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Item 1. Financial Statements

2025-04-10 compared with 2024-08-13 · 533 added, 517 removed, 199 unchanged (84% of the section changed)

3 unchanged sentences

CONDENSED CONSOLIDATED BALANCE SHEETS

June 30, 2024

December 31, 2024

September 30, 2024

1 unchanged sentence

Cash and cash equivalents

Accounts receivable, net of an allowance for credit losses of $72,665 as of June 30, 2024 and $63,665 as of September 30, 2023

Accounts receivable, net of an allowance for credit losses of $ 60,665 as of December 31, 2024 and $ 60,665 as of September 30, 2024

Prepaid expenses and other current assets

Interest receivable - related party

Total current assets

Property and Equipment, net

Intangible Assets, net

Intangible Asset - customer list, net

Operating lease - right-of-use asset

Other assets:

Due from related party

Total other assets

LIABILITIES AND STOCKHOLDERS' EQUITY

LIABILITIES AND STOCKHOLDERS' DEFICIT

Current liabilities:

Accounts payable and accrued expenses

Deferred revenue, current portion

Deferred revenue

Operating lease liability

Total current liabilities

Long term liabilities:

Deferred revenue, net of current portion

Operating lease liability - long term

Total long term liabilities

Total liabilities

Commitments and Contingencies (See Note 6)

Stockholders' equity:

Stockholders' (deficit) equity:

Series A preferred stock - $ .00001 par value;

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

512,996 shares

authorized, 512,996 issued and outstanding, respectively.

Series B preferred stock - $ .00001 par value;

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

authorized, 0 shares issued and outstanding, respectively.

Series C preferred stock - $ .00001 par value;

50,000,000 shares authorized, 3,133,503 and 3,133,503 shares issued and outstanding, respectively.

50,000,000 shares

authorized, 3,133,503 and 3,133,503 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.

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;

4 unchanged sentences

( 15,444,900 )

Total stockholders' equity

Total liabilities and stockholders' equity

The accompanying notes are an integral part of these

consolidated financial statements

Total stockholders' deficit

Total liabilities and stockholders' deficit

The accompanying notes are an integral part of

these consolidated financial statements

CLEARTRONIC, INC.

1 unchanged sentence

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

June 30, 2024

June 30, 2023

June 30, 2024

June 30, 2023

For the Three Months

December 31, 2024

For the Three Months

December 31, 2023

Cost of Revenue

8 unchanged sentences

Total Other Income/(Expenses)

Income before income taxes

Loss (Income) before income taxes

Provision for income taxes from continuing operations

Net (loss) income

Preferred stock dividends Series A Preferred

Net income attributable to common stockholders

Net income per common share - basic

Net income per common share - diluted

Net (loss) income attributable to common stockholders

Net (loss) income per common share - basic

Net (loss) 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

consolidated financial statements

The accompanying notes are an integral part of

these consolidated financial statements

CLEARTRONIC, INC.

1 unchanged sentence

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW

June 30, 2024

June 30, 2023

For the Three Months

December 31, 2024

December 31, 2023

NET (LOSS) INCOME

Cash Flows From Operating Activities

4 unchanged sentences

Provision for credit losses

(Increase) decrease in assets:

Accounts receivable

4 unchanged sentences

Operating lease liability

Net Cash Provided (used) by Operating Activities

Net Cash (Used in) Provided by Operating Activities

Cash Flows From Investing Activities

Purchase of fixed assets

Purchase of intangible assets

1 unchanged sentence

Cash Flows From Financing Activities

Net (decrease) increase in cash

Net increase in cash

Cash at beginning of period

3 unchanged sentences

Cash paid for taxes

Supplemental disclosure of non-cash investing and financing activities:

Series C Convertible Preferred shares exchanged for common stock

Right-of-use asset obtained in exchange for operating lease liability

The accompanying notes are an integral part of these

consolidated financial statements

The accompanying notes are an integral part of

these consolidated financial statements

CLEARTRONIC, INC.

AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN

STOCKHOLDERS' EQUITY

FOR THE THREE AND NINE MONTHS ENDED JUNE 30, 2024

Preferred Stock

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES

IN STOCKHOLDERS' EQUITY/(DEFICIT)

FOR THE THREE MONTHS ENDED DECEMBER 31, 2024

Series A Preferred Stock

Series B Preferred Stock

Series C Preferred Stock

Series D Preferred Stock

Series E Preferred Stock

Stockholders'

1 unchanged sentence

$ 15,444,900 )

Net income for the nine months ended June 30, 2024

Balance at June 30, 2024 (Unaudited)

$ ( 202,431 )

Balance at March 31, 2024

Net loss for the three months ended December 31, 2024

Balance at December 31, 2024 (Unaudited)

$ ( 15,494,025 )

Net income for the three months ended June 30, 2024

Balance at June 30, 2024 (Unaudited)

$ ( 251,556 )

The accompanying notes are an integral part of these

consolidated financial statements

The accompanying notes are an integral part of

these consolidated financial statements

CLEARTRONIC, INC.

AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN

STOCKHOLDERS' EQUITY

FOR THE THREE AND NINE MONTHS ENDED JUNE 30, 2023

Preferred Stock

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES

IN STOCKHOLDERS' EQUITY

FOR THE THREE MONTHS ENDED DECEMBER 31, 2023

Series A Preferred Stock

Series B Preferred Stock

Series C Preferred Stock

Series D Preferred Stock

Series E Preferred Stock

Additional paid-in

Stockholders'

1 unchanged sentence

$ ( 15,237,292 )

Series C Convertible Preferred shares exchanged for common stock

Net income for the nine months ended June 30, 2023

Balance at June 30, 2023 (Unaudited)

$ ( 15,193,315 )

Balance at March 31, 2023

$ ( 15,201,935 )

Series C Convertible Preferred shares exchanged for common stock

Net income for the three months ended June 30, 2023

Balance at June 30, 2023 (Unaudited)

Net income for the three months ended December 31 , 2023

Balance at December 31, 2023 (Unaudited)

$ ( 15,219,625 )

The accompanying notes are an integral part of these

consolidated financial statements

The accompanying notes are an integral part of

these consolidated financial statements

CLEARTRONIC, INC.

1 unchanged sentence

Notes to Condensed Consolidated Financial Statements

June 30, 2024

December 31, 2024

NOTE 1 - ORGANIZATION

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, 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 ™ platforms and the AudioMate IP gateways discussed below.

