10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One) [ X ]	Quarterly Report Under Section 13 or 15(d) of the Securities Exchange Act of 1934
	For the quarterly period ended December 31, 2022
[ ]	Transition Report Under Section 13 or 15(d) of the Securities Exchange Act of 1934
	For the transition period from   to

CLEARTRONIC, INC. (Exact name of registrant as specified in its charter)
Florida	65-0958798
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
28050 US Hwy 19N Clearwater, Florida	33761
(Address of principal executive offices)	(Zip Code)
Registrant's telephone number, including area code: 813-289-7620

(Registrant's telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last report)

8000 North Federal Highway, Suite 100

Boca Raton, Florida 33487

561-939-3300

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes [X] No[ ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.

Large accelerated filer  ☐	Accelerated filer  ☐
Non-accelerated filer  [x]	Smaller reporting company  [x]
	Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 12(a) of the Exchange Act [  ]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [ ]  No [X ]

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS:

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes[ ] No[ ]

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common stock Par Value $0.00001	CLRI	NONE

APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date: 228,780,695 shares as of  February 10, 2023.

-i-

CLEARTRONIC, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
ASSETS
	December 31, 2022	September 30, 2022
	(unaudited)
Current assets:
Cash	$  280,153	$  468,167
Accounts receivable, net	562,782	538,030
Inventory	21,097	21,097
Prepaid expenses and other current assets	43,665	53,611
Interest receivable - related party	666	-
Total current assets	908,363	1,080,905
Property and Equipment, net	14,061	15,142
Other assets:
Due from related party	53,302	53,302
Total other assets	53,302	53,302
Total assets	$  975,726	$  1,149,349
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Accounts payable and accrued expenses	$  108,149	$  75,217
Deferred revenue, current portion	802,305	1,012,211
Total current liabilities	910,454	1,087,428
Long Term Liabilities
Deferred revenue, net of current portion	99,567	113,300
Total long term liabilities	99,567	113,300
Total liabilities	1,010,021	1,200,728
Commitments and Contingencies (See Note 7)
Stockholders'  deficit:
Series A preferred stock - $.00001 par value; 1,250,000 shares authorized,	5	5
512,996 issued and outstanding, respectively.
Series B preferred stock - $.00001 par value; 10 shares authorized,	-	-
0 shares issued and outstanding, respectively.
Series C preferred stock - $.00001 par value; 50,000,000 shares authorized,	33	34
3,209,503  and 3,341,503 shares issued and outstanding, respectively.
Series D preferred stock - $.00001 par value; 10,000,000 shares authorized,	7	7
670,904 shares issued and outstanding, respectively.
Series E preferred stock - $.00001 par value, 10,000,000 shares authorized,	30	30
3,000,000 shares issued and outstanding, respectively.
Common stock - $.00001 par value; 5,000,000,000 shares authorized,	2,288	2,281
228,780,695 and 228,120,995, shares issued and outstanding, respectively.
Additional paid-in capital	15,240,106	15,240,112
Accumulated Deficit	(15,276,764)	(15,293,848)
Total stockholders' deficit	(34,295)	(51,379)
Total liabilities and stockholders' deficit	$  975,726	$  1,149,349

The accompanying notes are an integral part of these consolidated financial statements

-1-

CLEARTRONIC, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
	For the Three Months Ended December 31, 2022	For the Three Months Ended December 31, 2021
Revenue	$  506,650	$  519,185
Cost of Revenue	77,491	92,236
Gross Profit	429,159	426,949
Operating Expenses:
Selling expenses	67,831	188,545
Administrative expenses	321,898	127,915
Depreciation expense	1,080	814
Research and development	21,815	49,260
Total Operating Expenses	412,624	366,534
Interest income/expense, net	549	(168)
Total Other Income/(Expenses)	549	(168)
Income before income taxes	17,084	60,247
Provision for income taxes from continuing operations	-	-
Net Income	17,084	60,247
Preferred stock dividends Series A Preferred	(10,344)	(10,344)
Net income attributable to common stockholders	$  6,740	$  49,903
Net income per common share - basic	$  0.00	$  0.00
Net income per common share - diluted	$  0.00	$  0.00
Weighted Average of number of shares outstanding - basic	228,630,043	228,578,995
Weighted Average of number of shares outstanding - diluted	599,331,678	599,940,630

The accompanying notes are an integral part of these consolidated financial statements

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CLEARTRONIC, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
(Unaudited)
	For the Three Months	For the Three Months
	Ended	Ended
	December 31, 2022	December 31, 2021
NET INCOME	$ 17,084	$ 60,247
Cash Flows From Operating Activities
Adjustments to reconcile net income to net cash used in
operating activities:
Depreciation expense	1,080	814
(Increase) decrease in assets:
Accounts receivable	(24,752)	46,867
Inventory	-	(6,588)
Prepaid expenses and other current assets	9,280	33,364
Due from related party	-	(6,386)
Increase (decrease) in liabilities:
Accounts payable	32,933	26,406
Deferred revenue	(223,639)	(172,573)
Net Cash Used In by Operating Activities	(188,014)	(17,849)
Cash Flows From Investing  Activities
Purchase of fixed assets	-	(5,058)
Net Cash Used in Investing Activities	-	(5,058)
Cash Flows From Financing Activities	-	-
Net (decrease) increase in cash	(188,014)	(22,907)
Cash at beginning of period	468,167	401,001
Cash at end of period	$ 280,153	$ 378,094
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for interest	$  666	$  168
Cash paid for taxes	$ 690	$  690
Supplemental disclosure of non-cash investing and financing activities:
Series C Convertible Preferred shares exchanged for common stock	$  7	$  -

The accompanying notes are an integral part of these consolidated financial statements

-3-

CLEARTRONIC, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT
FOR THE THREE MONTHS ENDED DECEMBER 31, 2022
(Unaudited)
													Additional		Total
	Series A Preferred Stock		Series B Preferred Stock		Series C Preferred Stock		Series D Preferred Stock		Series E Preferred Stock		Common Stock		paid-in	Accumulated	Stockholders'
	Shares	Amount	Shares	Amount	Shares	Amount	Shares	Amount	Shares	Amount	Shares	Amount	capital	deficit	Deficit
Balance at September 30, 2022	512,996	$  5	-	$  -	3,341,503	$  34	670,904	$  7	3,000,000	$  30	228,120,695	$  2,281	$ 15,240,112	$   (15,293,848)	$   (51,379)
Series C Convertible Preferred shares exchanged for common stock	-	-	-	-	(132,000)	(1)	-	-	-	-	660,000	7	(6)	-	-
Net income for the three months ended December 31, 2022	-	-	-	-	-	-	-	-	-	-	-	-	-	17,084	17,084
Balance at December 31, 2022 (Unaudited)	512,996	$  5	-	$  -	3,209,503	$  33	670,904	$  7	3,000,000	$  30	228,780,695	$  2,288	$ 15,240,106	$  (15,276,764)	$   (34,295)

The accompanying notes are an integral part of these consolidated financial statements

-4-

CLEARTRONIC, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT
FOR THE THREE MONTHS ENDED DECEMBER 31, 2021
(Unaudited)
													Additional		Total
	Series A Preferred Stock		Series B Preferred Stock		Series C Preferred Stock		Series D Preferred Stock		Series E Preferred Stock		Common Stock		paid-in	Accumulated	Stockholders'
	Shares	Amount	Shares	Amount	Shares	Amount	Shares	Amount	Shares	Amount	Shares	Amount	capital	deficit	Deficit
Balance at September 30, 2021	512,996	$  5	-	$  -	3,341,503	$  34	670,904	$  7	3,000,000	$  30	228,578,995	$  2,286	$ 15,240,107	$   (15,694,743)	$  (452,274)
Net income for the three months ended December 31, 2022	-	-	-	-	-	-	-	-	-	-	-	-	-	60,247	60,247
Balance at December 31, 2021 (Unaudited)	512,996	$  5	-	$  -	3,341,503	$  34	670,904	$  7	3,000,000	$  30	228,578,995	$  2,288	$ 15,240,107	$  (15,634,496)	$  (392,027)

The accompanying notes are an integral part of these consolidated financial statements

-5-

CLEARTRONIC, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

December 31, 2022

(Unaudited)

NOTE 1  - ORGANIZATION

Cleartronic, Inc. (the "Company") was incorporated in Florida on November 15, 1999. All current operations are conducted through the Company's wholly owned subsidiary, ReadyOp Communications, Inc. ("ReadyOp"), a Florida corporation incorporated on September 15, 2014. ReadyOp facilitates the marketing and sales of subscriptions to the ReadyOp™ and ReadyMed ™ platforms and the AudioMate IP gateways discussed below.

NOTE 2  - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

PRINCIPLES OF CONSOLIDATION

The accompanying consolidated financial statements contain the consolidated accounts of Cleartronic, Inc. and its subsidiary, ReadyOp Communications, Inc. All material intercompany transactions and balances have been eliminated.

BASIS OF PRESENTATION

The financial statements are prepared in accordance with Generally Accepted Accounting Principles in the United States of America (“U.S. GAAP”). The unaudited interim financial information furnished herein reflects all adjustments, consisting only of normal recurring items, which in the opinion of management are necessary to fairly state the Company’s financial position, results of operations and cash flows for the dates and periods presented and to make such information not misleading.  

These unaudited financial statements should be read in conjunction with the Company’s audited financial statements for the year ended September 30, 2022, contained in our General Form for Registration of Securities of Form 10-K as filed with the Securities and Exchange Commission (the “Commission”) on December 29, 2022. The results of operations for the three months ended December 31, 2022, are not necessarily indicative of results to be expected for any other interim period or the fiscal year ending September 30, 2023.

USE OF ESTIMATES

In preparing the financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the balance sheet and operations for the reporting period.

Although these estimates are based on management's knowledge of current events and actions it may undertake in the future, they may ultimately differ from actual results.

Significant estimates include the assumptions used in valuation of deferred tax assets, estimated useful life of property and equipment, valuation of inventory and allowance for doubtful accounts.

CASH AND CASH EQUIVALENTS

For financial statement purposes, the Company considers all highly liquid investments purchased with original maturities of three months or less to be cash equivalents. The Company did not own any cash equivalents on December 31, 2022 and September 30, 2022.

ACCOUNTS RECEIVABLE

The Company provides an allowance for uncollectible accounts based upon a periodic review and analysis of outstanding accounts receivable balances. Uncollectible receivables are charged to the allowance when deemed uncollectible. Recoveries of accounts previously written off are used to credit the allowance account in the periods in which the recoveries are made. When a client is invoiced, the amount is recorded as an asset in Accounts Receivable and as Deferred Revenue in Current Liabilities. When payment is received the amount is moved to Cash on the balance sheet and Accounts Receivables are reduced. The amount listed as Deferred Revenue is amortized monthly over the license period.

The Company provided $18,000 and $18,000 for allowances of doubtful accounts as of December 31, 2022 and September 30, 2022, respectively.

PREPAID EXPENSES AND OTHER CURRENT ASSETS

Prepaid expenses and other current assets consist primarily of deferred subscriber costs and prepaid expenses. Deferred subscriber costs totaling $25,500 and $38,250 at December 31, 2022 and September 30, 2022, respectively. Prepaid expenses totaling $25,667 and $18,165 at December 31, 2022 and September 30, 2022, respectively are primarily for insurance and other items

PROPERTY AND EQUIPMENT

Property and equipment are recorded at cost and depreciated or amortized using the straight-line method over the estimated useful life of the asset or the underlying lease term for leasehold improvements, whichever is shorter or when the property and equipment is put into service.

CONCENTRATION OF CREDIT RISK

The Company currently maintains cash balances at one FDIC-insured banking institution. Deposits held in non interest-bearing transaction accounts are insured up to a maximum of $250,000 at all FDIC-insured institutions. As of December 31, 2022 and September 30, 2022, the Company had $15,720 and $208,135, respectively, in excess of FDIC insurance limits.

RESEARCH AND DEVELOPMENT COSTS

The Company expenses research and development costs as incurred.

For the three months ended December 31, 2022 and 2021, the Company had $21,815 and $49,260 respectively, in research and development costs.

REVENUE RECOGNITION AND DEFERRED REVENUES

The Company revenue recognition policy follows guidance from Accounting Standards Codification (ASC) 606, Revenue from contract with customers. Revenue is recognized when the Company has transferred promised goods and services to the customer and in the amount that reflects the consideration to which the company expects to be entitled in exchange for those goods and services. The Company applies the following five-step model in order to determine this amount:

i. Identification of Contact with a customer;

ii. Identify the performance obligation of the contract

iii. Determine transaction price;

iv. Allocation of the transaction price to the performance obligations; and

v. Recognition of revenue when (or as) the Company satisfies each performance obligation.

-6-

The Company generates revenue primarily through the sale of integrated hardware and software licenses. The portion of the contract that is associated with ongoing hosting and related customer service is amortized monthly over the license period. The Company incurs certain incremental contract costs (referred to as deferred subscriber acquisition costs, net) including selling expenses (primarily commissions) related to acquiring customers. Deferred subscriber acquisition costs, net are included in prepaid and expenses and other current assets on the consolidated balance sheet. Commissions paid in connection with acquiring new customers are determined based on the value of the contractual fees. Deferred subscriber acquisition costs will be expensed as incurred on the date the revenue associated with the cost is recognized. As of December 31, 2022 and September 30, 2022, respectively, the Company recorded $25,500 and $38,250, respectively, in deferred subscriber costs, which are included as a component of prepaid expense.

