-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, EnB6y3IOCNcN18DhIZ5peVoBpD5JjBrKF2f7UBVwg163a5xr80sXLIp7ZHGQxR5X fvolsvnQEo9vEmQiPM+BIw== 0000789318-96-000011.txt : 19960813 0000789318-96-000011.hdr.sgml : 19960813 ACCESSION NUMBER: 0000789318-96-000011 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960630 FILED AS OF DATE: 19960812 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: CLANCY SYSTEMS INTERNATIONAL INC /CO/ CENTRAL INDEX KEY: 0000789318 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-PREPACKAGED SOFTWARE [7372] IRS NUMBER: 841027964 STATE OF INCORPORATION: CO FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 033-04882-D FILM NUMBER: 96607985 BUSINESS ADDRESS: STREET 1: 2250 S ONEIDA STREET 2: STE 308 CITY: DENVER STATE: CO ZIP: 80224 BUSINESS PHONE: 3037530197 MAIL ADDRESS: STREET 1: 2250 S ONEIDA STREET 2: STE 3308 CITY: DENVER STATE: CO ZIP: 80224 FORMER COMPANY: FORMER CONFORMED NAME: OXFORD FINANCIAL INC DATE OF NAME CHANGE: 19600201 10QSB 1 FORM 10-QSB UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 1996 OR TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number: Act No. 33-4882-D CLANCY SYSTEMS INTERNATIONAL, INC. (Exact name of Registrant as specified in its charter) Colorado 84-1027964 (State or other jurisdiction of (IRS Employer Identification incorporation or organization) Number) 2250 S. Oneida #308, Denver, Colorado 80224 (Address of principal executive offices and Zip Code) (303)753-0197 (Registrant's telephone number) (Former name, former address and former fiscal year, if changed since last report) 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: Yes X No APPLICABLE ONLY TO CORPORATE ISSUERS: Indicated the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. 336,889,149 common shares were outstanding as of August 9, 1996. CLANCY SYSTEMS INTERNATIONAL, INC. INDEX Page No. PART I. FINANCIAL INFORMATION Balance Sheet - September 30, 1995 and June 30, 1996 2 and 3 Statement of Operations - For the Three Months Ended June 30, 1995 and 1996 4 Statement of Operations - For the Nine Months Ended June 30, 1995 and 1996 5 Statement of Stockholders' Equity - For the Nine Months Ended June 30, 1996 6 Statement of Cash Flows - For the Nine Months Ended June 30, 1995 and 1996 7 Notes to Unaudited Financial Statements 8 Management's Discussion and Analysis of Financial Condition and Results of Operations 10 PART II. OTHER INFORMATION 10 1 CLANCY SYSTEMS INTERNATIONAL, INC. BALANCE SHEET September 30, 1995 and June 30, 1996 (Unaudited) ASSETS ------ September June --------- ---- Current assets: Cash, including interest bearing accounts of $166,616 (September) and $51,809 (June) $ 236,404 $ 144,507 Accounts receivable, less allowance for doubtful accounts of $0 175,281 160,122 Inventories (Note 2) 178,154 177,760 Investment in contract (Note 4) - 500,000 Income taxes refundable 12,000 720 Deferred tax asset (Note 3) 5,000 - Other current assets - 923 ---------- ------- Total current assets 606,839 984,032 Furniture and equipment, at cost: Office furniture and equipment 98,278 106,006 Equipment under service contracts 1,207,529 1,343,435 ---------- --------- 1,305,807 1,449,441 Less accumulated depreciation 848,617 906,251 ---------- --------- Net furniture and equipment 457,190 543,190 Other assets: Investment in contract (Note 4) - 125,000 Deposits and other 19,947 50,030 Software licenses 16,882 16,882 Software development costs 205,692 252,069 --------- ------- 242,521 443,981 Less accumulated amortization 147,237 176,426 --------- ------- Net other assets 95,284 267,555 --------- ------- $1,159,313 $1,794,777 ========== ========== See accompanying notes. 