Quarterly Report (10-q)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

_____________

FORM10-Q



(Mark One) [ X ]	Quarterly Report Under Section 13 or 15(d) of the Securities Exchange Act of 1934

	For the quarterly period ended June 30, 2020

[ ]	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.)

8000 North Federal Highway, Boca Raton, Florida 33487

(Address of principal executive offices) (Zip Code)

561-939-3300

(Registrant’s telephone number, including area code)

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

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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: 223,994,635 shares as of August 14, 2020.

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PART I - FINANCIAL INFORMATION

Item 1. Financial Statements


CLEARTRONIC, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS

ASSETS
	June 30, 2020	September 30, 2019
	(unaudited)
Current assets:
Cash	$ 62,848	$ 27,698
Accounts receivable, net	180,115	215,956
Inventory	6,796	19,838
Prepaid expenses and other current assets	-	15,000
Note receivable	25,000	-
Assets from discontinued operations	-	4,136
Total current assets	274,759	282,628

Property and Equipment, net	8,879	-

Other assets:
Due from related party	13,420	-
Other assets	-	8,656
ReadyOp software platform (net of amortization)	-	10,878
ReadyMed software platform (net of amortization)	461,918	-
Total other assets	475,338	19,534
Total assets	$ 758,976	$ 302,162

LIABILITIES AND STOCKHOLDERS' DEFICIT

Current liabilities:
Accounts payable	$ 236,836	$ 264,855
Accrued expenses	54,544	123,300
Deferred revenue, current portion	600,779	676,526
Notes payable stockholders	55,449	53,729
Note payable, current portion	38,842	-
Customer deposits	26,756	26,756
Liabilities from discontinued operations, current portion	-	184,559
Total current liabilities	1,013,206	1,329,725

Long Term Liabilities
Notes payable stockholders, net of current portion	16,688	39,140
Note payable, net of current portion	67,885	-
Deferred revenue, net of current portion	33,667	100,011
Liabilities from discontinued operations, net of current portion	-	10,667
Total long term liabilities	118,240	149,818
Total liabilities	1,131,446	1,479,543

Commitments and Contingencies (See Note 9)

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,	45	45
4,433,375 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,	2,240	2,120
223,994,635 and 211,994,635 shares issued and outstanding, respectively
Additional paid-in capital	15,866,718	15,041,522
Accumulated Deficit	(16,241,515)	(16,221,110)
Total stockholders' deficit	(372,470)	(1,177,381)
Total liabilities and stockholders' deficit	$ 758,976	$ 302,162

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

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CLEARTRONIC, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(Unaudited)

	For the three	For the three	For the nine	For the nine
	months ended	months ended	months ended	months ended
	June 30, 2020	June 30, 2019	June 30, 2020	June 30, 2019
Revenue	$ 375,250	$ 365,296	$ 1,319,152	$ 835,631
Cost of Revenue	73,142	81,435	322,564	178,541
Gross Profit	302,108	283,861	996,588	657,090

Operating Expenses:
Selling expenses	116,624	155,077	388,895	410,315
Administrative expenses	91,160	99,939	292,008	275,828
Amortization	53,050	16,299	148,960	56,943
Research and development	28,192	44,248	114,993	157,789
Total Operating Expenses	289,026	315,563	944,856	900,875

Other expense and interest expense	(2,116)	(1,799)	(7,201)	(11,913)
Total Other Income(Expense)	(2,116)	(1,799)	(7,201)	(11,913)

Income/(Loss) from continuing operations before income taxes	10,966	(33,501)	44,531	(255,698)

Provision for income taxes from continuing operations	-	-	-	-

Income/(Loss) from continuing operations	10,966	(33,501)	44,531	(255,698)

Discontinued operations
Income/(Loss) from discontinued operations	-	14,337	(64,936)	(23,752)

Provision for Income taxes from discontinued operations	-	-	-	-
Income/(Loss) from discontinued operations	-	14,337	(64,936)	(23,752)

Net Income/(Loss)	10,966	(19,164)	(20,405)	(279,450)

Preferred stock dividends Series A Preferred	(10,231)	(10,231)	(30,806)	(30,694)

Net income/(loss) attributable to common stockholders	$ 735	$ (29,395)	$ (51,211)	$ (310,144)

Net income/(loss) per share - basic and diluted
Income/(loss) from Continuing Operations	$ 0.00	$ (0.00)	$ 0.00	$ (0.00)
Income/(loss) from discontinued operations	$ -	$ 0.00	$ (0.00)	$ (0.00)
Net income/(loss) per common share - basic and diluted	$ 0.00	$ (0.00)	$ (0.00)	$ (0.00)

Weighted Average of number of shares outstanding
basic and diluted	223,994,635	207,647,935	222,355,291	206,414,819

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

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CLEARTRONIC, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOW
(Unaudited)

	For nine months	For nine months
	ended	ended
	June 30, 2020	June 30, 2019

NET LOSS	$ (20,405)	$ (279,450)

Adjustments to reconcile net loss to net cash provided by (used in)
operating activities:
Amortization of ReadyOp software platform	10,878	48,897
Amortization of ReadyOp customer list	-	8,046
Amortization of ReadyMed software platform	138,082	-
Depreciation expense	150	-
Provision (Recovery) for bad debt	(13,335)	22,000
(Increase) decrease in assets:
Accounts receivable	49,176	(75,011)
Inventory	13,042	9,106
Prepaid expenses and other current assets	15,000	(10,000)
Due from related party	(13,420)	-
Other assets	8,656	-
Assets from discontinued operations	9,929	(3,051)
Increase (decrease) in liabilities:
Accounts payable	(28,019)	(15,927)
Accrued expenses	(68,756)	(3,403)
Deferred revenue	(142,091)	140,207
Customer deposit	-	14,000
Liabilities from discontinued operations	2,486	64,260
Net Cash Provided by (Used in) Operating Activities	(38,627)	(80,326)

Cash Flows From Investing Activities
Purchase of fixed assets	(9,029)	-
Issuance of note receivable	(25,000)	-
Issuance of note receivable - discontinued operations	-	25,000
Repayment of note receivable - discontinued operations	-	(25,000)
Net Cash Used in Investing Activities	(34,029)	-

Cash Flows From Financing Activities
Proceeds from issuance of installment loan-discontinued operations	43,600	43,810
Repayment of installment loan - discontinued operations	(33,151)	(26,966)
Proceeds from notes payable stockholders	-	713
Proceeds from notes payable	156,727	-
Repayment of note payable	(50,000)	-
Repayment of notes payable stockholders	(20,732)	-
Proceeds from loan payable - related party - discontinued operations	11,362	-
Proceeds from issuance of common stock	-	100,000
Dividends paid	-	(7,204)
Net Cash Provided by Financing Activities	107,806	110,353

Net increase in cash	35,150	30,027

Cash at beginning of period	27,698	413

Cash at end of period	$ 62,848	$ 30,440


SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for interest	$ 4,433	$ 4,771
Cash paid for taxes	$ -	$ -

Supplemental disclosure of non-cash investing and financing activities:
Operating lease asset obtained for operating lease liability from discontinued operations	$ 75,078	$ -
Common stock issued for ReadyMed Platform	$ 600,000	$ -
Deconsolidation of Voiceinterop, Inc.	$ 225,316	$ -
Common stock issued for conversion of note payable, accrued interest and accrued dividends - related parties	$ -	$ 94,506

