What changed in this filing

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Item 1. Financial Statements

2021-02-17 compared with 2020-08-27 · 701 added, 675 removed, 378 unchanged (78% of the section changed)

1 unchanged sentence

Financial Gravity Companies, Inc.

and Subsidiaries

CONSOLIDATED BALANCE SHEETS

December 31, 2020

September 30, 2020

2 unchanged sentences

Trade accounts receivable, net

Right to use lease asset

Prepaid expenses and other current assets

1 unchanged sentence

Property and equipment, net

Right to use lease asset

Customer relationship, net

Proprietary content, net

Non-compete agreements, net

Right to use lease asset

Intellectual property

2 unchanged sentences

Accounts payable –

Related party payables

Accrued expenses and other current liabilities

Accrued expenses

Contract liabilities

Deferred rent

Line of credit

Lease Liability

Lease liability –

Related Party Payables

Notes payable

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300,000,000 shares authorized;

83,023,048 shares issued and outstanding as of June 30, 2020 and 41,436,033 shares issued and outstanding as of September 30, 2019

83,618,412 shares issued and outstanding as of December 31, 2020 and 83,618,412 shares issued and outstanding as of September 30, 2020

Additional paid-in capital

2 unchanged sentences

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

The accompanying notes are an integral part

The accompanying notes are in integral part

of these consolidated financial statements.

Financial Gravity Companies, Inc.

and Subsidiaries

CONSOLIDATED STATEMENTS OF OPERATIONS

For the Three Months Ended

For the Nine Months Ended

Total Revenue

Investment Management Fee

For the three months ended December 31,

2020 and 2019

December 31, 2020

December 31, 2019

Broker Dealer Income

Investment management fees

Service income

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General and administrative

Management fees - related party

Compensation Expense

Salaries and wages

Total operating expenses

Operating Income (Loss)

Net operating loss

OTHER EXPENSE

Interest expense

Other Income (Expense)

Interest & Other Expense

Total other expense

Net Loss before Income taxes

LOSS PER SHARE - Basic and Diluted

(1) Earnings per share amount is rounded up to $(0.01)

The accompanying notes are an integral part

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Financial Gravity Companies, Inc.

CONSOLIDATED STATEMENTS OF CHANGES IN

STOCKHOLDERS' EQUITY

and Subsidiaries

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’

For the three-month periods ended December

31, 2020 and 2019

Number of Shares Issued and Outstanding

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Stock based employee compensation expense

Stock options in lieu of expenses

Debt exchanged for stock

Balance at June 30, 2019

Balance at March 31, 2019

$ (6,095,901 )

Stock based employee compensation expense

Stock options in lieu of expenses

Debt exchanged for stock

Balance at June 30, 2019

$ (6,112,168 )

Balance at September 30, 2019

$ (6,199,115 )

Stock based employee compensation expense

Stock options exercised

Private Placement stock issue

Stock issued in exchange for services

Forta acquisition

Balance at June 30, 2020

Balance at December 31, 2019

$ (6,211,157 )

Balance at March 31, 2020

Balance at September 30, 2020

$ (6,990,790 )

Stock based employee compensation expense

Stock issued in exchange for services

Forta acquisition

Balance at June 30, 2020

Balance at December 31, 2020

$ (7,185,150 )

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Financial Gravity Companies, Inc.

and Subsidiaries

CONSOLIDATED STATEMENTS OF CASH FLOWS

Nine months Ended June 30, 2020 and 2019

Nine Months Ended

Three Months Ended December 31,

CASH FLOWS FROM OPERATING ACTIVITIES

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Stock based compensation

Stock options issued for services

Impairment of intangible

Right of use of lease asset

Changes in operating assets and liabilities:

Accounts receivable

Accounts receivable - related party

Prepaid expenses and other current assets

Accounts payable - trade, current

Prepaid expenses

Accounts payable –

Accrued expenses and other liabilities

Contract Liabilities

Related Party Payable

Deferred revenue

Lease liability

Net cash used in operating activities

CASH FLOWS FROM INVESTING ACTIVITIES

Cash acquired from Forta acquisition

Purchases of property and equipment

Purchase of trademark

Cash paid for purchase of property and equipment

Net cash used in investing activities

CASH FLOWS FROM FINANCING ACTIVITIES

Borrowings from line of credit

Borrowings from notes payable

Payments on line of credit

Borrowings from lines of credit

Proceeds from notes payable

Payments on notes payable

Proceeds from sale of common stock

Payments on line of credit

Proceeds from the sale of common stock

Net cash provided by financing activities

Net increase(decrease) in cash and cash equivalents

TOTAL INCREASE IN CASH AND CASH EQUIVALENTS

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD

CASH AND CASH EQUIVALENTS AT END OF PERIOD

Cash Paid for Interest

The accompanying notes are an integral part

Supplemental disclosures of cash flow information:

Cash paid during the period for:

The accompanying notes are in integral part

of these consolidated financial statements.

Financial Gravity Companies, Inc.

and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NATURE OF BUSINESS

Financial Gravity Companies, Inc.

parent company of financial services companies including brokerage, investment advisor, asset management, estate planning, family

office services, business and personal tax planning, business consulting, and financial advisor services.

Financial Gravity's mission

is to bring together financial services companies that create comprehensive customer service synergies for the clients that we

Financial Gravity Companies, Inc., and

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Cincinnati, Ohio.

The currently operating wholly owned subsidiaries of the organization include:

The currently operating wholly owned subsidiaries of the Company include:

Sofos Investments, Inc.

(“Sofos”).

formerly, Financial Gravity Wealth, Inc.).

Sofos is a registered investment advisor (“RIA”), registered with the Securities

and Exchange Commission, and provides asset management services to individuals and businesses, including money management, financial

planning, and wealth management.

Sofos is a registered investment advisor (“RIA”), registered with the Securities and Exchange Commission, and provides

asset management services to individuals and businesses, including money management, financial planning, and wealth management.

Sofos commenced its money management services in late 2019, and by December 2020 had in excess of $100,000,000 in assets under

Tax Master Network, LLC, runs the Tax Master

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the Tax Operating System, which is a system for integrating and executing tax planning strategies.

MPath Advisor Resources, LLC (formerly

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

and services to insurance agents or agencies.

In addition, TMN will be launching

new efforts to increase subscribers, including a revamped tax operating system and financial advisor business development programs

that will assist TMN subscribers in increasing their business activity.

The goal is to provide TMN subscribers with a platform

for them to enhance their business opportunities in the areas of investment and financial advice and to increase their effectiveness

as tax advisors to small businesses and individuals.

Tax Master Network, LLC gives CPAs, Enrolled

Agents, and other tax professionals a system for marketing, selling, and fulfilling tax-planning engagements.

The system rests

on two proprietary SAAS-based applications, the Tax Ninja software, which uses non-technical language in written reports introducing

clients to tax-saving concepts and strategies;

and the Tax Operating System®, which automates implementation of tax strategies.

The system also includes:

1) marketing and practice-management tools and resources;

2) access to the Technical Training Center

and the Sales Training Center to support members;

3) the monthly Fueled program which promotes personal development education;

4) the weekly Tax Beat client newsletter (a client newsletter);

and 6) the Certified Tax Master®

designation (which identifies

members as offering special training not usually available to clients).

TMN membership also includes the Financial Advisor Technical

Education (FATE) program, which serves two goals:

1) it helps tax planners do a better job helping clients manage tax exposure

in their investment portfolios;

and 2) it gives members a proprietary "done for you"

path into the investment advisory

MPath Advisor Resources, LLC (“MPath”)

MPath is an insurance marketing organization and provides insurance products and services to insurance agents or agencies.

is a new venture that will be focused upon insurance marketing and will capture business synergies in the sale of insurance products

by financial advisors with TMN and with Forta.

Forta Financial Group, Inc.

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independent advisors and representative in other states.

SEGMENT REPORTING

We manage our business in four reportable

Each of our subsidiaries is treated as a segment.

We evaluate the performance of our operating segments based on a segment’s

share of consolidated operating income, which excludes discontinued operations of Financial Gravity Tax that are shown in the report.

Financial Gravity Tax (discontinued)

Forta Financial Group

Sofos Investments

Tax Masters Network

Unallocated (Financial Gravity Companies, Inc.)

Ordinary Income

Total Service Income

Total Investment Management Fees

Total Compensation Expense

Total Cost of services

Total Depreciation & Amortization

Total General and Administrative

Total Marketing

Total Professional Services

Total Expense

Net Ordinary Income

Other Income/Expense

Total Other Income

Total Other Expense

Net Other Income

$ (1,548,990 )

BUSINESS ACQUISITION

On September 30, 2019, the Company entered

into a merger agreement with Forta Financial Group, Inc.

