What changed in this filing

/stocks — the workspaceLOADING

Item 9A. Controls and Procedures

2020-01-13 compared with 2019-01-15 · 542 added, 605 removed, 903 unchanged (56% of the section changed)

37 unchanged sentences

accounting principles.

The Company’s Chief Executive Officer and Chief Financial Officer reviewed the results of his assessment

The Company’s Chief Executive Officer and Chief Financial Officer reviewed the results of their assessment

with its board of directors.

2 unchanged sentences

factors stated below.

The Company has inadequate number of personnel with requisite expertise in the key functional areas of finance

and accounting to be able to have appropriately designed and operating entity level controls including risk assessment;

and communication;

Insufficient Resources :

The Company has inadequate number of personnel with requisite expertise in the key functional areas of finance and accounting to be able to have appropriately designed and operating entity level controls including risk assessment;

information and communication;

and financial reporting.

Inadequate Segregation of

Inadequate Segregation of Duties:

The Company has inadequate number of personnel to properly segregate duties to implement control procedures.

This annual report does not

include an attestation report of its Company’s independent registered public accounting firm regarding internal control

over financial reporting.

Management’s report was not subject to attestation by the Company’s independent registered

public accounting firm pursuant to rules of the Securities and Exchange Commission that permit the Company to provide only management’s

report in this annual report.

This annual report does not include an

attestation report of its Company’s independent registered public accounting firm regarding internal control over financial

Management’s report was not subject to attestation by the Company’s independent registered public accounting

firm pursuant to rules of the Securities and Exchange Commission that permit the Company to provide only management’s report

in this annual report.

Inherent Limitations on Effectiveness

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are reasonably likely to materially affect, the Company’s internal control over financial reporting:

The Company has implemented

a robust check disbursement policy that includes the following key control points:

first, the controller who handles check disbursements

is not an authorized signer on any bank account and cannot sign checks;

second, any disbursement amount less than $5,000.00 requires

written approval from one (1) member of the leadership team;

third, any disbursement amount of more than $5,000.00 and equal to

or less than $24,999.99 requires written approval of two (2) members of the leadership team;

fourth, any disbursement amount of

$25,000.00 or more requires approval by the Board of Directors;

and fifth, all disbursements are reviewed and approved by the Chief

Operating Officer.

As an additional control, all disbursement checks are signed by the CEO when available, and if the CEO is unable

to sign, disbursement checks are signed by a member of the leadership team.

All disbursements are controlled through a formal check

disbursement process that includes an official check disbursement request form.

This form is reviewed and signed by the appropriate

parties as referenced above.

The Company has implemented a robust check disbursement policy that includes the following key control points:

first, the controller who handles check disbursements is not an authorized signer on any bank account and cannot sign checks;

second, any disbursement amount less than $5,000.00 requires written approval from one (1) member of the leadership team;

third, any disbursement amount of more than $5,000.00 and equal to or less than $24,999.99 requires written approval of two (2) members of the leadership team;

fourth, any disbursement amount of $25,000.00 or more requires approval by the Board of Directors;

and fifth, all disbursements are reviewed and approved by the Chief Operating Officer.

As an additional control, all disbursement checks are signed by the CEO when available, and if the CEO is unable to sign, disbursement checks are signed by a member of the leadership team.

All disbursements are controlled through a formal check disbursement process that includes an official check disbursement request form.

This form is reviewed and signed by the appropriate parties as referenced above.

The leadership team currently comprises the following members:

The Chief Executive Officer, the Chief

Operating Officer, the Chief Financial Officer, the Chief Tax Strategist, the Chief Sales Officer, and the Director of Operations.

The Chief Executive Officer, the Chief Operating Officer, the Chief Financial Officer, the Chief Tax Strategist, the Chief Sales Officer, and the Director of Operations.

OTHER INFORMATION.

DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE.

DIRECTORS, EXECUTIVE OFFICERS,

AND CORPORATE GOVERNANCE.

Directors and Executive Officers

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Position with the Company

Chairman of the Board, Chief Executive Officer

Scott Winters

Co-Chairman of the Board, Chief Executive Officer

Co-Chairman of the Board, Executive Vice President - Sales

Paul Williams

Vice Chairman of the Board, Chief Financial Officer, Secretary and Treasurer

Chief Sales Officer

Jennifer Winters

Secretary, Executive Vice President

Former Chief Sales Officer

Chief Tax Strategist and Board Member

George Crumley

Assistant Secretary, Assistant Treasurer and Board Member

Former Assistant Secretary, former Assistant Treasurer and former Board Member

Michael Ashby

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Debbie Buckner

President, Chief Operating Officer, and Board Member

John Pollock , 51, has been

Former President, former Chief Operating Officer, and former Board Member

Scott Winters,

49, August 15, 2019, Financial Gravity Companies, Inc.

(the “Company”) appointed Mr.

Scott Winters, age 49,

to serve as Chief Executive Officer and Co-Chairman of the Board for the Company.

Prior to joining the Company, from 2016 to present,

Winters has served as Owner of Presidential Wealth Management, an investment advisory and wealth management firm.

Winters was CEO, Chairman of the Board and Co-Founder of Eqis Capital Management, also an investment advisory, and

wealth management firm.

John Pollock , 52, was

CEO/Founder of Business Legacy, Inc.

since 2002, Pollock Advisory Group since 2007 and he is currently CEO and Chairman of Financial

Gravity Companies, Inc.

Pollock’s specific experience, qualifications, attributes or skills that led to the conclusion

that he should serve as a director for the Company:

Has served as CEO and Chairman of Financial

Gravity since its inception

from 2002, Pollock Advisory Group from 2007, was the former CEO and Chairman of

Financial Gravity Companies, Inc.

(the Company), and is currently Co-Chairman of the Board and Executive Vice President

Pollock’s specific experience, qualifications, attributes or skills that led to the conclusion that

he should serve as a director for the Company:

Has served as CEO and Chairman of Financial Gravity since its inception until August 2019.

A seasoned manager

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has served as our Chief Financial Officer and Secretary –

Treasurer since 2016.

He graduated from Austin College in Sherman,

Texas in 1978 and the Institute for Organization Management in Washington, DC in 1982.

Treasurer from 2016 until August 2019.

He currently still serves

as Vice-Chairman, Chief Financial Officer and Treasurer.

He graduated from Austin College in Sherman, Texas in 1978 and the Institute

for Organization Management in Washington, DC in 1982.

Since 2007, Mr.

Williams has served as Chief

Executive Officer of Bison Financial Group, Inc., a corporate financial advisory and business development firm serving middle market

growth companies.

Williams has served as Chief Executive Officer of Bison

Financial Group, Inc., a corporate financial advisory and business development firm serving middle market growth companies.

Williams also serves as an officer

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Williams currently serves as:

Vice Chairman of the Board & Chief Financial

Officer of Dynamic Chemical Solutions, Inc.

in Frisco, Texas since 2016;

Chairman of the Board & Chief Financial Officer of

Curtis Mathes, Inc.

Vice Chairman of the Board of Dynamic Chemical

Solutions, Inc.

in Frisco, Texas since 2016;

and Chairman of the Board of Championship Sports Group, Inc.

in Frisco, Texas

Williams also currently serves on the Board of Directors and Executive Committee of the Frisco (Texas) Chamber

of Commerce and served as their Chairman of the Board in 2007.