ReadyOp facilitates the marketing and sales of

subscriptions to the ReadyOp™, ReadyMed ™ and Alastar ™ platforms and the AudioMate IP gateways discussed below.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

PRINCIPLES OF CONSOLIDATION

The accompanying consolidated financial statements

contain the consolidated accounts of Cleartronic, Inc.

The accompanying unaudited consolidated financial statements contain

the consolidated accounts of Cleartronic, Inc.

and its subsidiary, ReadyOp Communications, Inc.

2 unchanged sentences

BASIS OF PRESENTATION

The financial statements are prepared in accordance

with Generally Accepted Accounting Principles in the United States of America (“U.S.

The unaudited interim financial

information furnished herein reflects all adjustments, consisting only of normal recurring items, which in the opinion of management are

necessary to fairly state the Company’s financial position, results of operations and cash flows for the dates and periods presented

and to make such information not misleading.

These unaudited financial statements should be read

in conjunction with the Company’s audited financial statements for the year ended September 30, 2023, contained in our General Form

for Registration of Securities of Form 10-K as filed with the Securities and Exchange Commission (the “Commission”) on December

The results of operations for the three and nine months ended June 30, 2024, are not necessarily indicative of results to be

expected for any other interim period or the fiscal year ending September 30, 2024.

The financial statements are prepared in accordance with Generally

Accepted Accounting Principles in the United States of America (“U.S.

The unaudited interim financial information

furnished herein reflects all adjustments, consisting only of normal recurring items, which in the opinion of management are necessary

to fairly state the Company’s financial position, results of operations and cash flows for the dates and periods presented and to

make such information not misleading.

These unaudited financial statements should be read in conjunction

with the Company’s audited financial statements for the year ended September 30, 2024, contained in our General Form for Registration

of Securities of Form 10-K as filed with the Securities and Exchange Commission (the “Commission”) on March 21, 2025.

results of operations for the three months ended December 31, 2024, are not necessarily indicative of results to be expected for any other

interim period or the fiscal year ending September 30, 2025.

USE OF ESTIMATES

In preparing the consolidated financial statements,

management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of

the balance sheet and operations for the reporting period.

Although these estimates are based on management’s

knowledge of current events and actions it may undertake in the future, they may ultimately differ from actual results.

Significant estimates include the assumptions used

in valuation of deferred tax assets, estimated useful life of property and equipment, valuation of inventory and allowance for credit

In preparing the consolidated financial statements, management is required

to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the balance sheet and operations

for the reporting period.

Although these estimates are based on management’s knowledge of current events and actions it may undertake

in the future, they may ultimately differ from actual results.

Significant estimates include the assumptions used in valuation of deferred

tax assets, estimated useful life of property and equipment, valuation of inventory, intangible assets and allowance for credit losses.

RECLASSIFICATIONS

Certain prior year amounts have been reclassified

for consistency with the current year presentation.

These reclassifications had no material effect on the consolidated results of operations,

stockholders’ equity, or cash flows.

Certain prior year amounts have been reclassified for consistency with

the current year presentation.

These reclassifications had no material effect on the consolidated results of operations, stockholders’

equity, or cash flows.

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.

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 has investments Treasury Bills.

Bills have remaining terms ranging from four-weeks to thirteen weeks on June 30, 2024.

Treasury Bills with an original maturity date of three

months or less are included within cash and cash equivalents on the balance sheet at June 30, 2024.

The Treasury Bills have

remaining terms ranging from four-weeks to thirteen weeks on December 31, 2024.

Treasury Bills with an original maturity date

of three months or less are included within cash and cash equivalents on the balance sheet at December 31, 2024.

ACCOUNTS RECEIVABLE AND ALLOWANCE FOR CREDIT LOSSES

The Company maintains current receivable amounts with

most of its customers.

The Company maintains current receivable amounts with most of its customers.

The Company regularly monitors and assesses its risk of not collecting amounts owed by customers.

This evaluation

is based upon an analysis of current and past due amounts, along with relevant history and facts particular to the customer.

records its allowance for credit losses based on the results of this analysis.

The analysis requires the Company to make significant estimates

and as such, changes in facts and circumstances could result in material changes in the allowance for credit losses.

The Company considers

as past due any receivable balance not collected within its contractual terms.

The Company provided $ 72,665 and $ 63,665 allowances

for doubtful accounts as of June 30, 2024, and September 30, 2023, respectively.

This evaluation is based upon an analysis

of current and past due amounts, along with relevant history and facts particular to the customer.

The Company records its allowance for

credit losses based on the results of this analysis.

The analysis requires the Company to make significant estimates and as such, changes

in facts and circumstances could result in material changes in the allowance for credit losses.

The Company considers as past due any

receivable balance not collected within its contractual terms.

The Company provided $ 60,665 and $ 60,665 allowances for doubtful accounts

as of December 31, 2024, and September 30, 2024, respectively.

Inventory consists of components held for assembly and finished goods

held for resale or to be utilized for installation in projects.

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

first-out basis.

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

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

All existing inventory is considered current and usable.

The Company recorded no reserve for obsolete inventory as of December

31, 2024 and September 30, 2024, respectively.

At December 31, 2024 inventory was $ 35,642 of raw materials and finished

At September 30, 2024, inventory was $ 41,532 of raw materials and finished

PREPAID EXPENSES AND OTHER CURRENT ASSETS

Prepaid expenses and other current assets consist

primarily of deferred subscriber costs and prepaid expenses.

Deferred subscriber costs totaled $ 51,000 and $ 38,250 at June 30, 2024 and

September 30, 2023, respectively.

Prepaid expenses totaled $ 71,523 and $ 68,522 at June 30, 2024 and September 30, 2023, respectively.

Prepaid expenses and other current assets consist primarily of deferred

subscriber costs and prepaid expenses.

Deferred subscriber costs totaled $ 25,500 and $ 38,250 at December 31, 2024 and September 30, 2024,

respectively.

Prepaid expenses totaled $ 75,881 and $ 82,196 at December 31, 2024 and September 30, 2024, respectively.

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 or when the property and equipment is put into service.

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 or when the property and equipment is put into service.

IMPAIREMENT OF LONG-LIVED ASSETS

Management evaluates the recoverability of the Company’s identifiable

intangible assets and other long-lived assets when events or circumstances indicate a potential impairment exists, in accordance with

the provisions of ASC 360-10-35-15 “Impairment or Disposal of Long-Lived Assets.”

If impairment is indicated based on a comparison of the assets’

carrying values and the undiscounted cash flows, the impairment to be recognized is measured as the amount by which the carrying amount

of the assets exceeds the fair value of the assets.

There were no impairments recorded during the three months

ended December 31, 2024 and 2023, respectively.

