BRILLIANT N.E.V. CORP. - Annual Report: 2017 (Form 10-K)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.  20549

 

Form 10-K

 

[X] Annual Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the fiscal year ended July 31, 2017

 

[   ] 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: 333-213698

 

 

CLANCY CORP.

(Exact name of registrant as specified in its charter)

 

 

 

 

 

str. Vizantiou 28, Strovolos,

Lefkosia, Cyprus, 2006

office@corpclancy.com

+35722000341

(Address, including zip code, and telephone number, including area code, of registrant's principal executive offices)

 

 

 

 

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes       No x

 

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act.  Yes        No x

 

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 

 

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.   No x

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

 

 

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes        Nox

 

State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date:   2,275,000 common shares issued and outstanding as of July 31, 2017.

 

 

TABLE OF CONTENTS

 

 

 

PART I

Item 1. Description of Business

 

Forward-looking statements

 

Statements made in this Form 10-K that are not historical or current facts are "forward-looking statements" made pursuant to the safe harbor provisions of Section 27A of the Securities Act of 1933 (the "Act") and Section 21E of the Securities Exchange Act of 1934. These statements often can be identified by the use of terms such as "may," "will," "expect," "believe," "anticipate," "estimate," "approximate" or "continue," or the negative thereof. We intend that such forward-looking statements be subject to the safe harbors for such statements. We wish to caution readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made. Any forward-looking statements represent management's best judgment as to what may occur in the future. However, forward-looking statements are subject to risks, uncertainties and important factors beyond our control that could cause actual results and events to differ materially from historical results of operations and events and those presently anticipated or projected. We disclaim any obligation subsequently to revise any forward-looking statements to reflect events or circumstances after the date of such statement or to reflect the occurrence of anticipated or unanticipated events.

 

Financial information contained in this report and in our financial statements is stated in United States dollars and are prepared in accordance with United States generally accepted accounting principles.

 

IN GENERAL

We were incorporated on March 22, 2016 in the State of Nevada. We have never declared bankruptcy, have never been in receivership, and have never been involved in any legal action or proceedings. Since incorporation, we have made purchase of equipment and we rent our office in Cyprus. By condition of the Lease Agreement we shall pay to Landlord monthly rent fee of $300 per month and for the total first year the amount of $3,600 has to be paid. We have not had preliminary contact or discussions with, nor do we have any present plans, proposals, arrangements or understandings with, any representatives of the owners of any business or company regarding the possibility of an acquisition or merger.

 

We are not a «shell company» within the meaning of Rule 405, promulgated pursuant to Securities Act, because we do have hard assets and real business operations.

 

From inception until the date of this filing we have had limited operating activities, primarily consisting of the incorporation of our company, the initial equity funding by our sole officer and director, engaging in market research, rent of our office in Cyprus and entering into supply agreement. We received our initial funding of $2,000 from our sole officer and director who purchased 2,000,000 shares of common stock at $0.001 per share.

 

We have a goods sales contract between Clancy Corp. and Afrodita Co, Freskada Co, Omorfiб Co., OloToSуma Co. In accordance to this contracts Seller should receive from Buyer payment in accordance to the invoice to each order of Goods from the date of signing this Contract by the Parties. Buyer agreed to accept the Goods in Seller’s office.

 

We intend to use the net proceeds from this offering to develop our business operations. To fully implement our plan of operations we require a minimum funding of $20,000 for the next twelve months. After twelve months period we may need additional financing. If we do not generate any revenue we may need a minimum of $9,000 of additional funding to pay for SEC filing requirements. Iryna Kologrim, our President and a Director, has agreed to loan the Company funds, however, she has no firm commitment, arrangement or legal obligation to advance or loan funds to the Company. The Company's principal offices are located at str. Vizantiou 28, Strovolos, Lefkosia, Cyprus, 2006. The monthly rent fee is $300 per month from 1st day of September 2016 till 1st day of September 2017.

 

INITIAL FOCUS OF OUR BUSINESS

We produce our product in Cyprus and we have signed a contract with Hodm Professionals Limited, based in China, and we are ordering from them our equipment and raw materials for handcrafted soap production. We are also considering other firms as well for this work. We decided to use natural ingredients as an alternative to the synthetic ingredients prevalent in personal care products today. We intend to establish formulations using fresh, pure, and safe ingredients that appeal to people.

 

Our products are inspired by many growing trends. Most specifically consumers seeking new, intriguing formulations, which promote well-being either through the principles of natural therapy, or simply for the pleasure of natural aromas, which the product will bring. Moreover, there is an increasing awareness among consumers of the benefits in using organic and natural products. Unlike many other companies, our use of natural ingredients will not entail using a small portion of natural ingredients to tout the product as «natural». Our products are created to support optimal benefit to the users by containing ingredients that make a difference.  We plan to advertise through handcrafted soap trade shows and marketing campaign at the stores of our future customers, distributors and related. We intend to develop and maintain a database of potential customers who may want to purchase handcrafted soap from us. We will follow up with these clients periodically, send them our new catalogues and offer them special discounts from time to time. In future we plan to print flyers and mail them to potential customers. We intend to use marketing methods, such as web advertisements, direct mailing, and phone calls to acquire potential customers

 

 

We intend for our products to have the following characteristics:

 

§ Moisturizing, non-irritating, softening, cleansing and nourishing

§ No synthetic preservatives, colors or fragrances

§ No Sodium Laureth (Lauryl) Sulfate to irritate skin (we use coconut oil to lather)

§ No Petro-chemicals, lanolin or mineral oil

 

OUR PRODUCTS

Brief History of Our Products

Soap making history goes back many thousands years. The most basic supplies for soap making were those taken from animal and nature; many people made soap by mixing animal fats with lye. Today, soap is produce from fats and an alkali. The cold process method is the most popular soap making process today, while some soap makers use the historical hot process.