In 2009, he was recognized as the CFO of the Year for North Texas

by the Dallas Business Journal.

Chairman of the Board & Chief Financial Officer of Curtis Mathes, Inc.

Texas since 2013.

Within the last five years, on behalf of

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Has served as both officer and director of other public companies

Financial Gravity is the third public company for which Mr.

Williams is serving as Chief Financial

Financial Gravity is the fourth public company for which Mr.

Williams has served as Chief Financial Officer

Within the last 5 years, Mr.

Williams served as Vice-Chairman of the Board and Chief Financial

Officer at Halo Companies, Inc., a public company, and Chairman of the Board and Chief Financial Officer of Light Engine Design

Corp., a public company

Dan Sundby , 55, brings over

30 years of experience in sales, sales management, and sales training.

Before joining Financial Gravity in 2017, Mr.

Sundby served

as the Sales Manager-Columbus Division for Fischer Homes in Erlanger, KY from October 2013 to March 2017.

In that role, Mr.

was primarily responsible for recruiting, training, and leading sales teams for the Columbus Division.

Prior to joining Fischer

Homes, in October 2008 Mr.

Sundby founded Insurance Green Marketing Group in Colorado, where he recruited and trained sales teams

for an insurance marketing group and also operated as an independent sales agent in the insurance industry.

He has built sales

teams nationally within the insurance and financial services industries.

Dan’s organization was consistently the top producing

team with each company he recruited and trained for.

Dan also recruited and trained sales teams in the receivables management industry

and with a regional home builder with record setting performance in each.

Dan is currently serving as Chief Sales Officer for Financial

Gravity and is responsible for building the Company’s nationwide agent team.

Williams served as Vice-Chairman of the Board and Chief Financial Officer at Halo Companies, Inc., a public company, and Chairman of the Board and Chief Financial Officer of Light Engine Design Corp., a public company

Dan Sundby , 56 served as

Chief Sales Officer for Financial Gravity until March 2019.

Lyon , 54, has been the Company’s Chief Tax Strategist and a Director since October 2015.

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A nationally-recognized expert on tax planning

The author of 8 books, and has appeared on over 500 radio and television broadcasts to speak about

his areas of expertise

Crumley , 50, has

been on the Board of Directors since January 2015 and has served as our Assistant Secretary –

Assistant Treasurer since October

From 1994 to 2007 he was a practicing litigation attorney with the law firm of Stradley & Wright in Dallas, Texas where

he was named partner in 2001.

He formed Pittenger, Nuspl & Crumley in 2008 where he continues to practice, advising businesses

in matters including formation, contracts, employees, real estate and litigation among other areas of law.

He received BA.

degrees from Baylor University in 1989 and 1993, respectively.

Crumley currently serves on the Board of Directors for

Legacy Christian Academy in Frisco, Texas.

Crumley’s specific experience, qualifications, attributes or skills that led

to the conclusion that he should serve as a director for the Company:

23 years of experience in civil litigation and representing businesses with formation, contracts, lawsuits, employee disputes, real estate, and other matters.

The author of 8 books, and has appeared on over 500 radio and television broadcasts to speak about his areas of expertise

Winters, 47, August 27 th , the Board

appointed Jennifer Winters to serve as Corporate Secretary.

She will also serve as Executive Vice President.

In order for Jennifer

Winters to assume the role of Corporate Secretary, Mr.

Paul Williams relinquished that role.

Williams will continue to serve

the Company as Vice Chairman of the Board, Chief Financial Officer and Treasurer.

Winters is an accomplished executive, having

served as a Co-Founder of Eqis Holdings, Inc.

from 2007 to 2017.

She also served on their Board of Directors from 2010 to 2017.

In addition, she served as Chief Compliance Officer of Eqis Captial Management, Inc.

from 2007 to 2015.

She also served as their

Executive Vice President from 2015 to 2017.

Jennifer Winters is the spouse of Scott Winters, the Chief Executive Officer of the

Crumley , 51, was

on the Board of Directors from January 2015 until March of 2019.

Gary Nemer, 73, From 2016

to present, Mr.

Nemer has served as a Board Member and Chairman of the Board of Directors of Presidential Brokerage, Inc., an investment

advisory and wealth management firm.

Nemer also serves on the Board of Directors of Eqis Capital Management, also an investment

advisory and wealth management firm.

Nemer graduated from the USC Gould School of Law at the University of Southern California

and is a practicing attorney in the San Francisco area.

David Myers , 67, has been

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Experience managing large sales and marketing organizations

Debbie Buckner , 55, has

been on the Board of Directors since August 28, 2018.

Immediately prior to joining the Company, Ms.

Buckner served as Chief Operations

Officer for CDR Electronics, a retail provider of consumer electronics, based in Oklahoma City.

Buckner served in that role

since 2017 and during her tenure, re-engineered the company’s organizational foundation to create clarity, discipline and

accountability.

She also exceeded the annual budget, and successfully led the implementation of several major company-wide initiatives.

From 2016 to 2017, Ms.

Buckner served as an independent consultant and coach, working in McKinney, Texas through two organizations:

with a focus on technology & experiential marketing;

and Nicka & Associates –

with a focus on medical

coding, compliance and education.

From 2005 to 2015, Ms.

Buckner worked for Crossmark, a sales and marketing services company

in the consumer goods and services industry, based in Plano, Texas.

In her most recent role for Crossmark, Ms.

Buckner served

as Vice President of Operations (Training & Development/Support Services/Client Operations).

During her service in that senior

Buckner led the company’s Learning Management System implementation for 30,000 field-based employees, as well

as several other key initiatives having direct P&L impact.

Buckner’s specific experience, qualifications, attributes

or skills that led to the conclusion that she should serve as a director for the Company:

Over 10 years of experience directing teams and leading company-wide initiatives in the consumer goods and services industry

Success leading multi-million dollar domestic and international initiatives

Debbie Buckner , 56, was on

the Board of Directors from August 28, 2018 through August 22, 2019.

Section 16(a) Beneficial Ownership Reporting Compliance

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Option Awards

Scott Winters

CEO, Principal Executive Officer***

Executive Vice President –

Debbie Buckner

President and Chief Operating

Paul Williams

CFO, Principal Financial Officer

Principal Advisor

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 1.49% to 2.55% in 2018 and 0.85% to 1.41% in 2017, dividend yield of 0%, expected life of 2 years and volatility of

The aggregate grant date fair value of the option award is $232,596, to be recognized over the term of the option

Former CSO****

Former Principal Advisor****

***Current salary is $250,000 annually, with no other

compensation.

****Separated in March 2019.

(1) 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 1.50% to 2.89% in 2019 and 1.49% to 2.55% in 2018, dividend yield of 0%, expected

life of 10 years and volatility of 25.32% to 34.05%.

The aggregate grant date fair value of the option award is $232,596, to be

recognized over the term of the option award.

Except as described below, none of the Named Executive Officers

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Lyon, a member of the Board of

Directors, is party to an employment agreement with Tax Coach Software, LLC, a subsidiary of the Company.

The Agreement was entered

into effective November 1, 2015, and provides for Mr.

Lyon to serve as General Manager, responsible for supervising the business

and affairs of Tax Coach Software.

The agreement has a three-year term, which may be extended.

The agreement provides for base

salary of $42,000 per year, plus bonus.

