CLRI 10-Q
Cleartronic, Inc. (CLRI)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
|
(Mark One) |
Quarterly Report Under Section 13 or 15(d) of the Securities Exchange Act of 1934 | |
| For the quarterly period ended |
||
| Transition Report Under Section 13 or 15(d) of the Securities Exchange Act of 1934 | ||
| For the transition period from to |
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
|
|
|
| (Address of principal executive offices) | (Zip Code) |
| Registrant’s telephone number, including area code: | |
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.
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).
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 ☐ |
| Smaller reporting company | |
| 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 ☐
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 | ||
|
Par Value $0.00001 |
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: shares as of August 11, 2026.
| -i- |
TABLE OF CONTENTS
| -1- |
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
CLEARTRONIC, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
| June 30, 2026 | September 30, 2025 | |||||||
| (unaudited) | ||||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Accounts receivable, net of an allowance for credit losses of $0 as of June 30, 2026 and $150,308 as of September 30, 2025 | ||||||||
| Inventory | ||||||||
| Prepaid expenses and other current assets | ||||||||
| Total current assets | ||||||||
| Property and Equipment, net | ||||||||
| Intangible Asset - customer list, net | ||||||||
| Total assets | $ | $ | ||||||
| LIABILITIES AND STOCKHOLDERS' DEFICIT | ||||||||
| Current liabilities: | ||||||||
| Accounts payable and accrued expenses | $ | $ | ||||||
| Deferred revenue | ||||||||
| Total Current liabiities | ||||||||
| Total liabilities | ||||||||
| Commitments and Contingencies (See Note 6) | ||||||||
| Stockholders' (deficit) equity: | ||||||||
| Series A preferred stock - $ par value; shares authorized; shares authorized, issued and outstanding, respectively. | ||||||||
| Series B preferred stock - $ par value; shares authorized, shares issued and outstanding, respectively. | ||||||||
| Series C preferred stock - $ par value; shares authorized, and shares issued and outstanding, respectively. | ||||||||
| Series D preferred stock - $ par value; shares authorized, shares issued and outstanding, respectively. | ||||||||
| Series E preferred stock - $ par value, shares authorized, shares issued and outstanding, respectively. | ||||||||
| Common stock - $ par value; shares authorized, and shares issued and outstanding, respectively. | ||||||||
| Additional paid-in capital | ||||||||
| Accumulated Deficit | ( | ) | ( | ) | ||||
| Total stockholders' deficit | ( | ) | ( | ) | ||||
| Total liabilities and stockholders' deficit | $ | $ | ||||||
The accompanying notes are an integral part of these consolidated financial statements
| -2- |
CLEARTRONIC, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
| For the Three Months Ended June 30, 2026 | For the Three Months Ended June 30, 2025 | For the Nine Months Ended June 30, 2026 | For the Nine Months Ended June 30, 2025 | |||||||||||||
| Revenue | $ | $ | $ | $ | ||||||||||||
| Cost of Revenue | ||||||||||||||||
| Gross Profit | ||||||||||||||||
| Operating Expenses: | ||||||||||||||||
| Selling expenses | ||||||||||||||||
| Administrative expenses | ||||||||||||||||
| Depreciation and amortization expense | ||||||||||||||||
| Research and development | ||||||||||||||||
| Total Operating Expenses | ||||||||||||||||
| Interest income/expense, net | ||||||||||||||||
| Total Other Income/(Expenses) | ||||||||||||||||
| Income (Loss) before income taxes | ( | ) | ( | ) | ||||||||||||
| Provision for income taxes from continuing operations | ||||||||||||||||
| Net income (loss) | ( | ) | ( | ) | ||||||||||||
| Preferred stock dividends Series A Preferred | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Net income (loss) attributable to common stockholders | $ | $ | ( | ) | $ | $ | ( | ) | ||||||||
| Net income (loss) per common share - basic | $ | $ | ( | ) | $ | $ | ( | ) | ||||||||
| Net income (loss) per common share - diluted | $ | $ | ( | ) | $ | $ | ( | ) | ||||||||
| Weighted Average of number of shares outstanding - basic | ||||||||||||||||
| Weighted Average of number of shares outstanding - diluted | ||||||||||||||||
The accompanying notes are an integral part of these consolidated financial statements
| -3- |
CLEARTRONIC, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY/(DEFICIT)
FOR THE THREE AND NINE MONTHS ENDED JUNE 30, 2026
(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 | Stockholders' | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Shares | Amount | Shares | Amount | Shares | Amount | Shares | Amount | capital | Deficit | Deficit | ||||||||||||||||||||||||||||||||||||||||||||||
| Balance at September 30, 2025 (Audited) | $ | $ | $ | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||||||||||||||||||||||||||||||||||
| Net income for the three months ended December 31, 2025 | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance at December 31, 2025 (Unaudited) | $ | $ | $ | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||||||||||||||||||||||||||||||||||
| Net income for the three months ended March 31, 2026 | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance at March 31, 2026 (Unaudited) | $ | $ | $ | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||||||||||||||||||||||||||||||||||
| Net income for the three months ended June 30, 2026 | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance at June 30, 2026 (Unaudited) | $ | $ | $ | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||||||||||||||||||||||||||||||||||
The accompanying notes are an integral part of these consolidated financial statements
