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

Form 10-Q ~~X QUARTERLY REPORT PURSUANT TO SECTION~~

[X] Quarterly Report pursuant to Section 13 ~~OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF~~or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended March 31, ~~2009 OR TRANSITION REPORT PURSUANT TO SECTION~~2019

[ ] Transition Report pursuant to Section 13 ~~OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF~~or 15(d) of the Securities Exchange Act of 1934

For the transition period from __________ to __________

Commission ~~file number: 33-4882-D CLANCY SYSTEMS INTERNATIONAL, INC. (Exact~~File Number: 033-4882-D

Clancy Systems International, Inc.

(Exact name of ~~Registrant~~registrant as specified in its charter) ~~Colorado 84-1027964 (State or other jurisdiction of (IRS Employer incorporation or organization) Identification Number)~~

Colorado	84-1027964
(State or Other Jurisdiction of	(IRS Employer
Incorporation or Organization)	Identification Number

2250 S. Oneida #308

Denver, Colorado 80224 ~~(Address~~

Tel: 303-753-0197

(Address and telephone number of principal executive offices and Zip Code) (303) 753-0197 (Registrant's telephone number) N/A (Former name, former address and former fiscal year, if changed since last report) offices)

Securities registered pursuant to Section 12(b) of the Act:

Title of each Class	Trading Symbol	Name of each exchange on which registered
N/A	N/A	N/A

Securities registered pursuant to Section 12(g) of the 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:~~days. Yes X☐ No☒

Indicate by check mark whether the registrant has submitted electronically ~~and posted on its corporate web site, if any,~~ every Interactive Data File required to be submitted ~~and posted~~ pursuant to Rule 405 of Regulation S-T ~~(232.405~~(§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes☐ No X Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No X The number of shares outstanding of the issuer's class of common stock, as of May 18, 2009 is 378,742,011 shares, $.0001 par value. ☒

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

Large accelerated filer☐

Accelerated filer☐

Non-accelerated filer☒

Emerging growth company☐

Smaller reporting company☒

If an emerging growth company, X 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☒

The number of shares outstanding of the issuer's common stock, as of September 26, 2019 was 343,368,111.

CLANCY SYSTEMS INTERNATIONAL, INC. ~~INDEX PART I. FINANCIAL INFORMATION Page No. Item 1: Financial Statements Consolidated Balance Sheets -~~

BALANCE SHEETS

As of March 31, 2019 and September 30, ~~2008 and March 31, 2009~~ 2018
(unaudited) 3 and 4 Consolidated Statements of Operations and Other Comprehensive Income - For the Three Months Ended March 31, 2008 and March 31, 2009 (unaudited) 5 Consolidated Statements of Operations and Other Comprehensive Income - For the Six Months Ended March 31, 2008 and March 31, 2009 (unaudited) 6 Consolidated Statement of Stockholders' Equity - For the Six Months Ended March 31, 2009 (unaudited) 7 Consolidated Statements of Cash Flows - For the Six Months ended March 31, 2008 and March 31, 2009 (unaudited) 8 and 9 Notes to Unaudited Consolidated Financial Statements 10 Item 2: Management's Discussion and Analysis of Financial Condition and Results of Operations 14 Item 4T: Controls and Procedures 17 PART II. OTHER INFORMATION 18 Item 1. Legal Proceedings 18 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 19 Item 6. Exhibits 21 Signatures 22 ~~CLANCY SYSTEMS INTERNATIONAL, INC. CONSOLIDATED BALANCE SHEETS~~

ASSETS September 30, March 31, 2008 2009 (Unaudited) Current assets: ------------ ----------- Cash and cash equivalents $ 1,183,876 $ 1,372,655 Accounts receivable, net of allowance for doubtful accounts 650,771 526,677 Receivable from related party 43,461 43,461 Inventories 183,074 184,227 Prepaid expenses 69,558 39,381 Deferred tax asset 11,200 7,400 ---------- ---------- Total current assets 2,141,940 2,173,801 ---------- ---------- Furniture and equipment, at cost: Office furniture and equipment 190,696 194,496 Computers and equipment under service contracts 2,596,066 2,639,692 Leasehold improvements 13,000 13,000 Vehicles, including vehicles under capital leases 147,651 147,651 --------- --------- 2,947,413 2,994,839 Less accumulated depreciation (2,368,037) (2,480,857) ---------- --------- Net furniture and equipment 579,376 513,982 ---------- ---------- Other assets: Investment in marketable securities 858,912 1,015,537 Deposits and other 18,138 16,787 Goodwill 404,547 404,547 Software development costs, net of accumulated amortization 216,070 218,245 --------- -------- Total other assets 1,497,667 1,655,116 --------- --------- $ 4,218,983 $ 4,342,899 =========== ===========

	March 31, 2019			September 30, 2018
Current assets:
Cash and cash equivalents	$	1,364,657		$	1,624,657
Accounts receivable, net		242,133			242,133
Income tax receivable		150,900			150,900
Inventories		30,417			30,417
Prepaid expenses		1,054			1,054
Total current assets		2,049,161			2,049,161

Property and equipment, at cost:
Land		82,000			82,000
Building and building improvements		356,477			356,477
Office furniture and equipment		133,855			133,855
Equipment under service contracts		1,851,434			1,851,434
Vehicles		6,000			6,000
Less accumulated depreciation		(2,106,093	)		(2,106,093	)
Net property and equipment		323,673			323,673

Other assets:
Marketable securities		1,091,416			1,091,416
Deposits and other		317			317
Software development costs, net		333,689			333,689
Deferred tax assets, net		288,500			288,500
Total other assets		1,713,922			1,713,922
Total Assets	$	4,086,756		$	4,086,756

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
Deferred revenue	$	14,400		$	14,400
Total current liabilities		14,400			14,400

Commitments and contingencies

Stockholders' equity:
Preferred stock, $.0001 par value; 100,000,000 shares authorized, none issued
Common stock, $.0001 par value, 800,000,000 shares authorized, 332,422,251 shares issued and outstanding		33,242			33,242
Additional paid-in-capital		1,210,219			1,210,219
Unrealized gain (loss) on marketable securities		(1,881	)		(1,881	)
Retained earnings		2,830,776			2,830,776
Total stockholders' equity		4,072,356			4,072,356
Total Liabilities and Stockholders’ Equity	$	4,086,756		$	4,086,756

