What changed in this filing

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Item 2. Management’s Discussion and Analysis

2022-02-10 compared with 2021-08-16 · 120 added, 177 removed, 10 unchanged (97% of the section changed)

Management’s Discussion and Analysis of Financial Condition

and Results of Operations.

Management’s Discussion and Analysis

of Financial Condition and Results of Operations.

FORWARD-LOOKING STATEMENTS

The information set forth in this Management’s Discussion and Analysis

contains certain “forward-looking statements,” including, among others (i) expected changes in our revenues and profitability,

(ii) prospective business opportunities, and (iii) our strategy for financing our business.

Forward-looking statements are statements

other than historical information or statements of current condition.

Some forward-looking statements may be identified by use of terms

such as “believes,” “anticipates,” “intends,” or “expects.” These forward-looking statements

relate to our plans, objectives, and expectations for future operations.

Although we believe that our expectations with respect to the

forward-looking statements are based upon reasonable assumptions within the bounds of our knowledge of our business and operations, in

light of the risks and uncertainties inherent in all future projections, the inclusion of forward-looking statements in this prospectus

should not be regarded as a representation that our objectives or plans will be achieved.

In light of the risks and uncertainties, there

can be no assurance that actual results, performance, or achievements will not differ materially from any future results, performance,

or achievements expressed or implied by such forward-looking statements.

The foregoing review of important factors should not be construed

as exhaustive.

We undertake no obligation to release publicly the results of any future revisions we may make to forward-looking statements

to reflect events or circumstances after the date of this prospectus or to reflect the occurrence of unanticipated events.

The information set forth in this Management’s

Discussion and Analysis contains certain “forward-looking statements,” including, among others (i) expected changes in our

revenues and profitability, (ii) prospective business opportunities, and (iii) our strategy for financing our business.

Forward-looking

statements are statements other than historical information or statements of current condition.

Some forward-looking statements may be

identified by use of terms such as “believes,” “anticipates,” “intends,” or “expects.”

These forward-looking statements relate to our plans, objectives, and expectations for future operations.

Although we believe that our

expectations with respect to the forward-looking statements are based upon reasonable assumptions within the bounds of our knowledge of

our business and operations, in light of the risks and uncertainties inherent in all future projections, the inclusion of forward-looking

statements in this prospectus should not be regarded as a representation that our objectives or plans will be achieved.

In light of the

risks and uncertainties, there can be no assurance that actual results, performance, or achievements will not differ materially from any

future results, performance, or achievements expressed or implied by such forward-looking statements.

The foregoing review of important

factors should not be construed as exhaustive.

We undertake no obligation to release publicly the results of any future revisions we may

make to forward-looking statements to reflect events or circumstances after the date of this prospectus or to reflect the occurrence of

unanticipated events.

Cleartronic, Inc.

(the “Company”) was incorporated in Florida

on November 15, 1999.

All current operations are conducted through the Company’s wholly owned subsidiary, ReadyOp Communications,

(“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

ReadyOp is a proprietary, innovative web-based planning, communications

and operations platform for efficiently and effectively planning, managing, communicating, and directing operations and emergency response.

ReadyOp 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 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.

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

filed with the United States Securities and Exchange Commission.

Therefore, the Company has presented the operations of this subsidiary

as discontinued operations.

In October 2019, the Company acquired the ReadyMed software platform from

Collabria LLC.

(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 is a proprietary, innovative web-based

planning, communications and operations platform for efficiently and effectively planning, managing, communicating, and directing operations

and emergency response.

ReadyOp 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 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

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 filed with the United States Securities and Exchange Commission.

Therefore, the Company has presented the operations

of this subsidiary as discontinued operations.

In October 2019, the Company acquired the ReadyMed

software platform from Collabria LLC.

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

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 record keeping to track the healing

process of patients, record their recovery and monitor their medications.

ReadyMed 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.

FOR THE THREE MONTHS ENDED JUNE 30, 2021 COMPARED TO THE THREE MONTHS

ENDED JUNE 30, 2020

Revenues increased 10.29% to $413,868 for the three months ended June 30,

2021 as compared to $375,250 for the three months ended June 30, 2020.

