BRILLIANT N.E.V. CORP. - Quarter Report: 2020 October (Form 10-Q)

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended October 31, 2020

OR

☐ TRANSACTION 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)

+189-1098-4577

(Registrant’s telephone number, including area code)

(Former Name, former address and former fiscal year, if changed since last report)

Securities registered under Section 12(b) of the Exchange Act: None

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 ☒    No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒    No ☐

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

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☒    No ☐

As of December 18, 2020, there were 3,105,250 shares of common stock, $0.001 par value per share, outstanding. 

TABLE OF CONTENTS

PART I – FINANCIAL INFORMATION

CLANCY CORP.

INDEX TO FINANCIAL STATEMENTS

CLANCY CORP.

CONSOLIDATED BALANCE SHEETS

See accompanying notes to the consolidated financial statements.

CLANCY CORP.

CONSOLIDATED STATEMENTS OF OPERATIONS

for the three months ended October 31, 2020 and 2019

(unaudited) 

See accompanying notes to the consolidated financial statements

CLANCY CORP.

STATEMENT OF CHANGES IN SHAREHOLDERS’ DEFICIT

for the three months ended October 31, 2020

CLANCY CORP.

STATEMENT OF CHANGES IN SHAREHOLDERS’ DEFICIT

for the three months ended October 31, 2019

See accompanying notes to the consolidated financial statements

CLANCY CORP.

STATEMENT OF CASH FLOWS

for the three months ended October 31, 2020 and 2019

(unaudited)

See accompanying notes to the consolidated financial statements.

CLANCY CORP.

NOTES TO THE FINANCIAL STATEMENTS

October 31, 2020

(unaudited) 

NOTE 1 – ORGANIZATION AND NATURE OF BUSINESS

Clancy Corp. (“the Company”) was incorporated on March 22, 2016 under the laws of the State of Nevada, USA. The Company initially was formed for the purpose of producing and selling handcrafted soaps.

On April 13, 2020, the Company registered Shanghai Clancy Enterprise Management Co., Ltd. (Shanghai Clancy) as a wholly foreign-owned entity and as a wholly owned subsidiary in Shanghai, China. Shanghai Clancy had no business activity from inception through October 31, 2020.

On April 24, 2020, Shanghai Clancy registered Beijing Clancy Information Technology Co., Ltd. (Beijing Clancy) in Beijing as its wholly-owned subsidiary and a second tier subsidiary of the Company.

The main business scope is business management consulting, business information consulting, marketing planning, cultural and art exchange planning consulting (except performance brokers, business performances), corporate image planning, conference services and exhibition and display services.

NOTE 2 – MANAGEMENT PLANS

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. Although Beijing Clancy started business operation and had generated revenue for the three months ended October 31, 2020, the Company incurred loss, an accumulated deficit and experienced negative cash flow from operations. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Mr. Meng, the major stockholder, Chief Executive Officer and sole director of Company, verbally has agreed to provide continued financial support to the Company.

The company’s business objective for the next twelve month and beyond such time will be to expand business operations and increase revenue. The company will focus on product management, digital marketing, refined user operations, performance optimization, after-sales service, etc. to provide customers with more convenient and high- quality service experience.

The Covid-19 pandemic presents novel challenges and a chaotic business environment globally. The duration and intensity of the impact of the Covid-19 to business entities differ geographically. Covid-19 has a limited impact on the Company’s activities since Shanghai Clancy has no activities and Beijing Clancy operations are limited to Beijing, PRC. The impact on the result of operation and the financial statements was immaterial as of October 31, 2020.

NOTE 3 – BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The consolidated financial statements and related notes have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) and include the accounts of Clancy Corp. and its wholly owned subsidiaries. All material intercompany balances and transactions have been eliminated in consolidation.

Fiscal year end

The Company’s year end 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.

CLANCY CORP.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

October 31, 2020

NOTE 3 - BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

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 recognizes revenue in accordance with ASC 606, Revenue from Contracts. The core principle of ASC 606 is that an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. An entity recognizes revenue in accordance with that core principle by applying the following steps: Step 1: Identify the contract(s) with a customer Step 2: Identify the performance obligations in the contract Step 3: Determine the transaction price Step 4: Allocate the transaction price to the performance obligations in the contract Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation.