See accompanying notes to ~~consolidated~~ financial statements. ~~-3-~~

CLANCY SYSTEMS INTERNATIONAL, INC. CONSOLIDATED BALANCE SHEETS (Continued) LIABILITIES AND STOCKHOLDERS' EQUITY September 30, March 31, 2008 2009 (Unaudited) ------------ ----------- Current liabilities: Accounts payable $ 232,395 $ 308,109 Accrued expenses 329,737 376,577 Income taxes payable 19,652 15,901 Current portion of obligations under capital leases 3,393 3,393 Deferred revenue 104,782 75,753 --------- -------- Total current liabilities 689,959 779,733 Deferred income taxes payable 58,400 59,800 Obligations under capital lease, net of current portion 2,960 1,008 --------- ------- Total liabilities 751,319 840,541 --------- ------- Commitments and Contingencies Stockholders' equity: Preferred stock, $.0001 par value; 100,000,000 shares authorized, none issued - - Common stock, $.0001 par value; 800,000,000 shares authorized, 379,882,938 and 378,742,011 shares issued and outstanding at 9/30/08 and 3/31/09 respectively 37,988 37,874 Additional paid-in capital 1,350,078 1,346,024 Accumulated comprehensive income (loss): Unrealized loss on marketable securities (92,298) (29,036) Retained earnings 2,171,896 2,147,496 --------- --------- Total stockholders' equity 3,467,664 3,502,358 ----------- ----------- $ 4,218,983 $ 4,342,899 =========== =========== See accompanying notes to consolidated financial statements. -4- ~~CLANCY SYSTEMS INTERNATIONAL, INC. CONSOLIDATED~~

STATEMENTS OF OPERATIONS AND OTHER COMPREHENSIVE ~~INCOME (LOSS) (Unaudited)~~ LOSS

For ~~Three Months Ended March~~the six months ended March 31, ~~2008~~2019 and year ended September 31, 2009 -------- -------- Revenues $ 818,548 $ 996,092 Costs of Sales 182,618 252,531 ------------ ----------- Gross Profit 635,930 743,561 Costs and expenses ------------ ----------- General and administrative 584,382 628,872 Research and development 4,527 11,719 --------- --------- Total costs and expenses 588,909 640,591 --------- --------- Income from operations 47,021 102,970 -------- --------- Other income: Interest income 17,067 2,588 Interest expense 472 (2,230) Other income 50,567 7,168 --------- --------- Total other income (expense) 68,106 7,526 --------- --------- Income before provision for income taxes 115,127 110,496 --------- ---------- Provision for income taxes: Current expense 65,259 57,210 Deferred expense (2,300) 2,900 ---------- --------- Total income tax expense 62,959 60,110 ---------- --------- Net income 52,168 50,386 Other comprehensive income (loss) Unrealized gain (loss) on marketable securities (26,796) 43,841 ----------- -------- Comprehensive income 25,372 94,227 =========== ======== Basic and diluted: Net income per common share $ * $ * ========== ========== Weighted average number of shares outstanding 381,030,411 378,799,252 ============ =========== *Less than $.01 per share 2018

(unaudited)

	For the six months ended March 31, 2019		For the twelve months ended September 30, 2018
Revenues	$	–	$	1,381,508

Costs of sales		–		400,155

Gross profit		–		981,353

Costs and expenses:
General and administrative		–		1,115,565
Research and development		–		607

Total costs and expenses		–		1,116,172

Loss from operations		–		(134,819	)

Other income (expense):
Interest income		–		37,510
Loss on sale of marketable securities		–		(5,635	)

Total other income (expense)		–		31,875

Loss before provision for income taxes		–		(102,944	)

Provision for income taxes:
Current expense		–
Deferred benefit		–		(44,300	)

Total income tax benefit		–		(44,300	)

Net loss		–		(58,644	)

Other comprehensive income:
Unrealized gain on marketable securities		–		(23,884	)

Comprehensive loss	$	–	$	(82,528	)

Basic and diluted:
Net income (loss) per common share	*		*

Weighted average number of shares outstanding		343,368,111		332,541,922
* Less than $.01 per share

See accompanying notes to ~~consolidated~~ financial statements. ~~-5-~~

CLANCY SYSTEMS INTERNATIONAL, INC. CONSOLIDATED STATEMENTS OF OPERATIONS AND OTHER COMPREHENSIVE INCOME (LOSS) (Unaudited) For Six Months Ended March March 31, 2008 31, 2009 -------- -------- Revenues $ 1,974,856 $ 2,080,350 Costs of Sales 437,285 518,321 ------------ ----------- Gross Profit 1,537,571 1,562,029 Costs and expenses ------------ ----------- General and administrative 1,198,015 1,415,804 Research and development 7,120 15,857 --------- --------- Total costs and expenses 1,205,135 1,431,661 --------- --------- Income from operations 332,436 130,368 Other income: Interest income 35,720 27,963 Interest expense (421) (3,805) Loss on sale of marketable securities - (458) Other income 251,274 22,411 --------- --------- Total other income (expense) 286,573 46,111 --------- --------- Income before provision for income taxes 619,009 176,479 --------- ---------- Provision for income taxes: Current expense 145,466 182,230 Deferred expense 17,700 5,200 ---------- --------- Total income tax expense 163,166 187,430 ---------- --------- Net income (loss) 455,843 (10,951) ---------- --------- Other comprehensive income (loss) Unrealized gain (loss) on marketable securities (26,796) 63,262 ----------- -------- Comprehensive income 429,047 52,311 =========== ======== Basic and diluted: Net income per common share $ * $ * ========== =========== Weighted average number of shares outstanding 381,066,872 379,122,676 ============ =========== *Less than $.01 per share See accompanying notes to consolidated financial statements. -6- ~~CLANCY SYSTEMS INTERNATIONAL, INC. CONSOLIDATED~~

