What changed in this filing

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Item 1. Business

2021-02-18 compared with 2020-01-14 · 102 added, 127 removed, 54 unchanged (81% of the section changed)

We were initially incorporated on November 15, 1999, as Menu Sites, Inc., a Florida corporation.

On March 9, 2001, we changed our name to CNE Communications, Inc.

On October 1, 2004, we changed our name to CNE Industries, Inc.

On March 29, 2005, we changed our name to GlobalTel IP, Inc.

On May 9, 2008, we changed our name to Cleartronic, Inc.

All of our operations are conducted through our wholly owned subsidiary ReadyOp Communications, Inc.,(ReadyOp) a Florida corporation, incorporated on September 15, 2014, which facilitate the marketing and sales of ReadyOp ™ software and AudioMate IP gateways, discussed below.

In March 2018, the Company approved the spin-off VoiceInterop, Inc.(“Voiceinterop”) into a separate company under a Form S-1 registration to be filed with the United States Securities and Exchange Commission.

The Company was initially incorporated on November 15, 1999, as Menu Sites, Inc., a Florida corporation.

On March 9, 2001, the Company's name was changed to CNE Communications, Inc.

On October 1, 2004, the name was changed to CNE Industries, Inc.

and on March 29, 2005, the name was changed to GlobalTel IP, Inc.

On May 9, 2008, the Company's name was changed to Cleartronic, Inc.

All current operations are conducted through the Company's wholly owned subsidiary ReadyOp Communications, Inc.

("ReadyOp"), a Florida corporation incorporated on September 15, 2014, which facilitates the marketing and sales of the ReadyOp ™ software and the AudioMate IP gateways discussed below.

In March 2018, the Company approved the spin-off of VoiceInterop, Inc.

("Voiceinterop”), one of the Company's wholly-owned subsidiaries, into a separate company under a Form S-1 registration to be filed with the United States Securities and Exchange Commission.

On May 13, 2019, VoiceInterop filed an S-1 registration with the United States Securities and Exchange Commission.

All VoiceInterop transactions have been recorded as discontinued operations .

The Companys history is being reviewed by the Financial Industry Regulatory Authority (FINRA) and as of the date of this filing the review has not been completed.

No dividends can be distributed until that review is completed and approved by FINRA.

Business Overview

We do not currently have sufficient capital to conduct the present or proposed business activities described below.

The costs to operate our business are approximately $115,000 per month.

In order for us to cover our monthly operating expenses, we must generate revenues of approximately $175,000 per month.

Accordingly, in the absence of revenues, we must secure $115,000 in equity or debt capital each month to cover our overhead expenses.

In order to remain in business for one year without any revenues, we must secure $1,380,000 in equity or debt capital.

If we are unsuccessful in securing sufficient capital or revenues, we will be unable to continue any business activities.

We have not obtained any commitments for additional capital, and we may not be able to obtain any additional capital on terms not unfavorable to us, if at all.

From March 2005 to October 2007, we were primarily engaged in providing telecommunications services to our customers employing Voice over Internet Protocol (VoIP) technology.

In October 2007, we sold substantially all of our assets utilized in that business.

Prior to 2005, we were a website development company.

We are now a provider of Internet Protocol, or IP, unified group communication solutions.

The products used in our solutions include our own proprietary products as well as products from other software and hardware vendors.

Revenues have been generated from the design, construction and installation of the group communication systems.

We have also generated revenues from maintenance and support contracts, once a unified group communication solution has been installed and tested.

While we no longer sell WAVE based systems we will continue to support the installations that we have previously installed.

We also sell our proprietary line of Internet Protocol Gateways which we have branded the AudioMate 360 IP Gateway , discussed below.

These units are currently being sold directly to end-users and by Value Added Resellers (VARs).

As of the date of this filing, we have approximately 10 active VARs, and we have sold our gateways to more than 1,000 end-users in the United States and 18 foreign countries.

We have developed an Internet Protocol Gateway which we call the AudioMate 360 IP Gateway .

The AudioMate 360 IP Gateway has been designed to provide an Internet Protocol Gateway to users of unified group communications.

The AudioMate 360 IP Gateway is available in different configurations which enable it to be used with various types of communications equipment.