The annual bonus is the sum of the following:

(i) for Tax Coach Software revenues in excess

of $850,000 and less than $950,000, forty percent (40%) of Tax Coach Software’s gross profit (as determined in accordance

with generally acceptable accounting principles, net of amounts paid under employment agreements and consulting agreements), plus

(ii) for Tax Coach Software revenues in excess of $950,000, twenty percent (20%) of Tax Coach Software’s gross profit (as

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

Directors, is party to an employment agreement.

which provides for base salary of $42,000 per year, plus management fees of $198,000

annually, paid semi-monthly.

Lyon serves as the General Manager, responsible for supervising the business and affairs of Tax

Master Network.

Pollock, the amount shown in the Summary Compensation

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Dan Sundby has options currently vesting

and the options will be fully vested in July 2019.

and the options are fully vested.

Compensation of Directors

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Employment Contracts, Termination of Employment, Change-in-Control

There is no employment or other contracts

or arrangements with officers or Directors.

There are no compensation plans or arrangements, including payments to be made by us,

with respect to the Company’s officers, Directors or consultants that would result from the resignation, retirement or any

other termination of service in respect of such Directors, officers or consultants.

There are no arrangements for Directors, officers,

employees or consultants that would result from a change-in-control.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS

AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.

Certain executives have compensation agreements

that include payments to be made by us upon termination of service without cause, up to one year of annual salary.

arrangements for Directors, officers, employees or consultants that would result from a change-in-control, other than vesting as

described in the stock option grant agreement and plan.

SECURITY OWNERSHIP OF CERTAIN

BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.

Security Ownership of Certain Beneficial Owners and Management

The following table sets forth certain

information with respect to the beneficial ownership, as of September 30, 2018, of the Company’s common stock, which is the

Company’s only outstanding class of voting securities, and the voting power resulting from such beneficial ownership, by

each stockholder known by the Company to be the beneficial owner of more than 5% of the Company’s outstanding common stock;

each director of the Company;

each executive officer of the Company;

all directors and executive officers of the Company as a group.

except as noted below, each beneficial owner has sole voting and investment power with respect to all shares attributable to that owner.

The address for each such beneficial owner is 800 N.

Watters Road, Suite 120, Allen, Texas 75013.

Includes 180,000 options that vested upon closing of the merger on September 30, 2016.

Includes 650,000 options that vested upon closing of the merger on September 30, 2016.

Non-director or executive officer with more than 5% ownership.

indicates an ownership percentage of less than one percent.

information with respect to the beneficial ownership, as of September 30, 2019, of the Company’s common stock, which is

the Company’s only outstanding class of voting securities, and the voting power resulting from such beneficial ownership,

Beneficial Owner (1)

Amount of Beneficial Ownership (1)

Percentage of Shares

Ownership (1)

Percentage of

John Pollock (2)

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Represents shares subject to options that are currently vested.

Includes 150,000 shares subject to options that are currently vested, and 25,000 shares subject to warrants that are currently vested, and 720,000 shares of common stock.

Includes 150,000 shares subject to options that are currently vested, and 1,196,806 shares of common stock.

Includes 175,000 shares subject to options that are

currently vested, and 150,000 shares of common stock.

Scott Winters has 75,000 fully vested stock options.

indicates an ownership percentage of less than one percent.

Changes in Control

The Company is not aware of any contract

or other arrangement the operation of which may at a subsequent date result in a change of control of the Company.

On September 30, 2019, the Company

entered into a merger agreement with Forta Financial Group, Inc.

(formerly Presidential Brokerage, Inc.) (“Forta”),

to acquire Forta in exchange for Company stock.

The merger is awaiting FINRA approval.

When approved, the Forta shareholders will

own more than 50% of the Company.

John Pollock will remain the largest shareholder.

Securities authorized for issuance under equity compensation

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Number of securities remaining available for future issuance under equity compensation plan (excluding securities reflected in Column A)

Equity compensation plans approved by security

holders (2015 Stock Option Plan)

Equity compensation plans not approved by

security holders (2016 Stock Option Plan)

Equity compensation plans approved by security holders (2015 Stock Option Plan)

Equity compensation plans not approved by security holders (2016 Stock Option Plan)(6)

As consequence of the Merger, outstanding options of the 2015 Plan in the amount of 2,200,346 of the Company’s shares have vested.

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The 2015 Stock Option Plan was replaced by the 2016 Stock Option Plan.

Shares available for grant of stock options to employees, directors and consultants under the 2016 Stock Option Plan.

Shares available for grant of

stock options to employees, directors and consultants under the 2016 Stock Option Plan.

Subsequent to the fiscal year end,

the 2016 Stock Option has been amended to the 2016 Omnibus Incentive Plan, adding Stock Appreciation Rights (“SAR”)

as incentive offerings.

Since the amendment, SAR grants have been issued as incentive offerings to advisors for affiliating with

Following is a brief description of the

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The Company is authorized to issue an aggregate of 20,000,000 options, of which 13,239,354 remain available

for issuance, as non- statutory (non-qualified) stock options, under the 2016 Stock Option Plan.

Currently outstanding options

under the 2015 and 2016 Stock Option Plans vest over a period of no greater than two years and expire ten years from the grant

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS,

AND DIRECTOR INDEPENDENCE.

for issuance at September 30, 2019, as non- statutory (non-qualified) stock options, under the 2016 Stock Option Plan.

outstanding options under the 2015 and 2016 Stock Option Plans vest over a period of no greater than two years and expire ten years

from the grant date.

CERTAIN RELATIONSHIPS AND RELATED

TRANSACTIONS, AND DIRECTOR INDEPENDENCE.

Transactions with Related Persons, Promoters and Certain Control Persons

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two completed fiscal years.

Effective as of October 1, 2015, Financial Gravity

Holdings, a subsidiary of the Company, purchased all of the equity interests of Tax Coach Software, LLC, an Ohio limited liability

company, for aggregate consideration of 2,000,000 shares of the common stock of Financial Gravity (the “Tax Coach Software

Transaction”).

The Purchase Agreement for the Tax Coach Software Transaction was amended effective as of March 25, 2016 to

give effect to a three-for-one (3:1) forward split of the Financial Gravity Holdings common stock, bringing the aggregate consideration

to 6,000,000 shares of the common stock of Financial Gravity Holdings.

Company entered into an agreement

to purchase 100% of the stock of Forta.

Scott Winters, Gary Nemer and William Nelson, Jr.

own, in aggregate, in excess of 80%

of the shares of stock of Forta.

Winters nor Mr.

Nemer voted as Board Members on the approval of the acquisition of

TaxTuneup, LLC, which is an entity owned

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LLC, an entity owned by Mr.

Lyon, received the sum of $198,000 and $198,000, respectively, from the Company, in compensation

Lyon, received the sums of $198,000 and $198,000, respectively, from the Company, in compensation

for strategic tax planning recommendations and research, business consulting and writing of books and tax planning and Tax Master

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The Company’s Board of Directors has determined

that, of the Company’s present directors, each of George Crumley, David Myers, Michael Ashby, and Todd Bourgeois, constituting

that, of the Company’s present directors, each of Gary Nemer, David Myers, Michael Ashby, and Todd Bourgeois, constituting

four of the eight members of the Board, is an “independent director,”

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for purposes of qualifying as independent members of the Board and an Audit, Compensation and Nominating Committee of the Board,

but that John Pollock, Debbie Buckner, Paul Williams and Edward A.

but that Scott Winters, John Pollock, Paul Williams and Edward A.