(“Forta”

or “FFGI”, formerly, Presidential Brokerage,

Inc.), to acquire 100% of the stock of Forta in exchange for 45,785,879 shares of Company common stock.

Forta is a broker dealer,

registered investment advisor and an insurance brokerage, subject to FINRA, SEC and insurance regulation.

The acquisition transaction

closed on May 21, 2020.

Forta’s financial performance is included in Company’s consolidated statements starting as

of May 21, 2020.

Identification of Company as the Acquirer

The acquisition was primarily effected

by a merger and an exchange of Company’s common stock as the consideration paid to Forta stockholders by Company for their

equity interests in Forta.

We looked at all pertinent facts and circumstances identified in ASC 805-10-25-1, ASC 805-10-05-4 to

be considered in identifying the acquirer in a business combination effected by exchanging equity interests.

The standard recognizes

that the acquirer usually is the entity that issues its equity interests, but that in some business combinations the issuing entity

is the acquiree.

In these situations, the accounting acquiror is different than the legal acquiror.

The guidance provides the following factors

to consider in identifying the accounting acquiror in a business combination like the acquisition that is effected by exchanging

equity interests:

The majority shares ended up being held

by Forta shareholders.

The original calculation was to be an even 50% for Forta and Company shareholders.

However, the calculations

included shares that were granted through the option plan at Company, and it was assumed that each of the option share grants would

be exercised.

As it turned out, the vast majority of the option shares were not exercised, so that ended up skewing the majority

calculation in favor of the Forta shareholders.

There were no other special or unusual voting arrangements, convertible securities

or other financial instruments of the combined Company immediately after the acquisition.

After the acquisition, the largest single

minority interest would be held by a Company shareholder, John Pollock, and members of the Board of Directors and management of

Company, some of whom were shareholders of Forta, would end up owning in excess of 40% of the voting shares of Company.

There is no agreement on the election of

Board members, and neither Forta nor Financial Gravity shareholders have any agreement to elect a majority of the Board.

The composition of the senior management

of the combined entity.

Senior management is from Financial Gravity.

Based upon the above, the Company has concluded that Financial

Gravity will be treated as the acquirer.

Purchase Price Allocation

The purchase price of $7,600,415 was based

upon the share price of Company’s stock as of May 21, 2020.

We have used preliminary fair value estimates for the assets

acquired and liabilities assumed for the acquisition.

We believe significant synergies may arise from

this acquisition, as a result of which the purchase price was in excess of the fair value of the net assets acquired and, as a

result, we have preliminarily recorded goodwill of $7,358,050.

We have not yet finalized estimates that relate to certain tangible

and intangible assets, including customer relationships, trade names, contracts.

Our estimates and assumptions for these acquisitions

are subject to change as we obtain additional information for our estimates during the respective measurement periods (up to one

year from the acquisition date).

Assets Acquired and Liabilities Assumed

Forta Financial Group, Inc.

Assets Acquired and Liabilities Assumed

As of May 21, 2020

PURCHASE PRICE

Current Assets

Accounts Receivable

Other Current Assets

Total Current Assets

Current Liabilities

Total Accounts Payable

Total Other Current Liabilities

Total Current Liabilities

Long-Term Liabilities

Total Long-Term Liabilities

Total Liabilities

The accompanying unaudited pro forma condensed

combined financial statement of Financial Gravity Companies, Inc.

(“Financial Gravity”, “FGCO”

or the “Company”)

is presented to illustrate the estimated effects of the acquisition of 100% of the stock of Forta Financial Group, Inc.

(“Forta”

or “FFGI”), which closed on May 21, 2020 (the “acquisition”

or the “transaction”) on the historical

financial position and results of operations of the Company.

The unaudited pro forma condensed combined statement of operations

is based upon and derived from and should be read in conjunction with Company’s and Forta’s historical audited financial

statements for the year ended September 30, 2019 and the historical unaudited financial statements for the nine months ended June

30, 2020 –

Company will be fling its 8K/A with the financial information.

UNAUDITED PRO FORMA COMBINED FINANCIAL

Forta’s results of operations have been included in the

following financial statement for the nine months ending June 30, 2020 prospectively from the assumed date of acquisition of October

Pro forma results have been prepared by adjusting historical results to include Forta’s results of operations.

unaudited pro forma results presented do not necessarily reflect the results of operations that would have resulted had the acquisition

been completed at the beginning of October 1, 2019, nor does it indicate the results of operations in future periods.

Additionally,

the unaudited pro forma results do not include the impact of possible business model changes, nor does it consider any potential

impacts of current market conditions on revenues, reduction of expenses, asset dispositions, or other factors.

The impact of these

items could alter the following pro forma results:

FINANCIAL GRAVITY COMPANIES, INC.

UNAUDITED PRO FORMA CONDENSED COMBINED

STATEMENT OF OPERATIONS

FOR THE NINE MONTHS ENDED JUNE 30, 2020

Financial Gravity

Investment Management Fees

Service Income

Total Revenue

Compensation Expense

Cost of services

Depreciation & Amortization

General and Administrative

Professional Services

Total Expense

Net Ordinary Income

Other Income/Expense

Total Other Income

Total Other Expense

Net Other Income

Net income (loss) per common share:

Derived from the unaudited statement operations of Forta for the nine months ended June 30, 2020

Derived from the unaudited statement operations of FGCO for the nine months ended June 30, 2020

Forta will be focused on attracting independent advisors and supporting

TMN members as they grow their financial advisory businesses.

Forta is implementing plans to recruit independent advisors which

will increase revenue.

Forta does not hold funds or securities for customers or owe money or securities to customers.

to Rule 15c3-1 of the Securities Exchange Act of 1934, the Forta is required to maintain minimum net capital of $100,000 and ratio

of aggregate indebtedness to net capital shall not exceed 15 to 1.

On December 31, 2020, the Forta’s net capital was $294,485

and the aggregate indebtedness to net capital was 78.72%.

The Company is exempt from certain provisions of Rule 15c3-3 of the Securities

Exchange Act of 1934.

Such exemption is in accordance with paragraph (k) (2) (ii) of the Rule.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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

Effective May 21, 2020, Company acquired

100% of Forta in exchange for 45,785,879 shares of common stock of Company.

Forta’s assets and liabilities are included in

Company’s assets and liabilities as of June 30, 2020.

Forta’s results of operations have been consolidated with Company’s

results beginning as of June 1, 2020.

Beginning as of May 21, 2020 Forta’s

assets and liabilities are included in Company’s assets and liabilities and Forta’s results of operations have been

consolidated with Company’s results.

Cash and Cash Equivalents

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has not experienced any losses in such accounts and believes it is not exposed to any significant credit risk on cash and cash

Cash does not include restricted cash, including the net capital deposit of approximately $100,000 at First Clearing,

which is recorded on the balance sheet with prepaid expenses and other current assets.

Trade accounts receivable are carried at

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Recoveries of receivables previously written off are recorded when

The allowance for doubtful accounts was $0 as of June 30, 2020 and September 30, 2019, respectively.

The allowance for doubtful accounts was $0 as of December 31, 2020 and September 30, 2020, respectively.

In the normal course of business, the Company

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does not believe that it is exposed to any significant risk of loss on accounts receivable.

Prepaid Expenses

Prepaid Expenses and other current assets

Prepaid expenses consist of expenses the

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the related cost and accumulated depreciation are removed from the accounts and any gain or loss is included in operations.

In February 2016, the FASB issued ASU 2016-02

Leases, which changed financial reporting as it relates to leasing transactions to recognize a lease liability, measured on a discounted

and a right-of-use asset, for the lease term.

In July 2018, the FASB issued ASU No.

2018-10 Codification Improvements to

Topic 842, Leases and ASU No.

2018-11 Leases (Topic 842):

Targeted Improvements.

In March 2019, the FASB issued ASU No.

Codification Improvements to Topic 842, Leases.

The Company adopted these ASUs on October 1, 2019 on a modified retrospective basis.

The Company did not elect the hindsight practical expedient and did elect the package of practical expedients to not reassess prior

conclusions related to contracts containing leases, lease classification and initial direct costs for all leases.

The initial adoption

of the standard recognized right-of-use assets of $323,097 and lease liabilities of $337,454 on the Company’s statement of

financial position with no impact on the Company's results of operations.

The Company had no significant changes to processes

The Company leases

their office space through an operating lease in Denver Colorado, which expires at May 31, 2021, and non-material offices leases

in Cincinnati, Ohio and Loveland, Colorado.