Although other devices are available that perform the same or similar functions, we believe that our price for the AudioMate 360 IP Gateway is substantially lower than the prices others are presently charging for similar devices.

If we are unable to provide the AudioMate 360 IP Gateway to our prospective customers at substantially lower prices than others are charging for similar gateways, our business will be materially adversely affected.

We do not have any other products at this time.

Need for Unified Group Communications

Unified group communications and coordination within and between agencies for response actions to incidents and emergencies has been a challenge for many years.

The result has been inefficiencies and in some cases the loss of lives, time and money during response activities.

Governmental agencies, hospitals and other organizations experience these same interoperability failures.

We believe that ReadyOp™ software is a new approach to communication, coordination and interoperability that is simple, flexible, low-cost and is already in use by many agencies and enterprises in the governmental and private sectors.

ReadyOp™ Software

ReadyOp is a simple, innovative web-based planning and communications platform for efficiently and effectively planning, managing, communicating, and directing activities within a single organization or in a unified command structure.

ReadyOp is a comprehensive solution with multiple means of communications in a single program, including interoperable communications for radios and other devices.

ReadyOp s flexibility supports daily operations, exercises and response activities including multi-agency and multi-location operations.

ReadyOp is a single platform that provides communications, coordination, collaboration and critical response capabilities for first responders and other organizations.

Communication challenges and coordination failures within and between organizations have been well documented and remain a part of the final report for most every exercise and major incident.

This is especially evident when multiple agencies are involved in a response effort.

In 2003, Homeland Security Presidential Directive-5 (HSPD-5) created the National Incident Management System (NIMS).

NIMS is intended to provide a consistent template for government, private sector, and nongovernment organizations to work together during incidents and emergencies.

NIMS was used to create the Incident Command System (ICS) for first responders.

ICS is essentially an organizational chart with assigned roles for responsibilities during incident response.

Each role has assigned tasks to be accomplished, the goal being that all persons assuming the various roles complete their assigned tasks.

Use of ICS is mandated for all law enforcement, fire and other government agencies at all levels plus seaports, airports, universities and hospitals.

ReadyOp was initially designed based on the structure of ICS, but has evolved into a full response and communications platform.

All VoiceInterop transactions have been recorded as discontinued operations in this Form 10-K.

On February 14, 2020, the distribution of shares was approved by Financial Industry Regulatory Authority ("FINRA") and VoiceInterop was deconsolidated from Cleartronic, Inc.

In October 2019, the Company acquired the ReadyMed software platform from Collabria LLC.

In exchange for this asset, the Company issued 12,000,000 shares of Common stock of the Company.

ReadyMed is a web-based secure communications platform initially designed for the healthcare industry.

This includes hospitals, clinics, doctor's offices, health insurance companies, workers compensation insurance companies and many other segments of the healthcare industry.

The platform provides caregivers with patient tracking capability and allows physicians and other healthcare entities to track patient progress after medical treatment and/or release from hospital care.

The software also enables monitoring and reporting of patients in medium- and long-term care.

Additionally, the platform provides secure communications capabilities and recordkeeping to track the healing process of patients, record their recovery and monitor their medications.

During the year 2020 this software has proved beneficial for multiple clients in the healthcare industry due to the impact of the COVID-19 pandemic.

ReadyOp(tm) Software

ReadyOp(tm) is a proprietary, innovative web-based planning and communications platform for efficiently and effectively planning, managing, communicating, and directing operations and emergency response.

ReadyOp(tm) is used by local, state and federal government agencies, corporations, school districts, utilities, hospitals and others to manage and report daily operations as well as the ability to handle incidents and emergency situations.

ReadyOp(tm) is offered as a software as a service (SAAS) program on an annual contract basis although an increasing number of clients have requested multi-year agreements.

ReadyOp(tm) requires no new or on-site hardware or programming by clients and provides multiple options for communications including radio interoperability using the Company's AudioMate gateways.

Plans and operations can be built and stored securely in ReadyOp™

on a by-location, region and systemwide basis.

Assets can be listed along with their location, person to contact and other information that may be needed.

Diagrams, charts, maps, pictures, report forms and other documentation can be securely stored yet immediately available securely from any location.