INTANGIBLE ASSETS – FedRamp

During the year ended September 30, 2024, the Company conducted an

impairment assessment in accordance with ASC 350-30-35 and determined that all previously capitalized amounts associated with the Company’s

expenses related to its FedRAMP certification are no longer deemed recoverable as described in ASC 350-30-35.

As a result, the Company

recognized an impairment loss of $ 44,373 for the year ended September 30, 2024.

At December 31, 2024 and September 30, 2024, intangible assets, net,

is as follows:

Schedule of intangible assets

For the three months

December 31, 2024

September 30, 2024

Intangible Assets

The Company’s intangible assets consist of fees

paid to outside consulting services and employees that are assisting us in obtaining FedRAMP certification.

At June 30, 2024, the Company

had intangible assets with a cost of approximately $248,618, with finite lives.

The Company amortizes intangible assets with finite lives

over the shorter of their estimated useful or legal life.

The useful life is reevaluated for each reporting period.

For the nine months

ended June 30, 2024, no amortization expense was recorded due to the software not placed in service and still in the process of being

The Company evaluates intangible assets with finite

lives for impairment at least annually or when events or changes in circumstances indicate that an impairment may exist.

The Company determined

that none of its intangible assets were impaired during the nine months ended June 30, 2024.

Impairment Loss

Total Intangible Assets, net

ASSET PURCHASE - INTANGIBLE ASSET – CLIENT LIST

Accounting for asset acquisitions falls under the guidance of Topic

805, Business Combinations, specifically Subtopic 805-50.

A cost accumulation model is used to determine an asset acquisition’s

Assets acquired are based on their cost, generally allocated to them on a relative fair value basis.

Direct acquisition-related

costs are included in the cost of the acquired assets.

No goodwill is calculated in an asset acquisition.

On August 1, 2024, the Company acquired a group of similar assets from

Alastar, Inc.

(“Alastar”) for $ 50,000 .

This asset group consisted of cash, prepaids and other current assets,

as well as intellectual property including trademarks, software platforms, and a client list.

The client list was the only asset ascribed

value which was deemed to have continuing value to the Company.

The Company has classified this client list as an intangible asset,

which will be amortized over 5 years.

The table below summarizes the estimated fair value of the assets acquired

and the liabilities assumed at the effective acquisition date.

Schedule of estimated fair value of the assets acquired

Consideration

Fair Value of consideration transferred

Recognized amounts of identifiable assets acquired and liabilities assumed:

Prepaid expenses and other current assets

Total assets acquired

Deferred Revenue

Total liabilities assumed

Total identifiable net assets

Intangible Assets - Client List

At December 31, 2024 and September 30, 2024, intangible asset –

client list, net, is as follows:

Schedule of intangible assets

For the three months

December 31, 2024

September 30, 2024

Intangible Assets – Customer Lists

Accumulated Amortization

Total Intangible Assets, net

Amortization expense for the three months ended December 31, 2024 and

2023, was $ 2,500 and $ 0 , respectively.

Estimated future amortization expense for the three months ended December

Schedule of estimated future amortization expense

CONCENTRATION OF CREDIT RISK

The Company currently maintains cash balances at one

FDIC-insured banking institution.

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

all FDIC-insured institutions.

As of June 30, 2024 and September 30, 2023, the Company had $ 129,161 and $ 118,140 , respectively, in excess

of FDIC insured limits.

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

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, 2024 and September 30, 2024, the Company had $ 0 and $ 92,982 , respectively, in excess of FDIC insured

RESEARCH AND DEVELOPMENT COSTS

The Company expenses research and development costs

For the three months ended June 30, 2024 and 2023,

the Company had $ 2,000 and $ 2,000 respectively, in research and development costs.

For the nine months ended June 30, 2024 and 2023,

the Company had $ 18,603 and $ 25,815 respectively, in research and development costs.

The Company expenses research and development costs as incurred.

For the three months ended December 31, 2024 and 2023, the Company

had $ 2,000 and $ 13,559 respectively, in research and development costs.

REVENUE RECOGNITION AND DEFERRED REVENUES

The Company revenue recognition policy follows guidance

from Accounting Standards Codification (“ASC”) 606, Revenue from contract with customers.

Revenue is recognized when the Company

has transferred promised goods and services to the customer and in the amount that reflects the consideration to which the company expects

to be entitled to in exchange for those goods and services.

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

The Company revenue recognition policy follows guidance from Accounting

Standards Codification (“ASC”) 606, Revenue from contract with customers.

Revenue is recognized when the Company has transferred

promised goods and services to the customer and in the amount that reflects the consideration to which the company expects to be entitled

for the exchange for those goods and services.

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

Establishment of a contract with the customer;

1 unchanged sentence

Determine transaction price

Allocation of the transaction price to the performance

Recognition of revenue when (or as) the Company

satisfies each performance obligation.

The Company generates revenue primarily through the

sale of software licenses and integrated hardware.

The portion of the contract that is associated with ongoing hosting and related customer

service is amortized monthly over the license period.

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 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 will be

expensed as incurred on the date the revenue associated with the cost is recognized.

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

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

These charges are recorded as consulting fees

on our income statement.

Customer billings for services not yet rendered and

hardware not yet installed are deferred and recognized as revenue as services are provided.

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.

Under an agreement with the School District of Hillsborough

County Florida, the District has approved an agreement with the Company whereby the Company will provide 500 units of its AudioMate AM360

Radio gateways to a third party, Centegix, which will be installing the gateways under their agreement with the School District.

has paid the Company for the gateways in advance and the deposit is accounted for in deferred revenue.

As of June 30, 2024, the Company

delivered 250 units of its AudioMate AM360 Radio gatewayws and recognized hardware and sales revenue of $250,000.

The estimated completion

date for the project is August 31, 2024.

As of June 30, 2024 and September 30, 2023, respectively,

the Company recorded $ 1,479,678 and $ 1,177,680 , respectively, in deferred revenue.

Allocation of the transaction price to the performance obligations;

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

The Company generates revenue primarily through the sale of software

licenses and integrated hardware.

The portion of the contract that is associated with ongoing hosting and related customer service is

amortized monthly over the license period.

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 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 are expensed as incurred

on the date the revenue associated with the cost is recognized.

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.

employees to these meetings and charge our clients on a per diem basis.

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

Customer billings for services not yet rendered and hardware not yet

installed are deferred and recognized as revenue as services are provided.

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.

As of December 31, 2024 and September 30, 2024, respectively, the Company

recorded $ 1,333,984 and $ 1,373,325 , respectively, in deferred revenue.

