What changed in this filing

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Item 1. Financial Statements

2022-02-10 compared with 2019-02-21 · 207 added, 371 removed, 141 unchanged (80% of the section changed)

1 unchanged sentence

CLEARTRONIC, INC.

AND SUBSIDIARIES

AND SUBSIDIARY

CONDENSED CONSOLIDATED BALANCE SHEETS

September 30,

December 31, 2021

Current assets:

1 unchanged sentence

Prepaid expenses and other current assets

Assets from discontinued operations

Total current assets

Property and Equipment, net

Other assets:

ReadyOp software platform (net of amortization)

ReadyOp customer list (net of amortization)

Due from related party

Total other assets

LIABILITIES AND STOCKHOLDERS' DEFICIT

LIABILITIES AND STOCKHOLDERS'

Current liabilities:

Accounts payable

Accrued expenses

Accounts payable and accrued expenses

Deferred revenue, current portion

Notes payable stockholders

Customer deposits

Liabilities from discontinued operations, current portion

Total current liabilities

1 unchanged sentence

Deferred revenue, net of current portion

Liabilities from discontinued operations, net of current portion

Total long term liabilities

1 unchanged sentence

Commitments and Contingencies (See Note 6)

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,

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,

207,232,524 and 203,899,190 shares issued and outstanding, respectively

Stock subscription receivable

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, 3,341,503 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, 228,578,995 shares issued and outstanding, respectively.

Additional paid-in capital

Accumulated Deficit

Total stockholders' deficit

Total liabilities and stockholders' deficit

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

( 15,634,496 )

( 15,694,743 )

Total stockholders'

Total liabilities and stockholders'

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

CLEARTRONIC, INC.

AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

AND SUBSIDIARY

CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

For the Three Months ended December 31, 2021

For the Three Months ended December 31, 2020

Cost of Revenue

2 unchanged sentences

Administrative expenses

Amortization and depreciation

Research and development

Total Operating Expenses

Other Income (Expense)

Loss from continuing operations before income taxes

Income taxes from continuing operations

Loss from continuing operations

Discontinued operations:

Income (loss) from discontinued operations

Income taxes from discontinued operations

Income (loss) from discontinued operations

Interest expense, net

Total Other Expense

Income from operations before income taxes

Provision for income taxes

Preferred stock dividends Series A Preferred

Net loss attributable to common shareholders

Net loss per share - basic and diluted

Loss from continuing operations

Income (loss) from discontinued operations

Net loss per common share - basic and diluted

Weighted average number of shares outstanding:

Basic and diluted

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

Net income attributable to common stockholders

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

CLEARTRONIC, INC.

AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Adjustments to reconcile net loss to net cash

used in operating activities:

Amortization of Collabria client list

Amortization of ReadyOp software platform

AND SUBSIDIARY

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOW

For the Three Months

December 31, 2021

December 31, 2020

Cash Flows From Operating Activities

Adjustments to reconcile net income to net cash used in operating activities:

Depreciation expense

Provision for bad debt

2 unchanged sentences

Prepaid expenses and other current assets

Assets from discontinued operations

Due from related party

Increase (decrease) in liabilities:

Accounts payable

Accrued expenses

Customer deposits

Accounts payable and accrued expenses

Deferred revenue

Liabilities from discontinued operations

Net Cash Used in Operating Activities

Cash Flows From Investing Activities

Issuance of note receivable - discontinued operations

Purchase of fixed assets

Net Cash Used in Investing Activities

Cash Flows From Financing Activities

Proceeds from issuance of installment loan-discontinued operations

Repayment of installment loan - discontinued operations

Proceeds from note payable stockholders

Principal payments on notes payable stockholders

Proceeds from issuance of Common Stock

Net Cash Provided by Financing Activities

Net Increase (Decrease) in Cash

Cash - Beginning of Period

Cash - End of Period

Repayment of notes payable stockholders

Net Cash Used in Financing Activities

Net decrease in cash

Cash at beginning of period

Cash at end of period

SUPPLEMENTAL CASH FLOW INFORMATION:

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Cash paid for taxes

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

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

CLEARTRONIC, INC.

AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT

AND SUBSIDIARY

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’

FOR THE THREE MONTHS ENDED DECEMBER 31, 2021

Additional paid-in

BALANCE AT SEPTEMBER 30, 2018

Preferred Stock

Stockholders'

Balance at September 30, 2021 

( 15,694,743 )

Common Stock issued for cash

DECEMBER 31, 2018

Net income for the three months ended December 31, 2021

Balance at December 31, 2021  

( 15,634,496 )

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

CLEARTRONIC, INC.

