What changed in this filing

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Item 2. Management’s Discussion and Analysis

2024-05-06 compared with 2024-02-14 · 153 added, 101 removed, 19 unchanged (93% 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.

(the “Company”) was

incorporated in Florida on November 15, 1999.

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

2 unchanged sentences

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.

In October 2019, the Company acquired the ReadyMed software platform

from Collabria LLC.

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.

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 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 proved beneficial for

multiple clients in the healthcare industry due to the impact of the COVID-19 pandemic.

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 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, 2023 COMPARED TO THE THREE

MONTHS ENDED DECEMBER 31, 2022

Revenues increased 19.62% to $606,047 for the three months ended December

31, 2023 as compared to $506,650 for the three months ended December 31, 2022.

The primary reason for the increase was due to an increase

in revenue from the ReadyOp platform from $460,244 in 2022 to $589,547 in 2023.

Sales of ReadyOp hardware products increased from $6,125

in 2022 to $16,500 in 2023.

Consulting fees and related income decreased from $40,281 in 2022 to $0 in 2023 due to less training activity.

FOR THE THREE MONTHS ENDED MARCH 31, 2024 COMPARED

TO THE THREE MONTHS ENDED MARCH 31, 2023

Revenues increased 12.01% to $572,013 for the three

months ended March 31, 2024 as compared to $510,668 for the three months ended March 31, 2024.

The primary reason for the increase was

due to an increase in revenue from the ReadyOp platform from $492,969 in 2023 to $550,418 in 2024.

Sales of ReadyOp hardware products

increased from $17,968 in 2023 to $21,595 in 2024.

Consulting fees and related income decreased from $350 in 2023 to $0 in 2024 due to

less training activity.

Cost of Revenue

Cost of revenues increased to $95,631 for the three months ended December

31, 2023 as compared to $77,491 for the three months ended December 31, 2022.

Gross profits were $510,416 and $429,159 for the three months

ended December 31, 2023 and 2022, respectively.

Cost of revenues increased to $108,029 for the three

months ended March 31, 2024 as compared to $71,546 for the three months ended March 31, 2023.

Gross profits were $463,984 and $439,122

for the three months ended March 31, 2024 and 2023, respectively.

Operating Expenses

Operating expenses increased 31.15% to $541,149 for the three months

ended December 31, 2023 compared to $412,624 for the three months ended December 31, 2022.

The increase was primarily due increases in

administrative expense and selling expenses.

Operating expenses increased 23.85% to $452,013 for

the three months ended March 31, 2024 compared to $364,971 for the three months ended March 31, 2023.

The increase was primarily due increases

in administrative expense and selling expenses.

Administrative expenses increased by $65,120 or 22.09% as a result of an increase in consulting

expenses and employee salaries, due to new hires.

For the three months ended March 31, 2024, selling expenses were $87,501 compared to

$66,831 for the three months ended March 31, 2023, due to an increase in commissions expense and an increase in advertising and travel

expenses in connection with trade show appearances.

Research and development expenses were $3,044 for the three months ended March 31,

2024, as compared to $2,000 for the three months ended March 31, 2023.

This minimal increase was primarily maintenance costs associated

with existing patent license.

Other Income/(Expenses)

The Company’s other income increased by $8,678

from other income of $678 during the three months ended March 31, 2023, as compared to $9,356 for the three months ended March 31, 2024.

This increase was an increase in interest income on note receivable due from a related party and interest income on treasury bill investments.

Income before Income Taxes

The Company’s income before income taxes was

$21,327, during the three months ended March 31, 2024, as compared to income of $74,829 for the three months ended March 31, 2023.

decrease was primarily due to an increase in cost of revenues, administrative and selling expenses, and offset by an increase in sales

of ReadyOp licenses and hardware.

The increased costs were partially due to an increase in the costs of the hardware sold and administrative

expenses due to salaries.

Net Income Attributable to Common Stockholders

Net income attributable to common stockholders was

$11,096 for the three months ended March 31, 2024 as compared to a net income of $64,710 for the three months ended March 31, 2023.

decrease was primarily due to an increase in sales of ReadyOp licenses and hardware and offset by an increase in cost of revenues, administrative

and selling expenses.

The increased costs were partially due to an increase in the costs of the hardware sold and administrative expenses

due to salaries.

FOR THE SIX MONTHS ENDED MARCH 31, 2024 COMPARED

TO THE SIX MONTHS ENDED MARCH 31, 2023

Revenues increased 15.80% to $1,178,060 for the six

months ended March 31, 2024 as compared to $1,017,318 for the six months ended March 31, 2023.

The primary reason for the increase was

due to an increase in revenue from the ReadyOp platform from $953,214 in 2023 to $1,139,965 in 2024.

Sales of ReadyOp hardware products

increased from $22,125 in 2023 to $37,995 in 2024.

Consulting fees and related income decreased from $40,631 in 2023 to $0 in 2024 due

to less training activity.

Cost of Revenue

Cost of revenues increased to $203,660 for the six

months ended March 31, 2024 as compared to $149,037 for the six months ended March 31, 2023.

Gross profits were $974,400 and $868,281

for the six months ended March 31, 2024 and 2023, respectively.

Operating Expenses

Operating expenses increased 27.72% to $993,162 for

the six months ended March 31, 2024 compared to $777,595 for the six months ended March 31, 2023.