Lyon are not “independent directors”

currently serve as executive officers of the Company.

since they currently

serve as executive officers of the Company.

The Company’s Board of Directors

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not a significant division of oversight and operational responsibilities in managing the material risks facing the Company.

PRINCIPAL ACCOUNTING FEES AND SERVICES.

PRINCIPAL ACCOUNTING FEES AND

The following information summarizes the

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The Board of Directors serves as the audit committee for the Company.

EXHIBITS, FINANCIAL STATEMENT SCHEDULES

EXHIBITS, FINANCIAL STATEMENT

(a) Financial

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January 13, 2020

/s/ John Pollock

/s/ Scott Winters

Scott Winters

Chief Executive Officer

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and on the dates indicated.

/s/ John Pollock

Chairman, CEO

/s/ Scott Winters

Co-Chairman, CEO

January 13, 2020

Scott Winters

(principal executive officer)

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(principal financial officer)

/s/ George E.

January 15, 2019

/s/ Edward A.

January 15, 2019

/s/ David Myers

/s/ John Pollock

Co-Chairman, EVP

January 13, 2020

/s/ Michael Ashby

/s/ Jennifer Winters

Secretary, EVP, Director

January 13, 2020

Michael Ashby

/s/ Todd Bourgeois

Jennifer Winters

/s/ Edward A.

January 13, 2020

Todd Bourgeois

/s/ Debbie Buckner

Debbie Buckner

January 13, 2020

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

REPORT OF INDEPENDENT REGISTERED PUBLIC

ACCOUNTING FIRM

REPORT OF INDEPENDENT REGISTERED

PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders

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balance sheets of Financial Gravity Companies, Inc.

(the “Company”), as of September 30, 2018 and 2017, and the related consolidated statements of operations,

stockholders’

equity, and cash flows for the years then ended, and the related notes (collectively referred to as the “financial

statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial

position of the Company as of December 31, 2018 and 2017, and the results of their operations and their cash flows for the years

then ended, in conformity with accounting principles generally accepted in the United States of America.

(the “Company”), as of September 30, 2019 and 2018, and the related

consolidated statements of operations, stockholders’

equity, and cash flows for the years then ended, and the related notes

(collectively referred to as the “financial statements”).

In our opinion, the consolidated

financial statements present fairly, in all material respects, the financial position of the Company as of September 30, 2019 and

2018, and the results of their operations and their cash flows for the years then ended, in conformity with accounting principles

generally accepted in the United States of America.

Emphasis of Matter

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As discussed in Note 1 to the consolidated

financial statements, the Company has suffered recurring losses from operations and has a working capital deficiency that raises

substantial doubt about its ability to continue as a going concern.

Management's plans in regard to these matters are also described

financial statements, the Company has suffered recurring losses from operations and has a net capital deficiency that raises substantial

doubt about its ability to continue as a going concern.

Management's plans in regard to these matters are also described in Note

The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

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Our responsibility is to express an opinion on these financial statements based on our audits.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB")

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”)

and are required to be independent with respect to the Company in accordance with the U.S.

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Dallas, Texas

January 15, 2019

December 30, 2019

Financial Gravity Companies, Inc.

CONSOLIDATED BALANCE SHEETS

CONSOLIDATED BALANCE

As of September 30,

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Accounts receivable - related party

Prepaid expenses

Prepaid expenses and other current assets

Total current assets

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NOTES PAYABLE

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS’

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Financial Gravity Companies, Inc.

CONSOLIDATED STATEMENTS OF OPERATIONS

CONSOLIDATED STATEMENTS

OF OPERATIONS

Years Ended September 30,

Investment management fees

Service income

Rental income

and Service income

Total revenue

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General and administrative

Management fees - related party

Salaries and wages

3 unchanged sentences

Interest expense

Total other expense

$ (1,520,632 )

3 unchanged sentences

Financial Gravity Companies, Inc.

CONSOLIDATED STATEMENTS OF CHANGES IN

STOCKHOLDERS’

CONSOLIDATED STATEMENTS

OF CHANGES IN STOCKHOLDERS’

For the years ended September 30, 2019

2 unchanged sentences

Additional Paid-In-Capital

Accumulated Deficit

Balance at September 30, 2017

$ (4,054,998 )

Common stock issued under a private placement memorandum

Release of Pacific Oil Company shares for settlement of pre-acquisition liabilities

Common stock issued in exchange for services

Stock based compensation

Stock based employee compensation expense

Balance at September 30, 2018

Common stock issued under a private placement memorandum

Stock based compensation

$ (5,575,630 )

Stock based employee compensation expense

Stock options in lieu of expenses, as marketing expenses

Common stock issued upon conversion of debt

Balance at September 30, 2019

3 unchanged sentences

Financial Gravity Companies, Inc.

CONSOLIDATED STATEMENTS OF CASH FLOWS

CONSOLIDATED STATEMENTS

OF CASH FLOWS

Years Ended September 30,

1 unchanged sentence

$ (1,520,632 )

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

Adjustments to reconcile net loss to net cash provided by (used in) operating activities

Depreciation and amortization

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Deferred revenue

Pre-merger payables

Net cash used in operating activities

Net cash provided by (used in) operating activities

CASH FLOWS FROM INVESTING ACTIVITIES

Cash from the sale of investment

Cash paid for purchase of property and equipment

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Proceeds from the sale of common stock

Net cash provided by financing activities

(used in) provided by financing activities

TOTAL CHANGE IN CASH AND CASH EQUIVALENTS

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Cash paid during the year for:

Settlement of payables owed by legacy Pacific Oil Company Stockholders

The accompanying notes are an integral part

of these consolidated financial statements.

Accrued interest converted to equity

Notes payable converted to equity

The accompanying notes are an integral part of these consolidated

financial statements.

Financial Gravity Companies, Inc.

and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED

FINANCIAL STATEMENTS

NATURE OF BUSINESS

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and Subsidiaries

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

(the “Company”) 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.

Holdings, Inc.

(dissolved February 13, 2019), Financial Gravity Operations, Inc.

(dissolved February 12, 2019), Financial Gravity

Tax, Inc (sold October 31, 2019)., Sofos, Inc.

(formerly Financial Gravity Wealth, Inc.), MPath Advisor Resources, LLC.

Financial Gravity Business, LLC), Financial Gravity Ventures, LLC., Tax Master Network, LLC, and SASH Corporation (inactive and

awaiting dissolution).

Financial Gravity Holdings, Inc.

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Worth region, with further expansion into other markets in accordance with its long-term growth rate and strategic business plan.

FGH was merged into the Company, February 13, 2019 and subsequently dissolved.

Financial Gravity Operations, Inc.

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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.

FGB does not have any financial activity through September 30, 2018.

FGO was merged into the FGH, February 12, 2019 and subsequently dissolved.

MPath Advisor Resources, LLC.

Financial Gravity Business, LLC.) (“MPath”) MPath is an insurance marketing organization and provides insurance products

and services to insurance agents or agencies.

Financial Gravity Ventures, LLC.

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have any financial activity through September 30, 2019.

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.

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

is located in Allen, Texas.

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

and individuals.

FG Tax was sold October 31, 2019.

(formerly Financial Gravity

Wealth, Inc.) (“Sofos”) Sofos is a registered investment advisor, located in Allen, Texas.