AND SUBSIDIARY

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’

FOR THE THREE MONTHS ENDED DECEMBER 31, 2020

Preferred Stock

Stockholders’

Balance at September 30, 2020 

( 16,055,841 )

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

Net income for the three months ended December 31, 2020

Balance at December 31, 2020  

( 16,020,417 )

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

CLEARTRONIC, INC.

AND SUBSIDIARIES

AND SUBSIDIARY

Notes to Condensed Consolidated Financial Statements

2 unchanged sentences

Cleartronic, Inc.

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

The Companys subsidiaries are VoiceInterop, Inc.

(VoiceInterop) and ReadyOp Communications, Inc.

In September 2014, the Company formed ReadyOp Communications, Inc.

(a Florida corporation), as a wholly owned subsidiary to facilitate the marketing of ReadyOp software.

In November 2016, the Company cancelled its Licensing Agreement with Collabria LLC of Tampa, Florida (Collabria) and acquired all of the intellectual property related to Collabrias command and control software, trade-named ReadyOp.

In addition the Company acquired Collabrias client list.

In exchange for these assets the Company issued Collabria 3,000,000 restricted shares of the Companys Series E Convertible Preferred stock.

The Company assumed none of Collabrias liabilities.

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

into a separate company under a Form S-1 registration to be filed with the United States Securities and Exchange Commission.

Therefore, the Company has presented the operations of this subsidiary as discontinued operations.

(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.

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 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.

On February 14, 2020, the distribution of shares was approved by FINRA and VoiceInterop was deconsolidated from Cleartronic, Inc.

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 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

PRINCIPLES OF CONSOLIDATION

The accompanying unaudited interim consolidated financial statements contain the consolidated accounts of Cleartronic, Inc.

and its subsidiaries, VoiceInterop, Inc.

and ReadyOp Communications, Inc.

The accompanying consolidated financial statements contain the consolidated accounts of Cleartronic, Inc.

and its subsidiary, ReadyOp Communications, Inc.

All material intercompany transactions and balances have been eliminated.

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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, 2018 included in the Companys Annual Report on Form 10-K filed with the United States Securities and Exchange Commission.

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, 2021 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 months ended December 31, 2018 are not necessarily indicative of the results that may be expected for the fiscal year ending September 30, 2019.

Operating results for the three months ended December 31, 2021 are not necessarily indicative of the results that may be expected for the fiscal year ended September 30, 2022.

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 managements 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, valuation of inventory and allowance for doubtful accounts.

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 property and equipment, valuation of inventory and allowance for doubtful accounts.

CASH AND CASH EQUIVALENTS

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 at December 31, 2018 and September 30, 2018.

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

ACCOUNTS RECEIVABLE

2 unchanged sentences

Recoveries of accounts previously written off are used to credit the allowance account in the periods in which the recoveries are made.

When a client is invoiced, the amount is recorded as an asset in Accounts Receivable and as Deferred Revenue in Current Liabilities.

When payment is received the amount is moved to Cash on the balance sheet.

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

The Company provided $ 10,000 and $ 10,000 allowances for doubtful accounts as of December 31, 2021 and September 30, 2021, respectively.

ASSET ACQUISITION

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

In exchange for these assets the Company issued 3,000,000 shares of restricted Series E Convertible Preferred stock valued at $292,240.

This valuation was based on internal calculations and validated by a third party valuation expert.

The ReadyOp software platform was valued at $195,600 to be amortized over three years, amortization expense recognized for the three month period ended December 31, 2018 and 2017 was $16,299 and $16,299, respectively.

The Collabria customer base was valued at $96,640 to be amortized over two years, amortization expense recognized for the three month period ended December 31, 2018 and 2017 was $8,046 and $12,081, respectively.

As of December 31, 2018 the Collabria customer base has been fully amortized,

PROPERTY AND EQUIPMENT

Property and equipment are recorded at cost and depreciated or amortized using the straight-line method over the estimated useful life of the asset or the underlying lease term for leasehold improvements, whichever is shorter onset the property and equipment is put into service.

CONCENTRATION OF CREDIT RISK

The Company currently maintains cash balances at one FDIC-insured banking institution.