Company’s lease agreements obligate the Company to pay real estate taxes, insurance,

and certain maintenance costs, which are accounted for separately.

The Company’s lease agreements do not contain any material

residual value guarantees or material restrictive covenants.

The Company determines if an arrangement is an operating lease at

Leases with an initial term of 12 months or less are not recorded on the balance sheet.

All other leases are recorded

on the balance sheet as right-of-use assets and lease liabilities for the lease term.

Lease assets and lease liabilities are recognized

at commencement date based on the present value of lease payments over the lease term and include options to extend or terminate

the lease when they are reasonably certain to be exercised.

The present value of lease payments is determined primarily using the

incremental borrowing rate based on the information available at lease commencement date.

The Company’s operating lease expense

is recognized on a straight-line basis over the lease term and is recorded in general and administrative expenses.

Proprietary Content

The proprietary content acquired as a part

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

content on the date of the purchase.

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.

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

During each of the three months ended June 30, 2020 and 2019, and the nine months ended June 30, 2020 and 2019, the Company

recorded amortization expense of $16,320 and $49,138 for 2020 and $16,410 and $49,228 for 2019, respectively, on this intangible

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

amortization at June 30, 2020 was $311,688 and $246,140 at September 30, 2019.

During each of the three months ended December 31, 2020 and 2019, the Company recorded amortization expense of $16,544 and

$16,410 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, 2020 was $394,049 and $377,505 at September 30,

Future amortization of proprietary content

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

Non-compete Agreements

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

During each of the three and nine months ended June 30, 2020 and 2019,

the Company recorded amortization expense of $1,308 and $3,938 for 2020 and $1,315 and $3,945 for 2019, respectively on this intangible

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

amortization at June 30, 2020 was $24,978 and $19,725 at September 30, 2019.

During each of the three months ended December 31, 2020 and 2019, the

Company recorded amortization expense of $0 and $1,315 respectively on this intangible asset, which is included in depreciation

and amortization expense in the accompanying consolidated statements of operations.

Accumulated amortization was $26,300 at September

This asset is fully depreciated and written off, as of September 30, 2020.

Intellectual Property

Intellectual property is 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 sheets to be impaired as of June 30, 2020 and September 30, 2019.

Goodwill represents the excess of the

value of the purchase price and related costs over the identifiable assets from business acquisitions.

The Company conducts

an annual impairment assessment, at the reporting unit level, of its recorded goodwill.

The Company assesses qualitative

pertinent factors to determine whether it is more likely than not that the fair value of a reporting unit is less than it is

carrying amount.

The qualitative factors evaluated by the Company include macro-economic conditions of the local business

environment, overall financial performance, and other entity specific factors as deemed appropriate.

If, through this

qualitative assessment, the conclusion is made that it is more likely than not that a reporting unit’s fair value is

less than it is carrying amount, a two-step impairment test is performed.

Management determined, by assessing the qualitative

factors, that it is more likely than not that the fair value of the reporting unit is greater than it carries value.

Management does not consider the value of goodwill recorded for TMN in the accompanying consolidated balance sheets to be

impaired as of June 30, 2020 and September 30, 2019.

Goodwill related to the acquisition of Forta was recognized in the

amount of $7,358,050, being the difference between the value of Forta’s net assets and the market value of

Company’s stock at the time of the acquisition of Forta.

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 sheets

to be impaired as of December 31, 2020 and September 30, 2020.

Goodwill represents the excess of the value

of the purchase price and related costs over the identifiable assets from business acquisitions.

The Company conducts an annual

impairment assessment, at the reporting unit level, of its recorded goodwill.

The Company assesses qualitative factors in order

to determine whether it is more likely than not that the fair value of a reporting unit is less than it is carrying amount.

qualitative factors evaluated by the Company include:

macro-economic conditions of the local business environment, overall financial

performance, and other entity specific factors as deemed appropriate.

If, through this qualitative assessment, the conclusion is

made that it is more likely than not that a reporting unit’s fair value is less than it is carrying amount, a two-step impairment

test is performed.

Management determined, by assessing the qualitative factors, that it is more likely than not that the fair value

of the reporting unit is greater than it carries value.

Management does not consider the value of goodwill recorded in the accompanying

consolidated balance sheets to be impaired as of December 31, 2020 and September 30, 2020.

Goodwill consists of the following:

September 30,

Forta Goodwill

Total Goodwill

The Company records federal and state income,

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tax benefits as a component of income tax expense.

There was no accrued interest, penalties or uncertain tax positions as of June

There was no accrued interest, penalties or uncertain tax positions as of December

31, 2020 and September 30, 2020.

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Earnings Per Share

Basic loss per common share is computed

Basic earnings per common share is computed

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

The average number of common shares for the three months ended June 30, 2020 and 2019 respectively were 72,018,838 and

The average number of common shares for the nine months ended June 30, 2020 and 2019, respectively, were 51,669,659

and 36,949,650.

For the three and nine months ended June 30, 2020, 1,351,323 approximately common stock equivalents were not added

to the diluted average shares because inclusion of such equivalents would be antidilutive.

For the three and nine months ended

June 30, 2019, approximately 3,430,646 common stock equivalents were not added to the diluted average shares because inclusion

of such equivalents would be antidilutive.

Average number of common shares were 83,618,412 and 41,495,070 for the three months ended December 31, 2020 and 2019, respectively.

For the three months ended December 31,

2020, approximately 3,626,446 common stock equivalents were not added to the diluted average shares because inclusion of such

equivalents would be antidilutive.

For the three months ended December 31, 2019, approximately 2,161,605 common stock equivalents

were not added to the diluted average shares because inclusion of such equivalents 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, 2019 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

investment management fees, brokerage commissions, TMN subscriptions, financial advisor subscriptions, Tax BluePrint sales,

insurance sales and marketing programs, and Tax Operating System subscriptions.

Company generates investment management

fees by providing management services for client investments (through Sofos and Forta).

Investment management fees are calculated

as a percentage of assets under management for the period.

Investment management fees Revenue is recognized as earned, at the end

of each month that management services were performed.

Fees are withdrawn from investor accounts monthly, in arrears, or in the

case of Forta, investment management fees may be withdrawn quarterly in advance from investor accounts.

These advance payments

are recognized, equally, over the three months of the applicable quarter.

Company generates brokerage commissions

through Forta by providing brokerage services to clients.

Commissions are calculated based upon the value of the securities that

are bought or sold for the client.

Fees are paid as part of the purchase and sale transaction.

Depending upon the securities bought

or sold, recognition is either on the trade date or the date when the purchase contract is accepted.

Revenue is also derived from the sale of

annuities and premiums on life insurance policies issued by insurance companies to clients (through Forta), and from insurance

marketing programs (through MPath Advisor Resources, LLC.).

The revenue is recognized after the insurance policies are issued and

from the following activities:

Investment Management Fees, Securities Brokerage Commissions, Tax Master Network subscriptions,

Tax Operating System subscriptions, Financial Advisor subscriptions, Tax BluePrint sales, and Insurance Sales.

Investment management fees are recognized

as services are provided by the Company.

Investment management fees include fees earned from assets under management by providing

professional services to manage clients’

Fees are generally paid quarterly, in advance, for each quarter or

monthly in arrears.

Revenues are earned over the period in which the service is provided, which is typically monthly.

The Company generates services income which

is recognized when consulting and other professional services are performed by the Company (primarily from TMN and MPath).

is recognized as services are delivered.

Revenue represents gross billings less

discounts, and are net of sales taxes, as applicable.

Amounts invoiced for work not yet completed are shown as Contract Liabilities

Amounts invoiced for work not yet completed are shown as deferred revenue

in the accompanying consolidated balance sheets.

TMN provides several levels of subscription

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

The client subscribers are tax advisors that provide tax advice

to their customers.

None of these services comes with a long-term commitment or contract, and there is no up-front payment beyond

the monthly subscription fee.

Subscription income is billed to client credit cards monthly, on the monthly anniversary of client

Cancellations are processed within the month requested and subscriptions 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.

TMN also sells Tax Blueprint®.

These are customized tax plans to save

clients’

customers taxes through the implementation of the recommended tax strategies.

After an initial assessment, the customers

pay half of the year one tax savings, up to $10,000.

Trade accounts receivable are carried only

for investment management fees that are paid in arrears.

The allowance for doubtful accounts was $0 and $0 as of December 31, 2020

and 2019, respectively.

In the normal course of business, the Company

extends credit on an unsecured basis to its customers, substantially all of whom are located in the United States of America.

Company does not believe that it is exposed to any significant risk of loss on accounts receivable.

Sofos generates investment management fees

for services provided by the Company.