Sofos provides asset management

SASH Corporation, an Oklahoma corporation

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The purchase was made by Cloud9Accelerator,

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

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

business was sold during fiscal 2019 for a net gain of $28,585.

Tax Coach Software, LLC (“TCS”),

MDP is inactive and awaiting dissolution.

Tax Master Network, LLC (“TMN”),

was acquired effective October 1, 2015, and is an Ohio limited liability company.

The purchase was made by FGH.

TCS, located in

TMN, located in

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

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The consolidated financial statements

include the accounts of FGH, FGO, including Cloud9B2B and Cloud9 Accelerator, LLC, FGW (PAG), FGT (BLI), TMN (TCS) and MDP (through

June 2018), (collectively referred to as the “Company”).

All significant intercompany accounts and transactions have

been eliminated on consolidation.

include the accounts of Financial Gravity Companies, FGW, FGT, and TMN , (collectively referred to as the

“Company”).

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

Cash and Cash Equivalents

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Expenses associated with all other leases (operating leases)

are charged to income as incurred.

are charged to expense as incurred.

Customer Relationships

The customer relationships acquired from

the TCS purchase have been recognized in the accompanying consolidated balance sheets at $44,900, the value attributed to it on

the TMN purchase have been recognized in the accompanying consolidated balance sheets at $44,900, the value attributed to it on

the date of the purchase.

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

During the years ended September 30, 2018 and 2017, the Company recorded amortization expense of $11,225 on this intangible

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

The customer relationships are being amortized on a straight-line basis over a four- year estimated life.

During the years ended September 30, 2019 and 2018, the Company recorded amortization expense of $11,225 on this intangible asset,

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

amortization at September 30, 2019 and 2018 was $44,900, and $33,675 respectively.

Future amortization of customer relationships

is estimated to be as follows for the years ended September 30:

This has been fully amortized as of September

Proprietary Content

The proprietary content acquired as a part

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

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

on the date of the purchase.

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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 it on the

TMN purchase has been recognized in the accompanying consolidated balance sheets at $69,300, the value attributed to it 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 sheet to be impaired as of September 30, 2018 and 2017.

Management has determined that the trade name had no future value and considers the value of the trade name

recorded in the accompanying consolidated balance sheet to be impaired as of September 30, 2019.

Accordingly, this asset was fully

written off in 2019.

Non-compete Agreements

Non-compete agreements established as a

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

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

to them on the date of the purchase.

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agreements is estimated to be as follows for the years ended September 30:

The Company accounts for trademarks in

accordance with GAAP and accordingly, trademarks are stated at cost.

Trademarks with indefinite lives are not amortized but are

tested for impairment at least annually.

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 September 30, 2018 and 2017.

Intellectual Property

The Company accounts for intellectual property

in accordance with GAAP and accordingly, intellectual property are stated at cost.

Intellectual property with indefinite lives

are not amortized but are tested for impairment at least annually.

Management has determined that the intellectual property have

an indefinite life and do not consider the value of intellectual property recorded in the accompanying consolidated balance sheet

to be impaired as of September 30, 2019 and 2018.

Goodwill represents the excess of the value

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of the reporting unit is greater than it carries value.

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

the accompanying consolidated balance sheet to be impaired as of September 30, 2018, and 2017.

However, goodwill attributed to

Cloud9 and MDP was deemed to be impaired as of September 30, 2017 as that business offering has been discontinued.

The fair values of the assets acquired,

and liabilities assumed were determined primarily using the income approach, which determines the fair value for the asset based

on the present value of cash flows projected to be generated by the asset.

Projected cash flows are discounted at a rate of return

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

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, changes in stockholders’

equity and cash flows include the results of operations of the acquired subsidiaries

from the date of acquisition.

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

the accompanying consolidated balance sheets to be impaired as of September 30, 2019, and 2018.

Goodwill consists of the following:

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For the years ended September 30, 2019

and 2017, approximately 3,631,538 and 2,817,146 common stock options, respectively, were not added to the diluted average shares

because inclusion of such shares would be antidilutive.

and 2018, approximately 2,788,476 and 3,361,538 common stock options, respectively, and 25,000 and 200,000 warrants, respectively,

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

Revenue Recognition

The Company adopted the Financial Accounting Standards Board

("FASB") issued Accounting Standards Updates (“ASU”) ASU 2014-09, Revenue from Contracts with Customers October

1, 2018 on a modified basis.

As the initial adoption of the standard did not have a material impact on the Company's financial

condition or results of operations, no cumulative effect was recognized at the date of initial application.

The Company also had

no significant changes to systems, processes, or controls.

The Company derives its revenues primarily from six components:

Investment Management Fees, Tax Master Network subscriptions, Tax Operating System subscriptions, Financial Advisor subscriptions,

Tax BluePrint sales, and Insurance Sales.

FG Wealth generates investment management fees for services

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services to manage client investments.

FG Tax and MDP generate service income from its consulting and

other professional services performed.

Revenue is recognized as earned, at the end of each period.

FG Tax generates service income from its consulting and other

professional services performed.

Revenue recognized as service is provided.

Commission revenue is derived from the

sale of annuities and premiums on life insurance policies held by third parties.

The revenue is recognized at the time the policy

The revenue is recognized when commissions are

received from insurers and issuers of the products.

Revenue represents gross billings less

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in the accompanying 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.

Tax Master Network has five levels of services

that are charged and collected on a month to month subscription basis.

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.

Any subscription fees paid for a future period are deferred in the financial statements.

also sells Tax Blueprint®.

These are tax planning strategies guides, to save customers taxes through the implementation of

the recommended tax strategies.

After an initial assessment, the customers pay half of the year one tax savings.

Revenue is deferred

until the customer reviews and accepts the final Tax Blueprint®

document and returns an executed delivery agreement.

Advertising costs are charged to operations

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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 1.49% to 2.55% in 2018 and 0.85% to 1.41%

in 2017, dividend yield of 0%, expected life of 2 years and volatility of 36% to 137%.

period based on the Black-Scholes option pricing model based on a risk-free rate of 1.50% to 2.89% in 2019 and 1.49% to 2.55% in

2018, dividend yield of 0%, expected life of 10 years and volatility of 25.32% to 34.05%.

Use of Estimates

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The Agreement was

filed as an exhibit to a registration statement on Form S-1, filed with the Securities and Exchange Commission on September 18,

The Agreement contemplates a series of transactions, pursuant to which the Company will “put”

shares of its common

stock to GHS in consideration of the payment to the Company of eighty percent (80%) of the “Market Price”

filed as an exhibit to a registration statement on Form S-1, filed with the Securities and Exchange Commission (“SEC”)

on September 18, 2017.

The agreement was approved by the SEC November 13, 2018.

The Agreement contemplates a series of transactions,

pursuant to which the Company will “put”

shares of its common stock to GHS in consideration of the payment to the Company

of eighty percent (80%) of the “Market Price”

of such shares.

“Market Price”

shall mean the average of the two lowest trading prices of the Company’s Common Stock during the

ten (10) consecutive trading days preceding the receipt of the applicable put notice.

Accordingly, on each instance the Company

exercises a put option, the Company will know in advance, both the number of shares issuable upon exercise of the put option, and

the dollar amount of the purchase price for such shares.

The maximum purchase price for shares to be purchased by GHS Investments

under the Agreement is $11,000,000.