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

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CLEARTRONIC, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT
FOR THE THREE AND NINE MONTHS ENDED JUNE 30, 2020
(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, 2019	512,996	$ 5	-	$ -	4,433,375	$ 45	670,904	$ 7	3,000,000	$ 30	211,994,635	$ 2,120	$ 15,041,522	$ (16,221,110)	$ (1,177,381)

Acquisition of ReadyMed platform in exchange for common shares	-	-	-	-	-	-	-	-	-	-	12,000,000	120	599,880	-	600,000

Deconsolidation of Voiceintrop, Inc.	-	-	-	-	-	-	-	-	-	-	-	-	225,316	-	225,316

Net loss for the nine months ended June 30, 2020	-	-	-	-	-	-	-	-	-	-	-	-	-	(20,405)	(20,405)

Balance at June 30, 2020 (Unaudited)	512,996	$ 5	-	$ -	4,433,375	$ 45	670,904	$ 7	3,000,000	$ 30	223,994,635	$ 2,240	$ 15,866,718	$ (16,241,515)	$ (372,470)



Balance at March 31, 2020 (Unaudited)	512,996	$ 5	-	$ -	4,433,375	$ 45	670,904	$ 7	3,000,000	$ 30	223,994,635	$ 2,240	$ 15,866,718	$ (16,252,481)	$ (383,436)

Net income for the three months ended June 30, 2020	-	-	-	-	-	-	-	-	-	-	-	-	-	10,966	10,966

Balance at June 30, 2020 (Unaudited)	512,996	$ 5	-	$ -	4,433,375	$ 45	670,904	$ 7	3,000,000	$ 30	223,994,635	$ 2,240	$ 15,866,718	$ (16,241,515)	$ (372,470)

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

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CLEARTRONIC, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT
FOR THE THREE AND NINE MONTHS ENDED JUNE 30, 2019
(Unaudited)

	Series A Preferred Stock		Series B Preferred Stock		Series C Preferred Stock		Series D Preferred Stock		Series E Preferred Stock		Common Stock		Additional paid-in	Accumulated	Total Stockholders'
	Shares	Amount	Shares	Amount	Shares	Amount	Shares	Amount	Shares	Amount	Shares	Amount	capital	deficit	Deficit

Balance at September 30, 2018	512,996	$ 5	-	$ -	4,433,375	$ 45	670,904	$ 7	3,000,000	$ 30	203,899,190	$ 2,039	$ 14,854,301	$ (16,044,512)	$ (1,188,085)

Common stock issued for cash	-	-	-	-	-	-	-	-	-	-	3,333,334	33	99,967	-	100,000

Common stock issued for conversion of note payable, accrued interest and dividend - related parties	-	-	-	-	-	-	-	-	-	-	3,150,199	32	94,474	-	94,506

Dividends paid	-	-	-	-	-	-	-	-	-	-	-	-	(7,204)	-	(7,204)

Net loss for the nine months ended June 30, 2019	-	-	-	-	-	-	-	-	-	-	-	-	-	(279,450)	(279,450)

Balance at June 30, 2019 (Unaudited)	512,996	$ 5	-	$ -	4,433,375	$ 45	670,904	$ 7	3,000,000	$ 30	210,382,723	$ 2,104	$15,041,538	$ (16,323,962)	$ (1,280,233)




Balance at March 31, 2019 Uaudited)	512,996	$ 5	-	$ -	4,433,375	$ 45	670,904	$ 7	3,000,000	$ 30	207,232,524	$ 2,072	$14,954,268	$ (16,304,798)	$(1,348,371)

Common stock issued for conversion of note payable, accrued interest and dividend - related parties	-	-	-	-	-	-	-	-	-	-	3,150,199	32	94,474	-	94,506

Dividends paid	-	-	-	-	-	-	-	-	-	-	-	-	(7,204)	-	(7,204)

Net loss for the three months ended June 30, 2019	-	-	-	-	-	-	-	-	-	-	-	-	-	(19,164)	(19,164)

Balance at June 30, 2019 (Unaudited)	512,996	$ 5	-	$ -	4,433,375	$ 45	670,904	$ 7	3,000,000	$30	210,382,723	$ 2,104	$ 15,041,538	$(16,323,962)	$(1,280,233)

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

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CLEARTRONIC, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

June 30, 2020

(Unaudited)

NOTE 1 - ORGANIZATION

Cleartronic, Inc. (the “Company”) was incorporated in the state of Florida on November 15, 1999. The Company’s subsidiaries are VoiceInterop (“VoiceInterop”) and ReadyOp Communications, Inc. (“ReadyOp”). On February 14, 2020, VoiceInterop was deconsolidated.

In September 2014, the Company formed ReadyOp Communications, Inc. (a Florida corporation), as a wholly owned subsidiary to facilitate the marketing of ReadyOp software. The Company’s only operating subsidiary is ReadyOp Communications, Inc.

In November 2016, the Company cancelled its Licensing Agreement with Collabria LLC of Tampa, Florida (”Collabria”) and acquired all of the intellectual property related to Collabria’s command and control software, trade-named ReadyOp. In addition the Company acquired Collabria’s client list. In exchange for these assets the Company issued Collabria 3,000,000 restricted shares of the Company’s Series E Convertible Preferred stock. The Company assumed none of Collabria’s liabilities.

In March 2018, the Company approved the spin-off VoiceInterop into a separate company under a Form S-1 registration to be filed with the United States Securities and Exchange Commission. On May 13, 2019, VoiceInterop filed an S-1 registration with the United States Securities and Exchange Commission. All VoiceInterop transactions have been recorded as discontinued operations. On February 14, 2020, the distribution of shares was approved by FINRA and VoiceInterop was deconsolidated from Cleartronic, Inc. (See Note 10).

In October 2019, the Company acquired a software platform from Collabria LLC. In exchange for this asset, the Company issued 12,000,000 shares of Common stock of the Company. ReadyMed is a web based secure communication platform designed for the health care industry. This includes hospitals, clinics, doctor's offices and health insurance companies and many other segments of the health care industry. It provides hospitals with patient tracking capability within the hospital. It allows physicians to track patient progress after release from the hospital and allows for secure communication with the patient to track the healing process, record their recovery and monitor their medications.

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NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

PRINCIPLES OF CONSOLIDATION

The accompanying consolidated financial statements contain the consolidated accounts of Cleartronic, Inc. and its subsidiaries, ReadyOp Communications, Inc. and VoiceInterop, Inc. All material intercompany transactions and balances have been eliminated. On February 14, 2020, the deconsolidation of VoiceInterop was completed and transactions through that date are recorded as discontinued operations. (See Note 10).

BASIS OF PRESENTATION

The accompanying unaudited interim consolidated financial statements have been prepared in accordance with United States generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q of Regulation S-K. They may not include all information and footnotes required by United States generally accepted accounting principles for complete financial statements. However, except as disclosed herein, there have been no material changes in the information disclosed in the notes to the financial statements for the year ended September 30, 2019 included in the Company’s Annual Report on Form 10-K filed with the United States Securities and Exchange Commission. The unaudited interim consolidated financial statements should be read in conjunction with those financial statements included in the Form 10-K. In the opinion of management, all adjustments considered necessary for a fair presentation, consisting solely of normal and recurring adjustments have been made. Operating results for the three and nine months ended June 30, 2020 are not necessarily indicative of the results that may be expected for the fiscal year ending September 30, 2020.