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

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

As of December 31, 2021 and September 30, 2021, the Company had $ 0 and $ 139,577 , respectively, in excess of FDIC insurance limits.

RESEARCH AND DEVELOPMENT COSTS

The Company expenses research and development costs as incurred.

For the three months ended December 31, 2018 and 2017, the Company had $52,448 and $62,957, respectively, in research and development costs from continuing operations.

For the three months ended December 31, 2021 and 2020, the Company had $ 49,260 and $ 30,789 , respectively, in research and development costs.

REVENUE RECOGNITION AND DEFERRED REVENUES

In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No.

2014-09, "Revenue from Contracts with Customers (Topic 606),"

which supersedes the revenue recognition requirements in Accounting Standards Codification 605, "Revenue Recognition."

This ASU is based on the principle that revenue is recognized to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.

The ASU also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract.

In August 2015, the FASB issued ASU No.

2015-14, which deferred the effective date of the new revenue standard by one year, and allowed entities the option to early adopt the new revenue standard as of the original effective date.

There have been multiple standards updates amending this guidance or providing corrections or improvements on issues in the guidance.

The requirements for these standards relating to Topic 606 are effective for interim and annual periods beginning after December 15, 2017.

This standard permitted adoption using one of two transition methods, either the retrospectiveor modified retrospective transition method.

The Company adopted these standards at the beginning of fiscal year 2019 using the modified retrospective method.

The comparative information has not been restated and continues to be reported under the accounting standards in effect for those periods.

The Company did not recognize any cumulative-effect adjustment to retained earnings upon adoption as the effect was immaterial.

The current period impact of adoption of these standards on the Company's condensed consolidated statements of operations during the three months ended December 31, 2018 are described below.

The Company revenue recognition policy follows guidance from Accounting Standards Codification (ASC) 606, Revenue from contract with customers.

1 unchanged sentence

The Company applies the following five-step model in order to determine this amount:

(i) Identification of Contact with a customer;

(ii ) Identify the performant obligation of the contract

(iii) Determine transaction price;

(iv) Allocation of the transaction price to the performance obligations;

(v) Recognition of revenue when (or as) the Company satisfies each performance obligation.

Identification of Contact with a customer;

Identify the performance obligation of the contract

Determine transaction price;

Allocation of the transaction price to the performance obligations;

Recognition of revenue when (or as) the Company satisfies each performance obligation.

The Company generates revenue primarily through the sale of integrated hardware and software licenses.

1 unchanged sentence

The Company incurs certain incremental contract costs (referred to as deferred subscriber acquisition costs, net) including selling expenses (primarily commissions) related to acquiring customers.

Deferred subscriber acquisition costs, net are included in prepaid and expenses and other current assets on the condensed consolidated balance sheet.

Deferred subscriber acquisition costs, net are included in prepaid and expenses and other current assets on the consolidated balance sheet.

Commissions paid in connection with acquiring new customers are determined based on the value of the contractual fees.

Deferred subscriber acquisition costs, net balance as of December 31, 2018 was $18,000 which will be amortized over the license period.

In transactions in which hardware is sold to the customer, the Company recognizes revenue over the related software license period as the hardware cannot be used without a license and has no other alternative use.

Deferred subscriber acquisition costs will be expensed as incurred on the date the revenue associated with the cost is recognized.

As of December 31, 2021 and September 30, 2021, respectively, the Company recorded $ 0 and $ 41,283 , 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.

We send employees to these meeting and charge our clients on a per diem basis.

These charges are recorded as consulting fees on our income statement.

The Company allocates the transaction price to each performance obligation based on a relative standalone selling price.

1 unchanged sentence

Customer billings for services not yet rendered are deferred and recognized as revenue as services are provided.

These fees are recorded as current deferred revenue on the condensed consolidated balance sheet as the Company expects to satisfy any remaining performance obligations as well as recognize the related revenue within the next twelve months.

These fees are recorded as current deferred revenue on the consolidated balance sheet as the Company expects to satisfy any remaining performance obligations as well as recognize the related revenue within the next twelve months.

Accordingly, the Company has applied the practical expedient regarding deferred revenue to exclude the value of remaining performance obligations if (i) the contract has an original expected term of one year or less or (ii) the Company recognizes revenue in proportion to the amount it has the right to invoice for services performed.

