What changed in this filing

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Item 1. Financial Statements

2018-03-02 compared with 2017-08-21 · 461 added, 581 removed, 551 unchanged (65% of the section changed)

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and Subsidiaries

CONSOLIDATED BALANCE

June 30, 2017

CONSOLIDATED BALANCE SHEETS

December 31, 2017

September 30, 2017

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Cash and cash equivalents

Trade accounts receivable

Receivables, net

Accounts receivable - related party

Prepaid expenses

Prepaid expenses and other current assets

Total current assets

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Deferred revenue

Line of credit

Notes payable

Pre-merger payables

Total current liabilities

NOTES PAYABLE

STOCKHOLDERS’

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$0.001 par value;

35,837,900 shares issued and outstanding as of December 31, 2017 and 35,737,900 shares issued and outstanding as of September 30, 2017

Additional paid-in capital

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Total stockholders’

TOTAL LIABILITIES AND STOCKHOLDERS’

The accompanying notes are in integral part

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For the Three Months Ended

For the Nine Months Ended

Investment management fees

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Interest expense

Total other (expense) income

$ (1,156,040 )

EARNINGS PER SHARE - Basic and Diluted

Total other expense

LOSS PER SHARE - Basic and Diluted

The accompanying notes are in integral part

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CONSOLIDATED STATEMENTS OF CASH FLOWS

Nine months Ended June 30,

Three Months Ended December 31,

CASH FLOWS FROM OPERATING ACTIVITIES

$ (1,156,040 )

Adjustments to reconcile net loss to net cash used in operating activities

Depreciation and amortization

Write off of fixed assets

Stock compensation for services provided by a third party

Services provided to relieve accounts receivable - other

Changes in operating assets and liabilities, net of effects of purchase of subsidiaries

Trade accounts receivable

Stock based compensation

Changes in operating assets and liabilities:

Receivables, net

Accounts receivable - related party

Prepaid expenses

Accounts payable –

Accounts payable - related party

Accounts payable - trade

Accrued expenses

Deferred revenue

Pre-merger liabilities

Net cash used in operating activities

CASH FLOWS FROM INVESTING ACTIVITIES

Cash from the sale of investment

Cash paid for purchase of property and equipment

Cash paid for purchase of subsidiary

Deposit for future acquisition

Purchases of trademarks

Net cash provided by investing activities

Net cash used in investing activities

CASH FLOWS FROM FINANCING ACTIVITIES

Borrowings from notes payable

Proceeds from notes payable

Payments on notes payable

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Net cash provided by financing activities

TOTAL INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS

TOTAL INCREASE IN CASH AND CASH EQUIVALENTS

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD

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Non-cash activities:

Common stock issued upon acquisition of:

Tax Coach Software, LLC (Note 9)

Net assets (liabilities) assumed for purchase of:

Tax Coach Software, LLC (Note 9)

Settlement of payables owed by legacy Pacific Oil Company Stockholders

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and Subsidiaries

(“the Company”) is located in Allen, Texas.

The wholly-owned subsidiaries of the organization include:

Financial Gravity

Holdings, Inc., Financial Gravity Operations, Inc., Financial Gravity Tax, Inc., Financial Gravity Wealth, Inc., Cloud9 Holdings

Company, Financial Gravity Business, LLC, Financial Gravity Ventures, LLC., SASH Corporation (doing business as Metro Data Processing)

and Tax Coach Software, LLC.

On September 30, 2016, Financial Gravity

Holdings entered into a reverse merger transaction with Pacific Oil Company (the “Merger”).

Pacific Oil Company was

incorporated in Nevada on December 5, 2005 as Kat Racing, Inc.

On January 4, 2013, the Articles of Incorporation were amended to

change the name of the Company to Prairie West Oil & Gas, Ltd.

On July 26, 2013, the Articles of Incorporation were amended

to change the name of the company to Pacific Oil Company.

On October 31, 2016, following the Merger, the Articles of Incorporation

were amended to change the name of the Company to Financial Gravity Companies, Inc.

On the effective date of the Merger, the business

of Financial Gravity Holdings became the only business of Pacific Oil Company (currently named Financial Gravity Companies, Inc.).

Financial Gravity Holdings is now a subsidiary

of the Company.

Financial Gravity Holdings, Inc.

(“FGH”) was established on September 29, 2014 to engage in the acquisition

and integration of financial and other businesses which will deliver a wide range of accounting, tax planning and management services

to high net worth individuals and businesses in the Dallas/Fort Worth region, with further expansion into other markets in accordance

with its long-term growth rate and strategic business plan.

Financial Gravity Operations, Inc.

(“FGO”)

was established as a wholly-owned subsidiary of FGH in Texas on September 29, 2014.

FGO did not have any activity through September

Activity commenced in 2015 for FGO related to the management of operational expenses for the shared services of the subsidiaries.

Financial Gravity Business, LLC.

(“FGB”)

formerly Cloud9b2b, LLC (“Cloud9 B2B”) was acquired by Cloud9 Holdings Company effective December 31, 2014 and provides

business consulting services to Small Business Owners that identify ways to leverage a business’

current assets (people,

platforms and processes) and reduce exposure to risk, both short-term and long-term, while simplifying the business and increasing

profitability.

Financial Gravity Ventures, LLC.

(“FGV”)

formerly Cloud9 Accelerator, LLC was acquired by Cloud9 Holdings Company effective December 31, 2014 and holds acquired companies

and business assets until they are integrated into the main stream Financial Gravity business structure.

FGV does not have any

financial activity through June 30, 2017.

Effective January 1, 2015, Cloud9 assigned

100% of the membership interest in Cloud9 Accelerator, LLC and Cloud9b2b, to FGO.

Financial Gravity Tax, Inc.

Tax”) formerly Business Legacy, Inc., (“BLI”) was acquired by FGO for no cost effective January 1, 2015 and is

located in Allen, Texas.

BLI is a bookkeeping, tax planning, tax preparation, and payroll service provider to small companies and

Financial Gravity Wealth, Inc.

Wealth”) formerly Pollock Advisory Group, Inc., (“PAG”) was acquired by FGO for no cost effective January 1,

2015 and is a registered investment advisor, located in Allen, Texas.

PAG provides asset management services.

SASH Corporation, an Oklahoma corporation

doing business as Metro Data Processing (“MDP”) was acquired August 12, 2015.

The purchase was made by Cloud9Accelerator,

MDP is located in Tulsa, Oklahoma, and provides payroll services, software, and support solutions to business owners.

Tax Coach Software, LLC, an Ohio limited

liability company (“TCS”), was acquired effective October 1, 2015.

The purchase was made by FGH.

Located in Cincinnati,

Ohio, TCS provides three primary services including monthly subscriptions to the “Tax Coach”

software system, coaching

and email marketing services.

(the “Company”) is located in Allen, Texas and provides integrated tax, business, and financial solutions to small

businesses, small business owners and high net worth individuals.

The Company’s focus is on helping clients build wealth,

most often with tax savings, lowering costs and improving efficiency.

The wholly-owned subsidiaries of the Company include:

Gravity Holdings, Inc., Financial Gravity Operations, Inc., Financial Gravity Tax, Inc., Financial Gravity Wealth, Inc., Cloud9

Holdings Company, Financial Gravity Business, LLC, Financial Gravity Ventures, LLC., SASH Corporation (doing business as Metro

Data Processing) and Tax Coach Software, LLC.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

A summary of the significant accounting

polices consistently applied in the preparation of the accompanying consolidated financial statement in accordance with accounting

polices consistently applied in the preparation of the accompanying consolidated financial statements in accordance with accounting

principles generally accepted in the United States of America (“GAAP”) is as follows.

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The consolidated financial statements include

the accounts of FGH, FGO, Cloud9 (from the date of acquisition), including Cloud9b2b and Cloud9 Accelerator, LLC, PAG (from the

date of acquisition), BLI (from the date of acquisition), TCS (from the date of acquisition), and MDP (from the date of acquisition),

(collectively referred to as “the Company”).

All significant intercompany accounts and transactions have been eliminated

on consolidation.

the accounts of its subsidiaries.

All significant intercompany accounts and transactions have been eliminated on consolidation.

Cash and Cash Equivalents

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cash equivalents.