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 intangible assets and 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 at June 30, 2020 and September 30, 2019.

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.

The Company provided $6,000 and $52,000 allowances for doubtful accounts as of June 30, 2020 and September 30, 2019, respectively.

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PROPERTY AND EQUIPMENT

Property and equipment is 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 onset the property and equipment is put into service.

ASSET ACQUISITION

In October 2019, the Company acquired a software platform from Collabria LLC. In exchange for this asset, the Company issued 12,000,000 shares of Common stock valued at $600,000. This valuation was based on the historical cost of the software. The ReadyMed software platform of $600,000 to be amortized over three years, amortization expense recognized for the three month ended June 30, 2020 and 2019 was $53,050 and $0, respectively. The amortization expense for the nine month ended June 30, 2020 and 2019 was $138,082 and $0, respectively.

In November 2016, the Company acquired the ReadyOp software platform and the Collabria customer base from Collabria LLC. In exchange for these assets the Company issued 3,000,000 shares of restricted Series E Convertible Preferred stock valued at $292,240. This valuation was based on internal calculations and validated by a third party valuation expert. The ReadyOp software platform was valued at $195,600 to be amortized over three years, amortization expense recognized for the three month ended June 30, 2020 and 2019 was $0 and $16,299, respectively. The amortization expense for the nine month ended June 30, 2020 and 2019 was $10,878 and $48,897, respectively. As of June 30, 2020, ReadyOp software platform has been fully amortized.

The Collabria customer base was valued at $96,640 to be amortized over two years, amortization expense recognized for the three months ended June 30, 2020 and 2019 was $0 and $0, respectively. The amortization expense for the nine month periods ended June 30, 2020 and 2019 was $0 and $8,046, respectively. As of September 30, 2019, the Collabria customer base has been fully amortized.

CONCENTRATION OF CREDIT RISK

The Company currently maintains cash balances at one FDIC-insured banking institution. Deposits held in noninterest-bearing transaction accounts are insured up to a maximum of $250,000 at all FDIC-insured institutions. At June 30, 2020 and September 30, 2019, the Company had approximately $0 and $0, respectively in excess of FDIC insurance limits.

RESEARCH AND DEVELOPMENT COSTS

The Company expenses research and development costs as incurred.

For the nine months ended June 30, 2020 and 2019, the Company had $114,993 and $157,789, respectively, in research and development costs from continuing operations. For the three months ended June 30, 2020 and 2019, the Company had $28,192 and $44,248, respectively, in research and development costs from continuing operations.

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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 transferred promised goods and services to the customer and in the amount that reflect the consideration to which the company expected 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 amortized over the license period.

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 standalone 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.

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The following table summarizes the revenues for the three and nine months ended June 30, 2020 and 2019, respectively:


	For the three months ended		For the nine months ended
	June 30, 2020	June 30, 2019	June 30, 2020	June 30, 2019
Licensing of ReadyOp Software	$351,703	$258,835	$952,084	$683,019
Sale of ReadyOp ACE IP Gateways	20,880	82,755	307,050	103,755
Licensing of ReadyMed Software	2,667	-	10,667	-
Consulting Income	-	16,000	37,000	29,500
Pass-through Income	-	7,706	12,351	19,357
Total	$375,250	$ 365,296	$1,319,152	$835,631

EARNINGS PER SHARE

Basic income (loss) per common share is calculated using the weighted average number of shares outstanding during the periods reported. Diluted earnings per share include the weighted average effect of all dilutive securities outstanding during the periods presented. Diluted per share loss is the same as basic per share loss when there is a loss from continuing operations. Accordingly, for purposes of dilutive earnings per share, the Company excluded the effect of warrants and options.

As of June 30, 2020 and 2019, we had no options and warrants outstanding.

As of June 30, 2020 and 2019, the Company had 512,996 shares of Series A Convertible Preferred stock outstanding, which are convertible into 51,299,600 shares of common stock.

As of June 30, 2020 and 2019, we had 4,433,375 shares of Series C Convertible Preferred stock outstanding, which are convertible into 22,166,875 shares of common stock.

As of June 30, 2020 and 2019, we had 670,904 shares of Series D Preferred stock outstanding which are convertible into 3,354,520 shares of common stock.

As of June 30, 2020 and 2019, we had 3,000,000 shares of Series E Convertible Preferred stock outstanding which are convertible into 300,000,000 shares of common stock.

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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 fair value of long-term debt is based on current rates at which the Company could borrow funds with similar remaining maturities. 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 June 30, 2020 and September 30, 2019, respectively.

EQUITY INSTRUMENTS ISSUED TO PARTIES OTHER THAN EMPLOYEES FOR ACQUIRING GOODS OR SERVICES

The Company accounts for stock-based instruments issued for services in accordance with ASC 718 “Compensation – Stock Compensation.” ASC 718 requires companies to recognize in the statement of operations the grant-date fair value of stock options and other equity based compensation issued. The value of the portion of a stock award that is ultimately expected to vest is recognized as an expense over the requisite service periods using the straight-line attribution method.

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ADVERTISING COSTS

Advertising costs are expensed as incurred. The Company had advertising costs of $5,497 and $1,797 during the three months ended June 30, 2020 and 2019, respectively, and $25,691 and $5,591 during the nine months ended June 30, 2020 and 2019, respectively.

RECENT ACCOUNTING PRONOUNCEMENTS

In February 2016, the FASB issued ASU 2016-02, Leases, which will amend current lease accounting to require lessees to recognize (i) a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis, and (ii) a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. ASU 2016-02 does not significantly change lease accounting requirements applicable to lessors; however, certain changes were made to align, where necessary, lessor accounting with the lessee accounting model. This standard became effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The Company adopted this standard effective October 1, 2019 which are fully discussed in Note 9.

NOTE 3 - EQUIPMENT

At June 30, 2020 and December 31, 2019, property and equipment, net, is as follows:


	June 30, 2020		December 31, 2019
Office Equipment	$	9,029	$	-
Less: Accumulated Depreciation		(150)		-
Total Property and Equipment, net	$	8,879	$	-

Depreciation expense for the nine months ended June 30, 2020 and 2019, was $150 and $0, respectively

Depreciation expense for the three months ended June 30, 2020 and 2019, was $150 and $0, respectively.

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NOTE 4 - NOTES RECEVABLE

On June 18, 2020, the Company entered into an unsecured note receivable in the amount of $10,000 with a shareholder which bears interest at 6% and matures on August 31, 2020 (See Note 8).

On June 25, 2020, the Company entered into an unsecured note receivable in the amount of $15,000 with a shareholder which bears interest at 6% and matures on August 31, 2020 (See Note 8).