In transactions in which hardware is sold to a customer, the Company recognizes the revenue when the hardware has been shipped to the customer. The hardware supplied by the Company does not require a related software license and can be operated and fully functional without the Company's software.

From time to time clients request special training meetings. We send employees to these meeting and charge our clients on a per diem basis. These charges are recorded as consulting fees on our income statement.

The Company allocates the transaction price to each performance obligation based on a relative stand alone selling price. Revenue associated with the sale and installation of system licenses is recognized once installation is complete.

Customer billings for services not yet rendered are deferred and recognized as revenue as services are provided. These fees are recorded as current deferred revenue on the consolidated balance sheet as the Company expects to satisfy any remaining performance obligations as well as recognize the related revenue within the next twelve months. Accordingly, the Company has applied the practical expedient regarding deferred revenue to exclude the value of remaining performance obligations if (i) the contract has an original expected term of one year or less or (ii) the Company recognizes revenue in proportion to the amount it has the right to invoice for services performed. As of December 31, 2022 and September 30, 2022, respectively, the Company recorded $901,872 and $1,125,511, respectively, in deferred revenue.

DISAGGREGATED REVENUE

The following table sets forth the approximate net sales by primary category:

	For the three months ended
	December 31, 2022	December 31, 2021
Licensing of ReadyOp Software	$  460,244	$  449,500
Hardware Sales and Consulting	46,406	69,685
Total	$  506,650	$  519,185

DEFERRED REVENUE

The following table provides a summary of the changes included in deferred revenue during the three months ended December 31, 2022 and year ended September 30, 2022:

	For the three	For the year
	months
	ended	ended
	December 31, 2022	September 30, 2022
Beginning balance	$ 1,125,511	$ 1,131,796
Additions to contract liabilities (1)	283,011	2,011,278
Deductions to contract liabilities (2)	(506,650)	(2,017,563)
Ending balance	$  901,872	$  1,125,511
(1) Customer billings for services not yet rendered
(2) Revenue recognized in the current year related to the beginning liability

EARNINGS PER SHARE

Earnings per share ("EPS") are the amount of earnings attributable to each share of common stock. For convenience, the term is used to refer to either earnings or loss per share. EPS is computed pursuant to section 260-10-45 of the FASB Accounting Standards Codification. Pursuant to ASC Paragraphs 260-10-45-10 through 260-10-45-16, basic EPS shall be computed by dividing income available to common stockholders (the numerator) by the weighted-average number of common shares outstanding (the denominator) during the period. Income available to common stockholders shall be computed by adding both the dividends declared in the period on preferred stock (whether or not paid) and the dividends accumulated for the period on cumulative preferred stock (whether or not earned) from income from continuing operations (if that amount appears in the income statement) and also from net income. The computation of diluted EPS is similar to the computation of basic EPS except that the denominator is increased to include the number of additional common shares that would have been outstanding if the dilutive potential common shares had been issued during the period to reflect the potential dilution that could occur from common shares issuable through contingent shares issuance arrangement, stock options or warrants.

Pursuant to ASC Paragraphs 260-10-45-45-21 through 260-10-45-45-23 Diluted EPS shall be based on the most advantageous conversion rate or exercise price from the standpoint of the security holder. The dilutive effect of outstanding call options and warrants (and their equivalents) issued by the reporting entity shall be reflected in diluted EPS by application of the treasury stock method unless the provisions of paragraphs 260-10-45-35 through 45-36 and 260-10-55-8 through 55-11 require that another method be applied. Equivalents of options and warrants include non-vested stock granted to employees, stock purchase contracts, and partially paid stock subscriptions (see paragraph 260–10–55–23). Anti-dilutive contracts, such as purchased put options and purchased call options, shall be excluded from diluted EPS. Under the treasury stock method: a. Exercise of options and warrants shall be assumed at the beginning of the period (or at time of issuance, if later) and common shares shall be assumed to be issued. b. The proceeds from exercise shall be assumed to be used to purchase common stock at the average market price during the period. (See paragraphs 260-10-45-29 and 260-10-55-4 through 55-5.) c. The incremental shares (the difference between the number of shares assumed issued and the number of shares assumed purchased) shall be included in the denominator of the diluted EPS computation.

As of December 31, 2022 and 2021, we had no options and warrants outstanding.  

As of December 31, 2022 and 2021, we had 512,996 shares of Series A Convertible Preferred stock outstanding, which are convertible into 51,299,600 shares of common stock.

As of December 31, 2022 and 2021, we had 3,209,503 and 3,341,503 shares of Series C Convertible Preferred stock outstanding, respectively, which are convertible into 16,047,515 and 16,707,515 shares of common stock, respectively.

As of December 31, 2022 and 2021, we had 670,904 shares of Series D Preferred stock outstanding which are convertible into 3,354,520 shares of common stock.

As of December 31, 2022 and 2021, we had 3,000,000 shares of Series E Convertible Preferred stock outstanding which are convertible into 300,000,000 shares of common stock.

-7-

The table below details the computation of basic and diluted earnings per share ("EPS") for the three months ended December 31, 2022 and 2021:

		For the		For the
		three months		three months
		ended		ended
		December 31, 2022		December 31, 2021
Net income attributable to common stockholders for the period	$	6,740	$	49,903
Weighted average number of shares outstanding		228,630,043		228,578,995
Basic earnings per share	$	0.00	$	0.00

The following table sets for the computation of diluted earnings per share:

		For the		For the
		three months		three months
		ended		ended
		December 31, 2022		December 31, 2021
Net income attributable to common stockholders for the period	$	6,740	$	49,903
Add: Preferred stock dividends		10,344		10,344
Adjusted net income	$	17,084	$	60,247
Weighted average number of shares outstanding		228,630,043		228,578,995
Add: Shares issued upon conversion of preferred stock		370,701,635		371,361,635
Weighted average number of common and common equivalent shares		599,331,678		599,940,630
Diluted earnings per share	$	0.00	$	0.00

FAIR VALUE OF FINANCIAL INSTRUMENTS

The Company measures the fair value of its assets and liabilities under ASC topic 820, "Fair Value Measurements and Disclosures". ASC 820 defines "fair value" as the price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. There was no impact relating to the adoption of ASC 820 to the Company's consolidated financial statements.

ASC 820 also describes three levels of inputs that may be used to measure fair value:

- Level 1: Observable inputs that reflect unadjusted quoted prices for identical assets or liabilities traded in active markets.

- Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.

- Level 3: Inputs that are generally observable. These inputs may be used with internally developed methodologies that result in management's best estimate of fair value.

Financial instruments consist principally of cash, accounts receivable, prepaid expenses and other current assets, accounts payable, accrued expenses and deferred revenue. The carrying amounts of such financial instruments in the accompanying consolidated balance sheet approximate their fair values due to their relatively short-term nature. The carrying amounts approximate fair value. It is management's opinion that the Company is not exposed to any significant currency or credit risks arising from these financial instruments.

INVENTORY

Inventory consists of components held for assembly and finished goods held for resale or to be utilized for installation in projects. Inventory is valued at lower of cost or net realizable value on a first-in, first-out basis. The Company's policy is to record a reserve for technological obsolescence or slow-moving inventory items. The Company only carries finished goods to be shipped along with completed circuit boards and parts necessary for final assembly of finished product. All existing inventory is considered current and usable. The Company recorded no reserve for obsolete inventory as of December 31, 2022 and September 30, 2022, respectively.

At December 31, 2022 inventory was $21,097 of raw materials and $0 of finished goods.

At September 30, 2022, inventory was $21,097 of raw materials and $0 of finished goods.

ADVERTISING COSTS

Advertising costs are expensed as incurred. The Company had advertising costs of $13,149 and $5,025 during the three months ended December 31, 2022 and 2021, respectively.

RECENT ACCOUNTING PRONOUNCEMENTS

All newly issued accounting pronouncements but not yet effective have been deemed either immaterial or not applicable.

LEASE ACCOUNTING

We account for leases in accordance with ASC 842, Leases which requires lessees to recognize lease liabilities and right-of-use (ROU) assets on the balance sheet for most operating leases. We made the accounting policy election not to apply the recognition provisions of ASC 842 to short-term leases which are leases with a lease term of 12 months or less. Instead, we recognize the lease payments for short-term leases on a straight-line basis over the lease term.

Operating lease liabilities reflect our obligation to make future lease payments for real estate locations. Lease terms are comprised of contractual terms. Payments are discounted using the rate we would pay to borrow amounts equal to the lease payments over the lease term (our incremental borrowing rate). We do not separate lease and non-lease components for contracts in which we are the lessee. ROU assets are measured based on lease liabilities adjusted for incentives and timing differences between operating lease expense and payments, recognized on a straight-line basis over the lease term. Operating lease expense is recognized on a straight-line basis over the lease term, while variable lease payments are recognized as incurred. Common area maintenance and other executory costs are the main components of variable lease payments. Operating and variable lease expenses are recorded in general and administrative expense in the Condensed Consolidated Statements of Operations.

-8-

NOTE 3  - PROPERTY AND EQUIPMENT

At December 31, 2022 and September 30, 2022, property and equipment, net, is as follows:

Office Equipment	$	21,605	$	21,605
Less: Accumulated Depreciation		(7,544)		(6,463)
Total Property and Equipment, net	$	14,061	$	15,142

Depreciation expense for the three months ended December 31, 2022 and 2021, was $1,080 and $814, respectively.

NOTE 4 - EQUITY TRANSACTIONS

Preferred Stock Dividends

As of December 31, 2022 and September 30, 2022, the cumulative arrearage of undeclared dividends for Series A Preferred stock totaled $175,487 and $165,035, respectively.

As of the date of this report, we have 200,000,000 authorized shares of preferred stock, par value $0.00001 per share, of which 7,525,403 shares were issued and outstanding. There are currently 5 series of preferred stock designated as follows:

● 1,250,000 shares have been designated as Series A Preferred Stock, 512,996 of which are issued and outstanding;

● 10 shares have been designated as Series B Preferred Stock, none of which is issued and outstanding;

● 50,000,000 shares have been designated as Series C Preferred Stock, 3,209,503 of which are issued and outstanding; and

● 10,000,000 shares have been designated Series D Preferred stock, of which 670,904 are issued and outstanding; and

● 10,000,000 shares have been designated Series E Preferred stock, of which 3,000,000 are issued and outstanding.

Pursuant to our Articles of Incorporation establishing our preferred stock:

● A holder of shares of the Series A Preferred Stock is entitled to the number of votes equal to the number of shares of the Series A Preferred Stock held by such holder multiplied by one on all matters submitted to a vote of our stockholders. Each one share of our Series A Preferred Stock shall be convertible into 100 shares of our common stock. Each holder of Series A Preferred Stock is entitled to receive cumulative dividends at the rate of 8% of $1.00 per annum on each outstanding share of Series A Preferred Stock then held by such holder, on a pro rata basis.

● A holder of shares of the Series B Preferred Stock is entitled one vote per share on all matters submitted to a vote of our stockholders. If at least one share of Series B Preferred Stock is issued and outstanding, then the total aggregate issued shares of Series B Preferred Stock at any given time, regardless of their number, shall have voting rights equal to two times the sum of the total number of shares of our common stock which are issued and outstanding at the time of voting, plus the total number of shares of any shares of our preferred stock which are issued and outstanding at the time of voting. A holder of shares of the Series B Preferred Stock shall have no conversion rights or rights to dividends.

● A holder of shares of the Series C Preferred Stock is entitled to the number of votes equal to the number of shares of the Series C Preferred Stock held by such holder multiplied by 5 on all matters submitted to a vote of our stockholders. In addition, the holders of our Series C Preferred Stock shall be entitled to receive dividends when, as and if declared by the Board of Directors, in its sole discretion. No dividends have been declared. Finally, each one share of our Series C Preferred Stock shall be convertible into five shares of our common stock.

● A holder of shares of the Series D Preferred Stock is entitled, to the number of votes equal to the number of shares of the Series D Preferred Stock held by such holder multiplied by 5 on all matters submitted to a vote of our stockholders. In addition, the holders of our Series D Preferred Stock shall be entitled to receive dividends when, as and if declared by the Board of Directors, in its sole discretion. No dividends have been declared. Finally, each one share of our Series D Preferred Stock shall be convertible into five shares of our common stock.

● A holder of shares of the Series E Preferred Stock is entitled, to the number of votes equal to the number of shares of the Series E Preferred Stock held by such holder multiplied by 100 on all matters submitted to a vote of our stockholders. In addition, the holders of our Series E Preferred Stock shall be entitled to receive dividends when, as and if declared by the Board of Directors, in its sole discretion. No dividends have been declared. Finally, each one share of our Series E Preferred Stock shall be convertible into 100 shares of our common stock.

Common stock issued for Conversion of C Preferred

During the three months ended December 31, 2022, the holder of Series C preferred stock, converted 132,000 shares of Series C Preferred Stock into 661,000 shares of Common Stock at the stated conversion rate with no gain or loss recognized.

NOTE 6 - RELATED PARTY TRANSACTIONS

Through December 1, 2021, the Company leased its office space from VoiceInterop, the Company's former wholly owned subsidiary and now 96% owned by our shareholders for approximately $1,400 per month. On February 14, 2020, VoiceInterop was deconsolidated and is no longer our subsidiary.

