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Item 2. Management’s Discussion and Analysis

2025-04-10 compared with 2024-08-13 · 117 added, 165 removed, 10 unchanged (97% of the section changed)

Management’s Discussion and Analysis

of Financial Condition and Results of Operations.

Management’s Discussion and Analysis of Financial

Condition and Results of Operations.

FORWARD-LOOKING STATEMENTS

The information set forth in this Management’s

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

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

Forward-looking

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

Some forward-looking statements may be

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

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

Although we believe that our

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

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

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

In light of the

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

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

The foregoing review of important

factors should not be construed as exhaustive.

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

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

unanticipated events.

The information set forth in this Management’s Discussion and

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

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

Forward-looking statements are statements

other than historical information or statements of current condition.

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

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

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

Although we believe that our expectations with respect to the

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

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

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

In light of the risks and uncertainties, there

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

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

The foregoing review of important factors should not be construed

as exhaustive.

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

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

Cleartronic, Inc.

(the “Company”) was

incorporated in Florida on November 15, 1999.

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

ReadyOp Communications, Inc.

(the “Company”) was incorporated in Florida

on November 15, 1999.

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

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

ReadyOp facilitates the

marketing and sales of subscriptions to the ReadyOp ™ and ReadyMed ™ platform and the AudioMate

IP gateways discussed 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.

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.

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.

The Company offers both the ReadyOp and ReadyMed

capabilities to clients and usually refers to the platform as ReadyOp to avoid confusion in the marketplace of two products.

FOR THE THREE MONTHS ENDED JUNE 30, 2024 COMPARED

TO THE THREE MONTHS ENDED JUNE 30, 2023

Revenues increased 79.35% to $1,005,050 for the three

months ended June 30, 2024 as compared to $560,374 for the three months ended June 30, 2023.

The primary reason for the increase was due

to an increase in revenue from the ReadyOp platform from $527,074 in 2023 to $702,446 in 2024.

In addition, Sales of ReadyOp hardware

products increased from $15,200 in 2023 to $288,204 in 2024.

Consulting fees and related income decreased from $18,100 in 2023 to $14,400

in 2024 due to less training activity.

Cost of Revenue

Cost of revenues increased to $319,728 for the three

months ended June 30, 2024 as compared to $132,312 for the three months ended June 30, 2023.

Gross profits were $685,322 and $428,062

for the three months ended June 30, 2024 and 2023, respectively.

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

hardware product sales.

Operating Expenses

Operating expenses increased 44.41% to $606,721 for

the three months ended June 30, 2024 compared to $420,128 for the three months ended June 30, 2023.

The increase was primarily due increases

in administrative expense and selling expenses.

Administrative expenses increased by $168,592 or 47.64% as a result of an increase in

consulting expenses and employee salaries, due to new hires.

For the three months ended June 30, 2024, selling expenses were $79,913 compared

to $62,873 for the three months ended June 30, 2023, due to an increase in advertising and travel expenses in connection with trade show

Research and development expenses were $2,000 for the three months ended June 30, 2024, as compared to $2,000 for the three

months ended June 30, 2023.

Other Income/(Expenses)

The Company’s other income increased by $5,569

from other income of $686 during the three months ended June 30, 2023, as compared to $6,255 for the three months ended June 30, 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

$84,856, during the three months ended June 30, 2024, as compared to income of $8,620 for the three months ended June 30, 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.

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

$74,625 for the three months ended June 30, 2024 as compared to a net loss of $1,611 for the three months ended June 30, 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.

FOR THE NINE MONTHS ENDED JUNE 30, 2024 COMPARED

TO THE NINE MONTHS ENDED JUNE 30, 2023

Revenues increased 38.37% to $2,183,110 for the nine

months ended June 30, 2024 as compared to $1,577,692 for the nine months ended June 30, 2023.

The primary reason for the increase was

due to an increase in revenue from the ReadyOp platform from $1,480,287 in 2023 to $1,842,411 in 2024.

Sales of ReadyOp hardware products

increased from $37,325 in 2023 to $326,299 in 2024.

Consulting fees and related income decreased from $60.080 in 2023 to $14,400 in 2024

due to less training activity.

This includes

hospitals, clinics, doctor's offices, health insurance companies, workers compensation insurance companies and many other segments of

the healthcare industry.

The Company offers both the ReadyOp and ReadyMed capabilities to clients and usually refers to the platform as

ReadyOp to avoid confusion in the marketplace of two platforms.

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.

It is planned that all operations and marketing of the Alastar platform will be conducted in the

ReadyOp Communications subsidiary in conjunction with the current ReadyOp and ReadyMed activities.

FOR THE THREE MONTHS ENDED DECEMBER 31, 2024 COMPARED TO THE THREE

MONTHS ENDED DECEMBER 31, 2023

Revenues increased 59.61% to $967,324 for the three months ended December

31, 2024 as compared to $606,047 for the three months ended December 31, 2023.

The primary reason for the increase was an increase in

revenue from the ReadyOp platform and the addition of the Alastar platform from $589,547 in 2023 to $851,476 in 2024.

There was also an

increase in sales of ReadyOp hardware products from $16,500 in 2023 to $21,395 in 2024.

Consulting fees and related income increased from

$0 in 2023 to $94,453 in 2024 due to an increase in consulting activity.

Cost of Revenue

Cost of revenues increased to $592,975 for the nine

months ended June 30, 2024 as compared to $324,363 for the nine months ended June 30, 2023.

