Financial Gravity Companies, Inc 8-K/A, filed Aug 27, 2020

Financial Gravity Companies, Inc. (FGCO)

8-K/A 2020-08-27 For: 2020-05-21

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Added on April 06, 2026

About this 8-K/A

Financial Gravity Companies, Inc filed this 8-K/A on August 27, 2020, reporting on events of May 21, 2020.

Items reported

Item 9.01: Financial statements and exhibits

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333-144504–	20-4057712 –
(Commission File Number)	(IRS Employer Identification No.)

Title of each class	Trading symbol(s)	Name of each exchange on which registered
N/A	N/A	N/A

Exhibit Number		Description
2.1		Agreement and Plan of Merger entered into as of September 30, 2019, by and among Financial Gravity Companies, Inc., a Nevada corporation, Presidential Brokerage, Inc., a California corporation, and Financial Gravity Wealth, Inc., a Texas corporation (incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K filed on May 29, 2020).

2.2		Second Amendment to Agreement and Plan of Merger entered into as of May 14, 2020, by and among Financial Gravity Companies, Inc., a Nevada corporation, Forta Financial Group, Inc. (formerly named Presidential Brokerage, Inc.), a California corporation, and Sofos Investments, Inc. (formerly named Financial Gravity Wealth, Inc.), a Texas corporation (incorporated by reference to Exhibit 2.2 to the Company’s Current Report on Form 8-K filed on May 29, 2020).

99.1		The Company’s historical audited financial statements and accompanying notes as of and for (i) the year ended September 30, 2019, included in the Company’s Annual Report on Form 10-K, filed with the Securities Exchange Commission (the “SEC”) on January 13, 2020, and (ii) the year ended September 30, 2018, included in the Company’s Annual Report on Form 10-K filed with the SEC on January 15, 2019.

99.2		The Company’s historical unaudited financial statements and accompanying notes as of and for (i) the six months ended March 31, 2020, included in the Company’s Quarterly Report on Form 10-Q, filed with the SEC on May 29, 2020, and (ii) the six months ended March 31, 2019, filed with the SEC on May 14, 2019.

99.3*		Forta’s audited financial statements and accountants’ report for the fiscal years ended December 31, 2018 and September 30, 2019.

99.4*		Forta’s unaudited condensed financial statements for the nine months ended June 30, 2020

99.5*		Unaudited Pro Forma Condensed Combined Financial Statements of the Company And Subsidiaries For The Nine Months Ended June 30, 2020 and the fiscal year ended September 30, 2019.

Financial Gravity Companies, Inc.
(Registrant)

By:	/s/Scott Winters
	Name:	Scott Winters
	Title:	Chief Executive Officer

	Page
Report of Independent Registered Public Accounting Firm	3

Financial Statements

Statement of Financial Condition	4 - 5

Statement of Operations	6

Statement of Stockholders' Equity	7

Statement of Cash Flows	8

Notes to Financial Statements	9- 13

Supplemental Information	14

Report of Independent Registered Public Accounting Firm on Exemption Report	15

Independent Accountants' Agreed Upon Procedures Report on Schedule of Assessment and Payments (SIPC-7)	16

Cash and cash equivalents	$	224,137
Due from clearing house		38,052
Accrued revenue		21,017
Payroll Advances		2,500
Prepaid Expenses		39,215
Office equipment, furniture and leasehold improvements, at cost, less accumulated depreciation of $318,856		4,900
Clearing deposit		100,434
Deposit		38,995
Operating Lease Right of Use Asset		678,779

TOTAL ASSETS	$	1,148,030

Accounts payable	$	22,578
Accrued expenses		17,139
Accrued contingent liability		71,975
Commissions payable		71,999
Operating Lease liabilities		678,778

TOTAL LIABILITIES		862,469

COMMITMENT (Note 4)

STOCKHOLDERS' EQUITY:
Common stock, at a stated value of $0.05 per share; authorized 10,000,000 shares, 6,971,874 shares issued and outstanding		354,343
Treasury Stock		(1,001	)
Additional paid in capital		921,193
Retained deficit		(988,975	)

