-----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, JpiZ+PxkjVLJpg8ZNR0kRkbPcl4JdOEJ6UgCW+CgDXVR2+PDab2iXLLnw4ZEcHLr KAGCnFj+mmzPkXIEnPDpEw== 0000789318-03-000003.txt : 20030814 0000789318-03-000003.hdr.sgml : 20030814 20030814165707 ACCESSION NUMBER: 0000789318-03-000003 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 20030630 FILED AS OF DATE: 20030814 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: 03848535 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 q10q-604.txt UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-QSB X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2003 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: 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) N/A (Former name, former address and former fiscal year, if changed since last report) Transitional Small Business Disclosure format (check one): yes x no APPLICABLE ONLY TO CORPORATE ISSUERS: The number of shares outstanding of the issuer's classes of common stock, as of August 12, 2003 is 365,117,938 shares, $.0001 par value. CLANCY SYSTEMS INTERNATIONAL, INC. INDEX Page No. PART I. FINANCIAL INFORMATION Consolidated Balance Sheet - September 30, 2002 and June 30, 2003 (unaudited) 2 and 3 Consolidated Statement of Income - For the Three Months Ended June 30, 2002 and 2003 (unaudited) 4 Consolidated Statement of Income - For the Nine Months Ended June 30, 2002 and 2003 (unaudited) 5 Consolidated Statement of Stockholders' Equity - For the Nine Months Ended June 30, 2003 (unaudited) 6 Consolidated Statement of Cash Flows - For the Nine Months Ended June 30, 2002 and 2003 (unaudited) 7 Notes to Unaudited Consolidated Financial Statements 8 Management's Discussion and Analysis of Financial Condition and Results of Operations 10 PART II. OTHER INFORMATION 13 Item 3. Controls and Procedures 13 Item 6. Exhibits and Reports on Form 8-K 13 1 CLANCY SYSTEMS INTERNATIONAL, INC. CONSOLIDATED BALANCE SHEETS September 30, 2002 and June 30, 2003 (unaudited) ASSETS September June ---------- ------ Current assets: Cash, including interest bearing accounts $ 357,315 $ 559,172 Accounts receivable 339,599 643,029 Income tax refund receivable 35,063 --- Inventories (Note 2) 148,517 122,341 Prepaid expenses 138,141 54,228 --------- --------- Total current assets 1,018,635 1,378,770 Furniture and equipment, at cost: Office furniture and equipment 259,595 210,491 Equipment under service contracts 1,893,995 2,592,377 Leasehold improvements 105,259 96,782 Equipment and vehicles under capital leases 356,745 180,487 --------- ---------- 2,615,594 3,080,137 Less accumulated depreciation (1,170,030) (1,461,000) ---------- --------- Net furniture and equipment 1,445,564 1,619,137 Other assets: Deferred tax asset (Note 3) 38,200 --- Deposits and other 20,640 74,459 Goodwill 225,214 225,214 Software development costs, net of accumulated amortization 150,193 172,901 ---------- ---------- Total other assets 434,247 472,574 ---------- ---------- $ 2,898,446 3,470,481 ============ ============ See accompanying notes. 2 CLANCY SYSTEMS INTERNATIONAL, INC. CONSOLIDATED BALANCE SHEETS September 30, 2002 and June 30, 2003 (unaudited) LIABILITIES AND STOCKHOLDERS' EQUITY September June Current liabilities: --------- ------ Accounts payable $ 141,092 $ 101,550 Accrued expenses 166,159 258,906 Income taxes payable --- 113,526 Current portion of long term debt 111,111 331,588 Current portion of obligations under capital leases 132,279 45,096 Deferred revenue 110,722 80,328 ---------- --------- Total current liabilities 661,363 930,994 Long-term debt, net of current portions 182,824 211,370 Obligations under capital leases, net of current portion 53,423 92,900 Minority interest in subsidiary 142,769 134,611 Deferred Income Taxes Payable (note 3) --- 950 Commitments Stockholders' equity: Preferred stock, $.0001 par value; 100,000,000 shares authorized, none issued --- --- Common stock, $.0001 par value; 800,000,000 shares authorized, 365,117,938 shares issued and outstanding 36,512 36,512 Additional paid-in capital 1,151,547 1,151,547 Retained earnings 670,008 911,597 ---------- --------- Total stockholder's equity 1,858,067 2,099,656 ---------- --------- $ 2,898,446 3,470,481 =========== ========== See accompanying notes. 3 CLANCY SYSTEMS INTERNATIONAL, INC. CONSOLIDATED STATEMENTS OF INCOME For the three months ended June 30, 2002 and 2003 (unaudited) June June 2002 2003 ---- ---- Revenues: Sales $ 104,212 $ 51,539 Service contract income 329,852 785,577 Parking ticket collections 30,730 135,077 and other ---------- --------- Total revenues 464,794 972,193 Costs and expenses: Cost of sales 38,117 27,912 Cost of services 127,043 188,693 Cost of parking ticket collections 23,999 21,337 General and administrative 186,668 482,066 Research and development 6,511 6,421 -------- --------- Total costs and expenses 382,338 726,429 -------- -------- Income from operations 82,456 245,764 Other income (expense): Gain (loss) on disposal of assets --- 1,600 Interest income 1,070 448 Interest expense --- (11,768) Minority interest in loss of subsidiary --- 5,252 --------- --------- Total other income (expense) 1,070 (4,468) --------- --------- Income before provision for income taxes and loss in equity-basis partnership 83,526 241,296 Provision for income taxes: Current expense 25,402 78,260 Deferred expense 4,500 13,050 --------- ------ Total income tax expense 29,902 91,310 ---------- --------- Loss in equity basis partnership (net of tax benefit of $7,995 in 2002) (13,046) --- --------- --------- Net income $ 40,578 $ 149,986 ========== ========== Basic net income per common share $ * $ * =========== ========== Weighted average number of shares outstanding 364,600,000 365,118,000 =========== =========== *Less than $.01 per share See accompanying notes. 