What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2018-05-15 compared with 2018-03-02 · 236 added, 231 removed, 781 unchanged (37% of the section changed)

3 unchanged sentences

CONSOLIDATED BALANCE SHEETS

December 31, 2017

March 31, 2018

September 30, 2017

9 unchanged sentences

Non-compete agreements, net

Total other assets

LIABILITIES AND STOCKHOLDERS’

9 unchanged sentences

$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

35,837,900 shares issued and outstanding as of March 31, 2018 and 35,737,900 shares issued and outstanding as of September 30, 2017.

Additional paid-in capital

8 unchanged sentences

For the Three Months Ended

For the Six Months Ended

Investment management fees

12 unchanged sentences

OTHER INCOME (EXPENSE)

Other (expense) income

Interest expense

Total other expense

Total other (expense) income

LOSS PER SHARE - Basic and Diluted

4 unchanged sentences

CONSOLIDATED STATEMENTS OF CASH FLOWS

Three Months Ended December 31,

Six Months Ended March 31,

CASH FLOWS FROM OPERATING ACTIVITIES

12 unchanged sentences

Cash paid for purchase of property and equipment

Purchases of trademarks

Net cash used in investing activities

5 unchanged sentences

Net cash provided by financing activities

TOTAL INCREASE IN CASH AND CASH EQUIVALENTS

NET CHANGE IN CASH AND CASH EQUIVALENTS

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD

12 unchanged sentences

and Subsidiaries

(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 “Company”) 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.

Financial Gravity

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

Business, LLC, Financial Gravity Ventures, LLC., SASH Corporation (doing business as Metro Data Processing) and Tax Coach Software,

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

21 unchanged sentences

recorded when received.

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

The allowance for doubtful accounts was $14,842 as of March 31, 2018 and September 30, 2017.

In the normal course of business, the Company

28 unchanged sentences

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.

During each of the three and six months ended March 31, 2018 and 2017, the Company recorded amortization

expense of $2,806 and $5,612, respectively, on this intangible asset, which is included in depreciation and amortization expense

in the accompanying consolidated statements of operations.

Accumulated amortization at March 31, 2018 was $28,062 and $22,450 at

September 30,2017.

Proprietary Content

3 unchanged sentences

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.

During each of the three and six months ended March 31, 2018 and 2017, the Company recorded amortization expense of $16,410

and $32,820 on this intangible asset, which is included in depreciation and amortization expense in the accompanying consolidated

statements of operations.

Accumulated amortization at March 31, 2018 was $164,093 and $131,276 at September 30, 2017.

The trade name acquired as a part of the

2 unchanged sentences

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

of the trade name recorded in the accompanying consolidated balance sheets to be impaired as of March 31, 2018 and September 30,

Non-compete Agreements

4 unchanged sentences

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.

During each of the three and six months ended March 31, 2018 and 2017,

the Company recorded amortization expense of $1,315 and $2,630, respectively, on this intangible asset, which is included in depreciation

and amortization expense in the accompanying consolidated statements of operations.

Accumulated amortization at March 31, 2018

was $13,150 and $10,520 at September 30, 2017.

The Company accounts for trademarks in

3 unchanged sentences

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

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

the value of trademarks recorded in the accompanying consolidated balance sheet to be impaired as of March 31, 2018 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 sheets to be impaired as of December 31, 2017 and September 30, 2017.

accompanying consolidated balance sheets to be impaired as of March 31, 2018 and September 30, 2017.

The fair values of the assets acquired,

3 unchanged sentences

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

The fair value of relationships were determined

The fair value of relationships was 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 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

8 unchanged sentences

tax benefits as a component of income tax expense.

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

There was no accrued interest or penalties as of March 31, 2018 and September

From time to time, the Company is audited

5 unchanged sentences

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

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

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

Loss Per Share

1 unchanged sentence

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 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

Average number of common shares were 35,837,900 and 34,886,089 for the three months ended March 31, 2018 and 2017, respectively.

Average number of common shares were 35,823,648 and 35,137,625 for the six months ended March 31, 2018 and 2017, respectively.

For the periods ended March 31, 2018 and 2017 3,430,646 and 2,512,346 common stock options and warrants were excluded from diluted

loss per share as they were antidilutive.

Revenue Recognition

22 unchanged sentences

when incurred.