Cash and Cash Equivalents

Cash and cash equivalents consist of all cash balances and highly liquid investments with original maturities of three months or less. Because of short maturity of these investments, the carrying amounts approximate their fair values.

Concentration of Credit Risk

The Company is exposed to credit risk in the normal course of business, primarily related to cash and cash equivalents. A portion of the Company’s cash and cash equivalents are deposited with Industrial and Commercial Bank of China Limited in the PRC, which is not insured or otherwise protected. The Company had deposits of $23,693 as of October 31, 2020.  The Company has not experienced any losses in such accounts in the PRC.

Leases

The Company determines if an arrangement is a lease at inception. Operating leases are included in operating lease right-of-use (“ROU”) assets and operating lease liabilities in the consolidated balance sheets. Finance leases are included in finance lease ROU assets and finance lease liabilities in the consolidated balance sheets.

ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating lease and finance lease ROU assets and liabilities recognized at October 31, 2020 based on the present value of lease payments over the lease term discounted using the rate implicit in the lease. In cases where the implicit rate is not readily determinable, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. Lease expense for lease payments is recognized on a straight-line basis over the lease term.

The Company has elected not to recognize operating lease ROU assets and liabilities arising from short-term leases.

Reporting Currency and Translation

The financial statements of the Company’s foreign subsidiaries are measured using the local currency, Renminbi (“RMB”), as the functional currency; whereas the functional currency of Clancy Corp. and reporting currency of the Company is the United States dollar (“USD” or “$”).

CLANCY CORP.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

October 31, 2020

NOTE 3 - BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

The Company has operations in China where the local currency of RMB is used to prepare the consolidated financial statements which are translated into the Company’s reporting currency, U.S. dollars. The local currency of RMB is the functional currency for the operations outside the United States. Changes in the exchange rates between this currency and the Company’s reporting currency, are partially responsible for some of the periodic changes in the consolidated financial statements. Assets and liabilities of the Company’s foreign operations are translated into U.S. dollars at the spot rate in effect at the applicable reporting date. Revenues and expenses of the Company’s foreign operations are translated at the average exchange rate during the applicable period. The resulting unrealized cumulative translation adjustment is recorded as a component of accumulated other comprehensive income (loss) in stockholders’ deficit. Realized and unrealized transaction gains and losses generated by transactions denominated in a currency different from the functional currency of the applicable entity are recorded in general and administrative expense in the period in which they occur. For the three months period ended October 31, 2020 and 2019 there were no realized or unrealized transaction gains and losses generated by transactions denominated in a currency different from the functional currency of the applicable entities.

The exchange rates used to translate amounts in RMB to USD for the purposes of preparing the consolidated financial statements were as follows:

Foreign Operations

All of the Company’s operations and assets are located in Beijing China. The Company may be adversely affected by possible political or economic events in this country. The effect of these factors cannot be accurately predicted.

Contract Liabilities Need USD in below amounts

On July 29, 2020, the Company entered into three-year service maintenance agreements with three customers. The three service maintenance agreements total 1,188,000 RMB to be received over the three-year period. The contracts require three months of upfront payments each quarter, totaling 99,000 RMB per quarter. The Company's performance obligation will be satisfied on a monthly basis and the upfront payments will be recognized as revenue, pro rata on a monthly basis, over each fiscal quarter. For the three month period ended October 31, 2020, the company recognized revenue of $14,495.

One of the service maintenance agreements is with a company that is controlled by a supervising officer of Beijing Clancy and thus is deemed to be a related party. The total value of this service maintenance agreement is 540,000 RMB, payable quarterly with upfront quarterly payments of 45,000 RMB.

Basic Income (Loss) Per Share

The Company computes income (loss) per share in accordance with FASB ASC 260 “Earnings per Share”. Basic income (loss) per share is computed by dividing net income (loss) available to common stockholders 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. In the three months ended October 31, 2020 and 2019, there were no potentially dilutive equity instruments issued or outstanding.  

Comprehensive Income

The Company follows Financial Accounting Standards Board Accounting Standards Codification (“FASB ASC”) 220, “Comprehensive Income,” in reporting comprehensive income. Comprehensive income is a more inclusive financial reporting methodology that includes disclosure of certain financial information that historically has not been recognized in the calculation of net income. The Company has one item of other comprehensive loss, consisting of a currency translation adjustment of $1,824 for the three months ended October 31, 2020 compared to $0 for the three months ended October 31, 2019.