TOTAL STOCKHOLDERS' EQUITY		285,560

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	1,148,030

REVENUES:
Total services	$	2,714,247
TOTAL REVENUE		2,714,247

OPERATING EXPENSES:
Salaries and commissions		1,521,544
Rent		306,481
Advertising		126,355
Payroll and other taxes		111,995
Other operating		164,042
Office expense		4,470
Insurance		65,699
Outside services		110,005
Brokerage charges		151,075
Telephone		37,312
Registration fees		31,113
Client costs		32,001
Travel and entertainment		46,698
Depreciation		8,194
TOTAL EXPENSES		2,716,982

NET LOSS	$	(2,735	)

	Common Stock				Treasury Stock							Retained
	Shares		Amount		Shares			Amount		Capital		Earnings			Total
BALANCE, JANUARY 1, 2019		6,675,349	$	354,343		–		$	–	$	921,193	$	(986,239	)	$	289,297
Stock repurchase		296,525		–		(296,525	)		51,999		–		–			–
Net loss		–		–					–		–		(2,735	)		(2,735	)
BALANCE,SEPTEMBER 30, 2019		6,971,874	$	354,343		(296,525	)	$	51,999	$	921,193	$	(988,974	)	$	286,562

CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	(2,735	)
Non-cash items:
Depreciation		8,194
Increase (decrease) in cash resulting from change in:
Due from clearing house		70,702
Prepaid Expenses		(33,799	)
Accrued revenue		122
Accounts payable		(50,961	)
Accrued expenses		45,616
Commissions payable		(52,438	)

NET CASH USED FOR OPERATING ACTIVITIES		(15,299	)

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of office equipment and leasehold improvements		(13,095	)
Deposit paid		(6,426	)

NET CASH USED FOR INVESTING ACTIVITIES		(19,521	)

CASH FLOWS FROM FINANCING ACTIVITIES:
Treasury Stock Sale and Repurchase		51,999

NET CASH PROVIDED BY FINANCING ACTIVITIES		51,999

NET INCREASE IN CASH AND CASH EQUIVALENTS		17,179

CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR		206,958

CASH AND CASH EQUIVALENTS, END OF YEAR	$	224,137

Operating lease cost	$	289,687
Variable lease cost	$	16,794
Total lease cost	$	306,481

Operating leases:
Operating lease ROU assets	$	678,778
Operating lease liabilities	$	678,778

Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flow from operating leases	$	131,722
ROU assets obtained in exchange for lease obligations:
Operating leases	$	810,500
Reductions to ROU assets resulting from reductions to lease obligations:
Operating leases	$	(131,722	)
Weighted average remaining lease term:
Operating leases		2.5 years
Weighted average discount rate:
Operating leases		0%

STOCKHOLDERS' EQUITY	$	285,560

DEDUCTIONS:
Non-allowable assets		(85,611	)

NET CAPITAL	$	199,949

MINIMUM NET CAPITAL REQUIRED (greater of 6-2/3% of aggregate indebtedness or $100,000)	$	100,000

AGGREGATE INDEBTEDNESS

TOTAL AGGREGATE INDEBTEDNESS	$	183,691

RATIO OF AGGREGATE INDEBTEDNESS TO NET CAPITAL		91.87

CURRENT ASSETS:
Cash and cash equivalents	$	206,958
Due from clearing house		108,754
Accrued revenue		21,139
Prepaid Expenses		5,417

Total Current Assets		342,268

PROPERTY AND EQUIPMENT, at cost
Office equipment and furniture		311,013
Less accumulated depreciation		(311,013	)

Total Property and Equipment		–

OTHER ASSETS:
Clearing deposit		100,434
Deposit		32,569

Total Other Assets		133,003

TOTAL ASSETS	$	475,271

CURRENT LIABILITIES:
Accounts payable	$	73,539
Accrued expenses		27,148
Accrued contingent liability		22,000
Commissions payable		116,288

Total Current Liabilities		238,975

COMMITMENT (Note 4)

STOCKHOLDERS' EQUITY:
Common stock, at a stated value of $0.05 per share; authorized 10,000,000 shares, 1,764,333 shares issued and outstanding		354,343
Treasury Stock		(53,000	)
Additional paid in capital		921,193
Retained deficit		(986,239	)

Total Stockholders' Equity		236,297

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	475,272

REVENUES:
Total services	$	3,538,748
TOTAL REVENUE		3,538,748

OPERATING EXPENSES:
Salaries and commissions		2,575,119
Rent		539,710
Advertising		194,668
Payroll and other taxes		183,073
Other operating		75,094
Office expense		73,339
Insurance		92,194
Outside services		83,945
Brokerage charges		123,338
Telephone		42,188
Registration fees		53,221
Client costs		5,030
Travel and entertainment		37,351
Depreciation		2,350
TOTAL EXPENSES		4,080,619