ReadyOp(tm) also provides efficient planning and response for responding to disasters and for continuity of operations (COOP) and recovery.

ReadyOp(tm) is the COOP platform for multiple organizations including many federal agencies.

ReadyMed(tm) Software

In October 2019, the Company acquired the ReadyMed software platform from Collabria LLC.

In exchange for this asset, the Company issued 12,000,000 shares of Common stock of the Company.

ReadyMed is a web-based secure communications platform initially designed for the healthcare industry.

This includes hospitals, clinics, doctor's offices, health insurance companies, workers compensation insurance companies and many other segments of the healthcare industry.

The software also enables monitoring and reporting of patients in medium- and long-term care.

Additionally, the platform provides secure communications capabilities and recordkeeping to track the healing process of patients, record their recovery and monitor their medications.

During the year 2020 this software has proved beneficial for multiple clients in the healthcare industry due to the impact of the COVID-19 pandemic.

The Company offers both the ReadyOp and ReadyMed capabilities to clients and usually refers to the platform as ReadyOp to avoid confusion in the marketplace of two products.

AudioMate IP Gateways

The Company offers a proprietary line of Internet Protocol Gateways branded as AudioMate 360 IP Gateway .The AudioMate 360 IP Gateway was designed to provide an Internet Protocol Gateway to users of unified group communications.

The AudioMate 360 IP Gateway is available in different configurations to be used with various types of communications equipment.

The AudioMate units are currently being sold directly to end-users by the Company's sales teams and by Value Added Resellers ("VARs").

More than 1,000 end-users in the United States and 18 foreign countries have purchased the Company's AudioMate gateways.

Although other devices are available that perform the same or similar functions, we believe that our price for the AudioMate 360 IP Gateway is competitive with prices other companies are charging for similar devices.

Patents and Intellectual Property

If we are able to continue our business activities, our business will be dependent on our intellectual property, some of which we have developed for our software and hardware applications.

We do not have any trade secret confidentiality agreements.

For projects that are in development, we intend to rely on intellectual property rights afforded by trademark and trade secret laws, as well as confidentiality procedures and licensing arrangements, to establish and protect our rights to our technology and other intellectual property.

Our business will be dependent in part on our intellectual property.

For projects that are in development, we intend to rely on intellectual property rights afforded by trademark and trade secret laws, as well as confidentiality procedures, licensing arrangements and potential patent filings.

These measures are to establish and protect our rights to the technology and other intellectual property.

We cannot foretell if these procedures and arrangements will be adequate in protecting our intellectual property.

We have filed a patent application with the United States Patent and Trademark Office in connection with various configurations of our AudioMate 360 IP Gateway.

On March 13, 2012, the United States Patent Office notified the Company that U.S.

Patent Number 8,135,001 B1 had been granted for the 34 claims of our patent application for Multi Ad Hoc Interoperable Communicating Networks.

We may file similar patent applications in additional countries.

The claims in the patent application relate to various aspects of the AudioMate 360 IP Gateway.

On March 13, 2012, the United States Patent Office notified us that U.S.

Patent number 8,135,001 B1 had been granted for the 34 claims of our patent application for Multi Ad Hoc Interoperable Communicating Networks.

It may be that one or more of our claims are not meaningful.

It may be that one or more of the claims are not meaningful.

Furthermore, the validity of issued patents is frequently challenged by others.

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A patent application must be reviewed by the Patent Office of each relevant country prior to issuing as a patent and granting exclusive rights.

We have obtained a trademark on ReadyOp.

Because of our limited resources, we may be unable to protect a patent, either owned or licensed, or to challenge others who may infringe upon a patent.

Because many holders of patents in our industry have substantially greater resources than we do and patent litigation is very expensive, we may not have the resources necessary to successfully challenge the validity of patents held by others or withstand claims of infringement or challenges to any patent we may obtain.

Even if we prevail, the cost and management distraction of litigation could have a material adverse effect on us.

Because Internet Protocol Gateways and their related manufacturing processes are covered by a large number of patents and patent applications, infringement actions may be instituted against us if we use or are suspected of using technology, processes or other subject matter that is claimed under patents of others.

Because of limited resources, the Company may be unable to protect a patent, either owned or licensed, or to challenge others who may infringe upon a patent.