CLANCY CORP.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

October 31, 2020

NOTE 3 - BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Financial Instrument

The carrying value of the Company’s short-term financial instruments, such as accounts payable and advances, approximates their fair values because of their short maturities.

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.

Recently Adopted Accounting Pronouncements

As of October 31, 2020 and for the period then ended, there were no recently adopted accounting standards that had a material effect on the Company’s financial statements.

Recently Issued Accounting Pronouncements Not Yet Adopted

As of October 31, 2020, there was no recently issued accounting standards not yet adopted which would have a material effect on the Company’s consolidated financial statements.

NOTE 4 - OPERATING LEASE RIGHT-OF- USE ASSETS

As of October 31, 2020, the total operating lease Right of Use assets was $153,212. The total operating lease cost was $15,437 and $1,381 for the three-month period ended October 31, 2020 and 2019.

NOTE 5 - LEASE LIABILITIES- OPERATING LEASE

Future minimum lease payments under the operating lease as of October 31, 2020 are:

NOTE 6 - RELATED PARTY TRANSACTIONS

As of October 31, 2020 and July 31, 2020, the balance owing to a related party was $213,355 and $263,037, respectively. As of October 31, 2020 and October 31, 2019, the loan was interest free and unsecured and had no stated terms of repayment.

NOTE 7 - RESEARCH AND DEVELOPMENT EXPENSE

As of October 31, 2020, the company fully expensed the cost of development of software prepaid to a third party in the amount of $39,531. The research and development expense – software development was $39,531 and 0 for the three months ended October 31, 2020 and 2019.

CLANCY CORP.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

October 31, 2020

NOTE 8 - CONTRACT LIABILITY

$14,798 of service prepayment including $6,726 from a related party was received as of October 31, 2020 compared to $14,143 including $6, 426 received from a related party as of July 31, 2020.

NOTE 9 - INCOME TAXES

Income tax expense was $0 for the three months ended October 31, 2020 and 2019.

As of July 31, 2020, the Company had no unrecognized tax benefits and, accordingly, the Company did not recognize interest or penalties during the three months ended October 31, 2020 related to unrecognized tax benefits. There was no accrual for uncertain tax positions as of October 31, 2020.

There is no income tax benefit for the losses for the three months ended October 31, 2020 and 2019, since management has determined that the realization of the net tax deferred asset is not assured and has created a valuation allowance for the entire amount of such benefits.

Item 2. Management’s Discussion and Analysis of  Financial Condition and Results of Operations

Forward-Looking Statements

Certain statements made in this quarterly report on Form 10-Q are “forward-looking statements” in regard to the plans and objectives of management for future operations. Such statements involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements of the registrant to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. The forward-looking statements included herein are based on current expectations that involve numerous risks and uncertainties. The Company’s plans and objectives are based, in part, on assumptions involving the continued expansion of business. Assumptions relating to the foregoing involve judgments with respect to, among other things, future economic, competitive and market conditions and future business decisions, all of which are difficult or impossible to predict accurately and many of which are beyond the control of the Company. Although the Company believes its assumptions underlying the forward-looking statements are reasonable, any of the assumptions could prove inaccurate and, therefore, there can be no assurance the forward-looking statements included in this quarterly report will prove to be accurate. In light of the significant uncertainties inherent in the forward-looking statements included herein, the inclusion of such information should not be regarded as a representation by the registrant or any other person that the objectives and plans of the registrant will be achieved. 

Substantial risks exist with respect to an investment in the Company. These risks include but are not limited to, those factors discussed in our Annual Report on Form 10-K for the fiscal year ended July 31, 2020, filed with the Securities and Exchange Commission (“Commission”) on November 12, 2020. More broadly, these factors include, but are not limited to: 

Description of Business

Clancy Corp. (the “Company”) was incorporated under the laws of the State of Nevada on March 22, 2016.

Effective June 28, 2019 (“Effective Date”), a change of control occurred with respect to the Company. Pursuant to the terms of Stock Purchase Agreement, Gaoyang Liu purchased 2,000,000 shares of Company issued and outstanding common stock from Iryna Kologrim, the then sole officer, director, and majority shareholder of the Company. The 2,000,000 shares represented 64.4% of the shares of outstanding common stock of the Company. In connection with the transaction, Mr. Liu became the sole officer and director of the Company and Ms. Kologrim resigned in all capacities with respect to the Company. In addition, as of the Effective Date, the Company assigned all of the assets to Ms. Kologrim and she waived all liabilities, including any outstanding loans, and claims against the Company. In connection with the change of control, the Company ceased its business operation and is now a “shell company” as defined under Rule 405 promulgated under the Securities Act of 1933, as amended (the “Act”). Prior to such time, the Company produced and sold organic soaps.