NOTE 5 - GOING CONCERN

The Company's unaudited condensed consolidated financial statements are prepared using accounting principles generally accepted in the United States of America applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company believes the acquisition of the ReadyOp software platform was a prudent acquisition by the Company. Additional revenue has been generated for the Company and management believes revenue will continue to increase each quarter. The Company acquired the ReadyMed software platform in October 2019. The Company believes the acquisition of ReadyMed will also be a prudent purchase and that revenue will increase as a result of the acquisition

On January 30, 2020, the World Health Organization declared the coronavirus outbreak a "Public Health Emergency of International Concern" and on March 10, 2020, declared it to be a pandemic. Actions taken around the world to help mitigate the spread of the coronavirus include restrictions on travel, and quarantines in certain areas, and forced closures for certain types of public places and businesses. The coronavirus and actions taken to mitigate it have had and are expected to continue to have an adverse impact on the economies and financial markets of many countries, including the geographical area in which the Company operates. While the closures and limitations on movement, domestically and internationally, are expected to be temporary, if the outbreak continues on its current trajectory the duration of the supply chain disruption could reduce the availability, or result in delays, of materials or supplies to and from the Company, which in turn could materially interrupt the Company’s business operations. On May 14, 2020, the Florida Governor signed Executive Order No. 20-123, bringing all Florida counties into Full Phase I reopening. More restrictive proclamations and/or directives may be issued in the future. Given the speed and frequency of the continuously evolving developments with respect to this pandemic, the Company cannot reasonably estimate the magnitude of the impact to its consolidated results of operations.

The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually attain profitable operations. The accompanying consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

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NOTE 6 - NOTES PAYABLE

Notes payable to Stockholders

As of June 30, 2020 and September 30, 2019, the Company had unsecured notes payable to stockholders totaling $72,137 and $92,869, respectively. These notes range in interest from 8% to 15% which are payable quarterly. One note with a principal balances of $17,588 was due on December 31, 2019. The maturity of the note payable in the amount of $17,588 was extended to August 31, 2020.

On September 30, 2019, the note holder converted $65,000 of note payable and $10,279 of accrued interest into an installment promissory note with a principal balance of $75,279. The note is due on September 30, 2021 and bears an interest rate of 8%. This note requires a monthly payment of $3,405 for the next 24 months. As of June 30, 2020 and September 30, 2019 the balance due was $54,549 and $75,279, respectively.

Interest expense on the notes payable to stockholders was $2,116 and $1,799 for the three months ended June 30, 2020 and 2019, respectively, and $7,201 and $11,913 for the nine months ended June 30, 2020 and 2019, respectively.

Installment Loan Payable - Discontinued Operations

On December 14, 2018, VoiceInterop entered into a Business Loan Agreement with WebBank whereby VoiceInterop borrowed $59,751, of this amount $15,491 was recorded as debt issuance cost. The agreement calls for 308 installments of $194 paid over 432 days. The debt issuance cost is amortized over the life of the loan. As of June 30, 2020, the remaining loan balance of $18,429 was paid in full from the note payable dated October 8, 2019.

On October 8, 2019, VoiceInterop entered into a Business Loan Agreement with WebBank whereby VoiceInterop borrowed $56,680, of this amount $13,080 was recorded as debt issuance cost. The debt issuance cost is amortized over the life of the loan. The agreement calls for 308 installments of $184 paid over 432 days. The Company used $18,429 of loan proceeds to pay off the remaining loan balance of WebBank loan dated December 14, 2018. As of February 14, 2020, the loan balance is $31,269, net of debt issuance cost of $10,688. The amount is included in VoiceInterop deconsolidation as of February 14, 2020 (See Note 10).

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Note Payable

On June 10, 2020, the Company, was granted a loan (the “Loan”) from Bank of America, N.A., in the aggregate amount of $106,727, pursuant to the Paycheck Protection Program (the “PPP”) under Division A, Title I of the CARES Act, which was enacted March 27, 2020.

The Loan, which was in the form of a Note dated on or about June 10, 2020 issued by the Borrower, matures on or about June 10, 2025 and bears interest at an approximate rate of 1% per annum. The Note may be prepaid by the Borrower at any time prior to maturity with no prepayment penalties. Funds from the Loan may only be used for payroll costs, costs used to continue group health care benefits, mortgage payments, rent, utilities, and interest on other debt obligations incurred before February 15, 2020. The Company intends to use the entire Loan amount for qualifying expenses. Under the terms of the PPP, certain amounts of the Loan may be forgiven if they are used for qualifying expenses as described in the CARES Act.

On December 2, 2019, the Company issued a promissory note in the amount of $50,000. The note bear 6% interest and matured on February 29, 2020. As of June 30, 2020 the loan balance of $50,000 and interest of $732 was paid in full.

Loan Payable - related party

During the nine months ended June 30, 2020, the Company owed $16,262 to two officers, of which $7,262 is included in liabilities from discontinued operations. The loan is non-interest bearing and payable on demand. As of June 30, 2020 the loan balance of $9,000 was paid in full and $7,626 included in labilities from discontinued operations was deconsolidated as of February 14, 2020. (See Note 8 and 10).

NOTE 7 - EQUITY TRANSACTIONS

Common stock issued for cash

In December 2018, the Company sold 3,333,334 shares of common stock to unrelated parties for $75,000 in cash of which $25,000 was received by the Company on January 15, 2019.

Common stock issued for Ready Med Platform

In October 2019, the Company acquired the software platform from Collabria LLC, a related party. In exchange for these assets the Company issued 12,000,000 shares of Common stock valued at the historical cost of the asset of $600,000 (See Note 2).

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Preferred Stock Dividends

As of June 30, 2020 and September 30, 2019, the cumulative arrearage of undeclared dividends for Series A Preferred stock totaled $72,726 and $41,920, respectively.

Subscription Agreements between VoiceInterop, Inc., our wholly-owned subsidiary and private investors

During the year ended September 30, 2018, VoiceInterop committed to sell 600,000 shares of its common stock to private investors for $68,000. The shares issuance is contingent upon a spin-off of the Company from Cleartronic, Inc. into a separate company. As of February 14, 2020, the spin-off has been completed and the shares have been issued (See Note 10).

Declaration of Stock Dividend

On April 23, 2018, the board of Directors declared a stock dividend for common stock shareholders and for certain classes of preferred stock shareholder of the Company. That each common shareholder would receive .075 shares of VoiceInterop common stock for each one (1) share of Cleartronic stock held by the shareholder, and that each shareholder of Series C and D Preferred stock shall receive .375 shares of VoiceInterop common stock for each one (1) share of Series C or Series D Preferred stock held by the shareholder.

May 13, 2019 VoiceInterop filed an S-1 registration statement with the SEC which was approved on November 14, 2019. On February 14, 2020, the Company distributed 17,819,827 shares of VoiceInterop common stock to its shareholders (See Note 10). The Company recorded $225,316 to additional paid in capital for deconsolidation of VoiceInterop, Inc.

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NOTE 8 - RELATED PARTY TRANSACTIONS

The Company leases its office space from VoiceInterop the Company’s former wholly owned subsidiary and now 96% owned by our shareholders. On February 14, 2020, VoiceInterop was deconsolidated and is no longer our subsidiary. Rent expense paid to the related party was $4,905 and $11,947 for the three months ended June 30, 2020 and 2019, respectively. Rent expense paid to the related party was $27,059 and $35,643 for the nine months ended June 30, 2020 and 2019, respectively.

In October 2017, the Company issued two promissory notes to a shareholder and director in the amounts of $15,000 each. The notes bear interest at 8% per annum and mature June 30, 2019. The note was converted to an installment promissory note on September 30, 2019 (See below and Note 6).

During the three months ended December 31, 2019, the Company owed $16,262 to two officers, of which $7,262 is included in liabilities from discontinued operations. The loan is non-interest bearing and payable on demand. As of June 30, 2020 the loan balance of $9,000 was paid in full and $7,262 included in liabilities from discontinued operations was deconsolidated as of February 14, 2020 (See Note 6 and 10).