Rent expense incurred during the three months ended December 31, 2022 and 2021 was $2,343 and $5,886, respectively (See Note 7).

As of December 31, 2022, the Company advanced $53,302 to VoiceInterop, the Company's former wholly owned subsidiary and now 96% owned by our shareholders. The amount is included in due from related party on the consolidated balance sheet. The amount is due on September 30, 2024, and bears interest at 5% effective October 1, 2022. As of December 31, 2022, the Company recorded $666 in interest receivable – related party.  

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NOTE 7 - COMMITMENTS AND CONTINGENCIES

Obligation Under Operating Lease

On December 2, 2022, and effective on January 1, 2023, the Company signed a two-year lease of 1,145 square feet for our principal offices in Clearwater, Florida. The monthly rent is $2,134 in year one and increases to $2,198 in year two. The lease expires on December 31, 2024.  On January 1, 2023, upon adoption of ASC 842, the Company will recognize  right-to-use assets as operating leases and operating lease obligations.

On December 1, 2021, the Company signed a one year lease approximately 2,000 square feet for our principal offices in Boca Raton, Florida. The monthly rent is $2,200. The lease expired on November 30, 2022.

Rent expense incurred during the three months ended December 31, 2022 and 2021 was $2,343 and $5,886, respectively (See Note 6).

Revenue and Accounts Receivable Concentration

For the three months ended December 31, 2022, one customer accounted for 16% of the Company's revenues. 

For the three months ended December 31, 2021, one customer accounted for 14% of the Company's revenues.

As of December 31, 2022, no customers accounted for more than 10% of the Company's total outstanding accounts receivable.

As of September 30, 2022, no customer accounted for more than 10% of the Company's total outstanding accounts receivable.

Major Supplier and Sole Manufacturing Source

The Company relies on no major supplier for its products. The Company has contracted with local manufacturing facilities to provide completed circuit boards used in the assembly of its IP gateway devices. Interruption of adequate supply of components, primarily computer chips, to the manufacturing source presents additional risk to the Company. The Company believes that additional commercial facilities exist at competitive rates to match the resources and capabilities of its existing manufacturing source, but the current worldwide shortage of computer chips does limit our ability to supply our proprietary radio gateways to clients and other buyers .

Employment Agreements

In December 2016, the Board of Directors accepted the resignation of Larry M. Reid as Chief Executive Officer of the corporation and appointed Mr. Reid as Chief Financial Officer. The Board also appointed Michael M. Moore as Chief Executive Officer.

Under the terms of an employment agreement effective on November 28, 2016, Mr. Moore as CEO receives an annual salary of $200,000. The term of agreement is for a one-year period beginning on the effective date and shall automatically renew and continue in effect for additional one-year periods. Effective April 20, 2022, the annual compensation increased to $220,000.

Under the terms of an employment agreement effective on March 13, 2015, Mr. Reid as CFO receives an annual salary of $96,000. The term of agreement is for a one-year period beginning on the effective date and shall automatically renew and continue in effect for additional one-year periods. Effective October 1, 2021, the annual compensation increased to $104,000.

Exclusive Licensing Agreement

On May 5, 2017, the Company entered into an Exclusive Licensing Agreement with Sublicensing Terms (the "Agreement") with the University of South Florida Research Foundation, Inc. ("USFRF") relating to an exclusive license of certain patent rights in connection with one of USFRF's U.S. Patent Applications. Both parties recognize that the research and development work provided by the Company was sufficient for USFRF to enter into the Agreement with the Company.

The Agreement is effective April 25, 2017 and continues until the later of the date that no Licensed Patent remains a pending application or an enforceable patent or the date on which the Licensee's obligation to pay royalties expires.

The Company agreed to pay USFRF a royalty of 3% for sales of all Licensed Products and Licensed Processes and agreed to pay USFRF minimum royalty payments as follows:

Payment	Year
$1,000	2019
$4,000	2020
$8,000	2021

-and every year thereafter on the same date, for the life of the agreement.

In the event the Company proposes to sell any Equity Securities, then USFRF will have the right to purchase 5% of the securities issued in such offering on the same terms and conditions are offered to other purchasers in such financing. As of December 31, 2022 and 2021, the Company has recorded $3,640 and $2,953 for the minimum royalty for the fiscal year ended 2022 and 2021.

NOTE 9 - SUBSEQUENT EVENT

On January 6, 2023, the Board of Directors approved a stock repurchase program pursuant to which the Company may repurchase shares of its outstanding common stock. The repurchase program may be extended, suspended, or discontinued at any time.

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Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.

FORWARD-LOOKING STATEMENTS

The information set forth in this Management's Discussion and Analysis contains certain "forward-looking statements," including, among others (i) expected changes in our revenues and profitability, (ii) prospective business opportunities, and (iii) our strategy for financing our business. Forward-looking statements are statements other than historical information or statements of current condition. Some forward-looking statements may be identified by use of terms such as "believes," "anticipates," "intends," or "expects." These forward-looking statements relate to our plans, objectives, and expectations for future operations. Although we believe that our expectations with respect to the forward-looking statements are based upon reasonable assumptions within the bounds of our knowledge of our business and operations, in light of the risks and uncertainties inherent in all future projections, the inclusion of forward-looking statements in this prospectus should not be regarded as a representation that our objectives or plans will be achieved. In light of the risks and uncertainties, there can be no assurance that actual results, performance, or achievements will not differ materially from any future results, performance, or achievements expressed or implied by such forward-looking statements. The foregoing review of important factors should not be construed as exhaustive. We undertake no obligation to release publicly the results of any future revisions we may make to forward-looking statements to reflect events or circumstances after the date of this prospectus or to reflect the occurrence of unanticipated events.

Overview

Cleartronic, Inc. (the "Company") was incorporated in Florida on November 15, 1999. All current operations are conducted through the Company's wholly owned subsidiary, ReadyOp Communications, Inc. ("ReadyOp"), a Florida corporation incorporated on September 15, 2014. ReadyOp facilitates the marketing and sales of subscriptions to the ReadyOp^™ and ReadyMed^™ platform and the AudioMate IP gateways discussed below.

ReadyOp is a proprietary, innovative web-based planning, communications and operations platform for efficiently and effectively planning, managing, communicating, and directing operations and emergency response. ReadyOp is used by local, state and federal government agencies, corporations, school districts, utilities, hospitals and others to manage and report daily operations as well as the ability to handle incidents and emergency situations. ReadyOp is offered as a software as a service (SAAS) program on an annual contract basis although an increasing number of clients have requested multi-year agreements.

In March 2018, the Company approved the spin-off of VoiceInterop, Inc. ("Voiceinterop"), one of the Company's wholly-owned subsidiaries, into a separate company under a Form S-1 registration filed with the United States Securities and Exchange Commission.

In October 2019, the Company acquired the ReadyMed software platform from Collabria LLC. ReadyMed is a web-based secure communications platform initially designed for the healthcare industry. This includes hospitals, clinics, doctor's offices, health insurance companies, workers compensation insurance companies and many other segments of the healthcare industry. The platform provides caregivers with patient tracking capability and allows physicians and other healthcare entities to track patient progress after medical treatment and/or release from hospital care. The software also enables monitoring and reporting of patients in medium and long-term care. Additionally, the platform provides secure communications capabilities and record keeping to track the healing process of patients, record their recovery and monitor their medications. ReadyMed has proved beneficial for multiple clients in the healthcare industry due to the impact of the COVID-19 pandemic. The Company offers both the ReadyOp and ReadyMed capabilities to clients and usually refers to the platform as ReadyOp to avoid confusion in the marketplace of two products.

FOR THE THREE MONTHS ENDED DECEMBER 31, 2022 COMPARED TO THE THREE MONTHS ENDED DECEMBER 31, 2021

Revenue

Revenues decreased 2.41% to $506,650 for the three months ended December 31, 2022 as compared to $519,185 for the three months ended December 31, 2021. The primary reason for the decrease was due to a decrease in sales of ReadyOp hardware products from $32,000 in 2021 to $6,125 in 2022. Revenue from the ReadyOp platform increased from $449,500 in 2021 to $460,244 in 2022. Consulting fees and related income increased from $37,685 in 2021 to $40,281 in 2022 due to more training activity and conference income.

Cost of Revenue

Cost of revenues decreased to $77,491 for the three months ended December 31, 2022 as compared to $92,236 for the three months ended December 31, 2021. Gross profits were $429,159 and $426,949 for the three months ended December 31, 2022 and December 31, 2021, respectively. Gross profit margins increased from 82% for the three months ended December 31, 2021 to 85% for the three months ended December 31, 2022. The increase in gross profit and gross profit margin was primarily due to the increase in sales of subscriptions to the ReadyOp platform and the decrease in sales of hardware products.

Operating Expenses

Operating expenses increased 12.57% to $412,624 for the three months ended December 31, 2022 compared to $366,534 for the three months ended December 31, 2021. The increase was primarily due increases in administrative expense and slightly offset by decrease in selling expenses. General and administrative expenses increased by $193,983 or 151.65% as a result of the increase in general business expenses. This increase was primarily due to salary expenses included as part of general business expenses, charitable contributions, and employee holiday bonuses.  For the three months ended December 31, 2022, selling expenses were $67,831 compared to $188,545 for the three months ended December 31, 2021. This decrease was primarily due to a decrease in commissions expense with an offset by an increase in advertising and travel expenses. Research and development expenses were $49,260 for the three months ended December 31, 2021, as compared to $21,815 for the three months ended December 31, 2022. The increase was primarily due to a decrease in expenses associated with the development of a new technology associated with a patent owned by the University of South Florida Research Foundation. The Company has obtained the exclusive license to develop and market the technology associated with the patent. 

Other Income/(Expenses)

The Company's other income increased by $717 from other income of $542 during the three months ended December 31, 2022 as compared to $168 in other expenses, for the three months ended December 31, 2021. The primary reason for this increase was an increase in interest income on note receivable due from a related party.  

Income before Income Taxes

The Company's income before income taxes was $17,084, during the three months ended December 31, 2022, as compared to $60,247 for the three months ended December 31, 2021. The decrease was primarily due to an increase in administrative and research and development expenses and a decrease in sales of ReadyOp hardware products. The increased costs were partially increase in subscription of ReadyOp software and consulting income in 2022.

Net Income Attributable to Common Stockholders

Net income attributable to common stockholders was $6,740 for the three months ended December 31, 2022 as compared to a net income of $49,903 for the three months ended December 31, 2021. The decrease was primarily due to an increase in administrative and research and development expenses and a decrease in sales of ReadyOp hardware products. The increased costs were partially due to an in increase in subscriptions of ReadyOp software and consulting income in 2022 while preferred stock dividends remained consistent.  

LIQUIDITY AND CAPITAL RESOURCES

For the three months ended December 31, 2022, net cash used in operations of $188,014 was the result of a net income of $17,084, depreciation expense of $1,080, an increase in accounts payable of $32,933, and a decrease in prepaid expenses of $9,280.  These were offset by an increase in accounts receivable of $24,752 and a decrease in deferred revenue of $223,639.

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For the three months ended December 31, 2021, net cash used in operations of $17,849 was the result of a net income of $60,247, depreciation expense of $814, an increase in accounts payable of $26,406, a decrease in accounts receivable of $46,867, a decrease in prepaid expenses of $33,364.  These were offset by an increase in inventory of $6,588, an increase in due from related party of $6,386, and a decrease in deferred revenue of $172,573.

Net cash used in investing activities was $0 and $5,058 for the three months ended December 31, 2022 and 2021, respectively, which was for the purchase of fixed assets.

Critical Accounting Estimates

See "Management's Discussion and Analysis of Financial Condition and Results of Operations - Critical Accounting Estimates" in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2022 for information regarding our critical accounting estimates.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

Not applicable.

Item 4. Controls and Procedures.

An evaluation was conducted by the registrant's Chief Executive Officer (CEO) and Chief Financial Officer (CFO) of the effectiveness of the design and operation of the registrant's disclosure controls and procedures as of December 30, 2022. Based on that evaluation, the CEO and CFO concluded that the registrant's controls and procedures were effective as of such date to ensure that information required to be disclosed in the reports that the registrant files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms.

Change in Internal Controls over Financial Reporting

There was no change in the registrant's internal control over financial reporting identified in connection with the evaluation required by paragraph (d) of Rule 13a–15 or Rule 15d–15 under the Securities Exchange Act of 1934 that occurred during the registrant's last fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings

Cleartronic is not engaged in any litigation at the present time and management is unaware of any claims or complaints that could result in future litigation. Management will seek to minimize disputes with the Company's customers but recognizes the inevitability of legal action in today's business environment as an unfortunate price of conducting business.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

 The registrant claimed exemption from the registration provisions of the Securities Act of 1933 with respect to the securities pursuant to Section 4(2) thereof in as much as no public offering was involved. The shares were not offered or sold by means of: (i) any advertisement, article, notice or other communication published in any newspaper, magazine or similar medium, or broadcast over television or radio, (ii) any seminar or meeting whose attendees have been invited by any general solicitation or general advertising, or (iii) any other form of general solicitation or advertising and the purchases were made for investment and not with a view to distribution. Each of the purchasers was, at the time of the purchaser's respective purchase, an accredited investor, as that term is defined in Regulation D under the Securities Act of 1933 and had access to sufficient information concerning the registrant and the offering.

