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Cleartronic, Inc. – ‘10-K’ for 9/30/17 – ‘EX-101.INS’

On:  Tuesday, 1/16/18, at 4:35pm ET   ·   For:  9/30/17   ·   Accession #:  1091818-18-6   ·   File #:  0-55329

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  As Of               Filer                 Filing    For·On·As Docs:Size             Issuer                      Filing Agent

 1/16/18  Cleartronic, Inc.                 10-K        9/30/17   55:3.1M                                   Yes International/FA

Annual Report   —   Form 10-K   —   Sect. 13 / 15(d) – SEA’34
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 10-K        Year End Report- Sept. 30, 2017                     HTML    404K 
 3: EX-10.21    Material Contract                                   HTML     39K 
 2: EX-10.4     Material Contract                                   HTML     87K 
 4: EX-31.1     Certification -- §302 - SOA'02                      HTML     20K 
 5: EX-31.2     Certification -- §302 - SOA'02                      HTML     20K 
 6: EX-32.1     Certification -- §906 - SOA'02                      HTML     17K 
 7: EX-32.2     Certification -- §906 - SOA'02                      HTML     17K 
14: R1          Document and Entity Information                     HTML     45K 
15: R2          Consolidated Balance Sheets                         HTML    114K 
16: R3          Consolidated Balance Sheets (Parenthetical)         HTML     47K 
17: R4          Consolidated Statements of Operations               HTML     64K 
18: R5          Consolidated Statements of Cash Flows               HTML     91K 
19: R6          Consolidated Statements of Cash Flows               HTML     40K 
                (Parenthetical)                                                  
20: R7          Consolidated Statements of Changes in               HTML     78K 
                Stockholders' Equity (Deficit)                                   
21: R8          Organization, and Summary of Significant            HTML     71K 
                Accounting Policies                                              
22: R9          Recent Accounting Pronouncements                    HTML     23K 
23: R10         Going Concern                                       HTML     22K 
24: R11         Deferred Income Taxes                               HTML     36K 
25: R12         Notes Payable - Stockholders                        HTML     21K 
26: R13         Convertible Promissory Notes                        HTML     29K 
27: R14         Equity Transactions                                 HTML     39K 
28: R15         Related Party Transactions                          HTML     23K 
29: R16         Commitments and Contingencies                       HTML     28K 
30: R17         Subsequent Events                                   HTML     19K 
31: R18         Organization, and Summary of Significant            HTML    126K 
                Accounting Policies (Policies)                                   
32: R19         Organization, and Summary of Significant            HTML     37K 
                Accounting Policies (Tables)                                     
33: R20         Deferred Income Taxes (Tables)                      HTML     36K 
34: R21         Equity Transactions (Tables)                        HTML     25K 
35: R22         Commitments and Contingencies (Tables)              HTML     23K 
36: R23         Organization, and Summary of Significant            HTML     76K 
                Accounting Policies (Details)                                    
37: R24         Organization, and Summary of Significant            HTML     35K 
                Accounting Policies(Summary of fair value                        
                hierarchy for intangible assets) (Details)                       
38: R25         Going Concern (Details)                             HTML     29K 
39: R26         Deferred Income Taxes (Narrative) (Details)         HTML     22K 
40: R27         Deferred Income Taxes (Schedule of Net Deferred     HTML     33K 
                Income Tax Assets and Liabilities) (Details)                     
41: R28         Deferred Income Taxes (Reconciliation of Federal    HTML     31K 
                and State Income Tax Rate) (Details)                             
42: R29         Notes Payable - Stockholders (Details)              HTML     42K 
43: R30         Convertible Promissory Notes (Details)              HTML     98K 
44: R31         Equity Transactions (Preferred Stock) (Details)     HTML     60K 
45: R32         Equity Transactions (Common Stock) (Details)        HTML     77K 
46: R33         Equity Transactions (Consultant Stock Plans)        HTML     20K 
                (Details)                                                        
47: R34         Equity Transactions (Schedule of Stock Option       HTML     40K 
                Activity) (Details)                                              
48: R35         Related Party Transactions (Details)                HTML     62K 
49: R36         Commitments and Contingencies (Obligations Under    HTML     32K 
                Operarting Leases) (Details)                                     
50: R37         Commitments and Contingencies (Major Customer,      HTML     35K 
                Major Supplier and Exclusive Licensing Agreement)                
                (Details)                                                        
51: R38         Commitments and Contingencies (Schedule of Minimum  HTML     23K 
                Royalty Payments) (Details)                                      
52: R39         Subsequent Events (Details)                         HTML     36K 
54: XML         IDEA XML File -- Filing Summary                      XML     90K 
53: EXCEL       IDEA Workbook of Financial Reports                  XLSX     59K 
 8: EX-101.INS  XBRL Instance -- clri-20170930                       XML    758K 
10: EX-101.CAL  XBRL Calculations -- clri-20170930_cal               XML    143K 
11: EX-101.DEF  XBRL Definitions -- clri-20170930_def                XML    471K 
12: EX-101.LAB  XBRL Labels -- clri-20170930_lab                     XML    755K 
13: EX-101.PRE  XBRL Presentations -- clri-20170930_pre              XML    619K 
 9: EX-101.SCH  XBRL Schema -- clri-20170930                         XSD    102K 
55: ZIP         XBRL Zipped Folder -- 0001091818-18-000006-xbrl      Zip    100K 


‘EX-101.INS’   —   XBRL Instance — clri-20170930


This Exhibit is an XBRL XML File.


                                                                                                                                                                                
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<p style="text-align: justify; margin: 0pt; padding-left: 63.35pt"><b>NOTE 1 - ORGANIZATION, AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES </b></p> <p style="text-align: justify; margin: 0pt; padding-left: 63.35pt"><b> </b></p> <p style="text-align: justify; margin: 0pt; padding-left: 63.35pt"><b> </b></p> <p style="text-align: justify; margin: 0pt; padding-left: 63.35pt"><b> </b></p> <p style="text-align: justify; margin: 0pt; padding-left: 63.35pt"><b>ORGANIZATION</b></p> <p style="text-align: justify; margin: 0pt"> </p> <p style="text-align: justify; margin: 0pt; padding-left: 63.7pt">Cleartronic, Inc. (the “Company”) was incorporated in the state of Florida on November 15, 1999. </p> <p style="text-align: justify; margin: 0pt"> </p> <p style="text-align: justify; margin: 0pt; padding-left: 63.7pt">The Company, through one of its wholly owned subsidiaries VoiceInterop, Inc., designs, builds and installs unified group communication solutions, including unique hardware and customized software, for public and private enterprises and markets those services and products under the VoiceInterop brand name. </p> <p style="text-align: justify; margin: 0pt"> </p> <p style="text-align: justify; margin: 0pt; padding-left: 63.7pt">In November 2016, the Company cancelled its Licensing Agreement with Collabria LLC of Tampa, Florida (”Collabria”) and acquired all of the intellectual property related to  Collabria’s command and control software, trade-named ReadyOp. along with Collabria’s client list. In exchange for these assets the Company issued Collabria 3,000,000 share of the Company’s Series E Convertible Preferred stock. The Company assumed none of Collabria’s liabilities. In September 2014, the Company formed ReadyOp Communications, Inc. (a Florida corporation), as a wholly owned subsidiary to facilitate the marketing of ReadyOp software. The Company’s two operating subsidiaries are VoiceInterop, Inc. and ReadyOp Communications, Inc.</p> <p style="text-align: justify; margin: 0pt"> </p> <p style="text-align: justify; margin: 0pt; padding-left: 63.7pt">The Company’s two operating subsidiaries are Voiceinterop, Inc. and ReadyOp Communications, Inc.</p> <p style="text-align: justify; margin: 0pt"> </p> <p style="text-align: justify; margin: 0pt; padding-left: 63.35pt"><b>PRINCIPLES OF CONSOLIDATION</b></p> <p style="text-align: justify; margin: 0pt"> </p> <p style="text-align: justify; margin: 0pt; padding-left: 63.35pt">The consolidated financial statements and accompanying notes have been prepared in conformity with accounting principles generally accepted in the United States of America. The consolidated financial statements include the accounts of Cleartronic, Inc. and its subsidiaries, VoiceInterop, Inc. and ReadyOp Communications, Inc. All intercompany transactions and balances have been eliminated.</p> <p style="text-align: justify; margin: 0pt"> </p> <p style="text-align: justify; margin: 0pt; padding-left: 63.35pt"><b>USE OF ESTIMATES</b></p> <p style="text-align: justify; margin: 0pt"> </p> <p style="text-align: justify; margin: 0pt; padding-left: 63.7pt">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, equity transactions, valuation of fair value of derivative liability, valuation of deferred tax assets, estimated useful life of licensing agreement, valuation of inventory and allowance for doubtful account.</p> <p style="text-align: justify; margin: 0pt; padding-left: 63.35pt"> </p> <p style="text-align: justify; margin: 0pt; padding-left: 63.35pt"><b>CASH AND CASH EQUIVALENTS</b></p> <p style="text-align: justify; margin: 0pt"> </p> <p style="text-align: justify; margin: 0pt; padding-left: 63.7pt">For financial statement purposes, the Company considers all highly liquid investments purchased with original maturities of three months or less to be cash equivalents. The Company did not own any cash equivalents at September 30, 2017 and 2016.</p> <p style="text-align: justify; margin: 0pt"> </p> <p style="text-align: justify; margin: 0pt; padding-left: 63.35pt"><b>ACCOUNTS RECEIVABLE</b></p> <p style="text-align: justify; margin: 0pt"> </p> <p style="text-align: justify; margin: 0pt; padding-left: 63.7pt">The Company provides an allowance for uncollectible accounts based upon a periodic review and analysis of outstanding accounts receivable balances. Uncollectible receivables are charged to the allowance when deemed uncollectible. Recoveries of accounts previously written off are used to credit the allowance account in the periods in which the recoveries are made. </p> <p style="text-align: justify; margin: 0pt"> </p> <p style="text-align: justify; margin: 0pt; padding-left: 63.7pt">The Company provided $2,000 as allowances for doubtful accounts for the years ended September 30, 2017 and 2016, respectively.</p> <p style="text-align: justify; margin: 0pt"> </p> <p style="text-align: justify; margin: 0pt"> </p> <p style="text-align: justify; margin: 0pt; padding-left: 63.35pt"><b>LICENSING AGREEMENT</b></p> <p style="text-align: justify; margin: 0pt"> </p> <p style="text-align: justify; margin: 0pt; padding-left: 64.1pt">In November 2016, the Company cancelled its Licensing Agreement with Collabria LLC. As a result of this cancellation, the remaining balance of the licensing agreement in the amount of $240,332 was expensed in 2017. During the year ended September 30, 2016 the Company amortized $139,668.</p> <p style="text-align: justify; margin: 0pt"><br /></p> <p style="text-align: justify; margin: 0pt; padding-left: 64.1pt"><b>ASSET ACQUISITION</b></p> <p style="text-align: justify; margin: 0pt"> </p> <p style="text-align: justify; margin: 0pt; padding-left: 63.35pt">In November 2016, the Company acquired the ReadyOp software platform and the Collabria customer base from Collabria LLC. In exchange for these assets the Company issued 3,000,000 shares of restricted Series E Convertible Preferred stock valued at $292,240.  This valuation was based on internal calculations and validated by a third party valuation expert. The ReadyOp software platform was valued at $195,600 to be amortized over three years, amortization expense recognized for the year ended September 30, 2017 was $54,333. The Collabria customer base was valued at $96,640 to be amortized over two years, amortization expense recognized for the year ended September 30, 2017 was $40,267.</p> <p style="text-align: justify; margin: 0pt"> </p> <p style="text-align: justify; margin: 0pt; text-indent: 63.7pt"><b>CONCENTRATION OF CREDIT RISK</b></p> <p style="text-align: justify; margin: 0pt"> </p> <p style="text-align: justify; margin: 0pt; padding-left: 63.35pt">The Company currently maintains cash balances at one FDIC-insured banking institution. Deposits held in noninterest-bearing transaction accounts are insured up to a maximum of $250,000 at all FDIC-insured institutions. At September 30, 2017 and 2016, the Company had no cash balances above the FDIC-insured limit, respectively.</p> <p style="text-align: justify; margin: 0pt"><br /></p> <p style="text-align: justify; margin: 0pt; padding-left: 63.35pt"><b>RESEARCH AND DEVELOPMENT COSTS</b></p> <p style="text-align: justify; margin: 0pt"> </p> <p style="text-align: justify; margin: 0pt; padding-left: 63.7pt">The Company expenses research and development costs as incurred.  For the years ended September 30, 2017 and 2016, the Company had $105,768 and $14,636, respectively, in research and development costs.</p> <p style="text-align: justify; margin: 0pt; padding-left: 63.35pt"> </p> <p style="text-align: justify; margin: 0pt; padding-left: 63.35pt"><b>REVENUE RECOGNITION AND DEFERRED REVENUES</b></p> <p style="text-align: justify; margin: 0pt"> </p> <p style="text-align: justify; margin: 0pt; padding-left: 63pt">Unified group communication solutions consist of three elements to be provided to customers: software licenses and equipment purchased from third-party vendors, proprietary hardware that is manufactured on contract to required specifications and installation and integration of the hardware and software into the cohesive communication source.</p> <p style="text-align: justify; margin: 0pt"> </p> <p style="text-align: justify; margin: 0pt; padding-left: 63pt">The Company's revenue recognition policies are in accordance with Accounting Standards Codification 605-10 “Revenue Recognition” (ASC 605-10). Revenue is recognized when persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, the contract price is fixed or determinable, and collectability is reasonably assured. No right of return privileges are granted to customers after shipment. The Company recognizes revenue for the elements separately as the sales of the equipment and software, installation and integration, and support services represent separate earnings processes that are generally specified under separate agreements. </p> <p style="text-align: justify; margin: 0pt"> </p> <p style="text-align: justify; margin: 0pt; padding-left: 63pt">Revenue from the resale of equipment utilized in unified group communication solutions is recognized when shipped. For software licenses, the Company does not provide any services that are considered essential to the functionality of the software, and therefore revenue is recognized upon delivery of the software, provided (1) there is evidence of an arrangement, (2) collection of the fee is considered probable and (3) the fee is fixed and determinable. Upon acquisition of the ReadyOp software platform, the Company changed its revenue recognition for ReadyOp software. For ReadyOp software the Company currently defers the license fee on issuance of the license and recognizes the revenue over the term of the agreement. This is due to the fact that the software license comes with customer support for the license period. The Company now provides support to customers which was previously provided by Collabria LLC. Royalties paid to software vendors are categorized as Cost of Goods Sold. </p> <p style="text-align: justify; margin: 0pt"><br /></p> <p style="margin: 0pt; padding-left: 63pt">The Company also provides support to customers under separate contracts varying from one to five years. The Company’s obligations under its service contracts vary by the length of the contract. In all cases the Company is the primary obligor to provide first level support to the client. If the contract has less than one year of service and support remaining on the contract, it is classified as a current liability; if longer, it is classified as a non-current liability.