On January 15, 2020, the Company filed a Certificate of Amendment to Articles of Incorporation with the Nevada Secretary of State (the “Amendment”) which effectuated the following corporate actions (“Corporate Actions”):

The Corporate Actions were adopted by written consent of our sole Director, Mr. Gaoyang Liu, on January 2, 2020, and the sole Director recommended the Corporate Actions be presented to our shareholders for approval. On January 3, 2020, Mr. Liu, the Company’s majority stockholder, holding 64.4% of the company’s outstanding voting securities executed written consent approving the Corporate Actions. For purposes of the forward stock split described above, the sole Director also set January 2, 2020 as the record date of such action.  

On March 31, 2020, a change of control occurred with respect to the Company. Pursuant to a Stock Purchase Agreement entered into by and among the Clancy Corp. (“Company”), Gaoyang Liu (“Seller”), and Xiangying Meng (“Buyer”) (the “Purchase Agreement”), Seller assigned, transferred and conveyed to Buyer 60,000,000 shares of common stock of Company (“Common Stock”), which represents 64.4% of the total issued and outstanding shares of the Company, for the sum of $285,000. In addition, Seller assigned his rights and interest to outstanding loans made by Seller to the Company in the amount of $55,609 for the face value of such loans. As a result of the transaction, Mr. Meng owned 67,500,000 shares of common stock of the Company or 72.5% of the issued and outstanding shares of common stock of the Company.

In connection with the transaction, Mr. Liu, the then sole officer and director of the Company resigned in all officer and director capacities from the Company and Mr. Meng was appointed Chief Executive Officer and Chief Financial Officer of the Company. In addition, Mr. Meng was appointed the sole director of the Company.

On July 6, 2020, the Nevada Secretary of State approved the Company’s Certificate of Amendment to Articles of Incorporation which effectuated the following corporate action (“Corporate Action”):

The above corporate action was adopted by written consent of our sole Director on June 11, 2020, and the sole Director recommended the corporate action be presented to our shareholders for approval. For purposes of the reverse stock split described above, the sole Director also set June 12, 2020 as the record date of such action. On June 12, 2020, our majority stockholder, holding 91.885% of our outstanding voting securities, executed written consent in lieu of a shareholder meeting approving the corporate action.

On April 13, 2020, the Company registered Shanghai Clancy Enterprise Management Co., Ltd. (Shanghai Clancy) as a wholly foreign-owned entity and as a wholly owned subsidiary in Shanghai, China. Shanghai Clancy had no business activity from inception through October 31, 2020.

On April 24, 2020, Shanghai Clancy registered Beijing Clancy Information Technology Co., Ltd. (Beijing Clancy) in Beijing as a wholly-owned subsidiary. Beijing Clancy had no business activity from inception through April 30, 2020. 

Results of Operations

While we commenced limited operations during the first fiscal quarter of this year, at the present time, the Company still is considered a shell company as defined in Rule 504 of the Act. One of our principal business objective for the next 12 months and beyond such time will be to achieve meaningful business operations. Alternatively, if we are unable to successfully develop our business, we may seek a combination with a business rather than immediate, short-term earnings. The Company will not restrict our potential candidate target companies to any specific business, industry or geographical location and, thus, may acquire any type of business.

Revenues.

For the three months ended October 31, 2020 and 2019, the company had revenues of $14,516 and 0, respectively. The revenues are from our technology related business conducted through our WOFE, Shanghai Clancy and its subsidiary, Beijing Clancy.

Cost of Goods Sold

For the three month ended October 31, 2020 and 2019, the Company had cost of goods sold $19,255 and 0, respectively. Cost of goods sold includes salaries and benefits of IT technicians. The increase in cost of goods sold is due to the commencement of our technology driven business in the first quarter of this current fiscal year. We did not have any business operations during the same period of the last fiscal year.

Operating Expenses.