Because many holders of patents have substantially greater resources and patent litigation is very expensive, we may not have the resources necessary to successfully challenge the validity of patents held by others or withstand claims of infringement or challenges to any patent the Company may possess or obtain.

Even if we prevail, the cost and management distraction of litigation could have a material adverse effect on the Company.

Internet Protocol Gateways and their related manufacturing processes are covered by a large number of patents and patent applications.

Infringement actions may be instituted against the Company if we use or are suspected of using technology, processes or other subject matter that is claimed under patents of others.

An adverse outcome in any future patent dispute could subject us to significant liabilities to third parties, require disputed rights to be licensed or require us to cease using the infringed technology.

If trade secrets and other means of protection upon which we rely may not adequately protect us, our intellectual property could become available to others.

Although we may rely on trade secrets, copyright law, employee and third-party nondisclosure agreements and other protective measures to protect some of our intellectual property, these measures may not provide meaningful protection to us.

If trade secrets and other means of protection upon which the Company relies may not adequately protect us, the Company's intellectual property could become available to others.

The laws of many foreign countries do not protect intellectual property rights to the same extent as do the laws of the United States, if at all.

Exclusive Licensing Agreement

On May 5, 2017, the Company entered into an Exclusive Licensing Agreement with Sublicensing Terms (the Agreement) with the University of Southern Florida Research Foundation, Inc.

On May 5, 2017, the Company entered into an Exclusive Licensing Agreement with Sublicensing Terms (the "Agreement") with the University of South Florida Research Foundation, Inc.

("USFRF") relating to an exclusive license of certain patent rights in connection with one of USFRF's U.S.

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The Company paid USFRF a License Issue Fee of $3,000 and $7,253.50 as reimbursement of expenses associated with the filing of the Licensed Patent..

The Company agreed to complete the first commercial sale of products to the retail customer on or before January 31, 2019 or USFRF has the right to terminate the agreement.

In addition, the Company agreed that it will have made and tested a prototype by August 31, 2018 or USFRF has the right to terminate the agreement.

The company agreed to pay USFRF a royalty of 3% for sales of all Licensed Products and Licensed Processes and agreed to pay USFRF minimum royalty payments as follows:

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In the event the Company proposes to sell any Equity Securities, then USFRF will have the right to purchase 5% of the securities issued in such offering on the same terms and conditions as are offered to other purchasers in such financing.

Rapid Technological Change Could Render Our Products Obsolete

Our markets are characterized by rapid technological changes, frequent new product introductions and enhancements, uncertain product life cycles, changes in customer requirements, and evolving industry standards.

Rapid Technological Change Could Render the Company's Products Obsolete

The Company's markets are characterized by rapid technological changes, frequent new product introductions and enhancements, uncertain product life cycles, changes in customer requirements, and evolving industry standards.

The introduction of new products embodying new technologies and the emergence of new industry standards could render our existing products obsolete.

Our future success will depend upon our ability to continue to develop and introduce a variety of new products and product enhancements to address the increasingly sophisticated needs of our customers.

We may experience delays in releasing new products and product enhancements in the future.

Material delays in introducing new products or product enhancements may cause customers to forego purchases of our products and purchase those of our competitors.

The Company's future success will depend upon our ability to continue to develop and introduce new products and services to address the increasingly sophisticated needs of customers.

The Company may experience delays in releasing new products, product enhancements and services in the future which may cause customers and prospective to forego purchase and use of our products and purchase those of competitors.

Seasonality of Our Business

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We are affected by inflation along with the rest of the economy.

Specifically, our costs to complete our products could rise if specific components needed incur a rise in cost.

Specifically, our costs to complete our products could rise if specific components needed incur an increase in cost.

Manufacturing and Suppliers

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Avoid costly capital expenditures for the establishment of manufacturing operations;

· Focus on the design, development, sales and support of our hardware products;

Focus on the design, development, sales and support of our products and services;

Leverage the scale, expertise and purchasing power of specialized contract manufacturers.

Currently, we have arrangements for the production of our gateways with a contract manufacturer in Florida.

Our reliance on contract manufacturers involves a number of potential risks, including the absence of adequate capacity, ownership of certain elements of electronic designs, and reduced control over delivery schedules.