Investment management fees include fees earned from assets under management by providing

professional services to manage client investments.

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

Forta generates commission revenue from

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

The revenue is recognized on a trade date

basis for commission revenue and upon acceptance of insurance policies by insurers.

MPath generates revenue from insurance

marketing services for insurance agents, including sourcing of insurance policies through selling agreements.

Tax Master Network has five levels of network

subscription services that are charged and collected on a month-to-month 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.

A contract liability

is recognized when the customer payment is received.

Revenue is deferred until the customer reviews and accepts the final Tax Blueprint®

document and returns an executed delivery agreement.

Tax Blueprint®

sales are billed to the client after a preliminary assessment

and client approval to move forward.

The Company received revenue from Sofos’

operations that are primarily from investment management fees, including money management fees.

Investment management fees are

based upon a percentage of assets under management and totaled $408,473 and $424,326 or the three months ended December 31, 2020

and 2019, respectively.

The Company received revenue from Forta’s

operations for the three months ended December 31, 2020 including:

Investment Advisory fees

Commission-based transactions

Insurance and Other Service Revenue

Total Revenue

The Company received revenue from TMN’s

operations from the following major sources for the three months ended December 31:

TMN membership subscriptions

Tax Blueprints

Commissions/Referrals

The Company received revenue from MPath’s

operations from insurance sales of $172,602 and $0 for the three months ended December 31, 2020 and 2019, respectively.

Advertising and Marketing

Advertising and marketing costs are charged

to operations when incurred.

Marketing costs are charged to operations

when incurred.

Marketing expenses were $20,546 and $21,113 for the three months ended December 31, 2020 and 2019, respectively.

Stock-Based Compensation

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grants, and stock appreciation rights grants, on a straight-line basis over the vesting period, using the Black-Scholes option

pricing model, which is based on risk-free rate of 0.59% in the quarter ended June 30, 2020 and 1.49% to 2.55% in 2019, dividend

yield of 0%, expected life of 7 years and volatility of 100% in 2020 and volatility of 35% to 40% in 2019.

pricing model, which is based on risk-free rate of 0.59% in the quarter ended December 31, 2020 and 1.49% to 2.55% in 2019, dividend

yield of 0%, expected life of 10 years and volatility of 35% to 40% in 2020 and 100% in 2019 respectively.

SAR awards are new this

year and are being treated as a liability award while the options are being treated as equity awards.

While the fair value of the

options are based on the Black Scholes assumptions included here, the SAR awards are based on assumptions at period end and are

treated as liability awards.

Forfeitures are recorded as they occur.”

Use of Estimates

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with the audited consolidated financial statements of the Company for the fiscal year ended September 30, 2020, included in its

Annual Report on Form 10-K/A.

Annual Report on Form 10K.

Going Concern

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growth and establishment of a stronger brand.

For the three months ended December 31,

2020, the Company reported $1,707,677 in revenue, a net loss of $194,360, use of cash of $51,762, and an accumulated deficit of

These operating results raise substantial doubt about our ability to continue as a going concern.

The financial statements

do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the

amounts and classification of liabilities that may result from the outcome of these uncertainties.

On May 8, 2020, the Company received a

Paycheck Protection Program (“PPP”) loan in the amount of $283,345.

Additionally, on May 15, 2020, Forta received a

PPP loan in the amount of $283,345.

PPP loans bear a fixed interest rate of 1% over a two-year term, are guaranteed by the federal

government, and do not require collateral.

The loans may be forgiven, in part or whole, if the proceeds are used to retain and

pay employees and for other qualifying expenditures.

The Company expects that the full proceeds of the PPP loans will be eligible

for forgiveness, which would result in an increase in capital of $661,045.

On May 23, 2017, the Company and GHS Investments,

LLC (“GHS Investments”) entered into an Equity Financing Agreement (the “Agreement”).

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 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.

Company has not had to use this as a source of funding and expects it to expire with no impact on the Company’s

Management, in the ordinary course of business,

will pursue raising additional capital through sales of common stock as well as seeking financing via equity or debt, or both from

third parties.

There are no assurances that additional financing will be available on favorable terms, or at all.

If additional

financing is not available, the Company will need to reduce, defer or cancel development programs, planned initiatives and overhead

expenditures.

The failure to adequately fund its capital requirements could have a material adverse effect on the Company’s

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 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.

Additionally, on May 15, 2020, Forta received a PPP loan in the amount of $377,700.

bear a fixed interest rate of 1% over a two-year term, are guaranteed by the federal government, and do not require collateral.

The loans may be forgiven, in part or whole, if the proceeds are used to retain and pay employees and for other qualifying expenditures.

The Company expects that the full proceeds of the PPP loans will be eligible for forgiveness, which would result in an increase

in capital of $661,045.

Company’s plans for expansion include

attracting additional clients through marketing efforts with its current and future brokerage, investment management and insurance

agent representatives, as well as increasing the TMN membership and the investment advisory activity of the members to increase

assets under management and Company’s revenue.

Future growth plans will include efforts to increase advisory headcount through

recruiting of individuals advisors and groups of advisors.

There is no guaranty that the Company will achieve these objectives.

Future Accounting Pronouncements

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

The new guidance is effective for

The new guidance was effective for

the Company beginning October 1, 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.

SEGMENT REPORTING

We manage our business in four reportable

Each of our active subsidiaries is treated as a segment.

We evaluate the performance of our operating segments based

on a segment’s share of consolidated operating income.

Therefore, for instance, the tax unit, Financial Gravity Tax (“FGT”),

was sold in October of 2019 because the Company did not see growth potential in the unit’s accounting and direct tax advice

Certain growth operations of the tax unit, including the tax operating system, have been taken over by TMN.

CONSOLIDATING STATEMENTS OF OPERATIONS

FOR THREE MONTHS ENDED DECEMBER 31, 2019

(discontinued)

Service Income*

Management Fees

Compensation Expense

Cost of services

Depreciation Amortization

General and Administrative

Total Expense

Net Operating Income

Net Income/(Loss)

* Includes non-recurring

revenue of $150,000 from the sale of the tax unit

CONSOLIDATING STATEMENTS OF OPERATIONS

FOR THREE MONTHS ENDED DECEMBER 31, 2020

Broker Dealer

Service Income

Investment Management Fees

Income from Inv in Subsidiaries

Compensation Expense

Cost of services

Depreciation & Amortization

General and Administrative

Professional Services

Total Expense

Net Operating Income

Other Income/Expense

Total Other Expense

Net Other Income

Net Income/(Loss)

BUSINESS ACQUISITION

On May 21, 2020 the Company acquired 100%

of the stock of Forta.

Forta is a broker dealer, registered investment advisor and an insurance brokerage, subject to FINRA, SEC

and insurance regulation.

Forta’s financial performance is included in Company’s consolidated statements starting as

of May 21, 2020.

The Company acquired Forta in May of 2020

in exchange for 45,785,879 shares of Company common stock.

A liability of $699,117 has been recorded for 4,178,564 shares of common

stock related to the acquisition remaining to be issued as of December 31, 2020.

Forta is a broker dealer, and its acquisition

presented the Company with an opportunity to compete in the broker dealer market, and to try to grow in this area of financial

Forta also has key employees who assumed vital executive leadership roles within the Company, including key executives

who will focus on improving operations and growth opportunity.

Forta also contributed key operating assets, including in excess

of $700,000 in cash, and annual revenues in excess of $3,000,000.

Purchase Price Allocation

The purchase price of $7,652,415 was based

upon the share price of Company’s stock as of May 21, 2020 and $52,000 note payable.

We have used preliminary fair value

estimates for the assets acquired and liabilities assumed for the acquisition.

We believe significant synergies may arise

from this acquisition, as a result of which the purchase price was in excess of the fair value of the net assets acquired and,

as a result, we have preliminarily recorded goodwill of $7,380,603, which is based upon book value, to account for adjustments

We have not yet finalized estimates that relate to certain tangible and intangible assets, including customer relationships,

trade names, contracts.

Our estimates and assumptions for these acquisitions are subject to change as we obtain additional information

for our estimates during the respective measurement periods (up to one year from the acquisition date).

Assets Acquired and Liabilities Assumed

Forta Financial Group, Inc.

Assets Acquired and Liabilities Assumed

As of May 21, 2020

PURCHASE PRICE

Current Assets

Accounts Receivable

Other Current Assets

Total Current Assets

Current Liabilities

Total Accounts Payable

Total Other Current Liabilities

Total Current Liabilities

Long-Term Liabilities

Total Long-Term Liabilities

Total Liabilities

PROPERTY AND EQUIPMENT

Property and equipment consist of the following at June 30,

2020 and September 30, 2019:

Property and equipment consist of the following at December

Estimated Service Lives

September 30,

Furniture, fixtures and equipment

Internally developed software

Less accumulated depreciation and amortization depreciation

* The value of the assets has not been finalized and may be

adjusted based upon purchase price allocations.