</p> <p style="text-align: justify; margin: 0pt"> </p> <p style="text-align: justify; margin: 0pt; padding-left: 63pt">Installation and integration services are recognized upon completion.</p> <p style="text-align: justify; margin: 0pt; padding-left: 63.35pt"> </p> <p style="text-align: justify; margin: 0pt; padding-left: 63.35pt"><b>EARNINGS PER SHARE</b></p> <p style="text-align: justify; margin: 0pt"> </p> <p style="text-align: justify; margin: 0pt; padding-left: 63.7pt">In accordance with accounting guidance now codified as FASB ASC 260 “Earning per Share”, basic income (loss) per common share is calculated using the weighted average number of shares outstanding during the periods reported. Diluted earnings per share include the weighted average effect of all dilutive securities outstanding during the periods presented. Diluted per share loss is the same as basic per share loss when there is a loss from continuing operations. </p> <p style="text-align: justify; margin: 0pt"> </p> <p style="text-align: justify; margin: 0pt; line-height: 13pt; padding-left: 63pt">As of September 30, 2017 and 2016, we had no options and warrants outstanding.  <i> </i>As of September 30, 2017 and 2016, we had 566,496 and 40,750 shares of Series A Convertible Preferred stock outstanding, respectively. As of September 30, 2017, 40,750 shares of Series A Convertible Preferred stock are convertible into 4,075,000 shares of common stock and 525,746 shares of Series A Convertible Preferred are convertible after a two-year period from the issuance date.  As of September 30, 2017 and 2016, we have 2,563,375 shares of Series C Convertible Preferred stock outstanding which are convertible into 12,816,875 shares of common stock. As of September 30, 2017 and 2016, we had 670,904 shares of Series D Convertible Preferred stock outstanding which are convertible into 3,354,520 shares of common stock. As of September 30, 2017 we had 3,000,000 shares of Series E Convertible Preferred stock outstanding which are convertible after a two-year period from date of issuance. As of September 30, 2016 there were no shares of Series E Convertible Preferred stock outstanding.</p> <p style="text-align: justify; margin: 0pt"> </p> <p style="text-align: justify; margin: 0pt; padding-left: 63.35pt"><b>FAIR VALUE OF FINANCIAL INSTRUMENTS</b></p> <p style="text-align: justify; margin: 0pt"> </p> <p style="text-align: justify; padding-left: 60.5pt; margin-top: 3.75pt; margin-bottom: 0pt">The Company adopted ASC topic 820, “Fair Value Measurements and Disclosures” (ASC 820), “Fair Value Measurements,” effective January 1, 2009. 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. </p> <p style="text-align: justify; padding-left: 60.5pt; margin-top: 7.5pt; margin-bottom: 0pt">ASC 820 also describes three levels of inputs that may be used to measure fair value: </p> <p style="margin: 0pt"> </p> <table cellspacing="0" style="font-size: 10pt"> <tr> <td style="width: 90px"></td> <td style="width: 102px"></td> <td style="width: 1105px"></td></tr> <tr> <td style="width: 90px; vertical-align: top"> </td> <td style="width: 102px; vertical-align: top"> <p style="margin: 0pt; padding-left: 58.5pt"></p></td> <td style="width: 1105px; vertical-align: top"> <p style="padding-left: 8.95pt; margin-top: 4.15pt; margin-bottom: 4.15pt">Level 1: Observable inputs that reflect unadjusted quoted prices for identical assets or liabilities traded in active markets. </p></td></tr></table> <p style="margin: 0pt; padding-left: 58.5pt"> </p> <table cellspacing="0" style="font-size: 10pt"> <tr> <td style="width: 92px"></td> <td style="width: 97px"></td> <td style="width: 1104px"></td></tr> <tr> <td style="width: 92px; vertical-align: top"> </td> <td style="width: 97px; vertical-align: top"> <p style="margin: 0pt; padding-left: 58.5pt"></p></td> <td style="width: 1104px; vertical-align: top"> <p style="padding-left: 9.65pt; margin-top: 4.15pt; margin-bottom: 4.15pt">Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. </p></td></tr></table> <p style="margin: 0pt; padding-left: 58.5pt"> </p> <table cellspacing="0" style="width: 1304px; font-size: 10pt"> <tr> <td style="width: 92px"></td> <td style="width: 96px"></td> <td style="width: 1108px"></td></tr> <tr> <td style="width: 92px; vertical-align: top"> </td> <td style="width: 96px; vertical-align: top"> <p style="margin: 0pt; padding-left: 58.5pt"></p></td> <td style="width: 1108px; vertical-align: top"> <p style="padding-left: 9.65pt; margin-top: 4.15pt; margin-bottom: 4.15pt">Level 3: Inputs that are generally unobservable. These inputs may be used with internally developed methodologies that result in management’s best estimate of fair value. </p></td></tr></table> <p style="text-align: justify; padding-left: 63.7pt; margin-top: 7.5pt; margin-bottom: 0pt">Financial instruments consist principally of cash, accounts receivable, prepaid expenses and other current assets, accounts payable, accrued expenses and deferred revenue. The carrying amounts of such financial instruments in the accompanying consolidated balance sheet approximate their fair values due to their relatively short-term nature. The fair value of long-term debt is based on current rates at which the Company could borrow funds with similar remaining maturities. The carrying amounts approximate fair value. It is management’s opinion that the Company is not exposed to any significant currency or credit risks arising from these financial instruments. </p> <p style="text-align: left; padding-left: 63.7pt; margin-top: 7.5pt; margin-bottom: 0pt">The Company’s fair value hierarchy for intangible assets as of September 20, 2017 and 2016, respectively, was as follows: <br /></p> <div align="center"> <table cellspacing="0" style="font-size: 10pt"> <tr> <td style="width: 169px"></td> <td style="width: 12px"></td> <td style="width: 14px"></td> <td style="width: 52px"></td> <td style="width: 12px"></td> <td style="width: 12px"></td> <td style="width: 14px"></td> <td style="width: 36px"></td> <td style="width: 12px"></td> <td style="width: 14px"></td> <td style="width: 44px"></td> <td style="width: 12px"></td> <td style="width: 14px"></td> <td style="width: 52px"></td></tr> <tr> <td colspan="14" style="width: 638px; vertical-align: bottom"> <p style="margin: 0pt"> </p></td></tr> <tr> <td style="width: 226px"> </td> <td style="width: 17px; vertical-align: bottom"> </td> <td style="width: 19px; vertical-align: bottom"> </td> <td style="width: 69px; vertical-align: bottom"> </td> <td style="width: 17px; vertical-align: bottom"> </td> <td style="width: 17px; vertical-align: bottom"> </td> <td style="width: 19px; vertical-align: bottom"> </td> <td style="width: 48px; vertical-align: bottom"> </td> <td style="width: 17px; vertical-align: bottom"> </td> <td style="width: 19px; vertical-align: bottom"> </td> <td style="width: 59px; vertical-align: bottom"> </td> <td style="width: 17px; vertical-align: bottom"> </td> <td style="width: 19px; vertical-align: bottom"> </td> <td style="width: 69px; vertical-align: bottom"> </td></tr> <tr> <td rowspan="2" style="width: 226px"> </td> <td rowspan="2" style="width: 17px"> </td> <td colspan="2" style="width: 89px"> <p style="text-align: center; margin: 0pt"><b>September 30,</b></p></td> <td rowspan="2" style="width: 17px"> </td> <td rowspan="2" style="width: 17px"> </td> <td colspan="2" style="width: 68px"> </td> <td rowspan="2" style="width: 17px"> </td> <td colspan="2" style="width: 79px"> </td> <td rowspan="2" style="width: 17px"> </td> <td colspan="2" style="width: 89px"> </td></tr> <tr> <td colspan="2" style="width: 89px; border-bottom: rgb(0, 0, 0) 0.5pt solid"> <p style="text-align: center; margin: 0pt"><b>2017</b></p></td> <td colspan="2" style="width: 68px; border-bottom: rgb(0, 0, 0) 0.5pt solid"> <p style="text-align: center; margin: 0pt"><b>Level 1</b></p></td> <td colspan="2" style="width: 79px; border-bottom: rgb(0, 0, 0) 0.5pt solid"> <p style="text-align: center; margin: 0pt"><b>Level 2</b></p></td> <td colspan="2" style="width: 89px; border-bottom: rgb(0, 0, 0) 0.5pt solid"> <p style="text-align: center; margin: 0pt"><b>Level 3</b></p></td></tr> <tr> <td style="width: 226px"> <p style="margin: 0pt"><b>Intangible assets</b></p></td> <td style="width: 17px"> <p style="margin: 0pt"> </p></td> <td style="width: 19px"> <p style="margin: 0pt"> </p></td> <td style="width: 69px"> <p style="margin: 0pt"> </p></td> <td style="width: 17px"> <p style="margin: 0pt"> </p></td> <td style="width: 17px"> <p style="margin: 0pt"> </p></td> <td style="width: 19px"> <p style="margin: 0pt"> </p></td> <td style="width: 48px"> <p style="margin: 0pt"> </p></td> <td style="width: 17px"> <p style="margin: 0pt"> </p></td> <td style="width: 19px"> <p style="margin: 0pt"> </p></td> <td style="width: 59px"> <p style="margin: 0pt"> </p></td> <td style="width: 17px"> <p style="margin: 0pt"> </p></td> <td style="width: 19px"> <p style="margin: 0pt"> </p></td> <td style="width: 69px"> <p style="margin: 0pt"> </p></td></tr> <tr> <td style="width: 226px"> <p style="margin: 0pt">Licensing agreement, net of amortization</p></td> <td style="width: 17px"> <p style="margin: 0pt"> </p></td> <td style="width: 19px"> <p style="margin: 0pt">$</p></td> <td style="width: 69px"> <p style="text-align: right; margin: 0pt">                 -   </p></td> <td style="width: 17px"> <p style="margin: 0pt"> </p></td> <td style="width: 17px"> <p style="margin: 0pt"> </p></td> <td style="width: 19px"> <p style="margin: 0pt">$</p></td> <td style="width: 48px"> <p style="text-align: right; margin: 0pt">           -   </p></td> <td style="width: 17px"> <p style="margin: 0pt"> </p></td> <td style="width: 19px"> <p style="margin: 0pt">$</p></td> <td style="width: 59px"> <p style="text-align: right; margin: 0pt">               -   </p></td> <td style="width: 17px"> <p style="margin: 0pt"> </p></td> <td style="width: 19px"> <p style="margin: 0pt">$</p></td> <td style="width: 69px"> <p style="text-align: right; margin: 0pt">                 -   </p></td></tr> <tr> <td style="width: 226px"> <p style="margin: 0pt">ReadyOp software platform, net of amortization</p></td> <td style="width: 17px"> <p style="margin: 0pt"> </p></td> <td style="width: 19px"> <p style="margin: 0pt"> </p></td> <td style="width: 69px"> <p style="text-align: right; margin: 0pt">       141,270 </p></td> <td style="width: 17px"> <p style="margin: 0pt"> </p></td> <td style="width: 17px"> <p style="margin: 0pt"> </p></td> <td style="width: 19px"> <p style="margin: 0pt"> </p></td> <td style="width: 48px"> <p style="text-align: right; margin: 0pt">           -   </p></td> <td style="width: 17px"> <p style="margin: 0pt"> </p></td> <td style="width: 19px"> <p style="margin: 0pt"> </p></td> <td style="width: 59px"> <p style="text-align: right; margin: 0pt">               -   </p></td> <td style="width: 17px"> <p style="margin: 0pt"> </p></td> <td style="width: 19px"> <p style="margin: 0pt"> </p></td> <td style="width: 69px"> <p style="text-align: right; margin: 0pt">       141,270 </p></td></tr> <tr> <td style="width: 226px"> <p style="margin: 0pt">ReadyOp customer list, net of amortization</p></td> <td style="width: 17px"> <p style="margin: 0pt"> </p></td> <td style="width: 19px; border-bottom: rgb(0, 0, 0) 1pt solid"> <p style="margin: 0pt"> </p></td> <td style="width: 69px; border-bottom: rgb(0, 0, 0) 1pt solid"> <p style="text-align: right; margin: 0pt">         56,370 </p></td> <td style="width: 17px"> <p style="margin: 0pt"> </p></td> <td style="width: 17px"> <p style="margin: 0pt"> </p></td> <td style="width: 19px; border-bottom: rgb(0, 0, 0) 1pt solid"> <p style="margin: 0pt"> </p></td> <td style="width: 48px; border-bottom: rgb(0, 0, 0) 1pt solid"> <p style="text-align: right; margin: 0pt">           -   </p></td> <td style="width: 17px"> <p style="margin: 0pt"> </p></td> <td style="width: 19px; border-bottom: rgb(0, 0, 0) 1pt solid"> <p style="margin: 0pt"> </p></td> <td style="width: 59px; border-bottom: rgb(0, 0, 0) 1pt solid"> <p style="text-align: right; margin: 0pt">               -   </p></td> <td style="width: 17px"> <p style="margin: 0pt"> </p></td> <td style="width: 19px; border-bottom: rgb(0, 0, 0) 1pt solid"> <p style="margin: 0pt"> </p></td> <td style="width: 69px; border-bottom: rgb(0, 0, 0) 1pt solid"> <p style="text-align: right; margin: 0pt">         56,370 </p></td></tr> <tr> <td style="width: 226px"> <p style="margin: 0pt">Total</p></td> <td style="width: 17px"> <p style="margin: 0pt"> </p></td> <td style="width: 19px; border-bottom: rgb(0, 0, 0) 3pt double"> <p style="margin: 0pt">$</p></td> <td style="width: 69px; border-bottom: rgb(0, 0, 0) 3pt double"> <p style="text-align: right; margin: 0pt">       197,640 </p></td> <td style="width: 17px"> <p style="margin: 0pt"> </p></td> <td style="width: 17px"> <p style="margin: 0pt"> </p></td> <td style="width: 19px; border-bottom: rgb(0, 0, 0) 3pt double"> <p style="margin: 0pt">$</p></td> <td style="width: 48px; border-bottom: rgb(0, 0, 0) 3pt double"> <p style="text-align: right; margin: 0pt">           -   </p></td> <td style="width: 17px"> <p style="margin: 0pt"> </p></td> <td style="width: 19px; border-bottom: rgb(0, 0, 0) 3pt double"> <p style="margin: 0pt">$</p></td> <td style="width: 59px; border-bottom: rgb(0, 0, 0) 3pt double"> <p style="text-align: right; margin: 0pt">               -   </p></td> <td style="width: 17px"> <p style="margin: 0pt"> </p></td> <td style="width: 19px; border-bottom: rgb(0, 0, 0) 3pt double"> <p style="margin: 0pt">$</p></td> <td style="width: 69px; border-bottom: rgb(0, 0, 0) 3pt double"> <p style="text-align: right; margin: 0pt">       197,640 </p></td></tr> <tr> <td style="width: 226px"> </td> <td style="width: 17px; vertical-align: bottom"> </td> <td style="width: 19px; vertical-align: bottom"> </td> <td style="width: 69px; vertical-align: bottom"> </td> <td style="width: 17px; vertical-align: bottom"> </td> <td style="width: 17px; vertical-align: bottom"> </td> <td style="width: 19px; vertical-align: bottom"> </td> <td style="width: 48px; vertical-align: bottom"> </td> <td style="width: 17px; vertical-align: bottom"> </td> <td style="width: 19px; vertical-align: bottom"> </td> <td style="width: 59px; vertical-align: bottom"> </td> <td style="width: 17px; vertical-align: bottom"> </td> <td style="width: 19px; vertical-align: bottom"> </td> <td style="width: 69px; vertical-align: bottom"> </td></tr> <tr> <td rowspan="2" style="width: 226px"> </td> <td rowspan="2" style="width: 17px"> </td> <td colspan="2" style="width: 89px"> <p style="text-align: center; margin: 0pt"><b>September 30,</b></p></td> <td rowspan="2" style="width: 17px"> </td> <td rowspan="2" style="width: 17px"> </td> <td colspan="2" style="width: 68px"> </td> <td rowspan="2" style="width: 17px"> </td> <td colspan="2" style="width: 79px"> </td> <td rowspan="2" style="width: 17px"> </td> <td colspan="2" style="width: 89px"> </td></tr> <tr> <td colspan="2" style="width: 89px; border-bottom: rgb(0, 0, 0) 0.5pt solid"> <p style="text-align: center; margin: 0pt"><b>2016</b></p></td> <td colspan="2" style="width: 68px; border-bottom: rgb(0, 0, 0) 0.5pt solid"> <p style="text-align: center; margin: 0pt"><b>Level 1</b></p></td> <td colspan="2" style="width: 79px; border-bottom: rgb(0, 0, 0) 0.5pt solid"> <p style="text-align: center; margin: 0pt"><b>Level 2</b></p></td> <td colspan="2" style="width: 89px; border-bottom: rgb(0, 0, 0) 0.5pt solid"> <p style="text-align: center; margin: 0pt"><b>Level 3</b></p></td></tr> <tr> <td style="width: 226px"> <p style="margin: 0pt"><b>Intangible assets</b></p></td> <td style="width: 17px"> <p style="margin: 0pt"> </p></td> <td style="width: 19px"> <p style="margin: 0pt"> </p></td> <td style="width: 69px"> <p style="margin: 0pt"> </p></td> <td style="width: 17px"> <p style="margin: 0pt"> </p></td> <td style="width: 17px"> <p style="margin: 0pt"> </p></td> <td style="width: 19px"> <p style="margin: 0pt"> </p></td> <td style="width: 48px"> <p style="margin: 0pt"> </p></td> <td style="width: 17px"> <p style="margin: 0pt"> </p></td> <td style="width: 19px"> <p style="margin: 0pt"> </p></td> <td style="width: 59px"> <p style="margin: 0pt"> </p></td> <td style="width: 17px"> <p style="margin: 0pt"> </p></td> <td style="width: 19px"> <p style="margin: 0pt"> </p></td> <td style="width: 69px"> <p style="margin: 0pt"> </p></td></tr> <tr> <td style="width: 226px"> <p style="margin: 0pt">Licensing agreement, net of amortization</p></td> <td style="width: 17px"> <p style="margin: 0pt"> </p></td> <td style="width: 19px"> <p style="margin: 0pt">$</p></td> <td style="width: 69px"> <p style="text-align: right; margin: 0pt">       240,332 </p></td> <td style="width: 17px"> <p style="margin: 0pt"> </p></td> <td style="width: 17px"> <p style="margin: 0pt"> </p></td> <td style="width: 19px"> <p style="margin: 0pt">$</p></td> <td style="width: 48px"> <p