DISAGGREGATED REVENUE

The following table sets forth the approximate net

sales by primary category:

The following table sets forth the approximate net sales by primary

Schedule of disaggregated revenue

For the three months ended

June 30, 2024

June 30, 2023

Licensing of ReadyOp Software

Hardware Sales and Consulting

For the nine months ended

June 30, 2024

June 30, 2023

December 31, 2024

December 31, 2023

Licensing of ReadyOp Software

1 unchanged sentence

DEFERRED REVENUE

The following table provides a summary of the changes

included in deferred revenue during the nine months ended June 30, 2024 and year ended September 30, 2023:

The following table provides a summary of the changes included in deferred

revenue during the three months ended December 31, 2024 and year ended September 30, 2024:

Schedule of deferred revenue

For the three months

December 31, 2024

September 30, 2024

3 unchanged sentences

( 3,126,148 )

( 2,131,955 )

Ending balance

(1) Customer billings for services not yet rendered and hardware not yet installed

(2) Revenue recognized in the current year related to the deferred liability

(1) Customer billings for services not yet rendered and hardware not

yet installed

(2) Revenue recognized in the current year related to the deferred

EARNINGS PER SHARE

Earnings per share (“EPS”) are the amount

of earnings attributable to each share of common stock.

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

adding 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.

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 adding 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

Pursuant to ASC Paragraphs 260-10-45-45-21 through 260-10-45-45-23

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

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

Diluted EPS shall be based on the most advantageous conversion rate or exercise price from the standpoint of the security holder.

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.

10 unchanged sentences

shares assumed issued and the number of shares assumed purchased) shall be included in the denominator of the diluted EPS computation.

As of June 30, 2024 and 2023, we had no options and

warrants outstanding.

As of June 30, 2024 and 2023, we had 512,996 shares

of Series A Convertible Preferred stock outstanding, which are convertible into 51,299,600 shares of common stock.

As of June 30, 2024 and 2023, we had 3,133,503 shares

of Series C Convertible Preferred stock outstanding which are convertible into 15,947,515 and shares of common stock.

As of June 30, 2024 and 2023, we had 670,904 shares

of Series D Preferred stock outstanding which are convertible into 3,354,520 shares of common stock.

As of June 30, 2024 and 2023, 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 and nine months ended June 30, 2024 and 2023:

As of December 31, 2024 and 2023, we had no options and warrants outstanding.

As of December 31, 2024 and 2023, 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, 2024 and 2023, we had 3,133,503 shares of

Series C Convertible Preferred stock outstanding which are convertible into 15,667,515 and shares of common stock.

As of December 31, 2024 and 2023, 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, 2024 and 2023, 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, 2024 and 2023:

Schedule of diluted earnings per share

For the three

Net income (loss) attributable to common stockholders for the period

Weighted average number of shares outstanding

Basic earnings per share

For the three months

December 31, 2024

For the three months

December 31, 2023

Net (loss) income attributable to common stockholders for the period

1 unchanged sentence

Basic earnings per share

The following table sets for the computation of diluted

earnings per share:

The following table sets for the computation of diluted earnings per

Schedule of computation of diluted earnings per share

For the three

Net income (loss) 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

For the three months

December 31, 2024

For the three months

December 31, 2023

Net (loss) income attributable to common stockholders for the period

Preferred stock dividends

Adjusted net income

Adjusted net (loss) income

Weighted average number of shares outstanding

3 unchanged sentences

FAIR VALUE OF FINANCIAL INSTRUMENTS

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:

Observable inputs that reflect unadjusted quoted prices for identical assets or liabilities traded

in active markets.

Inputs other than quoted prices included within Level 1 that are observable for the asset or

liability, either directly or indirectly.

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

Observable inputs that reflect unadjusted quoted prices

for identical assets or liabilities traded in active markets.

Inputs other than quoted prices included within Level 1

that are observable for the asset or liability, either directly or indirectly.

Inputs that are generally observable.

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.

amounts of such financial instruments in the accompanying consolidated balance sheet approximate their fair values due to their relatively

short-term nature.

The carrying amounts approximate fair value.

It is management’s opinion that the Company is not exposed to any

significant currency or credit risks arising from these financial instruments.

As of June 30, 2024 and September 30, 2023, we held

no assets that were required to be measured at fair value on a recurring basis.

There were no transfers between levels in the fair value

hierarchy during the three and nine months ended June 30, 2024 and year ended September 30, 2023, respectively.

Inventory consists of components held for assembly

and finished goods held for resale or to be utilized for installation in projects.

Inventory is valued at lower of cost or net realizable

value on a first-in, first-out basis.

The Company’s policy is to record a reserve for technological obsolescence or slow-moving

inventory items.

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

assembly of finished product.

All existing inventory is considered current and usable.

The Company recorded no reserve for obsolete inventory

as of June 30, 2024 and September 30, 2023, respectively.

At June 30, 2024 inventory was $ 129,910 of raw materials

and finished goods.

At September 30, 2023, inventory was $ 21,913 of raw

materials and finished goods.

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 consolidated balance sheet approximate their fair values due to their relatively short-term nature.

carrying amounts approximate fair value.

It is management’s opinion that the Company is not exposed to any significant currency

or credit risks arising from these financial instruments.

As of December 31, 2024 and September 30, 2024, we held no assets that

were required to be measured at fair value on a recurring basis.

There were no transfers between levels in the fair value hierarchy during

the three months ended December 31, 2024 and year ended September 30, 2024, respectively.

ADVERTISING COSTS

Advertising costs are expensed as incurred.

had advertising costs of $ 94,974 and $ 46,693 during the three months ended June 30, 2024 and 2023, respectively.

Advertising costs are expensed as incurred.

had advertising costs of $ 157,266 and $ 77,460 during the nine months ended June 30, 2024 and 2023, respectively.

RECENT ADOPTED ACCOUNTING PRONOUNCEMENTS

Troubled Debt Restructurings and Vintage Disclosures

In March 2022, the Financial Accounting Standards

Board (the “FASB”) issued ASU 2022-02, Financial Instruments – Credit Losses (Topic 326):

Troubled Debt Restructurings

and Vintage Disclosures (“ASU 2022-02”), which eliminates the accounting guidance on troubled debt restructurings (“TDRs”)

for creditors in ASC 310, Receivables (Topic 310), and requires entities to provide disclosures about current period gross write-offs

by year of origination.