Trade Accounts Receivable

Trade accounts receivable are carried at

the invoiced amount less an estimate made for doubtful accounts based on management’s review of outstanding balances.

collectability of the Company’s accounts receivable is reviewed on an ongoing basis, using historical payment trends and

a review of specific accounts.

Accounts receivable are written off after all reasonable collection efforts have been exhausted

and when management determines the amounts to be uncollectible.

Recoveries of receivables previously written off are recorded when

There was no allowance for doubtful accounts recorded as of June 30, 2017 and September 30, 2016.

Receivables include trade accounts receivable

and are carried at the invoiced amount less an estimate made for doubtful accounts based on management’s review of outstanding

The collectability of the Company’s accounts receivable is reviewed on an ongoing basis, using historical payment

trends and a review of specific accounts.

Accounts receivable are written off after all reasonable collection efforts have been

exhausted and when management determines the amounts to be uncollectible.

Recoveries of receivables previously written off are

recorded when received.

The allowance for doubtful accounts was $17,014 as of December 31, 2017 and September 30, 2017.

In the normal course of business, the Company

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part of the TCS purchase have been recognized in the accompanying consolidated balance sheets at $44,900, the value attributed

to such relationships on the date of the purchase (see Note 9).

The customer relationships are being amortized on a straight-line

basis over a four-year estimated life.

During each of the three and nine months ended June 30, 2017 and 2016, the Company recorded

amortization expense of $2,806 and $8,418, respectively, on this intangible asset, which is included in depreciation and amortization

expense in the accompanying consolidated statements of operations.

Accumulated amortization at June 30, 2017 was $19,643 and $11,225

at September 30, 2016.

to such relationships on the date of the purchase.

The customer relationships are being amortized on a straight-line basis over

a four-year estimated life.

During each of the quarters ended December 31, 2017 and 2016, the Company recorded amortization expense

of $2,806, respectively, on this intangible asset, which is included in depreciation and amortization expense in the accompanying

consolidated statements of operations.

Accumulated amortization at December 31, 2017 was $25,256 and $22,450 at September 30, 2017.

Proprietary Content

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of the TCS purchase has been recognized in the accompanying consolidated balance sheets at $525,100, the value attributed to such

content on the date of the purchase (see Note 9).

The proprietary content is being amortized on a straight-line basis over an eight-year

estimated life.

During each of the three and nine months ended June 30, 2017 and 2016, the Company recorded amortization expense

of $16,410 and $49,230, respectively, on this intangible asset, which is included in depreciation and amortization expense in the

accompanying consolidated statements of operations.

Accumulated amortization at June 30, 2017 was $114,866 and $65,637 at September

content on the date of the purchase.

The proprietary content is being amortized on a straight-line basis over an eight-year estimated

During each of the quarters ended December 31, 2017 and 2016, the Company recorded amortization expense of $16,410 on this

intangible asset, which is included in depreciation and amortization expense in the accompanying consolidated statements of operations.

Accumulated amortization at December 31, 2017 was $147,686 and $131,276 at September 30, 2017.

The trade name acquired as a part of the

TCS purchase has been recognized in the accompanying consolidated balance sheets at $69,300, the value attributed to such name

on the date of the purchase (see Note 9).

Management has determined that the trade name has an indefinite life and does not consider

the value of the trade name recorded in the accompanying consolidated balance sheet to be impaired as of June 30, 2017.

Prospect List

The prospect list acquired as a part of

the TCS purchase has been recognized in the accompanying consolidated balance sheets at $53,800, the value attributed to such list

on the date of the purchase (see Note 9).

The prospect list is being amortized on a straight-line basis over a one-year estimated

During the year ended September 30, 2016, the Company recorded the full amortization expense of $53,800 on this intangible

asset, which is included in depreciation and amortization expense in the accompanying consolidated statements of operations.

amortization at September 31, 2016 was $53,800.

on the date of the purchase.

Management has determined that the trade name has an indefinite life and does not consider the value

of the trade name recorded in the accompanying consolidated balance sheets to be impaired as of December 31, 2017 and September

Non-compete Agreements

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a part of the TCS purchase have been recognized in the accompanying consolidated balance sheets at $26,300, the value attributed

to such agreements on the date of the purchase (see Note 9).

The non-compete agreements are being amortized on a straight-line

basis over the five-year term of the non-compete clause of the agreement.

During each of the three and nine months ended June 30,

2017 and 2016, the Company recorded amortization expense of $1,315 and $3,945, respectively, on this intangible asset, which is

included in depreciation and amortization expense in the accompanying consolidated statements of operations.

Accumulated amortization

at June 30, 2017 was $9,205 and $5,260 at September 30, 2016.

to such agreements on the date of the purchase.

The non-compete agreements are being amortized on a straight-line basis over the

five-year term of the non-compete clause of the agreement.

During each of the quarters ended December 31, 2017 and 2016, the Company

recorded amortization expense of $1,315 on this intangible asset, which is included in depreciation and amortization expense in

the accompanying consolidated statements of operations.

Accumulated amortization at December 31, 2017 was $11,835 and $10,520 at

September 30, 2017.

The Company accounts for trademarks in

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Management has determined that the trademarks have an indefinite life and do not consider

the value of trademarks recorded in the accompanying consolidated balance sheet to be impaired as of June 30, 2017.

the value of trademarks recorded in the accompanying consolidated balance sheets to be impaired as of December 31, 2017 and September

Goodwill represents the excess of the value

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Management does not consider the value of goodwill recorded for TCS in the

accompanying consolidated balance sheet to be impaired as of June 30, 2017, and September 30, 2016.

However, goodwill attributed

to Cloud9 and MDP was deemed to be impaired during the year ended September 30, 2016 as the assumptions for what those entities

would be used for at acquisition had significantly changed and the valuation of those entities during the year did not support

the goodwill at acquisition.

accompanying consolidated balance sheets to be impaired as of December 31, 2017 and September 30, 2017.

The fair values of the assets acquired

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that reflects the relative risk of achieving the cash flow and the time value of money.

The fair value of relationships was determined

The fair value of relationships were determined

by projecting expected cash flows and subtracting the portion of the cash flow derived by the relevant contributory assets.

The accompanying consolidated balance sheets,

consolidated statements of operations, changes in stockholders’

equity and cash flows include the results of operations of

the acquired subsidiaries from the date of acquisition.

The accompanying consolidated balance

sheets, consolidated statements of operations and cash flows include the results of operations of the acquired subsidiaries from

the date of acquisition.

The Company accounts for Federal and state

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tax benefits as a component of income tax expense.

There was no accrued interest or penalties as of June 30, 2017 and September

There was no accrued interest or penalties as of December 31, 2017 and September

From time to time, the Company is audited

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by taxing authorities could be different from those of the Company, which could result in the imposition of additional taxes.

Company’s Federal returns since 2014 are still subject for examination by taxing authorities.

Losses Per Share

Basic earnings per common share is computed

The Company’s Federal returns since 2014 are still subject for examination by taxing authorities.

Loss Per Share

Basic loss per common share is computed

by dividing net losses available to common stockholders by the weighted average number of common shares outstanding for the reporting

Average number of common shares were 34,973,013 and 31,990,466 for the three months ended June 30, 2017 and 2016, respectively.

Average number of common shares were 35,383,552 and 32,913,403 for the nine months ended June 30, 2017 and 2016, respectively.

For the nine months ended June 30,

2017 and 2016, approximately 2,340,171 and 2,200,346 shares of common stock underlying options and warrants, respectively,

were not added to the diluted average shares because inclusion of such shares would be antidilutive.

Average number of common shares were 35,812,952 and 35,037,900 for the quarters ended December 31, 2017 and 2016, respectively.

For the quarter ended December 31, 2017,

approximately 3,430,646 common stock shares were not added to the diluted average shares because inclusion of such shares would

be antidilutive.

The antidilutive shares for December 31, 2017 include 350,000 warrants and 3,080,646 in options.

For the quarter

ended December 31, 2016, approximately 2,350,346 common stock shares were not added to the diluted average shares because inclusion

of such shares would be antidilutive.

The antidilutive shares for December 31, 2016 include 150,000 warrants and 2,200,346 in

Revenue Recognition

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revenue in the accompanying consolidated balance sheets.