Gross profits were $1,590,135 and $1,253,329

for the nine months ended June 30, 2024 and 2023, respectively.

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

hardware product sales.

Cost of revenues increased to $214,938 for the three months ended December

31, 2024 as compared to $118,895 for the three months ended December31, 2023.

Gross profits were $752,386 and $487,152 for the three months

ended December 31, 2024 and 2023, respectively.

The primary reason for the increase was due to an increase in ReadyOp and Alastar

platform sales and consulting activity.

Operating Expenses

Operating expenses increased 41.14% to $1,629,714

for the nine months ended June 30, 2024 compared to $1,154,709 for the nine months ended June 30, 2023.

The increase was primarily due

to increases in administrative and selling expenses.

General and Administrative expenses increased by $417,230 or 42.98% as a result of

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

For the nine months ended June 30, 2024, selling expenses

were $218,062 compared to $154,521 for the nine months ended June 30, 2024 due to an increase allowance for credit losses and advertising

and travel expenses in connection with trade show appearances.

Research and development expenses were $18,603 for the nine months ended

June 30, 2024, as compared to $25,815 for the nine months ended June 30, 2023.

This decrease was primarily indirect research and development

Operating expenses increased 56.08% to $808,306 for the three months

ended December 31, 2024 compared to $517,885 for the three months ended December 31, 2023.

The increase was primarily due to administrative

expenses, with a slight offset in research and development expenses, and selling expenses.

General and administrative expenses increased

by $341,736 or 84.17% as a result of the increase in general business expenses, an increase in headcount and personnel related costs associated

with the addition of new employees.

There were also charitable contributions paid during the three months.

For the three months ended December 31, 2024, selling expenses were

$53,089 compared to $96,971 for the three months ended December 31, 2023.

This decrease was primarily due to a decrease in advertising

and travel expenses as the Company.

Research and development expenses were $2,000 for the three months

ended December 31, 2024, as compared to $13,559 for the three months ended December 31, 2023.

This decrease was primarily due to research

and development expenses.

Other Income/(Expenses)

The Company’s other income increased by $62,098

from other income of $1,913 during the nine months ended June 30, 2023, as compared to $64,011 for the nine months ended June 30, 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

$24,432, during the nine months ended June 30, 2024, as compared to income of $100,533 for the nine months ended June 30, 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 loss attributable to common stockholders was $6,373

for the nine months ended June 30, 2024 as compared to a net income of $69,839 for the nine months ended June 30, 2023.

The 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.

The Company's other income decreased by $41,605 from other income of

$6,795 during the three months ended December 31, 2024 as compared to $48,400 in other income for the three months ended December 31,

This decrease was due to a decrease in extinguishment of liabilities of $44,052 for the three months ended December 31, 2023 and

an increase in interest income on treasury bill investments of $2,447for the year ended December 31, 2024.

(Loss) Income before Income Taxes

The Company’s loss before income taxes was $49,125, during the

three months ended December 31, 2024, as compared to income of $17,667 income before income taxes for the three months ended December

The increased costs were partially offset by an increase in subscriptions of ReadyOp licenses.

Net (Loss) Income Attributable to Common Stockholders

Net loss attributable to common stockholders was $59,468 for the three

months ended December 31, 2024 as compared to a net income of $7,324 for the three months ended December 31, 2023.

The decrease was primarily

due to an increase in administrative expenses and offset by an increase in sales of ReadyOp licenses The increased costs were partially

due to addition of new employees associated with Alastar and costs associated FedRAMP certification .

The preferred stock dividends remained

LIQUIDITY AND CAPITAL RESOURCES

For the nine months ended June 30, 2024, net cash

provided by operations of $398,421 was the result of a net income of $24,432, depreciation expense of $5,140, amortization of operating

lease of $17,948, extinguishment of liabilities of $44,052, increase in provision for credit losses of $9,000, increase in prepaid expenses

of $5,137, a decrease in accounts receivable of $129,880, an increase in inventory of $107,997 .

These were offset by an increase in accounts

payable of $85,411 and an increase in deferred revenue of $301,988.

For the nine months ended June 30, 2023, net cash

used in operations of $35,234 was the result of a net income of $100,533, depreciation expense of $3,694, amortization of operating lease

of $11,966, an increase in accounts payable of $11,942, and a decrease in inventory of $668.

These were offset by an increase in accounts

receivable of $71,083, increase in prepaid expenses of $39,745 and a decrease in deferred revenue of $42,137.

Net cash used in investing activities was $126,185

and $6,435 for the nine months ended June 30, 2024 and 2023, respectively, which was for the purchase of intangible and fixed assets.

For the three months ended December 31, 2024, net cash used in operations

of $164,714 was the result of a net loss of $49,125, depreciation and amortization expense of $5,483, amortization of operating lease

of $5,983, an increase of accounts receivable of $70,019.

These were offset by a decrease in accounts payable of $23,394, a decrease in

deferred revenue of $39,341, a decrease in inventory of $5,890 and a decrease in prepaid expenses of $6,315.

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.

Net cash used in investing activities was $0 and $77,018 for the three

months ended December 31, 2024 and 2023, respectively, which was for the purchase of intangible assets.

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, 2024 for information regarding our critical accounting estimates.

Quantitative and Qualitative Disclosures About Market Risk.

Not applicable

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis