-----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, O5mM3GkK3zRTaYhN4rIkw/YTGj6YJcAIKXqB6YPhHKcFiCxkEMLTGN3qDOq0Bgxz Ozo32jE/xqGXcw3ttgUe7w== 0000789318-99-000003.txt : 19990217 0000789318-99-000003.hdr.sgml : 19990217 ACCESSION NUMBER: 0000789318-99-000003 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19981231 FILED AS OF DATE: 19990216 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: SEC FILE NUMBER: 033-04882-D FILM NUMBER: 99539581 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 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 December 31, 1998 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) 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: The number of shares outstanding of the issuer's classes of common stock, as of February 15, 1999 is 336,889,149 shares, $.0001 par value. CLANCY SYSTEMS INTERNATIONAL, INC. INDEX Page No. PART I. FINANCIAL INFORMATION Balance Sheet - September 30, 1998 and December 31, 1998 (unaudited) 2 and 3 Income Statement - For the Three Months Ended December 31, 1997 and 1998 (unaudited) 4 Statement of Stockholders' Equity - For the Three Months Ended December 31, 1998 (unaudited) 5 Statement of Cash Flows - For the Three Months Ended December 31, 1997 and 1998 (unaudited) 6 Notes to Unaudited Financial Statements 7 Management's Discussion and Analysis of Financial Condition and Results of Operations 8 PART II. OTHER INFORMATION 9 1 CLANCY SYSTEMS INTERNATIONAL, INC. BALANCE SHEET September 30, 1998 and December 31, 1998 (Unaudited) ASSETS September December --------- -------- Current assets: Cash and cash equivalents $ 91,432 $ 92,210 Accounts receivable 244,448 331,331 Inventories (Note 2 190,960 201,696 Investment in contract, net 23,334 14,584 Income taxes refundable 16,000 - ---------- ---------- Total current assets 566,174 639,821 Furniture and equipment, at cost: Office furniture and equipment 235,180 235,180 Equipment under service contracts 1,442,295 1,473,218 ---------- ---------- 1,677,475 1,708,398 Less accumulated depreciation 1,204,775 1,250,537 ---------- ---------- Net furniture and equipment 472,700 457,861 Other assets: Investment in partnership 329,915 371,535 Deposits and other 28,310 28,310 Deferred tax asset (Note 3) 5,000 2,500 Software licenses 16,882 - Software development costs 356,353 364,803 736,460 767,148 Less accumulated amortizati 225,040 221,990 ---------- ----------- Net other assets 511,420 545,158 ---------- ---------- $1,550,294 $1,642,840 ========== ========== See accompanying notes. 2 CLANCY SYSTEMS INTERNATIONAL, INC. BALANCE SHEET September 30, 1998 and December 31, 1998 (Unaudited) LIABILITIES AND STOCKHOLDERS' EQUITY September December --------- -------- Current liabilities: Accounts payable $ 37,999 $ - Note payable - bank - 320,000 Note payable - related party (Note 4) - 55,000 Deferred revenue 87,971 129,999 ---------- ---------- Total current liabilities 125,970 504,999 Long-term note payable - bank 320,000 - 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 39,961 73,478 ---------- ---------- Total stockholders' equity 1,104,324 1,137,841 ---------- ---------- $1,550,294 $1,642,840 ========== ========== See accompanying notes. 3 CLANCY SYSTEMS INTERNATIONAL, INC. INCOME STATEMENT For the Three Months Ended December 31, 1997 and 1998 (Unaudited) 1997 1998 ---------- ---------- Revenues: Sales $ 83,003 $ 102,564 Service contract income 230,228 281,410 Parking ticket collections 5,415 84,242 ---------- --------- Total revenues 318,646 468,216 Costs and expenses: Cost of sales 36,377 16,475 Cost of services 126,226 142,807 Cost of parking ticket collections 20,719 87,938 General and administrative 101,459 137,318 Research and development 14,325 12,046 ----------- ---------- Total costs and expenses 299,106 396,584 ----------- ---------- Income from operations 19,540 71,632 Other income (expense); Interest income 2,075 593 Interest expens - (6,828) ----------- ---------- Total other income (expense) 2,075 (6,235) ----------- ---------- Income before provision for income taxes and loss in equity-basis partnership 21,615 65,397 Provision for income taxes 7,000 23,000 Loss in equity basis partnership (net of tax benefit of $4,500) - 8,880 ----------- ---------- Net income $ 14,615 $ 33,517 =========== ========== Basic income per common 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 STOCKHOLDERS' EQUITY For the Three Months Ended December 31, 1998 (Unaudited)
Additional Common stock paid-in Retained Shares Amount capital earnings ----------- ------ ---------- -------- Balance, September 30, 1998 336,889,149 $ 33,689 $ 1,030,674 $ 39,961 Net income for the three months ended December 31, 1998 - - - 33,517 ----------- -------- ----------- -------- Balance, December 31, 1998 336,889,149 $ 33,689 $ 1,030,674 $ 73,478 ============ ========= ============ ========
