 | 153,105,464 |
Additional Paid-in Capital [Member] | ||||||
Statement [Line Items] | ||||||
Beginning balance, value | $ 213,251 | $ 213,251 | $ 213,251 | $ 213,251 | $ 213,251 | $ 213,251 |
Net Loss | ||||||
Currency Translation Adjustment | ||||||
Currency translation | ||||||
Ending balance, value | 213,251 | 213,251 | 213,251 | 213,251 | 213,251 | 213,251 |
AOCI Attributable to Parent [Member] | ||||||
Statement [Line Items] | ||||||
Beginning balance, value | 8,019 | 35,213 | 12,058 | (4,225) | (3,684) | (2,489) |
Net Loss | ||||||
Currency Translation Adjustment | 23,155 | (1,195) | ||||
Currency translation | 11,935 | 10,638 | (541) | |||
Ending balance, value | 19,946 | 8,019 | 35,213 | 6,413 | (4,225) | (3,684) |
Retained Earnings [Member] | ||||||
Statement [Line Items] | ||||||
Beginning balance, value | (1,039,639) | (969,794) | (876,571) | (705,486) | (602,115) | (495,920) |
Net Loss | (77,987) | (69,845) | (93,223) | (90,844) | (103,371) | (106,195) |
Currency Translation Adjustment | ||||||
Currency translation | ||||||
Ending balance, value | (1,117,618) | (1,039,639) | (969,794) | (796,331) | (705,486) | (602,115) |
Beginning balance, value | (665,264) | (568,225) | (498,157) | (343,355) | (239,443) | (132,053) |
Net Loss | (77,987) | (69,845) | (93,223) | (90,844) | (103,371) | (106,195) |
Currency Translation Adjustment | 23,155 | (1,195) | ||||
Currency translation | 11,935 | 10,638 | (541) | |||
Ending balance, value | $ (731,316) | $ (665,264) | $ (568,225) | $ (423,562) | $ (343,355) | $ (239,443) |
ORGANIZATION AND NATURE OF BUSINESS |
9 Months Ended |
---|---|
Apr. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
ORGANIZATION AND NATURE OF BUSINESS | NOTE 1 – ORGANIZATION AND NATURE OF BUSINESS
Clancy Corp. (Company) was incorporated on March 22, 2016 under the laws of the State of Nevada, USA.
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 April 30, 2023.
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. Beginning in May 2021, the Company terminated its IT services and 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.
|
GOING CONCERN |
9 Months Ended |
---|---|
Apr. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
GOING CONCERN | NOTE 2 – GOING CONCERN
The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. For the three and nine months ended April 30, 2023, the Company incurred loss, an accumulated deficit and experienced negative cash flow from operations. These conditions raise substantial doubt about the Companys 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 major stockholder, Chief Executive Officer and sole director of Company, verbally has agreed to provide continued financial support to the Company.
The Companys 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 Companys activities since Shanghai Clancy has no activities and Beijing Clancy operations are limited to Beijing, PRC. The impact on the Companys result of operation and the financial statements was immaterial as of April 30, 2023.
|
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
9 Months Ended | ||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Apr. 30, 2023 | |||||||||||||||||||||||||||||||||||||
Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 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.
Fiscal year end
The Companys year-end 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. 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. A portion of the Companys cash and cash equivalents are deposited with Industrial and Commercial Bank of China Limited and Pingan Bank in the PRC, which is not insured or otherwise protected. The Company had deposits of $23,994 as of April 30, 2023. The Company has not experienced any losses in such accounts in the PRC.
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 Companys right to use an underlying asset for the lease term and lease liabilities represent the Companys obligation to make lease payments arising from the lease. Operating lease and finance lease ROU assets and liabilities recognized at April 30, 2023 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.
The Company has elected not to recognize operating lease ROU assets and liabilities arising from short-term leases.
Reporting Currency and Translation
The financial statements of the Companys 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 Companys 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 Companys reporting currency are partially responsible for some of the periodic changes in the consolidated financial statements. Assets and liabilities of the Companys foreign operations are translated into U.S. dollars at the spot rate in effect at the applicable reporting date. Revenues and expenses of the Companys 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 six months period ended April 30, 2023 and 2022 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 translate amounts in RMB to USD for the purposes of preparing the consolidated financial statements were as follows:
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 and nine months ended April 30, 2023 and 2022, there were potentially dilutive equity instruments issued or outstanding.
Financial Instrument
The carrying value of the Companys 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 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 April 30, 2023 and for the period then ended, there were no recently adopted accounting standards that had a material effect on the Companys financial statements.