 

In the early beginnings of soap making, it was an exclusive technique used by small groups of soap makers. Over time, recipes for soap making became more widely known. Back then, plant byproducts and animal and vegetable oils were the main ingredients of soap. The price of soap was significantly reduced in 1791 when a Frenchman by the name of LeBlanc discovered a chemical process that allowed soap to be sold for significantly less money.

 

More than 20 years later, another Frenchman identified relationships between glycerin, fats and acid what marked the beginning of modern soap making. Since that time, there have been no major discoveries and the same processes are used for the soap making we use and enjoy today.

 

In the mid-nineteenth century, soap for bathing became a separate commodity from laundry soap, with milder soaps being packaged, sold and made available for personal use. Liquid hand soaps were invented in the 1970s and this invention keeps soaps in the public view.

 

Types of Handcrafted Soap

While the chemical reaction that creates soap is always the same, different types of soaps can be made by different methods, all still relying upon that basic chemical reaction that occurs.

 

Cold Process Soap

Cold process soap making is the method most often used by soap makers who make soap from scratch. It is called «cold» process because no additional heat is added during the soap making process; however the process itself does generate heat.

 

Handcrafted soap makers generally pride themselves on their unique recipes, developed to create their signature soaps. Soap ingredients are usually food-quality, natural ingredients starting with a variety of vegetable oils such as olive, coconut, or palm, or purified tallow or lard. To these the soap maker might add specialized oils, nut butters or seed extracts to bring the desired qualities to the finished bar.

 

Soaps produced via the cold process method are opaque and usually have a creamy feel to the bar. Without any additives that change the color, the soap ranges from white-white to creamy-tan, depending on the oils used in making the soap.

 

The feel of the lather varies, also dependent upon the oils used to make the soap. The lather can range from tiny, very slippery, long-lasting bubbles (as with pure olive oil soap), to big, fluffy, short-lived bubbles (as with pure coconut oil soap).

 

The hardness of the bar is determined by the selection of oils, the amount of water used and how long the soap was dried. Cold process soaps will continue to get harder as they age because additional water evaporates out of the soap.

 

Most cold process soaps are made with a combination of oils, in a recipe developed by the soap maker to create a good lather and hard bar, as well as to provide benefits with additional ingredients.

 

Hot Process Soap

In hot process soap making, additional heat is applied to the soap mixture. The chemical reaction is the same, but occurs faster than in cold process soap making. Because of the additional heat, the finished soap bar tends to feel smoother to the touch. The hardness of the bar again depends on the selection of oils, amount of water used in the process and length of time allowed for water to evaporate out of the finished bar.

 

 

As with cold process soap, the hot process soap is opaque and ranges from white-white to creamy-tan depending on the oils used, although clear soaps can be produced (see «Transparent Soap» below).

 

The oils determine the type and quality of the lather and other benefits of the soap and other ingredients selected to make the soap.

 

Transparent Soap

Transparent Soap is made by the hot process method, with some added ingredients and steps in the process to make the soap clear. There are a few highly skilled handcrafted soap makers who produce transparent soap from scratch, but a majority of handcrafted transparent soaps on the market are produced from a ready-made soap base.

 

«Glycerin» Soap

Glycerin is a by-product of the chemical reaction of the soap making process. In commercial soaps, the glycerin is typically removed, purified and then sold for other uses including food, cosmetics, various industrial production and explosive manufacturing. The method for removing the glycerin from soap is complex and requires considerable equipment and skill. As a result, all handcrafted soaps made from scratch retain the glycerin (and all its beneficial properties) and so are all technically «glycerin soap».

 

Subsequently, the term «glycerin soap» is somewhat of a misnomer. Most people using the term «glycerin soap» are, in fact, referring to transparent soap.

 

Ready-Made Soap Bases

Rather than make soap from scratch, some soap makers choose to purchase ready-made soap bases which are melted down, have color, scent or other ingredients added and are then poured into molds.

 

The benefit to using a ready-made soap base is that the chemical reaction which produces soap has already occurred, making it easier for the handcrafter to craft elegantly and uniquely shaped and colored soaps. Many of the artistic presentations of handcrafted soap can only be created with a ready-made soap base.

 

A ready-made soap base may be a «true soap» (made via the chemical reaction referred to above) or could include synthetic detergents as all or a portion of its ingredients.