Our contract manufacturers can provide us with a range of operational and manufacturing services, including component procurement and performing final testing and assembly of our products.

We intend to depend on our contract manufacturers to procure components and to maintain adequate manufacturing capacity.

We have also relied on a small number of suppliers for several key components utilized in the assembly of our AudioMate 360 IP Gateway .

For example, our contract manufacturer has purchased a key component that is essential to the production of our gateways from a single source supplier.

We have not identified any alternative suppliers for that component.

Our contract manufacturer has maintained relatively low inventories and acquired components only as needed.

As a result, our ability to efficiently respond to customer orders, if any, may be constrained by, among other things, the then-current availability or terms and pricing of necessary components.

We may be unable to obtain a sufficient quantity of these components in a timely manner to meet the demands of our customers.

In addition, we have no control over the prices of these components.

Any delays or any disruption of the supply of these components could also materially and adversely affect our operating results.

The unified group communications industry is extremely competitive.

Over the past year, the number of companies entering our industry has increased dramatically.

Competitive pricing pressures can negatively impact profit margins, if any.

Competitors include Cisco Systems, Inc., Tyco Electronics Ltd., Catalyst Communications Technologies, Inc., Telex, Inc., Federal Signal Corporation and Mutual-Link, Inc.

as well as Motorola and its authorized dealers.

These and other potential competitors are generally large and well capitalized and have substantially more experience than we do in our industry.

Consequently, in order for Cleartronic to be successful in its intended operations, it must be able to compete effectively against its competitors.

If Cleartronic cannot effectively compete for whatever reason, we will not be successful.

Currently, the Company has arrangements for the production of the AudioMate gateways with a contract manufacturer.

The reliance on contract manufacturing involves a number of potential risks, including the absence of adequate capacity, ownership of certain elements of electronic designs, and reduced control over delivery schedules.

The Company's contract manufacturer can provide a range of operational and manufacturing services, including component procurement and performing final testing and assembly of our products.

The Company intends to continue use of contract manufacturers to procure components and to maintain adequate manufacturing capacity.

The unified group communications industry where the Company's gateways are offered is extremely competitive.

The number of companies entering the industry has increased and competitive pricing pressures can negatively impact profit margins.

The Company will continue to offer the AudioMate gateways, but primarily in conjunction with the ReadyOp platform in order to provide radio interoperability.

Competition for an integrated radio and operations platform is limited and the Company will continue to market the ReadyOp/ReadyMed platform, both with the gateways and without.

We are not aware of any direct competitors for ReadyOp and ReadyMed that offer the same combinations of capabilities and function.

However, there are similar programs being marketed that appear similar and are sometimes confused with ReadyOp such as WebEOC and Everbridge.

ReadyOp provides different capabilities and is priced lower than both of these and in fact, has several clients that use one or even both of these programs in addition to ReadyOp.

We do anticipate having increased competition in the future and will continue to develop and enhance the ReadyOp/ReadyMed platform to improve the value and increase the potential market size and growth of our client clientele.

Sales and Marketing

We have marketed our unified group communication solutions and AudioMate 360 IP Gateway through a commissioned sales person.

The majority of our sales leads have come through sales persons, VARs and our website.

If we are able to continue our business activities, we intend to expand the use of commissioned sales representatives to market and sell the ReadyOp™ software solution along with our AudioMate 360 IP Gateway line of Internet Protocol Gateways.

We will continue to use our network of VARs to market our AudioMate 360 IP Gateway .

The ReadyOp/ReadyMed platform is currently marketed through a combination of inside salespersons and outside sales groups.

We intend to expand the use of commissioned inside and outside salespersons and outside groups when travel and other COVID-related restrictions are eased

The Company markets the unified group communication solutions and AudioMate 360 IP Gateways through VARs and commissioned salespersons.

We intend to expand the use of commissioned sales groups and individual sales representatives to market and sell our programs and gateways.

Key Personnel of Cleartronic

Our future financial success depends to a large degree upon the personal efforts of our key personnel.

Moore, our Chief Executive Officer and Director, and Larry M.

Reid, our President, Chief Financial Officer, Principal Accounting Officer, and Secretary and Director, and their intended designees will play the major roles in securing the services of those persons deemed capable to develop and execute upon our business strategy.

