What changed in this filing

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Item 1. Financial Statements

2021-08-16 compared with 2021-05-17 · 257 added, 194 removed, 373 unchanged (55% of the section changed)

3 unchanged sentences

CONDENSED CONSOLIDATED BALANCE SHEETS

March 31, 2021

September 30, 2020

June 30, 2021

Current assets:

7 unchanged sentences

Total other assets

LIABILITIES AND STOCKHOLDERS' DEFICIT

LIABILITIES AND STOCKHOLDERS'

Current liabilities:

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Commitments and Contingencies (See Note 8)

Stockholders' deficit:

Series A preferred stock - $.00001 par value;

1,250,000 shares authorized,

512,996 issued and outstanding, respectively.

Series B preferred stock - $.00001 par value;

10 shares authorized,

0 shares issued and outstanding, respectively.

Series C preferred stock - $.00001 par value;

50,000,000 shares authorized,

3,911,715 and 4,433,375 shares issued and outstanding, respectively

Series D preferred stock - $.00001 par value;

10,000,000 shares authorized,

670,904 shares issued and outstanding, respectively.

Series E preferred stock - $.00001 par value, 10,000,000 shares authorized,

3,000,000 shares issued and outstanding, respectively.

Common stock - $.00001 par value;

5,000,000,000 shares authorized,

226,602,935 and 223,994,635 shares issued and outstanding, respectively

Stockholders'

Series A preferred stock - $.

00001 par value;

1,250,000 shares authorized, 512,996 issued and outstanding, respectively.

Series B preferred stock - $.

00001 par value;

10 shares authorized, 0 shares issued and outstanding, respectively.

Series C preferred stock - $.

00001 par value;

50,000,000 shares authorized, 3,911,715 and 4,433,375 shares issued and outstanding, respectively

Series D preferred stock - $.

00001 par value;

10,000,000 shares authorized, 670,904 shares issued and outstanding, respectively.

Series E preferred stock - $.

00001 par value, 10,000,000 shares authorized, 3,000,000 shares issued and outstanding, respectively.

Common stock - $.

00001 par value;

5,000,000,000 shares authorized, 226,602,935 and 223,994,635 shares issued and outstanding, respectively

Additional paid-in capital

Accumulated Deficit

Total stockholders' deficit

Total liabilities and stockholders' deficit

( 15,884,052 )

( 16,055,841 )

Total stockholders'

Total liabilities and stockholders'

The accompanying notes are an integral part of these condensed consolidated unaudited financial statements

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CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

For the Three Months ended March 31, 2021

For the Three Months ended March 31, 2020

For the Six Months ended March 31, 2021

For the Six Months ended March 31, 2020

For the Three Months ended June 30, 2021

For the Three Months ended June 30, 2020

For the Nine Months ended June 30, 2021

For the Nine Months ended June 30, 2020

Cost of Revenue

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Total Operating Expenses

Other expense and interest expense

Total Other Expense

Gain on the settlement and reversal of accounts payable

Interest expense, net

Total Other Income(Expense)

Income from continuing operations before income taxes

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Discontinued operations

Loss from discontinued operations

Loss from discontinued operations before income taxes

Provision for Income taxes from discontinued operations

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Loss from discontinued operations

Net income per common share - basic and diluted

Weighted Average of number of shares outstanding

basic and diluted

Net income per common share - basic

Net income per common share - diluted

Weighted Average of number of shares outstanding - basic

Weighted Average of number of shares outstanding - diluted

The accompanying notes are an integral part of these condensed consolidated unaudited financial statements

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CONDENSED CONSOLIDATED STATEMENT OF CASH FLOW

For six months

March 31, 2021

March 31, 2020

For nine months

June 30, 2021

June 30, 2020

Cash Flows From Operating Activities

Adjustments to reconcile net income to net cash provided by operating activities:

Adjustments to reconcile net income to net cash provided by (used in) operating activities:

Amortization of ReadyOp software platform

Depreciation expense

Gain on the settlement and reversal of accounts payable

Provision (Recovery) for bad debt

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Prepaid expenses and other current assets

Due from related party

Assets from discontinued operations

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Liabilities from discontinued operations

Net Cash Provided By Operating Activities

Net Cash Provided By (Used In) Operating Activities

Cash Flows From Investing Activities

Purchase of fixed assets

Issuance of note receivable

Net Cash Used in Investing Activities

Cash Flows From Financing Activities

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AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT

FOR THE THREE AND SIX MONTHS ENDED MARCH 31, 2021

Series A Preferred Stock

Series B Preferred Stock

Series C Preferred Stock

Series D Preferred Stock

Series E Preferred Stock

Stockholders'

Balance at September 30, 2020

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS'

FOR THE THREE AND NINE MONTHS ENDED JUNE 30, 2021

Preferred Stock

Stockholders'

Balance at March 31, 2021 (Unaudited) 

( 15,949,295 )

Series C Convertible Preferred shares exchanged for common shares

Net income for the six months ended March 31, 2021

Balance at March 31, 2021 (Unaudited)

Net income for the three months ended June 30, 2021

Balance at June 30, 2021  

( 15,884,052 )

Balance at December 31, 2020 (Unaudited)

Preferred Stock

Stockholders'

Balance at September 30, 2020 

( 16,055,841 )

Series C Convertible Preferred shares exchanged for common shares

Net income for the three months ended March 31, 2021

Balance at March 31, 2021 (Unaudited)

Net income for the nine months ended June 30, 2021

Balance at June 30, 2021  

( 15,884,052 )

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AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT

FOR THE THREE AND SIX MONTHS ENDED MARCH 31, 2020

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS'

FOR THE THREE AND NINE MONTHS ENDED JUNE 30, 2020

(Restated and Unaudited)

Series A Preferred Stock

Series B Preferred Stock

Series C Preferred Stock

Series D Preferred Stock

Series E Preferred Stock

Stockholders'

Balance at September 30, 2019

$ (16,221,110)

$ (1,177,381)

Net loss for six months ended March 31 ,2020

Deconsolidation of Voiceintrop, Inc.

Acquisition of ReadyMed platform in exchange for common shares

Preferred Stock

Stockholders'

Balance at March 31, 2020 (Restated and Unaudited)

( 16,167,449 )

Balance at December 31, 2019 (Restated and Unaudited)

Net income for three months ended June 30, 2020

Balance at June 30, 2020 (Restated and Unaudited)

( 16,103,433 )

Preferred Stock

Stockholders'

Balance at September 30, 2019 

( 16,221,110 )

Deconsolidation of Voiceintrop, Inc.

Net income for three months ended March 31 ,2020

Balance at March 31, 2020 (Restated and Unaudited)

( 1,177,381 )

Deconsolidation of Voiceintrop, Inc.

Acquisition of ReadyMed platform in exchange for common shares

Net income for nine months ended June 30, 2020

Balance at June 30, 2020 (Restated and Unaudited)

( 16,103,433 )

The accompanying notes are an integral part of these condensed consolidated unaudited financial statements

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Notes to Condensed Consolidated Financial Statements

March 31, 2021

June 30, 2021

NOTE 1 - ORGANIZATION

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(the "Company") was incorporated in Florida on November 15, 1999.

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

("ReadyOp"), a Florida corporation incorporated on September 15, 2014.

ReadyOp facilitates the marketing and sales of subscriptions to the ReadyOp ™ and ReadyMed ™ platform and the AudioMate IP gateways discussed below.

ReadyOp facilitates the marketing and sales of subscriptions to the ReadyOp ™

and ReadyMed ™

platform and the AudioMate IP gateways discussed below.

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

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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 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.

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

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 platforms.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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They may not include all information and footnotes required by United States generally accepted accounting principles for complete financial statements.

However, except as disclosed herein, there have been no material changes in the information disclosed in the notes to the financial statements for the year ended September 30, 2020 included in the Company's Annual Report on Form 10-K filed with the United States Securities and Exchange Commission.

The unaudited interim consolidated financial statements should be read in conjunction with those financial statements included in the Form 10-K.

In the opinion of management, all adjustments considered necessary for a fair presentation, consisting solely of normal and recurring adjustments have been made.

Operating results for the three and six months ended March 31, 2021 are not necessarily indicative of the results that may be expected for the fiscal year ended September 30, 2021.

Operating results for the three and nine months ended June 30, 2021 are not necessarily indicative of the results that may be expected for the fiscal year ended September 30, 2021.

USE OF ESTIMATES

In preparing the financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the balance sheet and operations for the reporting period.

Although these estimates are based on management's knowledge of current events and actions it may undertake in the future, they may ultimately differ from actual results.

Significant estimates include the assumptions used in valuation of deferred tax assets, estimated useful life of intangible assets and property and equipment, valuation of inventory and allowance for doubtful accounts.

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For financial statement purposes, the Company considers all highly liquid investments purchased with original maturities of three months or less to be cash equivalents.