 

There are some basic recipes we used for production our handcrafted soap:

 

Development, Production and Distribution

Our officer and director, Iryna Kologrim, has developed a number of handcrafted soap products, based in part on the above ingredients, using a unique blend of different raw materials. We consider these formulations unique; however, we have no patents pending for our formulations. Our products, while largely formulated with the base of unique ingredients, are still in the development phase. We are currently in the process of finalizing our product formulations.  We intend to sample each finalized product and complete the process of choosing all the peripheral items involved in the production and marketing process, including: the shape and size of the product containers; the types of caps; the packaging; the logo and label designs; and unit cartons. We intend to use Hodm Professionals Limited to handle our packaging design. In prestige markets, more than any other, the package is the product. We are in negotiations with Hodm Professionals Limited for various pricing and decorative options for product presentation.

 

We are planning to develop our online store for distribution the soap. We are in the process of defining the launch schedule and the promotional events that will surround it. We expect our products to be available on the website once we start our significant operations and obtain customers, although a definitive launch date has yet to be determined.  Following our online launch, we intend to locate and negotiate with distributors to develop additional channels for our product.

 

COMPETITION

Among all the brands found in this industry, we consider our closest competitors to be Vegenero and Trifillaris is a natural line that reflects our product concept and closely resembles our proposed product line. The concept and creation of the Vegenero and Trifillaris product line, like ours, is an extrapolation on the benefits of the antioxidants, polyphenols, and organic and natural ingredients. The advantage of Vegenero and Trifillaris over our proposed product in the marketplace at this time is twofold: (a) they have been on the market for over a decade and have grown to be a global brand with distribution outlets all over the world; and (b) they serve a larger target audience with a lower price point than we anticipate.

 

 

The prime difference between Vegenero or Trifillaris and our proposed product line is expected to be based on the market segment and Certified Organic quality of ingredients that will be included in our products. Therefore, the containers are key to our products' success as well. Further, our brand will use only the highest quality USDA Certified Organic ingredients available, including extracts, producing a highly concentrated preparation of antioxidant polyphenols. We are also using our own uniquely innovative raw materials derived from Certified Organic farmers in China, to process as opposed to only using commercially available raw materials. Our product line will also be packaged in high quality containers with inviting labels, versus the lesser quality plastic tubes and bottles used by Hodm Professionals Limited. We believe these same characteristics, Certified Organic, quality ingredients, and decorative containers, will also help us stand out in the prestige market.

 

RESEARCH AND DEVELOPMENT EXPENDITURES

We have not incurred any research expenditures since our incorporation.

 

BANKRUPTCY OR SIMILAR PROCEEDINGS

There has been no bankruptcy, receivership or similar proceeding.

 

REORGANIZATIONS, PURCHASE OR SALE OF ASSETS

There have been no material reclassifications, mergers, consolidations, or purchase or sale of a significant amount of assets not in the ordinary course of business.

 

COMPLIANCE WITH GOVERNMENT REGULATION

We will be required to comply with all regulations, rules and directives of governmental authorities and agencies applicable to the construction and operation of any facility in any jurisdiction which we would conduct activities.

 

We do not believe that any existing or probable government regulation on our business, including any applicable export or import regulation or control imposed by China or Cyprus will have a material impact on the way we conduct our business.

 

PATENTS, TRADEMARKS AND COPYRIGHTS

We do not own, either legally or beneficially, any patents or trademarks. We intend to protect our website with copyright laws. Beyond our trade name, we do not hold any other intellectual property.

 

FACILITIES

We currently rent our physical property in Cyprus: our office. Our current business address is str. Vizantiou 28, Strovolos, Lefkosia, Cyprus, 2006. Our telephone number is +35722000341. This location serves as our primary office for planning and implementing our business plan. Management believes the current premises arrangements are sufficient for its needs for at least the next 12 months.

 

EMPLOYEES AND EMPLOYMENT AGREEMENTS

We have no employees as of the date of this prospectus. Our sole officer and director, Iryna Kologrim, is an independent contractor to the Company and currently devotes approximately from 10 to 20 hours per week to company matters. After receiving funding, Iryna Kologrim plans to devote as much time to the operation of the Company as she determines is necessary for her to manage the affairs of the Company. As our business and operations increase, we will assess the need for full time management and administrative support personnel.

 

Item 1A.  Risk Factors

 

Not applicable to smaller reporting companies.

 

Item 1B. Unresolved Staff Comments

 

Not applicable to smaller reporting companies.

 

Item 2.  Description of Property

 

We do not own any real estate or other properties.  

Item 3.  Legal Proceedings

We know of no legal proceedings to which we are a party or to which any of our property is the subject which are pending, threatened or contemplated or any unsatisfied judgments against us.

Item 4.  Mine Safety Disclosures

Not applicable.

 

PART II

 

Item 5. Market for Common Equity and Related Stockholder Matters      

Market Information

 

There is a limited public market for our common shares.  Our common shares are not quoted on the OTC Bulletin Board at this time.  Trading in stocks quoted on the OTC Bulletin Board is often thin and is characterized by wide fluctuations in trading prices due to many factors that may be unrelated to a company’s operations or business prospects.  We cannot assure you that there will be a market in the future for our common stock.