The increase was primarily due to increases

in administrative and selling expenses.

General and Administrative expenses increased by $149,220 or 24.19% as a result of an increase

in consulting expenses and employee holiday bonuses.

For the three months ended December 31, 2023, selling expenses were $120,235 compared

to $67,831 for the three months ended December 31, 2022 due to an increase in commissions expense, allowance for credit losses and an

increase in advertising and travel expenses in connection with the trade show.

Research and development expenses were $13,559 for the

three months ended December 31, 2023, as compared to $21,815 for the three months ended December 31, 2022.

This decrease was primarily

indirect research and development costs.

in consulting expenses and employee salaries, due to new hires.

For the six months ended March 31, 2024, selling expenses were $207,736

compared to $134,662 for the six months ended March 31, 2024 due to an increase in commissions expense, allowance for credit losses and

an increase in advertising and travel expenses in connection with trade show apperances.

Research and development expenses were $16,603

for the six months ended March 31, 2024, as compared to $23,815 for the six months ended March 31, 2023.

This decrease was primarily indirect

research and development costs.

Other Income/(Expenses)

The Company’s other income increased by $56,529

$47,851 from other income of $549 during the three months ended December 31, 2022, as compared to $48,400 for the three months ended

December 31, 2023.

This increase was an increase in interest income on note receivable due from a related party, interest income on treasury

bill investments and extinguishment of liabilities of $44,052.

from other income of $1,227 during the six months ended March 31, 2023, as compared to $57,756 for the six months ended March 31, 2024.

This increase was an increase in interest income on a note receivable due from a related party, interest income on treasury bill investments

and extinguishment of liabilities of $44,052.

Income before Income Taxes

The Company’s income before income taxes

was $17,667, during the three months ended December 31, 2023, as compared to income of $17,084 for the three months ended December 31,

The increase was primarily due to an increase in cost of revenues, administrative and selling expenses, and offset by an increase

in sales of ReadyOp licenses and hardware and extinguishment of liabilities.

The increased costs were partially due to an increase

in the costs of the hardware sold and administrative expenses due to salaries.

The Company’s income before income taxes was

$38,994, during the six months ended March 31, 2024, as compared to income of $91,913 for the six months ended March 31, 2023.

was primarily due to an increase in cost of revenues, administrative and selling expenses, and offset by an increase in sales of ReadyOp

licenses and hardware and extinguishment of liabilities.

The increased costs were partially due to an increase in the costs of hardware

sold and administrative expenses due to increased salaries for new employee hires.

Net Income Attributable to Common Stockholders

Net income attributable to common stockholders was $7,324 for the three

months ended December 31, 2023 as compared to a net income of $6,740 for the three months ended December 31, 2022.

The increase was primarily

due to an increase in sales of ReadyOp licenses and hardware and offset by an increase in cost of revenues, administrative and selling

The increased costs were partially due to an increase in the costs of the hardware sold and administrative expenses due to salaries.

Net income attributable to common stockholders was

$18,420 for the six months ended March 31, 2024 as compared to a net income of $71,450 for the six months ended March 31, 2023.

was primarily due to an increase in sales of ReadyOp licenses and hardware and offset by an increase in cost of revenues, administrative

and selling expenses.

The increased costs were partially due to an increase in the costs of the hardware sold and administrative expenses

due to salaries.

LIQUIDITY AND CAPITAL RESOURCES

For the three months ended December 31, 2023,

net cash provided by operations of $378,588 was the result of a net income of $17,667, depreciation expense of $1,357, amortization of

operating lease of $5,982, extinguishment of liabilities of $44,052, increase in provision for credit losses of $29,000, increase in

prepaid expenses of $17,756, and an increase in accounts payable of $7,731.

These were offset by a decrease in accounts receivable of

$40,008, a decrease in inventory of $5,733 and an increase in deferred revenue of $350,204.

For the three months ended December 31, 2022, net cash used in operations

of $188,014 was the result of a net income of $17,084, depreciation expense of $1,080, an increase in accounts payable of $32,933, and

a decrease in prepaid expenses of $9,280.

These were offset by an increase in accounts receivable of $24,752 and a decrease in deferred

revenue of $223,639.

For the six months ended March 31, 2024, net cash

provided by operations of $290,255 was the result of a net income of $38,994, depreciation expense of $2,847, amortization of operating

lease of $11,965, extinguishment of liabilities of $44,052, increase in provision for credit losses of $15,000, increase in prepaid expenses

of $28,658, an increase in accounts receivable of $49,283, an increase in inventory of $9,260 .

These were offset by a decrease in accounts

payable of $47,430 and an increase in deferred revenue of $399,646.

For the six months ended March 31, 2023, net cash

used in operations of $78,100 was the result of a net income of $91,913, depreciation expense of $2,362, amortization of operating lease

of $5,983, an increase in accounts payable of $4,585, and a decrease in prepaid expenses of $18,652.

These were offset by an increase

in accounts receivable of $7,006, an increase in inventory of $973 and a decrease in deferred revenue of $202,147.

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, 2023 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, 2023 for information regarding our critical accounting estimates.

Quantitative and Qualitative Disclosures

About Market Risk.

Not applicable

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What changed 10-Q

Item 2. Management’s Discussion and Analysis