The impact from the adoption of the new revenue standard on the Company's condensed consolidated financial statements as of and for the three months ended December 31, 2018 was as follows:

Condensed Consolidated Statement of Operations (Unaudited)

(As reported)

(Prior to adoption)

(Effect of adoption)

Cost of Revenue

Condensed Consolidated Balance Sheet (Unaudited)

(As reported)

(Prior to adoption)

(Effect of adoption)

Current assets:

Prepaid expenses and other current assets

Total current assets

Current liabilities:

Deferred revenue, current portion

Total current liabilities

Total liabilities

EARNINGS PER SHARE

Basic income (loss) per common share is calculated using the weighted average number of shares outstanding during the periods reported.

Diluted earnings per share include the weighted average effect of all dilutive securities outstanding during the periods presented.

Diluted per share loss is the same as basic per share loss when there is a loss from continuing operations.

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

Earnings per share (“EPS”) are the amount of earnings attributable to each share of common stock.

For convenience, the term is used to refer to either earnings or loss per share.

EPS is computed pursuant to section 260-10-45 of the FASB Accounting Standards Codification.

Pursuant to ASC Paragraphs 260-10-45-10 through 260-10-45-16, basic EPS shall be computed by dividing income available to common stockholders (the numerator) by the weighted average number of common shares outstanding (the denominator) during the period.

Income available to common stockholders shall be computed by deducting both the dividends declared in the period on preferred stock (whether or not paid) and the dividends accumulated for the period on cumulative preferred stock (whether or not earned) from income from continuing operations (if that amount appears in the income statement) and also from net income.

The computation of diluted EPS is similar to the computation of basic EPS except that the denominator is increased to include the number of additional common shares that would have been outstanding if the dilutive potential common shares had been issued during the period to reflect the potential dilution that could occur from common shares issuable through contingent shares issuance arrangement, stock options or warrants.

Pursuant to ASC Paragraphs 260-10-45-45-21 through 260-10-45-45-23 Diluted EPS shall be based on the most advantageous conversion rate or exercise price from the standpoint of the security holder.

The dilutive effect of outstanding call options and warrants (and their equivalents) issued by the reporting entity shall be reflected in diluted EPS by application of the treasury stock method unless the provisions of paragraphs 260-10-45-35 through 45-36 and 260-10-55-8 through 55-11 require that another method be applied.

Equivalents of options and warrants include non-vested stock granted to employees, stock purchase contracts, and partially paid stock subscriptions (see paragraph 260–10–55–23).

Anti-dilutive contracts, such as purchased put options and purchased call options, shall be excluded from diluted EPS.

Under the treasury stock method:

Exercise of options and warrants shall be assumed at the beginning of the period (or at time of issuance, if later) and common shares shall be assumed to be issued.

The proceeds from exercise shall be assumed to be used to purchase common stock at the average market price during the period.

(See paragraphs 260-10-45-29 and 260-10-55-4 through 55-5.) c.

The incremental shares (the difference between the number of shares assumed issued and the number of shares assumed purchased) shall be included in the denominator of the diluted EPS computation.

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

As of December 31, 2018 and 2017, the Company had 512,996 and 566,496 shares of Series A Convertible Preferred stock outstanding, respectively.

As of December 31, 2018, 512,996 shares of Series A Convertible Preferred stock outstanding are convertible into 51,299,600 shares of common stock.

As of December 31, 2017, 40,750 shares of Series A Preferred stock was convertible into 4,075,000 shares of common, the balance was subject to a two-year waiting period before conversion.

As of December 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 December 31, 2021 and 2020, we had 3,341,503 and 4,433,375 shares of Series C Convertible Preferred stock outstanding, respectively, which are convertible into 16,707,515 and 22,166,875 shares of common stock, respectively.

As of December 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 December 31, 2018, 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 December 31, 2017, we had 3,000,000 Series E Convertible Preferred stock outstanding which were subject to a two-year waiting period before conversion.

As of December 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.

The table below details the computation of basic and diluted earnings per share ("EPS") for the three months ended December 31, 2021 and 2020:

For the Three Months ended

December 31, 2021

For the Three Months ended

December 31, 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

December 31, 2021

For the Three Months ended

December 31, 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

The Company adopted ASC topic 820, Fair Value Measurements and Disclosures (ASC 820), formerly SFAS No.

157 Fair Value Measurements, effective January 1, 2009.

ASC 820 defines fair value 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 Companys consolidated financial statements.

The Company measures the fair value of its assets and liabilities under ASC topic 820, "Fair Value Measurements and Disclosures".

ASC 820 defines "fair value"

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.