While we intend to employ additional executive, development, and technical personnel in order to minimize the critical dependency upon any one person, we may not be successful in attracting and retaining the persons needed.

At present, Cleartronic has two executive officers, Larry M.

Reid and Michael M.

In March 2015, the Company entered into a new employment agreement with the Companys CEO, Larry M.

Moore, our Chief Executive Officer (CEO) and Director, and Larry M.

Reid, our Chief Financial Officer (CFO), Secretary and Director.

They and their designees play the major role in securing persons capable of developing and executing the Company's business strategy.

While the Company intends to employ additional executive, development and technical personnel in order to minimize dependency upon any one person, we may not be successful in attracting and retaining the persons needed.

At present, Cleartronic has two executive officers, Michael M.

Moore and Larry M.

A copy of the employment agreement with Mr.

Moore has been previously filed on January 13, 2016 as an exhibit to a Form 10-K.

Moore is paid a base salary of $16,667 per month.

"Certain Relationships and Related Transactions and Director Independence."

In March 2015, the Company entered into a new employment agreement with the Company's CFO, Larry M.

Reid (the "Agreement").

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Reid agreed to remit 2.0 billion shares of common stock back to the Company in exchange for 200,000 shares of Series C Convertible Preferred stock with a fair value of $252,000.

Unless Cleartronic shall have given Mr.

Moore written notice at least 30 days prior to the Termination Date, the Agreement shall automatically renew and continue in effect for additional one-year periods, provided, however, that we may, at our election at any time after the expiration of the initial term of the Agreement, give Mr.

Reid notice of Termination.

Reid will be paid a base salary of $8,000 per month.

Reid is paid a base salary of $8,000 per month.

A copy of the employment agreement with Mr.

Reid has been previously filed on March 18, 2015 with the SEC as an exhibit to a Form 8-K.

Moore will be paid a base salary of $16,667 per month.

A copy of the employment agreement with Mr.

Moore has been previously filed on January 13, 2016 as an exhibit to a Form 10-K.

Certain Relationships and Related Transactions and Director Independence.

Adequacy of Working Capital for Cleartronic

We estimate that we will need at least $1.4 million to continue operations over the next 12 months.

We will apply great efforts to raise through equity or debt offerings what we feel is sufficient working capital for our intended business plan by various means.

If we are not able to raise additional capital, we will not be able to continue operations and our business may fail.

Unless the Company shall have given Mr.

Reid written notice at least 30 days prior to the Termination Date, the employment agreements automatically renew and continue in effect for additional one-year periods.

The Company has the election at any time after the expiration of the initial term of the Mr.

Reid's Agreement to give Mr.

Reid notice of Termination.

The Financial Results for Cleartronic May Be Affected by Factors Outside of Our Control

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We may be unable to adjust spending rapidly enough to compensate for any unexpected revenues shortfall.

Accordingly, any significant shortfall in revenues in relation to our planned expenditures would materially and adversely affect our business, operating results, and financial condition.

Accordingly, any significant shortfall in revenue in relation to our planned expenditures could materially and adversely affect our business, operating results, and financial condition.

Further, we believe that period-to-period comparisons of our operating results are not necessarily a meaningful indication of future performance.

As of the date of this report, we have eight employees, Michael M.

Moore, our Chief Executive Officer and Director, Larry M.

Reid, our President, Chief Financial Officer, Principal Accounting Officer, Secretary, and Director.

, John Ohl, Engineering Director ReadyOp communications, Inc., Gene Hubbard, Technical Assistant ReadyOp Communications, Inc, Jennifer Ohl, Customer Service Manager, ReadyOp Communications, Inc.

and Gabriel Saffold, Director Research and Development.

Transfer Agent

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Unresolved Staff Comments.

We lease approximately 1,700 square feet for our principal offices in Boca Raton, Florida, from an unaffiliated party at a monthly rental of approximately $3,630.

We sub-lease approximately 1,700 square feet for our principal offices in Boca Raton, Florida, from VoiceInterop, Inc.

The monthly rent is $1,400 and provides for annual increases of base rent of 4% until the expiration date.

The lease expires on November 30, 2021.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business