Depreciation expense was $21,009 and $9,967

during the three months ended June 30, 2020 and June 30, 2019, respectively, and $33,367 and $27,943 during the nine months ended

June 30, 2020 and June 30, 2019, respectively.

Less accumulated depreciation and amortization

Depreciation expense was $42,419 and $37,647 during the years

ended December 31, 2020 and 2019, respectively.

INTELLECTUAL PROPERTY

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Intellectual property purchased at cost

Intellectual property at September 30, 2019

Intellectual property purchased at cost

Intellectual property at June 30, 2020

The Company has traditionally conducted

some of its operations from leased premises.

On June 16, 2020, the Company entered

into a lease termination agreement with its landlord on the premises located in Allen, Texas.

The landlord accepted termination

of the lease, and Company’s remaining obligation is limited to issuing shares of its common stock if the landlord’s

efforts to re-lease the premises results in a loss, but not to exceed $66,000.

The Company leases premises in Denver Colorado.

The Denver ends on May 31, 2021, and Company will be leasing other space at the end of the term.

The remaining lease obligations

In addition, the Company has small locations in Allen, Texas, Austin, Texas and Cincinnati, Ohio.

The undiscounted annual future minimum lease payments consist

of the following at:

Total lease payments

Present value of lease liabilities

Intellectual property at December 31 2020

In February 2016, the FASB issued ASU 2016-02

Leases, which changed financial reporting as it relates to leasing transactions to recognize a lease liability, measured on a discounted

and a right-of-use asset, for the lease term.

In July 2018, the FASB issued ASU No.

2018-10 Codification Improvements to

Topic 842, Leases and ASU No.

2018-11 Leases (Topic 842):

Targeted Improvements.

In March 2019, the FASB issued ASU No.

Codification Improvements to Topic 842, Leases.

The Company adopted these ASUs on October 1, 2019 on a modified retrospective basis.

The Company did not elect the hindsight practical expedient and did elect the package of practical expedients to not reassess prior

conclusions related to contracts containing leases, lease classification and initial direct costs for all leases.

The initial adoption

of the standard recognized right-of-use assets of $323,097 and lease liabilities of $337,454 on the Company’s statement of

financial position with no impact on the Company's results of operations.

The Company had no significant changes to processes or

The Company leases their office space through

an operating lease in Denver Colorado runs through 2024 and non-material offices leases in Cincinnati, Ohio, and short-term tenancies

in Austin, Texas, Allen, Texas and Loveland, Colorado.

Company’s lease agreements obligate the Company to pay real estate

taxes, insurance, and certain maintenance costs, which are accounted for separately.

The Company’s lease agreements do not

contain any material residual value guarantees or material restrictive covenants.

The Company determines if an arrangement is an

operating lease at inception.

Leases with an initial term of 12 months or less are not recorded on the balance sheet.

leases are recorded on the balance sheet as right-of-use assets and lease liabilities for the lease term.

Lease assets and lease

liabilities are recognized at commencement date based on the present value of lease payments over the lease term and include options

to extend or terminate the lease when they are reasonably certain to be exercised.

The present value of lease payments is determined

primarily using the incremental borrowing rate based on the information available at lease commencement date.

The Company’s

operating lease expense is recognized on a straight-line basis over the lease term and is recorded in general and administrative

The Company also leases certain equipment

under operating leases.

Total rent expense for the three months

ended December 31, 2020 was $117,344 for Forta’s the Denver Lease (Greenwood Village –

the lease ends in May 2024).

As part of the lease amendment entered into with the lessor in December 2020, the rent owed for September to December 2020 was

deferred and will be paid over the term of the amended lease.”

The difference between rental expense and rental payments

is recorded as deferred rent in the accompanying consolidated balance sheets.

Management expects that in the normal course of business,

leases will be renewed or replaced by other leases.

Company also has short term leases that are insignificant in its other locations.

Minimum future annual rental payments under

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

Rental Payments

Total Rental Payments

Deferred Rent

Net Rental Payments

LINE OF CREDIT

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guarantee of John Pollock.

Line of credit balance was $58,985 and $67,005 at June 30, 2020 and September 30, 2019, respectively.

Line of credit balance was $49,145 and $62,019 at December 31, 2020 and 2019, respectively, and $54,112

at September 30, 2020.

NOTES PAYABLE

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.

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

into an unsecured Promissory Note Payable with Charles O’Banon (“O’Banon”), a customer, in the amount of

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

The monthly 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 outstanding balance on June 30, 2020 and September 30, 2019 was $26,511, and

$29,401 respectively.

The Company entered into and received a Paycheck Protection

Program (“PPP”) loan in the amount of $283,345 on May 8, 2020.

Additionally, on May 15, 2020, Forta received a PPP

loan in the amount of $377,700.

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 authority, however the abatement was denied.

The outstanding balance on December 31, 2020 and 2019, was $23,534

and $29,401 respectively.

On August 31, 2020, the Company entered

into an agreement with John DuPriest (DuPriest), a former officer of Forta, in settlement pursuant to employment termination.

parties entered into an unsecured promissory note to DuPriest in the amount of $52,000.00, bearing interest of 5%, payable over

26 months beginning with January 15, 2021 through February 15, 2023.

On May 8, 2020, the Company received a

Paycheck Protection Program (“PPP”) loan in the amount of $283,345.

Additionally, on May 15, 2020, Forta received a

PPP loan in the amount of $377,700.

PPP loans bear a fixed interest rate of 1% over a two-year term, are guaranteed by the federal

government, and do not require collateral.

The loans may be forgiven, in part or whole, if the proceeds are used to retain and

pay employees and for other qualifying expenditures.

The Company expects that the full proceeds of the PPP loans will be eligible

for forgiveness, which would result in an increase in capital of $661,045.

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 is due on

December 1, 2020.

See Related Party Transactions.

The loans may be forgiven, in part or whole,

if the proceeds are used to retain and pay employees and for other qualifying expenditures.

The Company expects that the full proceeds

of the PPP loans will be eligible for forgiveness, which would result in an increase in capital of $661,045.

Forta submitted its

forgiveness application to the SBA in December of 2020, and Company is awaiting the SBA’s follow-up on its application for

The Company’s maturities of debt

subsequent to June 30, 2020 are as follows:

subsequent to December 31, 2020 are as follows:

ACCRUED EXPENSES

Accrued expenses increased by $110,835

for the nine months ending June 30, 2020, to $358,994 from $128,295 as of September 30, 2019, due to inclusion of Forta’s

advisor commission accruals ($86,879) that are paid with payroll on the 15 th of the following month, taxes ($25,072),

accrued vacation pay ($42,808), stock appreciation rights liability ($41,703), and credit card balances ($17,555).

For the three and nine months ended June

for the three months ending December 31, 2020 to $1,178,227 from $1,067,392 as of September 30, 2020.

Accrued expenses consist

of the following at December 31:

December 31, 2020

September 30, 2020

SAR Liability

Accrued payroll

Commissions payable

State Tax liability

Federal Tax liability

Other Accounts payable

Accrued operating expenses

For the three months ending December 31,

2020 and 2019, 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

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.

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The deferred tax assets and liabilities

in the accompanying consolidated balance sheets include the following components at June 30, 2020 and September 30, 2019:

in the accompanying consolidated balance sheets include the following components at December 31, 2020 and September 30, 2020:

Net non-current deferred tax assets:

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COMMITMENTS, CONTINGENCIES AND CONCENTRATIONS

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

Management believes the legal proceedings that the Company is involved in are immaterial to our ability to operate or

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

From time to time, the Company is a party

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

It is management’s opinion that there are no legal proceedings the outcome of which will be material to its ability

to operate or market its services, its consolidated financial position, operating results or cash flows.

STOCKHOLDERS’

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

During the nine months ended June 30, 2020

and 2019, the Company sold 75,757 shares and 0 shares, respectively, for $25,000 and $0, respectively.

During the three months ended December

31, 2020 and 2019, the Company sold 0 shares and 75,757 for $25,000, respectively.

STOCK OPTION PLAN

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Canceled or expired

(1,299,405 ) *

Outstanding - September 30, 2020

Canceled or expired

Outstanding - June 30, 2020

Exercisable - June 30, 2020

Outstanding - December 31, 2020

Exercisable - December 31, 2020

* 500,000 SARs grants reflected as expired

prior to September 30, 2020 actually expired in the three months ended December 31, 2020.