To facilitate the sale of the shares so purchased by GHS Investments, the Company agreed to

file a registration statement with the Securities and Exchange Commission.

The Company also entered into a Registration Rights

Agreement with GHS Investments, pursuant to which the Company has agreed to provide certain registration rights under the Securities

Act of 1933, the rules and regulations promulgated thereunder, and applicable state securities laws.

The Agreement will terminate

(i) when GHS Investments has purchased an aggregate of $11,000,000 of the common stock of the Company, or (ii) 36 months after

the effective date of the Agreement, or (iii) at such time that the registration statement is no longer in effect.

shall mean the average of

the two lowest trading prices of the Company’s Common Stock during the ten (10) consecutive trading days preceding the receipt

of the applicable put notice.

Accordingly, on each instance the Company exercises a put option, the Company will know in advance,

both the number of shares issuable upon exercise of the put option, and the dollar amount of the purchase price for such shares.

The maximum purchase price for shares to be purchased by GHS Investments under the Agreement is $11,000,000.

To facilitate the

sale of the shares so purchased by GHS Investments, the Company agreed to file a registration statement with the Securities and

Exchange Commission.

The Company also entered into a Registration Rights Agreement with GHS Investments, pursuant to which the

Company has agreed to provide certain registration rights under the Securities Act of 1933, the rules and regulations promulgated

thereunder, and applicable state securities laws.

The Agreement will terminate (i) when GHS Investments has purchased an aggregate

of $11,000,000 of the common stock of the Company, or (ii) 36 months after the effective date of the Agreement, or (iii) at such

time that the registration statement is no longer in effect.

Additionally, the Company is also actively

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Future Accounting Pronouncements

In February 2017, the FASB issued ASU Update

2017-02 Leases (Topic 842).

Under the new guidance, a lessee will be required to recognize assets and liabilities for leases

with lease terms of more than 12 months.

Consistent with current GAAP, the recognition, measurement, and presentation of expenses

and cash flows arising from a lease by a lessee primarily will depend on its classification as a finance or operating lease.

unlike current GAAP - which requires only capital leases to be recognized on the balance sheet - the new ASU will require both

types of leases to be recognized on the balance sheet.

ASU 2017-02 is effective for the years beginning after December 15, 2018

and for all periods presented.

In June 2016, the FASB issued ASU 2016-13 Financial Instruments-Credit

Losses, which amends how entities will measure credit losses for most financial assets and certain other instruments that are not

measured at fair value through net income, which applies to trade accounts receivable and the calculation of the allowance for

uncollectible accounts receivable.

The new standard will become effective for the Company for annual and interim periods beginning

after December 31, 2019, with early adoption permitted.

The Company is currently evaluating the impact of the adoption of this

accounting guidance will have on the consolidated financial statements.

Since the Company currently uses an expected losses from

customers method, the Company does not anticipate the adoption of ASU 2016-13 will have a material impact on the Company's financial

condition or results of operations.

In January 2017, the FASB issued ASU No.

2017-04 Intangibles-Goodwill

and Other Simplifying the Test for Goodwill Impairment, which provides guidance to simplify the subsequent measurement of goodwill

by eliminating the Step 2 procedure from the goodwill impairment test.

The new guidance is effective for the Company beginning

with the fourth quarter of 2020.

The Company does not anticipate the adoption of ASU 2017-04 will have a material impact on the

Company's financial condition or results of operations.

In February 2018, the FASB issued ASU Update No.

2018-02 Leases

Under the new guidance, a lessee will be required to recognize assets and liabilities for leases with lease terms

of more than 12 months.

Consistent with current GAAP, the recognition, measurement, and presentation of expenses and cash flows

arising from a lease by a lessee primarily will depend on its classification as a finance or operating lease.

However, unlike current

GAAP - which requires only capital leases to be recognized on the balance sheet - the new ASU will require both types of leases

to be recognized on the balance sheet.

ASU 2018-02 is effective for the years beginning after December 31, 2019 and for all periods

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.

The Company does not expect any significant financial

impact to the financial statements upon adoption of this standard.

In March 2018, the FASB issued ASU Update

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

In March 2017, the FASB issued ASU Update

2017-08, Revenue from Contracts with Customers (Topic 606).

The amendments in this Update are intended to improve the operability

and understandability of the implementation guidance on principal versus agent considerations by clarifying the criteria in determining

a principal versus agent relationship.

The core principle of the guidance is that an entity should recognize revenue to depict

the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects

to be entitled in exchange for those goods or services.

To achieve this core principle, an entity should apply the following five

(1) identify contracts with customers, (2) identify the performance obligations in the contracts, (3) determine the transaction

price, (4) allocate the transaction price to the performance obligation in the contract, and (5) recognize revenue as the entity

satisfies performance obligations.

The new guidance is effective for annual reporting periods beginning after December 15, 2018,

including interim periods within that reporting period.

Early application is permitted for annual reporting periods beginning after

December 15, 2017, including interim periods within that reporting period.

We are currently evaluating what impact adoption of

this guidance will have on our financial position, results of operations, cash flows and disclosures.

The Company does not expect

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

In March 2017, the FASB issued ASU Update

2017-09, Compensation –

In March 2018, the FASB issued ASU Update No.

2018-09, 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 2017-09 is effective for annual periods beginning

after December 15, 2017, 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.

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

statements upon adoption of this standard.

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 2018-09 is effective for annual periods beginning after December 31, 2018, 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

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

PROPERTY AND EQUIPMENT

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during the years ended September 30, 2019 and 2018, respectively.

Intellectual property consists of the

INTELLECTUAL PROPERTY

Intellectual property consists of the following:

Trademarks at September 30, 2017

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30, 2019 and 2018, respectively.

With the acquisition of Tax Coach Software,

LLC, the Company also acquired a promissory note payable to The Huntington National Bank.

The note permits maximum borrowings of

Interest is paid monthly at prime plus 1.25% and the balance is due on demand.

The facility matured in February 2018

(paid off on November 30, 2017), is collateralized by substantially all assets of Tax Coach Software, LLC, and is secured by a

personal guarantee from Keith VandeStadt, a significant stockholder of the Company.

The balance outstanding under this note payable

was $0 and $92,197 at September 30, 2018 and 2017, respectively.

The Company entered into a Business Loan and Security Agreement

to Small Business Financial Solutions, LLC, on October 28, 2017 in the amount of $100,000.

The transaction is structured as an

advance against assets.

The lender has a security interest in all collateral of the Company, and outstanding under this note payable

was $0 and $7,935 at September 30, 2018 and 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

The note matured on August 16, 2018.

Fourly is owned by the majority stockholder of the Company.

The outstanding balance

was $0 and $46,461 at September 30, 2018 and 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.

A second year payment equal to 10% of the loan value was issued on January 1, 2019 with monthly

principal and interest of $4,614 starting on year three.

The note matures July 15, 2021.

The outstanding balance was $100,000 at

September 30, 2018 and 2017, respectively.

On August 9, 2017 the Company entered

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

into a Promissory Note Payable with Elmer Fink (Fink) 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 note matures

August 15, 2020.

The outstanding balance was $92,406 and $100,000 at September 30, 2018 and 2017, respectively.

payment is equal to 10% of the loan value.

A second-year payment equal to 10% of the loan was issued on December 1, 2019 with

monthly principal and interest of $4,614 starting on year three.