Tax Coach Software has 3 types of

services that are charged and collected on a month to month subscription basis (Tax Coach basic membership, All-Stars

coaching, and Wire Service weekly broadcast email).

None of these programs come with a long-term commitment or contract, and

there is no up-front payment beyond the monthly subscription fee.

Cancellations are processed within the month requested and

memberships are closed at the end of the period for which the most recent payment was made.

Members are not entitled to

refunds for unused memberships.

Tax Coach Software has 3 types of services

that are charged and collected on a month to month subscription basis (Tax Coach basic membership, All-Stars coaching, and Wire

Service weekly broadcast email).

None of these programs come with a long-term commitment or contract, and there is no up-front

payment beyond the monthly subscription fee.

Cancellations are processed within the month requested and memberships are closed

at the end of the period for which the most recent payment was made.

Members are not entitled to refunds for unused memberships.

Advertising costs are charged to operations

when incurred.

Advertising and marketing expense was $131,508 and $106,922 for the three months ended June 30, 2017 and 2016, respectively;

and $307,977 and $298,385 for the nine months ended June 30, 2017 and 2016, respectively.

Advertising and marketing expense was $60,538 and $101,878 for the quarters ended December 31, 2017 and 2016, respectively.

Stock-Based Compensation

The Company recognizes the fair value of

the stock-based compensation awards as wages in the accompanying statements of operations on a straight-line basis over the vesting

period based on the Black-Scholes option pricing model based on a risk-free rate from 0.97% in 2016 and 1.15% in 2017, dividend

yield of 0%, expected life of 2 years and volatility of 1.00.

The Company recognizes

the fair value of stock-based compensation awards as wages in the accompanying statements of operations on a straight-line basis

over the vesting period, using the Black-Scholes option pricing model, which is based on risk-free rates of 0.85% to 1.41% in 2017

and 0.97% in 2016, dividend yield of 0%, expected life of 2 years and volatility of 43% to 137%.

Use of Estimates

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Actual results could differ from these estimates.

All adjustments that, in the opinion of

management, are necessary for a fair presentation for the periods presented have been reflected in the financial statements.

Going Concern

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Future Accounting Pronouncements

In January 2017, the FASB issued ASU No.

2017-03, Accounting Changes and Error Corrections (Topic 250) and Investments-Equity Method and Joint Ventures (Topic 323).

2017-03 amends the Codification for SEC staff announcements made at two Emerging Issues Task Force (EITF) meetings.

At the September

2016 meeting, the SEC staff expressed its expectations about the extent of disclosures registrants should make about the effects

of the new FASB guidance (including any amendments issued prior to adoption) on revenue (ASU 2014-09), leases (ASU 2016-02) and

credit losses on financial instruments (ASU 2016-13) in accordance with SAB Topic 11.M.

That Topic requires registrants to disclose

the effect that recently issued accounting standards will have on their financial statements when adopted in a future period.

2017-03 incorporates these SEC staff views into ASC 250 and adds references to that guidance in the transition paragraphs of each

of the three new standards.

The ASU also conforms ASC 323-740-S99-2, which describes the SEC staff’s views on accounting

for investments in qualified affordable housing projects, to the guidance issued in ASU 2014-01.

The staff announced the change

at the November 2016 EITF meeting.

In November 2015, the FASB issued ASU No.

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years beginning after December 15, 2018.

The Company does not expect any significant financial impact to the financial statements

upon adoption of this standard.

Early application of the amendments in this ASU is permitted.

The Company does not expect

any significant financial impact to the financial statements upon adoption of this standard.

In February 2016, the FASB issued ASU Update

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any significant financial impact to the financial statements upon adoption of this standard.

In March 2016, the FASB issued ASU Update

2016-09, Compensation –

Stock Compensation (Topic 718).

The amendments in this Update are to simplify several aspects

of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either

equity or liabilities, and classification on the statement of cash flows.

ASU 2016-09 is effective for annual periods beginning

after December 15, 2016, and interim periods within those annual periods.

The Company has yet to do a full analysis on the impact

this will have but will do during the next fiscal year.

PROPERTY AND EQUIPMENT

Property and equipment consist of the following at June 30,

Property and equipment consist of the following at December

31, 2017 and September 30, 2017:

Service Lives

December 31, 2017

September 30, 2017

Furniture and fixtures

Furniture, fixtures and equipment

Internally developed software

Less accumulated depreciation and amortization

Depreciation expense was $3,800 during each of the three months

ended June 30, 2017 and 2016, respectively;

and $11,400 during each of the nine months ended June 30, 2017 and 2016.

Depreciation expense was $5,298 and $4,146 during the quarters

ended December 31, 2017 and 2016, respectively.

Trademarks consist of the following:

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Trademarks purchased at cost

Trademarks at June 30, 2017

Trademarks at December 31, 2017

LINE OF CREDIT

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the personal guarantee of the majority stockholder.

Line of credit balance was $18,481 and $19,732 at June 30, 2017 and September

30, 2016, respectively.

No amounts were outstanding under the line of credit at December 31, 2017 or

September 30, 2017.

NOTES PAYABLE

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a significant stockholder of the Company.

The balance outstanding under this note payable was $92,498 and $93,397 at June 30, 2017

The balance outstanding under this note payable was $0 and $92,197 at December 31, 2017

and September 30, 2017, respectively.

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The lender has a security interest in all collateral of the Company, and outstanding

under this note payable was $39,910 and $0 at June 30 2017, and September 30, 2016, respectively.

under this note payable was $171 and $7,935 at December 31, 2017 and September 30, 2017, respectively.

On July 31, 2017, the Company entered into

a Promissory Note Payable with Fourly Enterprises, LLC (“Fourly”) in the amount of $50,000.

The interest rate on the

note is 20% with payments of $5,000 due monthly.

The note matures on August 16, 2018.

Fourly is owned by the majority stockholder

of the Company.

The outstanding balance was $35,213 and $46,461 at December 31, 2017 and September 30, 2017, respectively.

On August 9, 2017 the Company entered into

a Promissory Note Payable with Elmer Fink in the amount of $100,000.

The interest rate on the note is 10%.

First year payment is

equal to 10% of the loan value with monthly principal and interest of $4,614 starting on year two.

The remaining principal and

accrued interest of this note is due on the maturity date, July 31, 2020.

The outstanding balance was $100,000 at December 31,

2017 and September 30, 2017.

On August 9, 2017 the Company entered into

a Promissory Note Payable with Mike and Terri Ashby in the amount of $100,000.

The interest rate on the note is 10%.

payment is equal to 10% of the loan value with monthly principal and interest of $4,614 starting on year two.

The remaining principal

and accrued interest of this note is due on the maturity date, August 15, 2020.

The outstanding balance was $100,000 at December

31, 2017 and September 30, 2017.

On September 5, 2017 the Company entered

into a Promissory Note Payable with Heleon Investment Company, Ltd.

in the amount of $100,000.

The interest rate on the note is

First year payment is equal to 10% of the loan value with monthly principal and interest of $4,614 starting on year two.

remaining principal and accrued interest of this note is due on the maturity date, August 15, 2020.

The outstanding balance was

$100,000 at December 31, 2017 and September 30, 2017.

On October 2, 2017 the Company entered

into a Promissory Note Payable with Indy and Sybill Bally in the amount of $100,000.

The interest rate on the note is 10%.

year payment is equal to 10% of the loan value with monthly principal and interest of $4,614 starting on year two.

The remaining

principal and accrued interest of this note is due on the maturity date, October 2, 2020.

The outstanding balance was $100,000

at December 31, 2017 and $0 at September 30, 2017.

On October 2, 2017 the Company entered

into a Promissory Note Payable with Paul Frueh in the amount of $100,000.

The interest rate on the note is 10%.

First year payment

is equal to 10% of the loan value with monthly principal and interest of $4,614 starting on year two.

The remaining principal

and accrued interest of this note is due on the maturity date, October 20, 2020.

The outstanding balance was $100,000 at December

31, 2017 and $0 at September 30, 2017.

On November 2, 2017 the Company entered

into a Promissory Note Payable with Michael and Donna Dage in the amount of $340,000.

The interest rate on the note is 10%.

year payment is equal to 10% of the loan value with monthly principal and interest of $15,689 starting on year two.