Unamortized share-based compensation expense

as of June 30, 2020 amounted to $424,496 which is expected to be recognized over the next 4.6685 years.

as of December 31, 2020 amounted to $424,496 which is expected to be recognized over the next 4.6685 years.

Total compensation expense, included in

salaries and wages, of previously unamortized stock compensation was $50,885 and $41,370 for the three ended June 30, 2020 and

2019, respectively, and $67,136 and $133,714 for the nine months ended June 30, 2020 and 2019, respectively.

salaries and wages, of previously unamortized stock compensation was $60,170 and $7,085 for the three months ended December 31,

2020 and 2019.

On November 27, 2019, the 2016 Plan was

amended to allow grants of other equity related rights, including Stock Appreciation Rights.

During the three and nine months ended

June 30, 2020, 500,000 and 5,350,000 options and SARs were granted, respectively.

SARs are recorded as a liability because there

is a cash settlement option.

During the three months ended December

31, 2020, 0 and 0 options and SARs were granted, respectively.

SARs are recorded as a liability because there is a cash settlement

RELATED PARTY TRANSACTIONS

On May 21, 2020, the Company completed

the purchase of 100% of the stock of Forta.

As a result, Scott Winters, William Nelson, Jr., and Gary Nemer (a former board member)

now own, in aggregate, in excess of 39% of the shares of stock of Company.

As a result of the acquisition of the TMN

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board member), each month totaling $16,500.

The total paid under these agreements in the three months ended June 30, 2020 and 2019

respectively, were $49,500 and $49,500, and for the nine months ended June 30, 2020 and 2019 were $148,500 and $148,500.

The total paid under these agreements in the three months ended December 31, 2020 and

2019 respectively, were $49,500 and $49,500,

On April 12, 2019, the Company entered

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

The balance of the loan at June 30, 2020 was $5,116 and at

September 30, 2019 was $7,526.

On February 28, 2020 and March 5, 2020,

the Board of Directions approved employment agreements that included employee stock options and stock appreciation rights to employees

that are also Board members and related parties totaling 3,450,000 in grants.

The balance of the loan at December 31, 2020 was $5,187 and

at September 30, 2020 was $5,152.

In addition, there are payables owed to

Pollock of approximately $51,000 related to services rendered by him to Company, and $10,000 owed to a former principal of

TMN for services rendered.

There is no specific due date on these obligations, but Company plans are substantial reductions in

the amounts owing this fiscal year.

SUBSEQUENT EVENTS

On July 20, 2020, the Company issued to

Gary Nemer 250,000 in employee stock options vesting over a three-year period and 500,000 in stock appreciation rights vesting

over five years

On August 14, 2020, one of the advisors

at Forta in Denver resigned to join a smaller firm.

The departure will affect future headcount and revenue in the Denver office.

A total of 4,670,352 shares that will be

issued to Forta shareholders have not yet been issued due to lack of shareholder paperwork.

When issue, the total issued shares

will be 87,693,400.

In February of 2021, Forta received a

second draw of a PPP Loan in the amount of $422,900.

Company believes that the loan will be forgiven.

In December 2020 Company entered into a

non-binding term sheet for the acquisition of two related companies with investment advisory practices.

The term sheet contemplates

that Company will be issuing shares 8,000,000 shares of its common stock in exchange for 100% ownership of the two companies.

owners of the two companies and some staff will become employees of Forta.

The term sheet provides for a close of the transaction

in February 2021.

In December 2019, a novel strain of coronavirus,

referred to as COVID-19, was reported to have surfaced in Wuhan, China.

Since then, COVID-19 has spread to other countries, including

the United States.

In March 2020, the World Health Organization declared the COVID-19 outbreak a pandemic.

Further, the President

of the United States declared the COVID-19 pandemic a national emergency.

States in which we operate declared states of emergency

related to the spread of COVID-19 and issued executive orders directing individuals to stay at their place of residence for an

indefinite period of time.

The financial markets demonstrated significant

volatility in reaction to the virus outbreak.

There has been considerable strain on companies in many sectors of the economy.

suffered significant decreases in the value of their investment portfolios, and the economy has significantly shut down.

unclear when the economy will start up again, and the lingering effects are not known.

During periods of high volatility and uncertainty

many investors choose to stop ongoing investment activity and sit on the sidelines until the markets become more stable.

The Company’s revenues are adversely

affected when investors reduce their investment activities.

In addition, part of Company’s revenues is based upon the value

of assets under management.

If the investment portfolios of clients decrease in value, the fees charged for investment advice also

The Company could be affected by lack of

access to its offices, although that seems to have had little short-term impact as employees have succeeded in maintaining productivity

while working remotely.

The long-term effects, however, may present significant issues.

Any significant shutdown of the economy

for a sustained period will affect the Company’s revenue which could lead to losses.

Management’s Discussion and Analysis of Financial

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Forward-Looking Statements

The following Management’s

Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is intended to help you understand

our historical results of operations during the periods presented and our financial condition.

This MD&A should be read in

conjunction with our financial statements and the accompanying notes and contains forward-looking statements that involve risks

and uncertainties and assumptions that could cause our actual results to differ materially from management’s expectations.

See the sections entitled “Risk Factors and Uncertainties”

The following Management’s Discussion

and Analysis of Financial Condition and Results of Operations (“MD&A”) is intended to help you understand its historical

results of operations during the periods presented and its financial condition.

This MD&A should be read in conjunction with

its financial statements and the accompanying notes and contains forward-looking statements that involve risks and uncertainties

and assumptions that could cause its actual results to differ materially from management’s expectations.

See the sections

entitled “Forward-Looking Statements”

and “Risk Factors”

included in this Form 10-Q for the three months

ended December 31, 2020.

Plan of Operations

Financial Gravity

Companies, Inc.

(“Financial Gravity”, “We”

or the “Company”), based in Austin, Texas, was formed

specifically to be the parent company of several subsidiaries that provide integrated tax, investment, business, and financial

Financial Gravity’s clients include small businesses, small business owners and high and middle net worth individuals.

The Company’s services are focused on helping clients make more money and build wealth, most often with investment advice,

tax savings, lowering costs and improving efficiency.

In addition to expanding through client procurement and organic growth, Financial

Gravity intends to pursue acquisitions.

The primary acquisition targets currently include investment marketing and financial advisory

and broker dealer firms.

The Company is actively identifying potential acquisition candidates to fuel more rapid growth.

Financial Gravity is a parent company of

best of breed financial services companies including brokerage, wealth management, estate planning, family office services, risk

management, business and personal tax planning, business consulting, and financial advisor services.

Financial Gravity's mission

is to synergistically bring together companies that create symbiotic advantages to each other in order to bring a complete financial

experience to the clients that we serve.

Financial Gravity’s Subsidiaries:

and Reportable Segments:

The following outline briefly describes

Financial Gravity’s active subsidiaries and the products and services they offer:

Sofos Investments, Inc.

is a registered investment advisor (“RIA”), registered with the Securities and Exchange Commission, and provides asset

management services to individuals and businesses, including financial planning, wealth management and money management.

Tax Master Network, LLC (“TMN”) through

the Tax Master Network®

provides monthly subscriptions services to the TMN systems, coaching and marketing services to over

300 Certified Public Accountants (“CPA”) and Enrolled Agent professionals, training them to add crucial tax planning

services to support clients.

TMN’s tax planning services include the Tax Blueprint®, Certified Tax Master®, and the

Tax Operating System.

MPath Advisor Resources, LLC (“MPath”)

MPath is an insurance marketing organization and provides insurance products and services to insurance agents or agencies.

Forta Financial Group, Inc.

(“Forta”)

Forta is a broker dealer, registered investment advisor and an insurance brokerage, subject to FINRA, SEC and insurance regulation.

Growth comes from the following reportable

Tax services and financial advisory services,

including Tax Blueprint®

and Tax Operating System®

services through TMN.

Brokerage and wealth management services

through Forta and money management and investment advisory services through Sofos.

Other products and services include insurance

and other miscellaneous products and services.

Future growth is expected to come from

these key areas, organic growth, acquisitions, and strategic alliances.

Results of Operations for the three and nine months ended

June 30, 2020 compared to the three and nine months ended June 30, 2019

RESULTS OF OPERATIONS

As described in Notes to Consolidated Financial

Statements, “Segment Reporting”, we evaluate the performance of our operating segments based on net income.

For the three months ended June 30, 2020

revenues increased $20,950 to $947,491 from $926,541 for the three months ended June 30, 2019.

