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

                       FORM 10-KSB

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

   For the fiscal year ended:  September 30, 2003

	OR

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

   For the transition period from ____________ to ___________

                 Commission file number:   33-4882-D
                 CLANCY SYSTEMS INTERNATIONAL, INC.
        (Exact name of Company as specified in its charter)
   _____COLORADO_______                ______84-1027964______
State or other jurisdiction of    (IRS Employer  Identification
   incorporation or organization            Number)

         2250 S. Oneida #308, Denver, Colorado 80224
     (Address of principal executive offices and Zip Code)
                       (303) 753-0197
      (Company's telephone number, including area code)

                        N/A
     (Former name, former address and former fiscal year,
               if changed since last report)

   Securities registered pursuant to Section 12(b) of the Act:
                              None

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark whether the Company (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, and (2) has
been subject to such filing requirements for the past 90 days.

   (1) Yes __X__   No _____
   (2) Yes __X__   No _____



<PAGE>








     Check if there is no disclosure of delinquent filers in
response to Item 405 of Regulation S-B, and no disclosure will be
contained, to the best of Company's knowledge, in definitive proxy
or information statements incorporated by reference in Part III of
this Form 10-KSB or any amendments to this Form 10-KSB.  [X]

     The Company's revenues for its most recent fiscal year were
$3,072,301.

     The aggregate market value of the voting stock held by
nonaffiliates (based upon the average of the bid and asked price
of these shares on the over-the-counter market) as of January 9,
2004 was approximately $4,977,364.

Class                        Outstanding at January 9, 2004

Common stock, $.0001 par value           365,117,938 shares


Documents incorporated by reference:  None

Transitional Small Business Disclosure Format:

               Yes___ No  X





<PAGE>


























             CLANCY SYSTEMS INTERNATIONAL, INC.
                         Form 10-KSB



                     TABLE OF CONTENTS


   PART I
   Item 1.  Description of Business

   Item 2.  Description of Property

   Item 3.  Legal Proceedings

   Item 4.  Submission of Matters to a Vote of Security Holders


   PART II

   Item 5.  Market for Common Equity and Related Stockholder Matters

   Item 6.  Management's Discussion and Analysis or Plan of Operations

   Item 7.  Financial Statements

   Item 8.  Changes In and Disagreements with Accountants on Accounting
            and Financial Disclosure

   Item 8A.  Controls and Procedures


   PART III

    Item 9.  Directors, Executive Officers, Promoters and Control
             Persons; Compliance with Section 16(a) of the Exchange Act

   Item 10.  Executive Compensation

   Item 11.  Security Ownership of Certain Beneficial Owners and
             Management and Related Stockholder Matters

   Item 12.  Certain Relationships and Related Transactions

   Item 13.  Exhibits and Reports on Form 8-K

   Item 14.  Principal Accountant Fees and Services





<PAGE>



              CLANCY SYSTEMS INTERNATIONAL, INC.
                       Form 10-KSB
                         PART I

Item 1.  Description of Business

Business Development.

In April 1987 Oxford Financial,Inc. (Oxford) merged with
Clancy Systems International,Inc.(Old Clancy).  Oxford,
as the surviving company in the merger, changed its name
to Clancy Systems International, Inc. (the "Company").
Oxford was organized under the laws of the State of Colorado
on March 3, 1986.  Old Clancy was organized under the laws
of the State of Colorado on June 28, 1984.

In February 1998, the Company acquired 60% ownership in a
partnership with Urban Transit Solutions (UTS).  UTS is a
consolidated subsidiary and is therefore included in the
consolidated financial statements of Clancy as of September
30, 2002 and 2003.


The Company designs, develops and manufactures automated
parking enforcement systems primarily for lease to municipalities,
universities and institutions, including a ticket writing system
and other enforcement systems.

The Company has installed numerous parking enforcement
systems for various clients, towns and universities.
To augment the enforcement elementof the system, the Company
manufactures and markets the original Denver Boot and other
enforcement tools.  By utilizing an  integrated approach, the
Company offers a complete parking citation processing system
including tracking, enforcement, collection and automatic
identification of delinquent violators in an effective and
efficient manner.

 The Company also acquired and developed several stand alone
computer programs for special niche operations including
IDBadge.com, WhatsImportantNow.com, VirtualPermit.com, Remit-
online.com, Expo1000.com, Permit-sales.com and Park-by-phone.com.
The Company acquired Expo1000.com and Remit-online.com during
fiscal year 2001. The Company developed IDBadge.com,
WhatsImportantnow.com, VirtualPermit.com, Permit-sales.com and
Park-by-phone.com internally.

The Company also provides hardware and software for special
projects for Hertz Corporation including a project called Fleet
Control.  Fleet Control was developed in 1987 as an internal
security system used by Hertz to track the transfer of cars
between locations.


                          -1-
<PAGE>

The Company's principal executive offices are located at 2250
S. Oneida Street, #308, Denver, Colorado 80224 and its
telephone number is (303) 753-0197. The Company's web site is
www.clancysystems.com.

Business of the Issuer.

Principal Products or Services and Markets and
Distribution Methods.

The Company's parking enforcement system is an automated system
which generates parking citations.  The system consists of a
hand-held, light-weight, portable data entry terminal, a light-weight
printer to generate the parking citation and a data collection
computer system to store parking citation data at the end of each day.
The data entry terminal includes features such as large keys for
use with gloved hands, easily readable liquid crystal display,
phosphorescent keypad for illuminated night use and a large memory.
The printer contains a "no-wait" buffer which acts to eliminate delay
in entering citation data. The printer has been streamlined and along
with the hand-held terminal weighs less than two pounds and is battery
charged to last for at least eight hours with overnight recharging
capability. The citations are printed on a continuous fan fold flat
forms.  The  data collection computer is used for uploading and
downloading data and contains the capacity for interfacing directly
to a user's computer.  There are currently approximately 2000
ticket-writing units in operation.

The Company's system also includes a complete back office
processing and filing system.  The Company provides computers,
printers and software to enable the user obtain state Department of
Motor Vehicle lookups, maintain citation information storage and
recall, generate delinquent notices and have immediate access to
files of all tickets previously written.  In addition, the
Company's system maintains a current, readily accessible list of
vehicles with multiple outstanding citations, stolen vehicles, or
vehicles otherwise wanted by local law enforcement officials.  The
system also generates reports of citations by number and officer,
revenues collected, names of scofflaws, officer productivity and
other reports as deemed necessary or valuable to the agency.

The Company offers Internet payment processing  of tickets,
permit registrations, and clearing of funds for its clients and
industry affiliates.  The program accepts credit cards and checks
at its Remit-online.com web site 24 hours a day.  As the items are
accepted, email notification goes immediately to the client for
notification and posting of payment.  Settlement of funds is weekly
or monthly per contract arrangement.

A service first offered to clients during the 2001 year was a
permit fulfillment program.  Patrons can purchase permits at
on-line web addresses for specific agencies.  Payment processing
is done for checks and credit cards and the permits are
mailed directly for the agencies.

                             -2-
<PAGE>

The Company's contracts for its parking enforcement systems
generally provide that the Company will provide the ticket writers,
a back office processing system, custom software and training and
support in consideration of a fee per citation issued, a monthly
fee for computer equipment rental and/or a set  monthly fee.
Occasionally, the Company will provide its system through an
outright sale rather than through its typical lease arrangement.
The Company generally warrants its equipment, provides updating
and improvements to its system hardware and software and provides
customary indemnification. The Company also contracts its systems
under a privatization program whereby the Company provides a
complete facilities management program for the client.  The
operation includes personnel to operate the system, issue tickets,
and take care of enforcement tasks, along with the collection of
ticket revenues, backlog ticket collections and other related
duties.  These programs are offered under a revenue guarantee or
revenue split contract.

The Company currently has systems installed in municipalities
and universities representing approximately 9,000,000 tickets
issued per year.

The Denver Boot

The Denver Boot is a metal clamp which is fastened around a
wheel which effectively prevents a vehicle from being moved.  The
Denver Boot is removed by unlocking a padlock.  The Company
acquired all rights to the product in a transaction with Grace
Berg in June of 1994.  The Company paid Mrs. Berg  royalties on
all sales for a period extending through June 1999.   The Denver
Boot is used by a number of law enforcement agencies on vehicles
with multiple offenses. The Denver Boot can be integrated into the
Company's parking control and enforcement system or may be sold
separately.  The Company recently introduced a Super Boot to fit
some of the larger pickup trucks and SUV models.

Fleet Control

The Company sells charger/communication cradles to the Hertz
Corporation for its fleet control project and maintains the
equipment for Hertz under a maintenance service contract
agreement.

Phoenix Group Systems

In conjunction with the Phoenix Group, of Torrance, California,
the Company has installed computerized parking citation
issuance systems at Phoenix Group client locations. The data is
then sent to Phoenix Group for ticket collection.  These clients
write approximately 200,000 tickets per year.


                            -3-

<PAGE>

Remit-online.com

Remit-online.com is an Internet based payment processing
system which allows for credit card and check payments to be made
for parking citations and other payment processing activities.
The business was developed independent of Clancy and funded by
Stanley Wolfson, the President of Clancy.  The Company acquired
Remit-online.com (with Expo1000.com) from  Wolfson in February
2001, in exchange for 17,489,315 shares of Clancy Systems
International, Inc. restricted stock.

Remit-online.com has been expanding and is being offered to
all clients of the Company as well as to other parking industry
businesses.  The company is able to process credit card and check
payments through services provided by 3rd parties. The company
receives a processing fee for each transaction.  As each
transaction is processed, notification is sent to the paid agency
by email so that posting of the account can be made promptly as
parking citations are date critical regarding amount due and
potential late fees.  Settlement of collected funds between the
Company and the agency is made based on contractual agreement
either weekly or monthly.

Expo1000.com

Expo1000.com is an Internet based industry guide that is
structured as a virtual trade show with links to the actual
exhibitors Web sites.  Expo1000.com was developed and funded
independent of the Company, and acquired from Stanley J. Wolfson
with the Remit-online business on November 18, 1999. The final
agreement and issuance of shares took place in early 2001.

The business has been developed for specific industries with
focus at this time on Parking. Expo1000.com contains an internal
search engine which searches key words industry specific.  Client
company listings are available by company name, product, as well
as search engine within the industry.  The listings are
subscription based and billed annually.  To make the site viable,
the primary focus in addition to selling the listings is to increase
the visits and exposure to sites. The Expo1000.com site highlights
"what's new" for the industry (press releases, new product
announcements, new service announcements). The site contains a
message board and an email services to its subscribers and its
visitors.