style="text-align: right; margin: 0pt">           -   </p></td> <td style="width: 17px"> <p style="margin: 0pt"> </p></td> <td style="width: 19px"> <p style="margin: 0pt">$</p></td> <td style="width: 59px"> <p style="text-align: right; margin: 0pt">               -   </p></td> <td style="width: 17px"> <p style="margin: 0pt"> </p></td> <td style="width: 19px"> <p style="margin: 0pt">$</p></td> <td style="width: 69px"> <p style="text-align: right; margin: 0pt">       240,332 </p></td></tr> <tr> <td style="width: 226px"> <p style="margin: 0pt">ReadyOp software platform, net of amortization</p></td> <td style="width: 17px"> <p style="margin: 0pt"> </p></td> <td style="width: 19px"> <p style="margin: 0pt"> </p></td> <td style="width: 69px"> <p style="text-align: right; margin: 0pt">                 -   </p></td> <td style="width: 17px"> <p style="margin: 0pt"> </p></td> <td style="width: 17px"> <p style="margin: 0pt"> </p></td> <td style="width: 19px"> <p style="margin: 0pt"> </p></td> <td style="width: 48px"> <p style="text-align: right; margin: 0pt">           -   </p></td> <td style="width: 17px"> <p style="margin: 0pt"> </p></td> <td style="width: 19px"> <p style="margin: 0pt"> </p></td> <td style="width: 59px"> <p style="text-align: right; margin: 0pt">               -   </p></td> <td style="width: 17px"> <p style="margin: 0pt"> </p></td> <td style="width: 19px"> <p style="margin: 0pt"> </p></td> <td style="width: 69px"> <p style="text-align: right; margin: 0pt">                 -   </p></td></tr> <tr> <td style="width: 226px"> <p style="margin: 0pt">ReadyOp customer list, net of amortization</p></td> <td style="width: 17px"> <p style="margin: 0pt"> </p></td> <td style="width: 19px; border-bottom: rgb(0, 0, 0) 1pt solid"> <p style="margin: 0pt"> </p></td> <td style="width: 69px; border-bottom: rgb(0, 0, 0) 1pt solid"> <p style="text-align: right; margin: 0pt">                 -   </p></td> <td style="width: 17px"> <p style="margin: 0pt"> </p></td> <td style="width: 17px"> <p style="margin: 0pt"> </p></td> <td style="width: 19px; border-bottom: rgb(0, 0, 0) 1pt solid"> <p style="margin: 0pt"> </p></td> <td style="width: 48px; border-bottom: rgb(0, 0, 0) 1pt solid"> <p style="text-align: right; margin: 0pt">           -   </p></td> <td style="width: 17px"> <p style="margin: 0pt"> </p></td> <td style="width: 19px; border-bottom: rgb(0, 0, 0) 1pt solid"> <p style="margin: 0pt"> </p></td> <td style="width: 59px; border-bottom: rgb(0, 0, 0) 1pt solid"> <p style="text-align: right; margin: 0pt">               -   </p></td> <td style="width: 17px"> <p style="margin: 0pt"> </p></td> <td style="width: 19px; border-bottom: rgb(0, 0, 0) 1pt solid"> <p style="margin: 0pt"> </p></td> <td style="width: 69px; border-bottom: rgb(0, 0, 0) 1pt solid"> <p style="text-align: right; margin: 0pt">                 -   </p></td></tr> <tr> <td style="width: 226px"> <p style="margin: 0pt">Total</p></td> <td style="width: 17px"> <p style="margin: 0pt"> </p></td> <td style="width: 19px; border-bottom: rgb(0, 0, 0) 3pt double"> <p style="margin: 0pt">$</p></td> <td style="width: 69px; border-bottom: rgb(0, 0, 0) 3pt double"> <p style="text-align: right; margin: 0pt">       240,332 </p></td> <td style="width: 17px"> <p style="margin: 0pt"> </p></td> <td style="width: 17px"> <p style="margin: 0pt"> </p></td> <td style="width: 19px; border-bottom: rgb(0, 0, 0) 3pt double"> <p style="margin: 0pt">$</p></td> <td style="width: 48px; border-bottom: rgb(0, 0, 0) 3pt double"> <p style="text-align: right; margin: 0pt">           -   </p></td> <td style="width: 17px"> <p style="margin: 0pt"> </p></td> <td style="width: 19px; border-bottom: rgb(0, 0, 0) 3pt double"> <p style="margin: 0pt">$</p></td> <td style="width: 59px; border-bottom: rgb(0, 0, 0) 3pt double"> <p style="text-align: right; margin: 0pt">               -   </p></td> <td style="width: 17px"> <p style="margin: 0pt"> </p></td> <td style="width: 19px; border-bottom: rgb(0, 0, 0) 3pt double"> <p style="margin: 0pt">$</p></td> <td style="width: 69px; border-bottom: rgb(0, 0, 0) 3pt double"> <p style="text-align: right; margin: 0pt">       240,332 </p></td></tr> <tr> <td style="width: 226px; vertical-align: bottom"> </td> <td style="width: 17px; vertical-align: bottom"> </td> <td style="width: 19px; vertical-align: bottom"> </td> <td style="width: 69px; vertical-align: bottom"> </td> <td style="width: 17px; vertical-align: bottom"> </td> <td style="width: 17px; vertical-align: bottom"> </td> <td style="width: 19px; vertical-align: bottom"> </td> <td style="width: 48px; vertical-align: bottom"> </td> <td style="width: 17px; vertical-align: bottom"> </td> <td style="width: 19px; vertical-align: bottom"> </td> <td style="width: 59px; vertical-align: bottom"> </td> <td style="width: 17px; vertical-align: bottom"> </td> <td style="width: 19px; vertical-align: bottom"> </td> <td style="width: 69px; vertical-align: bottom"> </td></tr> <tr> <td style="width: 226px; vertical-align: bottom"> </td> <td style="width: 17px; vertical-align: bottom"> </td> <td style="width: 19px; vertical-align: bottom"> </td> <td style="width: 69px; vertical-align: bottom"> </td> <td style="width: 17px; vertical-align: bottom"> </td> <td style="width: 17px; vertical-align: bottom"> </td> <td style="width: 19px; vertical-align: bottom"> </td> <td style="width: 48px; vertical-align: bottom"> </td> <td style="width: 17px; vertical-align: bottom"> </td> <td style="width: 19px; vertical-align: bottom"> </td> <td style="width: 59px; vertical-align: bottom"> </td> <td style="width: 17px; vertical-align: bottom"> </td> <td style="width: 19px; vertical-align: bottom"> </td> <td style="width: 69px; vertical-align: bottom"> </td></tr></table></div> <p style="text-align: justify; margin: 0pt; padding-left: 63.7pt"><b>INVENTORY</b></p> <p style="text-align: justify; margin: 0pt"> </p> <p style="text-align: justify; margin: 0pt; padding-left: 63.7pt">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 market on a first-in, first-out basis. The Company purchases completed circuit boards at a price that includes component parts and assembly charges. 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 and the Company recorded no reserve for obsolete inventory for the years ended September 30, 2017 and 2016. </p> <p></p> <p style="text-align: justify; margin: 0pt; padding-left: 63.35pt"><b>PROPERTY AND EQUIPMENT</b></p> <p style="text-align: justify; margin: 0pt"><br /></p> <p style="text-align: justify; margin: 0pt; padding-left: 63.7pt">Property and equipment are recorded at cost. For financial statement purposes depreciation of property and equipment is computed using the straight-line method over the estimated useful lives of the asset. </p> <p style="text-align: justify; margin: 0pt"> </p> <p style="text-align: justify; margin: 0pt; padding-left: 63.7pt">Expenditures for replacements, maintenance and repairs that do not extend the lives of the respective assets are charged to expense as incurred. When assets are retired, sold or otherwise disposed of, their costs and related accumulated depreciation are removed from the accounts and resulting gains or losses are recognized.</p> <p style="text-align: justify; margin: 0pt"> </p> <p style="text-align: justify; margin: 0pt; padding-left: 63.7pt">As of September 30, 2017 and 2016 all property and equipment had been fully depreciated.</p> <p style="text-align: justify; margin: 0pt"><br /></p> <p style="text-align: justify; margin: 0pt; padding-left: 63.7pt"><b>INCOME TAXES</b></p> <p style="margin: 0pt"> </p> <p style="text-align: justify; margin: 0pt; padding-left: 63.35pt">The Company accounts for income taxes in accordance with accounting guidance now codified as FASB ASC Topic 740, “Income Taxes,” which requires that the Company recognizes income taxes using the asset and liability method. Under the asset and liability method, deferred tax assets and liabilities are recorded for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases.</p> <p style="text-align: justify; margin: 0pt"> </p> <p style="text-align: justify; margin: 0pt; padding-left: 63.7pt">Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect of a tax rate change on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date. The Company records valuation allowance to reduce net deferred tax assets to the amount considered more likely than not to be realized. Changes in estimates of future taxable income can materially change the amount of such valuation allowances.</p> <p style="text-align: justify; margin: 0pt"> </p> <p style="text-align: justify; margin: 0pt; padding-left: 63.7pt">The Company is required to recognize measure, classify, and disclose in the financial statements uncertain tax positions taken or expected to be taken in the Company’s tax returns. Management has determined that the Company does not have any uncertain tax positions and associated unrecognized benefits that materially impact the financial statements or related disclosures. Since tax matters are subject to some degree of uncertainty, there can be no assurance that the Company’s tax returns will not be challenged by the taxing authorities and that the Company will not be subject to additional tax penalties, and interest as a result of such challenge. The federal and state income tax returns of the Company for the years ended September 30, 2016, 2015 and 2014 are subject to examination by the IRS and state taxing authorities generally for three years after they were filed. There are no tax examinations currently in process.</p> <p style="text-align: justify; margin: 0pt; padding-left: 63.35pt"> </p> <p style="text-align: justify; margin: 0pt; text-indent: 27pt; padding-left: 36pt"><b>STOCK-BASED COMPENSATION</b></p> <p style="text-align: justify; margin: 0pt"> </p> <p style="text-align: justify; margin: 0pt; padding-left: 63pt">Effective January 1, 2006, the Company adopted the fair value recognition provisions of Accounting Standards Codification 718-10 “Compensation” (ASC 718-10) using the modified retrospective transition method. ASC 718-10 requires companies to estimate the fair value of share-based payment awards on the date of grant using an option-pricing model. The value of the portion of the award that is ultimately expected to vest is recognized as expense ratably over the requisite service periods. The Company has estimated the fair value of each award as of the date of grant or assumption using the Black-Scholes option pricing model, which was developed for use in estimating the value of traded options that have no vesting restrictions and that are freely transferable. The Black-Scholes option pricing model considers, among other factors, the expected life of the award and the expected volatility of the Company's stock price. In March 2005, the SEC issued SAB No. 107, Share-Based Payment ("SAB 107"), which provides guidance regarding the interaction of ASC 718-10 and certain SEC rules and regulations. The Company has applied the provisions of SAB 107 in its adoption of ASC 718-10.</p> <p style="text-align: justify; margin: 0pt"> </p> <p style="text-align: justify; margin: 0pt; padding-left: 63pt">The Company accounts for equity instruments issued to parties other than employees for acquiring goods or services under guidance of section 505-50-30 of the FASB Accounting Standards Codification (“FASB ASC Section 505-50-30”).  Pursuant to FASB ASC Section 505-50-30, all transactions in which goods or services are the consideration received for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable.  The measurement date used to determine the fair value of the equity instrument issued is the earlier of the date on which the performance is complete or the date on which it is probable that performance will occur.</p> <p style="text-align: justify; margin: 0pt"> </p> <p style="text-align: justify; margin: 0pt; text-indent: 36pt; padding-left: 27pt"><b>DERIVATIVE INSTRUMENTS</b></p> <p style="text-align: justify; margin: 0pt"> </p> <p style="text-align: justify; margin: 0pt; padding-left: 63pt">The Company evaluates its convertible debt, warrants or other contracts to determine if those contracts or embedded components of those contracts qualify as derivatives to be separately accounted for in accordance with paragraph 810-10-05-4 of the FASB Accounting Standards Codification and paragraph 815-40-25 of the FASB Accounting Standards Codification. The result of this accounting treatment is that the fair value of the embedded derivative is marked-to-market each balance sheet date and recorded as a liability. In the event that the fair value is recorded as a liability, the change in fair value is recorded in the Statement of Operations as other income orexpense. Upon conversion or exercise of a derivative instrument, the instrument is marked to fair value at the conversion date</p> <p style="text-align: justify; margin: 0pt; padding-left: 63pt">and then that fair value is reclassified to equity.</p> <p style="text-align: justify; margin: 0pt"> </p> <p style="text-align: justify; margin: 0pt; padding-left: 63pt">In circumstances where the embedded conversion option in a convertible instrument is required to be bifurcated and there are also other embedded derivative instruments in the convertible instrument that are required to be bifurcated, the bifurcated derivative instruments are accounted for as a single, compound derivative instrument.</p> <p style="text-align: justify; margin: 0pt"> </p> <p style="text-align: justify; margin: 0pt; text-indent: 0.35pt; padding-left: 63pt">The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is re-assessed at the end of each reporting period. Equity instruments that are initially classified as equity that become subject to reclassification are reclassified to liability at the fair value of the instrument on the reclassification date. Derivative instrument liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement of the derivative instrument is expected within 12 months of the balance sheet date. As of September 30, 2017 and 2016 there were no derivative liabilities.</p> <p style="text-align: justify; margin: 0pt; padding-left: 63.35pt"> </p> <p style="text-align: justify; margin: 0pt; padding-left: 63.35pt"><b>ADVERTISING COSTS</b></p> <p style="text-align: justify; margin: 0pt"> </p> <p style="text-align: justify; margin: 0pt; padding-left: 63.35pt">Advertising costs are expensed as incurred. The Company had advertising costs of $6,850 during the year ended September 30, 2017 and $4,275 during the year ended September 30, 2016.</p>
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<us-gaap:ScheduleOfNewAccountingPronouncementsAndChangesInAccountingPrinciplesTextBlock contextRef="From2016-10-01to2017-09-30">
<p style="text-align: justify; text-indent: 0; padding-left: 56.9pt; margin-top: 0pt; margin-bottom: -12pt"><b>NOTE 2 - </b><b>RECENT ACCOUNTING PRONOUNCEMENTS</b></p><br /> <p style="text-align: justify; margin: 0pt"> </p> <p style="text-align: justify; margin: 0pt; padding-left: 64.8pt">In February 2016, the FASB issued ASU 2016-02, <i>Leases</i>, which will amend current lease accounting to require lessees to recognize (i) a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis, and (ii) a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. ASU 2016-02 does not significantly change lease accounting requirements applicable to lessors; however, certain changes were made to align, where necessary, lessor accounting with the lessee accounting model. This standard will be effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. We are currently reviewing the provisions of this ASU to determine if there will be any impact on our results of operations, cash flows or financial condition.</p> <p style="text-align: justify; margin: 0pt"> </p> <p style="text-align: justify; margin: 0pt; padding-left: 64.8pt">In April 2016, the FASB issued ASU 2016–10 Revenue from Contract with Customers (Topic 606): identifying Performance Obligations and Licensing “ .The amendments in this Update do not change the core principle of the guidance in Topic 606. Rather, the amendments in this Update clarify the following two aspects of Topic 606: identifying performance obligations and the licensing implementation guidance, while retaining the related principles for those areas. Topic 606 includes implementation guidance on (a) contracts with customers to transfer goods and services in exchange for consideration and (b) determining whether an entity’s promise to grant a license provides a customer with either a right to use the entity’s intellectual property (which is satisfied at a point in time) or a right to access the entity’s intellectual property (which is satisfied over time). The amendments in this Update are intended render more detailed implementation guidance with the expectation to reduce the degree of judgement necessary to comply with Topic 606. We are currently reviewing the provisions of this ASU to determine if there will be any impact on our results of operations, cash flows or financial condition.</p>