STATEMENT OF STOCKHOLDERS' EQUITY
For the ~~Six Months Ended March 31, 2009 (Unaudited)~~
Accumulated Other Additional Compre- Common Stock paid-in hensive Retained Shares Amount Capital Income Earnings (Loss) ------ ------ --------- -------- ------ Balance, September 30, 2008 379,882,938 $ 37,988 $ 1,350,078 $(92,298)$ 2,171,896 Common stock repurchase (1,140,927) (114) (4,054) - (13,449) Unrealized gain on marketable securities - - - 63,262 - Net loss for the six months ended March 31, 2009 - - - - (10,951) ---------- --------- ---------- ------- ------ Balance, March 31, 2009 378,742,011 $ 37,874 $ 1,346,024 $ (29,036) $2,147,496 (unaudited) =========== ========= ============= ======== ======== See accompanying notes to consolidated financial statements. -7-
CLANCY SYSTEMS INTERNATIONAL, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) For Six Months Ended March March 31, 2008 31, 2009 ------- ------- Cash flows from operating activities: Net income (loss) $ 455,843 $ (10,951) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation and amortization 174,604 157,072 Deferred income tax expense 17,700 5,200 Loss on sale of marketable securities - 458 Changes in assets and liabilities: Accounts receivable 124,875 130,359 Inventories (11,753) (1,153) Income taxes refundable (5,827) (6,265) Prepaid expenses 25,562 30,177 Accounts payable (32,299) 75,714 Accrued expenses (25,552) 46,840 Income taxes payable (24,507) (3,751) Deferred revenue 33,464 (29,029) ---------- --------- Total adjustments 276,267 405,622 ---------- --------- Net cash provided by operating activities 732,110 394,671 ---------- --------- Cash flows from investing activities: Acquisition of furniture and equipment (88,499) (47,524) Increase in software licenses and software development costs (38,802) (45,040) Increase in investments in marketable securities (101,005) (108,821) Proceeds from sale of marketable securities - 15,000 Decrease (increase)in deposits and other assets (1,454) 62 ---------- --------- Net cash (used in) investing activities (229,760) (186,323) ---------- --------- Cash flows from financing activities: Repurchase of common stock (3,514) (17,617) Payments on long-term debt and capital leases (1,724) (1,952) ---------- ---------- Net cash (used in) financing activities (5,238) (19,569) ----------- ---------- See accompanying notes to consolidated financial statements. -8- CLANCY SYSTEMS INTERNATIONAL, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued) (Unaudited) For Six Months Ended March March 31, 2008 31, 2009 ------- ------- Increase in cash and cash equivalents 497,112 188,779 Cash and cash equivalents at beginning of period 619,642 1,183,876 ---------- --------- Cash and cash equivalents at end of period $ 1,116,754 $ 1,372,655 ========== ========== See accompanying notes to consolidated financial statements. -9- CLANCY SYSTEMS INTERNATIONAL, INC. CONSOLIDATED NOTES TO FINANCIAL STATEMENTS March 31, 2009 (Unaudited) 1. Basis of Presentation The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Form 10-Q. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. The accompanying unaudited consolidated financial statements reflect all adjustments that, in the opinion of management, are considered necessary for a fair presentation of the financial position, results of operations, and cash flows for the periods presented. All such adjustments are of a normal and recurring nature only. The results of operations for such periods are not necessarily indicative of the results expected for the full fiscal year or for any future period. The accompanying unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements of Clancy Systems International, Inc. included in the Form 10-KSB for the fiscal year ended September 30, 2008. The Company's subsidiary, Urban Transit Solutions, Inc. ("UTS") was incorporated under the Laws of the Commonwealth of Puerto Rico. The financial statements of UTS have been prepared on the basis of accounting principles generally accepted in the United States of America2018 and are denominated in U.S. dollars. Therefore, there are no amounts recorded for foreign currency translation or for transactions denominated in a foreign currency. The Company has consolidated the financial results of UTS with those of the Company for the six months ended March 31, ~~2008~~2019
(unaudited)

	Common Stock Shares			Amount			Additional paid-in capital			Other compre- hensive income			Retained earnings
Balance, September 30, 2017		332,662,251			33,266			1,210,795			22,003			2,889,420
Common stock repurchased		(240,000	)		(24	)		(576	)		–			–
Unrealized loss on marketable securities		–			–			–			(23,884	)		–
Net loss for the year ended September 30, 2018		–			–			–			–			(58,644	)
Balance, September 30, 2018		332,422,251		$	33,242		$	1,210,219		$	(1,881	)	$	2,830,776
Net loss for the six months ended March 31, 2019											–			–
Balance, March 31, 2019		332,422,251		$	33,242		$	1,210,219		$	(1,881	)	$	2,830,776

See accompanying notes to financial statements.

CLANCY SYSTEMS INTERNATIONAL, INC.

STATEMENTS OF CASH FLOWS

For the six months ended March 31, 2019 and ~~2009. All significant intercompany transactions~~the year ended September 30, 2018

(unaudited)

	For the six months ended March 31, 2019		For the year ended September 30, 2018

Cash flows from operating activities:
Net loss	$	–	$	(58,644	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization		–		129,040
Loss on sale of marketable securities		–		5,635
Deferred income tax benefit		–		(44,300	)
Changes in assets and liabilities:
Accounts receivable		–		338,109
Income taxes refundable and payable		–		3,650
Prepaid expenses		–		6,550
Deferred revenue		–

Total adjustments		–		438,684

Net cash provided by operating activities		–		380,040

Cash flows from investing activities:
Increase in software licenses and software development costs		–		(123,245	)
Acquisitions of marketable securities		–		(143,738	)
Proceeds from sale of marketable securities		–		150,000

Net cash used in investing activities		–		(116,983	)

Cash flows from financing activities:
Repurchase of common stock		–		(600	)

Net cash used in financing activities		–		(600	)

Increase (decrease) in cash and cash equivalents		–		262,457

Cash and cash equivalents at beginning of period		1,624,657		1,362,200
Cash and cash equivalents at end of period	$	1,624,657	$	1,624,657

Supplemental disclosure of cash flow information:
Net cash paid (refunded) during the period for income taxes	$	–	$	(1,462	)

Supplemental disclosure of non-cash investing and financing activities:
Unrealized loss on available for sale securities	$	–	$	(23,884	)

See accompanying notes to financial statements.

CLANCY SYSTEMS INTERNATIONAL, INC.

NOTES TO FINANCIAL STATEMENTS

For the six months ended March 31, 2019

(unaudited)

1.	Organization and Summary of Significant Accounting Policies

Organization:

Clancy Systems International, Inc. (the "Company") was organized in Colorado on June 28, 1984. The Company is in the business of developing and ~~balances have been eliminated~~marketing parking ticket writing systems, internet payment remittance systems, and internet industry guides. The Company's revenues are derived primarily from cities, universities, car rental companies and laundry facilities throughout the United States and Canada. The Company manufactures some of its equipment for field operations, including printers, chargers, mobile device keypads and other items used in ~~consolidation.~~ its applications.

Use of estimates:

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and ~~assumptions. These estimates~~assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. ~~Reclassification: Certain reclassifications~~

Accounts receivable:

The Company evaluates trade receivables that are past due to determine the appropriate allowance for doubtful accounts. The receivables are charged off in the period which they are deemed uncollectible. The Company contracts primarily with government agencies and takes into account budget year issues in evaluating its past due receivables. Recoveries of trade receivables previously charged off are recorded when received.

Inventories:

Inventories are carried at the lower of cost (first-in, first-out) and net realizable value. Inventory costs include materials, labor and manufacturing overhead. Inventories consist primarily of computer and printer parts and supplies and are subject to technical obsolescence.