Expo1000.com is also a parking advocacy forum  and sponsors one
day solution seminars in strategic locations for exhibition and
education purposes.  Expo1000.com vendors demonstrate their product
to invitees from strategic municipal, university and commercial
parking agencies.  During  fiscal 2001-2002 Expo forums were held
in Houston, San Francisco, St. Petersburg, and Los Angeles.


                            -4-

<PAGE>

WhatsImportantNow.com

This is a PC based messaging program which allows user to
send critical data and messages to pagers and cell phones. This
program is marketed as a stand alone product and is sold for $79
per license. While available for purchase to outside customers,
this program is made available to the Company's clients and is
used extensively in house.

IDBadgemaker.com

This is a PC based badge and security ID program that is used
in conjunction with digital photos to allow user to easily and
inexpensively make two-sided ID badges (with critical information
and bar codes).  The program is sold as a stand alone program and
has been marketed  directly to our clients as well as through
several on-line software product/download sites such as
Download.com.  The product sells for $199 per license.  The
download version can be used for demonstration with the word DEMO
stamped across any badge produced.  The Company has had a great
deal of interest in the program and sales are commencing on a
regular basis.  The program receives "excellent" ratings at
download.com.

VirtualPermit.com

This program is a paperless (and hard copy) permit system
now being used by many of the Company's clients.  It includes
monitoring lots and garages, inventory of spaces, and can validate
active or lapsed permits.

Permit-sales.com

The Company offers a comprehensive permit registration, fulfillment,
and customer service program.

Park-by-phone.com

Launched at the end of fiscal 2002-2003, this program is a
technology based parking reservation and payment system that will
benefit the customers by allowing them to pay and park by making one
telephone call to the Park-by-phone data center.  Through strategic
alliances with parking operators, cities, and venues, this system
will allow customers to have paid parking in an instant.

Status of Publicly-Announced New Product or Services.

The Company has developed and is currently manufacturing a product
named "palmtype" which is a keyboard/cradle for a Palm PDA.  The
Palmtype is a cradle that the device docks into for the purpose
of using keys with tactile feedback for entering data into the
Palm device.  Unique software created for the Palmtype allows
for assignable keys for specific functions.

                           -5-
<PAGE>

Competition.

The Company is aware of other companies that currently offer
an automated ticket writing system: Enforcement Technologies,
Inc.; Cardinal; Com-Plus; DMS;  Radix-T-2, and others. The Company
believes that it is able to compete effectively in the field
because of its fee per citation and leased system marketing
approach which eliminates any significant capital expenditures
by the user, its excellent program for customer support and
because of the various enforcement products which it offers
to complement its system.

Initially, the Company provides potential parking control
clients with consulting services to analyze the client's ticketing
and enforcement needs.  The Company then develops a proposal based
upon those needs, which indicates how the Company's system and
related products would aid the client in achieving the two primary
goals of ticket writing and enforcement:  creation of an equitable
enforcement policy and an increase in revenues.  The Company
believes that a system which is perceived by the public to provide
a greater certainty of enforcement will result in a greater
willingness upon the part of the public to promptly and
consistently pay fines, thus increasing the flow of revenues to
the client. Depending upon the size of the client, the Company's
services may range from the simple sale of hardware (i.e., the
Denver Boot) to providing a ticketing and enforcement system and
related equipment through a lease or sale arrangement, training
users and handling data processing of tickets and the collection
of fines.  The Internet based services added to client programs as
well as the Remit-online.com payment processing program makes the
Company's system more comprehensive and advantageous than
competitor systems.

Although a few of the Company's systems provide for the
purchase of systems or fees based on set monthly amounts, the
Company has been marketing its system and other products to
municipalities, universities, colleges, institutions and parking
companies primarily under a professional services contract  geared
to a transactional or per citation basis.  The Company supplies
all hardware, software, training, supplies and maintenance for the
system, thus eliminating all significant capital expenditures by
the user.

The Company markets its ticket writing and enforcement system
directly to municipalities, universities, colleges, institutions
and parking companies through commissioned sales representatives
and members of management.  The Company currently has marketing
alliances with two organizations throughout the United States.
The Company's management attends trade shows and makes direct
sales calls.



                                 -6-

<PAGE>

Raw Materials and Principal Suppliers.

The Company purchases its hand-held computers from outside
vendors and the Company builds the printer units that incorporate
the hand-held terminal.  The printer units for the various systems
are the same. The Company's latest generation printers feature
injection molded cases and an automatic top-of-form feature for
the paper feed. Other new technology for the electronics enable
interfacing with auxiliary hardware such as radio communications
devices, magnetic credit card readers and other peripheral devices.
The Company purchases its hand-held terminals from several different
vendors who sell computers that are all comparable in quality.
One type of handheld the Company uses for it's parking enforcement
systems is a Palm PDA.


Component parts for the Company's products are purchased from
various sources.  The Company has established relationships with
various vendors for such parts.  The Company is not reliant on
sole source vendors for any item which provides alternative
sources of supply to ensure availability.

The Company's paper products are purchased from outside
vendors.  Should any of these vendors be unable to supply these
specialized products, the Company believes that there are many
other available sources of supply.

The Company has manufactured a  printer to interface to Palm
Computing devices.  In December 2001, the Company  began
production of a special keyboard/cradle  for the Palm 500 series.
The cradle is called a Palmtype.

Other products sold by the Company which complement the
parking citation issuance programs, include: ID BADGEMAKER
(which is sold for $199 per license) and PalmTicketer which
is a program to issue special event tickets. The Company has
enhanced features on its ticket processing system; digital photo
system; virtual permit system which is a fully operational permit
issuance, payment and tracking system which reduces paperwork,
decal distribution and employee time to administer a parking permit
program; a daily permit one use parking permit program for short
duration parking validation; an employee badge ID system which
can be used by parking systems, rental car systems, and other
industries; a management alert system which is an automated data
analysis program which emails information and alerts  directly to
management to reveal such information as permit violations, ticket
issuance productivity numbers, revenue numbers and other
and timely information.   Other software products include the
on-line permit renewal system.


                               -7-

<PAGE>



Significant Customers.

Presently, the Company has 132 customers. No customer has
generated more than 5% of total revenues.  The Company
continually updates the hardware and software products provided
to these and all of its customers in an effort to ensure quality
service and customer satisfaction.

Privatization Contracts.  In a contract for privatization,
the Company provides a full facilities management operation for
the city of Logan, UT and Los Angeles Metropolitan Transportation
Authority. For the City of Logan, the Company provides personnel,
vehicles, an office, ticket issuance and ticket payment processing.
The Company pays the City a 50/50 split after all expenses are
paid. For the LAMTA, the Company provides lot services including
signage and striping, ticket issuance, permit fulfillment, special
event parking, and other related services.  Fees are based on
the different service levels.

Urban Transit Solutions, Puerto Rico. In February 1998, the
Company acquired 60% ownership in a partnership with Urban Transit
Solutions (UTS). The Company  committed to $500,000 in funding to
UTS between January 20, 1998 and April 30, 1999.  At September 30,
2001, the Company had paid $500,000 to UTS. UTS currently has
contracts in Mayaguez, Humacao, Carolina, San German, Manati, Aricebo
and Cauguas Puerto Rico. In Mayaguez, UTS has installed 600 parking
meters and is responsible for collection of parking meter revenues.
In Cauguas, UTS leases a parking facilities from the City and
collects the parking revenues from the lot.  UTS has installed
meters and provides ticket issuance parking enforcement. In
Humacao, UTS installed meters and collects revenues from the
meters as well as provides ticket issuance parking enforcement.
UTS is completing installation of parking meters in San German
and will also provide ticket issuance and enforcement.
UTS anticipates additional contracts in Puerto Rican cities
for meter installation, collections and ticket issuance
enforcement.  The marketing approach is to bring Puerto
Rican cities into the 21st century by organizing parking
operations and providing current technology to modernize city
operations.

Patents and Licenses.

The Company obtained a patent (#5,006,002) for its printer
used in its parking enforcement, rental car return and inventory
control systems in April 1991. This patent expires April 2008.

The company also obtained a patent for a printer latch on
June 27, 2000. The patent expires in June 2019.

The company applied for a patent for its palmtype and
Palm specific software in July of 2002.  The company has
abandoned its claim on the hardware application but is
pursuing its patent on the software claims.

                         -8-
<PAGE>

Need for Governmental Approval.

Many of the Company's contracts are awarded after a
Request for Proposal has been tendered by the agency.
Other companies with similar technologies also bid on
the Request for Proposal tenders.

Research and Development.

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 has redesigned
the printer so that it weighs less than two pounds. New
battery technology has also allowed the Company to reduce
the weight in the printers.
 During fiscal 2001/2002, Clancy began manufacturing of
a new printer to interface to Palm handheld devices.  It
incorporates a state of the art print mechanism, light weight
battery technology and flat forms. In 2002/2003 a new case
design was completed and tooling will be finished mid 2004.

The Company has developed a keyboard and cradle for Palm
devices.

Management keeps informed of new developments in components
so that the printer is up-to-date, fast and suits user
requirements. The Company communicates with vendors on a regular
and ongoing basis so that management is aware of upgraded
components, new components and new processes to upgrade its
hardware.  By adapting its equipment to user needs and keeping
current of the latest technology, the Company anticipates that its
enforcement ticket writing and rental car systems will not become
obsolete. The company is currently developing new applications
with the new printer and Palm computing devices which will move
outside the parking and rental car industries. The Company's
software is developed in-house by five full-time programmers and
by Stanley J. Wolfson, the Company's President and a director,
and is maintained and updated on a regular basis.

The office computer software allows the daily ticket and
rental and inventory information to be transferred from the
portable units to a central computer.  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 most software at the client's location via a modem and
the Internet.

The Company spent $41,507 and $33,471 on research and
development activities for the fiscal years ended September 30,
2002 and 2003, respectively.  None of the cost of such activities
was borne directly by the customers.
                               -9-
<PAGE>
Compliance with Environmental Laws.

Compliance with federal, state and local provisions regulating
the discharge of materials into the environment or otherwise
relating to the protection of the environment will have no material
effect on the capital expenditures, earnings and competitive position
of the Company.  The Company has entered into an arrangement with
RBRC (Rechargeable Battery Recycling Corporation) for the recycling of
all batteries).

The Company donates its used computer equipment to various
churches.  The program has been very successful as the computers
are capable of early computer training programs even though they
are no longer acceptable to operate the Company's systems.