Item 3. Defaults Upon Senior Securities

None

Item 5. Other Information

None

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Item 6.  Exhibits.

Exhibit No.	Identification of Exhibit
3.1**	Articles of Incorporation, filed as exhibit 3.01 to the registrant's registration statement on Form SB-2 on July 3, 2006, Commission File Number 333-135585.
3.2**	Articles of Amendment to Articles of Incorporation filed March 12, 2001, filed as exhibit 3.02 to the registrant's registration statement on Form SB-2 on July 3, 2006, Commission File Number 333-135585.
3.3**	Articles of Amendment to Articles of Incorporation filed October 4, 2004, filed as exhibit 3.03 to the registrant's registration statement on Form SB-2 on July 3, 2006, Commission File Number 333-135585.
3.4**	Articles of Amendment to Articles of Incorporation filed March 31, 2005, filed as exhibit 3.04 to the registrant's registration statement on Form SB-2 on July 3, 2006, Commission File Number 333-135585.
3.5**	Articles of Amendment to Articles of Incorporation filed May 9, 2008, filed as exhibit 3.02 to the registrant's registration statement on Form S-1 on May 28, 2008, Commission File Number 333-135585.
3.6**	Articles of Amendment to Articles of Incorporation filed June 28, 2010, filed as exhibit 3.7 to the registrant's Form 10-Q on February 14, 2011, Commission File Number 333-135585.
3.7**	Articles of Amendment to Articles of Incorporation filed May 6, 2011, filed as exhibit 3.1 to the registrant's Form 8-K on May 6, 2011, Commission File Number 333-135585.
3.8**	Articles of Amendment to Articles of Incorporation filed April 19, 2012, filed as exhibit 3.09 to the registrant's Form 10-Q on May 14, 2012, Commission File Number 333-135585.
3.9**	Articles of Amendment to Articles of Incorporation filed September 7, 2012, filed as exhibit 3.1 to the registrant's Form 8-K on September 7, 2012, Commission File Number 333-135585.
3.10**	Articles of Amendment to Articles of Incorporation filed September 19, 2012, filed as exhibit 3.1 to the registrant's Form 8-K on September 19, 2012, Commission File Number 333-135585.
3.11**	Articles of Amendment to Articles of Incorporation filed October 5, 2012, filed as exhibit 3.1 to the registrant's Form 8-K on October 5, 2012, Commission File Number 333-135585.
3.12**	Articles of Amendment to Articles of Incorporation filed December 28, 2013, filed as exhibit 3.12 to the registrant's Form 8-K on January 14, 2014, Commission File Number 333-135585.
3.13**	Bylaws, filed as exhibit 3.05 to the registrant's registration statement on Form SB-2 on July 3, 2006, Commission File Number 333-135585.
3.14**	Amended and Restated Bylaws, filed as exhibit 3.1 to the registrant's Form 8-K on July 26, 2010, Commission File Number 333-135585.
10.1**	Employment Agreement dated October 5, 2012, between Larry M. Reid and the registrant, filed as exhibit 10.1 to the registrant's Form 8-K on October 12, 2012, Commission File Number 333-135585.
10.2**	Lease Agreement dated November 30, 2014, between BGNP Associates, LLC and Cleartronic, Inc, filed as Exhibit 10.10 to the registrant's Form 10-K on January 13, 2015, Commission File Number 000-55329
10.3**	Employment Agreement dated  March 13, 2015, between Larry M. Reid and the registrant, filed as Exhibit 10.1 to the registrant's Form 8-K on March 18, 2015, Commission File Number 000-55329
10.4**	Subscription Agreement between registrant and private accredited investor dated March 31, 2015 for purchase of 278,743 shares of Series D Convertible Preferred stock, filed as exhibit 10.1 to the registrant's Form 8-K on April 10, 2015, Commission File Number 000-55329
10.5**	Subscription Agreement between registrant and private accredited investor dated March 31, 2015 for purchase of 270,024 shares of Series D Convertible Preferred stock, filed as exhibit 10.2 to the registrant's Form 8-K on April 10, 2015, Commission File Number 000-55329
10.6**	Subscription Agreement between registrant and private accredited investor dated March 31, 2015 for purchase of 278,743 shares of Series D Convertible Preferred stock, filed as exhibit 10.3 to the registrant's Form 8-K on April 10, 2015, Commission File Number 000-55329

10.7**	Promissory Note date November 24, 2015 in the original amount of $50,000 issued to Mr. Marc Moore filed as exhibit 10.18 to the registrant's Form 10-K on January 13, 2016, Commission File 000-55329.
10.8**	Asset Purchase Agreement dated November 29, 2016 between the registrant and Collabria LLC. Filed as an exhibit to the registrant's Form 8-K on December 5, 2016.
10.9**	Employment Agreement dated November 28, 2016 between the registrant and Mr. Moore.
10.10**	Promissory Note dated September 27, 2017 in the amount of $35,000 issued to Richard Martin.
10.11**	Promissory Note dated October 12, 2017 in the amount of $15,000 issued to Richard Martin
10.12**	Installment Note dated September 30, 2019 in the amount of $75,279 issued to Richard Martin
10.13**	Lease Agreement dated December 1, 2018 , between BGNP Associates, LLC and VoiceInterop, Inc.
10.14**	Promissory Note dated December 2, 2019 in the amount of $50,000 issued to Mr. John F. Marek.
31.1*	Certification of Michael M. Moore, Chief Executive Officer of Cleartronic, Inc., pursuant to 18 U.S.C. §1350, as adopted pursuant to §302 of the Sarbanes-Oxley Act of 2002.
31.2*	Certification of Larry M. Reid, Chief Financial Officer and Principal Accounting Officer of Cleartronic, Inc., pursuant to 18 U.S.C. §1350, as adopted pursuant to §302 of the Sarbanes-Oxley Act of 2002.
32.1*	Certification of Michael M. Moore, Chief Executive Officer of Cleartronic, Inc.,pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002.
32.2*	Certification of Larry M. Reid, Chief Financial Officer and Principal Accounting Officer of Cleartronic, Inc., pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002.
101	XBRL Instance Document (XBRL tags are embedded within the Inline iXBRL document)

____________

*Filed herewith.

**Previously filed.

SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

CLEARTRONIC, INC.

February 13, 2023

By: /s/ Michael M. Moore

 Michael M. Moore

 Principal Executive Officer

By:/s/ Larry M. Reid

 Larry M. Reid

 Principal Financial Officer and

 Chief Accounting Officer

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Exhibit 31.1

CERTIFICATION

I, Michael M. Moore, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Cleartronic, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. I am the only certifying officer responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under my supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report my conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report)

that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the registrant's auditors and the Board of Directors:

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: February 13, 2023

/s/ Michael M. Moore

Michael M. Moore, Principal Executive Officer

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Exhibit 31.2

CERTIFICATION

I, Larry Reid, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Cleartronic, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. I am the only certifying officer responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under my supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report my conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the registrant's auditors and the Board of Directors:

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: February 13, 2023

/s/ Larry M. Reid

Larry Reid, Principal Financial Officer

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Exhibit 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code), the undersigned officer of Cleartronic, Inc. (the "Company"), does hereby certify, to such officer's knowledge, that the Quarterly Report on Form 10-Q for the quarter ended December 31, 2022 of the Company fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company.

February 13, 2023

By:  /s/ Michael M. Moore

Michael M. Moore

Principal Executive Officer

By:  /s/ Larry M. Reid

Larry M. Reid

Principal Financial Officer 

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Exhibit 32.2

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code), the undersigned officer of Cleartronic, Inc. (the "Company"), does hereby certify, to such officer's knowledge, that the Quarterly Report on Form 10-Q for the quarter ended December 31, 2022 of the Company fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company.

February 13, 2023

By:  /s/ Michael M. Moore

Michael M. Moore

Principal Executive Officer

By:  /s/ Larry M. Reid

Larry M. Reid

Principal Financial Officer 

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EX-31.1

Exhibit 31.1

CERTIFICATION

I, Michael M. Moore, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Cleartronic, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. I am the only certifying officer responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under my supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report my conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report)

that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the registrant's auditors and the Board of Directors:

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: February 13, 2023

/s/ Michael M. Moore

Michael M. Moore, Principal Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION

I, Larry Reid, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Cleartronic, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. I am the only certifying officer responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under my supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report my conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the registrant's auditors and the Board of Directors:

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: February 13, 2023

/s/ Larry M. Reid

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code), the undersigned officer of Cleartronic, Inc. (the "Company"), does hereby certify, to such officer's knowledge, that the Quarterly Report on Form 10-Q for the quarter ended December 31, 2022 of the Company fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company.

February 13, 2023

By:  /s/ Michael M. Moore

Michael M. Moore

Principal Executive Officer

By:  /s/ Larry M. Reid

Larry M. Reid

Principal Financial Officer 

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code), the undersigned officer of Cleartronic, Inc. (the "Company"), does hereby certify, to such officer's knowledge, that the Quarterly Report on Form 10-Q for the quarter ended December 31, 2022 of the Company fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company.

February 13, 2023

By:  /s/ Michael M. Moore

Michael M. Moore

Principal Executive Officer

By:  /s/ Larry M. Reid

Larry M. Reid

Principal Financial Officer 

25

XML

Document And Entity Information - shares	3 Months Ended
	Dec. 31, 2022	Feb. 16, 2023
Document Information Line Items
Entity Registrant Name	CLEARTRONIC, INC.
Trading Symbol	CLRI
Document Type	10-Q
Current Fiscal Year End Date	--09-30
Entity Common Stock, Shares Outstanding		228,780,695
Amendment Flag	false
Entity Central Index Key	0001362516
Entity Current Reporting Status	Yes
Entity Filer Category	Non-accelerated Filer
Document Period End Date	Dec. 31, 2022
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	Q1
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Document Quarterly Report	true
Document Transition Report	false
Entity Incorporation, State or Country Code	FL
Entity Tax Identification Number	65-0958798
Entity Address, Address Line One	28050 US Hwy 19N
Entity Address, City or Town	Clearwater
Entity Address, State or Province	FL
Entity Address, Postal Zip Code	33761
Local Phone Number	289-7620
City Area Code	813
Entity Interactive Data Current	Yes
Title of 12(b) Security	Common stock Par Value $0.00001
Security Exchange Name	NONE
Entity File Number	000-55329

XML

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($)	Dec. 31, 2022	Sep. 30, 2022
Current assets:
Cash	$ 280,153	$ 468,167
Accounts receivable, net	562,782	538,030
Inventory	21,097	21,097
Prepaid expenses and other current assets	43,665	53,611
Interest receivable - related party	666
Total current assets	908,363	1,080,905
Property and Equipment, net	14,061	15,142
Other assets:
Due from related party	53,302	53,302
Total other assets	53,302	53,302
Total assets	975,726	1,149,349
Current liabilities:
Accounts payable and accrued expenses	108,149	75,217
Deferred revenue, current portion	802,305	1,012,211
Total current liabilities	910,454	1,087,428
Long Term Liabilities
Deferred revenue, net of current portion	99,567	113,300
Total long term liabilities	99,567	113,300
Total liabilities	1,010,021	1,200,728
Commitments and Contingencies (See Note 7)
Stockholders' deficit:
Common stock - $.00001 par value; 5,000,000,000 shares authorized,	2,288	2,281
Additional paid-in capital	15,240,106	15,240,112
Accumulated Deficit	(15,276,764)	(15,293,848)
Total stockholders' deficit	(34,295)	(51,379)
Total liabilities and stockholders' deficit	975,726	1,149,349
Series A Preferred Stock [Member]
Stockholders' deficit:
Preferred stock	5	5
Series B Preferred Stock [Member]
Stockholders' deficit:
Preferred stock
Series C Preferred Stock [Member]
Stockholders' deficit:
Preferred stock	33	34
Series D Preferred Stock [Member]
Stockholders' deficit:
Preferred stock	7	7
Series E Preferred Stock [Member]
Stockholders' deficit:
Preferred stock	$ 30	$ 30

XML

CONDENSED CONSOLIDATED BALANCE SHEETS (Parentheticals) - $ / shares	Dec. 31, 2022	Sep. 30, 2022
Common Stock, par value (in Dollars per share)	$ 0.00001	$ 0.00001
Common Stock, shares authorized	5,000,000,000	5,000,000,000
Common Stock, shares issued	228,780,695	228,780,695
Common Stock, shares outstanding	228,120,995	228,120,995
Series A Preferred Stock [Member]
Preferred Stock, par value (in Dollars per share)	$ 0.00001	$ 0.00001
Preferred Stock, shares authorized	1,250,000	1,250,000
Preferred Stock, shares issued	512,996	512,996
Preferred Stock, shares outstanding	512,996	512,996
Series B Preferred Stock [Member]
Preferred Stock, par value (in Dollars per share)	$ 0.00001	$ 0.00001
Preferred Stock, shares authorized	10	10
Preferred Stock, shares issued	0	0
Preferred Stock, shares outstanding	0	0
Series C Preferred Stock [Member]
Preferred Stock, par value (in Dollars per share)	$ 0.00001	$ 0.00001
Preferred Stock, shares authorized	50,000,000	50,000,000
Preferred Stock, shares issued	3,341,503	3,341,503
Preferred Stock, shares outstanding	3,209,503	3,209,503
Series D Preferred Stock [Member]
Preferred Stock, par value (in Dollars per share)	$ 0.00001	$ 0.00001
Preferred Stock, shares authorized	10,000,000	10,000,000
Preferred Stock, shares issued	670,904	670,904
Preferred Stock, shares outstanding	670,904	670,904
Series E Preferred Stock [Member]
Preferred Stock, par value (in Dollars per share)	$ 0.00001	$ 0.00001
Preferred Stock, shares authorized	10,000,000	10,000,000
Preferred Stock, shares issued	3,000,000	3,000,000
Preferred Stock, shares outstanding	3,000,000	3,000,000