Computer software:

Costs incurred to establish the technological feasibility of computer software are classified as research and development costs, which are charged to expense as incurred. Software development costs incurred subsequent to establishment of technological feasibility are capitalized and subsequently amortized based on the lesser of the straight line method over the remaining estimated economic life of the product (generally five years) or the estimate of current and future revenues for the related software product. The cost of direct labor is periodically capitalized as computer software costs.

Property and equipment:

Property and equipment are stated at cost. Depreciation is provided by the Company on the straight line method over the assets' estimated useful lives as follows:

Building and building improvements	10 to 30 years
Office furniture and equipment	5 years
Equipment under service contracts	3 to 5 years
Vehicles	3 to 5 years

Property and equipment consists partly of computers and printers which are subject to technical obsolescence.

Sales and retirements of depreciable property are recorded by removing the related cost and accumulated depreciation from the accounts. Gains and losses on sales and retirements of property are reflected in results of operations.

Revenue recognition:

Revenue derived from professional service contracts on equipment and support services is included in income as earned over the contract term; related costs consist mainly of depreciation, supplies and sales commissions. The Company defers revenue for equipment and services under service contracts that are billed to customers on a quarterly, semi-annual, annual or other basis. Revenue from the issuance of parking tickets is recognized on a cash basis when received. Revenue derived from professional service contracts on parking meter, lots fees and laundry facility collections are recognized on a cash basis when received. Related costs consist mainly of municipalities' fees, depreciation and lot rents.

The Company recognizes revenue in accordance with the Securities and Exchange Commission Staff Accounting Bulletin 104 ("SAB 104"). SAB 104 provides the conditions for realization of revenue areas as follows: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred or services have been ~~made~~rendered; (3) the seller's price to the ~~prior year statements to conform~~buyer is fixed or determinable, and (4) collectibility is reasonably assured.

In addition, in accordance with FASB ASC 605-45, revenue is presented gross, determined on a contract by contract basis, where the Company acts as principal, takes title to the products sold, has the risks and rewards of ownership, such as the risk of loss for collection, delivery or product returns. Revenue is presented net of direct costs, determined on contract by contract basis, where the Company primarily acts as agent by providing services for a commission or fee.

Before the Company recognizes revenue, a contract is entered into with the client (which details the fees to be charged), all software and equipment per the contract is delivered, and as most of the Company's clients are municipalities or universities, collectability is reasonably assured.

Contracts for the Company's ticket writing system are entered into under one of four different pricing options. The Company (1) sells the equipment and ticket stock and licenses the software separately, (2) charges a monthly fee for the use of the equipment and software, (3) charges a fee per ticket at the time the ticket stock is provided to the client, or (4) provides a full privatization program. In a sale transaction, revenue is recognized on the sale of the equipment, license and ticket stock (less an amount for customer support). When the Company charges a monthly fee, that fee is recognized in income in the period the services are provided. When the Company charges a fee per ticket, the Company recognizes revenue for the portion considered a sale of the ticket stock on delivery of the tickets to the client and the remainder is recognized as revenue over the period of estimated usage of the tickets based on past history with the client.

In a privatization program, client revenue guarantees may be entered into for a period of time, generally one year at a time. A ratable portion of the client revenue guarantee is recognized each month as an expense. In revenue split arrangements, the portion of the cash collected and owed each month is recognized as a liability and an expense.

The Company does not offer a right of return on sales of equipment or ticket stock. Equipment sold, other than the Company's proprietary products, is covered under the manufacturer's warranty.

Warranty expense for the Company's products has been immaterial in the past. Revenue recognition commences after the equipment has been delivered and the software has been installed and is operational.

Shipping and handling costs:

The Company pays all shipping costs for its contract services. Customers are provided prepaid shipping labels for returning equipment to the Company for repair and shipping repaired equipment back to the client is paid for by the Company.

Deferred Income taxes:

The Company accounts for deferred income taxes under FASB ASC 740-10. Under ASC 740-10, deferred income taxes are accounted for under an asset and liability approach that requires recognition of deferred tax assets and liabilities for the expected future tax consequences of transactions based on temporary differences. Temporary differences are differences between the tax basis of assets and liabilities and their reported amounts in the financial statements that will result in taxable or deductible amounts in future years. The Company's temporary differences consist primarily of tax operating loss carry forwards, depreciation differences and capitalized section 263A costs. In November 2015, the FASB issued ASU No. 2015-17,Income Taxes (Topic 740) Balance Sheet Classification of Deferred Taxes.This guidance is designed to reduce complexity in financial reporting without sacrificing the quality of information provided to users. Under current ~~year presentation. -10-~~ ~~CLANCY SYSTEMS INTERNATIONAL, INC. CONSOLIDATED NOTES TO FINANCIAL STATEMENTS March 31,2009 (Unaudited) 1. Basis~~GAAP, an entity is required to separate deferred income tax liabilities and assets into current and noncurrent amounts in a classified statement of ~~Presentation (continued) Net~~financial position. The new standard requires deferred tax assets and liabilities to be classified as noncurrent in a classified statement of financial position. The Company has adjusted the presentation of these financial statements accordingly. The ASU has been applied retrospectively to all periods presented.

Cash equivalents:

For purposes of the statement of cash flows, the Company considers all highly liquid debt instruments purchased with a maturity of three months or less to be cash equivalents.

Marketable securities:

The Company accounts for marketable securities in accordance with ASC 320-10. In accordance with ASC 320-10, the investment in securities has been classified as available-for-sale because the securities are being held for an indefinite period of time. Under the available-for-sale classification, the securities are recorded as an asset at current market value on the balance sheet with an amount representing unrealized gains and losses recorded as comprehensive income. The current market value is derived from published market quotations. At the time of sale, a gain or loss is recognized in the statement of operations using the cost basis of securities sold as determined by specific identification.

Fair value of financial instruments:

All financial instruments are held for purposes other than trading. The following methods and assumptions were used to estimate the fair value of each financial instrument for which it is practicable to estimate that value.

For cash and cash equivalents, accounts receivable and accounts payable the carrying amount is assumed to approximate fair value due to the short-term maturities of these instruments.

Marketable securities — the carrying amounts approximate the fair value because the securities are valued at prices based on published market quotations.

Concentrations of credit risk:

Financial instruments which potentially subject the Company to concentrations of credit risk consist principally of cash, trade receivables and marketable securities. The Company places its cash with high quality financial institutions.

The Company provides credit, in the normal course of business, to customers throughout the United States. All transactions are denominated in U.S. Dollars. The Company performs ongoing credit evaluations of its customers. Credit terms are typically 30 days from billing date.

Significant portions of the Company's revenues are derived from contracts with universities, car rental companies, municipalities and laundry facilities.