Employees.

The Company currently has eleven employees in Company operations
and four employees in privatization projects, all of whom are employed
on a full time basis. Urban Transit Solutions has 2 employees in
upper management, 4 employees in field management and 22 employees
in operations.

Item 2.    Description of Properties.

The Company is leasing  approximately 1,700 square feet of
office space located at 2250 South Oneida Street, #308, Denver,
Colorado for its corporate offices for $2283 per month pursuant
to a lease agreement with an unaffiliated party which expires
May 31, 2004.

The Company also leases approximately 3,000 square feet of
manufacturing space located at 5789 S. Curtice, Littleton,
Colorado, from an unaffiliated party. Rental payments are $630 per
month pursuant to a lease agreement that expires August 1, 2004.

The Company leases an office in Logan, Utah which is
approximately 500 square feet from an unaffiliated party.  Rental
payments are $500 per month plus utilities pursuant to a lease
agreement which expires June 30, 2004.

The Company believes that these facilities are suitable and
adequate for its needs.

The Company has always entered into 1 and 2 year lease agreements
and is confident that it can renew its leases under the same
terms and conditions.



                              -10-

<PAGE>


Item 3.     Legal Proceedings.

In August 2000, the Company hired the law firm of Bingham Dana Ltd
to commence actions on behalf of the Company against several John
Does that bashed the company by posting false information about
the Company and its officers and directors on the Raging Bull
Internet chat room site and other chat rooms.  On September 19,
2000, the Company filed an action in Suffolk Superior Court
against John Short, Syracuse NY, who posted as Darth4, MrDarth4
and possible other aliases. Relief sought includes monetary
damages for harm done to the Company and its officers,
retraction of false and damaging statements and for the subject
to cease and desist posting or discussing the Company, its officers
and any activities related thereto.

In a judgment rendered by the Superior Court Department of the
Trial Court of Suffolk County, MA, a default judgment against Mr.
John Short was entered on October 31, 2001.  The judgment orders
Short to pay the Company attorney's fees and costs of $16,699.61
and an additional fine of $50,000 for his willful failure to
comply with a Court order of June 28, 2001.  Mr. Short filed an
appeal on December 2, 2001, 3 days late of the 30 day appeal
period.  The Company is filing a motion to strike the notice of
appeal as untimely. The appeal was denied.  Mr. Short filed a
Motion for Relief from Default Judgment on November 19, 2002.
The Motion was denied by the court on December 13, 2002.  On
December 20, 2002, Mr. Short filed an Emergency Motion for Stay
of Execution Pending Appeal From Order Denying Motion for Relief
From Judgment.  The motion was granted and another appeal was
filed.  No decision has been rendered as of the date of this
filing.

On March 21, 2002, a complaint was filed in Denver
District Court (Colorado) by Francis Salazar against the
Company.  Mr. Salazar is seeking compensation for alleged
loss of profit on the sale of 6,000,000 shares of the
Company's common stock which carried a restrictive legend
under Rule 144 of the Securities Act of 1933, as amended.
The complaint alleges that the restrictive legend prevented
him from selling the shares during an up tick in the Company's
stock price.  The Company views this as a non meritorious
lawsuit by Mr. Salazar and filed a Motion to Dismiss on April
29, 2002.  The Motion to Dismiss was granted in December 2002,
but subsequently overturned on appeal in October 2003.  Clancy
filed an answer and partial Motion to Dismiss on November 3, 2003.
The motion seeks to dismiss Salazar's second claim for relief.


                              -11-
<PAGE>

Mr. Salazar filed an amended second claim for relief on
December 4, 2003, and Clancy has filed another Motion to
Dismiss that claim on December 7, 2003.

Item 4.    Submission of Matters to a Vote of Security Holders.
     None.

PART II


Item 5(a). Market for Company's Common Stock and Related Security
Holder Matters.

The principal market on which the Company's Common Stock is
traded is the over-the-counter market and the Company's Common
Stock is quoted in the OTC Bulletin Board.

The range of high and low bid quotations for the Company's
Common Stock for the last two fiscal years are provided below.
The quotations are obtained daily from Yahoo.com stock quotations
via the Internet. These over-the-counter market quotations reflect
inter-dealer prices without retail markup, markdown or commissions
and may not necessarily represent actual transactions.


                             High bid   Low bid

10/01/01 - 12/30/01          .009        .007
01/01/02 - 03/31/02          .008        .006
04/01/02 - 06/30/02          .008        .005
07/02/02 - 09/30/02          .005        .005
10/01/02 - 12/30/02          .0045       .004
01/01/03 - 03/31/03          .013        .005
04/01/03 - 06/30/03          .017        .015
07/01/03 - 09/30/03          .015        .011



On January 9, 2004 the reported bid and asked prices for
the Company's Common Stock were $.021 and $.029, respectively.

The approximate number of record holders of the Company's
Common Stock on January 9, 2004 was 571.
 The Company has paid no dividends with respect to its Common
Stock.

There are no contractual restrictions on the Company's
present or future ability to pay dividends.



                             -12-
<PAGE>

Item 6.   Management's Discussion and Analysis or Plan of
          Operation

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 obtain sufficient financing for
business opportunities, (iii) the ability of the Company to
reduce costs and thereby maintain adequate profit margins.

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

At September 30, 2003, the Company had working capital of
$1,007,082 for Clancy and $361,991 for Clancy consolidated with
UTS as compared to $843,151 for Clancy and $357,272 for Clancy
consolidated with UTS at September 30, 2002.

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,
2004.

Clancy's current ratio decreased from  8.17 to 1 to 4.51 to 1
from September 30, 2002 to September 30, 2003. The consolidated
current ratio decreased from 1.54 to 1 to 1.35 to 1
from September 30, 2002 to September 30, 2003.

REVENUES.  From fiscal 2002 to fiscal 2003 revenues increased by
approximately $291,887 or 17.3% from $1,683,542 to $1,975,429 for
Clancy and $21,315 or 1.98% from $1,075,557 to $1,096,872 for UTS.
The increase in revenues is due to the addition of new customers
and products during the year ended September 30, 2003.

COST OF SERVICES.  From fiscal 2002 to fiscal 2003, cost of
services increased by $162,213 or 31.6% from $513,905 to $676,118
for Clancy.  The increase is primarily due to an increase of
$83,739 or 54% in depreciation expense (the Company has gone from
a 5 year straight line method to a 3 year straight line method)and
increases in cost of tickets/envelopes of $50,592 or 29%. Cost of
services as a percentage of service contract income was 38.3% for
fiscal 2002 and 42.5% for 2003.
                         -13-
<PAGE>
For UTS, cost of services increased by $71,291 or 60% from $118,924
in fiscal 2002 to $190,215 for fiscal 2003.  The increase is due
to municipal fees in Cauguas of $27,600, service and ticket fees
of $16,780 and increased depreciation of $27,260.  Cost of services
as a percentage of service contract income was 11.1% for fiscal
2002 and 17.3% for 2003.

RESEARCH AND DEVELOPMENT.  The Company's parking enforcement systems
research and development costs decreased from $41,507 to $33,471, or
19.4%, from fiscal 2002 to 2003. The Company's parking enforcement
research and development costs decreased from $42,296 to $41,507, or 2%,
from fiscal 2001, to 2002. While product development and improvement is
still paramount to the Company, costs have been contained.

GENERAL AND ADMINISTRATIVE.  General and administrative
expenses decreased by $6,737 or 1% from $735,851 to $729,114 for
Clancy and decreased $9,274 or 1% from $928,251, to $918,977 for
UTS from fiscal 2002 to 2003.  The decrease in general
and administrative costs for the Company is primarily due to the
decrease in legal fees due to the successful settlements of litigation
of $65,783 offset by increases in directors and officers insurance of
$10,665, accounting and other professional services of $20,598,
increased salaries and related expenses of expanding operations of
$21,269, bad debt expense of $10,129 and increases due to Sarbanes-
Oxley requirements. The decrease in general and administrative
expenses for UTS was primarily due to cost-cutting measures
implemented by change in management.

NET INCOME.  The Company reported net income of $96,789
for fiscal 2002 as compared to $243,063 for fiscal 2003.
The Company reported net income of $168,002 for fiscal
2001 as compared to net income of $96,789 for fiscal
2002.  The primary reason for the increase in net income of
$146,274 for fiscal 2003 is the increase in income from operations,
the components of which are described above.

During the fiscal years ended September 30, 2002 and 2003,
the Company had in place a total of approximately 120 and
132 ticket issuance systems respectively.

During the next twelve months, the Company will continue to expand
its Internet parking services and operations. A concentrated effort
will be put on "Park-by-phone" which will include an aggressive
advertising campaign.  The Company will also be manufacturing
its printer in a new and smaller case.

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.

                    -14-

<PAGE>

During 2001/2002, the Company began manufacturing a new
printer board to interface to Palm handheld devices.  It
incorporates a state of the art print mechanism, light
weight battery technology, and flat forms.  The company
has also developed a keyboard cradle for the Palm devices.
The Palm type has a 45 key full alpha/numeric keypad with
function keys and assignable function keys.

Management keeps informed of new developments in components
so that the printer and keypads are up-to-date, fast and
suit user requirements.  The Company communicates with
vendors on a regular and ongoing basis so that management
is aware of upgraded components, new technologies and
processes that can be used to upgrade its hardware.  The
Company has a relationship with an engineer, who, although
is works as an independent contractor, dedicates as much
time as the company requires to develop and enhance its
products.  The engineer also does R&D for the company and
makes prototype boards for testing and evaluation.

The Company's software is developed in-house by five 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.

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 it's Expo1000
Parking Industry Guide.

URBAN TRANSIT SOLUTIONS

The Company provided a total financial investment of $500,000 to
Urban Transit Solutions between March 1998 and April 1999. UTS
has been generating revenue since August 1998.  Collections from
parking lot fees from Cauguas commenced in January of 1999.  The
Company's loan to its primary bank and private lender have been
paid back by the Company's cash flows.  The settlement of ownership
between the Company and UTS set forth the opportunity for Clancy
management to take a more significant role in the operations of UTS.
In June, 2003, a new management team was installed at UTS.

                           -15-
<PAGE>
Kenneth Stewart is the President of UTS.  Damaris Carasquillo is
the operations manager. The UTS Board of Directors includes Kenneth
Stewart, Stanley Wolfson, and Lizabeth Wolfson. The new management
team has takem an aggressive approach to bringing the accounts
payable current, reducing unnecessary expenses and reducing debt
obligations. The Company expects to see a significant improvement
to UTS profitability during the 2003-2004 fiscal year.