The Company did not own any cash equivalents on March 31, 2021 and September 30, 2020.

The Company did not own any cash equivalents on June 30, 2021 and September 30, 2020.

ACCOUNTS RECEIVABLE

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The amount listed as Deferred Revenue is amortized monthly over the license period.

The Company provided $11,000 and $6,000 allowances for doubtful accounts as of March 31, 2021 and September 30, 2020, respectively.

The Company provided $ 6,000 and $ 6,000 allowances for doubtful accounts as of June 30, 2021 and September 30, 2020, respectively.

PROPERTY AND EQUIPMENT

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ReadyMed is a web based secure communication platform designed for the health care industry.

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

It provides hospitals with patient tracking capability within the hospital.

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Accordingly, the ReadyMed software platform purchased price was adjusted.

As of March 31, 2021 and September 30, 2020, the ReadyMed software platform is valued at historical costs of $0 (See Notes 6 and 7).

As of June 30, 2021 and September 30, 2020, the ReadyMed software platform is valued at historical costs of $ 0 (See Notes 6 and 7).

In November 2016, the Company acquired the ReadyOp software platform and the Collabria customer base from Collabria LLC.

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The ReadyOp software platform was valued at $ 195,600 to be amortized over three years .

The amortization expense for the six months ended March 31, 2021 and 2020 was $0 and $10,878, respectively.

As of March 31, 2021 and September 30, 2020, ReadyOp software platform has been fully amortized.

The amortization expense for the nine months ended June 30, 2021 and 2020 was $ 0 and $ 10,878 , respectively.

The amortization expense for the three months ended June 30, 2021 and 2020 was $ 0 and $ 0 , respectively.

As of June 30, 2021 and September 30, 2020, ReadyOp software platform has been fully amortized.

CONCENTRATION OF CREDIT RISK

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Deposits held in non interest-bearing transaction accounts are insured up to a maximum of $ 250,000 at all FDIC-insured institutions.

As of March 31, 2021 and September 30, 2020, the Company had no cash balances in excess of FDIC insurance limits.

As of June 30, 2021 and September 30, 2020, the Company had $ 51,690 and $ 0 , respectively, in excess of FDIC insurance limits.

RESEARCH AND DEVELOPMENT COSTS

The Company expenses research and development costs as incurred.

For the six months ended March 31, 2021 and 2020, the Company had $70,327 and $86,801, respectively, in research and development costs from continuing operations.

For the three months ended March 31, 2021 and 2020, the Company had $39,538 and $31,072, respectively, in research and development costs from continuing operations.

For the nine months ended June 30, 2021 and 2020, the Company had $ 118,612 and $ 114,993 , respectively, in research and development costs .

For the three months ended June 30, 2021 and 2020, the Company had $ 48,285 and $ 28,192 , respectively, in research and development costs.

REVENUE RECOGNITION AND DEFERRED REVENUES

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Deferred subscriber acquisition costs will be amortized over the license period.

As of March 31, 2021 and September 30, 2020, respectively, the Company recorded $9,100 and $20,900, respectively, in deferred subscriber costs, which is included as a component of prepaid expense.

As of June 30, 2021 and September 30, 2020, respectively, the Company recorded $ 56,866 and $ 20,900 , respectively, in deferred subscriber costs, which is included as a component of prepaid expense.

In transactions in which hardware is sold to a customer, the Company recognizes the revenue when the hardware has been shipped to the customer.

The hardware supplied by the Company does not require a related software license and can be operated and fully functional without the Company's software.

From time to time clients request special training meetings.

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Accordingly, for purposes of dilutive earnings per share, the Company excluded the effect of warrants and options.

As of March 31, 2021 and 2020, we had no options and warrants outstanding.

As of March 31, 2021 and 2020, we had 512,996 shares of Series A Convertible Preferred stock outstanding, which are convertible into 51,299,600 shares of common stock.

As of March 31, 2021 and 2020, we had 3,911,715 and 4,433,375 shares of Series C Convertible Preferred stock outstanding, respectively, which are convertible into 19,558,575 and 22,166,875 shares of common stock, respectively.

As of March 31, 2021 and 2020, we had 670,904 shares of Series D Preferred stock outstanding which are convertible into 3,354,520 shares of common stock.

As of March 31, 2021 and 2020, we had 3,000,000 shares of Series E Convertible Preferred stock outstanding which are convertible into 300,000,000 shares of common stock.