| -4- |
CLEARTRONIC, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY/(DEFICIT)
FOR THE THREE AND NINE MONTHS ENDED JUNE 30, 2025
(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 | Stockholders' | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Shares | Amount | Shares | Amount | Shares | Amount | Shares | Amount | capital | Deficit | Deficit | ||||||||||||||||||||||||||||||||||||||||||||||
| Balance at September 30, 2024 | $ | $ | $ | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||||||||||||||||||||||||||||||||||
| Net loss for the nine months ended June 30, 2025 | - | - | - | - | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance at June 30, 2025 (Unaudited) | $ | $ | $ | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||||||||||||||||||||||||||||||||||
| Balance at March 31, 2025 (Unaudited) | $ | $ | $ | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||||||||||||||||||||||||||||||||||
| Net loss for the three months ended June 30, 2025 | - | - | - | - | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance at June 30, 2025 (Unaudited) | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||||||||||||||||||||||||||||||||||
The accompanying notes are an integral part of these consolidated financial statements
| -5- |
CLEARTRONIC, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
(Unaudited)
| For the Nine Months | For the Nine Months | |||||||
| Ended | Ended | |||||||
| June 30, 2026 | June 30, 2025 | |||||||
| NET INCOME (LOSS ) | $ | $ | ( | ) | ||||
| Cash Flows From Operating Activities | ||||||||
| Adjustments to reconcile net income to net cash used in operating activities: | ||||||||
| Depreciation and amortization expense | ||||||||
| Amortization of operating lease - right-of-use asset | ||||||||
| Recovery of credit losses | ( | ) | ||||||
| Loss on sale of fixed asset | ||||||||
| (Increase) decrease in assets: | ||||||||
| Accounts receivable | ||||||||
| Inventory | ||||||||
| Prepaid expenses and other current assets | ( | ) | ( | ) | ||||
| Increase (decrease) in liabilities: | ||||||||
| Accounts payable | ( | ) | ||||||
| Deferred revenue | ( | ) | ||||||
| Operating lease liability | ( | ) | ||||||
| Net Cash Used In Operating Activities | ( | ) | ( | ) | ||||
| Cash Flows From Investing Activities | ||||||||
| Purchase of fixed assets | ( | ) | ( | ) | ||||
| Net Cash Used in Investing Activities | ( | ) | ( | ) | ||||
| Cash Flows From Financing Activities | ||||||||
| Net increase in cash | ( | ) | ( | ) | ||||
| Cash at beginning of period | ||||||||
| Cash at end of period | $ | $ | ||||||
| SUPPLEMENTAL CASH FLOW INFORMATION: | ||||||||
| Cash paid for interest | $ | $ | ||||||
| Cash paid for taxes | $ | $ | ||||||
The accompanying notes are an integral part of these consolidated financial statements
| -6- |
Notes to Condensed Consolidated Financial Statements
June 30, 2026
(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™, ReadyMed ™ Alastar platforms and the AudioMate IP gateways discussed below.
The Company’s fiscal year end is September 30.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
PRINCIPLES OF CONSOLIDATION
The accompanying unaudited 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, 2025, 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 30, 2025. The results of operations for the nine months ended June 30, 2026, are not necessarily indicative of results to be expected for any other interim period or the fiscal year ending September 30, 2026.
USE OF ESTIMATES
In preparing the consolidated 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, intangible assets and allowance for credit losses.
RECLASSIFICATIONS
Certain prior year amounts have been reclassified for consistency with the current year presentation. These reclassifications had no material effect on the consolidated results of operations, stockholders’ equity, or cash flows.
In the current year, the Company adjusted its classification of selling and administrative expenses in the Statement of Operations. For comparative purposes, amounts in the prior years have been reclassified to conform to current year presentations. These reclassifications had no effect on previously reported results of operations or retained earnings.
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 has investments Treasury Bills. The Treasury Bills have remaining terms ranging from four-weeks to thirteen weeks on June 30, 2026. Treasury Bills with an original maturity date of three months or less are included within cash and cash equivalents on the balance sheets at June 30, 2026 and September 30, 2025.
ACCOUNTS RECEIVABLE AND ALLOWANCE FOR CREDIT LOSSES
The Company maintains current receivable amounts with most of its customers. The Company regularly monitors and assesses its risk of not collecting amounts owed by customers. This evaluation is based upon an analysis of current and past due amounts, along with relevant history and facts particular to the customer. The Company records its allowance for credit losses based on the results of this analysis. The analysis requires the Company to make significant estimates and as such, changes in facts and circumstances could result in material changes in the allowance for credit losses. The Company considers as past due any receivable balance not collected within its contractual terms.
The Company provided $
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, 2026 and September 30, 2025, respectively.
At June 30, 2026 inventory was $
At September 30, 2025, inventory was $
| -7- |
PREPAID EXPENSES AND OTHER CURRENT ASSETS
Prepaid expenses and other current assets consist primarily of deferred
subscriber costs and prepaid expenses. Deferred subscriber costs totaled $
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.