UTS has funded its operations primarily by loans and cash
flows.  It has notes payable and capital lease obligations
arising from borrowings for working capital and purchases
of equipment.

TRENDS AND CONDITIONS

Known trends, events or uncertainties that
are reasonably likely to have a material impact on the
Company's short-term or long-term liquidity.

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.

The Company anticipates that its expenses shall increase
as a direct result of the Sarbanes-Oxley legislation as
it pertains to additional accounting and auditing
procedures.  The Company now utilizes four
different accounting firms for preparation of financial
statements, reviews and auditing functions.  Director and
Officer insurance premiums have tripled for the Company
(this is consistent with the industry as a result of the
public company accounting scandals of several years ago).
The Company is able to qualify for Directors and Officers
insurance when many companies are not longer able to
qualify.  The Company's newest equipment has proven to be
a capital intense 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 product 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 is 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.

                       -16-
<PAGE>

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 experienced a large number of inquiries about
its system related to the total program and special features and
anticipates growth in this area in the next fiscal year.

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
fiscal year ending September 30, 2004.

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.

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.  Remit processes and average
of $200,000 per month in transactions.  The Company has
observed a continuing increase in activity monthly.
                      -17-
<PAGE>

CONTRACTUAL OBLIGATIONS

The following obligations are the debt of UTS.  Clancy does
not have any debt obligations other than operating leases
for its office space.

                             Payment Due by Period

Contractual          Less than
Obligations  Total    1 year     1-3 years   4-5 years   Over
                                                        5 years

Long Term
debt        $ 375,063 $ 250,197  $ 124,866 $     -        $   -

Capital
Lease
Obligations   224,835   136,478     77,910    10,447          -

Operating
Expenses
   UTS         10,800     3,600      7,200         -          -
   Clancy      29,064    29,064

Purchase
Obligations         -         -          -         -           -

Other Long-
term
obligations         -         -          -         -           -
            --------- ---------  ----------  ----------  ---------

Total
Contractual
Cash
Obligations $ 639,762  $ 419,339  $ 209,976 $  10,447   $       -
            =========  ========== ========= ==========  ==========


                        -18-
<PAGE>

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.  The preparation of this Annual
Report 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.

Revenue from the issuance of parking citations for the
Company's privatization projects is recognized on a cash basis
when received as collectibility is not reasonably assured.

Revenue derived from professional service contracts on
parking meter and lots 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 changed to expensed 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.


                           -19-
<PAGE>

GOODWILL.  On January 1, 2002, the Company adopted Statement of
Financial Accounting Standards 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 annually and also in the event of
an impairment indicator.

RECENT ACCOUNTING PRONOUNCEMENTS

In June 2002, the Financial Accounting Standards Board (FASB)
issued Statement of Financial Accounting Standard (SFAS) No. 146,
"Accounting for Costs Associated with Exit or Disposal Activities".
SFAS No. 146 addresses accounting and reporting for costs
associated with exit or disposal activities and nullifies Emerging
Issues Task Force Issue No. 94-3, "Liability Recognition for
Certain Employee Termination Benefits and Other Costs to Exit an
Activity (Including Certain Costs Incurred in a Restructuring)."
SFAS No. 146 requires that a liability for a cost associated with
an exit or disposal activity be recognized and measured initially
at fair value when the liability is incurred.  SFAS No. 146 is
effective for exit and disposal activities that are initiated
after December 31, 2002, with early application encouraged.  The
adoption of this statement had no material impact on the Company's
consolidated financial statements.

In November 2002, the FASB published Interpretation No. 45
"Guarantor's Accounting and Disclosure Requirements for Guarantees,
Including Indirect Guarantees of Indebtedness of Others".  The
Interpretation expands on the accounting guidance of Statement Nos. 5,
57, and 107 and incorporates without change the provisions of FASB
Interpretation No. 34, which is being superseded.  The Interpretation
elaborates on the existing disclosure requirements for most guarantees,
including loan guarantees such as standby letters of credit.  It also
clarifies that at the time a company issues a guarantee, the company
must recognize an initial liability for the fair value, or market
value, of the obligations it assumes under that guarantee and must
disclose that information in its interim and annual financial statements.

The initial recognition and initial measurement provisions apply on a
prospective basis to guarantees issued or modified after December
31, 2002, regardless of the guarantor's fiscal year-end.  The
disclosure requirements in the Interpretation are effective for
financial statements of interim or annual periods ending after
December 15, 2002.  The adoption of this statement had no material
impact on the Company's consolidated financial statements.

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,
affirm or dispute information disclosed on these boards.

                          -20-
<PAGE>

Management can only provide 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.

HUMAN RESOURCES

Our greatest resources are our dedicated employees who
devote their talents and energies to bettering our systems
and improving our products.  Their efforts have driven the
Company's successand they continue to be the most valuable
resource of the Company.

Item 7.    Financial Statements.

The following financial statements are filed as a part of
this Form 10-KSB and are included immediately following the
signature page.

  Report of Independent Certified Public Accountants    F-1

  Consolidated Balance Sheets - September 30, 2002 and
                               September 30, 2003       F-3

  Consolidated Statements of Income -
               Years ended September 30, 2002 and 2003  F-5

  Consolidated Statements of Stockholders' Equity -
               Years ended September 30, 2002 and 2003  F-6

 Consolidated Statements of Cash Flows -
               Years ended September 30, 2002 and 2003  F-7

 Notes to Consolidated Financial Statements             F-9

Item 8.   Changes in and Disagreements With Accountants
          on Accounting and Financial Disclosure.

     Not applicable.

Item 8A.  Controls and Procedures

An evaluation was performed under the supervision and with
the participation of the Company's management, including the Chief
Executive Officer and Chief Financial Officer of the effectiveness
of the design and operation of the Company's disclosure controls
and procedures within 90 days before the filing date of this
annual report.  Based on that evaluation, the Company's
management, including the CEO and CFO, concluded that the Company's
disclosure controls and procedures were effective.  There have been
no significant changes in the Company's internal controls or in
other factors that could significantly affect internal controls
subject to their evaluation.

                              -21-
<PAGE>
                                PART III

Item 9. Directors, Executive Officers, Promoters and Control
        Persons; Compliance with Section 16(a) of the Exchange
        Act.

Identification of Directors and Executive Officers.
                                                         Dates
                           Position                       of
Name                    held with Company          Age   service

Stanley J. Wolfson    President, Chief Executive    60    1987
                      Officer and Director

Lizabeth M. Wolfson   Secretary-Treasurer and       58    1987
                      Chief Financial and Chief
                      Accounting Officer and Director

James R. Nyman        Director                      57    2003

The business experience of the Company's officers and
directors is as follows:

Stanley J. Wolfson, President, Chief Executive Officer and a
director of the Company since February 1987.  Mr. Wolfson attended
the University of Colorado at Boulder and the University of
Colorado at Denver. Mr. Wolfson had been president and a director
of Clancy from inception until its merger into the Company in
April 1987.  Since 1967 Mr. Wolfson has been president and
director of Portion Controlled Foods, Inc. d/b/a Stan Wolfson and
Associates, Inc., a data processing  systems consulting firm
located in Denver, Colorado which employs two persons on a
part-time basis.  His firm's clients include The Hertz Corporation
that utilizes Stan Wolfson and Associates, Inc.'s hand-held data
entry equipment as part of its on-site national inventory control
system.  The Hertz Corporation has been a major customer of the
Company.  See Part I, Item 1.  Mr. Wolfson has served as remote
data acquisition consultant for AT&T as well as a consultant for a
number of small local companies.  Mr. Wolfson is the husband of
Lizabeth Wolfson, an officer and director of the Company.


Lizabeth M. Wolfson, Secretary-Treasurer and Chief Financial
and Chief Accounting Officer of the Company since February 1987.
Mrs. Wolfson attended the University of Colorado at Boulder and
the University of Colorado at Denver. Mrs. Wolfson had been
secretary and treasurer of Clancy from 1986 and a director since
June 1999.  Since 1978, Mrs. Wolfson has served as secretary of
Stan Wolfson and Associates, Inc.   She is the wife of Stanley J.
Wolfson, President, Chief Executive Officer and a director of the
Company.


                           -23-

<PAGE>

James R. Nyman, Director since October 2003. Mr. Nyman is a graduate
of University of Minnesota with a degree in Aerospace Engineering and
received his Master's Degree in Business Administration at California
State University, Long Beach.  Mr. Nyman as 23 years of experience in
local government services.  He served as the director of Information
Services for the City of Inglewood, CA, from January, 1976 until
May, 2002 and from May 2002 to present he is serving as
President of California Municipal Technologies, Inc.  Mr. Nyman served
two terms as Mayor of Palos Verdes Estates, Palos Verdes, CA.

The Company currently does not have an audit committee.  The board
of directors is performing the functions of the audit committee
until an audit committee is established.

Family Relationships.

Lizabeth M. Wolfson, Secretary-Treasurer and Chief Financial and Chief
Accounting Officer of the Company, is the wife of Stanley J. Wolfson,
President, Chief Executive Officer and a director of the Company.

Section 16(a) Beneficial Ownership Reporting Compliance

Officers, directors and beneficial owners of more than 10% of the
Company's common stock are not required to file reports under Section
16(a)and therefore no disclosure of delinquent reports is included
in this annual report.

Code of Ethics

In December, 2003, the Company adopted a Code of Ethics and has
posted the Code of Ethics on its website.

Item 10. Executive Compensation.
 General.  For the fiscal year ended September 30, 2003
the Company paid a ten percent sales commission totaling $2,278
to Stanley J. Wolfson, the President, Chief Executive Officer
and a director of the Company, based upon gross sales
(excluding supplies) to the Hertz Corporation.  In addition,
Mr. Wolfson received a salary of $62,500 for the most recent
fiscal year ended.

Summary Compensation Table.

Name and                                           Other annual
principal position            Year        Salary    compensation

Stanley J. Wolfson            2003       $62,500       $2,278
President and Chief           2002        60,000        2,825
Executive Officer             2001        55,200        3,106



                                    -24-
<PAGE>

Item 11.  Security Ownership of Certain Beneficial Owners and
          Management.

Security Ownership of Beneficial Owners and Management.

The following table sets forth information as of January 9,
2004 with respect to the ownership of the Company's Common Stock
for all directors, individually, all officers and directors as a
group, and all beneficial owners of more than five percent of
the Common Stock.


