NOTES TO THE FINANCIAL STATEMENTS
JULY 31, 2019
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. The Company’s initially was formed for the
purpose of producing and selling handcrafted soaps.
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 connection with the change of control, the Company ceased its
business operations and is now a “shell company” as defined under Rule 405 promulgated under the Securities Act of
1933, as amended. It also assigned all assets to Iryna Kologrim, the then sole officer, director, and majority shareholder of the
Company in exchange for a waiver of all labilities owed to her by the Company.
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 $20,750 in revenues for the year ended July 31, 2019. The Company currently has losses
and has not completed its efforts to establish a stabilized source of revenues sufficient to cover operating costs over an extended
period of time, which adds substantial doubt about
the Company continuing as a going concern. 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.
NOTE 3 – SUMMARY OF SIGNIFICANT 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 $0 in
cash as of July 31, 2019 and $876 as of July 31, 2018. The total cash balance is insured by the Federal
Deposit Insurance Corporation (“FDIC”) up to $250,000 per commercial bank. For purposes of the statement of cash flows
we consider all cash and highly liquid investments with initial maturities of one year or less to be cash equivalents.
CLANCY CORP.
NOTES TO THE FINANCIAL STATEMENTS
JULY 31, 2019
NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES (CONTINUED)
Prepaid Expenses
Prepaid Expenses are recorded at fair
market value. The Company had no prepaid expenses as of July 31, 2019 and
$1,153 as of July 31, 2018.
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 it’s 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 $0 in inventory
as of July 31, 2019 and $3,819 as of July 31, 2018.
In connection with the change of control transaction on June 28, 2019, the Company ceased its business operations and is now a
“shell company” as defined under Rule 405 promulgated under the Securities Act of 1933, as amended. It also assigned
all assets and liabilities to the then sole officer, director, and majority shareholder of the Company.
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.
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:
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Level 1:
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defined as observable inputs such as quoted prices in active markets;
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Level 2:
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defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and
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Level 3:
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defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions.
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The carrying value of cash and the Company’s loan from shareholder
approximates its fair value due to their short-term maturity.
CLANCY CORP.
NOTES TO THE FINANCIAL STATEMENTS
JULY 31, 2019
NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES (CONTINUED)
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. Specifically, Section 606-10-50 requires an entity to provide information about:
a. Revenue recognized from contracts with customers, including the disaggregation of revenue into appropriate categories; b. Contract
balances, including the opening and closing balances of receivables, contract assets, and contract liabilities; c. Performance
obligations, including when the entity typically satisfies its performance obligations and the transaction price that is allocated
to the remaining performance obligations in a contract; d. Significant judgments, and changes in judgments, made in applying the
requirements to those contracts.
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, 2019, 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, 2019, 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.
CLANCY CORP.
NOTES TO THE FINANCIAL STATEMENTS
JULY 31, 2019
NOTE 4 – EQUIPMENT
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|
July 31, 2019
|
|
July 31, 2018
|
Equipment
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$
|
—
|
|
|
|
1,688
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Accumulated Depreciation
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$
|
—
|
|
|
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(914
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)
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Net equipment
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$
|
—
|
|
|
|
774
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Other Fixed Assets
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$
|
—
|
|
|
|
10,279
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Accumulated Depreciation
|
|
$
|
—
|
|
|
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(3,117
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)
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Net Other Fixed Assets
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|
$
|
—
|
|
|
|
7,162
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|
For the years ended July 31, 2019 and 2018 we recognized depreciation
expense in the amount of $3,368 and $3,368 accordingly.
In connection with the change of control transaction on June 28,
2019, the Company ceased its business operations and is now a “shell company” as defined under Rule 405 promulgated
under the Securities Act of 1933, as amended. It also assigned all assets and liabilities to the then sole officer, director, and
majority shareholder of the Company.
NOTE 5 – COMMITMENTS AND CONTINGENCIES
As of July 31, 2019, we do not know of any material, existing or
pending legal proceedings against our company; we are not 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 party or has a material interest adverse to our interest.
The Company has entered into a one year rental agreement for a $300
monthly fee, starting on September 1, 2016. Leased Premise with the area of 40 square meters is located at str. Vizantiou 28, Strovolos,
Lefkosia, Cyprus, 2006. This premise is used as a manufacturing area. The Company extended the lease agreement until September
1, 2019. The Company paid $900 for rent for the three months ended July 31, 2019 and $900 for rent for the three months ended July
31, 2018. The Company paid $3,600 for rent for the years ended July 31, 2019 and $3,600 for rent for the years ended
July 31, 2018. The lease has been paid in full and has been terminated as of September 1, 2019.
On October 19, 2017 the Company has
entered into a five year rental agreement for a $540 monthly fee, starting on November 1, 2017. Leased Premise with the area of
74 square meters is located at 8 Stasinou Ave, Lefkosia 1060, Nicosia, Cyprus. This premise will be used as a store for our clients.