2 CLANCY SYSTEMS INTERNATIONAL, INC. BALANCE SHEET September 30, 1995 and June 30, 1996 (Unaudited) LIABILITIES AND STOCKHOLDERS' EQUITY ------------------------------------ September June --------- ---- Current liabilities: Notes payable - bank (Note 5) $ - $ 600,000 Warranty reserve 7,300 5,100 Deferred revenue 62,521 66,135 ---------- --------- Total current liabilities 69,821 671,235 Deferred tax liability (Note 3) 9,000 17,000 Stockholders' equity: Preferred stock, $.0001 par value; 100,000,000 shares authorized, none issued - - Common stock, $.0001 par value; 800,000,000 shares authorized, 336,889,149 shares issued and outstanding 33,689 33,689 Additional paid-in capital 1,030,674 1,030,674 Retained earnings 16,129 42,179 --------- --------- Total stockholders' equity 1,080,492 1,106,542 --------- --------- $1,159,313 $1,794,777 ========== ========== See accompanying notes. 3 CLANCY SYSTEMS INTERNATIONAL, INC. STATEMENT OF OPERATIONS For the Three Months Ended June 30, 1995 and 1996 (Unaudited) 1995 1996 ---- ---- Revenues: Sales $ 138,931 $ 41,625 Service contract income 226,307 283,363 Parking ticket collections - 229,965 --------- --------- 365,238 554,953 Costs and expenses: Cost of sales 47,342 19,406 Contract support costs 56,992 95,564 Cost of parking ticket collections - 235,261 General and administrative 142,300 106,238 Depreciation and amortization 63,266 69,768 Research and development 6,356 8,136 Loss on disposal of fixed assets 500 168 -------- -------- Total costs and expenses 316,756 534,541 -------- ------- Income from operations 48,482 20,412 Other income (expense) Interest income 1,481 983 Interest expens - (16,327) Total other income (expense) 1,481 (15,344) ------- -------- Income before provision for income taxes 49,963 5,068 Current income tax expense (Note 3) - 341 ------- ------- Net income $ 49,963 $ 4,727 ========= ========= Net income per share $ * $ * ========= ========= Weighted average number of shares outstanding 336,900,000 336,900,000 =========== =========== * less than $.01 per share See accompanying notes. 4 CLANCY SYSTEMS INTERNATIONAL, INC. STATEMENT OF OPERATIONS For the Nine Months Ended June 30, 1995 and 1996 (Unaudited) 1995 1996 ---- ---- Revenues: Sales $ 192,191 $ 135,011 Service contract income 740,184 733,913 Parking ticket collections - 229,965 --------- --------- 932,375 1,098,889 Costs and expenses: Cost of sales 72,385 44,767 Cost of parking ticket collections - 235,261 Contract support costs 166,705 198,353 General and administrative 350,932 344,299 Depreciation and amortization 187,481 188,852 Research and development 23,582 36,112 Loss on disposal of fixed assets 500 4,720 -------- -------- Total costs and expenses 801,585 1,052,364 -------- --------- Income from operations 130,790 46,525 Other income (expense) Interest income 2,628 4,193 Interest expense (206) (16,327) -------- -------- Total other income (expense) 2,422 (12,134) -------- -------- Income before provision for income taxes 133,212 34,391 -------- -------- Current income tax expense (Note 3) - 8,341 -------- -------- Net income $ 133,212 $ 26,050 ========= ========== Net income per share $ * $ * Weighted average number of shares outstanding 336,900,000 336,900,000 =========== =========== * less than $.01 per share See accompanying notes. 5 CLANCY SYSTEMS INTERNATIONAL, INC. STATEMENT OF STOCKHOLDERS' EQUITY For the Nine Months Ended June 30, 1996 Unaudited) Additional Common Stock paid-in Retained Shares Amount capital earnings ---------------- ------- -------- Balance, September 30, 1995 336,889,149 $33,689 $1,030,674 $ 16,129 Net income for the nine months ended June 30, 1996 - - - 26,050 ----------- ------- ---------- -------- Balance June 30, 1996 336,889,149 $33,689 $1,030,674 $ 42,179 =========== ======= ========== ======== See accompanying notes. 