Name and address                   Number of
of beneficial owner                 shares              Percentage

Stanley J. Wolfson and
Lizabeth M. Wolfson             130,887,779 (1)            35.9%
2250 S. Oneida Ste. 308
Denver, Colorado  80224

James R. Nyman                   26,835,000 (2)             7.3%
2529 Via Olivera
Palos Verdes, CA 90274

All officers and directors      157,727,779 (1&2)          43.2%
as a group (3 persons)

__________

 (1)  Includes 4,075,642 shares of Common Stock owned of record by
Lizabeth M. Wolfson and 126,812,137 owned by Stanley J. Wolfson.

 (2)   Includes 26,510,000 shares owned by CMTI (an entity controlled
by Mr. Nyman) and 325,000 shares owned by James R. and Alice Nyman.

Item 12.     Certain Relationships and Related Transactions.

     Stanley Wolfson, President and Chief Executive Officer,
receives a 10% commission on all sales to Hertz Corporation based
on an agreement made between the Company and Mr. Wolfson in 1986.
During the years ended September 30, 2002 and 2003, the commissions
totaled $2825 and $2278 respectively.

                             -25-
<PAGE>

Item 13.     Exhibits and Reports on Form 8-K.

   (a) Exhibits.

The following is a complete list of exhibits filed as a part
of this Report on Form 10-KSB and are those incorporated herein by
reference.

Exhibit Number         Title of Exhibit

     3.1   Articles of Incorporation filed with the
           Colorado Secretary of State on March 3, 1986 (2)

     3.1(a)  Articles of Amendment to Articles of Incorporation
            (2)
     3.3    Bylaws (2)

     10.1   Partnership agreement between the Company and
            Urban Transit Solutions (4)

     10.6   Indemnification Agreements between the Company
            and Robert M. Brodbeck, Stanley J. Wolfson and
            Lizabeth M. Wolfson dated February 26, 1987 (1)

     10.12  Indemnity Agreements between Company and
            Stanley J. Wolfson, and Lizabeth M. Wolfson (3)

     12.1   List of Subsidiaries, included herewith

     14.1   Code of Ethics, included herewith

     21.1   List of Subsidiaries, included herewith

     31.1   Certification Pursuant to 18 USC Section 302
            for Stanley Wolfson, included herewith
     31.2   Certification Pursuant to 18 USC Section 302
            for Lizabeth Wolfson, included herewith

     32.1   Certification Pursuant to 18 USC Section 1350
            as adopted pursuant to Section 906 of Sarbanes-
            Oxley Act of 2002 for Stanley Wolfson, included
            herewith

     32.2   Certification Pursuant to 18 USC Section 1350
            as adopted pursuant to Section 906 of Sarbanes-
            Oxley Act of 2002 for Lizabeth Wolfson, included
            herewith

________


(1)  Incorporated by reference from exhibit 2.1 filed with the
     Company's current report on Form 8-K dated February 26,
     1987.

(2)  Incorporated by reference from the like numbered exhibits
     filed with the Company's Registration Statement on Form
     S-18, SEC File No. 33-4882-D.

(3)  Incorporated by reference from the like numbered exhibits
     filed with the Company's Annual Report on Form 10-KSB for
     the year ended September 30, 1987.

     (b)  Reports on Form 8-K.  During the last quarter of the
          period covered by this report the Company filed no
          reports on form 8-K.

(4)  Incorporated by reference from like numbered exhibits
     filed with the Company's Annual Report on Form 10-KSB for
     the year ended September 30, 1998.



                           -26-

<PAGE>


Item 14.  Principal Accountant Fees and Services.

..
AUDIT RELATED FEES.  The aggregate fees billed in each of the
last two fiscal years ended September 30, 2003 and 2002 by
Causey, Demgen & Moore, Inc. for assurance and related services
that were reasonably related to the performance of the audit or
review of the financial statements were $20,975  and $18,330,
respectively.

TAX FEES.  The aggregate fees billed for tax services rendered
by Causey, Demgen & Moore, Inc. for tax compliance and tax
advice for the two fiscal years ended September 30, 2003 and
2002, were $2415 and $2300, respectively.

ALL OTHER FEES.  The aggregate fees billed for other services
rendered by Causey, Demgen & Moore, Inc., for the two fiscal years
ended September 30, 2003 and 2002 were $595 and $0, respectively.

The Board of Directors is requested to and did approve the retention
of Causey, Demgen & Moore, Inc. and the fees and other significant
compensation paid to it for the fiscal year ended September 30,
2003 and 2002.





                                    -27-
<PAGE>


                                SIGNATURES


     In accordance with the requirements of Section 13 or 15(d)
of the Securities Exchange Act of 1934, the Company has duly
caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.


                              CLANCY SYSTEMS INTERNATIONAL, INC.


                               By  /s/ Stanley J. Wolfson
                               Stanley J. Wolfson, President


Date:  January 12, 2004

     In accordance with the requirements of the Securities
Exchange Act of 1934, this report has been signed below by the
following persons on behalf of the Company and in the capacities
and on the dates indicated.


Date:  January 12, 2004          /s/ Stanley J. Wolfson
                                 Stanley J. Wolfson, resident,
                                 Chief Executive Officer and a
                                 Director

Date: January 12, 2004           /s/ Lizabeth M. Wolfson
                                 Lizabeth M. Wolfson, Secretary-
                                 Treasurer and Chief Financial
                                 and Chief Accounting Officer


Date: January 12, 2004           /s/James R.Nyman
                                 Director




                                  -28-


<PAGE>

SUPPLEMENTAL INFORMATION TO BE FURNISHED WITH REPORTS FILED
PURSUANT TO SECTION 15(d) OF THE EXCHANGE ACT BY NON-REPORTING
ISSUERS.

      None.


                        Index of Exhibits

Exhibit Number         Title of Exhibit

     3.1   Articles of Incorporation filed with the
           Colorado Secretary of State on March 3, 1986 (2)

     3.1(a)  Articles of Amendment to Articles of Incorporation
             (2)
     3.3    Bylaws (2)

     10.1   Partnership agreement between the Company and
            Urban Transit Solutions (4)

     10.6   Indemnification Agreements between the Company
            and Robert M. Brodbeck, Stanley J. Wolfson and
            Lizabeth M. Wolfson dated February 26, 1987 (1)

     10.12  Indemnity Agreements between Company and
            Stanley J. Wolfson, and Lizabeth M. Wolfson (3)

     14.1   Code of Ethics, included herewith

     21.1   List of Subsidiaries, included herewith

     31.1   Certification Pursuant to 18 USC Section 906
            for Stanley Wolfson, included herewith
     31.2   Certification Pursuant to 18 USC Section 906
            for Lizabeth Wolfson, included herewith

     32.1   Certification Pursuant to 18 USC Section 1350
            as adopted pursuant to Section 906 of Sarbanes-
            Oxley Act of 2002 for Stanley Wolfson, included
            herewith

     32.2   Certification Pursuant to 18 USC Section 1350
            as adopted pursuant to Section 906 of Sarbanes-
            Oxley Act of 2002 for Lizabeth Wolfson, included
            herewith
________

(1)  Incorporated by reference from exhibit 2.1 filed with the
     Company's current report on Form 8-K dated February 26,
     1987.

(2)  Incorporated by reference from the like numbered exhibits
     filed with the Company's Registration Statement on Form
     S-18, SEC File No. 33-4882-D.

 (3) Incorporated by reference from the like numbered exhibits
     filed with the Company's Annual Report on Form 10-KSB for
     the year ended September 30, 1987.

                            -29-
<PAGE>

     (b)  Reports on Form 8-K.  During the last quarter of the
          period covered by this report the Company filed no
          reports on form 8-K.

(4)  Incorporated by reference from like numbered exhibits
     filed with the Company's Annual Report on Form 10-KSB for
     the year ended September 30, 1998.


                            -30-

<PAGE>


                 CLANCY SYSTEMS INTERNATIONAL, INC.
                 CONSOLIDATED FINANCIAL STATEMENTS



Report of Independent Certified Public Accountants

Board of Directors and Shareholders
Clancy Systems International, Inc.
  and Subsidiary


We have audited the consolidated balance sheets of Clancy Systems
International, Inc. and subsidiary as of September 30, 2002 and 2003,
and the related consolidated statements of income, stockholders'
equity and cash flows for the years then ended.  These consolidated
financial statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these consolidated
financial statements based on our audits.  We did not audit the
financial statements of Urban Transit Solutions, Inc. (UTS), a
partially owned subsidiary, as of and for the year ended September 30,
2003.  Those statements were audited by other auditors whose report is
included herein and our opinion, insofar as it relates to the amounts
included for UTS, is based solely on the report of the other auditors.

We conducted our audits in accordance with auditing standards
generally accepted in the United States of America.  Those standards
require that we plan and perform the audits to obtain reasonable
assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the
overall financial statement presentation.  We believe that our audits
and the report of other auditors provide a reasonable basis for our
opinion.

In our opinion, based on our audits and the report of other auditors,
the consolidated financial statements referred to above present fairly,
in all material respects, the financial position of Clancy Systems
International, Inc. and subsidiary at September 30, 2002 and 2003,
and the consolidated results of their operations and their consolidated
cash flow for the years then ended, in conformity with accounting
principles generally accepted in the United States of America.


CAUSEY DEMGEN & MOORE INC.
Denver, Colorado
December 23, 2003



                             F-1
 <PAGE>

Independent Auditors' Report


To the Board of Directors and Stockholders of
Urban Transit Solutions, Inc.


We have audited the balance sheet of Urban Transit Solutions,
Inc. as of September 30, 2003, and the related statements of operations,
stockholders' equity and cash flows for the year then ended.  These financial
statements are the responsibility of the Company's management.  Our
responsibility is to express an opinion on these financial statements based on
our audit. The financial statements as of and for the year ended
September 30, 2002, were audited by their auditors whose report thereon dated
November 20, 2002, expressed an unqualified opinion on those statements.

We conducted our audit in accordance with auditing standards generally accepted
in the United States of America.  Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement.  An audit includes examining, on
a test basis, evidence supporting the amounts and disclosures in the financial
statements.  An audit also includes assessing the accounting principles used
and significant estimates made by management, as well as evaluating the overall
financial statement presentation.  We believe that our audit provides a
reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Urban Transit Solutions, Inc.
as of September 30, 2003 and the results of its operations and its cash flows
for the year then ended in conformity with accounting principles generally
accepted in the United States of America.