On September 30, 2019, the note holder converted $65,000 of note payable and $10,279 of accrued interest into an installment promissory note. The note is due on September 30, 2021 and bears an interest rate of 8%. The note requires a monthly payment of $3,405 for the next 24 months. As of June 30, 2020 and September 30, 2019 the balance due was $54,549 and $75,279, respectively (See Note 6).

On June 18, 2020, the Company entered into an unsecured note receivable in the amount of $10,000 with a shareholder which bears interest at 6% and matures on August 31, 2020 (See Note 4).

On June 25, 2020, the Company entered into an unsecured note receivable in the amount of $15,000 with a shareholder which bears interest at 6% and matures on August 31, 2020 (See Note 4).

As of June 30, 2020, the Company advanced $13,420 to VoiceInterop, the Company’s former wholly owned subsidiary and now 96% owned by our shareholders.

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NOTE 9 - COMMITMENTS AND CONTINGENCIES

Obligation Under Operating Lease

The Company leases approximately 1,700 square feet for its principal offices in Boca Raton, Florida at a monthly rental of approximately $3,500, which expired in November 2018. VoiceInterop executed a new 3-year lease with its current landlord on December 1, 2018 for the same office space. The lease provided one month free as a concession. The monthly rent is $3,630 and provides for annual increases of base rent of 4% until the expiration date. The lease expires on November 30, 2021. Upon the deconsolidation, the Company subleases the office space from VoiceInterop at approximately $1,400 per month.

Rent expense incurred during the three months ended June 30, 2020 and 2019 was $4,905 and $11,947, respectively. Rent expense incurred during the nine months ended June 30, 2020 and 2019 was $27,059 and $35,643, respectively.

VoiceInterop subleases part of its office space to two entities for approximately $1,150 per month and is included in income from discontinued operations. Sublease rental income received during the period from October 1, 2019 through February 14, 2020 (deconsolidation date), was $5,750.

The Company adopted the new lease guidance effective October 1, 2019 using the modified retrospective transition approach, applying the new standard to all of its leases existing at the date of initial application which is the effective date of adoption. Consequently, financial information will not be updated and the disclosures required under the new standard will not be provided for dates and periods before October 1. 2019. We elected the package of practical expedients which permits us to not reassess (1) whether any expired or existing contracts are or contain leases, (2) the lease classification for any expired or existing leases, and (3) any initial direct costs for any existing leases as of the effective date. We did not elect the hindsight practical expedient which permits entities to use hindsight in determining the lease term and assessing impairment. The adoption of the lease standard did not change our previously reported consolidated statements of operations and did not result in a cumulative catch-up adjustment to opening equity. The adoption of the new guidance resulted in the recognition of operating lease assets of $75,078 and lease liability of $79,171.

The interest rate implicit in lease contracts is typically not readily determinable. As such, the Company utilizes its incremental borrowing rate, which is the rate incurred to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment. In calculating the present value of the lease payments, the Company elected to utilize its incremental borrowing rate based on the remaining lease terms as of the October 1, 2019 adoption date. This rate was determined to be 23% and the Company determined the initial present value, at inception, of $79,171.

Operating lease asset and operating lease liability are recognized based on the present value of the future minimum lease payments over the lease term at the commencement date. The operating lease asset also includes any lease payments made and excludes lease incentives and initial direct costs incurred, if any.

The Company has elected the practical expedient to combine lease and non-lease components as a single component. The lease expense is recognized over the expected term on a straight-line basis. Operating leases are recognized on the balance sheet as operating lease asset, current operating lease liability and non-current operating lease liability.

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The new standard also provides practical expedients and certain exemptions for an entity’s ongoing accounting. We have elected the short-term lease recognition exemption for all leases that qualify. This means, for those leases where the initial lease term is one year or less or for which the operating lease asset at inception is deemed immaterial, we will not recognize operating lease asset or lease liability. Those leases are expensed on a straight line basis over the term of the lease.

As of February 14, 2020 the operating lease liabilities of $66,114 and lease assets of $62,226 were included in liabilities from discontinued operations and were deconsolidated.

Revenue and Accounts Receivable Concentration

No customer accounted for more than 10% of the Company’s revenue for the nine months ended June 30, 2020. No customer accounted for 10% of the Company’s revenue for the nine months ended June 30, 2019. As of June 30, 2020 two customer accounted for approximately 27% of the Company’s total outstanding accounts receivable with each customer representing 14% and 13%, respectively. As of June 30, 2019, three customers accounted for approximately 24%, 13%, and 11% of the Company’s total outstanding accounts receivable.

Major Supplier and Sole Manufacturing Source

During 2014, the Company developed a proprietary interoperable communications solution. The Company relies on no major supplier for its products and services. The Company has contracted with a single local manufacturing facility to provide completed circuit boards used in the assembly of its IP gateway devices. Interruption to the manufacturing source presents additional risk to the Company. The Company believes that other commercial facilities exist at competitive rates to match the resources and capabilities of its existing manufacturing source.

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.

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.

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Exclusive Licensing Agreement

On May 5, 2017, the Company entered into an Exclusive Licensing Agreement with Sublicensing Terms (the “Agreement”) with the University of Southern 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 paid USFRF a License Issue Fee of $3,000 and $7,253 as reimbursement of expenses associated with the filing of the Licensed Patent. The Company agreed to complete the first commercial sale of products to the retail customer on or before January 31, 2019 or USFRF has the right to terminate the agreement. In addition, the Company agreed that it will have made and tested a prototype by August 31, 2018 or USFRF has the right to terminate the agreement. 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.

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As of June 30, 2020, the Company has recorded $2,000 for the minimum royalty for the fiscal year ended 2020.

As of September 30, 2019, the Company has recorded $1,000 for the minimum royalty for the fiscal year ended 2019.

NOTE 10 – DISCONTINUED OPERATIONS

In March 2018, the Company approved the spin-off VoiceInterop into a separate company under a Form S-1 registration to be filed with the United States Securities and Exchange Commission.

On April 23, 2018, the board of Directors declared a stock dividend for certain shareholders of the Company. The Company will distribute to its shareholders owning Common Stock and Series C and D Preferred stock an aggregate of 17,819,827 shares of shares of Common Stock of VoiceInterop. That each common shareholder would receive .075 shares of VoiceInterop common stock for each one (1) share of Cleartronic stock held by the shareholder, and that each shareholder of Series C and D Preferred stock shall receive .375 shares of VoiceInterop common stock for each one (1) share of Series C or Series D Preferred stock held by the shareholder.

The record date of the dividend distribution shall be defined as the first business day following an effective statement from the United States Securities and Exchange Commission (“SEC”) regarding a pending S-1 filing. On May 13, 2019 VoiceInterop filed an S-1 registration statement with the SEC. On November 14, 2019, VoiceInterop, Inc’s., S-1 Registration Statement was declared effective by Securities and Exchange Commission.

The Company’s history is being reviewed by the Financial Industry Regulatory Authority (“FINRA”) and as of the date of this filing the review is not been completed. No dividends can be distributed until that review is completed and approved by FINRA. On February 14, 2020, the distribution of shares was approved by FINRA and completed and deconsolidation was completed.

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The following table illustrates the reporting of the discontinued operations included in the Statements of Operations for the period from October 1, 2019 to February 14, 2020 and for the nine months period ended June 30, 2019.