Recently Issued Accounting Pronouncements Not Yet Adopted
As of April 30, 2023, there was no recently issued accounting standards adopted which would have a material effect on the Companys consolidated financial statements.
|
OPERATING LEASE RIGHT-OF-USE ASSETS |
9 Months Ended |
---|---|
Apr. 30, 2023 | |
Operating Lease Right-of-use Assets | |
OPERATING LEASE RIGHT-OF-USE ASSETS | NOTE 4 - OPERATING LEASE RIGHT-OF-USE ASSETS
As of April 30, 2023, the total operating lease Right of Use assets were $4,622. The total operating lease cost was $13,754 and $15,021, respectively, for the three-month period ended April 30, 2023 and 2022. The total operating lease cost was $41,263 and $48,380, respectively, for the nine-month period ended April 30, 2023 and 2022.
|
LEASE LIABILITIES- OPERATING LEASE |
9 Months Ended | ||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Apr. 30, 2023 | |||||||||||||||||||||||||||||||
Lease Liabilities- Operating Lease | |||||||||||||||||||||||||||||||
LEASE LIABILITIES- OPERATING LEASE | NOTE 5 - LEASE LIABILITIES- OPERATING LEASE
Future minimum lease payments under the operating lease as of April 30, 2023 are:
|
RELATED PARTY TRANSACTIONS |
9 Months Ended |
---|---|
Apr. 30, 2023 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 6 - RELATED PARTY TRANSACTIONS
The Companys major shareholder has orally agreed to loan funds to the Company for its operations on an as needed basis. For the nine months ended April 30, 2023 and 2022, the major shareholder loaned the Company $200,552 and $240,208, respectively.
As of April 30, 2023 and July 31, 2022, the balance owing the major shareholder was $732,485 and $541,750, respectively. The loan is interest free and unsecured and had no stated terms of repayment.
|
RESEARCH AND DEVELOPMENT EXPENSE |
9 Months Ended |
---|---|
Apr. 30, 2023 | |
Research And Development Expense | |
RESEARCH AND DEVELOPMENT EXPENSE | NOTE 7 - RESEARCH AND DEVELOPMENT EXPENSE
The Company incurred significant expenses in research and development (R&D). For the three months ended April 30, 2023 and 2022, the R&D expenses were $11,943 and $63,745, respectively. For the nine months ended April 30, 2023 and 2022, the R&D expenses were $53,477 and $204,246, respectively.
|
INCOME TAXES |
9 Months Ended |
---|---|
Apr. 30, 2023 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE 8 - INCOME TAXES
Income tax expense was $0 for the nine and there months ended April 30, 2023 and 2022.
As of April 30, 2023, the Company had no unrecognized tax benefits and, accordingly, the Company did not recognize interest or penalties during the three and nine months ended April 30, 2023 related to unrecognized tax benefits. There was no accrual for uncertain tax positions as of April 30, 2023.
There is no income tax benefit for the losses for the three and nine months ended April 30, 2023 and 2022, 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.
|
SUBSEQUENT EVENTS |
9 Months Ended |
---|---|
Apr. 30, 2023 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | 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. |
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Apr. 30, 2023 | |||||||||||||||||||||||||||||||||||||
Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||
Basis of Presentation | 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.
|
||||||||||||||||||||||||||||||||||||
Fiscal year end | Fiscal year end
The Companys year-end is July 31.
|
||||||||||||||||||||||||||||||||||||
Use of Estimates | 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
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 | 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
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 | 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 Companys cash and cash equivalents are deposited with Industrial and Commercial Bank of China Limited and Pingan Bank in the PRC, which is not insured or otherwise protected. The Company had deposits of $23,994 as of April 30, 2023. The Company has not experienced any losses in such accounts in the PRC.
|
||||||||||||||||||||||||||||||||||||
Leases | 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 Companys right to use an underlying asset for the lease term and lease liabilities represent the Companys obligation to make lease payments arising from the lease. Operating lease and finance lease ROU assets and liabilities recognized at April 30, 2023 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.
The Company has elected not to recognize operating lease ROU assets and liabilities arising from short-term leases.
|
||||||||||||||||||||||||||||||||||||
Reporting Currency and Translation | Reporting Currency and Translation
The financial statements of the Companys 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 Companys 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 Companys reporting currency are partially responsible for some of the periodic changes in the consolidated financial statements. Assets and liabilities of the Companys foreign operations are translated into U.S. dollars at the spot rate in effect at the applicable reporting date. Revenues and expenses of the Companys 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 six months period ended April 30, 2023 and 2022 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 translate amounts in RMB to USD for the purposes of preparing the consolidated financial statements were as follows:
|
||||||||||||||||||||||||||||||||||||
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 and nine months ended April 30, 2023 and 2022, there were potentially dilutive equity instruments issued or outstanding.
|
||||||||||||||||||||||||||||||||||||
Financial Instrument | Financial Instrument
The carrying value of the Companys 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 | Recently Adopted Accounting Pronouncements
As of April 30, 2023 and for the period then ended, there were no recently adopted accounting standards that had a material effect on the Companys financial statements.