IMPAIREMENT OF LONG-LIVED ASSETS
Management evaluates the recoverability of the Company’s identifiable intangible assets and other long-lived assets when events or circumstances indicate a potential impairment exists, in accordance with the provisions of ASC 360-10-35-15 “Impairment or Disposal of Long-Lived Assets.”
If impairment is indicated based on a comparison of the assets’ carrying values and the undiscounted cash flows, the impairment to be recognized is measured as the amount by which the carrying amount of the assets exceeds the fair value of the assets.
There were
ASSET PURCHASE - INTANGIBLE ASSET – CLIENT LIST
Accounting for asset acquisitions falls under the guidance of Topic 805, Business Combinations, specifically Subtopic 805-50. A cost accumulation model is used to determine an asset acquisition’s cost. Assets acquired are based on their cost, generally allocated to them on a relative fair value basis. Direct acquisition-related costs are included in the cost of the acquired assets. No goodwill is calculated in an asset acquisition.
On August 1, 2024, the Company acquired a group of similar assets from
Alastar, Inc. (“Alastar”) for $
This asset group consisted of cash, prepaids and other current assets,
as well as intellectual property including trademarks, software platforms, and a client list. The client list was the only asset ascribed
value which was deemed to have continuing value to the Company. The Company has classified this client list as an intangible asset, which
will be amortized over
The table below summarizes the estimated fair value of the assets acquired and the liabilities assumed at the effective acquisition date.
| Consideration | ||||
| Cash | $ | |||
| Fair Value of consideration transferred | $ | |||
| Recognized amounts of identifiable assets acquired and liabilities assumed: | ||||
| Cash | $ | |||
| Prepaid expenses and other current assets | $ | |||
| Total assets acquired | $ | |||
| Deferred Revenue | $ | |||
| Total liabilities assumed | $ | |||
| Total identifiable net assets | $ | |||
| Intangible Assets - Client List | $ | |||
At June 30, 2026 and September 30, 2025, intangible asset – client list, net, is as follows:
For nine months ended June 30, 2026 | For the year ended September 30, 2025 | |||||||
| Intangible Assets – Customer Lists | $ | $ | ||||||
| Less: Accumulated Amortization | ( | ) | ( | ) | ||||
| Total Intangible Assets, net | $ | $ | ||||||
Amortization expense for the three months ended June 30, 2026 and 2025,
was $
Amortization expense for the nine months ended June 30, 2026 and 2025,
was $
| -8- |
Estimated future amortization expense for the year ended September 30,
| 2026 (3 Months) | $ | |||
| 2027 | ||||
| 2028 | ||||
| 2029 | ||||
| $ |
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 $
RESEARCH AND DEVELOPMENT COSTS
The Company expenses research and development costs as incurred.
For the three months ended June 30, 2026 and 2025, the Company had $
For the nine months ended June 30, 2026 and 2025, the Company had $
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 for the exchange for those goods and services. The Company applies the following five-step model to determine this amount:
| i. | Establishment of a contract with the 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 software licenses and integrated hardware. 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 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 are expensed as incurred on the date the revenue associated with the cost is recognized.
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 meetings and charge our clients on a per diem basis. These charges are recorded as consulting fees in our income statement.
On occasion we host conferences for our current and potential clients. Conference registration revenues are recognized at a point in time when the related conference is held and the Company has satisfied its performance obligations. Payments received in advance are recorded as deferred revenue. These charges are recorded as consulting fees in our income statement.
Customer billings for services not yet rendered and hardware not yet installed 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 June 30, 2026 and September 30, 2025 respectively, the Company recorded
$
DISAGGREGATED REVENUE
The following table sets forth the approximate net sales by primary category:
| For the three months ended | ||||||||
| June 30, 2026 | June 30, 2025 | |||||||
| Licensing of ReadyOp Software | $ | $ | ||||||
| Hardware Sales and Consulting | ||||||||
| Total | $ | $ | ||||||
| For the nine months ended | ||||||||
| June 30, 2026 | June 30, 2025 | |||||||
| Licensing of ReadyOp Software | $ | $ | ||||||
| Hardware Sales and Consulting | ||||||||
| Total | $ | $ | ||||||
| -9- |
DEFERRED REVENUE
The following table provides a summary of the changes included in deferred revenue during the nine months ended June 30, 2026 and year ended September 30, 2025:
For the nine months ended June 30, 2026 | For the year ended September 30, 2025 | |||||||
| Beginning balance | $ | $ | ||||||
| Additions to deferred liability (1) | ||||||||
| Deductions to deferred liability (2) | ( | ) | ( | ) | ||||
| Ending balance | $ | $ | ||||||
| (1) |
| (2) |
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 June 30, 2026 and 2025, we had options and warrants outstanding.
As of June 30, 2026 and 2025, we had shares of Series A Convertible Preferred stock outstanding, which are convertible into shares of common stock.
As of June 30, 2026 and 2025, we had shares of Series C Convertible Preferred stock outstanding which are convertible into shares of common stock.