6 CLANCY SYSTEMS INTERNATIONAL, INC. STATEMENT OF CASH FLOWS For the Nine Months Ended June 30, 1995 and 1996 (Unaudited) 1995 1996 ---- ---- Cash flows from operating activities: Net income $133,212 $ 26,050 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 187,481 313,852 Decrease (increase) in deferred revenue (41,741) 3,614 Decrease in accounts receivable 172,016 15,159 Decrease (increase) in inventories (2,211) 394 Decrease in income taxes refundable - 11,280 Decrease in deferred tax asset - 5,000 Increase in deferred tax liability - 8,000 Increase in other current assets - (3,690) Increase (decrease) in warranty reserve 7,300 (2,200) Decrease in accounts payable and accrued liabilities (15,580) - Loss on disposal of fixed assets 500 4,720 -------- ------- Total adjustments 307,765 356,129 ------- ------- Net cash provided by operating activities 440,977 382,179 Cash flows from investing activities: Acquisition of furniture and equipment, software development costs and patent costs (86,022) (293,993) Investment in contract - (750,000) Increase in deposits and other (8,445) (30,083) -------- --------- Net cash used in investing activities (94,467) (1,074,076) Cash flows from financing activities: Borrowings from bank - 650,000 Repayment of notes payable - bank (59,530) (50,000) -------- -------- Net cash provided by (used in) financing activities (59,530) 600,000 -------- ------- Increase (decrease) in cash 286,980 (91,897) Cash at beginning of period 44,705 236,404 ------- -------- Cash at end of period $331,685 $ 144,507 ======== ========== See accompanying notes. 7 CLANCY SYSTEMS INTERNATIONAL, INC. NOTES TO UNAUDITED FINANCIAL STATEMENTS June 30, 1996 1. Basis of presentation The accompanying financial statements have been prepared by the Company, without audit. In the opinion of management, the accompanying unaudited financial statements contain all adjustments (consisting of only normal recurring accruals) necessary for a fair presentation of the financial position as of September 30, 1995 and June 30, 1996, and the results of operations and cash flows for the periods ended June 30, 1995 and 1996. Revenue recognition: On February 15, 1996, the Company entered into a three year agreement with the Town of Cicero, Illinois, whereby the Company will issue all parking tickets and provide collection services for the parking tickets issued and previously issued (see Note 4). Revenue from the issuance of parking tickets in Cicero, Illinois will be recognized on a cash basis when received. Costs consisting of payments to the Town of Cicero and commissions are recorded as prepaid and amortized ratably over the eighteen month period to which the payments relate. 2. Inventories Inventories consist of the following at: September 30, June 30, 1995 1996 ---- ---- Finished goods $ 8,800 $ 8,888 Work in process 2,587 62,216 Purchased parts and supplies 166,767 106,656 --------- -------- $178,154 $177,760 ======== ======== 3. Income taxes The provision for income taxes for the three months and nine months ended June 30, 1996 is based on the expected tax rate for the year. As of September 30, 1995 and June 30, 1996, total deferred tax assets and liabilities are as follows: September 30, June 30, 1995 1996 ---- ---- Deferred tax assets $ 3,000 $ - Deferred tax assets resulting from loss carryforward 2,000 - Deferred tax liabilities (9,000) (17,000) --------- --------- $ (4,000) $(17,000) ========= ========= 8 4. Agreement with the Town of Cicero, Illinois On February 15, 1996, the Company entered into a three year agreement with the Town of Cicero, Illinois, whereby the Company will issue all parking tickets and provide collection services for the parking tickets issued and previously issued. As consideration, the Company will receive all cash receipts from tickets issued and previously issued during the term of the agreement. The Company has paid a total of $750,000 for commissions and amounts due the Town which represents the contract amount payable by the Company for each eighteen months of the agreement including extensions. Such amount is being amortized monthly on a straight-line basis over the respective eighteen month period of the agreement commencing April 1, 1996. The agreement contains a renewal option based on eighteen month intervals through February 14, 2002. The agreement is cancelable by either party upon 30 days notice with all fees pro rated. Commencing April 1, 1996, the Company has maintained a list of receivables of current and prior ticket issuances totaling approximately $2,500,000. The receivables are not reflected on the Company's financial statements because only the amounts collected while the agreement is in effect belong to the Company. 