For the nine months ended June 30,

2020, revenues decreased $837,483 to $2,249,580 from $3,087,063 for to the nine months ended June 30, 2019.

The principal components

of the variance in revenue for the three months and nine months included the decrease in revenue from the sale of Company’s

tax and accounting subsidiary in the amount of $97,485 and $267,748, respectively;

reduction in insurance sales of $77,263 and

$343,144, respectively;

reduction of investment management fees of $117,549 and $60,034, respectively;

reduction of TMN membership

revenue for the nine months in $247,204 through membership reduction, and reductions in other revenue generating activities of

close to $150,000 in 2019.

$417,142 in investment management revenue was generated by Forta in April through May 21, 2020 that

is not reflected in the revenue during the three-month period because the acquisition of Forta is not included in revenue until

May 21, 2020.

Forta was acquired effective May 21, 2020

and is a securities broker dealer, a registered investment advisor and a licensed insurance agency.

Forta is a registered broker-dealer

with the Securities and Exchange Commission (''SEC") and with the Financial Industry Regulatory Authority ("FINRA").

Forta is also a member of the Securities Investor Protection Corporation ("SIPC").

The Company's securities activities

is limited to introducing and forwarding securities on a fully disclosed basis to a carrying broker-dealer.

The Company as a matter

of policy does not hold funds or securities for customers or owe money or securities to customers.

Pursuant to Rule 15c3-1 of the

Securities Exchange Act of 1934, the Forta is required to maintain minimum net capital of $100,000 and ratio of aggregate indebtedness

to net capital shall not exceed 15 to 1.

On December 31, 2020, the Forta’s net capital was $294,485 and the aggregate indebtedness

to net capital was 78.72%.

The Company is exempt from certain provisions of Rule 15c3-3 of the Securities Exchange Act of 1934.

Such exemption is in accordance with paragraph (k) (2) (ii) of the Rule.

Sofos Investments, Inc.

(formerly Financial

Gravity Wealth, Inc.)

After saving thousands

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

Sofos is a Registered Investment Advisory firm.

An RIA is an advisor or firm engaged in financial planning and wealth

management business and is registered either with the Securities and Exchange Commission “SEC”

or state securities

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

suitable investment advice and always act in the clients’

best interests.

MPath Advisor Resources, LLC (formerly

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

products and services to insurance agents or agencies.

Tax Master Network, LLC

Tax Master Network “TMN”

a key acquisition in fiscal year 2016.

TMN supports over 300 CPA and Enrolled Agent professionals, training them to add crucial

tax planning services to support clients.

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

TMN customer base adds significant business development opportunities for Forta and Sofos.

The Company developed the Certified

Tax Master®

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

TMN also provides tax services through its “Tax

Blueprint®”

system which identifies several strategies for lowering the client's taxes.

Results of Operations for the three

months ended December 31, 2020 compared to the three months ended December 31, 2019

For the three months ended December 31,

2020, revenue increased $865,927 to $1,707,677 from $841,750 (which included non-recurring revenue of $150,000 from the sale of

the tax unit) for the three months ended December 31, 2019.

The principal components of the increase in revenue are:

revenue of approximately $270,000 from Forta, increased investment management revenue from Forta and Sofos of approximately $430,000,

and increased revenue from TMN and Mpath of approximately $170,000 as compared to the three months ended December 31, 2019.

Operating Expenses

Cost of services increased by $2,187 to

$17,659 for the quarter ended June 30, 2020 from $15,473 for the three months ended June 30, 2019, and decreased by $440, to $44,317

from $44,783 for the nine months ended June 30, 2020 and June 30, 2019, respectively.

The variance in expenses for the three month

and nine-month periods arises from decreased credit card processing fees due to disposal of the Financial Gravity Tax line of business.

Cost of services activity increased $23,535

to $35,547 for the three months ended December 31, 2020 from $12,012 for the three months ended December 31, 2020.

services is credit card processing fees and Forta cost of brokerage services.

Professional services expenses include

legal expense, professional fees, and business consulting.

Professional services expenses decreased $57,524 to $61,681 for the

three months ended June 30, 2020 from $119,205 for the three months ended June 30, 2019.

Professional services decreased $35,117

to $234,881 for the nine months ended June 30, 2020 from $278,998 for the nine months ended June 30, 2019.

The variances are principally

comprised of a decrease of $63,750 for the three months and $148,000 for the nine months, respectively, related to reclassing related

party consulting fees to compensation, offset by costs of implementing new technology offerings.

Professional services expenses increased $17,397 to $132,730 for the

three months ended December 31, 2020 from $115,333 for the three months ended December 31, 20219 This increase is primarily due

to an increase in legal fees.

Depreciation and amortization expenses

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Depreciation and amortization expenses increased

$8,401 to $38,636 for the three months ended June 30, 2020 from $30,235 for the three months ended June 30, 2019.

is due to accelerating the depreciation of computers and software, reducing the useful lives over which they are depreciated to

three year lives.

Depreciation and amortization decreased $72,392 to $86,443 for the nine months ended June 30, 2020, from $158,835

for the nine months ended June 30, 2019.

The principal difference is a charge to amortization for full impairment of Trademarks,

General and administrative expenses increased

$28,854 to $168,084 for the three months ended June 30, 2020 from $139,220 for the three months ended June 30, 2019.

administrative expenses decreased $62,705 to $348,158 for the nine months ended June 30, 2020 from $410,863 for the nine months

ended June 30, 2019.

The variance in expenses for the three month and six-month periods related to Company discontinuing its tax

and accounting subsidiary.

Marketing expenses increased $8,504 to $56,865 for the three months ended June 30, 2020 from $48,330

for the three months ended June 30, 2019.

Marketing expenses decreased $18,526 to $90,999 for the nine months ended June 30, 2020

from $109,945 for the nine months ended June 30, 2019.

The variance in expenses for the three month and six-month periods from

reflects a change in marketing efforts influenced by Covid 19 restrictions that shut down some previous marketing channels, while

new channels are just starting to open up.

Compensation Expense expenses increased

$364,106 to $867,330 for the three months ended June 30, 2020 from $503,224 for the three months ended June 30, 2019 and decreased

$337,578 to $2,014,413 for the nine months ended June 30, 2020 from $2,351,991 for the nine months ended June 30, 2019.

for the three months ended June 30, 2020 was principally driven by Forta salaries ($85,000) and commissions ($86,000) being included

in compensation.

The decrease for the nine months was principally due to termination of advisors ($250,000) and decreases in stock-based

compensation ($145,000).

The Company experienced an increase in

its net loss of $254,299 to a net loss of $271,170 for the three months ended June 30, 2020 from a net loss of $16,941 for the

three months ended June 30, 2019.

The Company experienced a decrease in its net loss of $99,027 to a net loss of $437,512 for

the nine months ended June 30, 2020 from a net loss of $536,538 for the nine months ended June 30, 2019.

The variance in loss

for the three months ended June 30, 2020 reflects the impact of the Covid-19 reduction in marketing and sales, which impacted

revenue, and the reduction of non-recurring revenue from the sale of the tax unit ($150,000).

The decrease in the net loss for

the nine months was primarily due to the sale of the tax unit.

$9,308 to $$35,330 for the three months ended December 31, 2020 from $26,022 for the three months ended December 31, 2019.

decrease is due to some assets becoming fully depreciated.

General and administrative

expenses increased $237,935 to $336,766 for the three months ended December 31, 2020 from $98,831 for the three months ended December

The increase is primarily due to inclusion of Forta's expenses or approximately $235,000 for the period.

Marketing expenses decreased slightly by

$567 to $20,546 for the three months ended December 31, 2020 from $21,113 for the three months ended December 31, 2019.

is due to the Company shutting down some previous marketing channels, while new channels have yet to be identified and implemented.

Compensation expenses increased $755,970

to $1,334,782 for the three months ended December 31, 2020 from $578,812 for the three months ended December 31, 2019.

increase was principally due to inclusion of Forta's compensation expense (approximately $624,000), increase in Mpath's compensation

expense (approximately $50,000) and increases of compensation expenses at Sofos and Company (approximately $73,000).

The Company experienced an increase

in its net loss of $182,318 to a net loss of $194,360 for the three months ended December 31, 2020 from a net loss of $12,042

for the three months ended December 31, 2019, primarily attributable to the reasons noted above.

Significant Accounting Policies

Certain critical accounting policies affect

the more significant judgments and estimates used in the preparation of Financial Gravity’s consolidated financial statements.

the more significant judgments and estimates used in the preparation of the Company’s consolidated financial statements.

These policies are contained in Note 1 to the consolidated financial statements.

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Actual results could differ from those estimates.