The remaining

principal and accrued interest of this note is due on the maturity date, October 20, 2020.

The outstanding balance was $340,000

at December 31, 2017 and $0 at September 30, 2017.

The Company’s maturities

of debt subsequent to December 31, 2017 are as follows:

ACCRUED EXPENSES

Accrued expenses consist of the following

at June 30, 2017 and September 30, 2016:

at December 31, and September 30, 2017:

September 30,

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Deferred rent

For the three and nine months ended June

For the three months ended December 31,

2017 and 2016, the effective tax rate of 0% varies from the U.S.

federal statutory rate primarily due to state income taxes,

net losses, certain nondeductible expenses and an increase in the valuation allowance associated with the net operating loss carryforwards.

Our deferred tax assets related to net operating loss carryforwards remain fully reserved due to uncertainty of utilization of

those assets.

federal statutory rate primarily due to state income taxes, net

losses, certain nondeductible expenses, changes in the federal statutory rate are from 35% to 21%, and an increase in the valuation

allowance associated with the net operating loss carryforwards.

Our deferred tax assets related to net operating loss carryforwards

remain fully reserved due to uncertainty of utilization of those assets.

A deferred tax liability or asset is determined

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and income tax recognition of NOL carry-forwards.

The deferred tax assets and liabilities

in the accompanying consolidated balance sheets include the following components at June 30, 2017 and September 30, 2016:

The deferred tax assets and

liabilities in the accompanying consolidated balance sheets include the following components at December 31, 2017 and

September 30, 2017:

September 30,

Net non-current deferred tax assets:

Net operating loss carry-forward

Property and equipment

Net non-current deferred tax liabilities:

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equipment under operating leases.

Total rent expense for the three months ended June 30, 2017 and 2016 was $22,887 and $19,481,

Total rent expense for the quarters ended December 31, 2017 and 2016 was $31,079 and $22,201,

respectively.

and $45,088 and $39,717 for the nine months ended June 30, 2017 and 2016, respectively.

Rent expense is recorded

on a straight-line basis over the term of the lease.

The difference between rental expense and rental payments is recorded as deferred

rent within accrued expenses in the accompanying consolidated balance sheets.

Management expects that in the normal course of business,

leases will be renewed or replaced by other leases.

Rent expense is recorded on a straight-line basis over the term of the lease.

The difference between rental expense

and rental payments is recorded as deferred rent within accrued expenses in the accompanying consolidated balance sheets.

expects that in the normal course of business, leases will be renewed or replaced by other leases.

Future minimum rental obligations as of

June 30, 2017 are as follows:

December 31, 2017 are as follows:

Contingencies

Prior to the merger, Pacific Oil Company

had approximately $75,000 outstanding payables.

A stock pledge from prior management has been earmarked to pay down the balance.

Management believes the amount is sufficient to pay the balance in full.

Legal Proceedings

From time to time, we are a party to or

otherwise involved in legal proceedings, claims and other legal matters, arising in the ordinary course of our business or otherwise.

A subsidiary of the Company is currently involved in one legal proceeding, the outcome of which will not be material to our ability

to operate or market our services, our consolidated financial position, results of operations or cash flows.

BUSINESS ACQUISITIONS

Business Acquisition –

Software, Inc.

Effective October 1, 2015, the Company

completed the acquisition of Tax Coach Software, LLC, an Ohio limited liability company (“Tax Coach Software”).

purchase was made by Financial Gravity Holdings, Inc.

Under the terms of the acquisition, the Company acquired 100% of Tax Coach

Software’s membership interests, for shares of common stock of the Company.

Effective October 1, 2015,

the Company completed the acquisition of Tax Coach Software, LLC, an Ohio limited liability company ("Tax Coach Software").

The purchase was made by Financial Gravity Holdings, Inc.

Under the terms of the acquisition, the Company acquired 100% of Tax

Coach Software's membership interests, for shares of common stock of the Company.

The total number of shares of common stock issued

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of the membership interests of Tax Coach Software.

Goodwill, as a result of this acquisition, is not deductible for tax purposes.

Certificates representing the shares of

common stock which served as the purchase price, were required to be deposited in escrow as of the effective date of the acquisition.

As part of the purchase agreement documentation, the Sellers maintained the right to unwind the transaction under certain conditions

as described.

The Sellers also retained all rights as shareholders while shares were held in escrow, including the right to vote.

Under the escrow agreement, if the average daily closing price of the shares for any continuous 10-day trading period equals or

exceeds $1.00 during the thirty-six months following October 28, 2015, the Company had the right to cause the shares deposited

in escrow to be distributed to the Sellers, terminating any right to unwind the transaction.

If the shares did not trade as to

provide a closing price during the thirty-six months following October 28, 2015 or if the average daily closing price of the shares

for any continuous 10-day trading period failed to equal or exceed $1.00 during the thirty-six months following October 28, 2015,

then no later than five days following the conclusion of the thirty-six month period, the Sellers would have the right to unwind

the acquisition of Tax Coach Software by the Company and the Company would immediately transfer the ownership of Tax Coach Software

back to the Sellers in exchange for the return of common stock issued during the acquisition.

The closing price was defined as

the last closing trade price for the shares on an electronic bulletin board as reported by Bloomberg or on the NASDAQ Capital Market

or the highest bid price as reported on “pink sheets”

by Pink Sheets LLC (formerly the National Quotation Bureau, Inc.).

If listed for trading on the American or New York Stock Exchange during the thirty-six months following October 28, 2015 it will

be deemed to meet the $1.00 benchmark.

On November 11, 2016, the parties to the

escrow agreement agreed (in a Company Distribution Notice) that the average daily closing price of the shares had exceeded the

$1.00 threshold and accordingly, the shares were released from escrow and the right to unwind the Tax Coach Software acquisition

transaction terminated.

Three employment agreements were entered

into as a condition to the acquisition.

Each agreement has an effective date as of November 1, 2015 and is effective for a period

of three years.

Two employment agreements include a base salary of $42,000 per year, per employee.

These same two agreements, include

a bonus that is calculated, for each employee, as the sum of 40% of the gross profit of Tax Coach Software for all revenues that

exceed $850,000 and are less than $950,000 and 20% of the gross profit of Tax Coach Software for all revenues earned in excess

One employment agreement includes a base salary of $60,000 per year.

This same agreement, includes a bonus that is

calculated as the sum of 20% of the gross profit of Tax Coach Software for all revenues that exceed $850,000 and are less than

$950,000 and 10% of the gross profit of Tax Coach Software for all revenues earned in excess of $950,000.

Gross profit is determined

in accordance with generally acceptable accounting principles, net of other amounts paid under employment and consulting agreements.

The agreements also include certain termination and non-compete clauses.

Compensation during the month of October 2015 to be paid

to the three employees totals an aggregate amount of $49,150.

In addition to the referenced employment

agreements, three consulting agreements were entered into as a condition to the acquisition.

Two agreements require certain services

at a fixed fee of $17,000 per month, per agreement, commencing on November 1, 2015 with a 90-day termination clause.

One agreement

requires certain services at a fixed fee of $3,500 per month, commencing on November 1, 2015 with a 90-day termination clause.

$444,650 in professional fees were paid under these three agreements in the year ended September 30, 2016.

Tax Coach Software, located in Cincinnati,

Ohio, provides three primary services including monthly subscription revenue from the “Tax Coach”

software system,

coaching revenue and email marketing services for customers.

The transaction resulted in a fair value of the acquisition

of $1,094,702 as follows:

Common stock issued in stock exchange at a value of $0.25 per share (as amended)

Additional paid in capital for the escrow agreement provision

Total value of the goodwill generated on acquisition

Intangible assets acquired

Net tangible assets acquired

Total assets acquired

Total fair value of acquisition

The intangible assets were as follows:

Customer relationships

Proprietary content

Prospect list

Non-compete agreements

Total intangible assets

The tangible assets acquired and liabilities assumed were as

Assets acquired:

Accounts receivable

Accounts receivable - other

Internally developed software

Total tangible assets

Liabilities assumed:

Accrued expenses

Total liabilities

Net acquired assets

The primary asset acquired from Tax Coach

Software is the proprietary content which includes a comprehensive platform of tax planning strategies including marketing and

instructional guides.

TCS will provide the Company with expertise in areas of service which expand beyond the Company’s current

service areas.