Also, ASU 2022-02 updates the requirements related to accounting for credit losses under ASC 326, Financial Instruments

– Credit Losses (Topic 326), and adds enhanced disclosures for creditors with respect to loan refinancings and restructurings for

borrowers experiencing financial difficulty.

ASU 2022-02 was effective for the Company October 1, 2022.

The adoption of ASU 2022-02 did

not have a material impact on the Company’s consolidated financial statements.

RECENT ISSUED ACCOUNTING PRONOUNCEMENTS

The Company continues to monitor new accounting pronouncements

issued by the FASB and does not believe any accounting pronouncements issued through the date of this report will have a material impact

on the Company’s Financial Statements.

In the current year, the Company adjusted its classification

of selling and administrative expenses in the Statement of Operations.

For comparative purposes, amounts in the prior years have been

reclassified to conform to current year presentations.

These reclassifications had no effect on previously reported results of operations

or retained earnings.

The Company had advertising

costs of $ 31,540 and $ 22,584 during the three months ended December 31, 2024 and 2023, respectively.

RECENTLY ADOPTED ACCOUNTING PRONOUNCEMENTS

In November 2023, the FASB issued ASU No.

2023-07, Segment Reporting

(Topic 280) – Improvements to Reportable Segment Disclosures , to require enhanced disclosures that include reportable segment

The amendments in this update provide that a business entity disclose significant segment expenses, segment profit or loss (after

significant segment expenses), and allows reporting of additional measures of a segments profit or loss if used in assessing segment performance.

Such disclosures apply to entities with a single reportable segment.

These amendments were effective for the Company in 2024 and retrospectively

to all prior periods using the significant segment expense categories identified.

The impact of the adoption of the amendments in this

update was not material to the Company’s consolidated financial position and results of operations, as the requirements impact only

segment reporting disclosures in the footnotes to the Company’s consolidated financial statements.

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

The Company continues to monitor new accounting pronouncements issued

by the FASB and does not believe any accounting pronouncements issued through the date of this report will have a material impact on the

Company’s Financial Statements.

In the current year, the Company adjusted its classification of selling

and administrative expenses in the Statement of Operations.

For comparative purposes, amounts in the prior years have been reclassified

to conform to current year presentations.

These reclassifications had no effect on previously reported results of operations or retained

SEGMENT REPORTING

Operating segments are defined as components of an enterprise that

have the following characteristics:

(i) they engage in business activities from which they may earn revenue and incur expense, (ii) their

operating results are regularly reviewed by the chief operating decision maker (“CODM”) for resource allocation decisions

and performance assessment, and (iii) their discrete financial information is available.

Our CODM is our Chief Executive Officer, who

manages and allocates resources to our operations on a consolidated basis.

We operate as one segment, and ReadyOp facilitates the marketing

and sales of subscriptions to the ReadyOp™ and ReadyMed ™ platforms and the AudioMate IP gateways.

Segment information is

further described in Note 8.

LEASE ACCOUNTING

We determine if an arrangement is a lease, or contains

a lease, at inception and record the leases in our financial statements upon lease commencement, which is the date when the underlying

asset is made available for use by the lessor.

We have a lease agreement with lease and non-lease

components and have elected to utilize the practical expedient to account for lease and non-lease components together as a single combined

lease component, from both a lessee and lessor perspective with the exception of direct sales-type leases and production equipment classes

embedded in supply agreements.

From a lessor perspective, the timing and pattern of transfer are the same for the non-lease components

and associated lease component and, the lease component, if accounted for separately, would be classified as an operating lease.

We have elected not to present short-term leases on

the balance sheet as these leases have a lease term of 12 months or less at lease inception and do not contain purchase options or renewal

terms that we are reasonably certain to exercise.

All other lease assets and lease liabilities are recognized based on the present value

of lease payments over the lease term at commencement date.

Because our lease does not provide an implicit rate of return, we used our

incremental borrowing rate based on the information available at lease commencement date in determining the present value of lease payments.

In general, leases, where we are the lessee, may include

options to extend the lease term.

We determine if an arrangement is a lease, or contains a lease, at

inception and record the leases in our financial statements upon lease commencement, which is the date when the underlying asset is made

available for use by the lessor.

We have a lease agreement with lease and non-lease components and have

elected to utilize the practical expedient to account for lease and non-lease components together as a single combined lease component,

from both a lessee and lessor perspective with the exception of direct sales-type leases and production equipment classes embedded in

supply agreements.

From a lessor perspective, the timing and pattern of transfer are the same for the non-lease components and associated

lease component and, the lease component, if accounted for separately, would be classified as an operating lease.

We have elected not to present short-term leases on the balance sheet

as these leases have a lease term of 12 months or less at lease inception and do not contain purchase options or renewal terms that we

are reasonably certain to exercise.

All other lease assets and lease liabilities are recognized based on the present value of lease payments

over the lease term at commencement date.

Because our lease does not provide an implicit rate of return, we used our incremental borrowing

rate based on the information available at lease commencement date in determining the present value of lease payments.

In general, leases, where we are the lessee, may include options to

extend the lease term.

These leases may include options to terminate the lease prior to the end of the agreed upon lease term.

For purposes of calculating lease liabilities, lease terms include options to extend or terminate the lease when it is reasonably certain

that we will exercise such options.

Lease expense for operating leases is recognized on

a straight-line basis over the lease term as cost of revenues or operating expenses depending on the nature of the leased asset.

operating leases provide for annual increases to lease payments based on an index or rate.

We calculate the present value of future lease

payments based on the index or rate at the lease commencement date.

Differences between the calculated lease payment and

actual payment are expensed as incurred.

Amortization of finance lease assets is recognized over the lease term as cost of revenues or

operating expenses depending on the nature of the leased asset.

On December 2, 2022, and effective on January 1, 2023,

the Company signed a two-year lease of 1,145 square feet for our principal offices in Clearwater, Florida.

The monthly rent is $ 2,134

in year one and increases to $ 2,198 in year two.

The lease expires on December 31, 2024.

The tables below present information regarding the

Company’s operating lease assets and liabilities at June 30, 2024 and September 30, 2023:

of calculating lease liabilities, lease terms include options to extend or terminate the lease when it is reasonably certain that we will

exercise such options.

Lease expense for operating leases is recognized on a straight-line

basis over the lease term as cost of revenues or operating expenses depending on the nature of the leased asset.

Certain operating leases

provide for annual increases to lease payments based on an index or rate.

We calculate the present value of future lease payments based

on the index or rate at the lease commencement date.

Differences between the calculated lease payment and actual payment

are expensed as incurred.

Amortization of finance lease assets is recognized over the lease term as cost of revenues or operating expenses

depending on the nature of the leased asset.

On December 2, 2022, and effective on January 1, 2023, the Company

signed a two-year lease of 1,145 square feet for our principal offices in Clearwater, Florida.

The monthly rent was $ 2,134 in year one

and increases to $ 2,198 in year two.

The lease expired on December 31, 2024.

Our current office space lease is month-to-month.

The tables below present information regarding the Company’s

operating lease assets and liabilities at December 31, 2024 and September 30, 2024:

Schedule of operating lease assets and liabilities

June 30, 2024

September 30,

5 unchanged sentences

Operating lease cost

Amorization on right-of-use operating lease asset

Amortization on right-of-use operating lease asset

Lease liability expense in connection with obligation repayment

3 unchanged sentences

Right-of-use asset obtained in exchange for new operating lease liability

At June 30, 2024, the Company has no financing leases as defined in ASC

842, “Leases.”

Future minimum lease payments required under leases

that have initial or remaining non-cancelable lease terms in excess of one year at June 30, 2024:

At December 31, 2024, the Company has no financing leases as defined

in ASC 842, “Leases.”

Future minimum lease payments required under leases that have initial

or remaining non-cancelable lease terms in excess of one year at December 31, 2024:

Schedule of future minimum lease payments required under leases

2024 (6 Months)

Total undiscounted cash flows

4 unchanged sentences

NOTE 3 – PROPERTY, EQUIPMENT AND INTANGIBLE ASSETS

At June 30, 2024 and September 30, 2023, property

and equipment, net, is as follows:

At December 31, 2024 and September 30, 2024, property and equipment,

net, is as follows:

Schedule of property and equipment net

June 30, 2024

For the three months

December 31, 2024

September 30, 2024

2 unchanged sentences

Total Property and Equipment, net

Depreciation expense for the three months ended June

30, 2024 and 2023, was $ 2,293 and $ 1,332 , respectively.

Depreciation expenses for the nine months ended June

30, 2024 and 2023, was $ 5,140 and $ 3,694 , respectively.

At June 30, 2024 and September 30, 2023, intangible

assets, net, is as follows:

Schedule of intangible assets

June 30, 2024

September 30, 2023

Intangible Assets

Total Intangible Assets, net

Amortization expense for the three and nine months

ended June 30, 2024 and 2023, was $ 0 and $ 0 , respectively.

Depreciation expense for the three months ended December 31, 2024 and

2023, was $ 2,983 and $ 1,357 , respectively.

NOTE 4 - EQUITY TRANSACTIONS

Preferred Stock Dividends

As of June 30, 2024 and September 30, 2023, the cumulative

arrearage of undeclared dividends for Series A Preferred stock totaled $ 236,463 and $ 205,658 , respectively and $ 30,805 for the nine months

ended June 30, 2024.

As of the date of this report, we have 200,000,000

authorized shares of preferred stock, par value $ 0.00001 per share, of which 7,317,403 shares were issued and outstanding.

There are currently

5 series of preferred stock designated as follows:

As of December 31, 2024 and September 30, 2024, the cumulative arrearage

of undeclared dividends for Series A Preferred stock totaled $ 257,672 and $ 247,329 , respectively and $ 10,343 for the three months ended

December 31, 2024.

As of the date of this report, we have 200,000,000 authorized shares

of preferred stock, par value $ 0.00001 per share, of which 7,317,403 shares were issued and outstanding.

There are currently 5 series

of preferred stock designated as follows:

● 1,250,000 shares have been designated as Series A Preferred Stock, 512,996 of which are issued and outstanding;

● 10 shares have been designated as Series B Preferred Stock, none of which is issued and outstanding;

● 50,000,000 shares have been designated as Series C Preferred Stock, 3,133,503 of which are issued and

● 50,000,000 shares have been designated as Series C Preferred Stock, 3,133,503 of which are issued and outstanding;

● 10,000,000 shares have been designated Series D Preferred stock, of which 670,904 are issued and outstanding;

● 10,000,000 shares have been designated Series E Preferred stock, of which 3,000,000 are issued and outstanding.

Pursuant to our Articles of Incorporation establishing our preferred stock:

● A holder of shares of the Series A Preferred Stock is entitled to the number of votes equal to the number

of shares of the Series A Preferred Stock held by such holder multiplied by one on all matters submitted to a vote of our stockholders.

Each one share of our Series A Preferred Stock shall be convertible into 100 shares of our common stock.

Each holder of Series A Preferred

Stock is entitled to receive cumulative dividends at the rate of 8 % of $ 1.00 per annum on each outstanding share of Series A Preferred

Stock then held by such holder, on a pro rata basis.

● A holder of shares of the Series B Preferred Stock is entitled to one vote per share on all matters submitted

to a vote of our stockholders.

If at least one share of Series B Preferred Stock is issued and outstanding, then the total aggregate issued

shares of Series B Preferred Stock at any given time, regardless of their number, shall have voting rights equal to two times the sum

of the total number of shares of our common stock which are issued and outstanding at the time of voting, plus the total number of shares

of any shares of our preferred stock which are issued and outstanding at the time of voting.

A holder of shares of the Series B Preferred

Stock shall have no conversion rights or rights to dividends.

● A holder of shares of the Series C Preferred Stock is entitled to the number of votes equal to the number

of shares of the Series C Preferred Stock held by such holder multiplied by 5 on all matters submitted to a vote of our stockholders.

In addition, the holders of our Series C Preferred Stock shall be entitled to receive dividends when, as and if declared by the Board

of Directors, in its sole discretion.

Pursuant to our Articles of Incorporation establishing our preferred

● A holder of shares of the Series A Preferred Stock is entitled to the number of votes equal to the number of shares of the Series

A Preferred Stock held by such holder multiplied by one on all matters submitted to a vote of our stockholders.

Each one share of our

Series A Preferred Stock shall be convertible into 100 shares of our common stock.

Each holder of Series A Preferred Stock is entitled

to receive cumulative dividends at the rate of 8 % of $ 1.00 per annum on each outstanding share of Series A Preferred Stock then held by

such holder, on a pro rata basis.

● A holder of shares of the Series B Preferred Stock is entitled to one vote per share on all matters submitted to a vote of our stockholders.

If at least one share of Series B Preferred Stock is issued and outstanding, then the total aggregate issued shares of Series B Preferred

Stock at any given time, regardless of their number, shall have voting rights equal to two times the sum of the total number of shares

of our common stock which are issued and outstanding at the time of voting, plus the total number of shares of any shares of our preferred

stock which are issued and outstanding at the time of voting.

A holder of shares of the Series B Preferred Stock shall have no conversion

rights or rights to dividends.

● A holder of shares of the Series C Preferred Stock is entitled to the number of votes equal to the number of shares of the Series

C Preferred Stock held by such holder multiplied by 5 on all matters submitted to a vote of our stockholders.

In addition, the holders

of our Series C Preferred Stock shall be entitled to receive dividends when, as and if declared by the Board of Directors, in its sole

No dividends have been declared.

Finally, each one share of our Series C Preferred Stock shall be

convertible into five shares of our common stock.

● A holder of shares of the Series D Preferred Stock is entitled to the number of votes equal to the number

of shares of the Series D Preferred Stock held by such holder multiplied by 5 on all matters submitted to a vote of our stockholders.

In addition, the holders of our Series D Preferred Stock shall be entitled to receive dividends when, as and if declared by the Board

of Directors, in its sole discretion.

Finally, each one share of our Series C Preferred Stock shall be convertible into five shares

of our common stock.

● A holder of shares of the Series D Preferred Stock is entitled to the number of votes equal to the number of shares of the Series

D Preferred Stock held by such holder multiplied by 5 on all matters submitted to a vote of our stockholders.

In addition, the holders

of our Series D Preferred Stock shall be entitled to receive dividends when, as and if declared by the Board of Directors, in its sole

No dividends have been declared.

Finally, each one share of our Series D Preferred Stock shall be

convertible into five shares of our common stock.

● A holder of shares of the Series E Preferred Stock is entitled to the number of votes equal to the number

of shares of the Series E Preferred Stock held by such holder multiplied by 100 on all matters submitted to a vote of our stockholders.

In addition, the holders of our Series E Preferred Stock shall be entitled to receive dividends when, as and if declared by the Board

of Directors, in its sole discretion.

Finally, each one share of our Series D Preferred Stock shall be convertible into five shares

of our common stock.

● A holder of shares of the Series E Preferred Stock is entitled to the number of votes equal to the number of shares of the Series

E Preferred Stock held by such holder multiplied by 100 on all matters submitted to a vote of our stockholders.

In addition, the holders

of our Series E Preferred Stock shall be entitled to receive dividends when, as and if declared by the Board of Directors, in its sole

No dividends have been declared.

Finally, each one share of our Series E Preferred Stock shall be

convertible into 100 shares of our common stock.

Finally, each one share of our Series E Preferred Stock shall be convertible into 100 shares

of our common stock.

Preferred Stock Classification

The Company applies the guidance outlined in ASC 480, Distinguishing

Liabilities from Equity, to determine the appropriate classification and measurement of preferred stock.

Under ASC 480-10-25-4, financial

instruments that embody an obligation to repurchase equity shares or require mandatory redemption at a fixed or determinable date must

be classified as liabilities and measured at fair value.

Preferred shares that are conditionally redeemable—including

those redeemable at the option of the holder or subject to redemption upon the occurrence of events outside the issuer’s control—are

classified as temporary equity in accordance with ASC 480-10-S99-3A.

Conversely, preferred shares that do not contain redemption provisions

are appropriately classified as permanent equity.

None of the Company’s Series A, B, C, D, or E Preferred Stock

contain any redemption rights, whether mandatory or conditional.

Because no redemption provisions exist, these shares do not meet the

criteria for liability classification under ASC 480-10-25-7.

Furthermore, since redemption is not possible under any circumstances, the

shares do not qualify as temporary equity under ASC 480-10-S99-3A.

Accordingly, the preferred stock is properly classified as permanent

Since the Company has a stockholders' deficit, all issuances of Series

A, B, C, D, and E Preferred Stock are presented as a component of stockholders’ deficit in the financial statements.

Stock repurchase program

On January 6, 2023, the Board of Directors approved a stock repurchase

program pursuant to which the Company may repurchase shares of its outstanding common stock.

The repurchase program may be extended, suspended,

or discontinued at any time.

As of December 31, 2024 and 2023, no common stock was repurchased.

NOTE 5 - RELATED PARTY TRANSACTIONS

Rent expense incurred during the three months ended

June 30, 2024 and 2023 was $ 0 and $ 0 , respectively (See Note 6).

Rent expense incurred during the nine months ended

June 30, 2024 and 2023 was $ 0 and $ 2,343 , respectively (See Note 6).

During the three months ended June 30, 2024 and 2023,

the Company paid $ 9,000 and $ 9,000 , respectively, to a related party consultant.

During the nine months ended June 30, 2024 and 2023,

the Company paid $ 30,000 and $ 27,000 , respectively, to a related party consultant.

As of June 30, 2024, the Company advanced $ 53,302

to VoiceInterop, the Company’s former wholly owned subsidiary and now 96 % owned by our shareholders.

The advance was related to

certain expenses paid on VoiceInterop behalf by the Company.

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

The amount is due on September 30, 2024, and bears interest at 5 % effective October 1, 2023.

As of June 30, 2024, the Company recorded

$ 4,860 in interest receivable – related party.

During the three months ended December 31, 2024 and 2023, the Company

paid $ 9,000 and $ 12,000 , respectively, to a related party consultant.

As of September 30, 2024, the Company owed $ 1,024 to the Company's

Chief Executive Officer for the Company's operating expenses.

The amount was repaid in October 2024.

Prior to September 30, 2024, the Company advanced $ 53,302 to VoiceInterop,

the Company’s former wholly owned subsidiary and now 96 % owned by our shareholders.

The advance was related to certain expenses

paid on VoiceInterop behalf by the Company.

As of September 30, 2024, the Company recorded $ 5,589 in interest receivable - related party.

In September 2024, the Company determined that it is probable the Company will not recover its loan principal and interest.

the Company took a bad debt expense for uncollectible note receivable and interest receivable of $ 58,891 in connection therewith.

NOTE 6 - COMMITMENTS AND CONTINGENCIES

Legal Proceedings

From time to time, the Company may be subject to various

legal proceedings and claims that arise in the ordinary course of the Company’s business activities.

The Company is not aware of

any claim or litigation, the outcome of which, if determined adversely to the Company, would have a material effect on the Company’s

financial position or results of operations.

From time to time, the Company may be subject to various legal proceedings

and claims that arise in the ordinary course of the Company’s business activities.

Cleartronic is not engaged in any litigation

at the present time and management is unaware of any claims or complaints that could result in future litigation.

Obligation Under Operating Lease

On December 2, 2023, and effective on January 1, 2023,

the Company signed a two-year lease of 1,145 square feet for our principal offices in Clearwater, Florida.