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

Advertising and marketing expense for the three months ended March 31, 2018 and 2017 was $82,307 and $74,591, respectively;

and $142,845 and $176,469 for the six months ended March 31, 2018 and 2017.

Stock-Based Compensation

28 unchanged sentences

Moreover, the sale of additional equity securities to raise financing

will result in additional dilution to the Company’s stockholders, and incurring additional indebtedness could involve an

increased debt service cash obligation, the imposition of covenants that restrict the Company’s operations or the Company’s

ability to perform on its current debt service requirements.

The consolidated financial statements do not include any adjustments

that might be necessary if the Company is unable to continue as a going concern.

will result in additional dilution to the Company’s stockholders and incurring additional indebtedness could involve an increased

debt service cash obligation, the imposition of covenants that restrict the Company’s operations or the Company’s ability

to perform on its current debt service requirements.

The consolidated financial statements do not include any adjustments that

might be necessary if the Company is unable to continue as a going concern.

Future Accounting Pronouncements

37 unchanged sentences

In March 2016, the FASB issued ASU Update

2016-07, Investments –

Equity Method and Joint Ventures (Topic 323).

The amendments in this Update eliminate the requirement

that when an investment qualifies for use of the equity method as a result of an increase in the level of ownership interest or

degree of influence, an investor must adjust the investment, results of operations, and retained earnings retroactively on a step-by-step

basis as if the equity method had been in effect during all previous periods that the investment had been held.

ASU 2016-07 is

effective for the years beginning after December 15, 2016.

Early application of the amendments in this ASU is permitted.

does not expect any significant financial impact to the financial statements upon adoption of this standard.

In March 2016, the FASB issued ASU Update

2016-08, Revenue from Contracts with Customers (Topic 606).

18 unchanged sentences

PROPERTY AND EQUIPMENT

Property and equipment consist of the following at December

31, 2017 and September 30, 2017:

Property and equipment consist of the following at

March 31, 2018 and September 30, 2017:

Service Lives

December 31, 2017

March 31, 2018

September 30, 2017

2 unchanged sentences

Less accumulated depreciation and amortization

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

ended December 31, 2017 and 2016, respectively.

Total Depreciation expense for the three months ended

March 31, 2018 and 2017 was $7,764 and $3,800, respectively;

and $13,062 and $7,600 for the six months ended March 31, 2018 and

2017, respectively.

Trademarks consist of the following:

3 unchanged sentences

Trademarks purchased at cost

Trademarks at December 31, 2017

Trademarks at March 31, 2018

LINE OF CREDIT

7 unchanged sentences

the personal guarantee of the majority stockholder.

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

September 30, 2017.

No amounts were outstanding under the line of credit at March 31, 2018 or September

NOTES PAYABLE

6 unchanged sentences

a significant stockholder of the Company.

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

The balance outstanding under this note payable was $0 and $92,197 at March 31, 2018

and September 30, 2017, respectively.

4 unchanged sentences

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

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

under this note payable was $0 and $7,935 at March 31, 2018 and September 30, 2017, respectively.

On July 31, 2017, the Company entered into

5 unchanged sentences

of the Company.

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

The outstanding balance was $22,949 and $46,461 at March 31, 2018 and September 30, 2017, respectively.

On August 9, 2017 the Company entered into

5 unchanged sentences

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

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

The outstanding balance was $100,000 at March 31, 2018

and September 30, 2017.

5 unchanged sentences

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

The outstanding balance was $100,000 at December

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

2018 and September 30, 2017.

6 unchanged sentences

The outstanding balance was

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

$100,000 at March 31, 2018 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.

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

The interest rate on the note is 10%.

3 unchanged sentences

The outstanding balance was $100,000

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

and $0 at March 31, 2018 and September 30, 2017.

On October 2, 2017 the Company entered

3 unchanged sentences

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.

The remaining principal and

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

The outstanding balance was $100,000 and $0 at March

31, 2018 and 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.

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

The interest rate on the note is 10%.

3 unchanged sentences

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:

and $0 at March 31, 2018 and September 30, 2017.

On March 15, 2018 the Company entered into

a Promissory Note Payable with Helen Janssen in the amount of $200,000.

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 $9,229 starting on year two.

The remaining principal and

accrued interest of this note is due on the maturity date, February 15, 2021.

The outstanding balance was $200,000 and $0 at March

31, 2018 and September 30, 2017.