4 CLANCY SYSTEMS INTERNATIONAL, INC. CONSOLIDATED STATEMENTS OF INCOME For the nine months ended June 30, 2002 and 2003 (unaudited) June June 2002 2003 Revenues: ---- ---- Sales $ 192,965 $ 123,206 Service contract income 1,017,827 2,046,901 Parking ticket collections 84,553 249,497 and other --------- --------- Total revenues 1,295,345 2,419,604 Costs and expenses: Cost of sales 85,710 70,356 Cost of services 375,254 513,012 Cost of parking ticket collections 75,674 86,201 General and administrative 559,598 1,296,495 Research and development 32,756 23,463 --------- --------- Total costs and expenses 1,128,992 1,989,527 --------- --------- Income from operations 166,353 430,077 Other income (expense): Loss on disposal of assets --- (16,119) Interest income 2,745 1,329 Interest expense --- (34,403) Minority interest in loss of subsidiary --- 8,159 --------- --------- Total other income (expense) 2,745 (41,034) --------- --------- Income before provision for income taxes and loss in equity-basis partnership 169,098 389,043 Provision for income taxes: Current expense 50,757 108,304 Deferred expense 13,500 39,150 --------- -------- Total income tax expense 64,257 147,454 --------- -------- Loss in equity basis partnership (net of tax benefit of $10,891 - 2002) (17,770) --- --------- -------- Net income $ 87,071 $ 241,589 =========== =========== Basic net income per common share $ * $ * ========== ========== Weighted average number of shares outstanding 364,600,000 365,118,000 =========== =========== *Less than $.01 per share See accompanying notes. 5 CLANCY SYSTEMS INTERNATIONAL, INC. CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY For the nine months ended June 30, 2003 (Unaudited)
Additional Common Stock Paid-In Retained Shares Amount Capital Earnings ------ ------- ---------- -------- Balance, September 30, 2002 365,117,938 $ 36,512 $ 1,151,547 $ 670,008 Net income for the nine months ended June 30, 2003 --- --- --- 241,589 ----------- -------- ----------- --------- Balance, June 30, 2003 365,117,938 $ 36,512 $ 1,151,547 $ 911,597 =========== ======== =========== =========
See accompanying notes. 6 CLANCY SYSTEMS INTERNATIONAL, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS For the nine months ended June 30, 2002 and 2003 (unaudited) June 30, June 30, 2002 2003 ------- ------- Cash flows from operating activities: Net income $ 87,071 $ 241,589 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 108,190 369,128 Deferred income tax expense 13,500 39,150 Minority interest --- (8,160) Common stock issued for services 18,000 --- Changes in assets and liabilities: Investment in equity-basis partnership 28,661 --- Accounts receivable (83,008) (303,430) Inventories (12,463) 26,176 Income taxes refundable 9,083 35,063 Prepaid expenses (84,121) 83,913 Accounts payable (16,008) (39,542) Accrued expenses --- 92,747 Income taxes payable --- 113,526 Deferred revenue 69,634 (30,394) --------- -------- Total adjustments 51,468 378,177 --------- -------- Net cash provided by operating activities 138,539 619,766 --------- -------- Cash flows from investing activities: Acquisition of furniture and equipment (109,810) (494,891) Increase in software licenses and software development costs (45,704) (68,585) Decrease (increase) in deposits and other assets 94 (55,750) --------- -------- Net cash used in investing activities (155,420) (619,226) --------- -------- Cash flows from financing activities: Borrowings on notes payable and capital leases --- 288,500 Payments on notes payable and capital leases --- (87,183) --------- -------- Net cash provided by financing activities --- 201,317 --------- -------- Increase (decrease) in cash and cash equivalents (16,881) 201,857 Cash and cash equivalents at beginning of period 385,491 357,315 --------- -------- Cash and cash equivalents at end of period $ 368,610 $ 559,172 ========== ============ See accompanying notes. 