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<p style="text-align: justify; text-indent: 0pt; padding-left: 57.1pt; margin-top: 0pt; margin-bottom: -12pt"><b>NOTE 4 -</b><b>DEFERRED INCOME TAXES</b></p><br /> <p style="text-align: justify; margin: 0pt"> </p> <p style="text-align: justify; margin: 0pt; padding-left: 63.7pt">The Company calculates its deferred tax assets based upon its consolidated net operating loss (NOL) carryovers available to offset future taxable income, net of other tax credit(s) or tax deferred liabilities, if any. No deferred tax assets for the years ended September 30, 2017 and 2016 have been recorded since any available deferred tax assets are fully offset by increases in its valuation allowances. The Company increased its valuation allowance based on its history of consolidated net losses. At September 30, 2017, the Company has an adjusted net operating loss carryforward of approximately $13,000,000 that expire through 2032. Should a cumulative change in the ownership of more than 50% occur within a three-year period, there could be an annual limitation on the use of the net operating loss carryforwards. </p> <p style="text-align: justify; margin: 0pt; padding-left: 63.7pt"> </p> <p style="text-align: justify; margin: 0pt; padding-left: 63.7pt">Deferred income taxes reflect the tax effects of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes plus any available consolidated, net deferred tax credits.  Significant components of the Company’s net deferred income tax assets at September 30, 2017 and 2016, respectively are as follows:  </p> <p style="text-align: center; margin: 0pt"> </p> <div align="center"> <table cellspacing="0" style="font-size: 10pt"> <tr> <td style="width: 306px"></td> <td style="width: 9px"></td> <td style="width: 9px"></td> <td style="width: 79px"></td> <td style="width: 3px"></td> <td style="width: 39px"></td> <td style="width: 7px"></td> <td style="width: 74px"></td> <td style="width: 8px"></td></tr> <tr> <td style="width: 306px; background-color: rgb(255, 255, 255)"> <p style="text-align: center; margin: 0pt"> </p></td> <td style="width: 9px; background-color: rgb(255, 255, 255)"> <p style="text-align: center; margin: 0pt"> </p></td> <td colspan="2" style="border-bottom: rgb(0, 0, 0) 1pt solid; background-color: rgb(255, 255, 255)"> <p style="text-align: center; margin: 0pt"> <b>2017</b></p></td> <td style="width: 3px; background-color: rgb(255, 255, 255)"> <p style="text-align: center; margin: 0pt"> </p></td> <td style="width: 39px; background-color: rgb(255, 255, 255)"> <p style="text-align: center; margin: 0pt"> </p></td> <td colspan="2" style="border-bottom: rgb(0, 0, 0) 1pt solid; background-color: rgb(255, 255, 255)"> <p style="text-align: center; margin: 0pt"><b>2016</b></p></td> <td style="width: 8px; border-bottom: rgb(0, 0, 0) 1pt solid; background-color: rgb(255, 255, 255)"> <p style="margin: 0pt"> </p></td></tr> <tr> <td style="width: 306px; background-color: rgb(255, 255, 255)"> <p style="margin: 0pt"> </p></td> <td style="width: 9px; background-color: rgb(255, 255, 255)"> <p style="margin: 0pt"> </p></td> <td style="width: 9px; background-color: rgb(255, 255, 255)"> <p style="margin: 0pt"> </p></td> <td style="width: 79px; background-color: rgb(255, 255, 255)"> <p style="text-align: right; margin: 0pt"> </p></td> <td style="width: 3px; background-color: rgb(255, 255, 255)"> <p style="margin: 0pt"> </p></td> <td style="width: 39px; background-color: rgb(255, 255, 255)"> <p style="margin: 0pt"> </p></td> <td style="width: 7px; background-color: rgb(255, 255, 255)"> <p style="margin: 0pt"> </p></td> <td style="width: 74px; background-color: rgb(255, 255, 255)"> <p style="margin: 0pt"> </p></td> <td style="width: 8px; background-color: rgb(255, 255, 255)"> <p style="margin: 0pt"> </p></td></tr> <tr> <td style="width: 306px; background-color: rgb(255, 255, 255)"> <p style="margin: 0pt"> Amortization and impairment of license agreement</p></td> <td style="width: 9px; background-color: rgb(255, 255, 255)"> <p style="margin: 0pt"> </p></td> <td style="width: 9px; background-color: rgb(255, 255, 255)"> <p style="text-align: right; margin: 0pt">$</p></td> <td style="width: 79px; background-color: rgb(255, 255, 255)"> <p style="text-align: right; margin: 0pt">    529,503</p></td> <td style="width: 3px; background-color: rgb(255, 255, 255)"> <p style="text-align: right; margin: 0pt"> </p></td> <td style="width: 39px; background-color: rgb(255, 255, 255)"> <p style="text-align: right; margin: 0pt"> </p></td> <td style="width: 7px; background-color: rgb(255, 255, 255)"> <p style="text-align: right; margin: 0pt">$</p></td> <td style="width: 74px; background-color: rgb(255, 255, 255)"> <p style="text-align: right; margin: 0pt">     582,500</p></td> <td style="width: 8px; background-color: rgb(255, 255, 255)"> </td></tr> <tr> <td style="width: 306px; background-color: rgb(255, 255, 255)"> <p style="margin: 0pt">Allowance for doubtful account</p></td> <td style="width: 9px; background-color: rgb(255, 255, 255)"> </td> <td style="width: 9px; background-color: rgb(255, 255, 255)"> </td> <td style="width: 79px; background-color: rgb(255, 255, 255)"> <p style="text-align: right; margin: 0pt">          750</p></td> <td style="width: 3px; background-color: rgb(255, 255, 255)"> <div align="right"></div></td> <td style="width: 39px; background-color: rgb(255, 255, 255)"> <p style="text-align: right; margin: 0pt">             </p></td> <td style="width: 7px; background-color: rgb(255, 255, 255)"> <div align="right"></div></td> <td style="width: 74px; background-color: rgb(255, 255, 255)"> <p style="text-align: right; margin: 0pt">            750</p></td> <td style="width: 8px; background-color: rgb(255, 255, 255)"> </td></tr> <tr> <td style="width: 306px; background-color: rgb(255, 255, 255)"> <p style="margin: 0pt">Net operating loss carryforward</p></td> <td style="width: 9px; background-color: rgb(255, 255, 255)"> </td> <td style="width: 9px; background-color: rgb(255, 255, 255)"> </td> <td style="width: 79px; background-color: rgb(255, 255, 255)"> <p style="text-align: right; margin: 0pt">  <u>4,909,891</u></p></td> <td style="width: 3px; background-color: rgb(255, 255, 255)"> <div align="right"></div></td> <td style="width: 39px; background-color: rgb(255, 255, 255)"> <div align="right"></div></td> <td style="width: 7px; background-color: rgb(255, 255, 255)"> <div align="right"></div></td> <td style="width: 74px; background-color: rgb(255, 255, 255)"> <p style="text-align: right; margin: 0pt">   <u>4,560,033</u></p></td> <td style="width: 8px; background-color: rgb(255, 255, 255)"> </td></tr> <tr> <td style="width: 306px; background-color: rgb(255, 255, 255)"> <p style="margin: 0pt">Net deferred income tax asset</p></td> <td style="width: 9px; background-color: rgb(255, 255, 255)"> <p style="margin: 0pt"> </p></td> <td style="width: 9px; background-color: rgb(255, 255, 255)"> <p style="margin: 0pt"> </p></td> <td style="width: 79px; background-color: rgb(255, 255, 255)"> <p style="text-align: right; margin: 0pt">  5,440,144</p></td> <td style="width: 3px; background-color: rgb(255, 255, 255)"> <p style="text-align: right; margin: 0pt"> </p></td> <td style="width: 39px; background-color: rgb(255, 255, 255)"> <p style="text-align: right; margin: 0pt"> </p></td> <td style="width: 7px; background-color: rgb(255, 255, 255)"> <p style="text-align: right; margin: 0pt"> </p></td> <td style="width: 74px; background-color: rgb(255, 255, 255)"> <p style="text-align: right; margin: 0pt">   5,143,283 </p></td> <td style="width: 8px; background-color: rgb(255, 255, 255)"> <p style="margin: 0pt"> </p></td></tr> <tr> <td style="width: 306px; background-color: rgb(255, 255, 255)"> <p style="margin: 0pt">Less: valuation allowance</p></td> <td style="width: 9px; background-color: rgb(255, 255, 255)"> <p style="margin: 0pt"> </p></td> <td style="width: 9px; background-color: rgb(255, 255, 255)"> <p style="margin: 0pt">  </p></td> <td style="width: 79px; background-color: rgb(255, 255, 255)"> <p style="text-align: right; margin: 0pt"> <u>(5,440,144)</u></p></td> <td style="width: 3px; background-color: rgb(255, 255, 255)"> <p style="text-align: right; margin: 0pt"> </p></td> <td style="width: 39px; background-color: rgb(255, 255, 255)"> <p style="text-align: right; margin: 0pt"> </p></td> <td style="width: 7px; background-color: rgb(255, 255, 255)"> <p style="text-align: right; margin: 0pt"> </p></td> <td style="width: 74px; background-color: rgb(255, 255, 255)"> <p style="text-align: right; margin: 0pt"><u>(5,143,283) </u></p></td> <td style="width: 8px; background-color: rgb(255, 255, 255)"> <p style="margin: 0pt"> </p></td></tr> <tr> <td style="width: 306px; background-color: rgb(255, 255, 255)"> <p style="margin: 0pt">Total deferred income tax assets</p></td> <td style="width: 9px; background-color: rgb(255, 255, 255)"> <p style="margin: 0pt"> </p></td> <td style="width: 9px; border-bottom: rgb(0, 0, 0) 2pt double; background-color: rgb(255, 255, 255)"> <p style="text-align: right; margin: 0pt">$</p></td> <td style="width: 79px; border-bottom: rgb(0, 0, 0) 2pt double; background-color: rgb(255, 255, 255)"> <p style="text-align: right; margin: 0pt">0.00</p></td> <td style="width: 3px; background-color: rgb(255, 255, 255)"> <p style="text-align: right; margin: 0pt"> </p></td> <td style="width: 39px; background-color: rgb(255, 255, 255)"> <p style="text-align: right; margin: 0pt"> </p></td> <td style="width: 7px; border-bottom: rgb(0, 0, 0) 2pt double; background-color: rgb(255, 255, 255)"> <p style="text-align: right; margin: 0pt">$</p></td> <td style="width: 74px; border-bottom: rgb(0, 0, 0) 2pt double; background-color: rgb(255, 255, 255)"> <p style="text-align: right; margin: 0pt">0.00</p></td> <td style="width: 8px; background-color: rgb(255, 255, 255)"> <p style="margin: 0pt"> </p></td></tr></table></div> <p style="text-align: justify; margin: 0pt"><br /></p> <p style="text-align: justify; margin: 0pt; padding-left: 63.7pt">A reconciliation of the Federal and respective State income tax rate as a percentage of income before taxes is as follows:</p> <p style="text-align: center; margin: 0pt"><br /></p> <div align="center"> <table cellspacing="0" style="font-size: 10pt"> <tr> <td style="width: 179px"></td> <td style="width: 18px"></td> <td style="width: 16px"></td> <td style="width: 43px"></td> <td style="width: 2px"></td> <td style="width: 5px"></td> <td style="width: 51px"></td> <td style="width: 1px"></td></tr> <tr> <td style="width: 239px; background-color: rgb(255, 255, 255)"> <p style="text-align: center; margin: 0pt"> </p></td> <td style="width: 24px; background-color: rgb(255, 255, 255)"> <p style="text-align: center; margin: 0pt"> </p></td> <td colspan="2" style="width: 79px; border-bottom: rgb(0, 0, 0) 1pt solid; background-color: rgb(255, 255, 255)"> <p style="text-align: center; margin: 0pt">      <b>2017</b></p></td> <td style="width: 3px; background-color: rgb(255, 255, 255)"> <p style="text-align: center; margin: 0pt"> </p></td> <td colspan="2" style="width: 76px; border-bottom: rgb(0, 0, 0) 1pt solid; background-color: rgb(255, 255, 255)"> <p style="text-align: center; margin: 0pt"><b>    2016</b></p></td> <td style="width: 2px; border-bottom: rgb(0, 0, 0) 1pt solid; background-color: rgb(255, 255, 255)"> <p style="margin: 0pt"> </p></td></tr> <tr> <td style="width: 239px; background-color: rgb(255, 255, 255)"> <p style="margin: 0pt"> </p></td> <td style="width: 24px; background-color: rgb(255, 255, 255)"> <p style="margin: 0pt"> </p></td> <td style="width: 22px; background-color: rgb(255, 255, 255)"> <p style="margin: 0pt"> </p></td> <td style="width: 57px; background-color: rgb(255, 255, 255)"> <p style="text-align: right; margin: 0pt"> </p></td> <td style="width: 3px; background-color: rgb(255, 255, 255)"> <p style="margin: 0pt"> </p></td> <td style="width: 7px; background-color: rgb(255, 255, 255)"> <p style="margin: 0pt"> </p></td> <td style="width: 68px; background-color: rgb(255, 255, 255)"> <p style="margin: 0pt"> </p></td> <td style="width: 2px; background-color: rgb(255, 255, 255)"> <p style="margin: 0pt"> </p></td></tr> <tr> <td style="width: 239px; background-color: rgb(255, 255, 255)"> <p style="margin: 0pt">Federal statutory income tax rate</p></td> <td style="width: 24px; background-color: rgb(255, 255, 255)"> <p style="margin: 0pt"> </p></td> <td style="width: 22px; background-color: rgb(255, 255, 255)"> </td> <td style="width: 57px; background-color: rgb(255, 255, 255)"> <p style="text-align: right; margin: 0pt">32.13%</p></td> <td style="width: 3px; background-color: rgb(255, 255, 255)"> <p style="margin: 0pt"> </p></td> <td style="width: 7px; background-color: rgb(255, 255, 255)"> </td> <td style="width: 68px; background-color: rgb(255, 255, 255)"> <p style="text-align: right; margin: 0pt">32.13%</p></td> <td style="width: 2px; background-color: rgb(255, 255, 255)"> <p style="margin: 0pt"> </p></td></tr> <tr> <td style="width: 239px; background-color: rgb(255, 255, 255)"> <p style="margin: 0pt">State taxes, net of federal benefit</p></td> <td style="width: 24px; background-color: rgb(255, 255, 255)"> <p style="margin: 0pt"> </p></td> <td style="width: 22px; border-bottom: rgb(0, 0, 0) 0pt solid; background-color: rgb(255, 255, 255)"> <p style="margin: 0pt"> </p></td> <td style="width: 57px; border-bottom: rgb(0, 0, 0) 0pt solid; background-color: rgb(255, 255, 255)"> <p style="text-align: right; margin: 0pt"><u>5.5%</u></p></td> <td style="width: 3px; background-color: rgb(255, 255, 255)"> <p style="margin: 0pt"> </p></td> <td style="width: 7px; border-bottom: rgb(0, 0, 0) 0pt solid; background-color: rgb(255, 255, 255)"> <p style="margin: 0pt"> </p></td> <td style="width: 68px; border-bottom: rgb(0, 0, 0) 0pt solid; background-color: rgb(255, 255, 255)"> <p style="text-align: right; margin: 0pt"><u> 5.5%</u></p></td> <td style="width: 2px; background-color: rgb(255, 255, 255)"> <p style="margin: 0pt"> </p></td></tr> <tr> <td style="width: 239px; background-color: rgb(255, 255, 255)"> <p style="margin: 0pt">Effective rate for deferred tax asset</p></td> <td style="width: 24px; background-color: rgb(255, 255, 255)"> <p style="margin: 0pt"> </p></td> <td style="width: 22px; background-color: rgb(255, 255, 255)"> <p style="margin: 0pt"> </p></td> <td style="width: 57px; background-color: rgb(255, 255, 255)"> <p style="text-align: right; margin: 0pt"> </p> <p style="text-align: right; margin: 0pt"><u>37.63%</u><b>  </b></p></td> <td style="width: 3px; background-color: rgb(255, 255, 255)"> <p style="margin: 0pt"> </p></td> <td style="width: 7px; border-bottom: rgb(0, 0, 0) 1pt solid; background-color: rgb(255, 255, 255)"></td> <td style="width: 68px; background-color: rgb(255, 255, 255)"> <p style="text-align: right; margin: 0pt"> </p> <p style="text-align: right; margin: 0pt"><u>37.63%</u></p></td> <td style="width: 2px; background-color: rgb(255, 255, 255)"> </td></tr> <tr> <td style="width: 239px; background-color: rgb(255, 255, 255)"> <p style="margin: 0pt">Less: Valuation allowance</p></td> <td style="width: 24px; background-color: rgb(255, 255, 255)"> <p style="margin: 0pt"> </p></td> <td style="width: 22px; background-color: rgb(255, 255, 255)"> </td> <td style="width: 57px; background-color: rgb(255, 255, 255)"> <p style="text-align: right; margin: 0pt"><u>(37.63%)</u></p></td> <td style="width: 3px; background-color: rgb(255, 255, 255)"> <p style="margin: 0pt"> </p></td> <td style="width: 7px; background-color: rgb(255, 255, 255)"> <p style="margin: 0pt"> </p></td> <td style="width: 68px; background-color: rgb(255, 255, 255)"> <p style="text-align: right; margin: 0pt">    <u>(37.63%)</u></p></td> <td style="width: 2px; background-color: rgb(255, 255, 255)"> <p style="margin: 0pt"> </p></td></tr> <tr> <td style="width: 239px; background-color: rgb(255, 255, 255)"> <p style="margin: 0pt">Effective income tax rate</p></td> <td style="width: 24px; background-color: rgb(255, 255, 255)"> <p style="margin: 0pt"> </p></td> <td style="width: 22px; background-color: rgb(255, 255, 255)"> </td> <td style="width: 57px; border-bottom: rgb(0, 0, 0) 2pt double; background-color: rgb(255, 255, 255)"> <p style="text-align: right; margin: 0pt">0.0%</p></td> <td style="width: 3px; background-color: rgb(255, 255, 255)"> <p style="margin: 0pt"> </p></td> <td style="width: 7px; background-color: rgb(255, 255, 255)"> </td> <td style="width: 68px; border-bottom: rgb(0, 0, 0) 2pt double; background-color: rgb(255, 255, 255)"> <p style="text-align: right; margin: 0pt">0.0%</p></td> <td style="width: 2px; background-color: rgb(255, 255, 255)"> <p style="margin: 0pt"> </p></td></tr></table></div><br /> <p></p> <p style="text-align: justify; margin: 0pt; padding-left: 63.7pt">Management has determined that it is more likely than not that the Company will not use the NOL carryforward and has a 100% valuation allowance against the deferred asset. The reserve is based on historical experience of the Company’s operations as it has not recognized net income in its current incarnation and there is no indication of any events or conditions that would show that trend will not continue due to the Company’s current expectation of expense requirements.</p>