The Company paid $1,620 for rent for the three months ended July 31, 2019 and
$1,620 for rent for the three months ended July 31, 2018. The Company paid $6,480 for rent for the years ended July 31, 2019 and
$4,860 for rent for the years ended July 31, 2018. The Company has paid rent through June 2019.
NOTE 6 – LOAN FROM DIRECTOR
As of July 31, 2019, our sole officer and director loaned to the
Company $23,334. This loan is unsecured, non-interest bearing and due on demand. As part of change of control transaction on June
28, 2019, the outstanding balance was forgiven and written off. The balance due to the director was $0 as of July 31, 2019 and $11,059
as of July 31, 2018. On that same date, it also assigned all assets and liabilities to the then sole officer, director, and majority
shareholder of the Company. In connection with the change of control, the Company ceased its business operations and is now a “shell
company” as defined under Rule 405 promulgated under the Securities Act of 1933, as amended. As of July 31, 2019, the new
Director had advanced the company $1,152. This loan is unsecured, non-interest bearing and due on demand.
CLANCY CORP.
NOTES TO THE FINANCIAL STATEMENTS
JULY 31, 2019
NOTE 7 – COMMON STOCK
The Company has 75,000,000, $0.001 par value shares of common stock
authorized.
In August 2017, the Company issued 96,500 shares of common stock
for cash proceeds of $3,860 at $0.04 per share.
In September 2017, the Company issued 233,750 shares of common stock
for cash proceeds of $9,350 at $0.04 per share.
In October 2017, the Company issued 425,000 shares of common stock
for cash proceeds of $17,000 at $0.04 per share.
In November 2017, the Company issued 75,000 shares of common stock
for cash proceeds of $3,000 at $0.04 per share.
There were 3,105,250 shares of common
stock issued and outstanding as of July 31, 2019 and 3,105,250 shares as
of July 31, 2018.
On June 28, 2019 (the “Effective Date”), Pursuant to
the terms of Stock Purchase Agreement, Gaoyang Liu purchased 2,000,000 shares of Clancy Corp’s (the “Company”)
issued and outstanding common stock from Iryna Kologrim, the sole officer, director, and majority shareholder of the Company. The
total of 2,000,000 shares represents 64.4% of the shares of outstanding common stock of the Company.
NOTE 8– INCOME TAXES
Federal Income taxes are not currently due since we have
had losses since inception.
On December
22, 2018 H.R. 1, originally known as the Tax Cuts and Jobs Act, (the “Tax Act”) was enacted. Among the significant
changes to the U.S. Internal Revenue Code, the Tax Act lowers the U.S. federal corporate income tax rate (“Federal Tax Rate”)
from 35% to 21% effective January 1, 2018. The Company will compute its income tax expense for the year ended July
31, 2019 using a Federal Tax Rate of 21%.
Income taxes are provided based upon the liability
method of accounting pursuant to ASC 740-10-25 Income Taxes – Recognition. Under this approach, deferred
income taxes are recorded to reflect the tax consequences in future years of differences between the tax basis of assets and liabilities
and their financial reporting amounts at each year-end. A valuation allowance is recorded against deferred tax assets if
management does not believe the Company has met the “more likely than not” standard required by ASC 740-10-25-5.
Deferred income tax amounts reflect the net
tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and
the amounts used for income tax reporting purposes.
CLANCY CORP.
NOTES TO THE FINANCIAL STATEMENTS
JULY 31, 2019
NOTE 8– INCOME TAXES (CONTINUED)
As of July 31, 2019, we had a
net operating loss carry-forward of approximately $(1,152) and a deferred tax asset of approximately $241 using the statutory rate
of 21%. However, due to the uncertainty of future events we have booked valuation allowance of $(241). FASB ASC 740 prescribes
recognition threshold and measurement attributes for the financial statement recognition and measurement of a tax position taken
or expected to be taken in a tax return. FASB ASC 740 also provides guidance on de-recognition, classification, interest and penalties,
accounting in interim periods, disclosure and transition. At July 31, 2019, the Company had not taken any tax positions that would
require disclosure under FASB ASC 740.
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|
July 31, 2019
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|
July 31, 2018
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Deferred Tax Asset
|
|
$
|
241
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|
|
$
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10,389
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Valuation Allowance
|
|
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(241
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)
|
|
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(10,389
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)
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Deferred Tax Asset (Net)
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|
$
|
—
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|
|
$
|
—
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On June 28, 2019 (the “Effective Date”),
pursuant to the terms of Stock Purchase Agreement, Gaoyang Liu purchased 2,000,000 shares of Clancy Corp’s (the “Company”)
issued and outstanding common stock from Iryna Kologrim, the sole officer, director, and majority shareholder of the Company. The
total of 2,000,000 shares represents 64.4% of the shares of outstanding common stock of the Company.
As a result of the change in control, the net operating loss will
be limited from that date forward.
NOTE 9 – SUBSEQUENT EVENTS
In accordance with SFAS 165 (ASC 855-10) the Company has analyzed
its operations subsequent to July 31, 2019 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.