For the three months ended October 31, 2020, the Company had total operating expenses of $64,785, consisting of $15,437 in lease expense, $9,817 in general and administrative expenses and $39,531 in research and development expense. These amounts compare with total operating expenses of $14,118 consisting of lease expense of $1,381 and general and administrative expense of $12,737 recorded in the three months ended October 31, 2019. The increase of $50,667 was due in large part to research and develop costs associated with our recent business developments, along with the three year lease which we entered into in May 2020.

Net Loss.   

For the three months ended October 31, 2020 and 2019, the Company had a net loss of $69,524 and $14,118, respectively, for the reasons discussed above.

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 $34,473 in cash and equivalents as of October 31, 2020.

Liquidity and Capital Resource

The Company had $34,473 and $21,821, respectively in cash and cash equivalents as of October 31, 2020 and July 31, 2020.

As of October 31, 2020 and July 31, 2020, the Company had working capital deficit of $205,589 and $19,409, respectively. The increase in working capital deficit was due to net loss for the current period.

The Company can provide no assurances that it can continue to satisfy its cash requirements for at least the next twelve months.

The following is a summary of the Company's cash flows from operating and financing activities for the three months ended October 31, 2020 and 2019:

Operating Activities 

During the three month ended October 31, 2020, the Company had a net loss of $69,524 and after adjusting for lease expense, research and development expense, prepaid expense and increase in accounts payable, a net cash used in operating activities of $14,230 was recorded. By comparison, during the three month period ended October 31, 2019, the Company incurred a net cash used in operating activities of $12,737.

Financing Activities

During the three months ended October 31, 2020, the Company repaid $57,206 in advances from the Company’s majority shareholder offset by $83,348 in advances returned from two non-affiliates, which resulted in $26,142 in total net cash provided by financing activities for the period. By comparison, during the three months ended October 31, 2019, the Company received $12,737 in advances from the Company’s majority shareholder resulting in $12,737 in total net cash provided by financing activities for the period.

Our financial statements reflect the fact that we do not have enough revenue to cover expenses. We are at present under-capitalized. The Company is dependent upon the receipt of capital investment or other financing to fund its ongoing operations and to execute its business plan of seeking a combination with a private operating company. In addition, the Company is dependent upon certain related parties to provide continued funding and capital resources. If continued funding and capital resources are unavailable at reasonable terms, the Company may not be able to implement its plan of operations. 

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 that is material to investors.  

Contractual Obligations

None.

Item 3. Quantitative and Qualitative Disclosures about Market Risk.

As a “smaller reporting company” as defined by Item 10 of Regulation S-K, the Company is not required to provide information required by this Item.

Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

In connection with the preparation of this quarterly report, an evaluation was carried out by the Company’s management, with the participation of the principal executive officer and the principal financial officer, of the effectiveness of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act (“Exchange Act”) as of October 31, 2020. Disclosure controls and procedures are designed to ensure that information required to be disclosed in reports filed or submitted under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the Commission’s rules and forms, and that such information is accumulated and communicated to management, including the principal executive officer and the principal financial officer, to allow timely decisions regarding required disclosures.

Based on that evaluation, the Company’s management concluded, as of the end of the period covered by this report, that the Company’s disclosure controls and procedures were not effective in recording, processing, summarizing, and reporting information required to be disclosed, within the time periods specified in the Commission’s rules and forms, and that such information was not accumulated and communicated to management, including the principal executive officer and the principal financial officer, to allow timely decisions regarding required disclosures.

Management’s Report on Internal Control over Financial Reporting

Change in Internal Control over Financial Reporting

During the quarter ended October 31, 2020, there has been no changes in internal control over financial reporting that has materially affected or is reasonably likely to materially affect our internal control over financial reporting.

PART II – OTHER INFORMATION

Item 1. Legal Proceedings.

There are presently no material pending legal proceedings to which the Company, any executive officer, any owner of record or beneficially of more than five percent of any class of voting securities is a party or as to which any of its property is subject, and no such proceedings are known to the Company to be threatened or contemplated against it.

Item 1A. Risk Factors.

As a “smaller reporting company” as defined by Item 10 of Regulation S-K, the Company is not required to provide information required by this Item.

Item 2. Unregistered Sale of Equity Securities and Use of Proceeds.

None.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

Not applicable to our Company.

Item 5. Other Information.

None

Item 6. Exhibits.

+ In accordance with SEC Release 33-8238, Exhibit 32.1 is being furnished and not filed.

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.