Earnings per share:

The Company follows ASC 260-10 in presenting earnings per share which establishes the methodology of calculating basic earnings per share and diluted earnings per share. The calculations differ by adding any instruments convertible to common stock (such as stock options, warrants, and convertible preferred stock) to weighted average shares outstanding when computing diluted earnings per share.

Impairment of long-lived assets:

The Company evaluates the carrying value of assets, other than investments in marketable securities, for potential impairment on an ongoing basis. In accordance with ASC 360-10, the Company periodically evaluates the carrying value of long-lived assets and long-lived assets to be disposed of and certain identifiable intangibles related to those assets for potential impairment. The Company considers projected future operating results, cash flows, trends and other circumstances in making such estimates and evaluations and, if necessary, reduces the carrying value of impaired assets to fair value.

Segment Information:

The Company follows ASC 280-10 for segment reporting. Certain information is disclosed, based on the way management organizes financial information for making operating decisions and assessing performance. The Company currently operates in a single segment and will evaluate additional segment disclosure requirements as it expands its operations.

Comprehensive income (loss) ~~per common share:~~ :

The Company ~~computes~~reports comprehensive income (loss) in accordance with ASC 220-10, which requires the reporting of all changes in equity during a period, except those resulting from investment by owners and distribution to owners, in a financial statement for the period in which they are recognized. This encompasses unrealized gains and losses from available-for-sale securities held.

2.	Inventories

Inventories consist of the following at March 31, 2019 and September 30, 2018:

	March 31, 2019		September 30, 2018
	(unaudited)		(unaudited)
Finished goods	$	19,738	$	19,738
Work in process		4,854		4,854
Purchased parts and supplies		5,825		5,825
	$	30,417	$	30,417

3.	Fair value measurements

Financial Accounting Standards Board ASC 820, establishes a framework for measuring fair value. That framework provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy under ASC 820 are described below:

Level 1:

Inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in active markets that the Company has the ability to access.

Level 2:

Inputs to the valuation methodology include:

Quoted prices for similar assets or liabilities in active markets;

Quoted prices for identical or similar assets or liabilities in inactive markets;

Inputs other than quoted prices that are observable for the asset or liability;

Inputs that are derived principally from or corroborated by observable market data by correlation or other means.

If the asset or liability has a specified (contractual) term, the level 2 input must be observable for substantially the full term of the asset or liability.

Level 3:

Inputs to the valuation methodology are unobservable and significant to the fair value measurement

The asset's or liability's fair value measurement level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Valuation techniques used need to maximize the use of observable inputs and minimize the use of unobservable inputs.

Following is a description of the valuation methodologies used for assets measured at fair value.

Municipal bonds:Valued at the closing price reported on the active market on which the individual securities are traded.

The methods described above may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. Furthermore, while the Company believes its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date.

4.	Income Taxes

The Company is subject to guidance issued by the FASB relating to "Accounting for Uncertainty in Income Taxes." The guidance applies to all tax positions accounted for in the financial statements, including positions taken in a previously filed tax return or expected to be taken in a future tax return.

The Company has analyzed its filing positions in Federal and significant state jurisdictions where it is required to file income ~~(loss)~~tax returns. Management believes the Company's positions and deductions will be sustained on audit and does not anticipate any adjustments that will result in a material adverse effect on its financial conditions, results of operations or cash flows.

Interest and penalties, if any are recorded as income taxes in the consolidated income statement. The Company is subject to routine audits by taxing jurisdictions; however, there are currently no audits for any tax periods in progress.

5.	Basic and diluted net income per common share

Basic and diluted net income per common share in accordance with Statement of Financial Accounting Standards No. 128, Earnings Per Share ("SFAS 128"). SFAS 128 provides for the calculation of basic and diluted earnings (loss) per share. Basic earnings (loss) per share includes no dilution and is ~~computed by dividing income available to common stockholders by~~based on the weighted average number of ~~common~~ shares outstanding ~~for the period. Dilutive earnings (loss) per share reflects the potential dilution~~ of securities that could share in the earnings of the Company. The Company has no potentially dilutive securities. 2. Inventories Inventories consist of the following at: September 30, March 31, 2008 2009 ---- ---- Finished goods $ 42,925 $ 48,161 Work in process 2,606 57,291 Purchased parts and supplies 137,543 78,775 -------- --------- $ 183,074 $ 184,227 ========= ========= 3. Income Taxes The provision for income taxes for343,368,111 during the six months ended March 31, ~~2008~~2019 and 2009 is based on the expected rate for the tax year. Differences in amounts of income taxes reported in the financial statements to taxes that would be obtained by applying regular tax rates to income taxes mainly consist of tax-exempt income and changes to estimates of previously reported income tax expense. The components of the Company's deferred tax assets and liabilities are as follows: September 30, March 31, 2008 2009 ------------ -------- Current deferred tax asset: Section 263A capitalization $ 3,200 $ 3,200 Allowance for doubtful accounts 8,000 4,200 --------- ---------- Current deferred tax assets $ 11,200 $ 7,400 ========= ========== -11- CLANCY SYSTEMS INTERNATIONAL, INC. CONSOLIDATED NOTES TO FINANCIAL STATEMENTS March 31,2009 (Unaudited) 3. Income taxes (continued) September 30, March 31, 2008 2009 ------------ -------- Non current deferred tax assets Loss on equity investment $ 221,500 $ 312,000 Section 263A capitalization 30,600 30,600 ---------- ---------- 252,100 342,600 Valuation allowance (221,500) (312,000) ---------- ---------- 30,600 30,600 Non current deferred tax liabilities: Depreciation and amortization (89,000) (90,400) ---------- ---------- Net non current deferred tax liabilities $ (58,400) $ (59,800) ========== ========== 4. Stockholders' Equity In December 2006, under Rule 10b-18, the Company implemented a policy to regularly repurchase shares of its common stock. Based on profitability at the end of each month, the Company will determine the dollar amount to allocate to the buyback program. During the six month period ended March 31, 2009 the Company reacquired 1,140,927 shares of its common stock for $17,617. The reacquisition has been accounted for by reducing common stock for the par value of the shares reacquired and the excess paid per share over the par value has been allocated to additional paid in capital, based on the number of shares acquired, and the balance charged to retained earnings. 5. Contingencies On March 21, 2002, a complaint was filed in Denver District Court by Francis Salazar against the Company. Mr. Salazar was seeking compensation for alleged loss of profit on the sale of 6,000,000 shares of the Company's common stock that carried a restrictive legend under Rule 144 of the Securities Act of 1933, as amended. The complaint alleges that the restrictive legend prevented Salazar from selling the shares during an uptick in the Company's share price. -12- CLANCY SYSTEMS INTERNATIONAL, INC. CONSOLIDATED NOTES TO FINANCIAL STATEMENTS March 31, 2009 (Unaudited) 5. Contingencies (continued) The Company filed a motion to dismiss which was granted in December 2002, but subsequently overturned on appeal in October 2003. Clancy filed a motion with the District Court, City and County of Denver, Colorado, Case #02-CV-2391, for Summary Judgment to dismiss the case in June 2004. That motion was granted and the case was dismissed on August 13, 2004. However, in November 2004, Mr. Salazar filed a notice of appeal in the Colorado Court of Appeals with respect to the suit dismissed by the District Court in August, 2004. In September 2006, the Court of Appeals granted Mr. Salazar's appeal. Clancy has filed a petition for certiorari seeking to have the matter heard by the Colorado Supreme Court. The Writ was granted and the Supreme Court heard the case on September 11, 2007. On March 17, 2008, the Colorado Supreme Court issued a decision affirming the District Court dismissal of Mr. Salazar's suit. It also denied Mr. Salazar's request to amend his Complaint in the District Court to add a new claim. The case was thereafter remanded to the District Court. Mr. Salazar then filed a motion in District Court to amend his Complaint to add a new claim. The District Court denied Mr. Salazar's motion to amend based upon the finality of the Supreme Court ruling and the Supreme Court's denial of Mr. Salazar's request to amend his pleading in the District Court. Mr. Salazar has filed notice of appeal in Colorado Court of Appeals with respect to the District Court's denial of his motion to amend. The appeal has not yet been briefed or argued. The Company is in dispute with the Puerto Rico Municipality Center (CRIM), the governmental entity in charge of the assessment collection of property taxes in Puerto Rico, for personal property taxed owed from 1998. The Company filed a written protest as to these assessments and vigorously contested the asserted deficiencies through the administrative appeals process. During the year ended September 30, ~~2008, the process finalized. -13-~~ CLANCY SYSTEMS INTERNATIONAL, INC. CONSOLIDATED NOTES TO FINANCIAL STATEMENTS March 31, 2009 (Unaudited) 5. Contingencies (continued) The accrual for $310,068 that was recorded on the books was reduced to $102,740 which is the total amount assessed by the CRIM for unpaid personal property tax since 1999. The effect of this reduction amounted to $219,814. However, during the quarter ended December 31, 2008, the CRIM assessed new debt for $430,232, including penalties, interest2018.