As of June 30, 2026 and 2025, we had shares of Series D Preferred stock outstanding which are convertible into shares of common stock.
As of June 30, 2026 and 2025, we had shares of Series E Convertible Preferred stock outstanding which are convertible into shares of common stock. The table below details the computation of basic and diluted earnings per share (“EPS”) for the three and nine months ended June 30, 2026 and 2025:
For the three months ended June 30, 2026 | For the three months ended June 30, 2025 | |||||||
| Net income (loss) attributable to common stockholders for the period | $ | $ | ( | ) | ||||
| Weighted average number of shares outstanding | ||||||||
| Basic earnings per share | $ | ) | $ | |||||
| -10- |
The following table sets for the computation of diluted earnings per share:
For the three months ended June 30, 2026 | For the three months ended June 30, 2025 | |||||||
| Net income (loss) attributable to common stockholders for the period | $ | $ | ( | ) | ||||
| Add: Preferred stock dividends | ||||||||
| Adjusted net income (loss) income | $ | $ | ( | ) | ||||
| Weighted average number of shares outstanding | ||||||||
| Add: Shares issued upon conversion of preferred stock | ||||||||
| Weighted average number of common and common equivalent shares | ||||||||
| Diluted earnings per share | $ | ) | $ | |||||
For the nine months ended June 30, 2026 | For the nine months ended June 30, 2025 | |||||||
| Net income (loss) attributable to common stockholders for the period | $ | $ | ( | ) | ||||
| Weighted average number of shares outstanding | ||||||||
| Basic earnings per share | $ | ) | $ | |||||
The following table sets for the computation of diluted earnings per share:
For the nine months ended June 30, 2026 | For the nine months ended June 30, 2025 | |||||||
| Net income (loss) attributable to common stockholders for the period | $ | $ | ( | ) | ||||
| Add: Preferred stock dividends | ||||||||
| Adjusted net income (loss) income | $ | $ | ( | ) | ||||
| Weighted average number of shares outstanding | ||||||||
| Add: Shares issued upon conversion of preferred stock | ||||||||
| Weighted average number of common and common equivalent shares | ||||||||
| Diluted earnings per share | $ | ) | $ | |||||
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.
As of June 30, 2026 and September 30, 2025, we held no assets that were required to be measured at fair value on a recurring basis. There were no transfers between levels in the fair value hierarchy during the three and nine months ended June 30, 2026, respectively, and year ended September 30, 2025, respectively.
ADVERTISING COSTS
Advertising costs are expensed as incurred. The Company had advertising
costs of $
Advertising costs are expensed as incurred. The Company had advertising
costs of $
| -11- |
EMPLOYEE BENEFITS
The Company's employees have access to a qualified 401(k)defined contribution plan.
The Company’s matching contributions expenditure under the plan was
$
The Company’s matching contributions expenditure under the plan was
$
RECENTLY ADOPTED ACCOUNTING PRONOUNCEMENTS
FASB ASU 2023-07 – Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures
In November 2023, the FASB issued ASU 2023-07, which enhances reportable segment disclosure requirements by:
| ● | Requiring disclosure of significant segment expenses regularly provided to the chief operating decision maker (“CODM”). |
| ● | Requiring disclosure of the title and position of the CODM. |
| ● | Extending certain annual disclosures to interim periods. |
| ● | Clarifying that single reportable segment entities must apply ASC 280 in its entirety. |
This ASU was effective for annual periods beginning after December 15, 2023, and interim periods beginning after December 15, 2024, with retrospective application required.
The Company adopted ASU 2023-07 effective January 1, 2025, for interim reporting, and for its annual reporting period ended December 31, 2024. The adoption resulted in enhanced segment disclosures but did not have a material impact on the Company’s financial position, results of operations, or cash flows.
FASB ASU 2023-09 – Income Taxes (Topic 740): Improvements to Income Tax Disclosures
In December 2023, the FASB issued ASU 2023-09, which enhances income tax disclosure requirements by:
| ● | Standardizing and disaggregating rate reconciliation categories. |
| ● | Requiring disclosure of income taxes paid by jurisdiction. |
This ASU was effective for annual periods beginning after December 15, 2024, and may be applied on a prospective or retrospective basis.
The Company adopted ASU 2023-09 effective January 1, 2025. The adoption resulted in enhanced income tax disclosures but did not have a material impact on the Company’s financial position, results of operations, or cash flows.
FASB ASU 2025-05 – Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets
In July 2025, the FASB issued ASU 2025-05, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets. The ASU provides a practical expedient that permits entities to assume that current economic conditions as of the balance sheet date will remain unchanged over the remaining life of current (short-term) accounts receivable and current contract assets arising from transactions accounted for under ASC 606.
The Company early adopted ASU 2025-05 effective January 1, 2025 and elected the practical expedient. The amendments were applied prospectively. The adoption did not have a material impact on the Company’s financial position, results of operations, or cash flows.
Recently Issued Accounting Standards Not Yet Adopted
FASB ASU 2024-03 / ASU 2025-01 – Income Statement (Topic 220): Reporting Comprehensive Income – Expense Disaggregation Disclosures
In November 2024, the FASB issued ASU 2024-03, Disaggregation of Income Statement Expenses, which requires public business entities to disclose, in annual and interim reporting periods, disaggregated information about certain income statement expense line items in a tabular format, along with a qualitative reconciliation to the captions on the face of the financial statements. In January 2025, the FASB issued ASU 2025-01 to clarify that the effective date for non-calendar year-end entities requires initial adoption in an annual reporting period, not an interim period. The ASU is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption is permitted and may be applied on either a prospective or retrospective basis. The Company is currently assessing the potential impact of ASU 2024-03/2025-01 on its financial statement disclosures.
FASB ASU 2024-04 – Debt with Conversion and Other Options (Subtopic 470-20): Induced Conversions of Convertible Debt Instruments
In November 2024, the FASB issued ASU 2024-04, which clarifies the requirements for determining whether certain settlements of convertible debt instruments should be accounted for as an induced conversion. ASU 2024-04 is effective for annual periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods. Early adoption is permitted for all entities that have adopted the amendments in ASU 2020-06. Adoption may be applied on a prospective or retrospective basis. The Company is currently evaluating the impact that ASU 2024-04 may have on its financial statement presentation and disclosures.
Other Accounting Standards Updates
The Company has evaluated all other recently issued accounting standards not yet effective and has determined that the adoption of such standards is not expected to have a material impact on the Company’s financial statements or disclosures.
The FASB has issued various technical corrections and industry-specific updates that are not expected to have a material impact on the Company’s financial position, results of operations, or cash flows.
SEGMENT REPORTING
Operating segments are defined as components of an enterprise that have the following characteristics: (i) they engage in business activities from which they may earn revenue and incur expense, (ii) their operating results are regularly reviewed by the chief operating decision maker (“CODM”) for resource allocation decisions and performance assessment, and (iii) their discrete financial information is available. Our CODM is our Chief Executive Officer, who manages and allocates resources to our operations on a consolidated basis. We operate as one segment, and ReadyOp facilitates the marketing and sales of subscriptions to the ReadyOp™, ReadyMed ™ and Alastar platforms and the AudioMate IP gateways. Segment information is further described in Note 8.
| -12- |
LEASE ACCOUNTING
We determine if an arrangement is a lease, or contains a lease, at inception and record the leases in our financial statements upon lease commencement, which is the date when the underlying asset is made available for use by the lessor. We currently have no lease agreements in place.
When we have a lease agreement with lease and non-lease components, we have elected to utilize the practical expedient to account for lease and non-lease components together as a single combined lease component, from both a lessee and lessor perspective with the exception of direct sales-type leases and production equipment classes embedded in supply agreements. From a lessor perspective, the timing and pattern of transfer are the same for the non-lease components and associated lease component and, the lease component, if accounted for separately, would be classified as an operating lease.
We have elected not to present short-term leases on the balance sheet as these leases have a lease term of 12 months or less at lease inception and do not contain purchase options or renewal terms that we are reasonably certain to exercise. All other lease assets and lease liabilities are recognized based on the present value of lease payments over the lease term at commencement date. If a lease does not provide an implicit rate of return, we used our incremental borrowing rate based on the information available at lease commencement date in determining the present value of lease payments.
In general, leases, where we are the lessee, may include options to extend the lease term. These leases may include options to terminate the lease prior to the end of the agreed upon lease term. For purposes of calculating lease liabilities, lease terms include options to extend or terminate the lease when it is reasonably certain that we will exercise such options.
Lease expense for operating leases is recognized on a straight-line basis over the lease term as cost of revenues or operating expenses depending on the nature of the leased asset. Certain operating leases provide for annual increases to lease payments based on an index or rate. We calculate the present value of future lease payments based on the index or rate at the lease commencement date.
Differences between the calculated lease payment and actual payment are expensed as incurred. Amortization of finance lease assets is recognized over the lease term as cost of revenues or operating expenses depending on the nature of the leased asset.
On December 2, 2022, and effective on January 1, 2023, the Company signed
a two-year lease of
The tables below present information regarding the Company’s operating lease assets and liabilities at June 30, 2026 and September 30, 2025:
| June 30, 2026 | September 30, 2025 | |||||||
| Assets | ||||||||
| Operating lease -right-of-use assets-non-current | $ | $ | ||||||
| Liabilities | ||||||||
| Operating lease liability | $ | $ | ||||||
| Weighted-average remaining lease term (years) | - | - | ||||||
| Weighted-average discount rate | % | % | ||||||
| The components of lease expense were as follows: | ||||||||
| Operating lease cost | ||||||||
| Amortization on right-of-use operating lease asset | $ | $ | ||||||
| Lease liability expense in connection with obligation repayment | ||||||||
| Total operating lease costs | $ | $ | ||||||
| Supplemental cash outflows information related to operation lease was as follows: | ||||||||
| Operating cash outflows from operating lease (obligation payment) | $ | $ | ||||||
| Right-of-use asset obtained in exchange for new operating lease liability | $ | $ | ||||||
At September 30, 2025, the Company has no financing leases as defined in ASC 842, “Leases.”
NOTE 3 – PROPERTY, EQUIPMENT AND INTANGIBLE ASSETS
At June 30, 2026 and September 30, 2025, property and equipment, net, is as follows:
| June 30, 2026 | September 30, 2025 | |||||||
| Office Equipment | $ | $ | ||||||
| Less: Accumulated Depreciation | ( | ) | ( | ) | ||||
| Total Property and Equipment, net | $ | $ | ||||||
Depreciation expense for the three months ended June 30, 2026 and 2025,
was $
Depreciation expense for the nine months ended June 30, 2026 and 2025,
was $
| -13- |
NOTE 4 - EQUITY TRANSACTIONS
Preferred Stock Dividends
As of June 30, 2026 and September 30, 2025, the cumulative arrearage of
undeclared dividends for Series A Preferred stock totaled $
As of the date of this report, we have authorized shares of preferred stock, par value $ per share, of which shares were issued and outstanding. There are currently 5 series of preferred stock designated as follows:
| ● | shares have been designated as Series A Preferred Stock, of which are issued and outstanding; | |
| ● | shares have been designated as Series B Preferred Stock, of which is issued and outstanding; | |
| ● | shares have been designated as Series C Preferred Stock, of which are issued and outstanding; and | |
| ● | shares have been designated Series D Preferred stock, of which are issued and outstanding; and | |
| ● | shares have been designated Series E Preferred stock, of which 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 to 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. |
Preferred Stock Classification
The Company applies the guidance outlined in ASC 480, Distinguishing Liabilities from Equity, to determine the appropriate classification and measurement of preferred stock. Under ASC 480-10-25-4, financial instruments that embody an obligation to repurchase equity shares or require mandatory redemption at a fixed or determinable date must be classified as liabilities and measured at fair value.
Preferred shares that are conditionally redeemable - including those redeemable at the option of the holder or subject to redemption upon the occurrence of events outside the issuer’s control—are classified as temporary equity in accordance with ASC 480-10-S99-3A. Conversely, preferred shares that do not contain redemption provisions are appropriately classified as permanent equity.
None of the Company’s Series A, B, C, D, or E Preferred Stock contain any redemption rights, whether mandatory or conditional. Because no redemption provisions exist, these shares do not meet the criteria for liability classification under ASC 480-10-25-7. Furthermore, since redemption is not possible under any circumstances, the shares do not qualify as temporary equity under ASC 480-10-S99-3A. Accordingly, the preferred stock is properly classified as permanent equity.
Since the Company has a stockholders' deficit, all issuances of Series A, B, C, D, and E Preferred Stock are presented as a component of stockholders’ deficit in the financial statements.
Stock repurchase program
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. As of June 30, 2026 and September 30, 2025, no common stock was repurchased.
NOTE 5 - RELATED PARTY TRANSACTIONS
During the three months ended June 30, 2026 and 2025, the Company paid
$
During the nine months ended June 30, 2026 and 2025, the Company paid $
NOTE 6 - COMMITMENTS AND CONTINGENCIES
Legal Proceedings
From time to time, the Company may be subject to various legal proceedings and claims that arise in the ordinary course of the Company’s business activities. 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.
Obligation Under Operating Lease
On December 2, 2023, and effective on January 1, 2023, the Company signed
a two-year lease of
Rent expense incurred during the nine months ended June 30, 2026 and 2025
was $
| -14- |
Revenue and Accounts Receivable Concentration
For the three months ended June 30, 2026, no customer accounted for more
than
For the three months ended June 30, 2025, no customer accounted for more
than
For the nine months ended June 30, 2026, no customer accounted for more
than
For the nine months ended June 30, 2025, no customer accounted for more
than
As of June 30, 2026, three customers accounted for more than
As of September 30, 2025, two customers accounted for more than
Deferred Revenue Concentration
As of June 30, 2026, one customer accounted for
As of September 30, 2025, one customer accounted for
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.
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 was 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
In the event the Company proposes to sell any Equity Securities, then USFRF
will have the right to purchase
NOTE 7 - SEGMENT INFORMATION
We operate as one segment, and ReadyOp facilitates the marketing and sales of subscriptions to the ReadyOp™, ReadyMed ™ and Alastar ™ platforms and the AudioMate IP gateways.
Our Chief Executive Officer, as the CODM, evaluates our expenditures and monitor budget versus actual results. The monitoring of budget versus actual results and cash on hand are used in assessing the performance of the segment and in establishing resource allocation across the organization.
Factors used in determining the reportable segment include the nature of our operating activities, the organizational and reporting structure and the type of information reviewed by the CODM to allocate resources and evaluate financial performance.
Significant expenses include general and administrative, professional fees, officers’ salary, research and development, and interest income, which are each separately presented on our consolidated statements of operations.
| -15- |
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, Alastar platforms and the AudioMate IP gateways discussed below.
ReadyOp™ Software
ReadyOp is a proprietary, innovative web-based planning and communications 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.