 

OTC Bulletin Board securities are not listed or traded on the floor of an organized national or regional stock exchange.  Instead, OTC Bulletin Board securities transactions are conducted through a telephone and computer network connecting dealers in stocks.  OTC Bulletin Board issuers are traditionally smaller companies that do not meet the financial and other listing requirements of a regional or national stock exchange.

 

As of July 31, 2017, no shares of our common stock have traded

 

Number of Holders

 

As of July 31, 2017, the 2,275,000 issued and outstanding shares of common stock were held by a total of 11 shareholder of record.

 

Dividends

 

No cash dividends were paid on our shares of common stock during the fiscal year ended July 31, 2017and 2016. 

 

Recent Sales of Unregistered Securities

 

The Company has 75,000,000, $0.001 par value shares of common stock authorized.

 

On July 25, 2016, the Company issued 2,000,000 shares of common stock to a director for cash proceeds of $2,000 at $0.001 per share.

 

In May 2017, the Company issued 137,500 shares of common stock for cash proceeds of $5,500 at $0.04 per share.

 

In June 2017, the Company issued 137,500 shares of common stock for cash proceeds of $5,500 at $0.04 per share.

 

There were 2,275,000 shares of common stock issued and outstanding as of July 31, 2017.

 

Purchase of our Equity Securities by Officers and Directors

 

On July 25, 2016, the Company offered and sold 2,000,000 restricted shares of common stock to our president and director, Iryna Kologrim, for a purchase price of $0.001 per share, for aggregate offering proceeds of $2,000, pursuant to Section 4(2) of the Securities Act of 1933 as he is a sophisticated investor and is in possession of all material information relating to us. Further, no commissions were paid to anyone in connection with the sale of these shares and general solicitation was not made to anyone.

 

Other Stockholder Matters

 

None.

 

Item 6. Selected Financial Data                                       

 

Not applicable to smaller reporting companies.

 

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations

 

The following discussion should be read in conjunction with our financial statements, including the notes thereto, appearing elsewhere in this annual report. The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs.  Our actual results could differ materially from those discussed in the forward-looking statements.   Our audited financial statements are stated in United States Dollars and are prepared in accordance with United States Generally Accepted Accounting Principles.

 

Results of Operations for the year ended July 31, 2017 and July 31, 2016:

 

Revenue and cost of goods sold

 

For the year ended July 31, 2017 and July 31, 2016 the Company generated total revenue of $20,020 and $0 from selling products to the customer. The cost of goods sold for the year ended July 31, 2017 and July 31, 2016 was $804 and $0, which represent the cost of raw materials.

 

Operating expenses

 

Total operating expenses for the year ended July 31, 2017 and July 31, 2016 were $19,778 and $1,201. The operating expenses for the year ended July 31, 2017 included bank charges of $1,337; foreign exchange loss of $153; computer and internet expenses of $280; depreciation expense of $663; audit fees of $5,350; legal fees of $4,427; rent expense of $3,300.

 

Net Loss

 

The net loss for the year ended July 31, 2017 and July 31, 2016 was $562 and $1,201 accordingly.

 

Liquidity and Capital Resources and Cash Requirements

 

At year ended July 31, 2017, the Company had cash of $3,491 ($1,527 as of July 31, 2016). Furthermore, the Company had a working capital deficit of $67 (profit of $799 as of July 31, 2016). The increase in working capital is attributed to sale of stock.

 

During the year ended July 31, 2017, the Company used $7,400 of cash in operating activities due to its net loss and increase in prepaid expenses of $4,753, increase in inventory of $2,747 and depreciation of $662. 

 

During the year ended July 31, 2017 the Company used $11,967 of cash in investing activities.

 

During the year ended July 31, 2017, the Company generated $21,331 of cash in financing activities.

 

We cannot guarantee that we will manage to sell all the shares required. We will attempt to raise the necessary funds to proceed with all phases of our plan of operation. 

 

As of the date of this report, the current funds available to the Company will not be sufficient to continue maintaining a reporting status. The Company’s sole officer and director, Iryna Kologrim, has concluded a verbal agreement with the Clancy Corp. in order to fund completion of the registration process and to maintain the reporting status with SEC.

 

Our auditors have issued a “going concern” opinion, meaning that there is substantial doubt we can continue as an on-going business for the next twelve months unless we obtain additional capital. Our only sources for cash at this time are investments by others in this offering, selling our paper dung products and loans from our director. We must raise cash to implement our plan and stay in business.

 

Management believes that current trends toward lower capital investment in start-up companies pose the most significant challenge to the Company’s success over the next year and in future years. Additionally, the Company will have to meet all the financial disclosure and reporting requirements associated with being a publicly reporting company. The Company’s management will have to spend additional time on policies and procedures to make sure it is compliant with various regulatory requirements, especially that of Section 404 of the Sarbanes-Oxley Act of 2002. This additional corporate governance time required of management could limit the amount of time management has to implement is business plan and impede the speed of its operations.

 

Limited operating history; need for additional capital

 

There is no historical financial information about us upon which to base an evaluation of our performance. We are in a start-up stage of operations and have generated limited revenues since inception. We cannot guarantee that we will be successful in our business operations. Our business is subject to risks inherent in the establishment of a new business enterprise, including limited capital resources and possible cost overruns due to price and cost increases in services and products.