The carrying amounts of such financial instruments in the accompanying condensed consolidated balance sheet approximate their fair values due to their relatively short-term nature.

The carrying amounts of such financial instruments in the accompanying consolidated balance sheet approximate their fair values due to their relatively short-term nature.

The fair value of long-term debt is based on current rates at which the Company could borrow funds with similar remaining maturities.

The carrying amounts approximate fair value.

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

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 Companys policy is to record a reserve for technological obsolescence or slow-moving inventory items.

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.

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RECENT ACCOUNTING PRONOUNCEMENTS

In February 2016, the FASB issued ASU 2016-02, Leases , which will amend current lease accounting to require lessees to recognize (i) a lease liability, which is a lessees obligation to make lease payments arising from a lease, measured on a discounted basis, and (ii) a right-of-use asset, which is an asset that represents the lessees right to use, or control the use of, a specified asset for the lease term.

ASU 2016-02 does not significantly change lease accounting requirements applicable to lessors;

however, certain changes were made to align, where necessary, lessor accounting with the lessee accounting model.

This standard will be effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years.

We are currently reviewing the provisions of this ASU to determine if there will be any impact on our results of operations, cash flows or financial condition.

NOTE 3 - GOING CONCERN

The Company's condensed consolidated financial statements are prepared using accounting principles generally accepted in the United States of America applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business.

The Company believes the acquisition of the ReadyOp software platform was a prudent purchase by the Company.

Additional revenue has been generated for the Company and management believes revenue will continue to increase each quarter.

In order to continue as a going concern, the Company will need, among other things, additional capital resources.

Management is currently seeking funding from significant shareholders and outside funding sources sufficient to meet its minimal operating expenses.

However, management cannot provide any assurances that the Company will be successful in accomplishing any of its capital funding plans.

The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually secure other sources of financing and attain profitable operations.

There is substantial doubt about the Companys ability to continue as a going concern.

The accompanying condensed consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

NOTE 4 - NOTES PAYABLE

Notes payable to Stockholders

As of December 31, 2018 and September 30, 2018, the Company had unsecured notes payable to stockholders totaling $147,589 and $147,589, respectively.

These notes range in interest from 8% to 15% which are payable quarterly.

Three notes in the balance of $82,589 mature on December 31, 2019.

The remaining balance of the notes mature on June 30, 2019.

In October 2017, the Company repaid the principal amount of $7,891 of a note payable to a shareholder.

In October 2017, the Company issued two promissory notes to a shareholder and director in the amount of $15,000 each.

The notes bear 8% interest and mature on June 30, 2019.

Interest expense on the notes payable to stockholders was $3,243 and $3,418 for the three months ended December 31, 2018 and 2017, respectively.

Installment Loan Payable

On December 14, 2018, VoiceInterop entered into a Business Loan Agreement with WebBank whereby VoiceInterop borrowed $59,751, of this amount $15,491 was recorded as debt issuance cost.

The debt issuance cost is amortized over the life of the loan.

The agreement calls for 308 installments of $194 paid over 432 days.

As of December 31, 2018, the loan balance is $42,840, net of debt issuance cost of $14,971.

The amount is included in liabilities from discontinued operations (see Note 8).

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

NOTE 3 - PROPERTY AND EQUIPMENT

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

December 31, 2021

September 30, 2021

Office Equipment

Accumulated Depreciation

Total Property and Equipment, net

Depreciation expense for the three months ended December 31, 2021 and 2020, was $ 814 and $ 451 , respectively.

NOTE 4 - EQUITY TRANSACTIONS

Common stock issued for cash

In December 2018, the Company sold 3,333,334 shares of common stock for $75,000 in cash and a stock subscription receivable for $25,000.

The stock subscription receivable was received by the Company on January 15, 2019.

Preferred Stock Dividends

As of December 31, 2021 and September 30, 2021, the cumulative arrearage of undeclared dividends for Series A Preferred stock totaled $ 134,342 and $ 123,998 , respectively.

Preferred stock issued for acquisition of assets

In November, 2016, the Board of Directors approved the Asset Purchase Agreement between the Company and Collabria LLC (Collabria).

Under the terms of the Agreement, the Company acquired all of the intellectual property of Collabria, including its ReadyOp command, control and communication platform trade named ReadyOp (the ReadyOp Platform).

In addition, the Company acquired Collabrias customer base (Collabria Client List).

The Company assumed no liabilities of Collabria under this Agreement.