NET LOSS	$	(541,872	)

	Common Stock					Treasury Stock					Paid-in		Retained
	Shares			Amount		Shares		Amount			Capital		Earnings			Total
BALANCE, JANUARY 1, 2018		1,764,333		$	88,976		–	$	–		$	533,596	$	(444,367	)	$	178,205
Stock repurchase		(396,317	)		–		396,317		(53,000	)		–		–			–
Stock purchase		5,307,333			265,367		–		–			337,597		–			602,964
Capital contribution		–			–		–		–			50,000		–			50,000
Net loss		–			–		–		–			–		(541,872	)		(541,872	)
BALANCE, DECEMBER 31, 2018		6,675,349		$	354,343		396,317	$	53,000	)	$	921,193	$	(986,239	)	$	289,297

	All Satisfactory Subordinated Debt			Debt that Qualifies as Equity Capital
BALANCE, JANUARY I, 2018	$	403,000		$	403,000

Increases: Debt issued and accrued interest		–			–

Decreases: Debt Converted to common stock		(403,000	)		(403,000	)

BALANCE, DECEMBER 31, 2018	$	–		$	–

	June 30, 2020			June 30, 2019
	Unaudited			Unaudited
ASSETS
Current Assets
Total Bank Accounts	$	565,834		$	192,614
Total Accounts Receivable		30,328			–
Total Other Current Assets		164,519			112,577
Total Current Assets		760,681			305,191
Fixed Assets		–			–
Total Fixed Assets		–			7,842
Other Assets		–			–
Total Other Assets		516,469			133,003
TOTAL ASSETS		1,277,150			446,036
LIABILITIES AND EQUITY
Liabilities
Current Liabilities
Total Accounts Payable		17,254			9,213
Other Current Liabilities		214,846			172,892
Total Current Liabilities		232,100			182,104
Long-Term Liabilities
Total Long-Term Liabilities		760,104			–
Total Liabilities		992,204			182,104
Equity
300 Common stock		354,343			354,343
303 Treasury Stock		(1,001	)		(1,001	)
305 Paid In Capital		921,193			921,193
32000 Retained Earnings		(988,975	)		(1,023,225	)
Net Income		(614	)		12,622
Total Equity		284,946			263,932
TOTAL LIABILITIES AND EQUITY	$	1,277,150		$	446,036

	Nine Months Ending June 30, 2020 Unaudited			Nine Months Ending June 30, 2019 Unaudited
Income
Revenue	$	2,737,721		$	3,108,246
Gross Profit		2,737,721			3,108,246
Expenses
Marketing		118,269			89,719
Compensation		1,728,617			1,695,485
General & Administrative		864,152			1,268,486
Depreciation Expense		6,182			4,900
Legal Services		6,986			16,529
Total Expenses		2,724,206			3,075,120
Net Operating Income		13,515			33,126
Other Expenses
Income Taxes		893			33,740
Total Other Expenses		893			33,740
Net Other Income		(893	)		(33,740	)
Net Loss	$	12,622		$	(614	)

	Nine Months Ending June 30, 2020			Nine Months Ending June 30, 2019
	Unaudited			Unaudited
OPERATING ACTIVITIES
Net Loss	$	12,622		$	(614	)

Adjustments to reconcile Net Loss to Net Cash provided by operations:
Accounts Receivable		–			(30,328	)
Accrued Revenue		(6,438	)		(59,677	)
Advances to Employees		–			2,500
Due from clearing house		(6,010	)		(7,383	)
Prepaid Expenses		229			20,825
Accounts Payable		(179	)		(5,324	)
401k Payable		1,072			722
Accrued Payroll Taxes		152			(1,226	)
Federal Income Tax Payable		–			11,799
Other Accrued Liabilities		1,475			(12,611	)
Payable to Advisors:Accrued Revenue Payable		(18,252	)		1,742
Payable to Advisors:Commissions Payable - Internal advisors		9,403			(9,860	)
Payable to Advisors:Commissions payable - External advisors		19,998			–
Payroll Payable		16,238			–
Payroll Taxes		4,402			–
Vacation Pay Liability		4,212			30,125
Prepaid Income		–			3,000
State Corp. Tax Liability		–			10,044
Total Adjustments to reconcile Net Income to Net Cash provided by operations:		6,304			(25,654	)
Net cash provided by operating activities		18,925			(26,268	)