ReadyOp requires no new or on-site hardware or programming by clients and provides multiple options for communications including radio interoperability using the Company's AudioMate gateways. Plans and operations can be built and stored securely in ReadyOp on a by-location, region and systemwide basis. Assets can be listed along with their location, person to contact and other information that may be needed. Diagrams, charts, maps, pictures, report forms and other documentation can be securely stored yet immediately available securely from any location. ReadyOp also provides efficient planning and response for responding to disasters and for continuity of operations (COOP) and recovery. ReadyOp is the COOP platform for multiple organizations including many federal agencies.
ReadyMed™ Software
In October 2019, the Company acquired the ReadyMed 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 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 recordkeeping to track the healing process of patients, record their recovery and monitor their medications. During the COVID-19 pandemic this software proved beneficial to multiple federal and state agencies and clients in the healthcare industry. 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.
Alastar Software
On August 1, 2024, the Company acquired a group of similar assets from Alastar, Inc. (“Alastar”) for $50,000. This asset group consisted of cash, prepaids and other current assets, as well as intellectual property including trademarks, software platforms, and a client list. The client list was the only asset ascribed value which was deemed to have continuing value to the Company. The Company has classified this client list as an intangible asset, which will be amortized over 5 years. It is planned that all operations and marketing of the Alastar platform will be conducted in the ReadyOp Communications subsidiary in conjunction with the current ReadyOp and ReadyMed activities.
The Company continues to support the clients who were using Alastar prior to the acquisition plus add additional new clients. Additionally, the Company has been transitioning much of the Alastar functionality into the ReadyOp platform as well as enhance the capabilities for existing and new clients. The Company plans to continue the transition and enhancement activities for at least the next two years.
AudioMate IP Gateways
The Company offers a proprietary line of Internet Protocol Gateways branded as AudioMate 360 IP Gateway. The AudioMate 360 IP Gateway was designed to provide an Internet Protocol Gateway to users of unified group communications. The AudioMate units are currently being sold directly to end-users by the Company's sales teams and by Value Added Resellers ("VARs"). More than 1,000 end-users in the United States and 18 foreign countries have purchased the Company's AudioMate gateways. Although other devices are available that perform the same or similar functions, we believe that our price for the AudioMate 360 IP Gateway is competitive with prices other companies are charging for similar devices.
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.
FOR THE THREE MONTHS ENDED JUNE 30, 2026 COMPARED TO THE THREE MONTHS ENDED JUNE 30, 2025
Revenue
Revenues increased 14.53% to $1,235,269 for the three months ended June 30, 2026 as compared to $1,078,530 for the three months ended June 30, 2025. The primary reason for the increase was an increase in revenue from the ReadyOp and Alastar platforms from $948,892 in 2025 to $1,060,941 in 2026. There was also an increase in sales of ReadyOp hardware products from $17,550 in 2025 to $47,250 in 2026. Consulting fees and related income increased from $112,088 in 2025 to $127,078 in 2026 due to an increase in consulting activity.
Cost of Revenue
Cost of revenues increased 19.02% to $313,629 for the three months ended June 30, 2026 as compared to $263,509 for the three months ended June 30, 2025. The primary reason for the increase was due to an increase in ReadyOp and Alastar platform sales and expenses associated with trade show attendance and other marketing expenses. Gross profits were $921,640 and $815,021 for the three months ended June 30, 2026 and 2025, respectively.
| -16- |
Operating Expenses
Operating expenses decreased 1.97% to $857,638 for the three months ended June 30, 2026 compared to $874,887 for the three months ended June 30, 2025. The decrease was primarily due to administrative expenses, with a slight offset in selling and research and development expenses. General and administrative expenses increased by $4,188 or 0.54% as a result of the increase in general business expenses, an increase in headcount and personnel related costs associated with the addition of new employees. There were also charitable contributions paid during the three months.
For the three months ended June 30, 2026, selling expenses were $66,025 compared to $85,840 for the three months ended June 30, 2025, a decrease of 23.08%. This decrease was primarily due to a decrease in advertising expense, travel expenses and offset by a recovery of credit losses.
Research and development expenses were $0 for the three months ended June 30, 2026, as compared to $2,000 for the three months ended June 30, 2025, a decrease of 100%. This decrease was primarily due to timing of research and development expenses.
Other Income/(Expenses)
The Company's other income increased by $2,231 from other income of $9,004 during the three months ended June 30, 2025 as compared to $11,235 in other income for the three months ended June 30, 2026, an increase of 24.78%. This increase was due to an increase in interest income on treasury bill investments of $6,735 for the three months ended June 30, 2026.
Income (Loss) before Income Taxes
The Company’s income before income taxes was $75,237, during the three months ended June 30, 2026, as compared to loss of $50,862 before income taxes for the three months ended June 30, 2025 due to the increase in revenue that was partially offset by the increase in the Company’s operating expenses.
Net Income (Loss) Income Attributable to Common Stockholders
Net income attributable to common stockholders was $65,006 for the three months ended June 30, 2026 as compared to a net loss of $61,093 for the three months ended June 30, 2025. The increase was primarily due to an increase in revenue which was partially offset by an increase in operating expenses. The increased costs were partially due to addition of new employees associated with Alastar. The preferred stock dividends remained consistent.