The remaining principal and accrued interest of this note is

due on the maturity date, July 15, 2021.

On December 1, 2019, the original note payable was amended.

Payments from December 2019,

through July 2019 to be interest only.

Full principal and interest payments to commence August 9, 2019 until maturity, when all

remaining principal and interest will be due and payable.

On June 15, 2019, Fink and the Company entered into an agreement to

convert the note into common shares of the Company and the note and accrued interest were settled in full as of that date.

outstanding balance was $0 and $100,000 at September 30, 2019 and 2018, respectively.

On August 9, 2017 the Company entered into

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

The interest rate on the note was 10%.

year payment was 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 was due on the maturity date, August 15, 2020.

On December 31, 2019, the original note

payable was amended.

The new interest rate on the note is 15%.

The remaining principal and accrued interest of this note is now

due on the maturity date, July 15, 2022.

A second-year payment equal to 15% of the loan was issued on February 6, 2019 with monthly

principal and interest of $4,614 starting on year three.

On June 15, 2019, Ashby and the Company entered into an agreement to convert

the note into common shares of the Company and the note and accrued interest were settled in full as of that date.

The outstanding

balance was $0 and $92,406 at September 30, 2019 and 2018, respectively.

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 September 30, 2018 and 2017, respectively.

(Heleon) in the amount of $100,000.

The interest rate on the

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

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

On December 31, 2019,

the original note payable was amended.

The new interest rate on the note is 15%.

Payment on the note is deferred until December

Interest for the deferment period will be capitalized into the amount due, December 31, 2020, resulting in a new Amount

The New Amount Due plus interest will amortize over the following 24 months, with the first payment due December 31, 2020.

On June 15, 2019, Heleon and the Company entered into an agreement to convert the note into common shares of the Company and the

note and accrued interest were settled in full as of that date.

The outstanding balance was $0 and $100,000 at September 30, 2019

and 2018, respectively.

On October 2, 2017 the Company entered

into a Promissory Note Payable with Indar and Sybil 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.

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

The interest rate on the note was 10%.

First year payment was 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

and $0 at September 30, 2018 and 2017, respectively.

On December 20, 2019, the original note

payable was amended.

The new interest rate on the note is 15%.

Payment on the note is deferred until February 2, 2020.

for the deferment period will be capitalized into the amount due, February 2, 2020, resulting in a new Amount Due.

The New Amount

Due plus interest will amortize over the following 24 months, with the first payment due February 2, 2020.

On June 15, 2019, Bally

and the Company entered into an agreement to convert the note into common shares of the Company and the note and accrued interest

were settled in full as of that date.

The outstanding balance was $0 and $100,000 at September 30, 2019 and 2018, respectively.

On October 2, 2017 the Company entered

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

into a Promissory Note Payable with Paul Frueh (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.

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.

On June 15, 2019, Frueh and the Company entered

into an agreement to convert the note into common shares of the Company and the note and accrued interest were settled in full

as of that date.

The outstanding balance was $0 and $100,000 at September 30, 2019 and 2018, respectively.

On November 2, 2017 the Company entered

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

The interest rate on the note was

First year payment was 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.

On December 20, 2019,

the original note payable was amended.

The new interest rate on the note is 15%.

Payment on the note is deferred until February

Interest for the deferment period will be capitalized into the amount due, February 20, 2020, resulting in a new Amount

The New Amount Due plus interest will amortize over the following 24 months, with the first payment due February 20, 2020.

On June 15, 2019, Dade and the Company entered into an agreement to convert the note into common shares of the Company and the

note and accrued interest were settled in full as of that date.

The outstanding balance was $0 and $340,000 at September 30, 2019

and 2018, respectively.

On November 2, 2017 the Company entered

into a Promissory Note Payable with Michael and Donna Dade 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

and $0 at September 30, 2018 and 2017, respectively.

On March 15, 2018 the Company entered into

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

a Promissory Note Payable with Helen Janssen (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 September

30, 2018 and 2017, respectively.

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.

On December 31, 2019, the original note payable

The new interest rate on the note is 15%.

Payment on the note is deferred until February 15, 2020.

Interest for the

deferment period will be capitalized into the amount due, February 15, 2020, resulting in a new Amount Due.

The New Amount Due

plus interest will amortize over the following 24 months, with the first payment due February 15, 2020.

On June 15, 2019, Janssen

and the Company entered into an agreement to convert the note into common shares of the Company and the note and accrued interest

were settled in full as of that date.

The outstanding balance was $0 and $200,000 at September 30, 2019 and 2018, respectively.

On November 29, 2018 the Company entered

into a Promissory Note Payable with Knight Capital in the amount of $155,000.

There is no interest rate associated with this note.

The repayment streams for this are calculated from a factoring of the receivables sold, and are payable in daily payments of $1,504

and is due on the maturity date, July 11, 2019.

The outstanding balance was $0 at September 30, 2019.

On April 19, 2019 the Company entered into

a Promissory Note Payable with Charles O’Banon (“O’Banon”), a customer, in the amount of $32,205.

is in settlement of tax penalties and interest he incurred, that were proximately caused by the Company’s actions.

principal and interest payments are $623, with a balloon payment of $14,048 in April 2022.

The note is being repaid over 36 months

and bears an interest rate of 6%.

The Company has instituted abatement efforts on O’Banon’s behalf, with the taxing

Should the abatement efforts be successful, all monies paid O’Banon by the Company shall be returned.

abatement efforts result in mitigation, any monies paid by the Company, in excess of the mitigated amounts, shall be returned.

The outstanding balance on September 30, 2019 and 2018, was $29,401 and $0 respectively.

On April 12, 2019, the Company entered

into a promissory note payable with a related party, John Pollock, the current EVP, in the amount of $15,000, and bears interest

The note is scheduled to be repaid in full by December 1, 2019.

The outstanding balance on September 30, 2019 and 2018,

was $7,526 and $0 respectively.

The Company’s maturities of debt

5 unchanged sentences

Deferred rent

The Company elected C Corporation tax status

upon inception in 2014.

The Company elected C Corporation tax

status from inception.

Net operating losses (“NOL”) since that date total $5,624,574 as of September 30, 2019 and

may be carried forward to offset future taxable income;

accordingly, no current provision for income tax has been recorded in the

accompanying statements of operations.

accordingly, no current provision for income tax has been recorded in

the accompanying statements of operations.

NOL carry-forward benefits begin to expire in 2035.

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The Tax Cuts and Jobs Act (the “Tax Act”), which

was enacted December 22, 2017, reduced the corporate income tax rate effective January 1, 2018 from 35% to 21%.

was enacted December 22, 2018, reduced the corporate income tax rate effective December 1, 2019 from 35% to 21%.

Among the other

significant tax law changes that potentially affect the Company are the limitations on the deduction for interest incurred in 2019

2018 or later of up to 70% of its taxable income for the carryforward year and the limitation of the utilization of post 2017

net operating loss carryforwards.

At September 30, 2018, the Company has not completed its accounting for the tax effects of enactment

of the Tax Act, however, it has made reasonable estimates of the effects on its existing deferred tax balances.

The Company does

not anticipate material changes to its income tax provision as a result of the passage of the Tax Act until pretax law change

net operating losses are fully utilized or expire in 2026.