The monthly rent is $ 2,134

in year one and increases to $ 2,198 in year two.

The lease expires on December 31, 2024.

On January 1, 2023, upon adoption of ASC 842,

the Company will recognize right-to-use assets as operating leases and operating lease obligations.

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 expired

on November 30, 2023 .

Rent expense incurred during the three months ended

June 30, 2024 and 2023 was $ 8,536 and $ 6,793 , respectively.

Rent expense incurred during the nine months ended

June 30, 2024 and 2023 was $ 21,266 and $ 19,944 , respectively.

On December 2, 2023, and effective on January 1, 2023, the Company

signed a two-year lease of 1,145 square feet for our principal offices in Clearwater, Florida.

The monthly rent is $ 2,134 in year one

and increases to $ 2,198 in year two.

The lease expired on December 31, 2024.

On January 1, 2023, upon adoption of ASC 842, the

Company will recognized right-to-use assets as operating leases and operating lease obligations.

Effective January 1, 2025, the Company

has a month-to-month lease.

Rent expense incurred during the three months ended December 31, 2024

and 2023 was $ 5,854 and $ 6,544 , respectively.

Revenue and Accounts Receivable Concentration

For the three months ended June 30, 2024, one customer

accounted for 27 % of the Company’s revenues.

For the nine months ended June 30, 2024, two customer

accounted for 22.95 % of the Company’s revenues.

For the nine months ended June 30, 2023, one customer

accounted for 17.23 % of the Company’s revenues.

As of June 30, 2024, no customer accounted for more

than 10 % of the Company’s total outstanding accounts receivable.

As of September 30, 2023, no customer accounted for

more than 10 % of the Company’s total outstanding accounts receivable.

For the three months ended December 31, 2024, one customer accounted

for 8.79 % of the Company’s revenues.

For the three months ended December 31, 2023, one customer accounted

for 12.72 % of the Company’s revenues.

As of December 31, 2024, no customer accounted for more than 10 % of

the Company’s total outstanding accounts receivable.

As of September 30, 2024, one customer accounted for more than 12 %

of the Company’s total outstanding accounts receivable.

Deferred Revenue Concentration

As of June 30, 2024, one customer accounted for more

than 16.90 % of the Company’s total outstanding deferred revenue.

As of September 30, 2023, no customer accounted for

more than 10 % of the Company’s total outstanding deferred revenue.

As of December 31, 2024, one customer accounted for 17 % of the Company’s

total outstanding deferred revenue.

As of September 30, 2024, no customer accounted for more than 10 % of

the Company’s total outstanding deferred revenue.

Major Supplier and Sole Manufacturing Source

The Company relies on no major supplier for its products.

The Company has contracted with local manufacturing facilities to provide completed circuit boards used in the assembly of its IP gateway

Interruption of adequate supply of components, primarily computer chips, to the manufacturing source presents additional risk

to the Company.

The Company believes that additional commercial facilities exist at competitive rates to match the resources and capabilities

of its existing manufacturing source, but the current worldwide shortage of computer chips does limit our ability to supply our proprietary

radio gateways to clients and other buyers.

has contracted with local manufacturing facilities to provide completed circuit boards used in the assembly of its IP gateway devices.

Interruption of adequate supply of components, primarily computer chips, to the manufacturing source presents additional risk to the Company.

The Company believes that additional commercial facilities exist at competitive rates to match the resources and capabilities of its existing

manufacturing source, but the current worldwide shortage of computer chips does limit our ability to supply our proprietary radio gateways

to clients and other buyers.

Exclusive Licensing Agreement

On May 5, 2017, the Company entered into an Exclusive

Licensing Agreement with Sublicensing Terms (the “Agreement”) with the University of South Florida Research Foundation, Inc.

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

On May 5, 2017, the Company entered into an Exclusive Licensing Agreement

with Sublicensing Terms (the “Agreement”) with the University of South Florida Research Foundation, Inc.

relating to an exclusive license of certain patent rights in connection with one of USFRF’s U.S.

Patent Applications.

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

with the Company.

The Agreement is effective April 25, 2017 and continues

until the later of the date that no Licensed Patent remains a pending application or an enforceable patent or the date on which the Licensee’s

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

The Agreement was effective April 25, 2017 and continues until the

later of the date that no Licensed Patent remains a pending application or an enforceable patent or the date on which the Licensee’s

obligation to pay royalties expires.

The Company 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 of $8,000 for fiscal year 2023

and thereafter on the same date, for the life of the agreement.

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.

As of June 30, 2024 and 2023, the Company has recorded $ 12,010 and $ 7,640 for the minimum

royalty for the fiscal year ended 2024 and 2023.

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 of $8,000 for fiscal year 2023 and thereafter on the

same date, for the life of the agreement.

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 7 – EXTINGUISHMENT OF LIABILITIES

During the nine months ended June 30, 2024, the Company

recorded a gain on extinguishment of liabilities $ 44,052 related to amounts due to vendors.

NOTE 8 – SUBSEQUENT EVENT

On August 1, 2024, the Company announced that it had

completed the acquisition of the assets, client list, and employee group of Alastar, Inc.

(“Alastar”), a company formerly

owned jointly by Advanced Technology International and the South Carolina Research Authority, a South Carolina nonprofit corporation.

Through this transaction, the Compnay acquired all intellectual properties, trademarks, software platforms, and other assets of Alastar,

along with its clients and employee group.

The immediate financial impact on the Company will be an increase in revenue and cash, which

will be offset by an increase in deferred revenue.

No liabilities of Alastar were assumed by the Company.

During the year ended September 30, 2024, the Company settled $44,052

of accounts payable with various vendors in exchange for $1,111 , resulting in a gain on settlement of $ 42,941 .

NOTE 8 - SEGMENT INFORMATION

We operate as one segment, and ReadyOp facilitates the marketing and

sales of subscriptions to the ReadyOp™, ReadyMed ™ and Alastar ™ platforms and the AudioMate IP gateways.

Our Chief Executive Officer, as the CODM, uses consolidated net loss

to evaluate our expenditures and monitor budget versus actual results.

The monitoring of budget versus actual results and cash on hand

are used in assessing the performance of the segment and in establishing resource allocation across the organization.

Factors used in determining the reportable segment include the nature

of our operating activities, the organizational and reporting structure and the type of information reviewed by the CODM to allocate resources

and evaluate financial performance.

Significant expenses within net loss include general and administrative,

professional fees, officers’ salary, research and development, and interest income, which are each separately presented on our consolidated

statements of operations.

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

What changed 10-Q

Item 1. Financial Statements