The primary reason for the increase in revenue was due to an increase

subscriptions to the ReadyOp platform increased from $349,570 in 2020 to $402,918 in 2021, or approximately 15.55% and slightly offset

by a decrease in sales of ReadyOp hardware products from $20,880 in 2020 to $8,550 in 2021.

Installation revenue and related income decreased

from $4,800 in 2020 to $2,400 in 2021 due to less training activity in the three months ended June 30, 2021.

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 record keeping to track the healing process of patients, record their recovery and monitor their medications.

ReadyMed 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.

FOR THE THREE MONTHS ENDED DECEMBER 31, 2021

COMPARED TO THE THREE MONTHS ENDED DECEMBER 31, 2020

Revenues increased 36.15% to $519,185 for the three

months ended December 31, 2021 as compared to $381,338 for the three months ended December 31, 2020.

The primary reason for the increase

in revenue was due to an increase subscriptions to the ReadyOp platform increased from $369,740 in 2020 to $449,500 in 2021, or approximately

21.57% and slightly offset by a decrease in sales of ReadyOp hardware products from $5,800 in 2020 to $2,000 in 2021.

Consulting fees

and related income increased from $5,798 in 2020 to $67,685 in 2021 due to more training activity and sale of thermal scanners in the

three months ended December 31, 2021.

Cost of Revenue

Cost of revenues was $64,777 for the three months ended June 30, 2021 as

compared to $73,142 for the three months ended June 30, 2020.Gross profits were $349,091 and $302,108 for the three months ended June

30, 2021 and June 30, 2020, respectively.

Gross profit margins increased from 81% for the three months ended June 30, 2020 to 84% for

the three months ended June 30, 2021.

The increase in gross profit was primarily due to higher margins associated with sales of subscriptions

to the ReadyOp platform.

Cost of revenues was $92,236 for the three months

ended December 31, 2021 as compared to $60,334 for the three months ended December 31, 2020.Gross profits were $426,949 and $321,004 for

the three months ended December 31, 2021 and December 31, 2020, respectively.

Gross profit margins decreased from 84% for the three months

ended December 31, 2020 to 82% for the three months ended December 31, 2021.

The decrease in gross profit was primarily due to higher

costs associated with sales of subscriptions to the ReadyOp platform.

Operating Expenses

Operating expenses increased 28.21% to $302,542 for the three months ended

June 30, 2021 compared to $235,976 for the three months ended June 30, 2020.

The increase was primarily due increases in selling, administrative

expense, research and development and amortization expense.

For the three months ended June 30, 2021, selling expenses were $147,483 compared

to $116,624 for the three months ended June 30, 2020.

This increase was primarily due to a decrease in advertising expense and offset

by an increase in commissions and travel expenses.

General and administrative expenses increased by $15,243 or 16.75% as a result of increase

in general business expenses.

Amortization and depreciation expense increased by 247.73% from $150 for the three months ended June 30,

2020 to $521 for the three months ended June 30, 2021 due to the depreciation of computer equipment.

Research and development expenses

were $28,192 for the three months ended June 30, 2020 as compared to $48,285 for the three months ended June 30, 2021.

The increase was

primarily due to expenses associated with the development of a new technology associated with a patent owned by the University of South

Florida Research Foundation.

The Company has obtained the exclusive license to develop and market the technology associated with the patent.

Other Income/(Expenses)

The Company's other income increased to $18,694 from other expense of ($2,116)

during the three months ended June 30, 2021 as compared to the three months ended June 30, 2020.

The primary reason for this increase

was the settlement of certain accounts payable, with an offset in interest expense.

Income from Continuing Operations

The Company's income from operations was $65,243 during the three months

ended June 30, 2021 as compared to $64,016 for the three months ended June 30, 2020.

The increase was primarily due to an increase in

subscription of ReadyOp software in 2021 and gain on settlement of old accounts payable and an offset by an increase in operating expenses.

Net Income Attributable to Common Stockholders

Net income attributable to common stockholders was $55,124 for the three

months ended June 30, 2021 as compared to a net income of $53,785 for the three months ended June 30, 2020.

Operating expenses increased 28.85% to $366,534

for the three months ended December 31, 2021 compared to $284,465 for the three months ended December 31, 2020.

The increase was primarily

due to increased subscriptions to the ReadyOp platform.