The terms of the Agreement called for the Company to issue 3,000,000 (Three million) shares of restricted Series E Convertible Preferred stock to Collabria with a fair value of $292,240.

As of December 1, 2018, each one (1) share of Series E Preferred shall be convertible into one hundred (100) shares of fully paid and non-assessable Common Stock at the sole option of the holder of Series E Preferred.

Subscription Agreements between VoiceInterop, Inc., our wholly-owned subsidiary and private investors

During the year ended September 30, 2018, VoiceInterop, Inc.

committed to sell 600,000 shares of its common stock to private investors for $68,000.

The shares issuance is contingent upon a spin-off of the Company from Cleartronic, Inc.

into a separate company.

As of December 31, 2018, $68,000 is recorded as due to unrelated parties as the spin-off has not been completed and the shares have not been issued.

This amount is included in liabilities from discontinued operations.

Declaration of Stock Dividend

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

That each common shareholder would receive .075 shares of VoiceInterop, Inc.

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, Inc.

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

As of the date of this report, the pending S-1 filing has not been submitted to the United States Securities and Exchange Commission for approval.

The record date of the dividend distribution shall be defined as the first business day following an effective statement from the SEC regarding a pending S-1 filing

NOTE 5 - RELATED PARTY TRANSACTIONS

The Company leases its office space from another entity that is also a stockholder.

Rent expense paid to the related party was $11,671 and $11,355 for the three months ended December 31, 2018 and 2017, respectively.

In December 2016, the Board of Directors accepted the resignation of Larry M.

Reid as Chief Executive Officer of the corporation and appointed Mr.

Reid as Chief Financial Officer.

The Board also appointed Michael M.

Moore as Chief Executive Officer.

Under the terms of an employment agreement effective on November 28, 2016, Mr.

Moore as CEO receives an annual salary of $200,000.

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.

Under the terms of an employment agreement effective on March 13, 2015, Mr.

Reid as CFO receives an annual salary of $96,000.

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.

In October 2017, the Company repaid the principal amount of $7,891 of a note payable to a shareholder.

In October 2017, the Company issued two promissory notes to a shareholder and director in the amounts of $15,000 each.

The notes bear interest at 8% per annum and mature June 30, 2019.

On December 17, 2018, VoiceInterop entered into an unsecured note receivable with a shareholder which bears interest at 35% and matures on February 10, 2019.

As of December 31, 2018, the note and interest receivable balance were $25,000 and $336, respectively.

These amounts are included in assets from discontinued operations (See Note 8).

On February 14, 2019 the Company granted a 30 day extension to the shareholder (See Note 9).

Through December 1, 2021, the Company leased 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 incurred during the three months ended December 31, 2021 and 2020 was $ 5,886 and $ 4,473 , respectively (See Note 6).

As of December 31, 2021, the Company advanced $ 51,187 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 bears interest at 5 % effective June 30, 2021.

NOTE 6 - COMMITMENTS AND CONTINGENCIES

Obligation Under Operating Lease

The Company leases approximately 1,700 square feet for its principal offices in Boca Raton, Florida at a monthly rental of approximately $3,500, which expired in November 2018.

Through December 1, 2021, the Company leases approximately 1,700 square feet for its principal offices in Boca Raton, Florida at a monthly rental of approximately $ 3,500 , which expired in November 2018.

VoiceInterop executed a new 3-year lease with its current landlord on December 1, 2018 for the same office space.

The lease provided one month free as a concession.

The monthly rent is $3,630 with annual increases of base rent of 4% until the expiration date.

The monthly rent is $ 3,630 and provides for annual increases of base rent of 4 % until the expiration date.

The lease expires on November 30, 2021 .

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

On December 1, 2021, the Company signed a one year lease approximately 2,000 square feet for our principal offices in Boca Raton, Florida.

The monthly rent is $ 2,200 .

The lease expires on November 30, 2022 .

Rent expense incurred during the three months ended December 31, 2021 and 2020 was $ 5,886 and $ 4,473 , respectively.

Revenue and Accounts Receivable Concentration

No customer accounted for more than 10% of the Companys revenue for the three months ended December 31, 2018 and 2017, respectively.

As of December 31, 2018 four customers accounted for approximately 56% of the Companys total outstanding accounts receivable.

As of September 30, 2018, two customers accounted for 24% of the Companys total outstanding accounts receivable.