7 CLANCY SYSTEMS INTERNATIONAL, INC. NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS JUNE 30, 2003 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, 2002 and June 30, 2003, and the results of operations and cash flows for the periods ended June 30, 2002 and 2003. As a result of the July 2002 settlement agreement with the principals of UTS (Urban Transit Solutions) we have changed the reporting method for the Company's 60% ownership in UTS from the equity method of accounting to presenting the information on a consolidated basis. The difference in presentation between the equity method of accounting and on a consolidated basis is significant. For the fiscal year ended September 30, 2002, Clancy presented its investment in UTS as a single Line item "investment in partnership" on the balance sheet and as a single line item on the statement of operations. For the fiscal year ending September 30 2003, the consolidated financial statements combine each line item on the balance sheet and statement of operations of Clancy with those of UTS. 2. Inventories Inventories consist of the following at: September 30, June 30, 2002 2003 ------------ ------------ Finished goods $ 22,272 $ 16,123 Work in process 4,795 59,010 Purchased parts and supplies 121,450 47,208 -------- --------- $148,517 $122,341 ======== ======== 8 CLANCY SYSTEMS INTERNATIONAL, INC. NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2003 3. Income taxes The provision for income taxes for the nine months ended June 30, 2002 and 2003 is based on the expected tax rate for the year. As of September 30, 2002 and June 30, 2003 total deferred tax assets and liabilities are as follows: September 30, June 30, 2002 2003 ---- ---- Deferred tax assets $ 87,700 $ 120,700 Deferred tax liabilities (49,500) (121,650) --------- ---------- $ 38,200 $ (950) ========= =========== 4. Investment in UTS Pro Forma consolidated financial information for the three and nine months ended June 30, 2002 are as follows: For three For nine months Pro Forma consolidated months ended ended June 30, statement of operations June 30, 2002 2002 ------------------------- ----------- -------------- Total Revenues $ 732,700 $ 2,109,877 Total costs and expenses (692,122) (2,022,806) ------------- -------------- Net income $ 40,578 $ 87,071 ============= ============== 9 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Critical Accounting Policies: The Company has identified the accounting policies described below as critical to its business operations and the understanding of the Company's results of operations. The impact and any associated risks related to these policies on the Company's business operations is discussed throughout this section where such policies affect the Company's reported and expected financial results. The preparation of this Quarterly Report requires the Company to make estimates and assumptions that affect the reported amount of assets and liabilities of the Company, revenues and expenses of the Company during the reporting period and contingent assets and liabilities as of the date of the Company's financial statements. There can be no assurance that the actual results will not differ from those estimates. Revenue Recognition: Revenue derived from professional service contracts on equipment and support services is included in income ratably over the contract term; related costs consist mainly of depreciation, supplies and sales commissions. The Company defers revenue for equipment and services under service contracts that are billed to customers on a quarterly, semi-annual, annual or other basis and are included in income ratably over the expected term of the contract. Revenue from the issuance of parking tickets for the Company's privatization projects is recognized on a cash basis when received as collectability is not reasonably assured. Revenue derived from professional service contracts on parking meter and lots fees collections is recognized net of municipalities' fees as services are provided. Related costs consist mainly of depreciation and lot rents. Revenue derived from professional service contracts for permit fulfillment and remit-online services is recognized based on add-on fees earned for each transaction. Computer software: Costs incurred prior to the establishment of the technological feasibility of computer software are research and development costs, which are charged to expense as incurred. Software development costs incurred subsequent to establishment of technological feasibility are capitalized and subsequently amortized based on the greater of the straight line method over the remaining estimated economic life of the product (generally five years) or the estimate of current and future revenues for the related software product. 10 Goodwill On January 1, 2002, the Company adopted Statement of Financial Accounting Standards No. 142 (SFAS 142), Goodwill and Intangible Assets, which clarifies the accounting for goodwill and intangible assets. Under SFAS 142, goodwill and intangible assets with indefinite lives will no longer be amortized, but will be tested for impairment annually and also in the event of an impairment indicator. Material Changes in Financial Condition At June 30, 2003 the Company had working capital of $447,776 derived primarily from contract sales and contract service, as compared to working capital of $357,272 at September 30, 2002. 