</us-gaap:IncomeTaxDisclosureTextBlock>
<us-gaap:DebtDisclosureTextBlock contextRef="From2016-10-01to2017-09-30">
<p style="text-align: justify; text-indent: 0pt; padding-left: 63.7pt; margin-top: 0pt; margin-bottom: -12pt"><b>NOTE 5 -</b><b>NOTES PAYABLE – STOCKHOLDERS</b></p><br /> <p style="text-align: justify; margin: 0pt"> </p> <p style="text-align: justify; margin: 0pt; padding-left: 63.7pt">As of September 30, 2017 and 2016, the Company has unsecured notes payable to stockholders totaling $134,087 and $132,676, respectively. These notes range in interest from 8% to 15% which are payable quarterly. One note in the amount of $16,498 matures on December 31, 2017 and the balance of these notes mature December 31, 2018. </p> <p style="text-align: justify; margin: 0pt; padding-left: 63.7pt"> </p> <p style="text-align: justify; margin: 0pt; padding-left: 63.7pt">During the year ended September 30, 2017, the Company issued an unsecured 8% promissory note maturing on December 31, 2018 to a shareholder, and director for $35,000.</p> <p style="text-align: justify; margin: 0pt"> </p> <p style="text-align: justify; margin: 0pt; padding-left: 63.7pt">Interest expense on notes payable – stockholders was $15,700 and $14,907 for the years ended September 30, 2017 and 2016, respectively.</p>
</us-gaap:DebtDisclosureTextBlock>
<clri:ConvertiblePromissoryNoteAndEmbeddedDerivativeLiabilitiesTextBlock contextRef="From2016-10-01to2017-09-30">
<p style="text-indent: 0pt; padding-left: 63pt; margin-top: 0pt; margin-bottom: -12pt"><b>NOTE 6 - </b><b>CONVERTIBLE PROMISSORY NOTES  </b></p> <p style="text-indent: -63pt; padding-left: 63pt; margin-top: 0pt; margin-bottom: -12pt"><b> </b></p> <p style="text-indent: -63pt; padding-left: 63pt; margin-top: 0pt; margin-bottom: -12pt"><b> </b></p> <p style="text-indent: -63pt; padding-left: 63pt; margin-top: 0pt; margin-bottom: -12pt"><b> </b></p> <p style="text-indent: -63pt; padding-left: 63pt; margin-top: 0pt; margin-bottom: -12pt"><b> </b></p><br /> <p style="text-align: justify; margin: 0pt"> </p> <p style="text-align: justify; margin: 0pt; padding-left: 63.35pt"> </p> <p style="text-align: justify; margin: 0pt; padding-left: 63.35pt"> </p> <p style="text-align: justify; margin: 0pt; padding-left: 63.35pt">The Company entered into a securities purchase agreement (the “Purchase Agreement”) with a private investors and issued a convertible promissory note in the amount of  $43,000 respectively (the “Note”).The Note was  dated  May 7, 2015, bore interest at 8% per annum and matured on  February 11, 2016. The note was convertible into shares of the Company’s common stock at the greater of; (i) the variable conversion price (58% multiplied by the market price) that is equal to the average of the three (3) lowest closing bid prices of the Common Stock during the ten (10) trading day period prior to the date of conversion or (ii) the fixed conversion price of $.00005. The Note also contained a prepayment option whereby the Company may make payments to the holder based on the length of time the Note has been outstanding, upon three (3) trading days' prior written notice to the holder. </p> <p style="text-align: justify; margin: 0pt"> </p> <p style="margin: 0pt; padding-left: 63.35pt">During the first 30 days, the Company may make a payment to the holder equal to 115% of the then outstanding unpaid principal and interest, from days 31 until 60 days, the Company may make a payment to the holder equal to 120% of the then outstanding unpaid principal and interest, from days 61 until 90 days, the Company may make a payment to the holder equal to 125% of the then outstanding unpaid principal and interest, from days 91 until 120 days the Company may make a payment to the holder equal to 130% of the then outstanding unpaid principal and interest, from days 121 until 150 days, the Company may make a payment to the holder equal to 135% of the then outstanding unpaid principal and interest, from days 151 until 180 days, the Company may make a payment to the holder equal to 140% of the then outstanding unpaid principal and interest, after 180 days, the Company has no right of prepay. In the event of default before the maturity dates, the payment is immediately due, in the amount of 22% of the outstanding unpaid principal, along with interest and any penalties.</p> <p style="text-align: justify; margin: 0pt"> </p> <p style="text-align: justify; margin: 0pt; padding-left: 63pt"><i><u>Beneficial Conversion Feature</u></i></p> <p style="text-align: justify; margin: 0pt"> </p> <p style="text-align: justify; margin: 0pt; padding-left: 63pt">In connection with the convertible note entered into in May 2015, the Company determined that a beneficial conversion feature existed on the date the note was issued. The beneficial conversion feature related to this note was valued as the difference between the effective conversion price (computed by dividing the relative fair value allocated to the convertible note by the number of shares the note is convertible into) and the fair value of the common stock multiplied by the number of shares into which the note may be converted.</p> <p style="text-align: justify; margin: 0pt"> </p> <p style="text-align: justify; margin: 0pt; padding-left: 63pt">In accordance with ASC 470 “Debt with Conversion and other Options”, the intrinsic value of the beneficial conversion features were recorded as a debt discount with a corresponding amount to additional paid in capital. The debt discount is amortized to interest expense over the life of the instrument. The Company recorded a beneficial conversion feature related to the May 2015 convertible note financing of $31,000. </p> <p style="text-align: justify; margin: 0pt"> </p> <p style="text-align: justify; margin: 0pt; padding-left: 63pt">On November 23, 2015, a convertible note holder converted $10,000 in principal of the $43,000 May 2015 note into 847,458 shares of common stock. On November 27, 2015 the Company repaid the remaining balance of the convertible note along with accrued interest and penalties for a total amount of $47,975. The remaining discount on the convertible note payable was recognized as interest totaling $13,779.  </p> <p style="text-align: justify; margin: 0pt"> </p> <p style="text-align: justify; margin: 0pt; padding-left: 63.35pt">In December 2015, the Company entered into a Convertible Promissory Note with a private investor in the principal sum of $150,000. The note matures on December 6, 2017 and carries a 10% Original Issue Discount and incurs a one-time 12% interest charge on March 6, 2016. The principal sum due to the investor shall be based on the consideration actually paid by the investor plus a 10% original issue discount on the consideration paid as well as any other interest or fees. The Company is only required to repay the amount funded and is not required to repay any unfunded portion of the note. The Company received $22,500, less $2,500 of original issuance discount pursuant to the terms of this convertible note. The note is convertible into shares of the Company’s common stock at the greater of; (i) the variable conversion price (60% multiplied by the market price) that is equal to the average of the lowest trading  price of the Common Stock during the twenty five (25) trading days prior to the date of conversion (ii) the investor has the right, at any time after 180 days after principal consideration has been paid to convert all or part of the outstanding principal along with interest and any fees into the Company’s common stock. The Company may repay the note at any time on or before 90 days from the effective date, after which the Company may not make further payments on the Note prior to the maturity date without written approval from the investor. On the issuance date, the fair value of derivative liability was $62,359. The Company recorded a debt discount of $25,000 and encountered a day-one derivative loss of $37,359. </p> <p style="text-align: justify; margin: 0pt"> </p> <p style="text-align: justify; margin: 0pt; padding-left: 63.35pt">In February 2016, the Company and noteholder agreed to amend the conversion price. In accordance with the amended convertible promissory note, the note is convertible into shares of the Company’s common stock at the greater of; (i) the variable conversion price (60% multiplied by the market price) that is equal to the average of the lowest trading  price of the Common Stock during the twenty five (25) trading days prior to the date of conversion or (ii) the fixed conversion price of $.00005 (iii) the investor has the right, at any time after 180 days after principal consideration has been paid to convert all or part of the outstanding principal along with interest and any fees into the Company’s common stock. Upon amendment, the Company determined that this convertible note is now considered as a conventional convertible debt and recorded a gain of $6,997 in the change of fair value of derivative liability. The Company reclassified the fair value of $55,362 to equity on the amendment date. In June, August and September 2016, the noteholder converted $25,000 in principal and $6,111 in accrued interest into 4,906,565 shares of common stock. Accordingly, the Company recognized $25,000 of interest expense for the debt discount and $2,500 of interest expense for the original issue discount. As of  September 30, 2016, the note was fully converted.</p>
</clri:ConvertiblePromissoryNoteAndEmbeddedDerivativeLiabilitiesTextBlock>
<us-gaap:CommitmentsAndContingenciesDisclosureTextBlock contextRef="From2016-10-01to2017-09-30">
<p style="text-align: justify; margin: 0pt"></p> <p style="text-align: justify; margin: 0pt; text-indent: 0pt; padding-left: 57.1pt"><b>NOTE 9 - COMMITMENTS AND CONTINGENCIES</b></p> <p style="text-align: justify; margin: 0pt"><br /></p> <p style="text-align: justify; margin: 0pt; padding-left: 63.35pt"><i>OBLIGATIONS UNDER OPERATING LEASES</i></p> <p style="text-align: justify; margin: 0pt"> </p> <p style="text-align: justify; margin: 0pt; padding-left: 63.35pt">The Company leases approximately 1,700 square feet for its principal offices in Boca Raton, Florida at a monthly rental of approximately $3,500. The lease, which provides for annual increases of base rent of 4%, expires on November 30, 2018. </p> <p style="text-align: justify; margin: 0pt; padding-left: 63.35pt"> </p> <p style="text-align: justify; margin: 0pt; padding-left: 63.35pt">The Company rents office space on a month to month basis for its Tampa operations at a cost of $2,000 per month.</p> <p style="text-align: justify; margin: 0pt"> </p> <p style="text-align: justify; margin: 0pt; padding-left: 63.35pt">Future lease commitments are as follows for the years ended September 30:</p> <p style="text-align: justify; margin: 0pt"><br />                      </p> <p style="text-align: justify; padding-left: 144pt; margin-top: 0pt; margin-bottom: -12pt">2018</p> <p style="text-align: justify; margin: 0pt; text-indent: 111.7pt; padding-left: 144pt">43,560</p> <p style="text-align: justify; padding-left: 144pt; margin-top: 0pt; margin-bottom: -12pt">2019</p> <p style="text-align: justify; margin: 0pt; text-indent: 116.7pt; padding-left: 144pt"><u>7,260</u></p> <p style="text-align: justify; margin: 0pt; text-indent: 106.7pt; padding-left: 144pt"><u style="border-bottom: black 1pt double">$50,820</u></p> <p style="text-align: justify; margin: 0pt"> </p> <p style="text-align: justify; margin: 0pt; padding-left: 63.35pt">Rent expense incurred during the years ended September 30, 2017 and 2016 was $60,258 and $42,524, respectively.</p> <p style="text-align: justify; margin: 0pt"> </p> <p style="text-align: justify; margin: 0pt; padding-left: 63.35pt"><i>MAJOR CUSTOMERS</i></p> <p style="text-align: justify; margin: 0pt"> </p> <p style="text-align: justify; margin: 0pt; padding-left: 63.35pt">No customer accounted for more than 10% of the Company’s revenues for the year ended September 30, 2017. As of September 30, 2017 two customers accounted for approximately 24% of the Company’s total outstanding accounts receivable. As of September 30, 2016 two customers accounted for approximately 78% of the Company’s total outstanding accounts receivable.</p> <p style="margin: 0pt"> </p> <p style="margin: 0pt"> </p> <p style="text-align: justify; margin: 0pt; padding-left: 63.35pt"><i>MAJOR SUPPLIER AND SOLE MANUFACTURING SOURCE</i></p> <p style="text-align: justify; margin: 0pt"><br /></p> <p style="text-align: justify; margin: 0pt; padding-left: 63.35pt">During 2014, the Company developed a proprietary interoperable communications solution. The Company relies on no major supplier for its products and services. The Company has contracted with a single local manufacturing facility to provide completed circuit boards used in the assembly of its IP gateway devices. Interruption to the manufacturing source presents additional risk to the Company. The Company believes that other commercial facilities exist at competitive rates to match the resources and capabilities of its existing manufacturing source. </p> <p style="text-align: justify; margin: 0pt"> </p> <p style="text-align: justify; margin: 0pt; padding-left: 63pt"><i>Exclusive Licensing Agreement</i></p> <p style="text-align: justify; margin: 0pt"><br /></p> <p style="text-align: justify; margin: 0pt; line-height: 14pt; padding-left: 63.35pt">On May 5, 2017, the Company entered into an Exclusive Licensing Agreement with Sublicensing Terms (the “Agreement”) with the University of Southern Florida Research Foundation, Inc. (“USFRF”) relating to an exclusive license of certain patent rights in connection with one of USFRF’s U.S. Patent Applications. Both parties recognize that the research and development work provided by the Company was sufficient for USFRF to enter into the Agreement with the Company.</p> <p style="text-align: justify; margin: 0pt"> </p> <p style="text-align: justify; margin: 0pt; line-height: 14pt; padding-left: 63.35pt">The Agreement is effective April 25, 2017 and continues until the later of the date that no Licensed Patent remains a pending application or an enforceable patent or the date on which the Licensee’s obligation to pay royalties expires.</p> <p style="text-align: justify; margin: 0pt; line-height: 14pt"> </p> <p style="text-align: justify; margin: 0pt; line-height: 14pt; padding-left: 63.35pt">The Company paid USFRF a License Issue Fee of $3,000 and $7,253.50 as reimbursement of expenses associated with the filing of the Licensed Patent. The Company agreed to complete the first commercial sale of products to the retail customer on or before January 31, 2019 or USFRF has the right to terminate the agreement. In addition, the Company agreed that it will have made and tested a prototype by August 31, 2018 or USFRF has the right to terminate the agreement. The company agreed to pay USFRF a royalty of 3% for sales of all Licensed Products and Licensed Processes and agreed to pay USFRF minimum royalty payments as follows:</p> <p style="text-align: center; margin: 0pt; line-height: 14pt"><br /></p> <div align="center"> <table cellspacing="0" style="font-size: 10pt"> <tr> <td style="width: 45px"></td> <td style="width: 30px"></td></tr> <tr> <td style="width: 61px; vertical-align: top"> <p style="text-align: justify; margin: 0pt; line-height: 14pt">Payment</p></td> <td style="width: 41px; vertical-align: top"> <p style="text-align: justify; margin: 0pt; line-height: 14pt">Year</p></td></tr> <tr> <td style="width: 61px; vertical-align: top"> <p style="text-align: justify; margin: 0pt; line-height: 14pt">$1,000</p></td> <td style="width: 41px; vertical-align: top"> <p style="text-align: justify; margin: 0pt; line-height: 14pt">2019</p></td></tr> <tr> <td style="width: 61px; vertical-align: top"> <p style="text-align: justify; margin: 0pt; line-height: 14pt">$4,000</p></td> <td style="width: 41px; vertical-align: top"> <p style="text-align: justify; margin: 0pt; line-height: 14pt">2020</p></td></tr> <tr> <td style="width: 61px; vertical-align: top"> <p style="text-align: justify; margin: 0pt; line-height: 14pt">$8,000</p></td> <td style="width: 41px; vertical-align: top"> <p style="text-align: justify; margin: 0pt; line-height: 14pt">2021</p></td></tr></table></div> <p style="text-align: center; margin: 0pt; line-height: 14pt; text-indent: 8.65pt; padding-left: 63.35pt">  -and every year thereafter on the same date, for the life of the agreement.</p> <p style="text-align: justify; margin: 0pt"> </p> <p style="text-align: justify; margin: 0pt; padding-left: 63pt">In the event the Company proposes to sell any Equity Securities, then USFRF will have the right to purchase 5% of the securities issued in such offering on the same terms and conditions as are offered to other purchasers in such financing.</p>
</us-gaap:CommitmentsAndContingenciesDisclosureTextBlock>
