Cleartronic, Inc.

Revenues from operations were $804,060 for the six months ended March 31, 2021 as compared to $943,902 for the six months ended March 31, 2020. Sales of ReadyOp ACE IP gateways decreased 86% from $286,170 to $40,294 in the six months  ended March 31, 2020 and 2021, respectively. This decrease was primarily due to one client purchasing $212,000 of ReadyOp ACE IP gateways in 2020.  Subscriptions of ReadyOp software increased 24% from $608,381 to $754,866 in the six- month period ended March 31, 2020 and 2021, respectively.  Consulting fees and related income decreased from $49,351 in 2020 to $6,500 in 2021 due to less training activity due to COVID in the six months ended March 31, 2021.

Cost of revenues was $133,803 for the six months ended March 31, 2021, as compared to $249,422 for the six months ended March 31, 2020. This decrease was primarily due to higher costs associated with the large ReadyOp ACE IP gateway sale in 2020. Gross profits were $670,257 and $694,480 for the six months ended March 31, 2021 and 2020, respectively. Despite the decrease in revenues, gross profit margins increased to 83% from 74% for the six months ended March 31, 2021 and 2020, respectively. The increase was primarily due to the lower profit margins from sales of ReadyOp ACE IP gateways as compared to higher margins generated from subscriptions of ReadyOp software.

Operating expenses decreased 1.46 % to approximately $562,443 for the six months ended March 31, 2021 compared to $570,798 for the six months ended March 31, 2020. For the six months ended March 31, 2021, selling expenses were $270,131 compared to $272,271 for the six months ended March 31, 2020. This slight decrease was primarily due to a decrease in travel  and advertising expenses. General and administrative expenses increased by $20,235 or 10.07%. This increase was primarily due to increased payroll expense offset a decrease in legal expense. Amortization and depreciation expense decreased by 91.71% from $10,878 for the three months ended March 31, 2020 to $902 for the six months ended March 31, 2021. Research and development expenses were $86,801 for the six months ended March 31, 2020 as compared to $70,327 for the six months ended March 31, 2021. The decrease was primarily due to decrease in consulting expense and expenses associated with the development of a new technology associated with a patent owned by the University of South Florida Research Foundation. The Company has obtained the exclusive license to develop and market the technology associated with the patent.

Net income attributable to common stockholders was $86,081 and $33,086 for the six months ended March 31, 2021 and 2020, respectively. The increase was primarily due to the lower profit margins from sales of ReadyOp ACE IP gateways generated in 2020 as compared to higher profit margins generated from subscription of ReadyOp software in 2021.

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.