FOR THE NINE MONTHS ENDED JUNE 30, 2021 COMPARED TO THE NINE MONTHS

ENDED JUNE 30, 2020

Revenues from operations were $1,217,928 for the nine months ended June

30, 2021 as compared to $1,319,152 for the nine months ended June 30, 2020.

Sales of ReadyOp ACE IP gateways decreased 91% from $307,050

to $28,950 in the nine months ended June 30, 2020 and 2021, respectively.

This decrease was primarily due to one client purchasing $212,000

of ReadyOp ACE IP gateways in 2020.

Subscriptions of ReadyOp software increased 20% from $957,751 to $1,157,784 in the nine- month period

ended June 30, 2020 and 2021, respectively.

Consulting fees and related income decreased from $49,351 in 2020 to $26,394 in 2021 due to

less training activity due to COVID in the nine months ended June 30, 2021.

Cost of Revenue

Cost of revenues was $198,580 for the nine months ended June 30, 2021,

as compared to $322,564 for the nine months ended June 30, 2020.

This decrease was primarily due to higher costs associated with the large

ReadyOp ACE IP gateway sale in 2020.

Gross profits were $1,019,348 and $996,588 for the nine months ended June 30, 2021 and 2020, respectively.

Despite the decrease in revenues, gross profit margins increased to 84% from 76% for the nine months ended June 30, 2021 and 2020, respectively.

The increase was primarily due to the lower profit margins from sales of ReadyOp ACE IP gateways as compared to higher margins generated

from subscriptions of ReadyOp software.

Operating Expenses

Operating expenses increased 7.22 % to approximately $864,985 for the nine

months ended June 30, 2021 compared to $806,774 for the nine months ended June 30, 2020.

For the nine months ended June 30, 2021, selling

expenses were $417,614 compared to $388,895 for the nine months ended June 30, 2020.

This increase is primarily due to an increase in

travel expenses and slightly offset by the decrease in advertising expenses.

General and administrative expenses increased by $35,478

This increase was primarily due to increased payroll expense offset a decrease in legal expense.

Amortization and depreciation

expense decreased by 87.10% from $11,028 for the three months ended June 30, 2020 to $1,423 for the nine months ended June 30, 2021.

and development expenses were $114,993 for the nine months ended June 30, 2020 as compared to $118,612 for the nine months ended June

The increase was primarily due to increase in consulting expense and expenses associated with the development of a new technology

associated with a patent owned by the University of South Florida Research Foundation.

The Company has obtained the exclusive license

to develop and market the technology associated with the patent.

Other Income/(Expenses)

The Company's other income increased to $17,426 from other expense of ($7,201)

during the nine months ended June 30, 2021 as compared to the nine months ended June 30, 2020.

The primary reason for this increase was

the settlement of certain accounts payable, with an offset in interest expense.

Income from Continuing Operations

The Company's income from continuing operations decreased to $171,789 from

$182,613 during the nine months ended June 30, 2021 as compared to the nine months ended June 30, 2020.

The primary reason for this decrease

was the decrease in revenue generated by a single large sale of the ReadyOp ACE IP gateways in 2020.

Loss from Discontinued Operations

There was no loss from discontinued operations during the nine months ended

June 30, 2021 compared to a loss of $64,936 for the nine months ended June 30, 2020.

The reason for the decrease was the deconsolidation

of VoiceInterop from the Company in February 2020.

due increases in selling, administrative expense, research and development and depreciation expense.

For the three months ended December

31, 2021, selling expenses were $188,545 compared to $160,859 for the three months ended December 31, 2020.

This increase was primarily

due to an increase in advertising, travel and commissions expense.

General and administrative expenses increased by $35,549 or 38.49%

as a result of increase in general business expenses.

Depreciation expense increased by 80.49% from $451 for the three months ended December

31, 2020 to $814 for the three months ended December 31, 2021 due to the additional computer equipment purchased during the period.

and development expenses were $30,789 for the three months ended December 31, 2020 as compared to $49,260 for the three months ended December

The increase was primarily due to expenses associated with the development of a new technology associated with a patent owned

by the University of South Florida Research Foundation and an increase in salary.

The Company has obtained the exclusive license to develop

and market the technology associated with the patent.