<us-gaap:RelatedPartyTransactionsDisclosureTextBlock contextRef="From2016-10-01to2017-09-30">
<p style="text-align: justify; margin: 0pt"><b>NOTE 8 – RELATED PARTY TRANSACTIONS</b></p> <p style="text-align: justify; margin: 0pt"> </p> <p style="text-align: justify; margin: 0pt; padding-left: 63.35pt"> The Company leases its office space from another entity that is also a stockholder. Rent expense paid to the related party was $60,258 and $42,454 for the years ended September 30, 2017 and 2016, respectively. </p> <p style="text-align: justify; margin: 0pt"> </p> <p style="text-align: justify; margin: 0pt; padding-left: 63.35pt">In December 2016, the Board of Directors accepted the resignation of Larry M. Reid as Chief Executive Officer of the corporation and appointed Mr. Reid as Chief Financial Officer. The Board also appointed Michael M. Moore as Chief Executive Officer.  </p> <p style="text-align: justify; margin: 0pt; padding-left: 63.35pt"> </p> <p style="text-align: justify; margin: 0pt; padding-left: 63.35pt">Under the terms of an employment agreement effective on November 28, 2016, Mr. Moore as CEO receives an annual salary of $200,000. The term of agreement is for a one-year period beginning on the effective date and shall automatically renew and continue in effect for additional one-year periods.</p> <p style="text-align: justify; margin: 0pt"> </p> <p style="text-align: justify; margin: 0pt; padding-left: 63.35pt">Under the terms of an employment agreement effective on March 13, 2015, Mr. Reid as CFO receives an annual salary of $96,000. The term of agreement is for a one-year period beginning on the effective date and shall automatically renew and continue in effect for additional one-year periods.</p> <p style="text-align: justify; margin: 0pt"> </p> <p style="text-align: justify; margin: 0pt; padding-left: 64.8pt">In November 2015, the Company entered into a promissory note for $50,000 with a stockholder, officer and director of the Company. The note bears an 8% interest rate, is unsecured and is due on December 31, 2017. In December 2017, the maturity date was extended to December 31, 2018.</p> <p style="text-align: justify; margin: 0pt; padding-left: 64.8pt"> </p> <p style="text-align: justify; margin: 0pt; padding-left: 63.35pt">In November 2016, the Company sold 525,746 shares of Series A Convertible Preferred stock to a private investor and director for $262,873 in cash.</p> <p style="text-align: justify; margin: 0pt"> </p> <p style="text-align: justify; margin: 0pt; padding-left: 63.35pt">During the year ended September 30, 2017, the Company repaid the principal amount of $33,920 of a note payable to a shareholder.</p> <p style="text-align: justify; margin: 0pt"> </p> <p style="text-align: justify; margin: 0pt; padding-left: 64.8pt">In September 2017, the Company issued an 8% unsecured promissory note in the amount of $35,000 to a shareholder and director. The note matures December 31, 2018.</p> <p style="text-align: justify; margin: 0pt"> </p> <p style="text-align: justify; margin: 0pt; padding-left: 63.35pt">In November 2016, the Company cancelled its Licensing Agreement with Collabria LLC of Tampa, Florida (”Collabria”) and acquired all of the intellectual property related to Collabria’s command and control software, trade-named ReadyOp. In addition the Company acquired Collabria’s client list. In exchange for these assets the Company issued Collabria 3,000,000 shares of the Company’s restricted Series E Convertible Preferred stock with a fair value of $292,240. The Company assumed none of Collabria’s liabilities.   </p>
</us-gaap:RelatedPartyTransactionsDisclosureTextBlock>
<us-gaap:SubsequentEventsTextBlock contextRef="From2016-10-01to2017-09-30">
<p style="text-align: justify; margin: 0pt"><b>NOTE 10 - SUBSEQUENT EVENTS</b></p> <p style="text-align: justify; margin: 0pt"> </p> <p style="text-align: justify; margin: 0pt; padding-left: 63.7pt">In October 2017, the Company issued an unsecured 8% promissory note to a shareholder and director in the amount of $15,000. The note matures December 31, 2018.</p> <p style="text-align: justify; margin: 0pt"> </p> <p style="text-align: justify; margin: 0pt; padding-left: 63.35pt">In October 2017, the Company repaid $7,891 in principal of a note payable to shareholder.</p>
</us-gaap:SubsequentEventsTextBlock>
<us-gaap:ConsolidationPolicyTextBlock contextRef="From2016-10-01to2017-09-30">
<p style="text-align: justify; margin: 0pt; padding-left: 63.35pt"><b>PRINCIPLES OF CONSOLIDATION</b></p> <p style="text-align: justify; margin: 0pt"> </p> <p style="text-align: justify; margin: 0pt; padding-left: 63.35pt">The consolidated financial statements and accompanying notes have been prepared in conformity with accounting principles generally accepted in the United States of America. The consolidated financial statements include the accounts of Cleartronic, Inc. and its subsidiaries, VoiceInterop, Inc. and ReadyOp Communications, Inc. All intercompany transactions and balances have been eliminated.</p>
</us-gaap:ConsolidationPolicyTextBlock>
<us-gaap:UseOfEstimates contextRef="From2016-10-01to2017-09-30">
<p style="text-align: justify; margin: 0pt; padding-left: 63.35pt"><b>USE OF ESTIMATES</b></p> <p style="text-align: justify; margin: 0pt"> </p> <p style="text-align: justify; margin: 0pt; padding-left: 63.7pt">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, equity transactions, valuation of fair value of derivative liability, valuation of deferred tax assets, estimated useful life of licensing agreement, valuation of inventory and allowance for doubtful account.</p>
</us-gaap:UseOfEstimates>
<us-gaap:CashAndCashEquivalentsPolicyTextBlock contextRef="From2016-10-01to2017-09-30">
<p style="text-align: justify; margin: 0pt; padding-left: 63.35pt"><b>CASH AND CASH EQUIVALENTS</b></p> <p style="text-align: justify; margin: 0pt"> </p> <p style="text-align: justify; margin: 0pt; padding-left: 63.7pt">For financial statement purposes, the Company considers all highly liquid investments purchased with original maturities of three months or less to be cash equivalents. The Company did not own any cash equivalents at September 30, 2017 and 2016.</p>
</us-gaap:CashAndCashEquivalentsPolicyTextBlock>
<us-gaap:ReceivablesPolicyTextBlock contextRef="From2016-10-01to2017-09-30">
<p style="text-align: justify; margin: 0pt; padding-left: 63.35pt"><b>ACCOUNTS RECEIVABLE</b></p> <p style="text-align: justify; margin: 0pt"> </p> <p style="text-align: justify; margin: 0pt; padding-left: 63.7pt">The Company provides an allowance for uncollectible accounts based upon a periodic review and analysis of outstanding accounts receivable balances. Uncollectible receivables are charged to the allowance when deemed uncollectible. Recoveries of accounts previously written off are used to credit the allowance account in the periods in which the recoveries are made. </p> <p style="text-align: justify; margin: 0pt"> </p> <p style="text-align: justify; margin: 0pt; padding-left: 63.7pt">The Company provided $2,000 as allowances for doubtful accounts for the years ended September 30, 2017 and 2016, respectively.</p>
</us-gaap:ReceivablesPolicyTextBlock>
<us-gaap:GoodwillAndIntangibleAssetsIntangibleAssetsPolicy contextRef="From2016-10-01to2017-09-30">
<p style="text-align: justify; margin: 0pt; padding-left: 63.35pt"><b>LICENSING AGREEMENT</b></p> <p style="text-align: justify; margin: 0pt"> </p> <p style="text-align: justify; margin: 0pt; padding-left: 64.1pt">In November 2016, the Company cancelled its Licensing Agreement with Collabria LLC. As a result of this cancellation, the remaining balance of the licensing agreement in the amount of $240,332 was expensed in 2017. During the year ended September 30, 2016 the Company amortized $139,668.</p>
</us-gaap:GoodwillAndIntangibleAssetsIntangibleAssetsPolicy>
<us-gaap:ResearchAndDevelopmentExpensePolicy contextRef="From2016-10-01to2017-09-30">
<p style="text-align: justify; margin: 0pt; padding-left: 63.35pt"><b>RESEARCH AND DEVELOPMENT COSTS</b></p> <p style="text-align: justify; margin: 0pt"> </p> <p style="text-align: justify; margin: 0pt; padding-left: 63.7pt">The Company expenses research and development costs as incurred.  For the years ended September 30, 2017 and 2016, the Company had $105,768 and $14,636, respectively, in research and development costs.</p>
</us-gaap:ResearchAndDevelopmentExpensePolicy>
<us-gaap:RevenueRecognitionPolicyTextBlock contextRef="From2016-10-01to2017-09-30">
<p style="text-align: justify; margin: 0pt; padding-left: 63.35pt"><b>REVENUE RECOGNITION AND DEFERRED REVENUES</b></p> <p style="text-align: justify; margin: 0pt"> </p> <p style="text-align: justify; margin: 0pt; padding-left: 63pt">Unified group communication solutions consist of three elements to be provided to customers: software licenses and equipment purchased from third-party vendors, proprietary hardware that is manufactured on contract to required specifications and installation and integration of the hardware and software into the cohesive communication source.</p> <p style="text-align: justify; margin: 0pt"> </p> <p style="text-align: justify; margin: 0pt; padding-left: 63pt">The Company's revenue recognition policies are in accordance with Accounting Standards Codification 605-10 “Revenue Recognition” (ASC 605-10). Revenue is recognized when persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, the contract price is fixed or determinable, and collectability is reasonably assured. No right of return privileges are granted to customers after shipment. The Company recognizes revenue for the elements separately as the sales of the equipment and software, installation and integration, and support services represent separate earnings processes that are generally specified under separate agreements. </p> <p style="text-align: justify; margin: 0pt"> </p> <p style="text-align: justify; margin: 0pt; padding-left: 63pt">Revenue from the resale of equipment utilized in unified group communication solutions is recognized when shipped. For software licenses, the Company does not provide any services that are considered essential to the functionality of the software, and therefore revenue is recognized upon delivery of the software, provided (1) there is evidence of an arrangement, (2) collection of the fee is considered probable and (3) the fee is fixed and determinable. Upon acquisition of the ReadyOp software platform, the Company changed its revenue recognition for ReadyOp software. For ReadyOp software the Company currently defers the license fee on issuance of the license and recognizes the revenue over the term of the agreement. This is due to the fact that the software license comes with customer support for the license period. The Company now provides support to customers which was previously provided by Collabria LLC. Royalties paid to software vendors are categorized as Cost of Goods Sold. </p> <p style="text-align: justify; margin: 0pt"><br /></p> <p style="margin: 0pt; padding-left: 63pt">The Company also provides support to customers under separate contracts varying from one to five years. The Company’s obligations under its service contracts vary by the length of the contract. In all cases the Company is the primary obligor to provide first level support to the client. If the contract has less than one year of service and support remaining on the contract, it is classified as a current liability; if longer, it is classified as a non-current liability.</p> <p style="text-align: justify; margin: 0pt"> </p> <p style="text-align: justify; margin: 0pt; padding-left: 63pt">Installation and integration services are recognized upon completion.</p>
</us-gaap:RevenueRecognitionPolicyTextBlock>
<us-gaap:EarningsPerSharePolicyTextBlock contextRef="From2016-10-01to2017-09-30">
<p style="text-align: justify; margin: 0pt; padding-left: 63.35pt"><b>EARNINGS PER SHARE</b></p> <p style="text-align: justify; margin: 0pt"> </p> <p style="text-align: justify; margin: 0pt; padding-left: 63.7pt">In accordance with accounting guidance now codified as FASB ASC 260 “Earning per Share”, basic income (loss) per common share is calculated using the weighted average number of shares outstanding during the periods reported. Diluted earnings per share include the weighted average effect of all dilutive securities outstanding during the periods presented. Diluted per share loss is the same as basic per share loss when there is a loss from continuing operations. </p> <p style="text-align: justify; margin: 0pt"> </p> <p style="text-align: justify; margin: 0pt; line-height: 13pt; padding-left: 63pt">As of September 30, 2017 and 2016, we had no options and warrants outstanding.  <i> </i>As of September 30, 2017 and 2016, we had 566,496 and 40,750 shares of Series A Convertible Preferred stock outstanding, respectively. As of September 30, 2017, 40,750 shares of Series A Convertible Preferred stock are convertible into 4,075,000 shares of common stock and 525,746 shares of Series A Convertible Preferred are convertible after a two-year period from the issuance date.  As of September 30, 2017 and 2016, we have 2,563,375 shares of Series C Convertible Preferred stock outstanding which are convertible into 12,816,875 shares of common stock. As of September 30, 2017 and 2016, we had 670,904 shares of Series D Convertible Preferred stock outstanding which are convertible into 3,354,520 shares of common stock. As of September 30, 2017 we had 3,000,000 shares of Series E Convertible Preferred stock outstanding which are convertible after a two-year period from date of issuance. As of September 30, 2016 there were no shares of Series E Convertible Preferred stock outstanding.</p>
</us-gaap:EarningsPerSharePolicyTextBlock>
<us-gaap:FairValueOfFinancialInstrumentsPolicy contextRef="From2016-10-01to2017-09-30">
<p style="text-align: justify; margin: 0pt; padding-left: 63.35pt"><b>FAIR VALUE OF FINANCIAL INSTRUMENTS</b></p> <p style="text-align: justify; margin: 0pt"> </p> <p style="text-align: justify; padding-left: 60.5pt; margin-top: 3.75pt; margin-bottom: 0pt">The Company adopted ASC topic 820, “Fair Value Measurements and Disclosures” (ASC 820), “Fair Value Measurements,” effective January 1, 2009. 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. </p> <p style="text-align: justify; padding-left: 60.5pt; margin-top: 7.5pt; margin-bottom: 0pt">ASC 820 also describes three levels of inputs that may be used to measure fair value: </p> <p style="margin: 0pt"> </p> <table cellspacing="0" style="font-size: 10pt"> <tr> <td style="width: 90px"></td> <td style="width: 102px"></td> <td style="width: 1105px"></td></tr> <tr> <td style="width: 90px; vertical-align: top"> </td> <td style="width: 102px; vertical-align: top"> <p style="margin: 0pt; padding-left: 58.5pt"></p></td> <td style="width: 1105px; vertical-align: top"> <p style="padding-left: 8.95pt; margin-top: 4.15pt; margin-bottom: 4.15pt">Level 1: Observable inputs that reflect unadjusted quoted prices for identical assets or liabilities traded in active markets. </p></td></tr></table> <p style="margin: 0pt; padding-left: 58.5pt"> </p> <table cellspacing="0" style="font-size: 10pt"> <tr> <td style="width: 92px"></td> <td style="width: 97px"></td> <td style="width: 1104px"></td></tr> <tr> <td style="width: 92px; vertical-align: top"> </td> <td style="width: 97px; vertical-align: top"> <p style="margin: 0pt; padding-left: 58.5pt"></p></td> <td style="width: 1104px; vertical-align: top"> <p style="padding-left: 9.65pt; margin-top: 4.15pt; margin-bottom: 4.15pt">Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. </p></td></tr></table> <p style="margin: 0pt; padding-left: 58.5pt"> </p> <table cellspacing="0" style="width: 1304px; font-size: 10pt"> <tr> <td style="width: 92px"></td> <td style="width: 96px"></td> <td style="width: 1108px"></td></tr> <tr> <td style="width: 92px; vertical-align: top"> </td> <td style="width: 96px; vertical-align: top"> <p style="margin: 0pt; padding-left: 58.5pt"></p></td> <td style="width: 1108px; vertical-align: top"> <p style="padding-left: 9.65pt; margin-top: 4.15pt; margin-bottom: 4.15pt">Level 3: Inputs that are generally unobservable. These inputs may be used with internally developed methodologies that result in management’s best estimate of fair value. </p></td></tr></table> <p style="text-align: justify; padding-left: 63.7pt; margin-top: 7.5pt; margin-bottom: 0pt">Financial instruments consist principally of cash, accounts receivable, prepaid expenses and other current assets, accounts payable, accrued expenses and deferred revenue. The carrying amounts of such financial instruments in the accompanying consolidated balance sheet approximate their fair values due to their relatively short-term nature. The fair value of long-term debt is based on current rates at which the Company could borrow funds with similar remaining maturities. The carrying amounts approximate fair value. It is management’s opinion that the Company is not exposed to any significant currency or credit risks arising from