The Company believes they will also be able to leverage the use of the proprietary content in maximizing the benefits

of consulting with customers.

The acquisition of this entity increases the additional services the Company can provide to high

net worth individuals and business in accordance with its strategic business plan.

Certificates representing the shares of common stock which served as the purchase

price, were required to be deposited in escrow as of the effective date of the acquisition.

As part of the purchase agreement documentation,

the Sellers maintained the right to unwind the transaction under certain conditions as described in the purchase agreement.

Sellers also retained all rights as shareholders while shares were held in escrow, including the right to vote.

On November 11, 2016, the

parties to the escrow agreement agreed (in a Company Distribution Notice) that the average daily closing price of the shares had

exceeded the $1.00 threshold and accordingly, the shares were released from escrow and the right to unwind the Tax Coach Software

acquisition transaction terminated.

At September 30, 2016, Pacific Oil Company

had outstanding payables that the previous owners were in the process of liquidating.

The Company recorded $99,056 in pre-merger

payables at September 30, 2016.

The liabilities have been recorded on the Company’s financial statements but are expected

to be settled by the previous owners.

Shares of the Company were held in escrow to cover the possibility that these liabilities

will ultimately have to be settled by the Company.

During the quarter ended December 31, 2016, $23,764 had been settled.

The remaining

payable was settled during the fiscal year ended September 30, 2017.

Legal Proceedings

From time to time, we are a party to

or are otherwise involved in legal proceedings, claims and other legal matters, arising in the ordinary course of our

business or otherwise.

A subsidiary of the Company is currently involved in one legal proceeding, the outcome of which will

not be material to our ability to operate or market our services, our consolidated financial position, results of operations

or cash flows.

STOCKHOLDERS’

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300,000,000 shares of common stock, par value $0.001 per share.

During the three months ended December

31, 2017 and 2016, the Company sold 100,000 shares and 350,000 shares, respectively, for $100,000 and $350,000, respectively.

Preferred Stock

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The rights and obligations of the preferred stock are as determined by the Board of Directors at the time of

For each of the Company and Financial Gravity

Holdings, its subsidiary, no preferred shares are issued or outstanding as of June 30, 2017 and September 30, 2016, respectively.

There were no preferred shares issued or outstanding as of December 31, 2017 and September 30, 2017 for Financial Gravity

As part of the sale of common shares starting

October 2016, the Company granted to investors who invest at value of $100,000 or above common stock purchase warrants (the “Warrants”).

October 2016, the Company granted to investors who invest at value of $100,000 or above common stock purchase warrants (the "Warrants").

In the quarter ended December 31, 2016 there were three individual investments of $100,000 for which the Company issued warrants

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an additional 75,000 shares of common stock of the Company at an exercise price of $1.50 for a 2-year term.

In the quarter ended

March 31, 2017 there were two individual investments of at least $100,000 for which the Company issued warrants for the purchase

of 50,000 shares of common stock of the Company at an exercise price of $1.25 per share for a 1-year term and an additional 50,000

shares of common stock of the Company at an exercise price of $1.50 for a 2-year term.

In the quarter ended March 31, 2017 there

were two individual investments for an aggregate of $250,000 for which the Company issued warrants for the purchase of 50,000 shares

of common stock of the Company at an exercise price of $1.25 per share for a l-year term and an additional 50,000 shares of common

stock of the Company at an exercise price of $1.50 for a 2-year term.

In the quarter ended September 30, 2017,

there was one additional investment of $100,000 for which the Company issued warrants for the purchase of 25,000 shares of common

stock of the Company after exercise price of $1.25 per share for 1-year term and an additional 25,000 shares of common stock of

the Company at an exercise price of $1.50 for a 2-year term.

In the quarter ended December 31, 2017,

an aggregate of 100,000 shares of the Company’s common stock had been sold for $100,000 for which the Company issued warrants

for the purchase of 25,000 shares of common stock of the Company at an exercise price of $1.25 per share for a 1 year term and

an additional 25,000 shares of common stock of the Company at an exercise price of $1.50 for a 2-year term.

The Company follows the provisions of ASC

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Private Placement Memorandum, Financial

Gravity Holdings

Gravity Holdings, Inc.

On October 31, 2014, Financial Gravity

issued a private placement memorandum (“PPM”) for stock purchases of up to 2,000,000 shares of common stock at a cost

of $1.00 and a par value of $0.00001, with a minimum purchase level of $50,000 per investor.

The subscription period initially

expired June 30, 2015, however, the Board of Directors extended the offering period indefinitely, and increased the number of shares

authorized for sale under the PPM incrementally to accommodate additional investor interest.

During the years ended September 30, 2016

and 2015, 785,000 shares and 5,625,000 shares, respectively, were issued under the PPM for $535,000 and $1,875,000 of additional

paid-in capital at September 30, 2016 and 2015, respectively.

Holdings issued a private placement memorandum (“PPM”) for stock purchases of up to 2,000,000 shares of common stock

at a cost of $1.00 and a par value of $0.00001, with a minimum purchase level of $50,000 per investor.

The subscription period

initially expired June 30, 2015, however, the Board of Directors extended the offering period indefinitely, and increased the number

of shares authorized for sale under the PPM incrementally to accommodate additional investor interest.

Additional Common Stock Issuances, Financial

Gravity Holdings

Gravity Holdings, Inc.

During the year ended September 30, 2016,

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sold under the PPM and common shares issued in connection with the Tax Coach Software, LLC acquisition.

Additional Common Stock Issuances, Financial

Gravity Companies, Inc

On April 1, 2017, the Company entered into

an agreement with FMW Media Works Corp (“FMW”), wherein FMW would provide television, production, and media analysis

to the Company.

The Company issued 50,000 shares of common stock, worth $50,000, to FMW along with $3,500 cash as payment for services.

During the nine months ended June 30, 2017, the Company sold 675,000 shares of common stock for $625,000.

Stock Split, Financial Gravity Holdings,

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No option may be issued under the Plan after ten years from the date of adoption of the 2016 Plan.

Stock option activity is summarized as follows:

Outstanding - September 30, 2016

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Exercisable - December 31, 2017

Canceled or expired

Outstanding - March 31, 2017

Exercisable - March 31, 2017

Canceled or expired

Outstanding - June 30, 2017

Exercisable - June 30, 2017

All outstanding stock options at September

30, 2016 became immediately vested upon the completion of the reverse merger with Pacific Oil Company.

Total compensation expense

of $22,129 for these options was included in salaries and wages in the year ended September 30, 2016.

There were 19,800 stock options granted

from the 2016 stock option plan in the three months ended June 30, 2017.

There were 37,600 stock options cancelled from the 2016

stock option plan in the three months ended June 30, 2017.

The unamortized value of these stock options is $0.

There were 32,000

stock options granted from the 2016 stock option plan in the three months ended December 31, 2016.

The unamortized value of these

stock options is $11,532 at June 30, 2017.

All outstanding 2015 Plan stock options

at September 30, 2016 became immediately vested upon the completion of the reverse merger with Pacific Oil Company.

stock options granted under the 2016 Plan have 2- year vesting periods but there were 45,000 options that vested at issuance.

Total compensation expense, included in salaries and wages, of previously unamortized stock compensation was $54,184 and $ 0 for

the quarters ended December 31, 2017 and 2016, respectively.

Unamortized share-based compensation expense as of December

31, 2017 amounted to $265,576 which is expected to recognized over the next 2 years.

RELATED PARTY TRANSACTIONS

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related party in the accompanying consolidated balance sheets

was $4,506 and $4,506 as of June 30, 2017 and September 30, 2016, respectively.

was $2,303 and $4,506 as of December 31, 2017 and September 30, 2017, respectively.

Management fees paid to the majority stockholder

of the entity, included as management fees - related party in the accompanying consolidated statement of operations were $50,000

and $50,000 for the three months ended June 30, 2017, and 2016, respectively;

and $153,000 and $163,333 for the nine months ended

June 30, 2017, and 2016, respectively.

of the entity, included as management fees - related party in the accompanying consolidated statements of operations were $50,000

and $53,000 for quarters ended December 31, 2017 and 2016, respectively.

A board member who is also a stockholder

provided services to the Company.