XML

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($)	3 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Income Statement [Abstract]
Revenue	$ 506,650	$ 519,185
Cost of Revenue	77,491	92,236
Gross Profit	429,159	426,949
Operating Expenses:
Selling expenses	67,831	188,545
Administrative expenses	321,898	127,915
Depreciation expense	1,080	814
Research and development	21,815	49,260
Total Operating Expenses	412,624	366,534
Interest income/expense, net	549	(168)
Total Other Income/(Expenses)	549	(168)
Income before income taxes	17,084	60,247
Provision for income taxes from continuing operations
Net Income	17,084	60,247
Preferred stock dividends Series A Preferred	(10,344)	(10,344)
Net income attributable to common stockholders	$ 6,740	$ 49,903
Net income per common share - basic (in Dollars per share)	$ 0	$ 0
Net income per common share - diluted (in Dollars per share)	$ 0	$ 0
Weighted Average of number of shares outstanding - basic (in Shares)	228,630,043	228,578,995
Weighted Average of number of shares outstanding - diluted (in Shares)	599,331,678	599,940,630

XML

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW (Unaudited) - USD ($)	3 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Statement of Cash Flows [Abstract]
NET INCOME	$ 17,084	$ 60,247
Adjustments to reconcile net income to net cash used in
Depreciation expense	1,080	814
(Increase) decrease in assets:
Accounts receivable	(24,752)	46,867
Inventory		(6,588)
Prepaid expenses and other current assets	9,280	33,364
Due from related party		(6,386)
Increase (decrease) in liabilities:
Accounts payable	32,933	26,406
Deferred revenue	(223,639)	(172,573)
Net Cash Used In by Operating Activities	(188,014)	(17,849)
Cash Flows From Investing Activities
Purchase of fixed assets		(5,058)
Net Cash Used in Investing Activities		(5,058)
Cash Flows From Financing Activities
Net (decrease) increase in cash	(188,014)	(22,907)
Cash at beginning of period	468,167	401,001
Cash at end of period	280,153	378,094
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for interest	666	168
Cash paid for taxes	690	690
Supplemental disclosure of non-cash investing and financing activities:
Series C Convertible Preferred shares exchanged for common stock	$ 7

XML

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT (Unaudited) - USD ($)	Series A Total	Series B Total	Series C Total	Series D Total	Series E Total	Common Stock	Additional paid-in capital	Accumulated deficit	Total
Balance at Sep. 30, 2021	$ 5		$ 34	$ 7	$ 30	$ 2,286	$ 15,240,107	$ (15,694,743)	$ (452,274)
Balance (in Shares) at Sep. 30, 2021	512,996		3,341,503	670,904	3,000,000	228,578,995
Net income								60,247	60,247
Balance at Dec. 31, 2021	$ 5		$ 34	$ 7	$ 30	$ 2,288	15,240,107	(15,634,496)	(392,027)
Balance (in Shares) at Dec. 31, 2021	512,996		3,341,503	670,904	3,000,000	228,578,995
Balance at Sep. 30, 2022	$ 5		$ 34	$ 7	$ 30	$ 2,281	15,240,112	(15,293,848)	(51,379)
Balance (in Shares) at Sep. 30, 2022	512,996		3,341,503	670,904	3,000,000	228,120,695
Series C Convertible Preferred shares exchanged for common stock			$ (1)			$ 7	(6)
Series C Convertible Preferred shares exchanged for common stock (in Shares)			(132,000)			660,000
Net income								17,084	17,084
Balance at Dec. 31, 2022	$ 5		$ 33	$ 7	$ 30	$ 2,288	$ 15,240,106	$ (15,276,764)	$ (34,295)
Balance (in Shares) at Dec. 31, 2022	512,996		3,209,503	670,904	3,000,000	228,780,695

XML

ORGANIZATION

3 Months Ended

Dec. 31, 2022

Organization, Consolidation and Presentation of Financial Statements [Abstract]

ORGANIZATION

NOTE 1  - ORGANIZATION

Cleartronic, Inc. (the "Company") was incorporated in Florida on November 15, 1999. All current operations are conducted through the Company's wholly owned subsidiary, ReadyOp Communications, Inc. ("ReadyOp"), a Florida corporation incorporated on September 15, 2014. ReadyOp facilitates the marketing and sales of subscriptions to the ReadyOp™ and ReadyMed ™ platforms and the AudioMate IP gateways discussed below.

XML

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

3 Months Ended

Dec. 31, 2022

Accounting Policies [Abstract]

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NOTE 2  - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

PRINCIPLES OF CONSOLIDATION

The accompanying consolidated financial statements contain the consolidated accounts of Cleartronic, Inc. and its subsidiary, ReadyOp Communications, Inc. All material intercompany transactions and balances have been eliminated.

BASIS OF PRESENTATION

The financial statements are prepared in accordance with Generally Accepted Accounting Principles in the United States of America (“U.S. GAAP”). The unaudited interim financial information furnished herein reflects all adjustments, consisting only of normal recurring items, which in the opinion of management are necessary to fairly state the Company’s financial position, results of operations and cash flows for the dates and periods presented and to make such information not misleading.  

These unaudited financial statements should be read in conjunction with the Company’s audited financial statements for the year ended September 30, 2022, contained in our General Form for Registration of Securities of Form 10-K as filed with the Securities and Exchange Commission (the “Commission”) on December 29, 2022. The results of operations for the three months ended December 31, 2022, are not necessarily indicative of results to be expected for any other interim period or the fiscal year ending September 30, 2023.

USE OF ESTIMATES

In preparing the financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the balance sheet and operations for the reporting period.

Although these estimates are based on management's knowledge of current events and actions it may undertake in the future, they may ultimately differ from actual results.

Significant estimates include the assumptions used in valuation of deferred tax assets, estimated useful life of property and equipment, valuation of inventory and allowance for doubtful accounts.

CASH AND CASH EQUIVALENTS

For financial statement purposes, the Company considers all highly liquid investments purchased with original maturities of three months or less to be cash equivalents. The Company did not own any cash equivalents on December 31, 2022 and September 30, 2022.

ACCOUNTS RECEIVABLE

The Company provides an allowance for uncollectible accounts based upon a periodic review and analysis of outstanding accounts receivable balances. Uncollectible receivables are charged to the allowance when deemed uncollectible. Recoveries of accounts previously written off are used to credit the allowance account in the periods in which the recoveries are made. When a client is invoiced, the amount is recorded as an asset in Accounts Receivable and as Deferred Revenue in Current Liabilities. When payment is received the amount is moved to Cash on the balance sheet and Accounts Receivables are reduced. The amount listed as Deferred Revenue is amortized monthly over the license period.

The Company provided $18,000 and $18,000 for allowances of doubtful accounts as of December 31, 2022 and September 30, 2022, respectively.

PREPAID EXPENSES AND OTHER CURRENT ASSETS

Prepaid expenses and other current assets consist primarily of deferred subscriber costs and prepaid expenses. Deferred subscriber costs totaling $25,500 and $38,250 at December 31, 2022 and September 30, 2022, respectively. Prepaid expenses totaling $25,667 and $18,165 at December 31, 2022 and September 30, 2022, respectively are primarily for insurance and other items

PROPERTY AND EQUIPMENT

Property and equipment are recorded at cost and depreciated or amortized using the straight-line method over the estimated useful life of the asset or the underlying lease term for leasehold improvements, whichever is shorter or when the property and equipment is put into service.

CONCENTRATION OF CREDIT RISK

The Company currently maintains cash balances at one FDIC-insured banking institution. Deposits held in non interest-bearing transaction accounts are insured up to a maximum of $250,000 at all FDIC-insured institutions. As of December 31, 2022 and September 30, 2022, the Company had $15,720 and $208,135, respectively, in excess of FDIC insurance limits.

RESEARCH AND DEVELOPMENT COSTS

The Company expenses research and development costs as incurred.

For the three months ended December 31, 2022 and 2021, the Company had $21,815 and $49,260 respectively, in research and development costs.

REVENUE RECOGNITION AND DEFERRED REVENUES

The Company revenue recognition policy follows guidance from Accounting Standards Codification (ASC) 606, Revenue from contract with customers. Revenue is recognized when the Company has transferred promised goods and services to the customer and in the amount that reflects the consideration to which the company expects to be entitled in exchange for those goods and services. The Company applies the following five-step model in order to determine this amount:

i. Identification of Contact with a customer;

ii. Identify the performance obligation of the contract

iii. Determine transaction price;

iv. Allocation of the transaction price to the performance obligations; and

v. Recognition of revenue when (or as) the Company satisfies each performance obligation.

The Company generates revenue primarily through the sale of integrated hardware and software licenses. The portion of the contract that is associated with ongoing hosting and related customer service is amortized monthly over the license period. The Company incurs certain incremental contract costs (referred to as deferred subscriber acquisition costs, net) including selling expenses (primarily commissions) related to acquiring customers. Deferred subscriber acquisition costs, net are included in prepaid and expenses and other current assets on the consolidated balance sheet. Commissions paid in connection with acquiring new customers are determined based on the value of the contractual fees. Deferred subscriber acquisition costs will be expensed as incurred on the date the revenue associated with the cost is recognized. As of December 31, 2022 and September 30, 2022, respectively, the Company recorded $25,500 and $38,250, respectively, in deferred subscriber costs, which are included as a component of prepaid expense.

In transactions in which hardware is sold to a customer, the Company recognizes the revenue when the hardware has been shipped to the customer. The hardware supplied by the Company does not require a related software license and can be operated and fully functional without the Company's software.

From time to time clients request special training meetings. We send employees to these meeting and charge our clients on a per diem basis. These charges are recorded as consulting fees on our income statement.

The Company allocates the transaction price to each performance obligation based on a relative stand alone selling price. Revenue associated with the sale and installation of system licenses is recognized once installation is complete.

Customer billings for services not yet rendered are deferred and recognized as revenue as services are provided. These fees are recorded as current deferred revenue on the consolidated balance sheet as the Company expects to satisfy any remaining performance obligations as well as recognize the related revenue within the next twelve months. Accordingly, the Company has applied the practical expedient regarding deferred revenue to exclude the value of remaining performance obligations if (i) the contract has an original expected term of one year or less or (ii) the Company recognizes revenue in proportion to the amount it has the right to invoice for services performed. As of December 31, 2022 and September 30, 2022, respectively, the Company recorded $901,872 and $1,125,511, respectively, in deferred revenue.

DISAGGREGATED REVENUE

The following table sets forth the approximate net sales by primary category:

	For the three months ended
	December 31, 2022	December 31, 2021
Licensing of ReadyOp Software	$  460,244	$  449,500
Hardware Sales and Consulting	46,406	69,685
Total	$  506,650	$  519,185

DEFERRED REVENUE

The following table provides a summary of the changes included in deferred revenue during the three months ended December 31, 2022 and year ended September 30, 2022:

	For the three	For the year
	months
	ended	ended
	December 31, 2022	September 30, 2022
Beginning balance	$ 1,125,511	$ 1,131,796
Additions to contract liabilities (1)	283,011	2,011,278
Deductions to contract liabilities (2)	(506,650)	(2,017,563)
Ending balance	$  901,872	$  1,125,511
(1) Customer billings for services not yet rendered
(2) Revenue recognized in the current year related to the beginning liability

EARNINGS PER SHARE

Earnings per share ("EPS") are the amount of earnings attributable to each share of common stock. For convenience, the term is used to refer to either earnings or loss per share. EPS is computed pursuant to section 260-10-45 of the FASB Accounting Standards Codification. Pursuant to ASC Paragraphs 260-10-45-10 through 260-10-45-16, basic EPS shall be computed by dividing income available to common stockholders (the numerator) by the weighted-average number of common shares outstanding (the denominator) during the period. Income available to common stockholders shall be computed by adding both the dividends declared in the period on preferred stock (whether or not paid) and the dividends accumulated for the period on cumulative preferred stock (whether or not earned) from income from continuing operations (if that amount appears in the income statement) and also from net income. The computation of diluted EPS is similar to the computation of basic EPS except that the denominator is increased to include the number of additional common shares that would have been outstanding if the dilutive potential common shares had been issued during the period to reflect the potential dilution that could occur from common shares issuable through contingent shares issuance arrangement, stock options or warrants.

Pursuant to ASC Paragraphs 260-10-45-45-21 through 260-10-45-45-23 Diluted EPS shall be based on the most advantageous conversion rate or exercise price from the standpoint of the security holder. The dilutive effect of outstanding call options and warrants (and their equivalents) issued by the reporting entity shall be reflected in diluted EPS by application of the treasury stock method unless the provisions of paragraphs 260-10-45-35 through 45-36 and 260-10-55-8 through 55-11 require that another method be applied. Equivalents of options and warrants include non-vested stock granted to employees, stock purchase contracts, and partially paid stock subscriptions (see paragraph 260–10–55–23). Anti-dilutive contracts, such as purchased put options and purchased call options, shall be excluded from diluted EPS. Under the treasury stock method: a. Exercise of options and warrants shall be assumed at the beginning of the period (or at time of issuance, if later) and common shares shall be assumed to be issued. b. The proceeds from exercise shall be assumed to be used to purchase common stock at the average market price during the period. (See paragraphs 260-10-45-29 and 260-10-55-4 through 55-5.) c. The incremental shares (the difference between the number of shares assumed issued and the number of shares assumed purchased) shall be included in the denominator of the diluted EPS computation.