As of June 30, 2021 and 2020, we had no options and warrants outstanding.

As of June 30, 2021 and 2020, we had 512,996 shares of Series A Convertible Preferred stock outstanding, which are convertible into 51,299,600 shares of common stock.

As of June 30, 2021 and 2020, we had 3,911,715 and 4,433,375 shares of Series C Convertible Preferred stock outstanding, respectively, which are convertible into 19,558,575 and 22,166,875 shares of common stock, respectively.

As of June 30, 2021 and 2020, we had 670,904 shares of Series D Preferred stock outstanding which are convertible into 3,354,520 shares of common stock.

As of June 30, 2021 and 2020, we had 3,000,000 shares of Series E Convertible Preferred stock outstanding which are convertible into 300,000,000 shares of common stock.

The table below details the computation of basic and diluted earnings per share ("EPS") for the three months ended June 30, 2021 and 2020:

For the three months ended

June 30, 2021

For the three months ended

June 30, 2020

Net income attributable to common stockholders for the period

Weighted average number of shares outstanding

Basic earnings per share

The following table sets for the computation of diluted earnings per share:

For the three months ended

June 30, 2021

For the three months ended

June 30, 2020

Net income attributable to common stockholders for the period

Preferred stock dividends

Adjusted net income

Weighted average number of shares outstanding

Shares issued upon conversion of preferred stock

Weighted average number of common and common equivalent shares

Diluted earnings per share

The table below details the computation of basic and diluted earnings per share ("EPS") for the nine months ended June 30, 2021 and 2020:

For the nine months ended

June 30, 2021

For the nine months ended

June 30, 2020

Net income attributable to common stockholders for the period

Weighted average number of shares outstanding

Basic earnings per share

The following table sets for the computation of diluted earnings per share:

For the nine months ended

June 30, 2021

For the nine months ended

June 30, 2020

Net income attributable to common stockholders for the period

Preferred stock dividends

Adjusted net income

Weighted average number of shares outstanding

Shares issued upon conversion of preferred stock

Weighted average number of common and common equivalent shares

Diluted earnings per share

FAIR VALUE OF FINANCIAL INSTRUMENTS

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as the price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date.

There was no impact relating to the adoption of ASC 820 to the Company's consolidated financial statements.

ASC 820 also describes three levels of inputs that may be used to measure fair value:

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Inputs that are generally observable.

These inputs may be used with internally developed methodologies that result in managements best estimate of fair value.

These inputs may be used with internally developed methodologies that result in management’s best estimate of fair value.

Financial instruments consist principally of cash, accounts receivable, prepaid expenses and other current assets, accounts payable, accrued expenses and deferred revenue.

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The carrying amounts approximate fair value.

It is management's opinion that the Company is not exposed to any significant currency or credit risks arising from these financial instruments.

Inventory consists of components held for assembly and finished goods held for resale or to be utilized for installation in projects.

Inventory is valued at lower of cost or net realizable value on a first-in, first-out basis.

The Company's policy is to record a reserve for technological obsolescence or slow-moving inventory items.

The Company only carries finished goods to be shipped along with completed circuit boards and parts necessary for final assembly of finished product.

All existing inventory is considered current and usable.

The Company recorded no reserve for obsolete inventory as of March 31, 2021 and September 30, 2020, respectively.

The Company recorded no reserve for obsolete inventory as of June 30, 2021 and September 30, 2020, respectively.

EQUITY INSTRUMENTS ISSUED TO PARTIES OTHER THAN EMPLOYEES FOR ACQUIRING GOODS OR SERVICES

The Company accounts for stock-based instruments issued for services in accordance with ASC 718 "Compensation Stock Compensation."

The Company accounts for stock-based instruments issued for services in accordance with ASC 718 "Compensation –

Stock Compensation."

ASC 718 requires companies to recognize in the statement of operations the grant-date fair value of stock options and other equity-based compensation issued.

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Advertising costs are expensed as incurred.

The Company had advertising costs of $8,706 and $14,816 during the six months ended March 31, 2021 and 2020, respectively, and $5,174 and $20,194 during the three months ended March 31, 2021 and 2020, respectively.

The Company had advertising costs of $ 12,583 and $ 25,691 during the nine months ended June 30, 2021 and 2020, respectively, and $ 3,877 and $ 5,497 during the three months ended June 30, 2021 and 2020, respectively.