Expenses for these services totaled $0 and $15,000 for the three months ended June 30, 2017,

and 2016, respectively;

and $9,000 and $40,000 for the nine months ended June 30, 2017, and 2016, respectively, and were included

as general and administrative expenses in the accompanying consolidated statement of operations.

Expenses for these services totaled $0 and $15,000 for the quarters ended December 31, 2017 and

2016, respectively, and were included as general and administrative expenses in the accompanying consolidated statements of operations.

Included in professional fees were consulting

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at a fixed fee of $3,500 per month, commencing on November 1, 2015 with a 90-day termination clause.

$109,500 in professional fees

were paid under these 3 agreements for each of the three months ended June 30, 2017 and June 30, 2016, respectively.

professional fees were paid under these 3 agreements for each of the nine months ended June 30, 2017 and June 30, 2016, respectively.

SUBSEQUENT EVENTS

On July 31, 2017, the Company entered into

a Promissory Note Payable to Fourly Enterprises, LLC (“Fourly”) in the amount of $50,000.

The interest rate on the

The note matures on August 16, 2018.

Fourly is owned by the majority stockholder of the Company.

On August 9, 2017 the Company

entered into a Promissory Note Payable Elmer Fink (“Fink”) in the amount of $100,000.

The interest rate on the

The note matures July 31, 2020.

Subsequent to June 30, 2017,

the Company has issued 100,000 common shares for $100,000.

As part of the common stock issuance, the Company has issued

25,000 warrants excisable at an exercise price of $1.25 per share and having a 1-year term, plus an additional 25,000

warrants at an exercise price of $1.50 and having a 2-year term.

Rick Johnson, Chief Operating Officer

of Financial Gravity Companies, Inc., has tendered his resignation effective August 4, 2017.

$101,960 and $116,100 in professional

fees were paid under these 3 agreements for the three months ended December 31, 2017 and December 31, 2016, respectively and were

included as professional services in the accompanying consolidated statements of operations.

Management’s Discussion and Analysis of Financial

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Financial Gravity’s Subsidiaries:

Financial Gravity Holdings,

This entity was created to engage

in the acquisition and integration of financial and other businesses which will deliver a wide range of accounting, tax planning

and management services to high net worth individuals and businesses in the Dallas/Fort Worth region, with further expansion into

other markets in accordance with its long-term growth rate and strategic business plan.

Financial Gravity Operations, Inc.

This entity was created

to raise capital to take the company public, and will be eliminated now that the public transaction is complete.

This entity integrates

the delivery of Financial Gravity Tax, Business, and Wealth Solutions to our growing customer base around the country.

This integration,

impossible to do for the small business marketplace until now, is what sets Financial Gravity apart from our peers.

This integration

will now be handled by Financial Gravity Companies, Inc.

This entity was created to raise capital

to take the company public, and will be eliminated now that the public transaction is complete.

This entity integrates the delivery

of Financial Gravity Tax, Business, and Wealth Solutions to its growing customer base around the country.

This integration, impossible

to do for the small business marketplace until now, is what sets Financial Gravity apart from its peers.

This integration is handled

by Financial Gravity Companies, Inc.

Financial Gravity Tax

Financial Gravity

has developed a precise procedure that has proven to be very successful in delivering lower taxes, higher profit, and greater wealth

for small business owners.

The process begins

with an extensive and comprehensive review of the client’s needs.

This assessment sets the requirements for the program that

is subsequently developed.

Financial Gravity has developed a precise

procedure that has proven to be very successful in delivering lower taxes, higher profit, and greater wealth for small business

The process begins with an extensive and

comprehensive review of the client’s needs.

This assessment sets the requirements for the program that is subsequently developed.

Next, Financial Gravity designs a unique "Tax Blueprint®"

which identifies several strategies

for lowering the client's taxes.

The second step is

to use the client’s custom Tax Blueprint®

to build that business entity and documentation that captures the identified

This is called the Tax Operating System®

This process is repeated as required and tuned for optimal efficiency

thus ensuring that the client receives the best service and optimal solutions in the phases of the business cycle during the year.

Clients continue to pay a monthly or weekly subscription fee as part of their TOS service for ongoing tax planning, tax return

preparation, payroll and bookkeeping services.

This business unit

promises clients they’ll pay the lowest legal, moral and ethical taxes possible.

which identifies several strategies for lowering the client's

The second step is to use the client’s

custom Tax Blueprint®

to build that business entity and documentation that captures the identified savings.

This is called

the Tax Operating System®

This process is repeated as required and tuned for optimal efficiency thus ensuring that the

client receives the best service and optimal solutions in the phases of the business cycle during the year.

Clients continue to

pay a monthly or weekly subscription fee as part of their TOS service for ongoing tax planning, tax return preparation, payroll

and bookkeeping services.

This business unit promises clients they’ll

pay the lowest legal, moral and ethical taxes possible.

Tax savings is the “tip of the spear”

in all our offerings.

No company has ever successfully married tax, wealth and business solutions together for Small Business Owners

(SBOs) and high net worth individuals.

(we guarantee to find double our initial

in all its offerings.

No company has ever successfully married tax, wealth and business solutions together for Small Business Owners (SBOs) and high

net worth individuals.

(the Company guarantee’s to find double its initial

fee in tax savings), clients are quick to sign up for proactive tax planning.

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These multi-tiered sales provide a 4-8 times multiple to a typical accounting or bookkeeping

SBO’s look

for two things from a typical CPA and bookkeeping firm:

SBO’s look for two things from a

typical CPA and bookkeeping firm, (1).

Lower personal income taxes;

and (2) Numbers that help them run/grow

their business better.

Numbers that help them run/grow their business better.

There is no national firm that provides these two services at any level.

Our tax planning sets us apart

from typical accounting and tax preparation firms.

We look forward to setting up a client’s business to be tax efficient.

The typical service model employed by CPA firms is oriented more toward compliance, which is the recording of historical data.

These providers work on historical records instead of looking forward to proactively plan.

SBOs are growing more and more frustrated

with accountants who “put numbers in boxes”

when what’s truly needed is a partner to help advise them in how

to be more efficient in their business.

Many SBOs can’t read a P/L or Balance Sheet and even when they can, the data is often

too old to act on.

Its tax planning sets us apart from typical accounting

and tax preparation firms.

The Company looks forward to setting up a client’s business to be tax efficient.

The typical service

model employed by CPA firms is oriented more toward compliance, which is the recording of historical data.

These providers work

on historical records instead of looking forward to proactively plan.

SBOs are growing more and more frustrated with accountants

who “put numbers in boxes”

when what’s truly needed is a partner to help advise them in how to be more efficient

in their business.

Many SBOs can’t read a P/L or Balance Sheet and even when they can, the data is often too old to act on.

As technology speeds up the pace of business real time data is becoming more important.

Most CPAs don’t

even calculate tax savings for their clients, as asking CPA’s to produce unique data to each client is outside the factory

mentality of the profession.

Our average tax savings is over $20,000 per year per business owner.

Financial Gravity Tax is pursuing

several M&A and/or partnership opportunities to deliver on the product Bookkeeping with Purpose®, that will help deliver

the promised tax savings and producer actionable real time data.

Most CPAs don’t even calculate tax

savings for their clients, as asking CPA’s to produce unique data to each client is outside the factory mentality of the

The average tax savings is over $20,000 per year per business owner.

Financial Gravity Tax is pursuing several M&A

and/or partnership opportunities to deliver on the product Bookkeeping with Purpose®, that will help deliver the promised tax

savings and producer actionable real time data.

Financial Gravity Wealth

After saving thousands

in taxes, clients are happy to trust us with the management of their wealth, especially when treated to a different wealth management

After saving thousands in taxes, clients

are happy to trust us with the management of their wealth, especially when treated to a different wealth management experience.

Financial Gravity Wealth is a Registered Investment Advisory (RIA) firm.

An RIA is an advisor or firm engaged in financial

planning and wealth management business and is registered either with the Securities and Exchange Commission (SEC) or state securities

An RIA has a fiduciary duty to his or her clients, which means that he or she has a fundamental obligation to provide

suitable investment advice and always act in the clients' best interests.