FOR THE NINE MONTHS ENDED JUNE 30, 2026 COMPARED TO THE NINE MONTHS ENDED JUNE 30, 2025
Revenue
Revenues increased 20.65% to $3,621,310 for the nine months ended June 30, 2026 as compared to $3,001,557 for the nine months ended June 30, 2025. The primary reason for the increase was an increase in revenue from the ReadyOp and Alastar platforms from $2,680,468 in 2025 to $3,062,436 in 2026. There was also an increase in sales of ReadyOp hardware products from $50,245 in 2025 to $177,250 in 2026. Consulting fees and related income increased from $270,844 in 2025 to $381,625 in 2026 due to an increase in consulting activity.
Cost of Revenue
Cost of revenues increased 8.70% to $716,453 for the nine months ended June 30, 2026 as compared to $659,098 for the nine months ended June 30, 2025. The primary reason for the increase was due to an increase in ReadyOp and Alastar platform sales and expenses associated with trade show attendance and other marketing expenses. Gross profits were $2,904,857 and $2,342,459 for the nine months ended June 30, 2026 and 2025, respectively.
Operating Expenses
Operating expenses increased 4.50% to $2,605,832 for the nine months ended June 30, 2026 compared to $2,493,718 for the nine months ended June 30, 2025. The increase was primarily due to administrative expenses, with a slight offset in selling and research and development expenses. General and administrative expenses increased by $166,974 or 7.37% as a result of the increase in general business expenses, an increase in headcount and personnel related costs associated with the addition of new employees. There were also charitable contributions paid during the nine months.
For the nine months ended June 30, 2026, selling expenses were $152,734 compared to $203,830 for the nine months ended June 30, 2025, a decrease of 25.07%. This decrease was primarily due to a decrease in advertising expense, travel expenses and offset by a recovery of credit losses.
Research and development expenses were $4,000 for the nine months ended June 30, 2026, as compared to $8,000 for the nine months ended June 30, 2025, a decrease of 50.00%. This decrease was primarily due to timing of research and development expenses.
Other Income/(Expenses)
The Company's other income increased by $11,609 from other income of $23,180 during the nine months ended June 30, 2025 as compared to $34,789 in other income for the nine months ended June 30, 2026, an increase of 50.08%. This increase was due to an increase in interest income on treasury bill investments of $24,615 for the nine months ended June 30, 2026.
Income (Loss) before Income Taxes
The Company’s income before income taxes was $333,814, during the nine months ended June 30, 2026, as compared to loss of $128,079 income before income taxes for the nine months ended June 30, 2025 due to the increase in revenue that was partially offset by the increase in the Company’s operating expenses.
Net Income (Loss) Income Attributable to Common Stockholders
Net income attributable to common stockholders was $303,121 for the nine months ended June 30, 2026 as compared to a net loss of $158,771 for the nine months ended June 30, 2025. The increase was primarily due to an increase in revenue which was partially offset by an increase in operating expenses. The increased costs were partially due to addition of new employees associated with Alastar . The preferred stock dividends remained consistent.
LIQUIDITY AND CAPITAL RESOURCES
For the nine months ended June 30, 2026, net cash used in operations of $108,277 was the result of a net income of $333,814, depreciation and amortization expense of $16,856, a recovery of credit losses of $23,343, a decrease of accounts receivable of $85,885, an increase in prepaid expenses of $16,696 and a decrease in inventory of $37,911. These were offset by a decrease in accounts payable of $44,732 and a decrease in deferred revenue of $497,972.
For the nine months ended June 30, 2025, net cash used in operations of $68,313 was the result of a net loss of $128,079, depreciation and amortization expense of $16,619, amortization of operating lease of $5,983, increase in provision of credit losses of $20,500, a loss on sale of fixed assets of $483, an increase in prepaid expenses of $65,988 and an increase in accounts payable of $16,463 and an increase in deferred revenue of $12,975. These were offset by a decrease of accounts receivable of $47,808, a decrease in inventory of $11,429, and a decrease in operating lease liability of $6,506.
Net cash used in investing activities was $8,617 and $4,768 for the nine months ended June 30, 2026 and 2025, respectively, which was for the purchase of fixed assets.
| -17- |
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, 2025 for information regarding our critical accounting estimates.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
Not applicable
Item 4. Controls and Procedures.
Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported, within the time period specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed or submitted under the Securities Exchange Act of 1934 is accumulated and communicated to management including our principal executive officer/principal financial officer as appropriate, to allow timely decisions regarding required disclosure
Management has carried out an evaluation of the effectiveness of the design and operation of our company’s disclosure controls and procedures. Due to limited number of personnel, there are inherent challenges in achieving complete segregation of duties within the financial reporting process, management concluded that the Company’s disclosure controls and procedures are not effective as of such date. We intend to take appropriate and reasonable steps to make the necessary improvements to remediate this deficiency as resources to do so become available.
Change in Internal Controls over Financial Reporting
During this quarter, 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 4. Mine Safety Disclosures
None
Item 5. Other Information
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. |
| -18- |
| 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. | |||
| August 12, 2026 | |||
| 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 | |||
| -19- |