these financial instruments. </p> <p style="text-align: left; padding-left: 63.7pt; margin-top: 7.5pt; margin-bottom: 0pt">The Company’s fair value hierarchy for intangible assets as of September 20, 2017 and 2016, respectively, was as follows: <br /></p> <div align="center"> <table cellspacing="0" style="font-size: 10pt"> <tr> <td style="width: 169px"></td> <td style="width: 12px"></td> <td style="width: 14px"></td> <td style="width: 52px"></td> <td style="width: 12px"></td> <td style="width: 12px"></td> <td style="width: 14px"></td> <td style="width: 36px"></td> <td style="width: 12px"></td> <td style="width: 14px"></td> <td style="width: 44px"></td> <td style="width: 12px"></td> <td style="width: 14px"></td> <td style="width: 52px"></td></tr> <tr> <td colspan="14" style="width: 638px; vertical-align: bottom"> <p style="margin: 0pt"> </p></td></tr> <tr> <td style="width: 226px"> </td> <td style="width: 17px; vertical-align: bottom"> </td> <td style="width: 19px; vertical-align: bottom"> </td> <td style="width: 69px; vertical-align: bottom"> </td> <td style="width: 17px; vertical-align: bottom"> </td> <td style="width: 17px; vertical-align: bottom"> </td> <td style="width: 19px; vertical-align: bottom"> </td> <td style="width: 48px; vertical-align: bottom"> </td> <td style="width: 17px; vertical-align: bottom"> </td> <td style="width: 19px; vertical-align: bottom"> </td> <td style="width: 59px; vertical-align: bottom"> </td> <td style="width: 17px; vertical-align: bottom"> </td> <td style="width: 19px; vertical-align: bottom"> </td> <td style="width: 69px; vertical-align: bottom"> </td></tr> <tr> <td rowspan="2" style="width: 226px"> </td> <td rowspan="2" style="width: 17px"> </td> <td colspan="2" style="width: 89px"> <p style="text-align: center; margin: 0pt"><b>September 30,</b></p></td> <td rowspan="2" style="width: 17px"> </td> <td rowspan="2" style="width: 17px"> </td> <td colspan="2" style="width: 68px"> </td> <td rowspan="2" style="width: 17px"> </td> <td colspan="2" style="width: 79px"> </td> <td rowspan="2" style="width: 17px"> </td> <td colspan="2" style="width: 89px"> </td></tr> <tr> <td colspan="2" style="width: 89px; border-bottom: rgb(0, 0, 0) 0.5pt solid"> <p style="text-align: center; margin: 0pt"><b>2017</b></p></td> <td colspan="2" style="width: 68px; border-bottom: rgb(0, 0, 0) 0.5pt solid"> <p style="text-align: center; margin: 0pt"><b>Level 1</b></p></td> <td colspan="2" style="width: 79px; border-bottom: rgb(0, 0, 0) 0.5pt solid"> <p style="text-align: center; margin: 0pt"><b>Level 2</b></p></td> <td colspan="2" style="width: 89px; border-bottom: rgb(0, 0, 0) 0.5pt solid"> <p style="text-align: center; margin: 0pt"><b>Level 3</b></p></td></tr> <tr> <td style="width: 226px"> <p style="margin: 0pt"><b>Intangible assets</b></p></td> <td style="width: 17px"> <p style="margin: 0pt"> </p></td> <td style="width: 19px"> <p style="margin: 0pt"> </p></td> <td style="width: 69px"> <p style="margin: 0pt"> </p></td> <td style="width: 17px"> <p style="margin: 0pt"> </p></td> <td style="width: 17px"> <p style="margin: 0pt"> </p></td> <td style="width: 19px"> <p style="margin: 0pt"> </p></td> <td style="width: 48px"> <p style="margin: 0pt"> </p></td> <td style="width: 17px"> <p style="margin: 0pt"> </p></td> <td style="width: 19px"> <p style="margin: 0pt"> </p></td> <td style="width: 59px"> <p style="margin: 0pt"> </p></td> <td style="width: 17px"> <p style="margin: 0pt"> </p></td> <td style="width: 19px"> <p style="margin: 0pt"> </p></td> <td style="width: 69px"> <p style="margin: 0pt"> </p></td></tr> <tr> <td style="width: 226px"> <p style="margin: 0pt">Licensing agreement, net of amortization</p></td> <td style="width: 17px"> <p style="margin: 0pt"> </p></td> <td style="width: 19px"> <p style="margin: 0pt">$</p></td> <td style="width: 69px"> <p style="text-align: right; margin: 0pt">                 -   </p></td> <td style="width: 17px"> <p style="margin: 0pt"> </p></td> <td style="width: 17px"> <p style="margin: 0pt"> </p></td> <td style="width: 19px"> <p style="margin: 0pt">$</p></td> <td style="width: 48px"> <p style="text-align: right; margin: 0pt">           -   </p></td> <td style="width: 17px"> <p style="margin: 0pt"> </p></td> <td style="width: 19px"> <p style="margin: 0pt">$</p></td> <td style="width: 59px"> <p style="text-align: right; margin: 0pt">               -   </p></td> <td style="width: 17px"> <p style="margin: 0pt"> </p></td> <td style="width: 19px"> <p style="margin: 0pt">$</p></td> <td style="width: 69px"> <p style="text-align: right; margin: 0pt">                 -   </p></td></tr> <tr> <td style="width: 226px"> <p style="margin: 0pt">ReadyOp software platform, net of amortization</p></td> <td style="width: 17px"> <p style="margin: 0pt"> </p></td> <td style="width: 19px"> <p style="margin: 0pt"> </p></td> <td style="width: 69px"> <p style="text-align: right; margin: 0pt">       141,270 </p></td> <td style="width: 17px"> <p style="margin: 0pt"> </p></td> <td style="width: 17px"> <p style="margin: 0pt"> </p></td> <td style="width: 19px"> <p style="margin: 0pt"> </p></td> <td style="width: 48px"> <p style="text-align: right; margin: 0pt">           -   </p></td> <td style="width: 17px"> <p style="margin: 0pt"> </p></td> <td style="width: 19px"> <p style="margin: 0pt"> </p></td> <td style="width: 59px"> <p style="text-align: right; margin: 0pt">               -   </p></td> <td style="width: 17px"> <p style="margin: 0pt"> </p></td> <td style="width: 19px"> <p style="margin: 0pt"> </p></td> <td style="width: 69px"> <p style="text-align: right; margin: 0pt">       141,270 </p></td></tr> <tr> <td style="width: 226px"> <p style="margin: 0pt">ReadyOp customer list, net of amortization</p></td> <td style="width: 17px"> <p style="margin: 0pt"> </p></td> <td style="width: 19px; border-bottom: rgb(0, 0, 0) 1pt solid"> <p style="margin: 0pt"> </p></td> <td style="width: 69px; border-bottom: rgb(0, 0, 0) 1pt solid"> <p style="text-align: right; margin: 0pt">         56,370 </p></td> <td style="width: 17px"> <p style="margin: 0pt"> </p></td> <td style="width: 17px"> <p style="margin: 0pt"> </p></td> <td style="width: 19px; border-bottom: rgb(0, 0, 0) 1pt solid"> <p style="margin: 0pt"> </p></td> <td style="width: 48px; border-bottom: rgb(0, 0, 0) 1pt solid"> <p style="text-align: right; margin: 0pt">           -   </p></td> <td style="width: 17px"> <p style="margin: 0pt"> </p></td> <td style="width: 19px; border-bottom: rgb(0, 0, 0) 1pt solid"> <p style="margin: 0pt"> </p></td> <td style="width: 59px; border-bottom: rgb(0, 0, 0) 1pt solid"> <p style="text-align: right; margin: 0pt">               -   </p></td> <td style="width: 17px"> <p style="margin: 0pt"> </p></td> <td style="width: 19px; border-bottom: rgb(0, 0, 0) 1pt solid"> <p style="margin: 0pt"> </p></td> <td style="width: 69px; border-bottom: rgb(0, 0, 0) 1pt solid"> <p style="text-align: right; margin: 0pt">         56,370 </p></td></tr> <tr> <td style="width: 226px"> <p style="margin: 0pt">Total</p></td> <td style="width: 17px"> <p style="margin: 0pt"> </p></td> <td style="width: 19px; border-bottom: rgb(0, 0, 0) 3pt double"> <p style="margin: 0pt">$</p></td> <td style="width: 69px; border-bottom: rgb(0, 0, 0) 3pt double"> <p style="text-align: right; margin: 0pt">       197,640 </p></td> <td style="width: 17px"> <p style="margin: 0pt"> </p></td> <td style="width: 17px"> <p style="margin: 0pt"> </p></td> <td style="width: 19px; border-bottom: rgb(0, 0, 0) 3pt double"> <p style="margin: 0pt">$</p></td> <td style="width: 48px; border-bottom: rgb(0, 0, 0) 3pt double"> <p style="text-align: right; margin: 0pt">           -   </p></td> <td style="width: 17px"> <p style="margin: 0pt"> </p></td> <td style="width: 19px; border-bottom: rgb(0, 0, 0) 3pt double"> <p style="margin: 0pt">$</p></td> <td style="width: 59px; border-bottom: rgb(0, 0, 0) 3pt double"> <p style="text-align: right; margin: 0pt">               -   </p></td> <td style="width: 17px"> <p style="margin: 0pt"> </p></td> <td style="width: 19px; border-bottom: rgb(0, 0, 0) 3pt double"> <p style="margin: 0pt">$</p></td> <td style="width: 69px; border-bottom: rgb(0, 0, 0) 3pt double"> <p style="text-align: right; margin: 0pt">       197,640 </p></td></tr> <tr> <td style="width: 226px"> </td> <td style="width: 17px; vertical-align: bottom"> </td> <td style="width: 19px; vertical-align: bottom"> </td> <td style="width: 69px; vertical-align: bottom"> </td> <td style="width: 17px; vertical-align: bottom"> </td> <td style="width: 17px; vertical-align: bottom"> </td> <td style="width: 19px; vertical-align: bottom"> </td> <td style="width: 48px; vertical-align: bottom"> </td> <td style="width: 17px; vertical-align: bottom"> </td> <td style="width: 19px; vertical-align: bottom"> </td> <td style="width: 59px; vertical-align: bottom"> </td> <td style="width: 17px; vertical-align: bottom"> </td> <td style="width: 19px; vertical-align: bottom"> </td> <td style="width: 69px; vertical-align: bottom"> </td></tr> <tr> <td rowspan="2" style="width: 226px"> </td> <td rowspan="2" style="width: 17px"> </td> <td colspan="2" style="width: 89px"> <p style="text-align: center; margin: 0pt"><b>September 30,</b></p></td> <td rowspan="2" style="width: 17px"> </td> <td rowspan="2" style="width: 17px"> </td> <td colspan="2" style="width: 68px"> </td> <td rowspan="2" style="width: 17px"> </td> <td colspan="2" style="width: 79px"> </td> <td rowspan="2" style="width: 17px"> </td> <td colspan="2" style="width: 89px"> </td></tr> <tr> <td colspan="2" style="width: 89px; border-bottom: rgb(0, 0, 0) 0.5pt solid"> <p style="text-align: center; margin: 0pt"><b>2016</b></p></td> <td colspan="2" style="width: 68px; border-bottom: rgb(0, 0, 0) 0.5pt solid"> <p style="text-align: center; margin: 0pt"><b>Level 1</b></p></td> <td colspan="2" style="width: 79px; border-bottom: rgb(0, 0, 0) 0.5pt solid"> <p style="text-align: center; margin: 0pt"><b>Level 2</b></p></td> <td colspan="2" style="width: 89px; border-bottom: rgb(0, 0, 0) 0.5pt solid"> <p style="text-align: center; margin: 0pt"><b>Level 3</b></p></td></tr> <tr> <td style="width: 226px"> <p style="margin: 0pt"><b>Intangible assets</b></p></td> <td style="width: 17px"> <p style="margin: 0pt"> </p></td> <td style="width: 19px"> <p style="margin: 0pt"> </p></td> <td style="width: 69px"> <p style="margin: 0pt"> </p></td> <td style="width: 17px"> <p style="margin: 0pt"> </p></td> <td style="width: 17px"> <p style="margin: 0pt"> </p></td> <td style="width: 19px"> <p style="margin: 0pt"> </p></td> <td style="width: 48px"> <p style="margin: 0pt"> </p></td> <td style="width: 17px"> <p style="margin: 0pt"> </p></td> <td style="width: 19px"> <p style="margin: 0pt"> </p></td> <td style="width: 59px"> <p style="margin: 0pt"> </p></td> <td style="width: 17px"> <p style="margin: 0pt"> </p></td> <td style="width: 19px"> <p style="margin: 0pt"> </p></td> <td style="width: 69px"> <p style="margin: 0pt"> </p></td></tr> <tr> <td style="width: 226px"> <p style="margin: 0pt">Licensing agreement, net of amortization</p></td> <td style="width: 17px"> <p style="margin: 0pt"> </p></td> <td style="width: 19px"> <p style="margin: 0pt">$</p></td> <td style="width: 69px"> <p style="text-align: right; margin: 0pt">       240,332 </p></td> <td style="width: 17px"> <p style="margin: 0pt"> </p></td> <td style="width: 17px"> <p style="margin: 0pt"> </p></td> <td style="width: 19px"> <p style="margin: 0pt">$</p></td> <td style="width: 48px"> <p style="text-align: right; margin: 0pt">           -   </p></td> <td style="width: 17px"> <p style="margin: 0pt"> </p></td> <td style="width: 19px"> <p style="margin: 0pt">$</p></td> <td style="width: 59px"> <p style="text-align: right; margin: 0pt">               -   </p></td> <td style="width: 17px"> <p style="margin: 0pt"> </p></td> <td style="width: 19px"> <p style="margin: 0pt">$</p></td> <td style="width: 69px"> <p style="text-align: right; margin: 0pt">       240,332 </p></td></tr> <tr> <td style="width: 226px"> <p style="margin: 0pt">ReadyOp software platform, net of amortization</p></td> <td style="width: 17px"> <p style="margin: 0pt"> </p></td> <td style="width: 19px"> <p style="margin: 0pt"> </p></td> <td style="width: 69px"> <p style="text-align: right; margin: 0pt">                 -   </p></td> <td style="width: 17px"> <p style="margin: 0pt"> </p></td> <td style="width: 17px"> <p style="margin: 0pt"> </p></td> <td style="width: 19px"> <p style="margin: 0pt"> </p></td> <td style="width: 48px"> <p style="text-align: right; margin: 0pt">           -   </p></td> <td style="width: 17px"> <p style="margin: 0pt"> </p></td> <td style="width: 19px"> <p style="margin: 0pt"> </p></td> <td style="width: 59px"> <p style="text-align: right; margin: 0pt">               -   </p></td> <td style="width: 17px"> <p style="margin: 0pt"> </p></td> <td style="width: 19px"> <p style="margin: 0pt"> </p></td> <td style="width: 69px"> <p style="text-align: right; margin: 0pt">                 -   </p></td></tr> <tr> <td style="width: 226px"> <p style="margin: 0pt">ReadyOp customer list, net of amortization</p></td> <td style="width: 17px"> <p style="margin: 0pt"> </p></td> <td style="width: 19px; border-bottom: rgb(0, 0, 0) 1pt solid"> <p style="margin: 0pt"> </p></td> <td style="width: 69px; border-bottom: rgb(0, 0, 0) 1pt solid"> <p style="text-align: right; margin: 0pt">                 -   </p></td> <td style="width: 17px"> <p style="margin: 0pt"> </p></td> <td style="width: 17px"> <p style="margin: 0pt"> </p></td> <td style="width: 19px; border-bottom: rgb(0, 0, 0) 1pt solid"> <p style="margin: 0pt"> </p></td> <td style="width: 48px; border-bottom: rgb(0, 0, 0) 1pt solid"> <p style="text-align: right; margin: 0pt">           -   </p></td> <td style="width: 17px"> <p style="margin: 0pt"> </p></td> <td style="width: 19px; border-bottom: rgb(0, 0, 0) 1pt solid"> <p style="margin: 0pt"> </p></td> <td style="width: 59px; border-bottom: rgb(0, 0, 0) 1pt solid"> <p style="text-align: right; margin: 0pt">               -   </p></td> <td style="width: 17px"> <p style="margin: 0pt"> </p></td> <td style="width: 19px; border-bottom: rgb(0, 0, 0) 1pt solid"> <p style="margin: 0pt"> </p></td> <td style="width: 69px; border-bottom: rgb(0, 0, 0) 1pt solid"> <p style="text-align: right; margin: 0pt">                 -   </p></td></tr> <tr> <td style="width: 226px"> <p style="margin: 0pt">Total</p></td> <td style="width: 17px"> <p style="margin: 0pt"> </p></td> <td style="width: 19px; border-bottom: rgb(0, 0, 0) 3pt double"> <p style="margin: 0pt">$</p></td> <td style="width: 69px; border-bottom: rgb(0, 0, 0) 3pt double"> <p style="text-align: right; margin: 0pt">       240,332 </p></td> <td style="width: 17px"> <p style="margin: 0pt"> </p></td> <td style="width: 17px"> <p style="margin: 0pt"> </p></td> <td style="width: 19px; border-bottom: rgb(0, 0, 0) 3pt double"> <p style="margin: 0pt">$</p></td> <td style="width: 48px; border-bottom: rgb(0, 0, 0) 3pt double"> <p style="text-align: right; margin: 0pt">           -   </p></td> <td style="width: 17px"> <p style="margin: 0pt"> </p></td> <td style="width: 19px; border-bottom: rgb(0, 0, 0) 3pt double"> <p style="margin: 0pt">$</p></td> <td style="width: 59px; border-bottom: rgb(0, 0, 0) 3pt double"> <p style="text-align: right; margin: 0pt">               -   </p></td> <td style="width: 17px"> <p style="margin: 0pt"> </p></td> <td style="width: 19px; border-bottom: rgb(0, 0, 0) 3pt double"> <p style="margin: 0pt">$</p></td> <td style="width: 69px; border-bottom: rgb(0, 0, 0) 3pt double"> <p style="text-align: right; margin: 0pt">       240,332 </p></td></tr> <tr> <td style="width: 226px; vertical-align: bottom"> </td> <td style="width: 17px; vertical-align: bottom"> </td> <td style="width: 19px; vertical-align: bottom"> </td> <td style="width: 69px; vertical-align: bottom"> </td> <td style="width: 17px; vertical-align: bottom"> </td> <td style="width: 17px; vertical-align: bottom"> </td> <td style="width: 19px; vertical-align: bottom"> </td> <td style="width: 48px; vertical-align: bottom"> </td> <td style="width: 17px; vertical-align: bottom"> </td> <td style="width: 19px; vertical-align: bottom"> </td> <td style="width: 59px; vertical-align: bottom"> </td> <td style="width: 17px; vertical-align: bottom"> </td> <td style="width: 19px; vertical-align: bottom"> </td> <td style="width: 69px; vertical-align: bottom"> </td></tr> <tr> <td style="width: 226px; vertical-align: bottom"> </td> <td style="width: 17px; vertical-align: bottom"> </td> <td style="width: 19px; vertical-align: bottom"> </td> <td style="width: 69px; vertical-align: bottom"> </td> <td style="width: 17px; vertical-align: bottom"> </td> <td style="width: 17px; vertical-align: bottom"> </td> <td style="width: 19px; vertical-align: bottom"> </td> <td style="width: 48px; vertical-align: bottom"> </td> <td style="width: 17px; vertical-align: bottom"> </td> <td style="width: 19px; vertical-align: bottom"> </td> <td style="width: 59px; vertical-align: bottom"> </td> <td style="width: 17px; vertical-align: bottom"> </td> <td style="width: 19px; vertical-align: bottom"> </td> <td style="width: 69px; vertical-align: bottom"> </td></tr></table></div>