	For the period from	For the Nine
	October 1, 2019 to	Months Ended
	February 14, 2020	June 30, 2019
	(Unaudited)	(Unaudited)

Revenue	$ 27,698	$ 75,721
Cost of Revenue	12,383	25,395
Gross Profit	15,315	50,326

Operating Expenses:
Selling expenses	3,862	10,200
Administrative expenses	24,151	18,374
Professional Fees	50,007	48,271
Total Operating Expenses	78,020	76,845

Loss from operations	(62,705)	(26,519)

Other Income (Expense)
Other Income	5,750	19,947
Interest and other expense	(7,981)	(17,180)
Total Other Income (Expense)	(2,231)	2,767

Loss Before Income Taxes	(64,936)	(23,752)
Provision for Income Taxes	-	-
Loss from discontinued operations	$ (64,936)	$ (23,752)

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On February 14, 2020, the Company recorded $225,316 to additional paid in capital for deconsolidation of VoiceInterop, Inc. and discontinued operations are not presented.



	February 14,	September 30,
	2020	2019
	(Unaudited)
Current assets:
Cash	$ 2,279	$ 4,136
Accounts Receivable	4,780	-
Operating lease asset, net	62,226	-

Total Assets from discontinued operations	$ 69,285	$ 4,136

Current liabilities:
Accounts payable and accrued expenses	$ 92,236	$ 77,584
Operating lease liability, current	33,941	-
Deferred revenue, current portion	17,357	23,492
Deferred rent, current portion	-	896
Installment loan, net, current portion	31,269	14,587
Due to related parties	11,362	-
Due to unrelated parties	68,000	68,000
Total Current liabilities from discontinued operations	254,165	184,559

Long Term Liabilities
Deferred revenue, net of current	8,263	9,987
Deferred rent, long term portion	-	680
Operating lease liability, net of current	32,173	-
Deferred revenue, current portion	-	-
Total Long term liabilities from discontinued operations	40,436	10,667

Total Liabilities from discontinued operations	$ 294,601	$ 195,226

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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.

Impact of COVID-19 Outbreak

On January 30, 2020, the World Health Organization declared the coronavirus outbreak a “Public Health Emergency of International Concern” and on March 10, 2020, declared it to be a pandemic. Actions taken around the world to help mitigate the spread of the coronavirus include restrictions on travel, and quarantines in certain areas, and forced closures for certain types of public places and businesses. The coronavirus and actions taken to mitigate it have had and are expected to continue to have an adverse impact on the economies and financial markets of many countries, including the geographical area in which the Company operates. While the closures and limitations on movement, domestically and internationally, are expected to be temporary, if the outbreak continues on its current trajectory the duration of the supply chain disruption could reduce the availability, or result in delays, of materials or supplies to and from the Company, which in turn could materially interrupt the Company’s business operations. Given the speed and frequency of the continuously evolving developments with respect to this pandemic, the Company cannot reasonably estimate the magnitude of the impact to its consolidated results of operations. We have taken every precaution possible to ensure the safety of our employees. Those precautions include, working remotely, limited face to face meetings with clients and restrictive travel conditions, and social distancing with fellow employees. On May 14, 2020, the Florida Governor signed Executive Order No. 20-123, bringing all Florida counties into Full Phase I reopening. More restrictive proclamations and/or directives may be issued in the future. Given the speed and frequency of the continuously evolving developments with respect to this pandemic, the Company cannot reasonably estimate the magnitude of the impact to its consolidated results of operations. Additionally, it is reasonably possible that estimates made in the financial statements have been, or will be, materially and adversely impacted in the near term as a result of these conditions.

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Overview

Cleartronic, Inc. (the “Company”) was incorporated in Florida on November 15, 1999. The Company operates through its wholly owned subsidiary ReadyOp Communications, Inc. ("ReadyOp").

In November, 2016, the Board of Directors approved the Asset Purchase Agreement between the Company and Collabria LLC (“Collabria”). Under the terms of the Agreement, the Company acquired the intellectual property of Collabria, including its ReadyOp command, control and communication platform trade named ReadyOp™ (the “ReadyOp Platform”). In addition, the Company acquired Collabria’s customer base (“Collabria Client List”). The Company assumed no liabilities of Collabria under this Agreement. The terms of the Agreement called for the Company to issue 3,000,000 (Three million) shares of the registrant’s Series E Convertible Preferred stock to Collabria. Shares of the Series E Convertible Preferred have the following conversion rights and provisions: After a period of two (2) years following the date of issuance, each one (1) share of Series E Preferred shall be convertible into one hundred (100) shares of fully paid and non-assessable Common Stock at the sole option of the holder of Series E Preferred. As a result of this Agreement the Licensing Agreement between Collabria and the Company was cancelled effective November 30, 2016. The ReadyOp software will be marketed, sold and supported through the Company’s subsidiary ReadyOp Communications, Inc.

In March 2018, the Company approved the spin-off VoiceInterop, Inc.(“VoiceInterop”) into a separate company under a Form S-1 registration to be filed with the United States Securities and Exchange Commission. On May 13, 2019, VoiceInterop filed an S-1 registration with the United States Securities and Exchange Commission. On November 14, 2019, the S-1 registration statement was declared effective by the Securities and Exchange Commission. Therefore, the Company has presented the operations of this subsidiary as discontinued operations. The Company has requested and received approval by the Financial Industry Regulatory Authority (“FINRA”) for the distribution of VoiceInterop’s shares of common stock totaling 17,819,827 shares as a dividend to the Company’s shareholders. Shareholders of record as of November 20, 2019 of the Company’s common stock and Series C and Series D Preferred stock will receive shares of VoiceInterop’s common stock. The distribution was completed on February 14, 2020.

In October 2019, the Company acquired the ReadyMed software platform from Collabria LLC, a communications software company based in Tampa, Florida. ReadyMed is a web based secure communication platform designed for the health care industry. This includes hospitals, clinics, doctor’s offices and health insurance companies and many other segments of the health care. It provides hospitals with patient tracking capability within the hospital. It allows physicians to track patient progress after release from the hospital and allows for secure communication with the patient to track the healing process, record their recovery and monitor their progress.

The Acquisition Agreement provides for the acquisition of substantially all the assets and business operations of ReadyMed (the “Acquisition”). The assets acquired include the software platform, templates and forms for numerous business categories in the health care industry, and all contacts created by ReadyMed interested in licensing the ReadyMed platform. As consideration for the Acquisition, Cleartronic issued 12 million shares of its common stock to Collabria which valued at historical cost of $600,000.

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FOR THE THREE MONTHS ENDED JUNE 30, 2020 COMPARED TO THE THREE MONTHS ENDED JUNE 30, 2019

Revenue

Revenues increased to $375,250 for the three months ended June 30, 2020 as compared to $365,296 for the three months ended June 30, 2019. The primary reason for the increase in revenue was due to an increase in licensing of ReadyOp Software from $258,835 in 2019 to $354,370 in 2020, an increase of approximately 37% and offset by decrease in sales of ReadyOp ACE IP gateways of $61,875. The overall increase in revenues is primarily due to the increase in the number of customers for three months ended June 30, 2020.

Cost of Revenue

Cost of revenues was $73,142 for the three months ended June 30, 2020 as compared to $81,435 for the three months ended June 30, 2019. Gross profits were $302,108 and $283,861 for the three months ended June 30, 2020 and 2019, respectively. Gross margins increased approximately 3% from 78% for the three months ended June 30, 2019 compared to 81% for the three months ended June 30, 2020. The primary reason for the increase was from a greater portion of revenue was from licensing fees of the Company’s ReadyOp software.