See accompanying notes. 5 CLANCY SYSTEMS INTERNATIONAL, INC. STATEMENT OF CASH FLOWS For the Three Months Ended December 31, 1997 and 1998 (Unaudited) 1997 1998 --------- --------- Cash flows from operating activities: Net income $ 14,615 $ 33,517 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 59,062 68,344 Deferred income tax expense 1,000 2,500 Increase in accounts receivabl (50,736) (86,883) Decrease (increase) in inventories 4,074 (10,736) Loss in equity basis partnership - 13,380 Decrease in accounts payable - (37,999) Decrease in accrued expenses (2,286) - Decrease in income taxes refundabl - 16,000 Increase in income taxes payable 6,000 - Increase in deferred revenue 4,493 42,028 Decrease in warranty reserve (400) - ----------- --------- Total adjustments 21,207 6,634 ----------- --------- Net cash provided by operating activities 35,822 40,151 Cash flows from investing activities: Acquisition of furniture and equipment - net (80,580) (30,923) Increase in software development costs (17,960) (8,450) Investment in partnership - (55,000) ----------- ---------- Net cash used in investing activities (98,540) (94,373) Cash flows from financing activities: Proceeds from note payable - bank 190,000 - Proceeds form note payable - related party - 55,000 ----------- ---------- Net cash provided by financing activities 190,000 55,000 ----------- ---------- Increase in cash and cash equivalents 127,282 778 Cash and cash equivalents at beginning of period 199,195 91,432 ----------- ---------- Cash and cash equivalents at end of period $ 326,477 $ 92,210 =========== ========== See accompanying notes. 6 CLANCY SYSTEMS INTERNATIONAL, INC. NOTES TO UNAUDITED FINANCIAL STATEMENTS December 31, 1998 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, 1998 and December 31, 1998, and the results of operations and cash flows for the periods ended December 31, 1997 and 1998. 2. Inventories Inventories consist of the following at: September 30, December 31, 1998 1998 ------------ ----------- Finished goods $ 19,690 $ 10,085 Work in process - 20,170 Purchased parts and supplies 171,270 171,441 -------- -------- $190,960 $201,696 ======== ======== 3. Income taxes The provision for income taxes for the three months ended December 31, 1997 and 1998 is based on the expected tax rate for the year. As of September 30, 1998 and December 31, 1998, total deferred tax assets and liabilities are as follows: September 30, December 31, 1998 1998 ------------- ------------ Deferred tax assets $10,000 $ 2,500 Deferred tax liabilities (5,000) - ------- ------- $ 5,000 $ 2,500 ======= ======= 4. Notes payable - related party On October 1, 1998, the Company executed a one-year note payable for $25,000 with an officer of the Company. The note is unsecured, bears interest at 8%, and is due on October 1, 1999. On December 1, 1998, the Company executed a one-year note payable for $30,000 with an officer of the Company. The note is unsecured, bears interest at 8%, and is due on December 1, 1999. 7 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Material Changes in Financial Condition At December 31, 1998, the Company had working capital of $134,822 derived primarily from contract sales, as compared to working capital of $440,204 at September 30, 1998. The Company received an additional loan of $55,000 from a Company officer for investment in the Urban Transit Solutions partnership. In addition, the $320,000 bank loan is now classified as a short term obligation because it is due October 15, 1999. These two liabilities - notes from the officer and note from the bank are reflected in the change in working capital. 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 December 31, 1998, the Company generated revenues from contract sales from its professional services contracts, sales, and privatization contracts. Berkeley, CA and Oklahoma City, OK each generated revenues in excess of 5% of total revenues. New clients added during the quarter include Charleston, WV, and McAllen, TX. Revenues during the quarter were 47% higher than the prior year's quarter. Expenses increased by 33% over the prior year's quarter due to costs associated with generating additional revenue. The Company reported a profit of $33,517 for the 1998 quarter as compared to a net profit of $14,615 for the prior year's quarter. During the fiscal year ended September 30, 1998, the Company upgraded 70% of its clients to its new year 2000 compliant software and hardware. The Company anticipates that by June 30, 1999, all client upgrades will have been completed. Costs associated with the software portion of the year 2000 upgrade have been insignificant because the Company is continually upgrading and improving its software for its clients as a normal course of business. Management estimates costs associated with completing replacement of hardware to be approximately $65,000 during fiscal year 1999. 8 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. PART II - OTHER INFORMATION Item 1. Legal Proceedings None. Item 6. Exhibits and Reports on Form 8-K (a) Exhibits 27.1 Financial Data Schedule (1) (b) During the quarter ended December 31, 1998, the Registrant has filed no reports on Form 8-K (1) Filed herewith 9 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: February 15, 1999 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 10 EX-27 2
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE REGISTRANT'S FORM 10-QSB FOR THE QUARTER ENDED DECEMBER 31, 1998 AND IS QUALIFIED IN ITS ENTIRETY TO SUCH FORM 10-QSB. 3-MOS SEP-30-1999 DEC-31-1998 92,210 0 331,331 0 201,696 639,821 1,708,398 1,250,537 1,642,840 504,999 0 0 0 33,689 1,104,152 1,137,841 102,564 468,216 16,475 247,220 149,364 0 6,828 65,397 0 0 0 0 0 33,517 0 0
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