Revenue Recognition and Accounts

Investment management fees are recognized

as services are provided by the Company.

Investment management fees include fees earned from assets under management by providing

professional services to manage clients’

Certain revenue generated by Forta is paid quarterly, in advance, and

recognized each month.

Revenue Recognition and Accounts Receivable.

The Company derives its revenues primarily

from six components:

Investment Management Fees, Brokerage Commissions, Tax Master Network subscriptions, Tax Operating System

subscriptions, Financial Advisor subscriptions, Tax BluePrint sales, and Insurance Sales.

Sofos Investments, Inc.

generates investment

management fees for services provided by the Company.

Investment management fees include fees earned from assets under management

by providing professional services to manage client investments.

Investment management fees are calculated as a percentage of assets

under management for the period.

Investment management fees are Revenue is recognized as earned, at the end of each period.

are withdrawn from investor assets monthly, in arrears.

Commission revenue is derived from the

sale of securities, annuities and premiums on life insurance policies.

The revenue is recognized when commissions are earned from

the sale of securities, and when it is determined that insurance products are sold.

Commissions are received after products are

sole, issued or in force.

Revenue represents gross billings less

discounts, and are net of sales taxes, as applicable.

Amounts invoiced for work not yet completed are shown as deferred revenue

in the accompanying consolidated balance sheets.

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

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

TMN 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.

Subscription income is billed to

client credit card monthly, on the monthly anniversary of client sign-up.

Tax BluePrint sales are billed to the client after a

preliminary assessment and client approval to move forward.

Revenue recognized in 2020, that was included in the deferred revenue

liability at the beginning of the year.

Services income is recognized as consulting

and other professional services are performed by the Company.

Income is recognized as services are delivered.

Commission revenue is derived from the

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

The revenue is recognized at the time the policy is issued.

The revenue is recognized as received from the insurer, issuer.

Revenue represents gross billings less

discounts, net of sales tax, as applicable.

Amounts invoiced for work not yet completed are shown as Contract liabilities in the

accompanying consolidated balance sheets.

Tax Master Network has 5 levels of subscription

services that are charged and collected on a month to month basis (Tax Master basic, advance, and elite membership, all-stars coaching,

and networker).

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.

Amounts invoiced for work not yet completed are shown as deferred revenue in the accompanying

consolidated balance sheets.

Tax Master Network has 3 types of services

that are charged and collected on a month-to-month subscription basis (Tax Master Network 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.

Accounts receivable are primarily generated

from the TMN subscriptions (collected in advance), the sale of investment products and services (collected directly from the custodian

or issuer), and of products related to tax planning (collected in advance).

The accounts are carried at the invoiced amount less

estimate made for doubtful accounts based on management’s review of outstanding balances.

The collectability of the Company’s

accounts receivable is reviewed on an ongoing basis, using historical payment trends and review of specific accounts.

receivable are written off after all reasonable collection efforts have been exhausted and when management determines the amounts

to be uncollectible.

Recoveries of receivables previously written off are recorded when received.

Trade accounts receivable are carried only

for subscription revenues not received in the period they apply to.

The allowance for doubtful accounts was $0 and $0 as of December

31, 2020 and September 30, 2020, respectively.

In the normal course of business, the Company

may extend credit on an unsecured basis to its customers, substantially all of whom are located in the United States of America.

The Company does not believe that it is exposed to any significant risk of loss on accounts receivable.

extends credit on an unsecured basis to its customers, substantially all of whom are located in the United States of America.

Company does not believe that it is exposed to any significant risk of loss on accounts receivable.

Stock-Based Compensation.

The Company recognizes the fair value of

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

period, using the Black-Scholes option pricing model, which is based on risk-free rates of 0.59% in the quarter ending June 30,

2020 and 1.49% to 2.55% in 2019, dividend yield of 0%, expected life of 10 years and volatility of 100% in 2020 and 35% to 40%

stock-based compensation awards as wages in the accompanying statements of operations for employee grants, commissions for non-employee

grants, and stock appreciation rights grants, on a straight-line basis over the vesting period, using the Black-Scholes option

pricing model, which is based on risk-free rate of 0.59% in the quarter ended December 31, 2020, dividend yield of 0%, expected

life of 10 years and volatility of 35% to 40% in 2020.

SAR awards are new this year and are being treated as a liability award

while the options are being treated as equity awards.

While the fair value of the options are based on the Black Scholes assumptions

included here, the SAR awards are based on assumptions at period end and are treated as liability awards.

Forfeitures are recorded

as they occur.

Liquidity and Capital Resources

As of June 30, 2020, the Company had cash

and cash equivalents of $629,322.

The increase of $593,269 in cash and cash equivalents during the nine months ended June 30, 2020

was primarily due to net cash used in operating activities ($407,842), the purchase of Forta, ($332,454, net of Forta PPP loan),

and the receipt of funding of the PPP loans, (Financial Gravity $283,345 and Forta $377,700).

The aggregate PPP loans are expected

to be forgiven.

As shown below, at June 30, 2020, our contractual

cash obligations totaled approximately $466,402, which consisted of operating lease obligations and debt principal, excluding the

PPP loan balances.

As of December 31, 2020, the Company had

cash and cash equivalents of $431,092.

The decrease of $51,762 in cash and cash equivalents from September 30, 2020 was due to

net cash used in operating activities of $44,392 and net cash used in investing activities of $881, and net cash used in financing

activities of $6,489.

As shown below, at December 31, 2020, our

contractual cash obligations totaled approximately $1,166,918, all of which consisted of debt principal.

Payments due by period

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Total contractual cash obligations

(1) This includes an estimate of $25,000 for shares issued to the Allen TX landlord pursuant to the

termination agreement.

The accompanying consolidated financial

statements have been prepared assuming that the Company will continue as a going concern, which contemplates the Company will need

additional financing to fund additional material capital expenditures and to fully implement its business plan.

There are no assurances

that additional financing will be available on favorable terms, or at all.

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.

to manage additional asset units under contract and/or additional financing to fully implement its business plan, including continued

growth and establishment of a stronger brand.

For the three months ended December 31,

2020, the Company reported $1,707,677 in revenue, a net loss of $194,360, use of cash of $51,762, and an accumulated deficit of

These operating results raise substantial doubt about our ability to continue as a going concern.

The financial statements

do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the

amounts and classification of liabilities that may result from the outcome of these uncertainties.

On May 8, 2020, the Company received a

PPP loan in the amount of $283,345.

Additionally, on May 15, 2020, Forta received a PPP loan in the amount of $377,700.

bear a fixed interest rate of 1% over a two-year term, are guaranteed by the federal government, and do not require collateral.

The loans may be forgiven, in part or whole, if the proceeds are used to retain and pay employees and for other qualifying expenditures.

The Company expects that the full proceeds of the PPP loans will be eligible for forgiveness, which would result in an increase

in capital of $661,045.

Company’s plans for expansion include

attracting additional clients through marketing efforts with its current and future brokerage, investment management and insurance

agent representatives, as well as increasing the TMN membership and the investment advisory activity of the members to increase

assets under management and Company’s revenue.

Future growth plans will include efforts to increase advisory headcount through

recruiting of individuals advisors and groups of advisors.

There is no guaranty that the Company will achieve these objectives.

Off Balance Sheet Transactions and Related Matters

There are no off-balance sheet transactions,

arrangements, obligations (including contingent obligations), or other relationships with unconsolidated entities or other persons

that have, or may have, a material effect on financial condition, changes in financial condition, revenues or expenses, results

of operations, liquidity, capital expenditures or capital resources of the Company.

On March 11, 2020, the World Health

Organization designated the spread of COVID-19 as a pandemic.

As of the date of this Quarterly Report on Form 10-Q, COVID-19 has

had a significant impact on global financial markets, and we continue to monitor its effects on the overall economy and our operations.

We are not yet able to determine the full impact of the pandemic;

however, should it continue for an extended period, there could

be a material and adverse financial impact to our results of operations.

For more information about the risks associated with COVID-19,

see Part II, “Item 1A.

Risk Factors and Uncertainties”

of this Quarterly Report on Form 10-Q.

Other than operating leases discussed in

Note 4 to the consolidated financial statements, there are no off-balance sheet transactions, arrangements, obligations (including

contingent obligations), or other relationships with unconsolidated entities or other persons that have, or may have, a material

effect on financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital

expenditures or capital resources of the Company.

Quantitative and Qualitative Disclosures About Market

Interest Rate Risk.

is leveraged and, accordingly, is sensitive to fluctuations in interest rates.

Any significant increase in interest rates could

have a material adverse effect on our financial condition and ability to continue as a going concern.

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