Operating Expenses

Operating expenses decreased approximately 8% to approximately $289,026 for the three months ended June 30, 2020 compared to $315,563 for the three months ended June 30, 2019. The slight decrease was primarily due to decrease in selling and administrative and research and development expense offset by increase in amortization expense. For the three months ended June 30, 2020, selling expenses decreased to $116,624 from $155,077 for the three months ended June 30, was primarily due to decreased travel expenses during to the Covid-19 pandemic. General and administrative expenses decreased by $8,779 or approximately 9%. The decrease is primarily due to a decrease in professional fees and general operating expenses and offset by a slight increase attributable to fees required in connection with filings with the Securities and Exchange Commission. Research and development expenses were $28,192 for the three months ended June 30, 2020 as compared to $44,248 for the three months ended June 30, 2019. The decrease of 36% is primarily due to completing the development of our "Rectenna" project. Amortization expense increased by $36,751 or 225% primarily due to the acquisition of the ReadyMed software platform from Collabria, LLC valued at the historical cost of $600,000.

Income (Loss) from Continuing Operations

The Company's income from continuing operations increased to $10,966 during the three months ended June 30, 2020 as compared to a loss of $(33,501) for the three months ended June 30, 2019. The primary reason for the increase was increases in licensing of ReadyOp software and offset by a decrease in sales of ReadyOp ACE IP gateways.

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Loss from Discontinued Operations

Loss from discontinued operations, decreased to $0 during the three months ended June 30, 2020 compared to income of $14,337 for the three months ended June 30, 2019. Decrease is due to the Company completing the spinoff of VoiceInterop, Inc. Therefore, VoiceInterop was deconsolidated on February 14, 2020. The result from operations for the third quarter of 2020 does not include the discontinued operations from VoiceInterop.

Net Loss Attributable to Common Shareholders

Net income attributable to common shareholders was $735 for the three months ended June 30, 2020 as compared to a net loss of $(29,395) for the three months ended June 30, 2019. The increase was primarily due to the increase in income from continuing operations for the three months ended June 30, 2020, which was $10,966 as compared to a loss of $(33,501) for the three months ended June 30, 2019. Net loss per common share was $(0.00) and $(0.00) for the three months ended June 30, 2020 and 2019, respectively.

FOR THE NINE MONTHS ENDED JUNE 30, 2020 COMPARED TO THE NINE MONTHS ENDED JUNE 30, 2019

Revenue

Revenues from operations were $1,319,152 for the nine months ended June 30, 2020 as compared to $835,631 for the nine months ended June 30, 2019. The increase was primarily due to the increase in licensing of ReadyOp software which increased 41% from $683,019 to $962,751 in the nine month ended June 30, 2019 and 2020, respectively. In addition, sales of ReadyOp ACE IP gateways increased 196% from $103,755 to $307,050 in the nine month ended June 30, 2019 and 2020, respectively. The overall increase in revenues is primarily due to the increase in the number of customers for nine months ended June 30, 2020.

Cost of Revenue

Cost of revenues was $322,564 for the nine months ended June 30, 2020, as compared to $178,541 for the nine months ended June 30, 2019. This increase was primarily due to higher costs associated with the ReadyOp ACE IP gateway due to higher costs for parts and materials. Gross profits were $996,588 and $657,090 for the nine months ended June 30, 2020 and 2019, respectively. Despite the increase in revenues, gross margins decreased slightly to 76% from 79% for the nine months ended June 30, 2020 and 2019, respectively. The decreases was primarily due to the lower profit margins from sales of ReadyOp ACE IP gateways as compared to higher margins generated from licensing of ReadyOp software.

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Operating Expenses

Operating expenses for the nine months ended June 30, 2020 were $944,856 compared to $900,875 for the nine months ended June 30, 2019. For the nine months ended June 30, 2020, selling expenses decreased to $388,895 from $410,315 for the nine months ended June 30, 2019. The 5% decrease was primarily due to decreased travel expenses during to the Covid-19 pandemic. Amortization expense increased by $42,796 or 27%, primarily due to amortization expenses associated with the acquisition of the ReadyMed software platform from Collabria LLC valued at the historical cost of $600,000. The decrease in research and development expense was due to the Company cutting back on development of the “Rectenna” project. The Company believes it has uncovered new uses for the “Rectenna” and intends to devote future research and development funds to commercialize these new uses.

Income (Loss) from Continuing Operations

The Company’s income from continuing operations increased to $44,531 during the nine months ended June 30, 2020 as compared to a loss of $(255,698) for the nine months ended June 30, 2019. The primary reason for this increase was the increase in revenue generated by sales of the ReadyOp ACE IP gateway and licensing of ReadyOp software.

Loss from Discontinued Operations

Loss from discontinued operations, increased to $64,936 during the period from October 1, 2019 to February 14, 2020 compared to a loss of $23,752 for the nine months ended June 30, 2019. The primary reason for the increase was due to decreased revenue generated by VoiceInterop. Revenue was $27,698 during the period from October 1, 2019 to February 14, 2020 as compared to $75,721 in the nine months ended June 30, 2019. Decrease in revenue was due to decrease in licensing of ReadyOp software offset in part by the increase in hardware revenues. Loss for discontinued operations also increased to $64,936 from $23,752 which was primarily attributable to the increase in professional fees offset by decrease in administrative expenses. The professional fees increased due to filing of Registration statement and decrease in administrative expense is due to the Company completing the spinoff of VoiceInterop, Inc. Therefore, VoiceInterop was deconsolidated on February 14, 2020. The result from operations for the quarter ended June 30, 2020 only includes the discontinued operations from the period from October 1, 2019 through February 14, 2020 resulting in a decrease on overall loss from discontinued operations.

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Net Loss Attributable to Common Stockholders

Net loss attributable to common stockholders was $(51,211) and $(310,144) for the nine months ended June 30, 2020 and 2019, respectively. The decrease was primarily due to the increase in gross profit which was $996,588 and $657,090 for the nine months ended June 30, 2020 and 2019 respectively. Net loss per common share was $(0.00) and $(0.00) for the nine months ended June 30, 2020 and 2019 respectively.

LIQUIDITY AND CAPITAL RESOURCES

Net cash used in operating activities was $38,627 for the nine months ended June 30, 2020 compared to net cash used in operating activities was $80,326 for the nine months ended June 30, 2019. This decrease was attributable to the lower net loss of $20,405 for the nine months ended June 30, 2020 as compared to $279,450 for the nine months ended June 30, 2019, and decreases in accounts receivable and inventory and an increase in amortization expense offset by decreases in accounts payable, accrued expenses and deferred revenue.

Net cash used in investing activities was $34,029 for the nine months ended June 30, 2020 compared to net cash used in investing activities was $0 for the nine months ended June 30, 2019. This increase was attributable to the issuance of note receivable of $25,000 and purchase of fixed assets of $9,029 for the nine months ended June 30, 2020.