As of December 31, 2022 and 2021, we had no options and warrants outstanding.  

As of December 31, 2022 and 2021, we had 512,996 shares of Series A Convertible Preferred stock outstanding, which are convertible into 51,299,600 shares of common stock.

As of December 31, 2022 and 2021, we had 3,209,503 and 3,341,503 shares of Series C Convertible Preferred stock outstanding, respectively, which are convertible into 16,047,515 and 16,707,515 shares of common stock, respectively.

As of December 31, 2022 and 2021, we had 670,904 shares of Series D Preferred stock outstanding which are convertible into 3,354,520 shares of common stock.

As of December 31, 2022 and 2021, we had 3,000,000 shares of Series E Convertible Preferred stock outstanding which are convertible into 300,000,000 shares of common stock.

The table below details the computation of basic and diluted earnings per share ("EPS") for the three months ended December 31, 2022 and 2021:

		For the		For the
		three months		three months
		ended		ended
		December 31, 2022		December 31, 2021
Net income attributable to common stockholders for the period	$	6,740	$	49,903
Weighted average number of shares outstanding		228,630,043		228,578,995
Basic earnings per share	$	0.00	$	0.00

The following table sets for the computation of diluted earnings per share:

		For the		For the
		three months		three months
		ended		ended
		December 31, 2022		December 31, 2021
Net income attributable to common stockholders for the period	$	6,740	$	49,903
Add: Preferred stock dividends		10,344		10,344
Adjusted net income	$	17,084	$	60,247
Weighted average number of shares outstanding		228,630,043		228,578,995
Add: Shares issued upon conversion of preferred stock		370,701,635		371,361,635
Weighted average number of common and common equivalent shares		599,331,678		599,940,630
Diluted earnings per share	$	0.00	$	0.00

FAIR VALUE OF FINANCIAL INSTRUMENTS

The Company measures the fair value of its assets and liabilities under ASC topic 820, "Fair Value Measurements and Disclosures". ASC 820 defines "fair value" as the price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. There was no impact relating to the adoption of ASC 820 to the Company's consolidated financial statements.

ASC 820 also describes three levels of inputs that may be used to measure fair value:

- Level 1: Observable inputs that reflect unadjusted quoted prices for identical assets or liabilities traded in active markets.

- Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.

- Level 3: Inputs that are generally observable. These inputs may be used with internally developed methodologies that result in management's best estimate of fair value.

Financial instruments consist principally of cash, accounts receivable, prepaid expenses and other current assets, accounts payable, accrued expenses and deferred revenue. The carrying amounts of such financial instruments in the accompanying consolidated balance sheet approximate their fair values due to their relatively short-term nature. The carrying amounts approximate fair value. It is management's opinion that the Company is not exposed to any significant currency or credit risks arising from these financial instruments.

INVENTORY

Inventory consists of components held for assembly and finished goods held for resale or to be utilized for installation in projects. Inventory is valued at lower of cost or net realizable value on a first-in, first-out basis. The Company's policy is to record a reserve for technological obsolescence or slow-moving inventory items. The Company only carries finished goods to be shipped along with completed circuit boards and parts necessary for final assembly of finished product. All existing inventory is considered current and usable. The Company recorded no reserve for obsolete inventory as of December 31, 2022 and September 30, 2022, respectively.

At December 31, 2022 inventory was $21,097 of raw materials and $0 of finished goods.

At September 30, 2022, inventory was $21,097 of raw materials and $0 of finished goods.

ADVERTISING COSTS

Advertising costs are expensed as incurred. The Company had advertising costs of $13,149 and $5,025 during the three months ended December 31, 2022 and 2021, respectively.

RECENT ACCOUNTING PRONOUNCEMENTS

All newly issued accounting pronouncements but not yet effective have been deemed either immaterial or not applicable.

LEASE ACCOUNTING

We account for leases in accordance with ASC 842, Leases which requires lessees to recognize lease liabilities and right-of-use (ROU) assets on the balance sheet for most operating leases. We made the accounting policy election not to apply the recognition provisions of ASC 842 to short-term leases which are leases with a lease term of 12 months or less. Instead, we recognize the lease payments for short-term leases on a straight-line basis over the lease term.

Operating lease liabilities reflect our obligation to make future lease payments for real estate locations. Lease terms are comprised of contractual terms. Payments are discounted using the rate we would pay to borrow amounts equal to the lease payments over the lease term (our incremental borrowing rate). We do not separate lease and non-lease components for contracts in which we are the lessee. ROU assets are measured based on lease liabilities adjusted for incentives and timing differences between operating lease expense and payments, recognized on a straight-line basis over the lease term. Operating lease expense is recognized on a straight-line basis over the lease term, while variable lease payments are recognized as incurred. Common area maintenance and other executory costs are the main components of variable lease payments. Operating and variable lease expenses are recorded in general and administrative expense in the Condensed Consolidated Statements of Operations.

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PROPERTY AND EQUIPMENT

3 Months Ended

Dec. 31, 2022

Property and Equipment [Abstract]

PROPERTY AND EQUIPMENT

NOTE 3  - PROPERTY AND EQUIPMENT

At December 31, 2022 and September 30, 2022, property and equipment, net, is as follows:

Office Equipment	$	21,605	$	21,605
Less: Accumulated Depreciation		(7,544)		(6,463)
Total Property and Equipment, net	$	14,061	$	15,142

Depreciation expense for the three months ended December 31, 2022 and 2021, was $1,080 and $814, respectively.

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EQUITY TRANSACTIONS

3 Months Ended

Dec. 31, 2022

Stockholders' Equity Note [Abstract]

EQUITY TRANSACTIONS

NOTE 4 - EQUITY TRANSACTIONS

Preferred Stock Dividends

As of December 31, 2022 and September 30, 2022, the cumulative arrearage of undeclared dividends for Series A Preferred stock totaled $175,487 and $165,035, respectively.

As of the date of this report, we have 200,000,000 authorized shares of preferred stock, par value $0.00001 per share, of which 7,525,403 shares were issued and outstanding. There are currently 5 series of preferred stock designated as follows:

● 1,250,000 shares have been designated as Series A Preferred Stock, 512,996 of which are issued and outstanding;

● 10 shares have been designated as Series B Preferred Stock, none of which is issued and outstanding;

● 50,000,000 shares have been designated as Series C Preferred Stock, 3,209,503 of which are issued and outstanding; and

● 10,000,000 shares have been designated Series D Preferred stock, of which 670,904 are issued and outstanding; and

● 10,000,000 shares have been designated Series E Preferred stock, of which 3,000,000 are issued and outstanding.

Pursuant to our Articles of Incorporation establishing our preferred stock:

● A holder of shares of the Series A Preferred Stock is entitled to the number of votes equal to the number of shares of the Series A Preferred Stock held by such holder multiplied by one on all matters submitted to a vote of our stockholders. Each one share of our Series A Preferred Stock shall be convertible into 100 shares of our common stock. Each holder of Series A Preferred Stock is entitled to receive cumulative dividends at the rate of 8% of $1.00 per annum on each outstanding share of Series A Preferred Stock then held by such holder, on a pro rata basis.

● A holder of shares of the Series B Preferred Stock is entitled one vote per share on all matters submitted to a vote of our stockholders. If at least one share of Series B Preferred Stock is issued and outstanding, then the total aggregate issued shares of Series B Preferred Stock at any given time, regardless of their number, shall have voting rights equal to two times the sum of the total number of shares of our common stock which are issued and outstanding at the time of voting, plus the total number of shares of any shares of our preferred stock which are issued and outstanding at the time of voting. A holder of shares of the Series B Preferred Stock shall have no conversion rights or rights to dividends.

● A holder of shares of the Series C Preferred Stock is entitled to the number of votes equal to the number of shares of the Series C Preferred Stock held by such holder multiplied by 5 on all matters submitted to a vote of our stockholders. In addition, the holders of our Series C Preferred Stock shall be entitled to receive dividends when, as and if declared by the Board of Directors, in its sole discretion. No dividends have been declared. Finally, each one share of our Series C Preferred Stock shall be convertible into five shares of our common stock.

● A holder of shares of the Series D Preferred Stock is entitled, to the number of votes equal to the number of shares of the Series D Preferred Stock held by such holder multiplied by 5 on all matters submitted to a vote of our stockholders. In addition, the holders of our Series D Preferred Stock shall be entitled to receive dividends when, as and if declared by the Board of Directors, in its sole discretion. No dividends have been declared. Finally, each one share of our Series D Preferred Stock shall be convertible into five shares of our common stock.

● A holder of shares of the Series E Preferred Stock is entitled, to the number of votes equal to the number of shares of the Series E Preferred Stock held by such holder multiplied by 100 on all matters submitted to a vote of our stockholders. In addition, the holders of our Series E Preferred Stock shall be entitled to receive dividends when, as and if declared by the Board of Directors, in its sole discretion. No dividends have been declared. Finally, each one share of our Series E Preferred Stock shall be convertible into 100 shares of our common stock.

Common stock issued for Conversion of C Preferred

During the three months ended December 31, 2022, the holder of Series C preferred stock, converted 132,000 shares of Series C Preferred Stock into 661,000 shares of Common Stock at the stated conversion rate with no gain or loss recognized.

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RELATED PARTY TRANSACTIONS

3 Months Ended

Dec. 31, 2022

Related Party Transactions [Abstract]

RELATED PARTY TRANSACTIONS

NOTE 6 - RELATED PARTY TRANSACTIONS

Through December 1, 2021, the Company leased its office space from VoiceInterop, the Company's former wholly owned subsidiary and now 96% owned by our shareholders for approximately $1,400 per month. On February 14, 2020, VoiceInterop was deconsolidated and is no longer our subsidiary.

Rent expense incurred during the three months ended December 31, 2022 and 2021 was $2,343 and $5,886, respectively (See Note 7).

As of December 31, 2022, the Company advanced $53,302 to VoiceInterop, the Company's former wholly owned subsidiary and now 96% owned by our shareholders. The amount is included in due from related party on the consolidated balance sheet. The amount is due on September 30, 2024, and bears interest at 5% effective October 1, 2022. As of December 31, 2022, the Company recorded $666 in interest receivable – related party.  

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COMMITMENTS AND CONTINGENCIES

3 Months Ended

Dec. 31, 2022

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS AND CONTINGENCIES

NOTE 7 - COMMITMENTS AND CONTINGENCIES

Obligation Under Operating Lease

On December 2, 2022, and effective on January 1, 2023, the Company signed a two-year lease of 1,145 square feet for our principal offices in Clearwater, Florida. The monthly rent is $2,134 in year one and increases to $2,198 in year two. The lease expires on December 31, 2024.  On January 1, 2023, upon adoption of ASC 842, the Company will recognize  right-to-use assets as operating leases and operating lease obligations.

On December 1, 2021, the Company signed a one year lease approximately 2,000 square feet for our principal offices in Boca Raton, Florida. The monthly rent is $2,200. The lease expired on November 30, 2022.

Rent expense incurred during the three months ended December 31, 2022 and 2021 was $2,343 and $5,886, respectively (See Note 6).

Revenue and Accounts Receivable Concentration

For the three months ended December 31, 2022, one customer accounted for 16% of the Company's revenues. 

For the three months ended December 31, 2021, one customer accounted for 14% of the Company's revenues.

As of December 31, 2022, no customers accounted for more than 10% of the Company's total outstanding accounts receivable.

As of September 30, 2022, no customer accounted for more than 10% of the Company's total outstanding accounts receivable.

Major Supplier and Sole Manufacturing Source

The Company relies on no major supplier for its products. The Company has contracted with local manufacturing facilities to provide completed circuit boards used in the assembly of its IP gateway devices. Interruption of adequate supply of components, primarily computer chips, to the manufacturing source presents additional risk to the Company. The Company believes that additional commercial facilities exist at competitive rates to match the resources and capabilities of its existing manufacturing source, but the current worldwide shortage of computer chips does limit our ability to supply our proprietary radio gateways to clients and other buyers .

Employment Agreements

In December 2016, the Board of Directors accepted the resignation of Larry M. Reid as Chief Executive Officer of the corporation and appointed Mr. Reid as Chief Financial Officer. The Board also appointed Michael M. Moore as Chief Executive Officer.

Under the terms of an employment agreement effective on November 28, 2016, Mr. Moore as CEO receives an annual salary of $200,000. The term of agreement is for a one-year period beginning on the effective date and shall automatically renew and continue in effect for additional one-year periods. Effective April 20, 2022, the annual compensation increased to $220,000.

Under the terms of an employment agreement effective on March 13, 2015, Mr. Reid as CFO receives an annual salary of $96,000. The term of agreement is for a one-year period beginning on the effective date and shall automatically renew and continue in effect for additional one-year periods. Effective October 1, 2021, the annual compensation increased to $104,000.