Other Expenses

The Company's other expenses decreased to $168 from

other expense of $1,115 during the three months ended December 31, 2021 as compared to the three months ended December 31, 2020.

reason for this decrease was a decrease in interest expense as the notes payable were fully repaid in the prior year.

Income from Operations

The Company’s income from operations was $60,247

during the three months ended December 31, 2021 as compared to $35,424 for the three months ended December 31, 2020.

The increase was

primarily due to an increase in subscription of ReadyOp software in 2021 and an offset by an increase in operating expenses.

Net Income Attributable to Common Stockholders

Net income attributable to common stockholders was $141,205 and $86,871

for the nine months ended June 30, 2021 and 2020, respectively.

The increase was primarily due to the lower profit margins from sales

of ReadyOp ACE IP gateways generated in 2020 as compared to higher profit margins generated from subscription of ReadyOp software in 2021.

Net income attributable to common stockholders was

$49,903 for the three months ended December 31, 2021 as compared to a net income of $25,078 for the three months ended December 31, 2020.

The increase was primarily due to increased subscriptions to the ReadyOp platform.

LIQUIDITY AND CAPITAL RESOURCES

For the nine months ended June 30, 2021, net cash provided by operations

of $276,634 was the result of a net income of $171,789, depreciation expense of $1,423, provision of bad debt of $6,000, a decrease in

accounts receivable of $9,470 and a slight decrease in inventory of $1,309.

These were offset by an increase in prepaid expenses of $49,152,

a decrease of accounts payable of $36,729, a decrease in accrued expenses of $43,457 and an increase in deferred revenue of $241,959.

For the nine months ended June 30, 2020, net cash used in operations of

$38,627 was the result of a net income of $117,677, depreciation expense of $10,878, depreciation expense of $150, a recovery of bad debt

of $13,335, a decrease in accounts receivable of $49,176, a decrease in inventory of $13,042, an increase in prepaid expenses of $15,000,

a decrease in other assets of $8,656 and a decrease in assets from discontinued operations of $9,929.

These were offset by a decrease

of accounts payable of $28,019, a decrease in accrued expenses of $68,756, a decrease in deferred revenue of $142,091.

Net cash used in investing activities was $2,068 for the nine months ended

June 30, 2021, which was a purchase of fixed assets compared to net cash used in investing activities was $34,029 for the nine months

ended June 30, 2020, which was attributable to the issuance of note receivable of $25,000 and purchase of fixed assets of $9,029.

Net cash used in financing activities was $48,447 for the nine months ended

June 30, 2021 which was a repayment of a stockholder note payable of $48,447.

Net cash provided by financing activities was $107,806 for

the nine months June 30, 2020, which was attributable to proceeds from notes payable stockholders and repayment of notes payable to stockholders.

For the three months ended December 31, 2021, net

cash used in operations of $17,849 was the result of a net income of $60,247, a decrease in accounts receivable of $46,867, and an increase

of accounts payable of $26,406.

These were offset by an increase in inventory of $6,588, a decrease in prepaid expenses of $33,364, and

a decrease in deferred revenue of $172,573.

For the three months ended December 31, 2020, net

cash used in operations of $1,927 was the result of a net income of $35,424, provision of bad debt of $16,500, a decrease in accounts

receivable of $40,900, and a decrease in inventory of $594.

These were offset by an increase in prepaid expenses of $14,404, a decrease

of accounts payable of $14,870, and a decrease in deferred revenue of $70,540.

Net cash used in investing activities was $5,058

for the three months ended December 31, 2021, which was a purchase of fixed assets.

Net cash used in financing activities was $15,615

for the three months ended December 31, 2020 which was a repayment of a stockholder note payable of $15,615.

Critical Accounting Estimates

See “Management’s Discussion and Analysis of Financial Condition

and Results of Operations - Critical Accounting Estimates” in Part II, Item 7 of our Annual Report on Form 10-K for the year ended

September 30, 2020 for information regarding our critical accounting estimates.

Quantitative and Qualitative Disclosures About Market Risk.

See “Management’s Discussion and Analysis

of Financial Condition and Results of Operations - Critical Accounting Estimates” in Part II, Item 7 of our Annual Report on Form

10-K for the year ended September 30, 2021 for information regarding our critical accounting estimates.

Quantitative and Qualitative Disclosures

About Market Risk.

Not applicable.

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 2. Management’s Discussion and Analysis