The Company’s maturities of

debt subsequent to March 31, 2018 are as follows:

ACCRUED EXPENSES

Accrued expenses consist of the following

at December 31, and September 30, 2017:

at March 31, 2018 and September 30, 2017:

March 31, 2018

September 30, 2017

1 unchanged sentence

Accrued operating expenses

Deferred rent

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, 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.

For the three months and six-month periods

ended March 31, 2018 and 2017, 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, 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

9 unchanged sentences

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 December 31, 2017 and

September 30, 2017:

The deferred tax assets and liabilities

in the accompanying consolidated balance sheets include the following components at March 31, 2018 and September 30, 2017:

March 31, 2018

September 30, 2017

11 unchanged sentences

equipment under operating leases.

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

Total rent expense for the three months ended March 31, 2018 and 2017 was $31,483 and $22,887,

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.

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

and $62,966 and $45,088 for the six months ended March 31, 2018 and 2017, 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.

Future minimum rental obligations as of

December 31, 2017 are as follows:

March 31, 2018 are as follows:

Contingencies

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

to the owners of Tax Coach Software was 6,000,000 shares (as amended), at par value of $0.00001 per share, in exchange for 100%

of the membership interests of Tax Coach Software.

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.

Effective October 1, 2015, the Company

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

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 to the owners

of Tax Coach Software was 6,000,000 shares (as amended), at par value of $0.00001 per share, in exchange for 100% of the membership

interests of Tax Coach Software.

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,

1 unchanged sentence

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.

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

6 unchanged sentences

will ultimately have to be settled by the Company.

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

During the quarter ended March 31, 2017, $61,365 had been settled.

The remaining

1 unchanged sentence

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.

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

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’

1 unchanged sentence

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

During the three months ended December

During the three months ended March 31,

2018 and 2017, the Company sold 0 shares and 275,000 shares, respectively, for $0 and $275,000, respectively.

During the six months ended March 31, 2018

and 2017, the Company sold 100,000 shares and 625,000 shares, respectively, for $100,000 and $625,000, respectively.

Preferred Stock

6 unchanged sentences

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

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

There were no preferred shares issued or outstanding as of March 31, 2018 and September 30, 2017 for Financial Gravity

As part of the sale of common shares starting

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

Additional Common Stock Issuances, Financial

Gravity Holdings, Inc.

During the year ended September 30, 2016,

one of the founding members of Financial Gravity Holdings forfeited 2,926,294 common shares, in addition to the issuance of shares

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

Stock Split, Financial Gravity Holdings,

Effective October 20, 2015, Financial Gravity

Holdings declared a three for one stock split of its common stock.

Upon the stock split, every one share of common stock issued

and outstanding was automatically reclassified and converted into three shares of common stock.

The common stock retained a par

value of $0.00001 per share.

STOCK OPTION PLAN

24 unchanged sentences

Canceled or expired

Outstanding - December 31, 2017

Exercisable - December 31, 2017

Outstanding –

March 31, 2018

Exercisable –

March 31, 2018

All outstanding 2015 Plan stock options

2 unchanged sentences

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.

the three months ended March 31, 2018 and 2017, and $94,764 and $0 for the six months ended March 31, 2018 and 2017, respectively.

Unamortized share-based compensation expense as of March 31, 2018 amounted to $224,997 which is expected to recognize over the

next 1.75 years.

RELATED PARTY TRANSACTIONS

2 unchanged sentences

related party in the accompanying consolidated balance sheets

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

was $2,303 and $4,506 as of March 31, 2018 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 statements of operations were $63,500

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

and $50,000 for three months ended March 31, 2018 and 2017, respectively $113,500 and $103,000 for the six months ended March 31,

2018 and 2017.

A board member who is also a stockholder

provided services to the Company.

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.

Expenses for these services totaled $0 and $15,000 for the three months ended March 31, 2018

and 2017, and $0 and $30,000 respectively, for the six months ended March 31, 2018 and 2017 and were included as general and administrative

expenses in the accompanying consolidated statements of operations.

Included in professional fees were consulting

2 unchanged sentences

$16,500 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.

$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.

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.

$109,500 and $109,500

in professional fees were paid under these 3 agreements for the three months ended March 31, 2018 and March 31, 2017, and $211,460

and $225,600 six months ended March 31, 2018 and March 31, 2017 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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are focused on helping clients make more money and build wealth, most often with tax savings, lowering costs and improving efficiency.

In addition to expanding through client procurement and organic growth, Financial Gravity intends to make a number of acquisitions.

In addition to expanding through client procurement and organic growth, Financial Gravity intends to make several acquisitions.

The primary acquisition targets currently include accounting, bookkeeping, and financial advisory firms.

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by Financial Gravity Companies, Inc.

Financial Gravity Tax

Financial Gravity Tax, Inc.

Financial Gravity has developed a precise

22 unchanged sentences

(the Company guarantee’s to find double its initial

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

(the Company guarantees to find double its initial fee

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

Lowering their personal taxes then fuels insurance,

wealth and business services sales.

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

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

SBO’s look for two things from a

22 unchanged sentences

savings and producer actionable real time data.

Financial Gravity Wealth

Financial Gravity Wealth, Inc.

After saving thousands in taxes, clients

1 unchanged sentence

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

An RIA is an advisor or firm engaged in financial planning

A 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.

A 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

4 unchanged sentences

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”

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

in a mutual fund and ETF portfolio,

5 unchanged sentences

their advice is considered less biased and more accurate.

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

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

attractive to the most profitable clients.

Financial Gravity Business

Financial Gravity Business, LLC.

The complexity of Advanced Tax Planning

18 unchanged sentences

Gravity Business but will be sold and build revenue in the Tax Coach Software platform.

Financial Gravity Ventures

Financial Gravity Ventures, LLC.

This entity in the Company’s corporate

2 unchanged sentences

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

Tax Coach Software

Tax Coach Software, LLC.

Tax Coach Software (TCS) was a key acquisition

6 unchanged sentences

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

Sash Corporation

Sash Corporation (dba Metro Data Processing)

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.

6 unchanged sentences

service offerings, business support, and marketing materials.

These trademarks/servicemarks include Financial Gravity®, Tax

These trademarks/service marks include Financial Gravity®, Tax

Blueprint®, Tax Operating System®, Bookkeeping with Purpose®, Diversity Trinity®, Investor Peace University®,

11 unchanged sentences

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.

Results of Operations for the three and six months

ended March 31, 2018 compared to the three and six months ended March 31, 2017

For the three months ended March 31, 2018,

revenue increased $117,373 to $1,085,070 from $967,697 for the three months ended March 31, 2017.

For the six months ended March

31, 2018, revenue increased $264,276 to $2,004,969 from $1,740,693 for the six months ended March 31, 2017.

The increase in revenue

is due in part to the restructure of services offered.

Operating Expenses

Cost of services activity decreased $16,628

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

merger costs, legal expense, professional fees, contract labor, business consulting, computer and internet expense, and earnest

money forfeited.

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.

to $4,079 for the three months ended March 31, 2018 from $20,707 for the three months ended March 31, 2017.

The decrease is primarily

related to a decrease in trimming all unnecessary expenses and cost of services activity decreased $27,753 to $13,211 for the six

months ended March 31, 2018 from $40,964 for the six months ended March 31, 2017.

The decrease is primarily related to a decrease

in trimming all unnecessary expenses.

Professional services expenses decreased

$176,975 to $182,582 for the three months ended March 31, 2018 from $359,557 for the three months ended March 31, 2017.

services expenses decreased $271,014 to $358,637 for the six months ended March 31, 2018 from $629,651 for the six months ended

March 31, 2017.

This decrease is primarily due to changes of outside representation.

Depreciation and amortization expenses

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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.

$3,528 to $28,295 for the three months ended March 31, 2018 from $24,767 for the three months ended March 31, 2017.

and amortization expenses increased $4,680 to $54,124 for the six months ended March 31, 2018 from $49,444 for the six months ended

March 31, 2017.

The increase is primarily due to assets purchased during the quarter ended March 31, 2018.

General and administrative expenses increased

$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.

$576,114 to $731,096 for the three months ended March 31, 2018 from $154,982 for the three months ended March 31, 2017.

and administrative expenses increased $695,197 to $972,005 from $276,808 for the six months ended March 31, 2018 and 2017.

increase is primarily due to an increase in costs associated with independent agent’s commissions and consulting cost.