6.	Professional service contracts

Clancy provides equipment and surcharges for $44,677, for parking meters considered as real property from 2002. Management has started a claim to get more information about it from CRIM and to request a reduction of the amount assessed. The accompanying September 30, 2008 balance sheet includes an accrual of $186,000 related to this debt. Management believes such accrual is adequate for any possible unfavorable outcome of this new claim. Subsequent to September 30, 2008, UTS has paid approximately $106,000 to the CRIM. During the quarter ended March 31, 2009, UTS has recorded an additional $68,000 in liability to the CRIM. support services under 12 month professional service contracts.

7.	Subsequent events

None

Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Statement Regarding Forward Looking Information

Statements of the Company's or management's intentions, beliefs, anticipations, expectations and similar expressions concerning future events contained in this document constitute "forward looking statements." As with any future event, there can be no assurance that the events described in forward looking statements made in this report will occur or that the results of future events will not vary materially from those described in the forward looking statements made in this document.

Important factors that could cause the Company's actual performance and operating results to differ materially from the forward looking statements include, but are not limited to, (i) the ability of the Company to obtain new customers, (ii) the ability of the Company to maintain its competitive position in the parking enforcement business by continuing to offer competitive products and services, (iii) and the ability of the Company to reduce costs and thereby maintain adequate profit margins. ~~At March 31, 2009, the Company had consolidated working capital of $1,394,068 derived primarily from contract sales and contract service.~~

The Company anticipates using its working capital to fund ongoing operations, including general and administrative expenses; equipment purchases, equipment manufacturing, travel, marketing and research and development. The Company ~~anticipates having sufficient working capital to fund operations for the fiscal year ending September 30, 2009. The Company~~ settles funds for permit collections after the end of each month. Occasionally this overlaps into the next quarter.

The timing of the payout is captured as an accounts payable amount if it falls into a subsequent quarter by a few days. ~~-14-~~ COMPARISON OF RESULTS FOR THE THREE MONTHS ENDED March 31, 2008 AND 2009 REVENUES. For the three month quarter ended March 31, 2008 to the three month quarter ended March 31, 2009 revenues increased by $177,544 or 21.7% from $818,548 to $996,092. The additional revenue reflects the UTS addition of the San Juan contract which was not in place during the prior year's reporting quarter. Clancy's Remit-online.com service has processed 76,941 transactions totaling $2,917,544 for the quarter ended March 31, 2009. Revenues are generated based on a per transaction fee less bank processing costs. The gross amount of cash flowing through Remit-online.com cannot be presented as revenue based on the SEC accounting guidance. The Company only presents its net profit from each transaction as revenue in the statements of operations. COST OF SERVICES. For the three month quarter ended March 31, 2008 to the three month quarter ended March 31, 2009, cost of services increased by $69,913 or 38.3% from $182,618 to $252,531 for the Company. Cost of services as a percentage of service contract income was 22.3% for the 2008 quarter and 25.4% for the 2009 quarter. The increase reflects costs related to contract expansion at Urban Transit Solutions. RESEARCH AND DEVELOPMENT. The Company's parking enforcement systems research and development costs increased from $4,527 to $11,719, or 158.9%, for the three month quarter ended March 31, 2008 to 2009, respectively. The primary reason for the increase in costs was the engineering and development of a sensor system for parking garage activity. The company is also working on a new board for it's blue tooth printer. GENERAL AND ADMINISTRATIVE. General and administrative expenses increased by $44,490 or 7.6% from $584,382 to $628,872 for the three month quarter ended March 31, 2008 and 2009, respectively. The increase in general and administrative expenses is a result of an additional property tax assessment by the Puerto Rico Municipality Revenue Center (CRIM), the governmental entity in charge of assessment and collection of property taxes, for approximately $153,000 that was completed in December 2008. NET INCOME (Loss). For the three month quarter ended March 31, 2009, the Company reported net income of $50,386 compared to net income of $52,168 for the three month quarter ended March 31, 2008. The primary reason for the decrease in net income is related to the property tax assessment discussed above and increase in expenses in expansion of services for the San Juan project. -15- COMPARISON OF RESULTS FOR THE SIX MONTHS ENDED March 31, 2008 AND 2009 REVENUES. For the six months ended March 31, 2008 to the six months ended March 31, 2009 revenues increased by $105,494 or 5.3% from $1,974,856 to $2,080,350. The additional revenue reflects the UTS addition of the San Juan contract which was not in place during the prior year's reporting quarter. Clancy's Remit-online.com service has processed 155,984 transactions totaling $5,895,612 for the six months ended March 31, 2009. Revenues are generated based on a per transaction fee less bank processing costs. The gross amount of cash flowing through Remit-online.com cannot be presented as revenue based on the SEC accounting guidance. The Company only presents its net profit from each transaction as revenue in the statements of operations. COST OF SERVICES. For the six months ended March 31, 2008 to the six months ended March 31, 2009, cost of services increased by $81,036 or 18.5% from $437,285 to $518,321 for the Company. Cost of services as a percentage of service contract income was 22.1% for the 2008 quarter and 24.9% for the 2009 quarter. The increase reflects costs related to contract expansion at Urban Transit Solutions. RESEARCH AND DEVELOPMENT. The Company's parking enforcement systems research and development costs increased from $7,120 to $15,857, or 122.7%, from the six months ended March 31, 2008 to 2009, respectively. The primary reason for the increase in costs was the engineering and development of a sensor system for parking garage activity. The company is also working on a new board for it's blue tooth printer. GENERAL AND ADMINISTRATIVE. General and administrative expenses increased by $217,789 or 18.2% from $1,198,015 to $1,415,804 for the six months ended March 31, 2008 and 2009, respectively. The increase in general and administrative expenses is a result of an additional property tax assessment by the Puerto Rico Municipality Revenue Agency (CRIM), the governmental entity in charge of assessment and collection of property taxes, for approximately $153,000 that was completed in December 2008. Additionally with the new contract in Puerto Rico, salaries and other expenses have increased. NET INCOME (Loss). For the six months ended March 31, 2009, the Company reported a net loss of $10,951 compared to net income of $455,843 for the six months ended March 31, 2008. The primary reason for the decrease in net income is related to the property tax assessment discussed above and increase in expenses in expansion of services for the San Juan project. Additionally in December 2007, the Company recieved a $200,000 contract termination fee from the city of Arecibo, Puerto Rico which is not a recurring item. -16- STATUS OF PRODUCTS AND SERVICES In order to keep its products and systems from becoming obsolete, the Company regularly modifies and updates its hardware and software. In order to streamline its ticket writing and car rental equipment, the Company redesigned the printer so that it weighs less than two pounds. New battery technology has also allowed the Company to reduce the size and weight of the printers. The Company is currently updating its Bluetooth printer technology. The Company has a relationship with an engineer, who, although he works as an independent contractor, dedicates as much time as the Company requires to develop and enhance its products. The engineer also performs research and development for the Company and makes prototype boards for testing and evaluation. The Company's software is developed in-house by four full- time programmers and by the Company's President, Stanley Wolfson, and is maintained and updated on a regular basis. Clancy has qualified to be a Microsoft Certified Partner. This relationship allows the Company to receive pre-releases of software products which gives the Company a leading edge on upgrading programs and embedding new services into our systems. The office computer software allows daily ticket, rental and inventory information to be transferred from the portable data entry units to a central computer database. The information is compiled and then processed further according to user requirements. Through sophisticated communications software developed internally, the Company is able to update, modify, repair, enhance and change programs at the client's location via modem and the Internet. The Company has developed numerous Internet based parking programs which include payment processing, permit registrations, and pre-paid parking and parking reservations, special event parking and permitting, and its Expo1000 Parking Industry Guide. URBAN TRANSIT SOLUTIONS In December 2007, UTS was awarded a contract for the city of San Juan. The company anticipates installing approximately 2,000 meters. In order to manage the operations in San Juan, UTS moved it's main office into the city. UTS has also installed a code enforcement system for the city of Cauguas. TRENDS AND CONDITIONS The Company anticipates no major impact as a result of trends of the past few years. A further discussion appears below. If current trends continue, the Company's liquidity will continue to improve on a short-term and a long-term basis. -17- The Company's newest equipment has proven to be a capital intensive program. The Company has designed its printer board to work and fit in both its current model case as well as its new case, which will prove to be a cost savings. While the Company has adequate cash flow to accomplish the upgrades without incurring debt, it is anticipated that the ongoing upgrades and tooling for newer products shall continue to require a large capital commitment. With the weakened economy as of recent years, municipalities are in search of additional revenues and the installation and implementation of means to efficiently and effectively collect parking ticket revenues as a viable source of such additional revenues for many locales. As on street parking spaces are finite, and populations increase, a structured management system of turnover, enforcement and accountability of parking revenues will be imperative for all cities. In addition, the Company supplies all hardware, software, training, supplies and maintenance for the system, thus eliminating all significant capital expenditures by the user. The Company has introduced a new cellular-based real time ticket issuance system. This is a giant leap in both issuing the citations and managing information. The Company anticipates this will be a program that will ensure continued growth. Uncertainties that can impact revenues from the Company's service contract agreements would be related to dramatic weather changes and municipal disaster occurrences (i.e. September 11, 2001). As parking ticket issuance operations are primarily "out-of-doors" tasks, severe weather such as a major blizzard, hurricane, or rains could impact ticket production for a limited period in certain locales. While such reductions are temporary, they can impact revenues as the Company bills most clients on a fee-per-ticket basis. The meter collections for UTS could be temporarily reduced during a hurricane or tropical storm. Further, as the Company is contracting primarily with City government agencies, a deployment of personnel to other duties during a disaster could temporarily reduce ticket issuance activities. INTERNAL AND EXTERNAL SOURCES OF LIQUIDITY The Company anticipates using its working capital to fund ongoing operations, including general and administrative expenses, equipment manufacturing, travel, marketing and research and development. The Company anticipates having sufficient working capital to fund operations for the next twelve months UTS has funded its operations primarily by cash flows and bank debt. It has notes payable and capital lease obligations arising from borrowings for working capital and purchases and installation of meter equipment. -18- The Company has experienced significant interest in the Denver Boot for vehicles as well as for security on other mobile devices including construction trailers and communications generators. There has also been a demand for the Denver Boot for enforcement on private property. Exposure on the Internet has been favorable for sales of this product. The Company has experienced an interest in its IDBadgemaker software. The program is utilized by news services, janitorial companies, social service agencies, private clubs and others for security and identification purposes. The program receives "excellent" ratings at download.com. Remit-on-line.com has grown as a ticket payment site. It is offered to Clancy ticket system clients and other companies in parking industry businesses. The Company continues to experience an increase in activity monthly. The Company generates revenue from Remit-online.com based on a per transaction fee. In addition, outstanding ticket fines of approximately $2,900,000, for UTS and $1,146,000 for Clancy, have not been recognized as revenue at March 31, 2009 based on SEC accounting guidance. CRITICAL ACCOUNTING POLICIES The Company has identified the accounting policies described below as critical to its business operations and the understanding of the Company's results of operations. The impact and any associated risks related to these policies on the Company's business operations is discussed throughout this section where such policies affect the Company's reported and expected financial results. USE OF ESTIMATES The preparation of financial statements requires the Company to make estimates and assumptions that affect the reported amount of assets and liabilities of the Company, revenues and expenses of the Company during the reporting period and contingent assets and liabilities as of the date of the Company's financial statements. There can be no assurance that the actual results will not differ from those estimates. REVENUE RECOGNITION: Revenue derived from professional service contracts on equipment and support services is included in income ratably over the contract term; related costs consist mainly of depreciation, supplies and sales commissions. The Company defers revenue for equipment and services under service contracts that are billed to customers on a quarterly, semi-annual, annual, or other basis and are included in income ratably over the expected term of the contract. -19- Revenue from the issuance of parking citations for the Company's privatization projects is recognized on a cash basis when received as collectability is not reasonably assured. Revenue derived from professional service contracts on parking meter and lot fees collections is recognized net of municipalities' fees as services are provided. Related costs consist mainly of depreciation and lot rents. Revenue derived from professional service contracts for permit fulfillment and remit-online services is recognized based on add-on fees earned for each transaction. COMPUTER SOFTWARE. Costs incurred prior to establishment of the technological feasibility of computer software are research and development costs, which are charged to expense as incurred. Software development costs incurred subsequent to establishment of technological feasibility are capitalized and subsequently amortized based on the greater of the straight line method over the remaining estimated economic life of the product (generally 5 years) or the estimate of current and future revenues for the related product. GOODWILL. The excess of the purchase price over net assets acquired by the Company from unrelated third parties is recorded as goodwill. Goodwill resulted from the acquisition of UTS. On January 1, 2002, the Company adopted Statement of Financial Accounting Standard No. 142 (SFAS 142), "Goodwill and Intangible Assets", which clarifies the accounting for goodwill and intangible assets. Under SFAS 142, goodwill and intangible assets with indefinite lives will no longer be amortized, but will be tested for impairment at least annually and also in the event of an impairment indicator. Chat Room Disclaimer This forum of exposure to publicly traded companies presents a venue for the public to inquire about companies from other individuals as well as post opinions. The Company has no way to regulate postings nor monitor information posed on these boards. Management can only provide accurate information to shareholders and potential shareholders when contacted directly and such information can only be provided when it is based on fact and has been filed as required by law with the Securities and Exchange Commission and other regulatory agencies. -20- Item 4T. Controls and Procedures Our management, with the participation of our chief executive officer and our chief financial officer, has evaluated the effectiveness of our disclosure controls and procedures as required by Exchange Act Rule 13a-15(b) as of March 31, 2009 (the end of the period covered by this report). Based on that evaluation, our chief executive officer and our chief financial officer have concluded that because of the material weakness identified in our internal control over financial reporting described in Item 8A(T) of our annual report for the year ended September 30, 2008 on Form 10-KSB, that, our disclosure controls and procedures were not effective as of March 31, 2009. Due to the small size of the Company and our lack of personnel resources, we are unlikely to immediately take any action to remediate the material weaknesses identified. Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Securities Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed under the Exchange Act is accumulated and communicated to our management, including our principal executive officer and our principal financial officer, as appropriate, to allow timely decisions regarding required disclosure. There were no changes in our internal control over financial reporting during the quarter ended March 31, 2009, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings The Company is in dispute with the Puerto Rico Municipality Center (CRIM), the governmental entity in charge of the assessment collection of property taxes in Puerto Rico, for personal property taxes owed from 1998. The company filed a written protest as to these assessments and vigorously contested the asserted deficiencies through the administrative appeals process. During the year ended September 30, 2008, the process finalized. The accrual for $310,068 that was recorded on the books was reduced to $102,740, which is the total amount assessed by the CRIM for unpaid personal property tax since 1999. The effect of this reduction amounted to $219,814. However the CRIM assessed a new debt for $430,232, including penalties, interest and surcharges for $44,677, for parking meters considered as real property from 2002. Management has started a claim to get more information about the assessment from CRIM and to request a reduction in the amount. The accompanying September 30, 2008 balance sheet includes an accrual of $186,000 related to this debt. Management believes such accrual is adequate for any possible unfavorable outcome of this new claim. Subsequent to September 30, 2008, UTS has paid approximately $106,000 to the CRIM. During the quarter ended March 31, 2009, UTS has recorded an additional $68,000 in liability to the CRIM. -21