RECENT ACCOUNTING PRONOUNCEMENTS

All newly issued accounting pronouncements but not yet effective have been deemed either immaterial or not applicable

In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740) :

Simplifying the Accounting for Income Taxes, as part of its overall simplification initiative to reduce costs and complexity of applying accounting standards while maintaining or improving the usefulness of the information provided to users of financial statements.

The FASB's amendments primarily impact ASC 740, Income Taxes , and may impact both interim and annual reporting periods.

ASU 2019-12 will be effective for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years and early adoption is permitted.

The Company is currently evaluating the impact of adopting ASU 2019-12.

All other newly issued accounting pronouncements but not yet effective have been deemed either immaterial or not applicable.

NOTE 3 - PROPERTY AND EQUIPMENT

At March 31, 2021 and September 30, 2020, property and equipment, net, is as follows:

March 31, 2021

At June 30, 2021 and September 30, 2020, property and equipment, net, is as follows:

June 30, 2021

September 30, 2020

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Total Property and Equipment, net

Depreciation expense for the three months ended March 31, 2021 and 2020, was $451 and $0, respectively.

Depreciation expense for the six months ended March 31, 2021 and 2020, was $902 and $0, respectively

Depreciation expense for the three months ended June 30, 2021 and 2020, was $ 521 and $ 150 , respectively.

Depreciation expense for the nine months ended June 30, 2021 and 2020, was $ 1,423 and $ 150 , respectively

NOTE 4 - NOTES RECEVABLE

On June 18, 2020, the Company entered into an unsecured note receivable in the amount of $ 10,000 with a shareholder which bears interest at 6 % and matures on August 31, 2020 .

The maturity of the note receivable in the amount of $10,000 was extended to March 31, 2021 (See Note 7).

As of March 31, 2021, interest receivable was $480.

The note is currently in default.

The maturity of the note receivable in the amount of $10,000 was extended to August 31, 2021 (See Note 7).

As of June 30, 2021, interest receivable was $ 638 .

On June 25, 2020, the Company entered into an unsecured note receivable in the amount of $ 15,000 with a shareholder which bears interest at 6 % and matures on August 31, 2020 .

The maturity of the note receivable in the amount of $15,000 was extended to March 31, 2021 (See Note 7).

As of March 31, 2021, interest receivable was $702.

The note is currently in default.

The maturity of the note receivable in the amount of $15,000 was extended to August 31, 2021 (See Note 7).

As of June 30, 2021, interest receivable was $ 938 .

Interest income for the three months ended June 30, 2021 and 2020 was $ 395 and $ 0 , respectively.

Interest income for the nine months ended June 30, 2021 and 2020 was $ 1,167 and $ 0 , respectively.

On July 15, 2021, a shareholder returned 875,000 shares of Company's common stock to the Company in exchange for the two notes receivable in the total sum of $ 25,000 and $ 1,576 in interest receivable (See Notes 7 and 11).

NOTE 5 - NOTES PAYABLE

Notes payable to Stockholders

As of March 31, 2021 and September 30, 2020, the Company had unsecured notes payable to stockholders totaling $0 and $48,447, respectively.

As of June 30, 2021 and September 30, 2020, the Company had unsecured notes payable to stockholders totaling $ 0 and $ 48,447 , respectively.

One note with a principal balance of $ 17,588 was due on December 31, 2019.

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This note requires a monthly payment of $ 3,405 for the next 24 months.

As of March 31, 2021 and September 30, 2020 the balance due was $0 and $48,447, respectively.

As of March 31, 2021, the note balance was paid in full.

Interest expense on the notes payable to stockholders was $542 and $2,936 for the three months ended March 31, 2021 and 2020, respectively.

Interest expense on the notes payable to stockholders was $2,040 and $5,085 for the six months ended March 31, 2021 and 2020, respectively.

March 31, 2021

As of September 30, 2020 the balance due was $ 48,447 .

As of June 30, 2021, the note balance was paid in full.

Interest expense on the notes payable to stockholders was $ 0 and $ 2,116 for the three months ended June 30, 2021 and 2020, respectively.

Interest expense on the notes payable to stockholders was $ 2,040 and $ 7,201 for the nine months ended June 30, 2021 and 2020, respectively.

June 30, 2021

September 30,

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As of September 30, 2020, the loan balance of $ 9,000 was paid in full and $7,262 included in liabilities from discontinued operations was deconsolidated as of February 14, 2020 (See Notes 7 and 9).

Note Payable PPP Loan

Note Payable –

On June 10, 2020, the Company, was granted a loan (the "Loan") from Bank of America, N.A., in the aggregate amount of $ 106,727 , pursuant to the Paycheck Protection Program (the "PPP") under Division A, Title I of the CARES Act, which was enacted March 27, 2020.