Management fees –

related party expenses

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.

expenses increased

$13,500 to $63,500 for the three months ended March 31, 2018 from $50,000 for the three months ended March 31, 2017 and increased

$10,500 to $113,500 for the six months ended March 31, 2018 from $103,000 for the six months ended March 31, 2017.

This increase

is due to changes in the contract with Fourly, LLC.

Marketing expenses increased $7,716 to

$82,307 for the three months ended March 31, 2018 from $74,591 for the three months ended March 31, 2018 and decreased $33,624

to $142,845 for the six months ended March 31, 2018 from $176,469 for the six months ended March 31, 2017.

This overall decrease

is from eliminating and consolidating marketing tools.

Salaries and wages expenses increased $231,468

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.

to $635,178 for the three months ended March 31, 2018 from $403,710 for the three months ended March 31, 2017 and increase $453,307

to $1,234,736 for the six months ended March 31, 2018 from $781,429 for the six months ended March 31, 2017.

Salaries and wages

increase is due to larger employee commissions being paid out, restructuring of staff members (hiring and separating of employees),

and hiring of temporary staff to assist with special projects.

The Company experienced a decrease in its

bottom line of $545,085 to a net loss of $682,030 for the three months ended March 31, 2018 from a net loss of $136,945 for the

three months ended March 31, 2017, and for the six months ended March 31, 2018 an increase in loss of $600,240 to $945,452 from

a net loss of $345,212 for the six months ended March 31, 2017, these losses are primarily attributable to the reasons noted above.

Significant Accounting Policies

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Liquidity and Capital Resources

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

As of March 31, 2018, the Company had cash

and cash equivalents of $219,348.

The decrease of $225,072 in cash and cash equivalents from September 30, 2017 was due to net

cash used in operating activities of $890,594 and net cash used in investing activities of $50,835, offset by net cash provided

by financing activities of $716,356.

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:

was $890,594 for the six months ended March 31, 2018, compared to $421,045 net cash used in operating activities for the six months

ended March 31, 2017.

The net cash used in operating activities for the six months ended March 31, 2018 was due to net loss of

$945,452 adjusted primarily by the following:

(1) depreciation and amortization of $54,124, Stock based compensation $94,764,

expense of $54,184, accounts receivable –

trade accounts receivable of $22,920, accounts receivable –

related party of $2,303, 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

of $68,744, (2) offset by decreases in prepaid expense of $36,766, accrued expenses of $55,630 and deferred revenue of $95,601.

Net cash provided by financing activities

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

was $716,356 for the six months ended March 31, 2018, compared to net cash provided by financing activities of $690,221 for the

six months ended March 31, 2017.

Financing activities for the six months ended March 31, 2018 consisted primarily of $740,000 in

borrowings and $100,000 of proceeds from the sale of common stock;

offset with payments made to reduce the Company’s debt

obligations in the amount of $123,644.

As shown below, at March 31, 2018, our

contractual cash obligations totaled approximately $1,113,349, all of which consisted of operating lease obligations and debt principal.

10 unchanged sentences

If additional financing is not available, the Company

will need to reduce, defer or cancel development programs, planned initiatives and overhead expenditures as a way to supplement

the cash flows generated by operations.

The Company has a backlog of fees under contract in addition to the Company’s accounts

receivable balance.

The failure to adequately fund its capital requirements could have a material adverse effect on our business,

financial condition and results of operations.

Moreover, the sale of additional equity securities to raise financing will result

in additional dilution to the Company’s stockholders, and incurring additional indebtedness could involve the imposition

of covenants that restrict our operations.

Management is trying to raise additional capital through sales of common stock as well

as seeking financing from third parties, via both debt and equity, to balance the Company’s cash requirements and to finance

specific capital projects.

will need to reduce, defer or cancel development programs, planned initiatives and overhead expenditures to supplement the cash

flows generated by operations.

The Company has a backlog of fees under contract in addition to the Company’s accounts receivable

The failure to adequately fund its capital requirements could have a material adverse effect on our business, financial

condition and results of operations.

Moreover, the sale of additional equity securities to raise financing will result in additional

dilution to the Company’s stockholders and incurring additional indebtedness could involve the imposition of covenants that

restrict our operations.

Management is trying to raise additional capital through sales of common stock as well as seeking financing

from third parties, via both debt and equity, to balance the Company’s cash requirements and to finance specific capital

Off Balance Sheet Transactions and Related Matters

10 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