For the three months ended December 31, 2021, one customer accounted for 14 % of the Company's revenues .

For the three months ended December 31, 2020, one customer accounted for 11 % of the Company's revenues.

As of December 31, 2021, no customer accounted for more than 10 % of the Company's total outstanding accounts receivable.

As of September 30, 2021, no customer accounted for more than 10 % of the Company's total outstanding accounts receivable.

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.

Effective October 1, 2021, the annual compensation increased to $ 104,000 .

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 USFRFs U.S.

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 Licensees obligation to pay royalties expires.

The Company paid USFRF a License Issue Fee of $ 6,000 and $ 953 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:

1 unchanged sentence

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 are offered to other purchasers in such financing.

NOTE 8 DISCONTINUED OPERATIONS

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

into a separate company under a Form S-1 registration to be filed with the United States Securities and Exchange Commission.

Therefore, the Company has presented the operations of this subsidiary as discontinued operations.

As of December 31, 2018 and September 30, 2018, assets and liabilities from discontinued operations are listed below:

September 30,

Current assets:

Accounts receivable, net

Note and interest receivable related party

Assets from discontinued operations

Current liabilities:

Accounts payable

Deferred revenue, current portion

Deferred rent, current portion

Installment loan, net of debt issuance cost, current portion

Due to unrelated parties

Current liabilities from discontinued operations

Long Term Liabilities

Deferred revenue, net of current

Deferred rent, long term portion

Installment loan, net of current

Long term liabilities from discontinued operations

The following table illustrates the reporting of the discontinued operations included in the Statements of Operations for the three months ended December 31, 2018 and 2017.

For the three months ended December 31, 2018

For the three months ended December 31, 2017

Cost of revenue

Operating expenses:

Selling expenses

Administrative expenses

Total operating expenses

Income (Loss) from operations

Other Income (Expense)

Interest and other expense

Total Other Income Expense

Income (Loss) Before Income Taxes

Provision for income taxes

Income (Loss) from discontinued operations

NOTE 9 SUBSEQUENT EVENTS

On January 15, 2019 the Company collected a stock subscription receivable in the amount of $25,000 (See Note 5).

On February 14, 2019, VoiceInterop granted a 30 day extension on a note receivable from a shareholder (See Note 6).

Managements Discussion and Analysis of Financial Condition and Results of Operations.

FORWARD-LOOKING STATEMENTS

The information set forth in this Managements 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.

The Company operates through two wholly owned subsidiaries, VoiceInterop, Inc.

and ReadyOp Communications, Inc.

In November, 2016, the Board of Directors approved the Asset Purchase Agreement between the Company and Collabria LLC (Collabria).

Under the terms of the Agreement, the Company acquired the intellectual property of Collabria, including its ReadyOp command, control and communication platform trade named ReadyOp™ (the “ReadyOp Platform”).

In addition, the Company acquired Collabria’s customer base (“Collabria Client List).

The Company assumed no liabilities of Collabria under this Agreement.

The terms of the Agreement called for the Company to issue 3,000,000 (Three million) shares of the registrants Series E Convertible Preferred stock to Collabria.

Shares of the Series E Convertible Preferred have the following conversion rights and provisions:

After a period of two (2) years following the date of issuance, each one (1) share of Series E Preferred shall be convertible into one hundred (100) shares of fully paid and non-assessable Common Stock at the sole option of the holder of Series E Preferred.

As a result of this Agreement the Licensing Agreement between Collabria and the Company was cancelled effective November 30, 2016.

The ReadyOp software will be marketed, sold and supported through the Companys subsidiary ReadyOp Communications, Inc.

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

into a separate company under a Form S-1 registration to be filed with the United States Securities and Exchange Commission.

The Company is moving forward with the spin-off of VoiceInterop, Inc.

Therefore, the Company has presented the operations of this subsidiary as discontinued operations.

FOR THE THREE MONTHS ENDED DECEMBER 31, 2018 COMPARED TO THE THREE MONTHS ENDED DECEMBER 31, 2017

Revenues increased to $191,332 for the three months ended December 31, 2018 as compared to $180,140 for the three months ended December 31, 2017.

The primary reason for the increase in revenue was due to an increase in sales of ReadyOp software from $159,140 in 2017 to $190,332 in 2018, or approximately 20%.

Approximately 95% of our ReadyOp licenses sold are for one-year terms.

Cost of Revenue

Cost of revenues was $49,122 for the three months ended December 31, 2018 as compared to $30,483 for the three months ended December 31, 2017.