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Under the terms of the PPP, certain amounts of the Loan may be forgiven if they are used for qualifying expenses as described in the CARES Act.

March 31, 2021

On July 20, 2021, the loan was 100 % forgiven by the SBA.

As a result, the Company will record a gain on debt forgiveness t of PPP loan in the amount of $ 106,727 in the fourth quarter of 2021.

(See Note 11).

June 30, 2021

September 30,

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Preferred Stock Dividends

As of March 31, 2021 and September 30, 2020, the cumulative arrearage of undeclared dividends for Series A Preferred stock totaled $103,532 and $83,071, respectively.

As of June 30, 2021 and September 30, 2020, the cumulative arrearage of undeclared dividends for Series A Preferred stock totaled $ 113,655 and $ 83,071 , respectively.

Common stock issued for Conversion of C Preferred

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On April 23, 2018, the board of Directors declared a stock dividend for common stock shareholders and for certain classes of preferred stock shareholder of the Company.

That each common shareholder would receive .075 shares of VoiceInterop common stock for each one (1) share of Cleartronic stock held by the shareholder, and that each shareholder of Series C and D Preferred stock shall receive .375 shares of VoiceInterop common stock for each one (1) share of Series C or Series D Preferred stock held by the shareholder.

That each common shareholder would receive .

075 shares of VoiceInterop common stock for each one (1) share of Cleartronic stock held by the shareholder, and that each shareholder of Series C and D Preferred stock shall receive .

375 shares of VoiceInterop common stock for each one (1) share of Series C or Series D Preferred stock held by the shareholder.

The record date of the dividend distribution shall be defined as the first business day following an effective statement from the United States Securities and Exchange Commission ("SEC") regarding a pending S-1 filing.

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NOTE 7 - RELATED PARTY TRANSACTIONS

The Company leases its office space from VoiceInterop the Company's former wholly owned subsidiary and now 96% owned by our shareholders for approximately $1,400 per month.

The Company leases its office space from VoiceInterop the Company's former wholly owned subsidiary and now 96 % owned by our shareholders for approximately $ 1,400 per month.

On February 14, 2020, VoiceInterop was deconsolidated and is no longer our subsidiary.

Rent expense during the three months ended March 31, 2021 and March 31, 2020 was $4,482, and $4,291, respectively.

Rent expense incurred during the six months ended March 31, 2021 and 2020 was $8,955 and $8,491, respectively (See Note 8).

Rent expense during the three months ended June 30, 2021 and June 30, 2020 was $ 4,473 , and $ 4,905 , respectively.

Rent expense incurred during the nine months ended June 30, 2021 and 2020 was $ 13,428 and $ 27,059 , respectively (See Note 8).

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

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The note requires a monthly payment of $ 3,405 for the next 24 months.

As March 31, 2021 and September 30, 2020, the balance due was $0 and $48,447, respectively.

As of March 31, 2021, the note balance was paid in full (See Note 5).

As September 30, 2020, the balance due was $ 48,447 .

As of June 30, 2021, the note balance was paid in full (See Note 5).

On June 18, 2020, the Company entered into an unsecured note receivable in the amount of $ 10,000 with a shareholder which bears interest at 6 % and matures on August 31, 2020 .

The maturity of the note receivable in the amount of $10,000 was extended to March 31, 2021 (See Note 4).

The note is currently in default.

The maturity of the note receivable in the amount of $10,000 was extended to August 31, 2021 (See Note 4).

On June 25, 2020, the Company entered into an unsecured note receivable in the amount of $ 15,000 with a shareholder which bears interest at 6 % and matures on August 31, 2020 .

The maturity of the note receivable in the amount of $15,000 was extended to March 31, 2021 (See Note 4).

The note is currently in default.

As of March 31, 2021, the Company advanced $16,495 to VoiceInterop, the Company's former wholly owned subsidiary and now 96% owned by our shareholders.

The maturity of the note receivable in the amount of $15,000 was extended to August 31, 2021 (See Note 4).

As of June 30, 2021, the Company advanced $ 20,968 to VoiceInterop, the Company's former wholly owned subsidiary and now 96 % owned by our shareholders.

The amount is included in due from related party on the consolidated balance sheet.

The amount is due on demand and is non-interest bearing.

The amount is due on demand and bears interest at 5 % effective June 30, 2021.