5. Notes payable Notes payable - bank consists of a three month unsecured note due September 25, 1996 including interest at 9.75% per annum. 9 Item 2. Management's Discussion and Analysis of Financial Condition and --------------------------------------------------------------- Results of Operations --------------------- Material Changes in Financial Condition --------------------------------------- At June 30, 1996 the Company had working capital of $312,797 derived primarily from contract sales, as compared to working capital of $537,018 at September 30, 1995. The Company anticipates that working capital will be sufficient to meet its working capital requirements for the current year. Funds will continue to be used for general and administrative purposes, equipment purchases, equipment manufacturing, travel, marketing and research and development. Material Changes in Results of Operations ----------------------------------------- During the quarter ended June 30, 1996, the Company generated revenues from contract sales to the City of Oklahoma City, the Hertz Corporation, Berkeley California, Yonkers NY, Clancy UK, Richmond Virginia and other professional service contract installations. Hertz Corporation, Oklahoma City, OK, Berkeley, CA, and Yonkers, NY each represented in excess of 5% of total revenues. New clients added to customer base during this period are Estes Park Colorado, Chicago Motor Coach, and Buffalo, NY. The Cicero project has generated $229,965 in revenues for the quarter ended June 30, 1996. Management anticipates parking ticket collection revenues to increase for the next quarter due to implementation of a collection program for backlog tickets. Also, costs of parking ticket collections should remain stable. Revenue for the three months and nine months in 1996 were substantially higher than the prior year's periods, because of ticket revenues from the Cicero project. The Company, however, reported net income of $4,727 and $26,050 for the three and nine months in 1996, respectively, as compared to net income of $49,963 and $133,212 for the prior year's periods, respectively. Net income for the period decreased because the Company experienced considerable start-up costs with the Cicero project and continues to have substantial R & D costs with its new printer and intelligent terminal. PART II - OTHER INFORMATION Item 5. Other Information ----------------- See footnote 4 above and Management's Discussion and Analysis for information with respect to the Company's new parking agreement with the Town of Cicero, Illinois Item 6. Exhibits and Reports on Form 8-K ------------------------------- (b) During the quarter ended June 30, 1996 the Registrant has filed no reports on Form 8-K. 10 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: August 9, 1996 Clancy Systems International, Inc. (Registrant) By:/s/ Stanley J. Wolfson ------------------- Stanley J. Wolfson, President and Chief Executive Officer By:/s/Lizabeth M. Wolfson ------------------- Lizabeth M. Wolfson, Secretary- Treasurer and Chief Financial and Chief Accounting Officer 11 EX-27 2
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACED FROM FORM 10-QSB FOR PERIOD ENDED 6/30/96 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FORM 10-QSB FOR PERIOD ENDED 6/30/96 9-MOS SEP-30-1996 JUN-30-1996 144,507 0 160,122 0 177,760 1,109,032 1,449,441 906,251 1,794,777 671,235 0 0 0 33,689 1,072,853 1,794,777 0 1,098,889 0 1,052,364 12,134 0 16,327 34,391 8,341 26,050 0 0 0 26,050 0 0
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