LANDA UMPIERRE PSC

San Juan, Puerto Rico
December 11, 2003



Stamp number 1892524 of the Puerto Rico Society of CPA's
was affixed to the record copy of this report.


                              F-2

<PAGE>

                CLANCY SYSTEMS INTERNATIONAL, INC.
                   CONSOLIDATED BALANCE SHEETS
                   SEPTEMBER 30, 2002 AND 2003

                           ASSETS

                                          2002       2003
Current assets:                           ----       ----

 Cash, including interest bearing
   accounts of $213,945 (2002) and
   $213,945 (2003)                   $  357,315     669,292
  Accounts receivable, net of
   allowance for doubtful accounts
   of $5,250 at September 30, 2003      312,463     488,361
  Accounts receivable, related party
   (Note 3)                              27,136      30,019
  Income tax refund receivable
   (Note 7)                              35,063       9,450
  Inventories (Note 2)                  148,517     135,437
  Prepaid expenses                      138,141      77,389
                                      ---------   ---------
   Total current assets               1,018,635   1,409,948

Furniture and equipment, at cost:
   Office furniture and equipment       259,595     269,523
  Equipment under service contracts
   (Note 10)                          1,893,995   2,109,045
  Leasehold improvements                105,259      96,604
  Equipment and vehicles under
   capital leases (Note 6)              356,745     439,286
                                       --------   --------
                                      2,615,594   2,914,458
  Less accumulated depreciation      (1,170,030) (1,328,226)
                                     ----------- -----------
   Net furniture and equipment        1,445,564   1,586,232

Other assets:
  Deferred tax asset (Note 7)            38,200         ---
  Deposits and other                     20,640      76,028
  Goodwill (Note 1)                     225,214     225,214
  Software development costs, net
   of accumulated amortization
   of $368,012 (2002) and $431,627
   (2003)                               150,193     180,163
                                      ---------   ---------

 Total other assets                     434,247     481,405
                                      ---------   ---------
                                     $2,898,446  $3,477,585
                                     ==========  ==========

   See accompanying notes to consolidated financial statements.

                              F-3

<PAGE>
             CLANCY SYSTEMS INTERNATIONAL, INC.
               CONSOLIDATED BALANCE SHEETS
               SEPTEMBER 30, 2002 AND 2003

           LIABILITIES AND STOCKHOLDERS' EQUITY

                                           2002       2003
Current liabilities:                       ----       ----

  Accounts payable                    $  141,092  $  229,229
  Accrued expenses                       166,159     276,176
  Accounts payable, related party            ---      11,000
  Income taxes payable (Note 7)              ---      21,852
  Current portion of long term debt
   (Note 5)                              111,111     250,197
  Current portion of obligations
   under capital leases (Note 6)         132,279     125,102
  Deferred revenue                       110,722     134,401
                                       ----------  ---------
    Total current liabilities            661,363   1,047,957
 Long-term debt, net of current
  portions (Note 5)                      182,824     124,866
Obligations under capital leases,
  net of current portion  (Note 6)        53,423      75,948
 Minority interest in subsidiary
 (Note 4)                                142,769     123,084
Deferred tax liability (Note 8)              ---       4,600

Commitments (Notes 5 and 6)

Stockholders' equity (Note 9):

  Preferred stock, $.0001 par value;
   100,000,000 shares authorized,
    none issued                              ---         ---
  Common stock, $.0001 par value;
    800,000,000 authorized,
    365,117,938 shares issued and
    outstanding (2002 and 2003)           36,512      36,512
  Additional paid-in capital           1,151,547   1,151,547
  Retained earnings                      670,008     913,071
                                       ---------   ---------
    Total stockholders' equity         1,858,067   2,101,130
                                       ---------   ---------
                                     $ 2,898,446 $ 3,477,585
                                     =========== ===========



    See accompanying notes to consolidated financial statements.
                              F-4

<PAGE>



              CLANCY SYSTEMS INTERNATIONAL, INC.
              CONSOLIDATED STATEMENTS OF INCOME
         FOR THE YEARS ENDED SEPTEMBER 30, 2002 AND 2003



                                           2002         2003
Revenues:                                  ----         ----
  Sales                                $   213,082   $  167,369
  Service contract income (Note 10)      2,418,208    2,686,947
  Parking ticket collections and other
   (Note 10)                               127,809      217,985
                                        ----------    ---------
  Total revenues                         2,759,099    3,072,301

Costs and expenses:
  Cost of sales                             91,499       72,281
  Cost of services  (Note 3)               632,829      866,332
  Cost of parking ticket collections
   (Note 10)                               114,025      110,730
  General and administrative             1,664,102    1,648,091
  Research and development                  41,507       33,471
                                         ---------    ---------
  Total costs and expenses               2,543,962    2,730,905
                                         ---------    ---------
Income from operations                     215,137      341,396

Other income (expense):
  Interest income                            3,702        1,466
  Interest expense                         (53,185)     (47,079)
  Other income                                 ---       10,185
  Minority interest in loss of
     subsidiary (Note 4)                     9,861       19,686
                                         ---------     --------
   Total other income (expense)            (39,622)     (15,742)
                                         ---------     --------
Income before provision for income
  taxes                                    175,515      325,654

Provision for income taxes: (Note 7 )
  Current expense                          (70,526)     (39,791)
  Deferred expense                         ( 8,200)     (42,800)
                                         ---------     --------
Total income tax expense                   (78,726)     (82,591)
                                         ---------     --------
Net income                               $  96,789    $ 243,063
                                         =========    =========
Basic net income per common share        $       *    $       *
                                         =========    =========
Weighted average number of shares
outstanding                            362,782,000  365,118,000
                                       ===========  ===========
*Less than $.01 per share

   See accompanying notes to consolidated financial statements.
                           F-5
<PAGE>

                          CLANCY SYSTEMS INTERNATIONAL, INC.
  CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
                   FOR THE YEARS ENDED SEPTEMBER 30, 2002 AND 2003

<TABLE>
<CAPTION>
<S>
                                                   Additional
                               Common Stock          Paid-In        Retained
                            Shares       Amount      Capital        Earnings
                            -------------------     ----------       --------
                             <C>         <C>           <C>             <C>
Balance, September 30,
    2001                361,617,938   $   36,162  $  1,131,397     $  573,219


Issuance of common
 stock in exchange for
 services (Note 9)       3,500,000          350         20,150           ---

Net income for the year
  ended September 30,
  2002                         ---          ---            ---          96,789
                        ----------     --------     ----------     -----------
Balance, September 30,
 2002                  365,117,938      36,512       1,151,547         670,008

Net income for the
  year ended September
  30, 2003                    ---          ---             ---         243,063
                  ---------    -------    --------     --------
Balance, September
 30, 2003              365,117,938    $  36,512   $  1,151,547      $  913,071
                       ============   =========     ==========      ==========









See accompanying notes to consolidated financial statements.




                             F-6

</TABLE>
<PAGE>


               CLANCY SYSTEMS INTERNATIONAL, INC.
             CONSOLIDTED STATEMENTS OF CASH FLOWS
         FOR THE YEARS ENDED SEPTEMBER 30, 2002 AND 2003

                                           2002         2003
                                           ----         ----
CASH FLOWS FROM OPERATING ACTIVITIES
Net income                             $   96,789  $  243,063
Adjustments to reconcile net income
 to net cash provided by operating
 activities:
   Depreciation and amortization          373,328     497,298
   Deferred income tax expense              8,200      42,800
   Minority interest                       (9,861)    (19,686)
   Common stock issued for services        20,500         ---
   Loss on disposal of equipment              ---      17,068
   Changes in assets and liabilities:
     Accounts receivable                   95,049    (175,898)
     Accounts receivable, related party       ---      (2,883)
     Inventories                           (3,915)     13,080
     Income taxes refundable               20,283      25,613
     Prepaid expenses                    (100,380)     60,752
     Other assets                            (845)        ---
     Accounts payable                      74,338      88,137
     Accrued expenses                      14,694     110,017
     Accounts payable, related party          ---      11,000
     Income taxes payable                     ---      21,852
     Deferred revenue                      (3,544)     23,679
                                          -------    --------
Net cash provided by operating
  activities                              584,636     955,892
                                          -------    --------
CASH FLOWS FROM INVESTING ACTIVITIES:
  Acquisition of furniture and equipment (332,917)   (680,280)
  Increase in software licenses and
    software development costs           ( 68,533)    (93,586)
  Proceeds from sales of equipment            ---      91,438
  Decrease in note receivable, employee    10,277         ---
  Decrease (increase) in deposits and
   other assets                            (8,425)    (57,963)
                                          -------   ---------
    Net cash used in investing
     activities                          (399,598)   (740,391)
                                         --------    --------
CASH FLOWS FROM FINANCING ACTIVITIES:
  Borrowings on long term debt                ---     320,000
  Borrowings on capital leases                ---      87,640
  Payments on long term debt and capital
   leases                                (241,404)   (311,164)
                                         --------    --------
continued on following page
 See accompanying notes to consolidated financial statements.
                      F-7
<PAGE>
            CLANCY SYSTEMS INTERNATIONAL, INC.
            CONSOLIDATED STATEMENTS OF CASH FLOWS
           FOR THE YEARS ENDED SEPTEMBER 30, 2002 AND 2003

                 (continued from preceding page)

                                              2002      2003
                                              ----      ----
Net cash provided by financing
   activities                             (241,404)   96,476
                                          ---------  --------
Increase (decrease) in cash and
  cash equivalents                          (56,366)  311,977
Cash and cash equivalents at
     beginning of period                    413,681   357,315
                                           --------  --------
Cash and cash equivalents at end
  of period                               $ 357,315 $ 669,292
                                          ========= =========



                                               2002      2003
                                               ----      ----

SUPPLEMENTAL DISCLOSURE OF CASH FLOW
  INFORMATION:
Cash paid during the year for interest      $  53,185  $  47,079
                                            =========  =========
Cash paid (refunded) during the year
  for income taxes                          $  50,243  $  (7,674)
                                            =========  =========


Supplemental disclosure of non-cash investing and financing
 activities:

During the year ended September 30, 2002, UTS entered into
capital leases for the purchase of equipment in the amount
of $219,560.

During the year ended September 30, 2003, UTS entered into
capital leasesfor the purchase of equipment in the amount of
$87,640.








See accompanying notes to consolidated financial statements.