 

 

 

 

 

 

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 Company's financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

 

Item 7A. Quantitative and Qualitative Disclosures about Market Risk   

 

Not applicable to smaller reporting companies.

 

Item 8. Financial Statements and Supplementary Data   

 

 

 

 

 

 

 

 

CLANCY CORP.  

 

FINANCIAL STATEMENTS

 

YEARS ENDED JULY 31, 2017 AND JULY 31, 2016

 

Table of Contents

 

 

 

 

 

 

 

 

CLANCY CORP.

BALANCE SHEET

AS OF JULY 31, 2017 AND JULY 31, 2016

(AUDITED)

 

 

 

 

 

 

 

 

 

 

 

 

 

See accompanying notes to financial statements.

 

CLANCY CORP.

STATEMENT OF OPERATIONS

YEAR ENDED JULY 31, 2017

(AUDITED)

 

 

 

 

 

 

 

 

 

 

 

See accompanying notes to financial statements.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CLANCY CORP.

STATEMENT OF CHANGES IN STOCKHOLDER’S EQUITY

YEARS ENDED JULY 31, 2017 AND JULY 31, 2016

(AUDITED)

 

 

 

 

 

 

 

 

 

See accompanying notes to financial statements.

 

CLANCY CORP.

STATEMENT OF CASH FLOWS

NINE MONTHS ENDED APRIL 30, 2017

(AUDITED)

 

 

 

 

 

 

 

 

 

See accompanying notes to financial statements.

 

CLANCY CORP.

NOTES TO THE AUDITED FINANCIAL STATEMENTS

JULY 31, 2017

 

NOTE 1 – ORGANIZATION AND NATURE OF BUSINESS

 

Clancy Corp. (“the Company”, “we”, “us” or “our”) was incorporated on March 22, 2016 under the laws of the State of Nevada, USA for the purpose of production handcrafted soap. The soap itself will be 100% organic and environment friendly. The Company also has a database of different kind ingredients for soap production, which gives the company an opportunity to expand variety offered products.

 

NOTE 2 – GOING CONCERN

 

The accompanying financial statements have been prepared in conformity with generally accepted accounting principles, which contemplate continuation of the Company as a going concern.  The Company had $20,020 of revenues as of July 31, 2017.  The Company currently has negative working capital, and has not completed its efforts to establish a stabilized source of revenues sufficient to cover operating costs over an extended period of time. Management anticipates that the Company will be dependent, for the near future, on additional investment capital to fund operating expenses The Company intends to position itself so that it will be able to raise additional funds through the capital markets. In light of management’s efforts, there are no assurances that the Company will be successful in this or any of its endeavors or become financially viable and continue as a going concern. The management plans to use high quality raw materials in their manufacturing process to increase the quality of the product and to increase the market share accordingly.

 

NOTE 3 – SUMMARY OF SIGNIFCANT ACCOUNTING POLICIES

 

Basis of presentation

The accompanying financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America. The Company’s yearend 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.

 

Cash and Cash Equivalents

The Company considers all highly liquid investments with the original maturities of three months or less to be cash equivalents. The Company had $3,491 of cash as of July 31, 2017.

 

Prepaid Expenses

Prepaid Expenses are recorded at fair market value. The Company had $4,753 in prepaid rent as of July 31, 2017.

 

Depreciation, Amortization, and Capitalization

The Company records depreciation and amortization when appropriate using straight-line balance method over the estimated useful life of the assets. The Company establishes capitalization policy of its assets based on dollar amount that are more than $1,000 in value or if its estimated useful life exceeds one year. We estimate that the useful life of our equipment is 3 years. Expenditures for maintenance and repairs are charged to expense as incurred. Additions, major renewals and replacements that increase the property's useful life are capitalized. Property sold or retired, together with the related accumulated depreciation is removed from the appropriated accounts and the resultant gain or loss is included in net income.

 

Inventories

Inventories are stated at the lower of cost or market. Cost is principally determined using the first-in, first out (FIFO) method. The Company had $2,748 in inventory as of July 31, 2017.

 

 

 

 

 

CLANCY CORP.

NOTES TO THE AUDITED FINANCIAL STATEMENTS

JULY 31, 2017

 

NOTE 3 – SUMMARY OF SIGNIFCANT ACCOUNTING POLICIES (CONTUNUED)

 

Fair Value of Financial Instruments

ASC topic 820 "Fair Value Measurements and Disclosures" establishes a three-tier fair value hierarchy, which prioritizes the inputs in measuring fair value. The hierarchy prioritizes the inputs into three levels based on the extent to which inputs used in measuring fair value are observable in the market.

 

These tiers include:

 

The carrying value of cash and the Company’s loan from shareholder approximates its fair value due to their short-term maturity.

 

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 will recognize revenue in accordance with ASC topic 605 “Revenue Recognition”. The Company recognizes revenue when products are fully delivered or services have been provided and collection is reasonably assured.

 

Basic Income (Loss) Per Share

The Company computes income (loss) per share in accordance with FASB ASC 260 “Earnings per Share”. Basic loss per share is computed by dividing net income (loss) available to common shareholders 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. As of July 31, 2017 there were no potentially dilutive debt or equity instruments issued or outstanding. 