The Department

of Labor’s Fiduciary Rule is a new ruling, scheduled to be phased in April 10, 2017 –

1, 2018, that will automatically

elevate all financial professionals who work with retirement plans or provide retirement planning advice to the level of a fiduciary,

bound legally and ethically to meet the standards of that status.

While the status of this rule is uncertain following the election,

we are positioned to do what we have always done, control advisor fees and reduce one of the biggest “fees”

fund and ETF portfolio, which is “tax friction”.

An RIA is an advisor or firm engaged in financial planning

and wealth management business and is registered either with the Securities and Exchange Commission (SEC) or state securities authorities.

An RIA has a fiduciary duty to his or her clients, which means that he or she has a fundamental obligation to provide suitable

investment advice and always act in the clients' best interests.

The Department of Labor’s Fiduciary

Rule is a new ruling, scheduled to be phased in April 10, 2017 –

1, 2018, that will automatically elevate all financial

professionals who work with retirement plans or provide retirement planning advice to the level of a fiduciary, bound legally

and ethically to meet the standards of that status.

While the impact of this rule is uncertain, the Company is positioned to do

what it have always done, control advisor fees and reduce one of the biggest “fees”

in a mutual fund and ETF portfolio,

which is “tax friction”.

These taxes erode about 1% per year in performance.

Only 5% of all financial

planners are RIAs.

Only 5% of all financial planners are RIAs.

The advantage of the RIA model is lower cost to the client.

Also, since RIAs are not compensated by commissions

on financial products, their advice is considered less biased and more accurate.

Coupled with tax savings, our status as an RIA

makes our firm very attractive to the most profitable clients.

Also, since RIAs are not compensated by commissions on financial products,

their advice is considered less biased and more accurate.

Coupled with tax savings, its status as an RIA makes the Company very

attractive to the most profitable clients.

Financial Gravity Business

The complexity of

Advanced Tax Planning next fuels Financial Gravity Business services.

The first product that was developed with a partner is Advisor

This product is designed to help financial advisors and accountants run their businesses better.

We intend to test the

service offering / coaching program with the first two markets where we have the most experience and then roll out the service

offering to other industries at a later date.

Clients spend some of their tax savings from Financial Gravity Tax planning for these

services, rendering them “cost neutral”.

We have also developed

our Partner Programs that teach financial advisors how to serve an underserved community, the Small Business Owner.

Financial Gravity

Business is the only non-product centric business system for financial advisors that helps them serve the needs of the small business

owner without needing to sell a financial services product like a life insurance policy or a 401(k) plan.

To broaden the skillset

of CPAs, we have created the Certified Tax Master®

The complexity of Advanced Tax Planning

next fuels Financial Gravity Business services.

The first product that was developed with a partner is Advisor Architect.

product is designed to help financial advisors and accountants run their businesses better.

The Company intends to test the service

offering / coaching program with the first two markets where it has the most experience and then roll out the service offering

to other industries at a later date.

Clients spend some of their tax savings from Financial Gravity Tax planning for these services,

rendering them “cost neutral”.

The Company has also developed its Partner

Programs that teach financial advisors how to serve an underserved community, the Small Business Owner.

Financial Gravity Business

is the only non-product centric business system for financial advisors that helps them serve the needs of the small business owner

without needing to sell a financial services product like a life insurance policy or a 401(k) plan.

To broaden the skillset of CPAs, the Company

has created the Certified Tax Master®

designation and partner program for CPA’s and Enrolled Agents (“EA’s”).

To our knowledge, there is no program offering like this of its kind available elsewhere.

To its knowledge, there is no program offering like this of its kind available elsewhere.

This program was created in Financial

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Financial Gravity Ventures

This entity in our

corporate family employs our M&A strategy to acquire talent and build wealth for Financial Gravity Companies, Inc.

This entity in the Company’s corporate

family employs its M&A strategy to acquire talent and build wealth for Financial Gravity Companies, Inc.

and acquired companies.

As mentioned earlier, Financial Gravity is pursuing several acquisition opportunities.

Tax Coach Software

(TCS) was a key acquisition in fiscal year 2016.

TCS supports over 550 CPA and Enrolled Agent professionals, training them to add

crucial tax planning services to support clients.

Not only did this acquisition bring high-end tax planning to Financial Gravity,

but the TCS customer base adds significant business development opportunities for Financial Gravity Wealth.

We developed the Certified

Tax Master®

Tax Coach Software (TCS) was a key acquisition

in fiscal year 2016.

TCS supports over 550 CPA and Enrolled Agent professionals, training them to add crucial tax planning services

to support clients.

Not only did this acquisition bring high-end tax planning to Financial Gravity, but the TCS customer base adds

significant business development opportunities for Financial Gravity Wealth.

The Company developed the Certified Tax Master®

for this group and rolled out new client systems in mid-2016.

Sash Corporation

dba Metro Data Processing, based in Tulsa, OK was the Company’s first acquisition.

The Company has been a fixture in payroll

processing in the Tulsa area for years and should prove to be a compelling storefront to begin selling additional tax services.

We go to market primarily

via Financial Advisors and accountants.

Our Partner Program is proven to provide financial professionals with recognized trademarked

Sash Corporation dba Metro Data Processing,

based in Tulsa, OK was the Company’s first acquisition and Metro Data Processing is based in Tulsa, OK.

The Company has been

a fixture in payroll processing in the Tulsa area for years and should prove to be a compelling storefront to begin selling additional

tax services.

The Company goes to market primarily via

Financial Advisors and accountants.

Its Partner Program is proven to provide financial professionals with recognized trademarked

service offerings, business support, and marketing materials.

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Factor Based Investing™, Fractional Family Office®, TaxCoach™, and Certified Business Strategist™

allowing financial professionals in our Partner Program to add additional value to their clients and their business.

Over the past few

years the Company has undertaken significant effort, and invested considerable capital, in order to attract and maintain a qualified

and capable staff, develop proprietary solutions, and implement systems, procedures, and infrastructure to execute the business

plan on a large scale.

Given the short time frame this current market opportunity has existed and due to the complexity of the

model we have a significant competitive advantage over others who may try to execute the same business plan.

Results of Operations for the three months and nine months

ended June 30, 2017 compared to the three months and nine months ended June 30, 2016

For the three months ended June 30, 2017,

revenue increased $124,395 or 17.9% to $819,419 from $695,024 for the three months ended June 30, 2016.

For the nine months ended

June 30, 2017, revenue increased $624,602 or 32.3% to $2,560,113 from $1,935,511 for the nine months ended June 30, 2016.

in revenue reflects increase in service income, primarily due to significant growth in partner programs, which resulted in an increase

in customer sales, and an increase in investment management fees because of significant growth in wealth clients.

allowing financial professionals in its Partner Program to add additional value to their clients and their business.

Over the past few years the Company has

undertaken significant effort, and invested considerable capital, in order to attract and maintain a qualified and capable staff,

develop proprietary solutions, and implement systems, procedures, and infrastructure to execute the business plan on a large scale.

Given the short time frame this current market opportunity has existed and due to the complexity of the model, the Company has

a significant competitive advantage over others who may try to execute the same business plan.

Significant effort and investment capital

has been incurred by the Company over the past few years in order to attract and maintain a qualified and capable staff, develop

proprietary solutions, and implement systems, procedures, and infrastructure to execute the business plan on a large scale.

the short time frame this current market opportunity has existed and due to the complexity of the model, the Company has a significant

competitive advantage over others who may try to execute the same business plan.

Results of Operations for the quarter ended December 31,

2017 compared to the quarter ended December 31, 2016

For the quarter ended December 31, 2017,

revenue increased $146,904 or 19% to $919,900 from $772,996 for the quarter ended December 31, 2016.

The increase in revenue reflects

an increase in 1) investment management fees primarily due to an increase of assets under management and 2) service income, primarily

due to growth in partner programs, which resulted in an increase in customer sales.

Operating Expenses

Cost of services activity remained relatively

stable for the three months and nine months ended June 30, 2017 and 2016.

Cost of services activity decreased $11,126

or 55 % to $9,132 for the quarter ended December 31, 2017 from $20,258 for the quarter ended December 31, 2016.

The decrease is

primarily related to a decrease in software subscription costs.

Professional services expenses include

1 unchanged sentence

money forfeited.

Professional services expenses increased $86,048 or 36.1% to $324,296 for the three months ended June 30, 2017

from $238,248 for the three months ended June 30, 2016.