                     F-8

<PAGE>


               CLANCY SYSTEMS INTERNATIONAL, INC.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                      SEPTEMBER 30, 2002 AND 2003

1.  Organization and Summary of Significant Accounting Policies

Organization:

The Company was organized in Colorado on June 28, 1984.  The Company
is in the business of developing and marketing ticket writing systems,
rental car return systems, internet payment remittance systems, and
internet industry guides.  The Company's revenues are derived primarily
from cities, universities and car rental companies throughout the United
States and Canada.

The Company's subsidiary, Urban Transit Solutions, Inc. ("UTS") was
incorporated on March 6, 1997 under the Laws of the Commonwealth of
Puerto Rico and is engaged in providing a wide variety of services
in the areas of consulting design and the management of digital
parking meter systems in Puerto Rico and Latin America.  The
financial statements of UTS have been prepared on the basis of
accounting principles generally accepted in the United States of
America and denominated in U.S dollars.  Therefore, there are no
amounts recorded for foreign currency translation or for
transactions denominated in a foreign currency.

Principles of Consolidation:

For the year ended September 30, 2001, the Company accounted for
its investment in UTS under the equity method of accounting.
During the year ended September 30, 2002, the Company entered into
a settlement agreement with the other owners of UTS which affirmed
the Company's 60% ownership interest in UTS. As a result, the
Company gained control of UTS and therefore has consolidated the
financial results of UTS with those of the Company for the entire
years ended September 30, 2002 and 2003.  All significant
intercompany transactions and balances have been eliminated
in consolidation.

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 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.






                             F-9
<PAGE>

               CLANCY SYSTEMS INTERNATIONAL, INC.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                      SEPTEMBER 30, 2002 AND 2003
                           (continued)

1.  Organization and Summary of Significant Accounting Policies
    (continued)

Accounts receivable:

The allowance for doubtful accounts at September 30, 2002 and
2003 was $-0- and $5,250, respectively.  An allowance for doubtful
accounts was not provided at September 30, 2002 as write offs and
accounts deemed uncollectible were not material.  Bad debt expense
amounted to $13,259 in 2002 and $28,638 in 2003.

Inventories:

Inventories are carried at the lower of cost (first-in, first-out)
or market.  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 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 five years) or the estimate of current and future revenues
for the related software product.  Amortization expense for the
years ended September 30, 2002 and 2003 amounted to $62,800 and
$63,616, respectively, and is included in cost of services.

Furniture and equipment:

Furniture and equipment are stated at cost.

Depreciation is provided by the Company on the straight line
method over the assets' estimated useful lives of three to
five years.  Leasehold improvements are being amortized over
the shorter of the useful life of the improvement or the remaining
term of the lease.  Vehicles under capital leases are amortized
over the related lease term.  Property and equipment consists
partly of computers and printers which are subject to technical
obsolescence.  During the quarter ended September 30, 2002,
the Company initiated a plan to replace much of the equipment



                        F-10

<PAGE>

                CLANCY SYSTEMS INTERNATIONAL, INC.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                      SEPTEMBER 30, 2002 AND 2003
                           (continued)

1.  Organization and Summary of Significant Accounting Policies
    (continued)

under service contracts over the next two years.  As a result,
the Company recorded a change in estimate relating to the
remaining useful life of this equipment to two years.  The
change resulted in a charge against income of approximately
$12,000 during the quarter ended September 30, 2002 (no effect
on loss per share) and will result in increased depreciation
charges over the next two years.  Depreciation expense for the
years ended September 30, 2002 and 2003 amounted to $326,206 and
$433,682, respectively.

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.

Other assets:

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 Standards
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.
There is no impairment of goodwill considered necessary as of September
30, 2002 or 2003.

Software license agreements are being amortized over a five-year
period, the period estimated by management to be benefited.

Research and development

Company funded research and development costs are charged
to expense as incurred.

Revenue recognition:

Summary.  - 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

                      F-11
<PAGE>

                 CLANCY SYSTEMS INTERNATIONAL, INC.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                      SEPTEMBER 30, 2002 AND 2003
                           (continued)

1.  Organization and Summary of Significant Accounting Policies
    (continued)

recognized on a cash basis when received.  Revenue derived
from professional service contracts on parking meter and lots
fees collections is recognized on a cash basis when received.
Related costs consist mainly of Municipalities' fees, depreciation
and lots rents.

The Company recognizes revenue in accordance the Securities and
Exchange Commission Staff Accounting Bulletin 101 ("SAB 101").
SAB 101 provides that the conditions for realization of revenue are
as follows:
(1) persuasive evidence of an arrangement exists; (2) delivery has
occurred or services have been rendered; (3) the seller's price to
the buyer is fixed or determinable, and (4) collectibility is
reasonably assured.

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, collectibility
is reasonably assured.

Contracts for the Company's ticket writing system take one of three
forms.  The Company (1) sells the equipment, ticket stock and.
licenses the software separately, (2) charges a monthly fee for the
use of the equipment and software or (3) charges a fee per ticket at
the time the ticket stock is provided to the client.  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.  As ticket stock is sold separately,
this price is used to recognize revenue on contracts where the sales
price of the ticket stock is not stated separately.

Revenue guarantees are entered into for a period of time, generally
one year at a time.  A ratable portion of the revenue guarantee
is recognized each month as an expense.  In revenue split arrangements,
the portion of the revenue owed each month is recognized as 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.

                             F-12
<PAGE>

                 CLANCY SYSTEMS INTERNATIONAL, INC.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                      SEPTEMBER 30, 2002 AND 2003
                           (continued)

1.  Organization and Summary of Significant Accounting Policies
    (continued)

Warranty expense for the Company's products has been immaterial
in the past.  Revenue recognition does not start until the
equipment has been delivered and the software has been installed
and operational.

Advertising costs:

The Company expenses the costs of advertising as incurred.
Advertising expense was $29,295 and $27,798 for the years
ended September 30, 2002 and 2003, respectively.

Income taxes:

The Company accounts for income taxes under Statement of Financial
Accounting Standards No. 109 ("SFAS 109").  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.

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.

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

Concentrations of credit risk:

Financial instruments which potentially subject the Company to
concentrations of credit risk consist principally of cash and
trade receivables.  The Company places its cash with high
quality financial institutions.  At September 30, 2002 and 2003
and at various times during the years, the balance at one of
the financial institutions exceeded FDIC limits.
                          F-13
<PAGE>

               CLANCY SYSTEMS INTERNATIONAL, INC.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                      SEPTEMBER 30, 2002 AND 2003
                           (continued)

1.  Organization and Summary of Significant Accounting Policies
    (continued)


The Company provides credit, in the normal course of business,
to customers throughout the United States and Canada.  The Company
performs ongoing credit evaluations of its customers.


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

Reclassifications:

Certain amounts in the 2002 consolidated financial statements
have been reclassified to conform to the 2003 presentation.

1.  Organization and Summary of Significant Accounting Policies
    (continued)

Recent accounting pronouncements:

In June 2002, the Financial Accounting Standards Board (FASB)
issued Statement of Financial Accounting Standard (SFAS) No. 146,
"Accounting for Costs Associated with Exit or Disposal Activities."
SFAS No. 146 addresses accounting and reporting for costs associated
with exit or disposal activities and nullifies Emerging  Issues
Task Force Issue No. 94-3, "Liability Recognition for Certain
Employee Termination Benefits and Other Costs to Exit an Activity
(Including Certain Costs Incurred in a Restructuring)."  SFAS
No. 146 requires that a liability for a cost associated with an
exit or disposal  activity be recognized and measured initially
at fair value when the liability is incurred.  SFAS No. 146 is
effective for exit or disposal activities that are initiated after
December 31, 2002, with early application encouraged.  The adoption
of this statement had no material impact on the Company's
consolidated financial statements.

In November 2002, the FASB published Interpretation No. 45
"Guarantor's Accounting and Disclosure Requirements for Guarantees,
Including Indirect Guarantees of Indebtedness of Others".  The
Interpretation expands on the accounting guidance of Statement
Nos. 5, 57, and 107 and incorporates without change the provisions
of FASB Interpretation No. 34, which is being superseded.  The
Interpretation elaborates on the existing disclosure requirements
for most guarantees, including loan guarantees such as standby
letters of credit.

                          F-14

<PAGE>
                CLANCY SYSTEMS INTERNATIONAL, INC.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                      SEPTEMBER 30, 2002 AND 2003
                           (continued)

1.  Organization and Summary of Significant Accounting Policies
    (continued)

It also clarifies that at the time a company issues a guarantee,
the company must recognize an initial liability for the fair value,
or market value, of the obligations it assumes under that guarantee
and must disclose that information in its interim and annual financial
statements.  The initial recognition and initial measurement provisions
apply on a prospective basis to guarantees issued or modified after
December 31, 2002, regardless of the guarantor's fiscal year-end.

The  disclosure requirements in the Interpretation are
effective for financial statements of interim or annual
periods ending after December 15, 2002.  The adoption of
this statement had no material impact on the Company's
consolidated financial statements.

2.  Inventories

Inventories consist of the following at September 30:

                                   2002       2003
                                   ----       ----

  Finished goods                $  22,272  $  21,521
  Work in process                   4,795      4,563
  Purchased parts and supplies    121,450    109,353
                                ---------  ---------
                                $ 148,517  $ 135,437
                                =========  =========

3.  Related party transactions

The Company pays a 10% sales commission to an officer
and director of the Company for gross sales (excluding
supplies)to The Hertz Corporation.  For the years ended
September 30, 2002 and 2003, commissions of $2,825 and
$2,278 have been paid under this agreement, respectively.

As of September 30, the following are the related
party account balances:
                                    2002          2003
                                    ----          ----
Accounts receivable,
   related party                 $ 27,136     $  30,019
                                 =========    =========
Accounts payable,
 related party                   $    ---     $  11,000
                                 =========    =========
                            F-15
<PAGE>
              CLANCY SYSTEMS INTERNATIONAL, INC.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                      SEPTEMBER 30, 2002 AND 2003
                           (continued)

3.  Related Party Transactions (continued)

Accounts receivable, related party is due from Pan
American Parking Solutions, Inc. which is a company
owned by the former president of UTS.

Accounts payable, related party is due to Pan American
Products, a company owned by the current president of UTS.

4.  Investment in partnership

On January 31, 1998, the Company entered into a partnership
agreement (the Partnership) with Urban Transit Solutions of
Puerto Rico (UTS).  The Partnership was formed to contract
with cities and towns in Puerto Rico for the privatization
of their parking ticket management and collection services.
As provided in the partnership agreement, the Company contributed
$500,000 in exchange for a 60% ownership in the Partnership and
will share in the net income and losses of the partnership based
on their percentage of ownership.  During 2001, UTS issued
additional stock diluting the ownership interest of the
Company below 50%.  Pursuant to the partnership agreement,
substantially all management authority was retained by UTS,
and consequently, the Company accounted for their investment
in the Partnership using the equity method through September
30, 2001.