 

Comprehensive Income

Comprehensive income is defined as all changes in stockholders' equity (deficit), exclusive of transactions with owners, such as capital investments. Comprehensive income includes net income or loss, changes in certain assets and liabilities that are reported directly in equity such as translation adjustments on investments in foreign subsidiaries and unrealized gains (losses) on available-for-sale securities. As of July 31, 2017 were no differences between our comprehensive loss and net loss.

 

Stock-Based Compensation

Stock-based compensation is accounted for at fair value in accordance with ASC Topic 718.  To date, the Company has not adopted a stock option plan and has not granted any stock options.

 

Recent Accounting Pronouncements

We have reviewed all the recently issued, but not yet effective, accounting pronouncements and we do not believe any of these pronouncements will have a material impact on the Company.

 

NOTE 4 – COMMITMENTS AND CONTINGENCIES

 

As of July 31, 2017, we know of no material, existing or pending legal proceedings against our neither company, nor are we involved as a plaintiff in any material proceeding or pending litigation. There are no proceedings in which any of our directors, officers, or affiliates, or many registered or beneficial shareholders, is an adverse patty or has a material interest adverse to our interest.

 

CLANCY CORP.

NOTES TO THE AUDITED FINANCIAL STATEMENTS

JULY 31, 2017

 

NOTE 5 – LOAN FROM DIRECTOR

 

As of July 31, 2017, our sole director has loaned to the Company $11,059. This loan is unsecured, non-interest bearing and due on demand. The balance due to the director was $11,059 as of July 31, 2017.

 

NOTE 6 – COMMON STOCK

 

The Company has 75,000,000, $0.001 par value shares of common stock authorized.

 

On July 25, 2016, the Company issued 2,000,000 shares of common stock to a director for cash proceeds of $2,000 at $0.001 per share.

 

In May 2017, the Company issued 137,500 shares of common stock for cash proceeds of $5,500 at $0.04 per share.

 

In June 2017, the Company issued 137,500 shares of common stock for cash proceeds of $5,500 at $0.04 per share.

 

There were 2,275,000 shares of common stock issued and outstanding as of July 31, 2017.

 

NOTE 7 – INCOME TAXES

 

The Company adopted the provisions of uncertain tax positions as addressed in ASC 740-10-65-1. As a result of the implementation of ASC 740-10-65-1, the Company recognized no increase in the liability for unrecognized tax benefits.

 

The Company has no tax position at July 31, 2017 for which the ultimate deductibility is highly certain but for which there is uncertainty about the timing of such deductibility. The Company does not recognize interest accrued related to unrecognized tax benefits in interest expense and penalties in operating expenses. No such interest or penalties were recognized during the period presented. The Company had no accruals for interest and penalties at July 31, 2017. The Company’s utilization of any net operating loss carry forward may be unlikely as a result of its intended activities.

 

The valuation allowance at July 31, 2017 was approximately $599. The net change in valuation allowance during the year ended July 31, 2017 was $191. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred income tax assets will not be realized. The ultimate realization of deferred income tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred income tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. Based on consideration of these items, management has determined that enough uncertainty exists relative to the realization of the deferred income tax asset balances to warrant the application of a full valuation allowance as of July 31, 2017.  All tax years since inception remains open for examination by taxing authorities.

 

The Company has a net operating loss carryforward for tax purposes totaling approximately $1,763 at July 31, 2017, expiring through 2035. There is a limitation on the amount of taxable income that can be offset by carryforwards after a change in control (generally greater than a 50% change in ownership). Temporary differences, which give rise to a net deferred tax asset, are as follows:

 

 

CLANCY CORP.

NOTES TO THE AUDITED FINANCIAL STATEMENTS

JULY 31, 2017

 

NOTE 7 – INCOME TAXES (CONTUNUED)

 

The actual tax benefit at the expected rate of 34% differs from the expected tax benefit for the year ended July 31, 2017 as follows:

 

 

 

NOTE 8 – SUBSEQUENT EVENTS

 

In accordance with SFAS 165 (ASC 855-10) the Company has analyzed its operations subsequent to July 31, 2017 to the date these financial statements were issued, and has determined that it does not have any material subsequent events to disclose in these financial statements, other than shares issuance process.

 

 

Item 9. Changes In and Disagreements with Accountants on Accounting and Financial Disclosure

 

None

 

Item 9A(T) Controls and Procedures

 

Disclosure Controls and Procedures.

 

The Company maintains disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended) that are designed to ensure that information required to be disclosed in the Company’s Securities Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms and that such information is accumulated and communicated to the Company’s management, as appropriate, to allow timely decisions regarding required disclosure.

 

The Company’s management, with the participation of our principal executive and principal financial officer evaluated the effectiveness of the Company’s disclosure controls and procedures as of the end of the period covered by this report. Based upon that evaluation, our principal executive and principal financial officer concluded that, as of the end of the period covered by this report, the Company’s disclosure controls and procedures were not effective.

 

Managements’ Report on Internal Controls over Financial Disclosure Controls and Procedures

 

Management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Exchange Act Rule 13a-15(f)). The Company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Under the supervision and with the participation of management, including the Chief Executive Officer and Chief Financial Officer, the Company conducted an evaluation of the effectiveness of the Company’s internal control over financial reporting as of July 31, 2017 using the criteria established in “Internal Control - Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO").

 

A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis. In its assessment of the effectiveness of internal control over financial reporting as of July 31, 2017, the Company determined that there were control deficiencies that constituted material weaknesses, as described below.

 

1.      We do not have an Audit Committee – While not being legally obligated to have an audit committee, it is the management’s view that such a committee, including a financial expert member, is an utmost important entity level control over the Company’s financial statement. Currently the Board of Directors acts in the capacity of the Audit Committee, and does not include a member that is considered to be independent of management to provide the necessary oversight over management’s activities.

 

 

2.      We did not maintain appropriate cash controls – As of July 31, 2017, the Company has not maintained sufficient internal controls over financial reporting for the cash process, including failure to segregate cash handling and accounting functions, and did not require dual signature on the Company’s bank accounts. Alternatively, the effects of poor cash controls were mitigated by the fact that the Company had limited transactions in their bank accounts.

 

3.      We did not implement appropriate information technology controls – As at July 31, 2017, the Company retains copies of all financial data and material agreements; however there is no formal procedure or evidence of normal backup of the Company’s data or off-site storage of data in the event of theft, misplacement, or loss due to unmitigated factors.

 

Accordingly, the Company concluded that these control deficiencies resulted in a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis by the company’s internal controls.

 

As a result of the material weaknesses described above, management has concluded that the Company did not maintain effective internal control over financial reporting as of July 31, 2017 based on criteria established in Internal Control- Integrated Framework issued by COSO.

 

System of Internal Control over Financial Reporting

 

Our management is responsible for establishing and maintaining a system of disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act) that is designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to the issuer’s management, including its principal executive officer or officers and principal financial officer or officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

 

An evaluation was conducted under the supervision and with the participation of our management of the effectiveness of the design and operation of our disclosure controls and procedures as of July 31, 2017. Based on that evaluation, our management concluded that our disclosure controls and procedures were not effective as of such date to ensure that information required to be disclosed in the reports that we file or submit under the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms.

 

Changes in Internal Control over Financial Reporting

 

There was no change in the Company’s internal control over financial reporting during the quarterly period covered by this report that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

 

Item 9B. Other Information.

 

None.

 

 

 

 

 

 

 

 

 

 

 

 

PART III

 

Item 10. Directors, Executive Officers, Promoters and Control Persons of the Company

Our executive officer's and director's and their respective ages are as follows:

 

 

Ms. Kologrim has served as our President, Chief Executive Officer, Chief Financial Officer, Secretary, Treasurer and Director since March 22, 2016. For the past five years the director was working for ERMA CAKES LTD from October, 2008 to May, 2013 and for GEMIGAR LTD in the area of production from June, 2013 to December, 2015. For the past five years Iryna Kologrim has a work experience in business accounting and in financial accounting. She can provide great assistance and financial services in these areas. Iryna Kologrim has got the needed skills to manage the current business of Clancy Corp. She was in direct connection with clients, where he learned how to build the productive relationship with customers. We believe that these skills will help our sole officer and director run the Company’s business. The responsibilities of our sole officer and director were updating and billing client premium statements, providing customer service for clients and carrier representatives, analyzing enrollments to determine proper eligibility according to the client's eligibility rules, balancing monthly billing statements for existing clients after changes are entered into billing system and make adjustments as necessary to the statements and related responsibilities.

 

TERM OF OFFICE

All directors hold office until the next annual meeting of the stockholders of the Company and until their successors have been duly elected and qualified. The Company's Bylaws provide that the Board of Directors will consist of a minimum of one member. Officers are elected by and serve at the discretion of the Board of Directors.

 

DIRECTOR INDEPENDENCE

Our board of directors is currently composed of one member, and she does not qualify as an independent director in accordance with the published listing requirements of the NASDAQ Global Market (the Company has no plans to list on the NASDAQ Global Market). The NASDAQ independence definition includes a series of objective tests, such as that the director is not, and has not been for at least three years, one of our employees and that neither the director, nor any of her family members has engaged in various types of business dealings with us. In addition, our board of directors has not made a subjective determination as to our director that no relationships exist, which in the opinion of our board of directors, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director, though such subjective determination is required by the NASDAQ rules. Had our board of directors made these determinations, our board of directors would have reviewed and discussed information provided by directors and us with regard to our director's business and personal activities and relationships as they may relate to our management and us.

 

SIGNIFICANT EMPLOYEES AND CONSULTANTS

We have no employees as of the date of this prospectus. Our sole officer and director, Iryna Kologrim, is an independent contractor to the Company and currently devotes approximately from 10 to 20 hours per week to company matters.

 

AUDIT COMMITTEE AND CONFLICTS OF INTEREST

Since we do not have an audit or compensation committee comprised of independent directors, the functions that would have been performed by such committees are performed by our directors. The Board of Directors has not established an audit committee and does not have an audit committee financial expert, nor has the Board of Directors established a nominating committee. The Board is of the opinion that such committees are not necessary since the Company is a start-up stage company and has only one director, and to date, such directors have been performing the functions of such committees. Thus, there is a potential conflict of interest in that our directors and officers have the authority to determine issues concerning management compensation, nominations, and audit issues that may affect management decisions.

 

Other than as described above, we are not aware of any other conflicts of interest with any of our executive officers or directors.

 

 

 

 

INVOLVEMENT IN CERTAIN LEGAL PROCEEDINGS

No director, person nominated to become a director, executive officer, promoter or control person of our company has, during the last ten years: (i) been convicted in or is currently subject to a pending a criminal proceeding (excluding traffic violations and other minor offenses); (ii) been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to any federal or state securities or banking or commodities laws including, without limitation, in any way limiting involvement in any business activity, or finding any violation with respect to such law, nor (iii) any bankruptcy petition been filed by or against the business of which such person was an executive officer or a general partner, whether at the time of the bankruptcy or for the two years prior thereto.

 

STOCKHOLDER COMMUNICATIONS WITH THE BOARD OF DIRECTORS

We have not implemented a formal policy or procedure by which our stockholders can communicate directly with our board of directors. Nevertheless, every effort will be made to ensure that the views of stockholders are heard by the board of directors, and that appropriate responses are provided to stockholders in a timely manner. During the upcoming year, our board of directors will continue to monitor whether it would be appropriate to adopt such a process.

 

Item 11. Executive Compensation

 

SUMMARY COMPENSATION TABLE

The following table sets forth information regarding each element of compensation that we paid or awarded to our named executive officers for fiscal 2016 and 2017:

 

 

Our sole officer and director has not received monetary compensation since our inception to the date of this prospectus. We currently do not pay any compensation to any officer or any member of our board of directors.

 

STOCK OPTION GRANTS

We had no outstanding equity awards as of July 31, 2017. The following table sets forth certain information concerning outstanding stock awards held by our officers and our directors as of July 31, 2017:

 

 

 

 

EMPLOYMENT AGREEMENTS

The Company is not a party to any employment agreement and has no compensation agreement with any officer or director.

 

DIRECTOR COMPENSATION

The following table sets forth director compensation as of July 31, 2017:

 

 

We have not compensated our directors for their service on our Board of Directors since our inception. There are no arrangements pursuant to which directors will be compensated in the future for any services provided as a director.

 

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

 

The following table lists, as of the date of this prospectus, the number of shares of common stock of our Company that are beneficially owned by (i) each person or entity known to our Company to be the beneficial owner of more than 5% of the outstanding common stock; (ii) each officer and director of our Company; and (iii) all officers and directors as a group. Information relating to beneficial ownership of common stock by our principal shareholders and management is based upon information furnished by each person using «beneficial ownership» concepts under the rules of the Securities and Exchange Commission. Under these rules, a person is deemed to be a beneficial owner of a security if that person has or shares voting power, which includes the power to vote or direct the voting of the security, or investment power, which includes the power to vote or direct the voting of the security. The person is also deemed to be a beneficial owner of any security of which that person has a right to acquire beneficial ownership within 60 days. Under the Securities and Exchange Commission rules, more than one person may be deemed to be a beneficial owner of the same securities, and a person may be deemed to be a beneficial owner of securities as to which he or she may not have any pecuniary beneficial interest. Except as noted below, each person has sole voting and investment power.

 

The percentages below are calculated based on 2,275,000 shares of our common stock issued and outstanding as of the date of this report. We do not have any outstanding warrant, options or other securities exercisable for or convertible into shares of our common stock.

 

 

Item 13. Certain Relationships and Related Transactions

 

Mrs. Kologrim is considered to be a promoter, and currently is the only promoter, of Clancy Corp., as that term is defined in the rules and regulations promulgated under the Securities and Exchange Act of 1933.

 

On July 25, 2016, we offered and sold 2,000,000 shares of common stock to Iryna Kologrim, our President, Chief Executive Officer, Chief Financial Officer, Secretary, Treasurer and a Director, at a purchase price of $0.001 per share, for aggregate proceeds of $2,000.

 

 

As of  April 15, 2016, The  director  and  sole  officer  of  Clancy  Corp.  Iryna  Kologrim  confirms  in  verbal agreement  to  grant  a  loan to  Clancy  Corp.  if  company  needs  funds  for  its  operation  and payment of liabilities in the amount of forty thousand (40,000) US dollars. The loan amount has no interest and should be considered unsafe without a maturity date. As of July 31, 2017, Iryna Kologrim has loaned us $11,059. The loan does not have any term, carries no interest and is not secured.

 

Item 14. Principal Accountant Fees and Services 

 

During fiscal year ended July 31, 2017, we incurred approximately $5,350 in fees to our principal independent accountants for professional services rendered in connection with the audit of our July 31, 2016 financial statements and for the reviews of our financial statements for the quarters ended October 31, 2016, January 31, 2017, and April 30, 2017.

 

PART IV

 

Item 15. Exhibits

 

The following exhibits are included as part of this report by reference:

 

 

 

 

 

 

 

 

 

 

 

SIGNATURES

 

In accordance with the requirements of the Securities Act of 1933, the Registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-1 and has authorized this registration statement to be signed on its behalf by the undersigned, in Strovolos, Lefkosia Cyprus, on the October 31, 2017.