INVESTING ACTIVITIES
Leasehold Improvements		(7,842	)		4,900
		–			(20,000	)
Deposits		(5,364	)		5,364
Net cash provided by investing activities		(13,206	)		(9,736	)

FINANCING ACTIVITIES
Treasury Stock		(1	)		–
Net cash provided by financing activities		5,719			377,700
Net cash increase for period		5,718			341,696
Cash at beginning of period		186,895			224,137
Cash at end of period	$	192,614		$	565,834

PURCHASE PRICE	$	7,600,415
ASSETS
Current Assets
Cash		710,154
Accounts Receivable		20,882
Other Current Assets		135,056
Total Current Assets		866,093
Other Assets		582,330
TOTAL ASSETS		1,448,423
LIABILITIES
Liabilities
Current Liabilities
Total Accounts Payable		18,215
Total Other Current Liabilities		739,579
Total Current Liabilities		757,793
Long-Term Liabilities
Total Long-Term Liabilities		448,265
Total Liabilities	$	1,206,058
Goodwill	$	7,358,050

	As of June 30, 2020			As of September 30, 2019
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	629,322		$	260,190
Trade accounts receivable, net		81,000			147,377
Prepaid expenses and other current assets		315,901			112,795
Total current assets		1,026,223			520,362

OTHER ASSETS
Property and equipment, net		88,452			144,890
Right to use lease asset		382,404			678,778
Deposits					139,429
Proprietary content, net		213,412			262,550
Non-compete agreements, net		1,322			5,260
Intellectual property		53,170			53,171
Goodwill		8,452,752			1,094,702
TOTAL ASSETS	$	10,217,735		$	2,899,143

LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES
Accounts payable – trade	$	67,948		$	197,327
		84,801			–
Accrued expenses and other current liabilities		1,134,582			307,985
Contract liabilities		70,070			94,733
Line of credit		58,985			63,919
		382,404			–
Notes payable		667,181			13,393
Total current liabilities		2,465,971			677,357

Notes payable - net of current		18,896			23,534
Lease liability - non-current		–			678,778
Total non-current liabilities		18,896			702,312
Total Liabilities		2,484,867			1,379,669

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS’ EQUITY
Common stock, $0.001 par value; 300,000,000 shares authorized; 83,023,048 shares issued and outstanding as of June 30, 2020 and 41,436,033 shares issued and outstanding as of September 30, 2019		83,023			395,779
Treasury Stock					(1,001	)
Additional paid-in capital		14,286,471			8,312,785
Accumulated deficit		(6,636,626	)		(7,188,090	)
Total stockholders’ equity		7,732,868			1,519,473

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	10,217,735		$	2,899,143

Income
Service Income	$	2,194,265
Investment Management Fees		1,779,117
Total Income		7,635,879
Gross Profit		7,635,879
Expense
Compensation Expense		5,626,092
Cost of services		54,927
Depreciation & Amortization		198,193
General and Administrative		1,759,285
Marketing		281,070
Professional Services		156,546
Total Expense		8,076,113
Net Ordinary Income		(440,234	)
Other Expense
Interest Expense		145,623
Income Taxes		893
Other Expense		2,484
Total Other Expense		149,000
Net Other Income		(149,000	)
Net Income	$	(589,234	)

	Forta (A)		Financial Gravity (B)			Combined
Income
Investment Management Fees	$	3,108,246	$	859,754		$	859,754
Service Income		–		979,959			4,088,206
Total Revenue		3,108,246		–			4,927,760
Gross Profit		3,108,246		–			4,927,760
Expense
Compensation Expense		1,695,484		1,752,987			3,448,472
Cost of services		139,847		33,309			173,157
Depreciation & Amortization		4,900		86,443			91,344
General and Administrative		906,878		265,749			1,172,628
Marketing		89,168		84,036			173,205
Professional Services		237,364		216,709			454,074
Total Expense		3,073,644		2,439,233			5,512,879
Net Ordinary Income		34,601		(599,521	)		(564,920	)
Other Income/Expense		–		135,919			135,919
Total Other Income		–		135,919			135,919
Total Other Expense		–		5,030			–
Net Other Income		–		–			130,889
Net Income	$	34,601	$	(468,632	)	$	(434,031	)
Net income (loss) per common share:	$	0	$	0		$	0

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