During the year ended September 30, 2001, the Company filed
suit against UTS and the officers of UTS claiming that UTS
unlawfully issued dilutive shares of stock in UTS.  During
the quarter ended September 30, 2002, the Company entered
into a settlement agreement with UTS reaffirming the Company's
60% ownership interest.  UTS was reorganized as a corporation.
Therefore, the Company has consolidated the results of operations
of UTS as if the Company owned 60% for the entire years ended
September 30, 2002 and 2003.  Accordingly, the financial results
of UTS have been consolidated for the entire years ended
September 30, 2002 and 2003.  All significant intercompany
transactions and balances have been eliminated in consolidation.









                              F-16

<PAGE>

                  CLANCY SYSTEMS INTERNATIONAL, INC.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                      SEPTEMBER 30, 2002 AND 2003
                           (continued)

5.  Long-term Debt

Long term debt consisted of the following at September 30:

                                        2002          2003
                                        ----          ----

Note payable to bank, interest at
 2% over prime rate (4.0% as of
 September 30, 2003), secured by
 third mortgage real estate property
 from the former president of UTS,
 payable in monthly installments of
 $9,259 plus interest through
 June 2005                             $ 293,935   $ 173,565

Note payable to bank, interest
 at 6.3%, secured by certain assets
 of the Company, payable in monthly
 installments of $4,445, due in
 March 2005                                 ---       84,098

Note payable to bank, interest at
  6.75%, secured by certain assets
  of the Company, payable in monthly
  installments of $7,823, due in
  October 2004                              ---      117,400
                                       --------     --------
                                        293,935      375,063
Less current maturities                (111,111)    (250,197)
                                       --------    ---------
                                      $ 182,824   $  124,866
                                    ===========    ==========

The aggregate maturities of long-term debt
for the following years is as follows:

        Year ending September 30, 2004          $   250,197
        Year ending September 30, 2005              124,866
                                                -----------
                                                $   375,063
                                                ===========

In May 2000, UTS entered into a loan agreement with the Banco
de Desarrollo Economico para Puerto Rico for an aggregate amount
of $500,000.  During the first six months, interest only was
due and payable monthly at 2% over the prime rate.  Beginning
on January 5, 2001, principal of $9,259, plus interest is due
and payable in 54 monthly installments.
                          F-17
<PAGE>

               CLANCY SYSTEMS INTERNATIONAL, INC.
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 SEPTEMBER 30, 2002 AND 2003
                      (continued)

5.  Long-term Debt (continued)

The loan is evidenced by a promissory note, collateralized by
a second mortgage of $85,000 on property located at Toa Baja,
Puerto Rico, and the personal guarantees of certain UTS
stockholders.  As part of the loan agreement, UTS has agreed
to comply with certain covenants. These consist primarily, of
reporting requirements, insurance coverage, no dividends or
other distribution without the written consent of the Bank
and other administrative requirements.

6.  Lease Commitments

UTS is party to certain non-cancelable lease arrangements for
vehicles with a lease finance company.  Terms of such leases
call for UTS to make monthly lease payments of from $269 to
$602 for leases that expire on various dates through the year
2007.  The effective annual interest rates, on the present
value of the monthly payments, vary from 8.50% to 14.95%.
..
UTS leases office spaces in Mayaguez under a three year lease,
and in Humacao, Manati and Carolina, Puerto Rico under a five
year lease, which commenced on April 27, 2000, May 26, 1999,
April 1, 2000 and September 2002, respectively.  The rental
rates for the offices are $850, $800, $650, and $1,250 per month,
respectively.

The Company leases office space in Denver, Colorado under a 24
month lease through May 31, 2004 and is party to various other
short term leases for office and warehouse space.  Total rent
expense under all operating leases for the years ended September
30, 2002 and 2003 amounted to $98,492 and $127,302, respectively.

The following is a schedule by years of the future minimum lease
payments under operating and capital leases together with the
present value of the net minimum lease payments for capital
leases as of September 30, 2003:







                              F-18



<PAGE>



                   CLANCY SYSTEMS INTERNATIONAL, INC.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                      SEPTEMBER 30, 2002 AND 2003
                           (continued)

6.  Lease Commitments (continued)

                             Capital       Real Estate
                              Leases         Leases         Total
                            --------       -----------      -----
Year ended September
   30,  2004              $ 136,478        $  32,664     $ 169,142
        2005                 41,774            2,300        44,074
        2006                 17,762            2,400        20,162
        2007                 18,374            2,500        20,874
        2008                 10,447              ---        10,447
                             ------           ------        ------
Total minimum lease
   payments               $ 224,835        $  39,864     $ 264,699
                                           =========     =========
Amount representing
   interest                  23,785
                            -------
Present value of future
 minimum lease payments     201,050

Current portion of
 lease obligations          125,102
                            -------
Obligations under capital
 leases due after one year $ 75,948
                           ========

The Company's property under capital leases,
which is included in property and equipment,
is summarized as follows:
                                     2002           2003
                                     ----           ----
Equipment                       $  238,755      $ 256,799
Vehicles                           117,990        182,487
                                ----------      ---------
                                   356,745        439,286
Accumulated amortization           (83,999)      (118,183)
                                ----------       --------
Net capitalized leased
  property                      $  272,746      $ 321,103
                               ===========     ==========

The Company has disputed amounts due under a certain capital
lease as the equipment under the lease is defective.  The
principal amount of the obligation is $84,166.  Pending
resolution of this matter, amounts due under this capital
ease have been classified as noncurrent.

                              F-19

<PAGE>

                 CLANCY SYSTEMS INTERNATIONAL, INC.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                      SEPTEMBER 30, 2002 AND 2003
                           (continued)

7.  Income Taxes

The components of the Company's deferred tax assets and
liabilities at September 30 are as follows:

                                 2002          2003
                                 ----          ----
Non current deferred tax
   assets                     $  87,700    $  68,400
Non current deferred tax
  liabilities                   (49,500)     (73,000)
                              ---------    ---------

Net non-current deferred
   taxes                     $   38,200    $  (4,600)
                             ===========  ===========
Deferred tax assets:
  Loss on equity investment  $   16,600    $  30,900
  Section 263A Capitalization    35,000       28,500
Website acquired from
  shareholder                    36,100        9,000
                             ----------     --------
                                 87,700       68,400
Deferred tax liabilities:
 Depreciation and amortization  (49,500)     (73,000)
                             ----------     --------

   Net non-current deferred
     taxes                    $  38,200    $  (4,600)
                           ============   ============





                                F-20


<PAGE>





                   CLANCY SYSTEMS INTERNATIONAL, INC.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                      SEPTEMBER 30, 2002 AND 2003
                           (continued)


7.  Income taxes

The  following is a reconciliation of the statutory
federal income tax rate applied to pre-tax accounting net
income compared to the income taxes in the consolidated
statements of income:

                         For the years ended September 30,
                                2002             2003
                                ----             ----
Income tax expense at
  the statutory rate        $  59,675        $  82,591
State and local income
  taxes, net of federal
  income tax                    5,792           10,747
Nondeductible expenses          1,700            1,306
Other timing differences,
   net                         11,559          (12,053)
                            ---------        ---------
                            $  78,726        $   82,591
                            =========        ==========


8.  Basic Net Income Per Common Share

Basic net income per common share is based on the weighted
average number of shares outstanding during the years ended
September 30, 2002 and 2003, of 362,782,322 shares and 365,117,938
shares respectively.

9.  Stockholders' equity

In November 1999, the Company entered into a letter of intent
to acquire two website related businesses owned and developed
by the Company's president and major shareholder for shares of
the Company's common stock valued at $255,344 (17,489,315 shares
of common stock at $.0146 per share).  The businesses were acquired
in February 2002 and were recorded at the president's historical
cost basis in the trademarks and proprietary technology related
to the websites which approximates the par value of the shares
issued of $1,749.  The income tax benefit to be derived from the
amortization of the tax basis of the web sites is recorded as
an addition of $86,222 to additional paid-in-capital.


                          F-21

<PAGE>

                 CLANCY SYSTEMS INTERNATIONAL, INC.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                      SEPTEMBER 30, 2002 AND 2003
                           (continued)

During the year ended September 30, 2002, the Company issued
3,000,000 shares of common stock to an employee of the Company
valued at $18,000 ($.006 per share based on market value) and
500,000 shares of common stock to an employee of the Company
valued at $2,500 ($.005 per share based on market value)
for services performed.

10.  Professional service contracts

Clancy provides equipment and support services under 12 month
professional service contracts.  At September 30, 2003, all of
the contracts contained cancellation provisions requiring notice
of 30 days or less.

The cost of the equipment provided in the contracts and related
accumulated depreciation are as follows at September 30:

                                  2002            2003
                                  ----            ----
Equipment under service
  contracts                   $ 1,062,867     $ 1,122,573
Less accumulated
   depreciation                  (734,107)       (715,605)
                              -----------      ----------
                              $   328,760     $   406,968
                              ===========       ==========

Parking citation collection services:

Clancy formed an agreement with the town of Logan, Utah for
the period of June 1998 through May 1999, for the purpose of
providing parking citation issuance, ticket processing, meter
collections and maintenance, and ticket collections.  In
conjunction with the contract, Clancy and the Town each receive
half of all revenues after payment of all associated costs
related to the collections.

The terms of the agreements can be extended or discontinued
with 30 days written notice.  At September 30, 2003, the Logan,
Utah agreement was in effect.

UTS has professional service contracts with the Municipal
Governments of Mayaguez, Humacao, Manati, Arecibo and Carolina,
Puerto Rico, to provide the equipment and management of its
digital parking meter system.  Under the terms of the contracts,
UTS will pay to the Municipalities 25% of the income before
income taxes.


                             F-22

<PAGE>

                 CLANCY SYSTEMS INTERNATIONAL, INC.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                      SEPTEMBER 30, 2002 AND 2003
                           (continued)

11.  Sales by geographic region

The Company's sales for the years ended September 30, by
geographic region, are as follows:

                                2002               2003
                                ----               ----
Canada                       $ 84,782          $  55,060
                              ========        ==========

Puerto Rico                $1,075,557         $1,096,872
                           ==========         ==========

United States              $1,598,760         $1,920,369
                           ==========         ==========






                               F-23
<PAGE>