The Company has remeasured certain deferred federal tax assets and

liabilities based on the rates at which they are expected to reverse in the future, which is generally 21%.

The deferred tax assets

of the Company were reduced by $408,041 as a result of this remeasurement.

This change was fully offset by the corresponding change

in the valuation allowance.

The Company is still analyzing certain aspects of the Tax Act, and refining its calculations, which

could potentially affect the measurement of those balances or potentially give rise to new deferred tax amounts.

The Company’s

estimates may also be affected in the future as the Company gains a more thorough understanding of the Tax Act, and how the individual

states are implementing this new law.

or later of up to 70% of its taxable income for the carryforward year and the limitation of the utilization of post 2018 net operating

loss carryforwards.

The Company does not anticipate material changes to its income tax provision as a result of the passage of

the Tax Act until pretax law change net operating losses are fully utilized or expire in 2026.

The Company has remeasured certain

deferred federal tax assets and liabilities based on the rates at which they are expected to reverse in the future, which is generally

The deferred tax assets of the Company were reduced by $408,041 as a result of this remeasurement.

This change was fully offset

by the corresponding change in the valuation allowance.

The Company is still analyzing certain aspects of the Tax Act, and refining

its calculations, which could potentially affect the measurement of those balances or potentially give rise to new deferred tax

The Company’s estimates may also be affected in the future as the Company gains a more thorough understanding of

the Tax Act, and how the individual states are implementing this new law.

COMMITMENTS, CONTINGENCIES AND CONCENTRATIONS

11 unchanged sentences

non-cancelable operating leases having original terms in excess of one year are as follows:

Contingencies

Under the terms of the TCS purchase agreement,

the common stock issued had been placed in escrow.

The sellers maintain the right to unwind this transaction under certain conditions.

One agreement with one of the employees was terminated during December 2016.

At September 30, 2016, Pacific Oil Company

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

Those liabilities have been shown here

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.

The liabilities were settled during 2017.

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.

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

Management does not believe that there are any current, material legal proceedings ongoing at this time.

STOCKHOLDERS’

9 unchanged sentences

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

Financial Gravity Holdings was dissolved February 13, 2019.

For each of the Company and Financial Gravity

Holdings, its subsidiary, there were no preferred shares issued or outstanding as of September 30, 2019 and 2018.

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").

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

for the purchase of 75,000 shares of common stock of the Company at an exercise price of $1.25 per share for a 1-year term and

an additional 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 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

815, “Derivatives and Hedging”.

ASC 815 requires freestanding contracts that are settled in a company’s own stock

to be designated as an equity instrument, assets or liability.

Under the provisions of ASC 815, a contract designated as an asset

or liability must be initially recorded and carried at fair value until the contract meets the requirements for classification

In the three months 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 815, “Derivatives and Hedging”.

ASC 815 requires freestanding contracts that are settled in a company’s

own stock to be designated as an equity instrument, assets or liability.

Under the provisions of ASC 815, a contract designated

as an asset, or liability must be initially recorded and carried at fair value until the contract meets the requirements for classification

as equity, until the contract is exercised or until the contract expires.

1 unchanged sentence

be accounted for as equity and as such no determination of fair value was necessary.

Private Placement Memorandum, Financial Gravity Holdings,

On October 31, 2014, Financial Gravity

Holdings, Inc.

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 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 $52,500, to FMW along with $3,500 cash as payment for services.

On August 22, 2017, the Company issued

100,000 shares of common stock, worth $60,000 to Nationwide EZ Cash Flow in exchange for professional services.

Additional Common Stock Issuances

During the years ended September

and 2017, 100,000 shares and 725,000 shares, respectively, were issued for $100,000 and $725,000, respectively.

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, everyone shares 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.

30, 2019 and 2018, 0 and 100,000 shares were issued, for $0 and $100,000 respectively.

STOCK OPTION PLAN

18 unchanged sentences

Stock option activity is summarized as follows:

Shares Under Option

Value of Shares Under Option

Weighted Average Exercise Price

Weighted Average Remaining Contractual Life

Shares Under Option

Value of Shares Under Option

Weighted Average Exercise Price

Weighted Average Remaining Contractual Life

Outstanding - beginning of year

Outstanding - September 30, 2017

Canceled or expired

Outstanding - end of year

Exercisable - end of year

Outstanding - September 30, 2018

Canceled or expired

Outstanding - September 30, 2019

Exercisable - September 30, 2019

All outstanding 2015 Plan stock options

7 unchanged sentences

RELATED PARTY TRANSACTIONS

Accounts receivable due from the majority

Accounts receivable due from the largest

stockholder of the entity, included in accounts receivable –

related party in the accompanying consolidated balance sheets

was $1,791 and $4,506 as of September 30, 2018 and 2017, respectively.

was $0 and $1,791 as of September 30, 2019 and September 30, 2018, 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 $203,000

and $200,000 for fiscal 2018 and 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

The note matures on August 16, 2018.

Fourly is owned by the majority stockholder of the Company.

The outstanding balance

was $0 and $46,461 at September 30, 2018 and 2017, respectively.

Three employment agreements were made as

a condition of the TCS acquisition during fiscal 2016.

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

for a period of three years.

Two employee 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 employee 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 other 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.

Three consulting agreements were made 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 was terminated by the Company during December 2017.

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.

$403,160 and $444,600 in professional

fees were paid under these 3 agreements during the years ended September 30, 2018 and 2017, respectively, and are included in selling,

general and administrative expenses in the accompanying statement of operations.

of the entity, included in salaries and wages in the accompanying consolidated statements of operations were $152,500 and $203,000

for fiscal 2019 and 2018, respectively.

Included in salaries and wages were consulting

fees paid to a related party as a condition to the TMN acquisition.

The agreement requires payments each month totaling $21,500.

The total paid under this agreement in fiscal 2019 and 2018 respectively, were $258,000 and $403,160.

On April 12, 2019 the Company entered into

a loan agreement with John Pollock, Executive Vice President of the Company.

The note bears interest at 2.76%, and will be repaid

in six equal installments of $2,520, beginning July 1, 2019.

The balance of the loan at September 30, 2019 was $7,526.

SUBSEQUENT EVENTS

Subsequent to September 30, 2018, an aggregate of 150,000 options

to purchase the Company’s common stock have been granted.

Financial Gravity entered into a new lease agreement with HPC

Services, LLC.

Starting November 1, 2018.

Financial Gravity will be expanding its new headquarters office space in the same building

and moving to a new suite.

The new corporate headquarters address will be at 800 N.

Suite 150, Allen, TX 75013 where

the company will have 5,214 square feet of office space under the new lease.

Financial Gravity is required to make monthly payments

of $7,712 per month (including operating expense) for the next 2 years.

The rent will increase February 2022 to $8,146 per month

(including operating expense) until the lease expires in January 2024.

September 30, 2019, the Company

entered into a merger agreement with Forta Financial Group, Inc.

(formerly Presidential Brokerage, Inc.) (“Forta”),

to acquire Forta in exchange for Company stock.

45,797,684 shares of Financial Gravity Companies, Inc.

will be issued in exchange

for the stock of Forta.

Companies will assume approximately $860,000 of Forta debt and receive approximately $1,220,000 in Forta

Subsequent to September 30, 2019, the Company applied to FINRA for approval of the merger.

The merger is subject to FINRA

approval and will be finalized upon such approval.

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-K

Item 9A. Controls and Procedures