NOTE 8 - COMMITMENTS AND CONTINGENCIES

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Upon the deconsolidation, the Company subleases the office space from VoiceInterop at approximately $ 1,400 per month.

Rent expense incurred during the three months ended March 31, 2021 and 2020 was $4,482 and $4,291, respectively.

Rent expense incurred during the six months ended March 31, 2021 and 2020 was $8,955 and $8,491, respectively.

Rent expense incurred during the three months ended June 30, 2021 and 2020 was $ 4,473 and $ 4,905 , respectively.

Rent expense incurred during the nine months ended June 30, 2021 and 2020 was $ 13,428 and $ 27,059 , respectively.

Revenue and Accounts Receivable Concentration

One customer accounted for more than 10% of the Companys revenue for the six months ended March 31, 2021.

No customer accounted for more than 10% of the Company's revenue for the six months ended March 31, 2020.

As of March 31, 2021, one customer accounted for approximately 20% of the Company's total outstanding accounts receivable.

As of September 30, 2020, two customers accounted for approximately 29% of the Company's total outstanding accounts receivable with each customer representing 18% and 11%, respectively.

No customer accounted for more than 10 % of the Company's revenue for the nine months ended June 30, 2021.

No customer accounted for more than 10 % of the Company's revenue for the nine months ended June 30, 2020.

As of June 30, 2021, one customer accounted for approximately 17 % of the Company's total outstanding accounts receivable.

As of September 30, 2020, two customers accounted for approximately 29 % of the Company's total outstanding accounts receivable with each customer representing 18 % and 11 %, respectively.

Major Supplier and Sole Manufacturing Source

16 unchanged sentences

The term of agreement is for a one-year period beginning on the effective date and shall automatically renew and continue in effect for additional one-year periods.

For the year ended September 30, 2020, the CFO received a onetime bonus of $15,356 as an additional compensation for services performed.

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.

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

Patent Applications.

Both parties recognize that the research and development work provided by the Company was sufficient for USFRF to enter into the Agreement with the Company.

The Agreement is effective April 25, 2017 and continues until the later of the date that no Licensed Patent remains a pending application or an enforceable patent or the date on which the Licensee's obligation to pay royalties expires.

The Company paid USFRF a License Issue Fee of $ 3,000 and $ 7,253 as reimbursement of expenses associated with the filing of the Licensed Patent.

3 unchanged sentences

As of September 30, 2020, the Company has recorded $ 2,000 for the minimum royalty for the fiscal year ended 2020.

NOTE 9 DISCONTINUED OPERATIONS

NOTE 9 –

DISCONTINUED OPERATIONS

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

On April 23, 2018, the board of Directors declared a stock dividend for certain shareholders of the Company.

The Company distributed to its shareholders owning Common Stock and Series C and D Preferred stock an aggregate of

17,819,827 shares of shares of Common Stock of VoiceInterop.

Each common shareholder received .075 shares of VoiceInterop common stock for each one (1) share of Cleartronic stock held by the shareholder, and each shareholder of Series C and D Preferred stock received 0.375 shares of VoiceInterop common stock for each one (1) share of Series C or Series D Preferred stock held by the shareholder.

On November 14, 2019, VoiceInterop, Inc.'s, S-1 Registration Statement was declared effective by Securities and Exchange Commission.

The Company distributed to its shareholders owning Common Stock and Series C and D Preferred stock an aggregate of 17,819,827 shares of shares of Common Stock of VoiceInterop.

Each common shareholder received .

075 shares of VoiceInterop common stock for each one (1) share of Cleartronic stock held by the shareholder, and each shareholder of Series C and D Preferred stock received 0.375 shares of VoiceInterop common stock for each one (1) share of Series C or Series D Preferred stock held by the shareholder.

On November 14, 2019, VoiceInterop, Inc.'s, S-1 Registration Statement was declared effective by Securities and Exchange Commission.

On February 14, 2020, the distribution of shares was approved by FINRA and completed and deconsolidation was completed.

1 unchanged sentence

and discontinued operations are not presented.

The following table illustrates the reporting of the discontinued operations included in the Statements of Operations for the period from January 1, 2020 to February 14, 2020.

For the period

From January 1, 2020

February 14, 2020

Cost of Revenue

Operating Expenses:

Selling expenses

Administrative expenses

Professional Fees

Total Operating Expenses

Loss from operations

Other Income (Expense)

Interest and other expense

Total Other Income (Expense)

Loss Before Income Taxes

Provision for Income Taxes

Loss from discontinued operations

The following table illustrates the reporting of the discontinued operations included in the Statements of Operations for the period from October 1, 2019 to February 14, 2020.