Net cash provided by financing activities was $107,806 for the nine months ended June 30, 2020 compared to $110,353 for the nine months ended June 30, 2019. The increase was primarily due to proceeds received from note payable part of Cares Act Paychecks Protection Program of $106,727, note payable from unrelated party of $50,000, proceeds from issuance net of repayment of installment note of $10,449 and proceeds from loan payable - related party of $11,362 included discontinued operations and offset by the repayment of note payable of $50,000 and repayment of stockholder note payable of $20,732 during the nine months ended June 30, 2020. The decrease was primarily due to proceeds of $100,000 received from the issuance of common stock, proceeds from issuance net of repayment of installment note included discontinued operations of $16,844, proceeds from note payable of $713 and offset by dividends paid of $7,204 in the nine months ended June 30, 2019.

Our obligations are being met on a month-to-month basis as cash becomes available. We have made a concentrated effort to restructure the company through the issuance of Preferred stock for cash and for the acquisition of the ReadyOp software platform. We believe that the ReadyOp software platform will continue to grow on a quarter to quarter basis putting the Company in a better position to become cash flow positive. We also believe that theReadyMed software platform will provide additional revenue. It is now being used by the Departments of Health in two states. We believe that the spin-off of VoiceInterop will also benefit the Company as VoiceInterop operations will no longer be a drain on cash flow. There can be no assurance that the Company’s efforts in this restructure will be successful or that present flow of cash will be sufficient to meet current and future obligations.

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We have incurred losses since our inception and continue to require additional capital to fund operations and development. As such, our ability to pay our already incurred obligations is mostly dependent on the Company being able to have substantially increased revenues and raising substantial additional capital through the sale of its equity or debt securities. There can be no assurance that the Company will be successful in accomplishing these actions.

On January 30, 2020, the World Health Organization declared the coronavirus outbreak a "Public Health Emergency of International Concern" and on March 10, 2020, declared it to be a pandemic. Actions taken around the world to help mitigate the spread of the coronavirus include restrictions on travel, and quarantines in certain areas, and forced closures for certain types of public places and businesses. The coronavirus and actions taken to mitigate it have had and are expected to continue to have an adverse impact on the economies and financial markets of many countries, including the geographical area in which the Company operates. While the closures and limitations on movement, domestically and internationally, are expected to be temporary, if the outbreak continues on its current trajectory the duration of the supply chain disruption could reduce the availability, or result in delays, of materials or supplies to and from the Company, which in turn could materially interrupt the Company’s business operations. Given the speed and frequency of the continuously evolving developments with respect to this pandemic, the Company cannot reasonably estimate the magnitude of the impact to its consolidated results of operations. On May 14, 2020, the Florida Governor signed Executive Order No. 20-123, bringing all Florida counties into Full Phase I reopening. More restrictive proclamations and/or directives may be issued in the future. Given the speed and frequency of the continuously evolving developments with respect to this pandemic, the Company cannot reasonably estimate the magnitude of the impact to its consolidated results of operations.

The costs to operate our current business are approximately $110,000 per month. In order for us to cover our monthly operating expenses, we would have to generate revenues of approximately $150,000 per month. However, in the absence of revenue, we would significantly reduce operations to a minimal sustainment level that would require approximately $25,000 per month. In order to remain in business for one year without any additional revenues we would need approximately $300,000. The Company’s current accounts receivable and pending invoices exceed this amount.

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 September 30, 2019 for information regarding our critical accounting estimates.

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Item 3. Quantitative and Qualitative Disclosures About Market Risk.

Not applicable

Item 4. Controls and Procedures.

An evaluation was conducted by our chief executive officer (“CEO”) and chief financial officer (“CFO”) of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended) as of June 30, 2020. Based on that evaluation, the CEO and CFO concluded that a change in our controls and procedures is needed to ensure that information required to be disclosed in the reports that we file or submit under the Securities Exchange Act of 1934 (i) is recorded, processed, summarized, and reported within the time periods specified in Securities and Exchange Commission rules and forms, and (ii) is accumulated and communicated to our management, including our CEO and CFO, as appropriate to allow timely decisions regarding required disclosures.

Management is aware that there is a lack of segregation of duties due to the small number of employees dealing with general administrative and financial matters. Management is preparing a travel and entertainment policy that provides for approval of these expenses by independent parties, as required in the SEC rules cited above. The CEO's travel and other expenses will be approved by the Chairman of the Board. For all other employees, the CEO and CFO will approve those expenses. Therefore, we will have adequate controls and segregation of duties over the approval of all expenses reimbursed to employees and consultants as required by the SEC regulation.

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.

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PART II - OTHER INFORMATION

Item 1. Legal Proceedings

There have been no material developments during the quarter ended June 30, 2020 in any material legal proceedings to which we are a party or of which any of our property is subject.

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

None

Item 3. Defaults upon Senior Securities

None

Item 5. Other Information

None

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Item 6. Exhibits.



Exhibit Number	Description
3.1	Articles of Incorporation (1)
3.2	Articles of Amendment to Articles of Incorporation, filed March 12, 2001. (1)
3.3	Articles of Amendment to Articles of Incorporation, filed October 4, 2004. (1)
3.4	Articles of Amendment to Articles of Incorporation, filed March 31, 2005. (1)
3.5	Articles of Amendment to Articles of Incorporation, filed May 9, 2008. (2)
3.6	Articles of Amendment to Articles of Incorporation, filed June 28, 2010. (3)
3.7	Articles of Amendment to Articles of Incorporation, filed May 6, 2011. (4)
3.8	Bylaws. (1)
3.9	Articles of Amendment to the Articles of Incorporation, filed April 19, 2012 (5)
3.10	Articles of Amendment to the Articles of Incorporation, filed on September 7, 2012 (6)
3.11	Articles of Amendment to the Articles of Incorporation, filed on September 19, 2012 (7)
3.12	Articles of Amendment to the Articles of Incorporation, filed on October 5, 2012 (8)

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31.1	Section 302 Certification by the Corporation’s Principal Executive Officer *
31.2	Section 302 Certification by the Corporation’s Principal Financial Officer *
32.1	Section 906 Certification by the Corporation’s Principal Executive Officer and Principal Financial Officer *
101	XBRL Interactive Exhibit Tables
	Filed herewith.*



(1)	Filed as an exhibit to the registrant’s registration statement on Form SB-2 filed with the Securities and Exchange Commission on July 3, 2006 and hereby incorporated by reference.
(2)	Filed as an exhibit to Amendment No. 6 to the registrant’s registration statement on Form S-1 filed with the Securities and Exchange Commission on May 28, 2008, and hereby incorporated by reference
(3)	Filed as an exhibit to the registrant's quarterly report on Form 10-Q filed with the Securities and Exchange Commission on February 14, 2011 and hereby incorporated by reference.
(4)	Filed as an exhibit to the registrant's current report on Form 8-K filed with the Securities and Exchange Commission on May 6, 2011 and hereby incorporated by reference.
(5)	Filed as an exhibit to the registrant's quarterly report on Form 10-Q filed with the Securities and Exchange Commission on May 15, 2012 and hereby incorporated by reference.
(6)	Filed as an exhibit to the registrant's current report on Form 8-K filed with the Securities and Exchange Commission on September 7, 2012 and hereby incorporated by reference.
(7)	Filed as an exhibit to the registrant's current report on Form 8-K filed with the Securities and Exchange Commission on September 19, 2012 and hereby incorporated by reference.
(8)	Filed as an exhibit to the registrant's current report on Form 8-K filed with the Securities and Exchange Commission on October 5, 2012 and hereby incorporated by reference.

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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.

August 14, 2020

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: August 14, 2020

/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.;

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:

(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: August 14, 2020

/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 June 30, 2020 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.

August 14, 2020

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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