Exclusive Licensing Agreement

On May 5, 2017, the Company entered into an Exclusive Licensing Agreement with Sublicensing Terms (the "Agreement") with the University of South Florida Research Foundation, Inc. ("USFRF") relating to an exclusive license of certain patent rights in connection with one of USFRF's U.S. Patent Applications. Both parties recognize that the research and development work provided by the Company was sufficient for USFRF to enter into the Agreement with the Company.

The Agreement is effective April 25, 2017 and continues until the later of the date that no Licensed Patent remains a pending application or an enforceable patent or the date on which the Licensee's obligation to pay royalties expires.

The Company agreed to pay USFRF a royalty of 3% for sales of all Licensed Products and Licensed Processes and agreed to pay USFRF minimum royalty payments as follows:

Payment	Year
$1,000	2019
$4,000	2020
$8,000	2021

-and every year thereafter on the same date, for the life of the agreement.

In the event the Company proposes to sell any Equity Securities, then USFRF will have the right to purchase 5% of the securities issued in such offering on the same terms and conditions are offered to other purchasers in such financing. As of December 31, 2022 and 2021, the Company has recorded $3,640 and $2,953 for the minimum royalty for the fiscal year ended 2022 and 2021.

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SUBSEQUENT EVENT

3 Months Ended

Dec. 31, 2022

Subsequent Events [Abstract]

SUBSEQUENT EVENT

NOTE 9 - SUBSEQUENT EVENT

On January 6, 2023, the Board of Directors approved a stock repurchase program pursuant to which the Company may repurchase shares of its outstanding common stock. The repurchase program may be extended, suspended, or discontinued at any time.

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Accounting Policies, by Policy (Policies)

3 Months Ended

Dec. 31, 2022

Accounting Policies [Abstract]

PRINCIPLES OF CONSOLIDATION

PRINCIPLES OF CONSOLIDATION

The accompanying consolidated financial statements contain the consolidated accounts of Cleartronic, Inc. and its subsidiary, ReadyOp Communications, Inc. All material intercompany transactions and balances have been eliminated.

BASIS OF PRESENTATION

BASIS OF PRESENTATION

The financial statements are prepared in accordance with Generally Accepted Accounting Principles in the United States of America (“U.S. GAAP”). The unaudited interim financial information furnished herein reflects all adjustments, consisting only of normal recurring items, which in the opinion of management are necessary to fairly state the Company’s financial position, results of operations and cash flows for the dates and periods presented and to make such information not misleading.  

These unaudited financial statements should be read in conjunction with the Company’s audited financial statements for the year ended September 30, 2022, contained in our General Form for Registration of Securities of Form 10-K as filed with the Securities and Exchange Commission (the “Commission”) on December 29, 2022. The results of operations for the three months ended December 31, 2022, are not necessarily indicative of results to be expected for any other interim period or the fiscal year ending September 30, 2023.

USE OF ESTIMATES

USE OF ESTIMATES

In preparing the financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the balance sheet and operations for the reporting period.

Although these estimates are based on management's knowledge of current events and actions it may undertake in the future, they may ultimately differ from actual results.

Significant estimates include the assumptions used in valuation of deferred tax assets, estimated useful life of property and equipment, valuation of inventory and allowance for doubtful accounts.

CASH AND CASH EQUIVALENTS

CASH AND CASH EQUIVALENTS

For financial statement purposes, the Company considers all highly liquid investments purchased with original maturities of three months or less to be cash equivalents. The Company did not own any cash equivalents on December 31, 2022 and September 30, 2022.

ACCOUNTS RECEIVABLE

ACCOUNTS RECEIVABLE

The Company provides an allowance for uncollectible accounts based upon a periodic review and analysis of outstanding accounts receivable balances. Uncollectible receivables are charged to the allowance when deemed uncollectible. Recoveries of accounts previously written off are used to credit the allowance account in the periods in which the recoveries are made. When a client is invoiced, the amount is recorded as an asset in Accounts Receivable and as Deferred Revenue in Current Liabilities. When payment is received the amount is moved to Cash on the balance sheet and Accounts Receivables are reduced. The amount listed as Deferred Revenue is amortized monthly over the license period.

The Company provided $18,000 and $18,000 for allowances of doubtful accounts as of December 31, 2022 and September 30, 2022, respectively.

PREPAID EXPENSES AND OTHER CURRENT ASSETS

PREPAID EXPENSES AND OTHER CURRENT ASSETS

Prepaid expenses and other current assets consist primarily of deferred subscriber costs and prepaid expenses. Deferred subscriber costs totaling $25,500 and $38,250 at December 31, 2022 and September 30, 2022, respectively. Prepaid expenses totaling $25,667 and $18,165 at December 31, 2022 and September 30, 2022, respectively are primarily for insurance and other items

PROPERTY AND EQUIPMENT

PROPERTY AND EQUIPMENT

Property and equipment are recorded at cost and depreciated or amortized using the straight-line method over the estimated useful life of the asset or the underlying lease term for leasehold improvements, whichever is shorter or when the property and equipment is put into service.

CONCENTRATION OF CREDIT RISK

CONCENTRATION OF CREDIT RISK

The Company currently maintains cash balances at one FDIC-insured banking institution. Deposits held in non interest-bearing transaction accounts are insured up to a maximum of $250,000 at all FDIC-insured institutions. As of December 31, 2022 and September 30, 2022, the Company had $15,720 and $208,135, respectively, in excess of FDIC insurance limits.

RESEARCH AND DEVELOPMENT COSTS

RESEARCH AND DEVELOPMENT COSTS

The Company expenses research and development costs as incurred.

For the three months ended December 31, 2022 and 2021, the Company had $21,815 and $49,260 respectively, in research and development costs.

REVENUE RECOGNITION AND DEFERRED REVENUES

REVENUE RECOGNITION AND DEFERRED REVENUES

The Company revenue recognition policy follows guidance from Accounting Standards Codification (ASC) 606, Revenue from contract with customers. Revenue is recognized when the Company has transferred promised goods and services to the customer and in the amount that reflects the consideration to which the company expects to be entitled in exchange for those goods and services. The Company applies the following five-step model in order to determine this amount:

i. Identification of Contact with a customer;

ii. Identify the performance obligation of the contract

iii. Determine transaction price;

iv. Allocation of the transaction price to the performance obligations; and

v. Recognition of revenue when (or as) the Company satisfies each performance obligation.

The Company generates revenue primarily through the sale of integrated hardware and software licenses. The portion of the contract that is associated with ongoing hosting and related customer service is amortized monthly over the license period. The Company incurs certain incremental contract costs (referred to as deferred subscriber acquisition costs, net) including selling expenses (primarily commissions) related to acquiring customers. Deferred subscriber acquisition costs, net are included in prepaid and expenses and other current assets on the consolidated balance sheet. Commissions paid in connection with acquiring new customers are determined based on the value of the contractual fees. Deferred subscriber acquisition costs will be expensed as incurred on the date the revenue associated with the cost is recognized. As of December 31, 2022 and September 30, 2022, respectively, the Company recorded $25,500 and $38,250, respectively, in deferred subscriber costs, which are included as a component of prepaid expense.

In transactions in which hardware is sold to a customer, the Company recognizes the revenue when the hardware has been shipped to the customer. The hardware supplied by the Company does not require a related software license and can be operated and fully functional without the Company's software.

From time to time clients request special training meetings. We send employees to these meeting and charge our clients on a per diem basis. These charges are recorded as consulting fees on our income statement.

The Company allocates the transaction price to each performance obligation based on a relative stand alone selling price. Revenue associated with the sale and installation of system licenses is recognized once installation is complete.

Customer billings for services not yet rendered are deferred and recognized as revenue as services are provided. These fees are recorded as current deferred revenue on the consolidated balance sheet as the Company expects to satisfy any remaining performance obligations as well as recognize the related revenue within the next twelve months. Accordingly, the Company has applied the practical expedient regarding deferred revenue to exclude the value of remaining performance obligations if (i) the contract has an original expected term of one year or less or (ii) the Company recognizes revenue in proportion to the amount it has the right to invoice for services performed. As of December 31, 2022 and September 30, 2022, respectively, the Company recorded $901,872 and $1,125,511, respectively, in deferred revenue.

DISAGGREGATED REVENUE

DISAGGREGATED REVENUE

The following table sets forth the approximate net sales by primary category:

	For the three months ended
	December 31, 2022	December 31, 2021
Licensing of ReadyOp Software	$  460,244	$  449,500
Hardware Sales and Consulting	46,406	69,685
Total	$  506,650	$  519,185

DEFERRED REVENUE

DEFERRED REVENUE

The following table provides a summary of the changes included in deferred revenue during the three months ended December 31, 2022 and year ended September 30, 2022:

	For the three	For the year
	months
	ended	ended
	December 31, 2022	September 30, 2022
Beginning balance	$ 1,125,511	$ 1,131,796
Additions to contract liabilities (1)	283,011	2,011,278
Deductions to contract liabilities (2)	(506,650)	(2,017,563)
Ending balance	$  901,872	$  1,125,511
(1) Customer billings for services not yet rendered
(2) Revenue recognized in the current year related to the beginning liability

EARNINGS PER SHARE

EARNINGS PER SHARE

Earnings per share ("EPS") are the amount of earnings attributable to each share of common stock. For convenience, the term is used to refer to either earnings or loss per share. EPS is computed pursuant to section 260-10-45 of the FASB Accounting Standards Codification. Pursuant to ASC Paragraphs 260-10-45-10 through 260-10-45-16, basic EPS shall be computed by dividing income available to common stockholders (the numerator) by the weighted-average number of common shares outstanding (the denominator) during the period. Income available to common stockholders shall be computed by adding both the dividends declared in the period on preferred stock (whether or not paid) and the dividends accumulated for the period on cumulative preferred stock (whether or not earned) from income from continuing operations (if that amount appears in the income statement) and also from net income. The computation of diluted EPS is similar to the computation of basic EPS except that the denominator is increased to include the number of additional common shares that would have been outstanding if the dilutive potential common shares had been issued during the period to reflect the potential dilution that could occur from common shares issuable through contingent shares issuance arrangement, stock options or warrants.

Pursuant to ASC Paragraphs 260-10-45-45-21 through 260-10-45-45-23 Diluted EPS shall be based on the most advantageous conversion rate or exercise price from the standpoint of the security holder. The dilutive effect of outstanding call options and warrants (and their equivalents) issued by the reporting entity shall be reflected in diluted EPS by application of the treasury stock method unless the provisions of paragraphs 260-10-45-35 through 45-36 and 260-10-55-8 through 55-11 require that another method be applied. Equivalents of options and warrants include non-vested stock granted to employees, stock purchase contracts, and partially paid stock subscriptions (see paragraph 260–10–55–23). Anti-dilutive contracts, such as purchased put options and purchased call options, shall be excluded from diluted EPS. Under the treasury stock method: a. Exercise of options and warrants shall be assumed at the beginning of the period (or at time of issuance, if later) and common shares shall be assumed to be issued. b. The proceeds from exercise shall be assumed to be used to purchase common stock at the average market price during the period. (See paragraphs 260-10-45-29 and 260-10-55-4 through 55-5.) c. The incremental shares (the difference between the number of shares assumed issued and the number of shares assumed purchased) shall be included in the denominator of the diluted EPS computation.

As of December 31, 2022 and 2021, we had no options and warrants outstanding.  

As of December 31, 2022 and 2021, we had 512,996 shares of Series A Convertible Preferred stock outstanding, which are convertible into 51,299,600 shares of common stock.

As of December 31, 2022 and 2021, we had 3,209,503 and 3,341,503 shares of Series C Convertible Preferred stock outstanding, respectively, which are convertible into 16,047,515 and 16,707,515 shares of common stock, respectively.

As of December 31, 2022 and 2021, we had 670,904 shares of Series D Preferred stock outstanding which are convertible into 3,354,520 shares of common stock.

As of December 31, 2022 and 2021, we had 3,000,000 shares of Series E Convertible Preferred stock outstanding which are convertible into 300,000,000 shares of common stock.

The table below details the computation of basic and diluted earnings per share ("EPS") for the three months ended December 31, 2022 and 2021:

		For the		For the
		three months		three months
		ended		ended
		December 31, 2022		December 31, 2021
Net income attributable to common stockholders for the period	$	6,740	$	49,903
Weighted average number of shares outstanding		228,630,043		228,578,995
Basic earnings per share	$	0.00	$	0.00

The following table sets for the computation of diluted earnings per share:

		For the		For the
		three months		three months
		ended		ended
		December 31, 2022		December 31, 2021
Net income attributable to common stockholders for the period	$	6,740	$	49,903
Add: Preferred stock dividends		10,344		10,344
Adjusted net income	$	17,084	$	60,247
Weighted average number of shares outstanding		228,630,043		228,578,995
Add: Shares issued upon conversion of preferred stock		370,701,635		371,361,635
Weighted average number of common and common equivalent shares		599,331,678		599,940,630
Diluted earnings per share	$	0.00	$	0.00

FAIR VALUE OF FINANCIAL INSTRUMENTS

FAIR VALUE OF FINANCIAL INSTRUMENTS

The Company measures the fair value of its assets and liabilities under ASC topic 820, "Fair Value Measurements and Disclosures". ASC 820 defines "fair value" as the price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. There was no impact relating to the adoption of ASC 820 to the Company's consolidated financial statements.

