Certain statements made in this Quarterly Report on Form 10-Q are “forward-looking statements” regarding management’s plans and objectives for future operations. Such statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of the registrant to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements. The forward-looking statements included herein are based on current expectations which involve numerous risks and uncertainties. The Company’s plans and objectives are based, in part, on assumptions regarding continued business expansion. Assumptions relating to the foregoing involve judgments regarding, among other things, future economic, competitive and market conditions and future business decisions, all of which are difficult or impossible to predict with precision and many of which are beyond the Company’s control. Although the Company believes that its assumptions underlying the forward-looking statements are reasonable, each of these assumptions may prove to be incorrect and, therefore, there can be no assurance that the forward-looking statements included in this quarterly report will prove to be accurate. In light of the material uncertainties inherent in the forward-looking statements included herein, the inclusion of such information should not be taken as a representation by the registrant or any other person that the registrant’s objectives and plans will be achieved. Substantial risks exist in connection with an investment in the Company. These risks include, but are not limited to, the factors discussed in our Annual Report on Form 10-K for the year ended July 31, 2021filed with the Security and Exchange Commission
(“Commission”) on November 12, 2021. More generally, 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;
? 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. The company was initially created with the aim of producing and selling handmade soaps.
On April 13, 2020the registered company Shanghai Clancy Enterprise Management Co., Ltd. (Shanghai Clancy) as a 100% foreign-owned entity and as a 100% subsidiary in Shanghai, China. Shanghai Clancy had no business activity from its inception until April 30, 2022.
On April 24, 2020Shanghai Clancy Registered Beijing Clancy Information Technology Co., Ltd. (Beijing Clancy) in beijing as a wholly-owned and second-tier subsidiary of the Company.
Of August 1, 2020 at April 30, 2021, the company’s business was focused on providing IT services to a small number of customers. In May 2021, the Company ceased its IT services and refocused its activities to provide marketing services to small and medium-sized businesses. Clancy is now a product marketing consulting firm that provides product marketing consulting services to its clients. The Company will develop marketing programs and strategies based on customer needs. Our marketing programs will provide clients with detailed analysis of market data in their industry, including historical data. We will also help clients expand their marketing communication channels, including but not limited to advertisements in trade journals, electronic communication tools such as WeChat marketing programs, etc. We charge an agreed fee based on the technical difficulties and marketing reach of the programs.
Results of Operations
Although we commenced limited operations in the first fiscal quarter of last year, at present the Company is still considered a shell company within the meaning of Rule 504 of the Act. One of our primary business goals for the next 12 months and beyond will be to achieve meaningful business operations. Alternatively, if we are unable to successfully grow our business, we may seek a combination with a business rather than immediate short-term profits. The Company will not limit our potential target companies to any specific business, industry or geographic location and, therefore, may acquire any type of business.
Table of Contents
Comparison of the three and nine month periods ended April 30, 2022 and 2021
For the three months ended April 30, 2022 and 2021, the company achieved revenues of
$0 and $15,050, respectively. For the nine months ended April 30, 2022 and 2021, the company achieved revenues of $0 and $44,688, respectively. Revenue for both periods in 2021 came from our IT-related businesses conducted through Beijing Clancy. As mentioned above, we ceased our IT activities in May 2021, and embarked on a new business model of providing marketing consulting services to clients. We have not received any revenue from our new business model in the current three and six month periods.
Cost of Revenues
For the three months ended April 30202 and 2021, the Company had a cost of revenue $0 and $67,687, respectively. For the nine months ended April 30202 and 2021, the Company had a cost of revenue $0 and $142,548, respectively. Revenue cost includes salaries and benefits for IT technicians. The decrease in cost of goods sold is due to the shutdown of our IT business which, as mentioned, ceased in May 2021. We had no cost of goods sold for our new business operations during the same three and nine month periods ended April 30, 2022.
For the three months ended April 30, 2022the Company had total operating expenses of $90,853made up of $63,745 in research and development (“R&D”) costs, $27,108 in general and administrative costs. These amounts compare to the total operating expenses of $22,618 made up of $1,093 in R&D expenses and
$21,525 in general and administrative expenses for the three months ended April 30, 2021. The raise of $68,235 for the current period is due to the increase in R&D expenses.
For the nine months ended April 30, 2022the Company had total operating expenses of $300,466made up of $204,246 in R&D expenses, $96,220 in general and administrative costs. These amounts compare to the total operating expenses of $125,844 made up of $40,624 in R&D expenses and $85,220 in general and administrative expenses for the nine months ended April 30, 2021. The raise of
$174,622 for the current period is due to the increase in R&D expenses.
For the nine months ended April 30, 2022 and 2021, the Company recorded a net loss of
$300,411 and $223,475respectively, for the reasons mentioned above.
For the three months ended April 30, 2022 and 2021, the Company recorded a net loss of $90,844 and $75,061respectively, for the reasons mentioned above.
Liquidity and capital resources
The company had $35,441 and $54,375respectively, in cash and cash equivalents at April 30, 2022 and July 31, 2021.
From April 30, 2022 and July 31, 2021the Company had a working capital deficit of $500,407 and $256,136, respectively. The increase in the working capital deficit is due to the increase in operating losses during the current period.
The Company cannot guarantee that it will be able to continue to meet its cash requirements for at least the next twelve months.
Table of Contents
The following is a summary of the Company’s cash flows from operating and financing activities for the nine months ended April 30, 2022 and 2021:
Nine Month Ended Nine Month Ended
April 30, April 30,
Net cash used from operating activities $ (258,622) $ (136,585) Net cash provided by financing activities
Effects of Exchange rate Changes on Cash (521 ) 1,716
Net Change in Cash $ (18,934 ) $ 182,696
In the nine months ended April 30, 2022the Company recorded a net loss of
$300,411 and after adjusting for rental expenses, decrease in cash amortization of prepaid expenses and decrease in payments on accounts payable, net cash used in operating activities was $258,622. In comparison, during the nine-month period ended April 30, 2021the Company incurred net cash flows used in operating activities of $136,585which came mainly from the net loss of $223,475 for the previous period.
In the nine months ended April 30, 2022the Company had cash available from the financing activities of $240,208, which were loans from a related party (the sole officer and principal shareholder of the Company). In comparison, during the nine months ended April 30, 2021the Company had cash available from the financing activities of $317,565which consisted mainly of shares issued in the context of an equity financing $300,000and loans from $17,565 of the related party.
Our financial statements reflect the fact that we do not have enough income to cover our expenses. We are currently undercapitalized. The Company is dependent on the receipt of capital investments or other funding to fund its ongoing operations and execute its business plan to seek a combination with a private operating company. In addition, the Company depends on certain related parties to provide ongoing financing and capital resources. If continued financing and capital resources are not available on reasonable terms, the Company may not be able to implement its operating plan.
Off-balance sheet arrangements
The Company has no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on the Company’s financial position, changes in financial position, income or expenses, results of operating, cash, capital expenditures or capital resources that is important to investors.
None, except as indicated in the notes to the financial statements.
Table of Contents
© Edgar Online, source Previews