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, 2003, the Company generated revenues from contract sales from its professional services contracts, sales, remit-online payment processing, privatization contract, and meter operations in Puerto Rico. New contracts signed during the quarter includedincluded Central Parking Virginia Beach, Central Parking Ft. Myers, Strategic Protectiion Agency, Western Towing, Summit Security, Santa Cruz CA, University of Louisiana at Lafayette, Morrison CO, Ft. Lewis College, Parking Control Systems Denver, Fairway Parking, Los Angeles Metropolitan Transit Authority, and BYU Idaho. Consolidated revenues during the quarter were higher than the prior year's quarter by $507,399 or 109%. Consolidated expenses increased by $344,091 or 90.0% over the prior year's quarter. The Company reported a profit of $149,986 ($163,116 for Clancy directly and a net loss of $13,130 for UTS)for the quarter as compared to a net profit of $40,578 for the prior year's quarter. The consolidated revenues are reported as $972,193 ($661,665 for Clancy directly, up 42.36% from the prior year's quarter, and $310,529 for UTS). The consolidated expenses are reported as $726,429 ($412,939 for Clancy directly, up 8.0% from the prior year's quarter and $313,490 for UTS). Long term debt, capital lease, and interest expenses are attributed to the obligations of UTS. Clancy directly has no outstanding debt. During the nine months ended June 30, 2003, consolidated revenues were higher than the prior year's period by 86.79%. The Company reported net income $241,589 ($261,988 for Clancy directly and a net loss of $20,399 for UTS)for the nine months as compared to a net profit of $87,071 for the prior year's period. The consolidated revenues are reported as $2,419,604 ($1,605,486 for Clancy directly, up 23.94% from the prior year's period, and $814,118 for UTS). The consolidated expenses are reported as $1,989,527 ($1,205,532 for Clancy directly, up 6.78% from the prior year's period and $783,995 for UTS). 11 General and administrative expenses increased 158% for the quarter and 132% for the nine months ended June 30, 2003 due to the following activities for Clancy: legal expenses during the quarter, increased travel expenses, increased customer supply expenses (ticket forms and envelopes), a monthly retainer fee to a consultant who works for Clancy as a liaison directly with UTS. Expense increases directly related to UTS include payment of a monthly retainer to the Clancy-UTS liaison, infrastructure expenses related to meter installations and general operational expenses. The Company anticipates that its expenses shall increase as a direct result of the Sarbanes-Oxley legislation as it pertains to additional accounting and auditing procedures. The company now utilizes two different accounting firms for preparation of financial statements, reviews and auditing functions. Director and Officer insurance premiums have tripled for the Company (this is consistent with the industry as a result of the public company accounting scandals of several years ago). Client upgrades to the Company's newest equipment has proven to be a capital intense program. While the Company has adequate cash flow to accomplish the upgrades without incuring debt, it is anticipated that the ongoing upgrades and tooling for newer product shall continue to require a large capital commitment. Forward Looking Information Statements of the Company's or management's intentions, beliefs, anticipations, expectations and similar expressions concerning future events contained in this document constitute "forward looking statements" as defined in the Private Securities Litigation Reform Act of 1995. As with any future event, there can be no assurance that the events described in the forward looking statements made in this report will occur or that the results of future events will not vary materially from those described in the forward looking statements in this document. Important factors that could cause the Company's actual performance and operating results to differ materially from the forward looking statements include, but are not limited to, (i) the ability of the Company to obtain new customers, (ii) the ability of the Company to obtain sufficient financing for business opportunities, (iii) the ability of the Company to reduce costs and thereby maintain adequate profit margins. Chat Room Disclaimer This forum of exposure to publicly traded companies presents a venue for the public to inquire about companies from other individuals as well as post opinions. The Company has no way to regulate postings nor monitor information posed on these boards. Management can only provide accurate information to shareholders and potential shareholders when contacted directly and such information can only be provided when it is based on fact and has been filed as required by law with the Securities and Exchange Commission and other regulatory agencies. 