ASC 820 also describes three levels of inputs that may be used to measure fair value:

- Level 1: Observable inputs that reflect unadjusted quoted prices for identical assets or liabilities traded in active markets.

- Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.

- Level 3: Inputs that are generally observable. These inputs may be used with internally developed methodologies that result in management's best estimate of fair value.

Financial instruments consist principally of cash, accounts receivable, prepaid expenses and other current assets, accounts payable, accrued expenses and deferred revenue. The carrying amounts of such financial instruments in the accompanying consolidated balance sheet approximate their fair values due to their relatively short-term nature. The carrying amounts approximate fair value. It is management's opinion that the Company is not exposed to any significant currency or credit risks arising from these financial instruments.

INVENTORY

INVENTORY

Inventory consists of components held for assembly and finished goods held for resale or to be utilized for installation in projects. Inventory is valued at lower of cost or net realizable value on a first-in, first-out basis. The Company's policy is to record a reserve for technological obsolescence or slow-moving inventory items. The Company only carries finished goods to be shipped along with completed circuit boards and parts necessary for final assembly of finished product. All existing inventory is considered current and usable. The Company recorded no reserve for obsolete inventory as of December 31, 2022 and September 30, 2022, respectively.

At December 31, 2022 inventory was $21,097 of raw materials and $0 of finished goods.

At September 30, 2022, inventory was $21,097 of raw materials and $0 of finished goods.

ADVERTISING COSTS

ADVERTISING COSTS

Advertising costs are expensed as incurred. The Company had advertising costs of $13,149 and $5,025 during the three months ended December 31, 2022 and 2021, respectively.

RECENT ACCOUNTING PRONOUNCEMENTS

RECENT ACCOUNTING PRONOUNCEMENTS

All newly issued accounting pronouncements but not yet effective have been deemed either immaterial or not applicable.

LEASE ACCOUNTING

LEASE ACCOUNTING

We account for leases in accordance with ASC 842, Leases which requires lessees to recognize lease liabilities and right-of-use (ROU) assets on the balance sheet for most operating leases. We made the accounting policy election not to apply the recognition provisions of ASC 842 to short-term leases which are leases with a lease term of 12 months or less. Instead, we recognize the lease payments for short-term leases on a straight-line basis over the lease term.

Operating lease liabilities reflect our obligation to make future lease payments for real estate locations. Lease terms are comprised of contractual terms. Payments are discounted using the rate we would pay to borrow amounts equal to the lease payments over the lease term (our incremental borrowing rate). We do not separate lease and non-lease components for contracts in which we are the lessee. ROU assets are measured based on lease liabilities adjusted for incentives and timing differences between operating lease expense and payments, recognized on a straight-line basis over the lease term. Operating lease expense is recognized on a straight-line basis over the lease term, while variable lease payments are recognized as incurred. Common area maintenance and other executory costs are the main components of variable lease payments. Operating and variable lease expenses are recorded in general and administrative expense in the Condensed Consolidated Statements of Operations.

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)

3 Months Ended

Dec. 31, 2022

Accounting Policies [Abstract]

Schedule of disaggregated revenue

	For the three months ended
	December 31, 2022	December 31, 2021
Licensing of ReadyOp Software	$  460,244	$  449,500
Hardware Sales and Consulting	46,406	69,685
Total	$  506,650	$  519,185

Schedule of deferred revenue

	For the three	For the year
	months
	ended	ended
	December 31, 2022	September 30, 2022
Beginning balance	$ 1,125,511	$ 1,131,796
Additions to contract liabilities (1)	283,011	2,011,278
Deductions to contract liabilities (2)	(506,650)	(2,017,563)
Ending balance	$  901,872	$  1,125,511
(1) Customer billings for services not yet rendered
(2) Revenue recognized in the current year related to the beginning liability

Schedule of earning per share

		For the		For the
		three months		three months
		ended		ended
		December 31, 2022		December 31, 2021
Net income attributable to common stockholders for the period	$	6,740	$	49,903
Weighted average number of shares outstanding		228,630,043		228,578,995
Basic earnings per share	$	0.00	$	0.00

		For the		For the
		three months		three months
		ended		ended
		December 31, 2022		December 31, 2021
Net income attributable to common stockholders for the period	$	6,740	$	49,903
Add: Preferred stock dividends		10,344		10,344
Adjusted net income	$	17,084	$	60,247
Weighted average number of shares outstanding		228,630,043		228,578,995
Add: Shares issued upon conversion of preferred stock		370,701,635		371,361,635
Weighted average number of common and common equivalent shares		599,331,678		599,940,630
Diluted earnings per share	$	0.00	$	0.00

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PROPERTY AND EQUIPMENT (Tables)

3 Months Ended

Dec. 31, 2022

Property and Equipment [Abstract]

Schedule of property and equipment net

Office Equipment	$	21,605	$	21,605
Less: Accumulated Depreciation		(7,544)		(6,463)
Total Property and Equipment, net	$	14,061	$	15,142

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COMMITMENTS AND CONTINGENCIES (Tables)

3 Months Ended

Dec. 31, 2022

Commitments and Contingencies Disclosure [Abstract]

Schedule of Minimum Royalty Payments

Payment	Year
$1,000	2019
$4,000	2020
$8,000	2021

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($)	3 Months Ended		12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Sep. 30, 2022
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) [Line Items]
Allowances for doubtful accounts	$ 18,000		$ 18,000
Deferred costs	25,500		38,250
Prepaid expenses	25,667		18,165
Cash balance insured by FDIC per financial institution	250,000
Amount of FDIC insurance limits	15,720		208,135
Research and development costs	21,815	$ 49,260
Deferred subscriber costs, net balance	25,500		38,250
Deferred revenue	901,872		1,125,511
Inventory	21,097		21,097
Raw materials	0		$ 0
Advertising cost	$ 13,149	$ 5,025
Series A Convertible Preferred stock [Member]
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) [Line Items]
Preferred stock, shares outstanding (in Shares)	512,996	512,996
Series A Preferred Stock [Member]
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) [Line Items]
Preferred stock, shares outstanding (in Shares)	512,996		512,996
Number common stock issued for convertible preferred stock (in Shares)	51,299,600	51,299,600
Series C Preferred Stock [Member]
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) [Line Items]
Preferred stock, shares outstanding (in Shares)	3,209,503		3,209,503
Number common stock issued for convertible preferred stock (in Shares)	16,047,515	16,707,515
Preferred stock outstanding (in Shares)	3,209,503	3,341,503
Series D Preferred Stock [Member]
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) [Line Items]
Preferred stock, shares outstanding (in Shares)	670,904	670,904	670,904
Number common stock issued for convertible preferred stock (in Shares)	3,354,520	3,354,520
Series E Convertible Preferred stock [Member]
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) [Line Items]
Preferred stock, shares outstanding (in Shares)	3,000,000		3,000,000
Number common stock issued for convertible preferred stock (in Shares)	300,000,000	300,000,000
Preferred stock outstanding (in Shares)	3,000,000	3,000,000

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - Schedule of disaggregated revenue - USD ($)	3 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - Schedule of disaggregated revenue [Line Items]
Total disaggregated revenue	$ 506,650	$ 519,185
Licensing of ReadyOp Software [Member]
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - Schedule of disaggregated revenue [Line Items]
Total disaggregated revenue	460,244	449,500
Hardware Sales and Consulting [Member]
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - Schedule of disaggregated revenue [Line Items]
Total disaggregated revenue	$ 46,406	$ 69,685

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - Schedule of deferred revenue - USD ($)		3 Months Ended	12 Months Ended
		Dec. 31, 2022	Sep. 30, 2022
Schedule of Deferred Revenue [Abstract]
Beginning balance		$ 1,125,511	$ 1,131,796
Additions to contract liabilities	[1]	283,011	2,011,278
Deductions to contract liabilities	[2]	(506,650)	(2,017,563)
Ending balance		$ 901,872	$ 1,125,511

[1] Customer billings for services not yet rendered

[2] Revenue recognized in the current year related to the beginning liability

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - Schedule of earning per share - USD ($)	3 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Schedule of Earning Per Share [Abstract]
Net income attributable to common stockholders for the period	$ 6,740	$ 49,903
Add: Preferred stock dividends	10,344	10,344
Adjusted net income	$ 17,084	$ 60,247
Weighted average number of shares outstanding	228,630,043	228,578,995
Add: Shares issued upon conversion of preferred stock	370,701,635	371,361,635
Weighted average number of common and common equivalent shares	599,331,678	599,940,630
Diluted earnings per share	$ 0	$ 0
Basic earnings per share	$ 0	$ 0

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PROPERTY AND EQUIPMENT (Details) - USD ($)	3 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Property, Plant and Equipment [Abstract]
Depreciation expense	$ 1,080	$ 814

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PROPERTY AND EQUIPMENT (Details) - Schedule of property and equipment net - USD ($)	Dec. 31, 2022	Sep. 30, 2022
Schedule of Property and Equipment [Abstract]
Office Equipment	$ 21,605	$ 21,605
Less: Accumulated Depreciation	(7,544)	(6,463)
Total Property and Equipment, net	$ 14,061	$ 15,142

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EQUITY TRANSACTIONS (Details) - USD ($)	3 Months Ended
	Dec. 31, 2022	Sep. 30, 2022
EQUITY TRANSACTIONS (Details) [Line Items]
Equity transactions description	There are currently 5 series of preferred stock designated as follows:   ● 1,250,000 shares have been designated as Series A Preferred Stock, 512,996 of which are issued and outstanding;   ● 10 shares have been designated as Series B Preferred Stock, none of which is issued and outstanding;   ● 50,000,000 shares have been designated as Series C Preferred Stock, 3,209,503 of which are issued and outstanding; and   ● 10,000,000 shares have been designated Series D Preferred stock, of which 670,904 are issued and outstanding; and   ● 10,000,000 shares have been designated Series E Preferred stock, of which 3,000,000 are issued and outstanding.
Number of Common Stock shares issued in conversion of Series C Preferred Stock	661,000
Common Stock [Member]
EQUITY TRANSACTIONS (Details) [Line Items]
Number of Common Stock shares issued in conversion of Series C Preferred Stock	132,000
Series A Preferred Stock [Member]
EQUITY TRANSACTIONS (Details) [Line Items]
Cumulative undeclared dividend (in Dollars)	$ 175,487	$ 165,035
Shares of common stock	100
Cumulative dividends	8.00%
Preferred stock outstanding (in Dollars per share)	$ 1
Series E Preferred Stock [Member]
EQUITY TRANSACTIONS (Details) [Line Items]
Shares of common stock	100
Series C Preferred Stock [Member] | Preferred Stock [Member]
EQUITY TRANSACTIONS (Details) [Line Items]
Number of Series C Preferred Stock converted to common stock	3

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RELATED PARTY TRANSACTIONS (Details) - USD ($)		3 Months Ended
	Dec. 02, 2022	Dec. 31, 2022	Dec. 31, 2021	Sep. 30, 2022	Dec. 01, 2021
RELATED PARTY TRANSACTIONS (Details) [Line Items]
Rent expense	$ 2,198	$ 2,343	$ 5,886
Related party transactions		53,302		$ 53,302
Interest receivable		$ 666
Subsidiaries [Member] | VoiceInterop Inc [Member]
RELATED PARTY TRANSACTIONS (Details) [Line Items]
Percentage of owned by our shareholders		96.00%			96.00%
Amount of owned by our shareholders					$ 1,400
Related party transactions		$ 53,302
Percentage of interest bear		5.00%

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COMMITMENTS AND CONTINGENCIES (Details)					1 Months Ended				3 Months Ended
	Dec. 02, 2022 USD ($) m²	Dec. 01, 2021 USD ($) ft²	Oct. 02, 2021 USD ($)	Mar. 13, 2015 USD ($)	Dec. 31, 2022	Sep. 30, 2022	Apr. 20, 2022 USD ($)	Nov. 28, 2016 USD ($)	Dec. 31, 2022 USD ($)	Dec. 31, 2021 USD ($)
COMMITMENTS AND CONTINGENCIES (Details) [Line Items]
Area of leased facility	1,145	2,000
Monthly rental cost	$ 2,134	$ 2,200
Rent expense	$ 2,198								$ 2,343	$ 5,886
Lease expiration date		Nov. 30, 2022
Concentration risk percentage										14.00%
Concentration risk percentage					10.00%	10.00%
Royalty Expense									$ 3,640	$ 2,953
USFRF [Member]
COMMITMENTS AND CONTINGENCIES (Details) [Line Items]
Royalty percentage									3.00%
Percentage of right to purchase securities									5.00%
Chief Executive Officer [Member]
COMMITMENTS AND CONTINGENCIES (Details) [Line Items]
Officers salary							$ 220,000	$ 200,000
Chief Financial Officer [Member]
COMMITMENTS AND CONTINGENCIES (Details) [Line Items]
Officers salary			$ 104,000	$ 96,000
Revenue Benchmark [Member]
COMMITMENTS AND CONTINGENCIES (Details) [Line Items]
Concentration risk percentage									16.00%

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COMMITMENTS AND CONTINGENCIES (Details) - Schedule of Minimum Royalty Payments - USFRF [Member]	Dec. 31, 2022 USD ($)
COMMITMENTS AND CONTINGENCIES (Details) - Schedule of Minimum Royalty Payments [Line Items]
2019	$ 1,000
2020	4,000
2021	$ 8,000