32 unchanged sentences

Deferred revenue, net of current

Deferred rent, long term portion

Operating lease liability, net of current

Deferred revenue, current portion

Total Long term liabilities from discontinued operations

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Operating lease asset and liability

The Company leases its office space from VoiceInterop the Company's former wholly owned subsidiary and now 96% owned by our shareholders.

The Company leases its office space from VoiceInterop the Company's former wholly owned subsidiary and now 96 % owned by our shareholders.

On February 14, 2020, VoiceInterop was deconsolidated and is no longer our subsidiary.

Rent expense paid to the related party was $8,955 and $22,154 for the six months ended March 31, 2021 and 2020, respectively.

Rent expense paid to the related party was $ 13,428 and $ 27,059 for the nine months ended June 30, 2021 and 2020, respectively.

As of February 14, 2020, the operating lease liabilities of $ 66,114 and lease assets of $ 62,226 were included in liabilities from discontinued operations and were deconsolidated.

NOTE 10 - RESTATEMENT

The Company is restating its Condensed Consolidated Unaudited Statement of Operations, Condensed Consolidated Unaudited Statement of Cash Flow, and Condensed Consolidated Unaudited Statement of Changes in Stockholders' Deficit for the three and six months ended March 31, 2020.

The restatement shows the previously filed financial statements, the restatement adjustments and as restated columns for the Condensed Consolidated Unaudited Statement of Operations, Condensed Consolidated Unaudited Statement of Cash Flow, and Condensed Consolidated Unaudited Statement of Changes in Stockholders' Deficit for the three and six months ended March 31, 2020.

The restatement of our financial statements in this Form 10-Q reflects the correction of certain identified errors related to the valuation of ReadyMed software platform acquired in October 2019.

The table below present the impact of the restatement in the Company's condensed consolidated unaudited financial statements:

For the Three Months ended March 31, 2020

As previously

Deficit for the three and nine months ended June 30, 2020.

The restatement of our financial statements in this Form 10-Q reflects the correction of certain identified miscalculations related to the valuation of the ReadyMed software platform acquired in October 2019.

The table below present the impact of the restatement in the Company's condensed consolidated unaudited financial statements:

For the Three Months ended June 30, 2020

As previously reported

Statement of Operations

Administrative expense

Amortization and depreciation

Total Operating Expense

Income/(Loss) from continuing operations before income taxes

Net Income/(Loss)

Net Income/(Loss) attributable to common stockholders

Net Income/(Loss) per share basic and diluted

Income/(Loss) from continuing operations

Income/(Loss) per common share - basic and diluted

For the Six Months ended March 31, 2020

As previously

Income from continuing operations before income taxes

Net Income attributable to common stockholders

Income from continuing operations

Net Income per common share - basic and diluted

For the Nine Months ended June 30, 2020

As previously reported

Statement of Operations

Administrative expense

Amortization and depreciation

3 unchanged sentences

Net Income/(Loss) attributable to common stockholders

Net Income/(Loss) per share basic and diluted

Income/(Loss) from continuing operations

Income/(Loss) per common share - basic and diluted

March 31, 2020

As previously

Statement of Changes in Stockholders Deficit

Income from continuing operations

Net Income/(Loss) per common share - basic and diluted

June 30, 2020

As previously reported

Statement of Changes in Stockholders’

Additional Paid in Capital

Accumulated Deficit

Total Stockholders Deficit

Total Liabilities and Stockholders Deficit

March 31, 2020

As previously

( 16,241,515 )

( 16,103,433 )

Total Stockholders’

Total Liabilities and Stockholders’

June 30, 2020

As previously reported

Statement of Cash Flow

3 unchanged sentences

Common stock issued for ReadyMed platform

* Reclassification

Certain reclassifications have been made to the 2020 financial statement amounts and disclosures to conform to the 2021 presentation.

NOTE 11 - SUBSEQUENT EVENTS

On July 20, 2021, the loan was 100 % forgiven by the SBA.

As a result, the Company will record a gain on debt forgiveness of the PPP loan in the amount of $ 106,727 in the fourth quarter of 2021 (See Note 5).

On July 8, 2021, a holder of Series C preferred stock, converted 275,000 shares of Series C Convertible Preferred Stock into 1,375,000 shares of Common Stock.

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-Q

Item 1. Financial Statements