This increase is primarily due to significant growth in our wealth management

and partner program, which resulted in an increase in commissions paid.

Professional services expenses remained consistent for the

nine months ended June 30, 2017 from the nine months ended June 30, 2016.

Professional services expenses decreased $94,039 or 35% to $176,054 for the quarter ended December 31, 2017 from

$270,093 for the quarter ended December 31, 2016.

This decrease is primarily due to the decrease of merger costs.

Depreciation and amortization expenses

include depreciation on fixed assets and amortization of definite lived intangibles.

Depreciation and amortization expenses decreased

$13,180 to $24,947 for the three months ended June 30, 2017 from $38,127 for the three months ended June 30, 2016.

and amortization expenses decreased $41,029 to $74,391 for the nine months ended June 30, 2017 from $115,420 for the nine months

ended June 30, 2016.

The decrease is primarily due to the fact that the Tax Coach Software prospect list was fully amortized by

September 30, 2016.

General and administrative expenses activity

remained relatively stable for the three months ended June 30, 2017 and 2016.

Depreciation and amortization expenses increased

$1,152 to $25,829 for the quarter ended December 31, 2017 from $24,677 for the quarter ended December 31, 2016.

The increase is

primarily due to assets purchased during the quarter ended December 31, 2017.

General and administrative expenses increased

or 32% to $384,477 for the nine months ended June 30, 2017 from $291,263 for the nine months ended June 30, 2016.

is primarily due to an increase in costs associated with the growth of the partner program.

$119,246 or 98% to $241,072 for the quarter ended December 31, 2017 from $121,826 for the quarter ended December 31, 2016.

increase is primarily due to an increase in costs associated with the growth of the partner program.

Management fees –

related party expenses

activity remained relatively stable for the three months and nine months ended June 30, 2017 and 2016.

Marketing expenses activity increased $24,586

or 23% to $131,508 for the three months ended June 30, 2017 from $106,922 for the three months ended June 30, 2016.

is primarily due to an increase in expenses related to growing the partner program.

Marketing expenses activity remained relatively

stable for the nine months ended June 30, 2017 and 2016.

Salaries and wages expenses activity increased

$53,248 or 11.2% to $530,125 for the three months ended June 30, 2017 from $476,877 for the three months ended June 30, 2016.

increase is primarily due to an increase in investment management commissions.

Salaries and wages expenses activity remained relatively

stable for the nine months ended June 30, 2017 and 2016.

The Company experienced a decrease in its

bottom line of $33,107 or 9.7% to a net loss of $375,291 for the three months ended June 30, 2017, from a net loss of $342,184

for the three months ended June 30, 2016, and an increase in its bottom line of $435,538 or 37.7% to a net loss of $720,502 for

the nine months ended June 30, 2017 from a net loss of $1,156,040 for the nine months ended June 30, 2016, primarily attributable

to the reasons noted above.

remained relatively stable for the quarter ended December 31, 2017 and 2016.

Marketing expenses decreased $40,941 or

40% to $60,937 for the quarter ended December 31, 2017 from $101,878 for the quarter ended December 31, 2016.

The decrease is primarily

due to the Company doing press releases and advertising on Facebook during the year ended September 30, 2017 which the Company

reduced during the three months ended December 31, 2017.

Salaries and wages expenses increased $228,621

or 61% to $606,341 for the quarter ended December 31, 2017 from $377,720 for the quarter ended December 31, 2016.

wages increased from first quarter of fiscal 2016 to first quarter of fiscal 2017 because the number of clients increased which

resulted in higher commissions paid.

The Company experienced a decrease in

its bottom line of $62,586 or 30% to a net loss of $270,853 for the quarter ended December 31, 2017 from a net loss of $208,267

for the quarter ended December 31, 2016, primarily attributable to the reasons noted above.

Significant Accounting Policies

22 unchanged sentences

consolidated balance sheets.

TaxCoach Software has 3 types of services

that are charged and collected on a month to month subscription basis (TaxCoach basic membership, All-Stars coaching, and Wire

Service weekly broadcast email).

None of these programs come with a long-term commitment or contract, and there is no up-front

payment beyond the monthly subscription fee.

Cancellations are processed within the month requested and memberships are closed

at the end of the period for which the most recent payment was made.

Members are not entitled to refunds for unused memberships.

Trade accounts receivable are carried at

9 unchanged sentences

Stock-Based Compensation.

The Company recognizes the fair value of

stock-based compensation awards as wages in the accompanying statements of operations on a straight-line basis over the vesting

period, using the Black-Scholes option pricing model, which is based on risk-free rates of from 0.97% in 2016 and 1.15% in 2017,

dividend yield of 0%, expected life of 2 years and volatility of 1.00.

The Company recognizes

the fair value of stock-based compensation awards as wages in the accompanying statements of operations on a straight-line basis

over the vesting period, using the Black-Scholes option pricing model, which is based on risk-free rates of 0.85% to 1.41% in 2017

and 0.97% in 2016, dividend yield of 0%, expected life of 2 years and volatility of 43% to 137%.

Liquidity and Capital Resources

As of June 30, 2017, the Company had cash

and cash equivalents of $154,468.

The increase of $21,665 in cash and cash equivalents from June 30, 2016 was due to net cash used

in operating activities of $648,884, offset by net cash provided by financing activities of $662,760 and net cash provided by investing

activities of $7,789.

Net cash used in operating activities was

$648,884 for the nine months ended June 30, 2017, compared to $1,005,705 net cash used in operating activities for the nine months

ended June 30, 2016.

The net cash used in operating activities for the nine months ended June 30, 2017 was due to net loss of $720,502,

adjusted primarily by the following:

(1) increases in depreciation and amortization of $72,443, stock compensation for services

provided by a third party, accounts payable –

trade of $4,203, accrued expenses of $27,378, and deferred revenue of $30,148,

(2) offset by decreases in trade accounts receivable of $66,985, prepaid expenses of $26,723, and pre-merger liabilities of $18,845.

Net cash provided by investing activities

was $7,789 for the nine months ended June 30, 2017, compared to $26,883 of net cash provided by investing activities for the

nine months ended June 30, 2016.

Investing activities for the nine months ended June 30, 2017 consisted of purchases of trademarks

of $50 and equipment of $2,161 offset by cash acquired for the sale of investments of $10,000.

As of December 31, 2017, the Company had

cash and cash equivalents of $608,700.

The increase of $164,280 in cash and cash equivalents from September 30, 2017 was due to

net cash used in operating activities of $357,373 and net cash used in investing activities of $7,138, offset by net cash provided

by financing activities of $528,791.

Net cash used in operating activities

was $357,373 for the three months ended December 31, 2017, compared to $156,576 net cash used in operating activities for the

three months ended December 31, 2016.

The net cash used in operating activities for the quarter ended December 31, 2017 was due

to net loss of $270,853 adjusted primarily by the following:

(1) depreciation and amortization of $25,829, stock based compensation

expense of $54,184, accounts receivable –

related party of $2,203, and accounts payable –

trade of $18,504, (2) offset

by decreases in trade accounts receivable of $59,287, prepaid expense of $44,495, accrued expenses of $38,129 and deferred revenue

Net cash provided by financing activities

was $662,760 for the nine months ended June 30, 2017, compared to net cash provided by financing activities of $398,131 for the

nine months ended June 30, 2016.

Financing activities for the nine months ended June 30, 2017 consisted primarily of $625,000 in

proceeds from sales of common stock, and $100,000 in proceeds from notes payable.

As shown below, at June 30, 2017, our contractual

cash obligations totaled approximately $242,089, all of which consisted of operating lease obligations and debt principal.

was $528,791 for the three months ended December 31, 2017, compared to net cash provided by financing activities of $437,903 for

the three months ended December 31, 2016.

Financing activities for the three months ended December 31, 2017 consisted primarily

of $100,000 in proceeds from sales of common stock, and $540,000 in borrowings;

offset with payments made to reduce the Company’s

debt obligations in the amount of $111,209.

As shown below, at December 31, 2017, our

contractual cash obligations totaled approximately $931,484, all of which consisted of operating lease obligations and debt principal.

Payments due by period

Contractual obligations

Line of credit

Notes payable

31 unchanged sentences

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