|
||||||||||||||||||||||||||||||||||||
Recently Issued Accounting Pronouncements Not Yet Adopted | Recently Issued Accounting Pronouncements Not Yet Adopted
As of April 30, 2023, there was no recently issued accounting standards adopted which would have a material effect on the Companys consolidated financial statements.
|
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Apr. 30, 2023 | |||||||||||||||||||||||||||||||||||||
Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||
Schedule of exchange rates |
|
LEASE LIABILITIES- OPERATING LEASE (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Apr. 30, 2023 | |||||||||||||||||||||||||||||||
Lease Liabilities- Operating Lease | |||||||||||||||||||||||||||||||
Schedule of future minimum lease payment |
|
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) |
Apr. 30, 2023 |
Apr. 30, 2022 |
---|---|---|
Period end RMB USD exchange rate [Member] | ||
Intercompany Foreign Currency Balance [Line Items] | ||
Exchange rate | 6.9240 | 6.6177 |
Period average RMB USD exchange rate [Member] | ||
Intercompany Foreign Currency Balance [Line Items] | ||
Exchange rate | 6.9796 | 6.4222 |
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Apr. 30, 2023 |
Apr. 30, 2022 |
Apr. 30, 2023 |
Apr. 30, 2022 |
|
Accounting Policies [Abstract] | ||||
Bank Deposits | $ 23,994 | $ 23,994 | ||
Potentially dilutive shares | 0 | 0 | 0 | 0 |
OPERATING LEASE RIGHT-OF-USE ASSETS (Details Narrative) - USD ($) |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Apr. 30, 2023 |
Apr. 30, 2022 |
Apr. 30, 2023 |
Apr. 30, 2022 |
Jul. 31, 2022 |
|
Operating Lease Right-of-use Assets | |||||
Operating lease right of use assets | $ 4,622 | $ 4,622 | $ 48,831 | ||
Operating lease cost | $ 13,754 | $ 15,021 | $ 41,263 | $ 48,380 |
LEASE LIABILITIES- OPERATING LEASE (Details) |
Apr. 30, 2023
USD ($)
|
---|---|
Lease Liabilities- Operating Lease | |
12 months ended April 30, 2024 | $ 21,060 |
12 months ended April 30, 2025 | |
Total Lease payments | 21,060 |
Less Imputed Interest | |
Net Lease liability | $ 21,060 |
RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($) |
9 Months Ended | ||
---|---|---|---|
Apr. 30, 2023 |
Apr. 30, 2022 |
Jul. 31, 2022 |
|
Related Party Transactions [Abstract] | |||
Proceeds from related party debt | $ 200,552 | $ 240,208 | |
Advance from related party | $ 732,485 | $ 541,750 |
RESEARCH AND DEVELOPMENT EXPENSE (Details Narrative) - USD ($) |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Apr. 30, 2023 |
Apr. 30, 2022 |
Apr. 30, 2023 |
Apr. 30, 2022 |
|
Research And Development Expense | ||||
Research and development expense | $ 11,943 | $ 63,745 | $ 53,477 | $ 204,246 |
INCOME TAXES (Details Narrative) - USD ($) |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Apr. 30, 2023 |
Apr. 30, 2022 |
Apr. 30, 2023 |
Apr. 30, 2022 |
|
Income Tax Disclosure [Abstract] | ||||
Income tax expense | $ (0) | $ (0) | $ (0) | $ (0) |
Unrecognized tax benefits | 0 | 0 | ||
Unrecognized tax benefits interest or penalties | 0 | 0 | ||
Uncertain tax positions | $ 0 | $ 0 |
[T+^ '',%,4RGUK9FS>AI](\^#3Q>7E)Q,7(/=[C9H]D]P]U1_OJR]
M]W?5:'.=(M)?0/L2-VY-*!PHN06'\0$N0S&1+N6\0!_$-;((XI6!N%F):45U
M5MAY'(
=GDX %QX[P#\
M'<"O=->.*I4S9MAHH&0)REH3FUU4H59H$L>%?925473+"6=&RV@5C9?3&QC/
M9S"+'J+O=XO;:'X/T:]%-%]% ]>0%VOKQCO&2
:PY4=DOD_\6
MOMTITX&E0DA284?S/9,I/X>2<:! J8)J7GYLU8+>=#ZJ =,WKI_4;4OTO_I9[H0V8D23JV$
M\Q^JUKFD'!FC,J50"&-(:[ !_7X#S5X6^59)NONDQV[M82CC%\@SWF+7,?U
M*O8S>3K
C_2S+"X;B(D*-R4D46X/M/
M.&Y3B']E R" BR=D1]INC)HU\E8)5EHW%T]-*]+[WR?DWNP@1!X'+1001A0T?D>
M GO))@IX;
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MS@OI%N^^A9PV;9_D/**#M]K#E5BA"V(_6GV3SBX)T+/%2;?%& .V^'8B!A"Q%<'\QUC/&S/