12 PART II - OTHER INFORMATION Item 3. Controls and Procedures An evaluation was performed under the supervision and with the participation of the Company's management, including the Chief Executive Officer and Chief Financial Officer of the effectiveness of the design and operation of the Company's disclosure controls and procedures within 180 days before the filing date of this quarterly report. Based on that evaluation, the Company's management, including the CEO and CFO, concluded that the Company's disclosure controls and procedures were effective. There have been no significant changes in the Company's internal controls or in other factors that could significantly affect internal controls subject to their evaluation. Item 6. Exhibits and Reports on Form 8-K (a) Exhibits Exhibit 31.1 Section 302 Certification by Chief Executive Officer Exhibit 31.2 Section 302 Certification by Chief Financial Officer Exhibit 32.1 Section 906 Certification by Chief Executive Officer Exhibit 32.2 Section 906 Certification by Chief Financial Officer Filed herewith. (b) Reports on form 8-K None 13 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 14, 2003 CLANCY SYSTEMS INTERNATIONAL, INC. (Registrant) By: /s/ Stanley J. Wolfson Stanley J. Wolfson, President and Chief Executive Officer 14 EX-31 3 q603-1.txt Exhibit 31.1 Section 302 Certification Quarterly Report on Form 10-QSB I, Stanley J. Wolfson, certify that: I have reviewed this quarterly report on Form 10-QSB of Clancy Systems International, Inc.; 1. Based on my knowledge, this 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 report; 2. Based on my knowledge, the financial statements, and other financial information included in this 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 presented in this report; 3. The small business issuer's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the small business issuer 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 small business issuer, 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) Evaluated the effectiveness of the small business issuer's 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 (c) Disclosed in this report any change in the small business issuer's internal control over financial reporting that occurred during the small business issuer's most recent fiscal quarter (the small business issuer's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the small business issuer's internal control over financial reporting; and 1 4. The small business issuer's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the small business issuer's auditors and the audit committee of the small business issuer's 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 small business issuer's 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 small business issuer's internal control over financial reporting. Date: August 14, 2003 /s/Stanley J. Wolfson Chief Executive Officer 2 EX-31 4 q603-2.txt Exhibit 31.2 Section 302 Certification Quarterly Report on Form 10-QSB I, Lizabeth M. Wolfson, certify that: I have reviewed this quarterly report on Form 10-QSB of Clancy Systems International, Inc.; 1. Based on my knowledge, this 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 report; 2. Based on my knowledge, the financial statements, and other financial information included in this 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 presented in this report; 3. The small business issuer's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e) for the small business issuer 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 small business issuer, 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) Evaluated the effectiveness of the small business issuer's 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 (c) Disclosed in this report any change in the small business issuer's internal control over financial reporting that occurred during the small business issuer's most recent fiscal quarter (the small business issuer's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the small business issuer's internal control over financial reporting; and 1 4. The small business issuer's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the small business issuer's auditors and the audit committee of the small business issuer's 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 small business issuer's 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 small business issuer's internal control over financial reporting. Date: August 14, 2003 /s/Lizabeth M. Wolfson Chief Financial Officer 2 EX-32 5 q603-3.txt Exhibit 32.1 CERTIFICATION 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 Systems International, Inc. (the "Company") on Form 10-QSB for the period ended June 30,2003 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Stanley J. Wolfson, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. 1350, as adopted pursuant to 906 of the Sarbanes-Oxley Act of 2002, that: (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. /s/ Stanley J. Wolfson _______________________ Chief Executive Officer August 14, 2003 1 EX-32 6 q603-4.txt Exhibit 32.2 CERTIFICATION 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 Systems International, Inc. (the "Company") on Form 10-QSB for the period ended June 30, 2003 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Lizabeth M. Wolfson, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. 1350, as adopted pursuant to 906 of the Sarbanes-Oxley Act of 2002, that: (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. /s/ Lizabeth M. Wolfson _______________________ Chief Financial Officer August 14, 2003 1 -----END PRIVACY-ENHANCED MESSAGE-----