Gross profits were $142,210 and $149,657 for the three months ended December 31, 2018 and 2017, respectively.

Gross margins declined approximately 15% from 83% for the three months ended December 31, 2017 compared to 68% for the three months ended December 31, 2018.

In order to secure a large government contract the Company sold its ReadyOp ACE IP gateways at less than cost in order to secure a contract for the ReadyOp software platform which resulted in lower gross margins for the three months ended December 31, 2018.

Operating Expenses

Operating expenses decreased approximately 6% to approximately $254,816 for the three months ended December 31, 2018 compared to $271,514 for the three months ended December 31, 2017.

For the three months ended December 31, 2018, selling expenses increased to $100,365 from $75,923 for the three months ended December 31, 2017.

The increase was primarily due to increased salaries associated with marketing of ReadyOp software.

General and administrative expenses decreased by $26,596 or approximately 26% which was a result of professional fees of $25,000 that were billed in the three months ended December 31, 2017 but not billed in the three months ended December 31, 2018.

Research and development expenses were $52,448 for the three months ended December 31, 2018 as compared to $62,957 for the three months ended December 31, 2017.

The primary reason for the decrease was lower expense incurred with licensing agreement with the University of South Florida Research Foundation.

Loss from Continuing Operations

The Companys net loss from continuing operations increased slightly to $116,606 during the three months ended December 31, 2018 as compared to $113,180 for the three months ended December 31, 2017.

The primary reason for the increase was due to the decrease in gross profit from $149,657 to $142,210 in the three months ended December 31, 2017 and 2018, respectively.

Income (Loss) from Discontinued Operations

Income from discontinued operations, increased to $5,446 during the three months ended December 31, 2018 compared to a loss of $6,747 for the three months ended December 31, 2017.

The primary reason for the increase was due to increased revenue generated by VoiceInterop.

Revenue was $45,551 was for three months ended December 31, 2018 compared to $22,618 in the three months ended December 31, 2017.

Net Loss Attributable to Common Shareholders

Net loss attributable to common shareholders was $121,504 for the three months ended December 31, 2018 as compared to a net loss of $131,350 for the three months ended December 31, 2017.

LIQUIDITY AND CAPITAL RESOURCES

Net cash used in operating activities was $45,624 for the three months ended December 31, 2018 compared to $27,379 for the three months ended December 31, 2017.

The primary reason for the increase was a decrease in accounts payable and increases in inventory and assets from discontinued operations partially offset by increases in accrued expense and liabilities from discontinued operations

Net cash provided by financing activities was $116,870 for the three months ended December 31, 2018 compared to $22,109 for the three months ended December 31, 2017.

The increase was primarily due to proceeds received from the issuance of common stock and the receipt of proceeds from an installment loan.

Our obligations are being met on a month-to-month basis as cash becomes available.

We have made a concentrated effort to restructure the company through the issuance of Preferred stock for cash and for the acquisition of the ReadyOp software platform.

We believe that ReadyOp software platform will put the Company in a better position to become cash flow positive.

There can be no assurance that the Companys efforts in this restructure will be successful or that present flow of cash will be sufficient to meet current and future obligations.

We have incurred losses since our inception and will continue to require additional capital to fund operations and development.

As such, our ability to pay our already incurred obligations is mostly dependent on the Company being able to have increased revenues and raising additional capital through the sale of its equity or debt securities.

There can be no assurance that the Company will be successful in accomplishing any of the foregoing.

In the past, in addition to revenues and deferred revenues, we have obtained funds from the private sale of our debt and equity securities.

We intend to continue to seek private financing from existing stockholders and others as may be needed to increase sales and marketing efforts or acquire new technologies and other assets.

Our current operating expenses are approximately $85,000 per month.

In order for us to cover our monthly operating expenses, we must generate approximately $115,000 per month in revenue.

Accordingly, in the absence of sufficient revenues, we must raise $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 our business activities.

There is substantial doubt about the Companys ability to continue as a going concern.

The accompanying condensed consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

Critical Accounting Estimates

See Managements 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, 2018 for information regarding our critical accounting estimates.

Quantitative and Qualitative Disclosures About Market Risk.

Not applicable.

As of December 31, 2021 and 2020, the Company has recorded $ 2,000 and $ 2,953 for the minimum royalty for the fiscal year ended 2022 and 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-Q/A

Item 1. Financial Statements