None.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds ~~(c) Repurchases~~

None.

Item 3. Defaults upon senior securities

None.

Item 4. Submission of ~~equity securities~~
Period (a) Total (b) Average (c) Total (d) Maximum Number Number Price Paid Number of of shares that of Shares Per Share Shares Purchased May Yet Be Purchased Purchased as Part of Under the Plans or Publicly Announced Programs Plans or Program - -------- ---------- ---------- ------------------ ------------------ - - January 1 through January 31, 2009 39,088 .0090 39,088 - February 1, through February 28, 2009 83,000 .0084 83,000 - March 1, through March 31, 2009 67,000 .0076 67,000 - ------- ---- --------- ---------- Total 189,088 $.0179 189,088 - ======== ======= ========= ==========
* The Company announced in its 10-KSB filing for the year ended September 30, 2006, that it implementedmatters to a ~~reacquisition~~vote of equity securities to commence in December 2006. Under Rule 10b-18, the Company intends to regularly repurchase shares of its common stock. Based on profitability at the end of each month, the Company will determine the dollar amount to allocate to the buyback program. -22- security holders

None.

Item 5. Other information

None.

Item 6. Exhibits

(a) Exhibits

Exhibit 31.1 Section 302 Certification by Chief Executive Officer

Exhibit 31.2 Section 302 Certification by Chief Financial Officer

Exhibit 32.1 Section 906 Certification by Chief Executive Officer ~~Exhibit 32.2 Section 906 Certification by~~and Chief Financial Officer ~~Filed herewith. -23-~~ ~~Signatures~~

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the ~~Registrant~~registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	Clancy Systems International, Inc.

	By:	/s/ Tony Nick
		Tony Nick Chief Executive Officer

Date: May 20, 2009 Clancy Systems International, Inc. (Registrant) By:/s/ Stanley J. Wolfson Stanley J. Wolfson, President and Chief Executive Officer By:/s/ Lizabeth Wolfson Lizabeth Wolfson, Secretary-Treasurer and Chief Financial and Chief Accounting Officer -24-

September 26, 2019