</us-gaap:FairValueOfFinancialInstrumentsPolicy>
<us-gaap:InventoryPolicyTextBlock contextRef="From2016-10-01to2017-09-30">
<p style="text-align: justify; margin: 0pt; padding-left: 63.7pt"><b>INVENTORY</b></p> <p style="text-align: justify; margin: 0pt"> </p> <p style="text-align: justify; margin: 0pt; padding-left: 63.7pt">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 market on a first-in, first-out basis. The Company purchases completed circuit boards at a price that includes component parts and assembly charges. 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 and the Company recorded no reserve for obsolete inventory for the years ended September 30, 2017 and 2016.</p>
</us-gaap:InventoryPolicyTextBlock>
<us-gaap:PropertyPlantAndEquipmentPolicyTextBlock contextRef="From2016-10-01to2017-09-30">
<p style="text-align: justify; margin: 0pt; padding-left: 63.35pt"><b>PROPERTY AND EQUIPMENT</b></p> <p style="text-align: justify; margin: 0pt"><br /></p> <p style="text-align: justify; margin: 0pt; padding-left: 63.7pt">Property and equipment are recorded at cost. For financial statement purposes depreciation of property and equipment is computed using the straight-line method over the estimated useful lives of the asset. </p> <p style="text-align: justify; margin: 0pt"> </p> <p style="text-align: justify; margin: 0pt; padding-left: 63.7pt">Expenditures for replacements, maintenance and repairs that do not extend the lives of the respective assets are charged to expense as incurred. When assets are retired, sold or otherwise disposed of, their costs and related accumulated depreciation are removed from the accounts and resulting gains or losses are recognized.</p> <p style="text-align: justify; margin: 0pt"> </p> <p style="text-align: justify; margin: 0pt; padding-left: 63.7pt">As of September 30, 2017 and 2016 all property and equipment had been fully depreciated.</p>
</us-gaap:PropertyPlantAndEquipmentPolicyTextBlock>
<us-gaap:IncomeTaxPolicyTextBlock contextRef="From2016-10-01to2017-09-30">
<p style="text-align: justify; margin: 0pt; padding-left: 63.7pt"><b>INCOME TAXES</b></p> <p style="margin: 0pt"> </p> <p style="text-align: justify; margin: 0pt; padding-left: 63.35pt">The Company accounts for income taxes in accordance with accounting guidance now codified as FASB ASC Topic 740, “Income Taxes,” which requires that the Company recognizes income taxes using the asset and liability method. Under the asset and liability method, deferred tax assets and liabilities are recorded for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases.</p> <p style="text-align: justify; margin: 0pt"> </p> <p style="text-align: justify; margin: 0pt; padding-left: 63.7pt">Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect of a tax rate change on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date. The Company records valuation allowance to reduce net deferred tax assets to the amount considered more likely than not to be realized. Changes in estimates of future taxable income can materially change the amount of such valuation allowances.</p> <p style="text-align: justify; margin: 0pt"> </p> <p style="text-align: justify; margin: 0pt; padding-left: 63.7pt">The Company is required to recognize measure, classify, and disclose in the financial statements uncertain tax positions taken or expected to be taken in the Company’s tax returns. Management has determined that the Company does not have any uncertain tax positions and associated unrecognized benefits that materially impact the financial statements or related disclosures. Since tax matters are subject to some degree of uncertainty, there can be no assurance that the Company’s tax returns will not be challenged by the taxing authorities and that the Company will not be subject to additional tax penalties, and interest as a result of such challenge. The federal and state income tax returns of the Company for the years ended September 30, 2016, 2015 and 2014 are subject to examination by the IRS and state taxing authorities generally for three years after they were filed. There are no tax examinations currently in process.</p>
</us-gaap:IncomeTaxPolicyTextBlock>
<us-gaap:ShareBasedCompensationOptionAndIncentivePlansPolicy contextRef="From2016-10-01to2017-09-30">
<p style="text-align: justify; margin: 0pt; text-indent: 27pt; padding-left: 36pt"><b>STOCK-BASED COMPENSATION</b></p> <p style="text-align: justify; margin: 0pt"> </p> <p style="text-align: justify; margin: 0pt; padding-left: 63pt">Effective January 1, 2006, the Company adopted the fair value recognition provisions of Accounting Standards Codification 718-10 “Compensation” (ASC 718-10) using the modified retrospective transition method. ASC 718-10 requires companies to estimate the fair value of share-based payment awards on the date of grant using an option-pricing model. The value of the portion of the award that is ultimately expected to vest is recognized as expense ratably over the requisite service periods. The Company has estimated the fair value of each award as of the date of grant or assumption using the Black-Scholes option pricing model, which was developed for use in estimating the value of traded options that have no vesting restrictions and that are freely transferable. The Black-Scholes option pricing model considers, among other factors, the expected life of the award and the expected volatility of the Company's stock price. In March 2005, the SEC issued SAB No. 107, Share-Based Payment ("SAB 107"), which provides guidance regarding the interaction of ASC 718-10 and certain SEC rules and regulations. The Company has applied the provisions of SAB 107 in its adoption of ASC 718-10.</p> <p style="text-align: justify; margin: 0pt"> </p> <p style="text-align: justify; margin: 0pt; padding-left: 63pt">The Company accounts for equity instruments issued to parties other than employees for acquiring goods or services under guidance of section 505-50-30 of the FASB Accounting Standards Codification (“FASB ASC Section 505-50-30”).  Pursuant to FASB ASC Section 505-50-30, all transactions in which goods or services are the consideration received for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable.  The measurement date used to determine the fair value of the equity instrument issued is the earlier of the date on which the performance is complete or the date on which it is probable that performance will occur.</p>
</us-gaap:ShareBasedCompensationOptionAndIncentivePlansPolicy>
<us-gaap:DerivativesPolicyTextBlock contextRef="From2016-10-01to2017-09-30">
<p style="text-align: justify; margin: 0pt; text-indent: 36pt; padding-left: 27pt"><b>DERIVATIVE INSTRUMENTS</b></p> <p style="text-align: justify; margin: 0pt"> </p> <p style="text-align: justify; margin: 0pt; padding-left: 63pt">The Company evaluates its convertible debt, warrants or other contracts to determine if those contracts or embedded components of those contracts qualify as derivatives to be separately accounted for in accordance with paragraph 810-10-05-4 of the FASB Accounting Standards Codification and paragraph 815-40-25 of the FASB Accounting Standards Codification. The result of this accounting treatment is that the fair value of the embedded derivative is marked-to-market each balance sheet date and recorded as a liability. In the event that the fair value is recorded as a liability, the change in fair value is recorded in the Statement of Operations as other income orexpense. Upon conversion or exercise of a derivative instrument, the instrument is marked to fair value at the conversion date</p> <p style="text-align: justify; margin: 0pt; padding-left: 63pt">and then that fair value is reclassified to equity.</p> <p style="text-align: justify; margin: 0pt"> </p> <p style="text-align: justify; margin: 0pt; padding-left: 63pt">In circumstances where the embedded conversion option in a convertible instrument is required to be bifurcated and there are also other embedded derivative instruments in the convertible instrument that are required to be bifurcated, the bifurcated derivative instruments are accounted for as a single, compound derivative instrument.</p> <p style="text-align: justify; margin: 0pt"> </p> <p style="text-align: justify; margin: 0pt; text-indent: 0.35pt; padding-left: 63pt">The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is re-assessed at the end of each reporting period. Equity instruments that are initially classified as equity that become subject to reclassification are reclassified to liability at the fair value of the instrument on the reclassification date. Derivative instrument liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement of the derivative instrument is expected within 12 months of the balance sheet date. As of September 30, 2017 and 2016 there were no derivative liabilities.</p>
</us-gaap:DerivativesPolicyTextBlock>
<us-gaap:AdvertisingCostsPolicyTextBlock contextRef="From2016-10-01to2017-09-30">
<p style="text-align: justify; margin: 0pt; padding-left: 63.35pt"><b>ADVERTISING COSTS</b></p> <p style="text-align: justify; margin: 0pt"> </p> <p style="text-align: justify; margin: 0pt; padding-left: 63.35pt">Advertising costs are expensed as incurred. The Company had advertising costs of $6,850 during the year ended September 30, 2017 and $4,275 during the year ended September 30, 2016.</p>
</us-gaap:AdvertisingCostsPolicyTextBlock>
<us-gaap:ScheduleOfShareBasedCompensationStockOptionsActivityTableTextBlock contextRef="From2016-10-01to2017-09-30">
<p style="text-align: justify; margin: 0pt; padding-left: 63.35pt">The following table summarizes information about stock options outstanding at September 30, 2017 and 2016:</p> <p style="text-align: center; margin: 0pt"><br /></p> <div align="center"> <table cellspacing="0" style="font-size: 10pt"> <tr> <td style="width: 189px"></td> <td style="width: 18px"></td> <td style="width: 81px"></td> <td style="width: 18px"></td> <td style="width: 108px"></td></tr> <tr> <td style="width: 252px; vertical-align: top"> <p style="text-align: justify; margin: 0pt"><br /></p></td> <td style="width: 24px; vertical-align: top"> </td> <td colspan="3" style="width: 277px; vertical-align: top; border-bottom: rgb(0, 0, 0) 0.5pt solid"> <p style="text-align: center; margin: 0pt">Stock Options</p></td></tr> <tr> <td style="width: 252px; vertical-align: top"> </td> <td style="width: 24px; vertical-align: top"> </td> <td style="width: 108px; vertical-align: top; border-bottom: rgb(0, 0, 0) 0.5pt solid"> <p style="text-align: center; margin: 0pt">Options</p></td> <td style="width: 24px; vertical-align: top"> </td> <td style="width: 145px; vertical-align: top; border-bottom: rgb(0, 0, 0) 0.5pt solid"> <p style="text-align: center; margin: 0pt">Wtd. Avg.      Exercise Price</p></td></tr> <tr> <td style="width: 252px; vertical-align: top"> <p style="text-align: justify; margin: 0pt">Outstanding at September 30, 2015</p> <p style="text-align: justify; margin: 0pt">Granted/Issued</p> <p style="text-align: justify; margin: 0pt">Exercised</p> <p style="text-align: justify; margin: 0pt">Expired/Canceled</p></td> <td style="width: 24px; vertical-align: top"> </td> <td style="width: 108px; vertical-align: top"> <p style="text-align: right; margin: 0pt">167</p> <p style="text-align: right; margin: 0pt">--</p> <p style="text-align: right; margin: 0pt">--</p> <p style="text-align: right; margin: 0pt; padding-bottom: 3pt; border-bottom: rgb(0, 0, 0) 0.5pt solid">(167) </p></td> <td style="width: 24px; vertical-align: top"> <div align="right"></div></td> <td style="width: 145px; vertical-align: top"> <p style="text-align: right; margin: 0pt">$90.00</p> <p style="text-align: right; margin: 0pt">--</p> <p style="text-align: right; margin: 0pt">--</p> <p style="text-align: right; margin: 0pt; padding-bottom: 3pt; border-bottom: rgb(0, 0, 0) 0.5pt solid">(90.00)</p></td></tr> <tr> <td style="width: 252px; vertical-align: top"> <p style="text-align: justify; margin: 0pt">Outstanding at September 30, 2016</p></td> <td style="width: 24px; vertical-align: top"> </td> <td style="width: 108px; vertical-align: top"> <p style="text-align: right; margin: 0pt">--</p></td> <td style="width: 24px; vertical-align: top"> <div align="right"></div></td> <td style="width: 145px; vertical-align: top"> <p style="text-align: right; margin: 0pt">--</p></td></tr> <tr> <td style="width: 252px; vertical-align: top"> <p style="text-align: justify; margin: 0pt">Granted/Issued</p></td> <td style="width: 24px; vertical-align: top"> </td> <td style="width: 108px; vertical-align: top"> <p style="text-align: right; margin: 0pt">--</p></td> <td style="width: 24px; vertical-align: top"> <div align="right"></div></td> <td style="width: 145px; vertical-align: top"> <p style="text-align: right; margin: 0pt">--</p></td></tr> <tr> <td style="width: 252px; vertical-align: top"> <p style="text-align: justify; margin: 0pt">Exercised</p></td> <td style="width: 24px; vertical-align: top"> </td> <td style="width: 108px; vertical-align: top"> <p style="text-align: right; margin: 0pt">--</p></td> <td style="width: 24px; vertical-align: top"> <div align="right"></div></td> <td style="width: 145px; vertical-align: top"> <p style="text-align: right; margin: 0pt">--</p></td></tr> <tr> <td style="width: 252px; vertical-align: top"> <p style="text-align: justify; margin: 0pt">Expired/Cancelled</p></td> <td style="width: 24px; vertical-align: top"> </td> <td style="width: 108px; vertical-align: top; border-bottom: rgb(0, 0, 0) 0.5pt solid"> <p style="text-align: right; margin: 0pt">--</p></td> <td style="width: 24px; vertical-align: top"> <div align="right"></div></td> <td style="width: 145px; vertical-align: top; border-bottom: rgb(0, 0, 0) 0.5pt solid"> <p style="text-align: right; margin: 0pt">--</p></td></tr> <tr> <td style="width: 252px; vertical-align: top"> <p style="text-align: justify; margin: 0pt">Outstanding at September, 30 2017</p></td> <td style="width: 24px; vertical-align: top"> </td> <td style="width: 108px; vertical-align: top"> <p style="text-align: right; margin: 0pt">--</p></td> <td style="width: 24px; vertical-align: top"> <div align="right"></div></td> <td style="width: 145px; vertical-align: top"> <p style="text-align: right; margin: 0pt">--</p></td></tr></table></div>
</us-gaap:ScheduleOfShareBasedCompensationStockOptionsActivityTableTextBlock>
<us-gaap:ScheduleOfFutureMinimumRentalPaymentsForOperatingLeasesTableTextBlock contextRef="From2016-10-01to2017-09-30">
<p style="text-align: justify; margin: 0pt; padding-left: 63.35pt">Future lease commitments are as follows for the years ended September 30:</p> <p style="text-align: justify; margin: 0pt"><br />                      </p> <p style="text-align: justify; padding-left: 144pt; margin-top: 0pt; margin-bottom: -12pt">2018</p> <p style="text-align: justify; margin: 0pt; text-indent: 111.7pt; padding-left: 144pt">43,560</p> <p style="text-align: justify; padding-left: 144pt; margin-top: 0pt; margin-bottom: -12pt">2019</p> <p style="text-align: justify; margin: 0pt; text-indent: 116.7pt; padding-left: 144pt"><u>7,260</u></p> <p style="text-align: justify; margin: 0pt; text-indent: 106.7pt; padding-left: 144pt"><u style="border-bottom: black 1pt double">$50,820</u></p>
</us-gaap:ScheduleOfFutureMinimumRentalPaymentsForOperatingLeasesTableTextBlock>
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<us-gaap:ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsOutstandingNumber contextRef="AsOf2017-09-30" unitRef="Shares" xsi:nil="true"/>
<us-gaap:ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsOutstandingNumber contextRef="AsOf2015-09-30" unitRef="Shares" decimals="INF"> 167 </us-gaap:ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsOutstandingNumber>
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<us-gaap:ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsOutstandingWeightedAverageExercisePrice contextRef="AsOf2017-09-30" unitRef="USDPerShare" xsi:nil="true"/>
<us-gaap:ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsOutstandingWeightedAverageExercisePrice contextRef="AsOf2015-09-30" unitRef="USDPerShare" decimals="INF"> 90.00 </us-gaap:ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsOutstandingWeightedAverageExercisePrice>
<us-gaap:AssetsCurrent contextRef="AsOf2016-09-30" unitRef="USD" decimals="0"> 52803 </us-gaap:AssetsCurrent>
<us-gaap:AssetsCurrent contextRef="AsOf2017-09-30" unitRef="USD" decimals="0"> 163437 </us-gaap:AssetsCurrent>
<us-gaap:PrepaidExpenseAndOtherAssetsCurrent contextRef="AsOf2016-09-30" unitRef="USD" decimals="0"> 16115 </us-gaap:PrepaidExpenseAndOtherAssetsCurrent>
<us-gaap:PrepaidExpenseAndOtherAssetsCurrent contextRef="AsOf2017-09-30" unitRef="USD" decimals="0"> 10689 </us-gaap:PrepaidExpenseAndOtherAssetsCurrent>
<us-gaap:InventoryNet contextRef="AsOf2016-09-30" unitRef="USD" decimals="0"> 9585 </us-gaap:InventoryNet>
<us-gaap:InventoryNet contextRef="AsOf2017-09-30" unitRef="USD" decimals="0"> 30259 </us-gaap:InventoryNet>
<us-gaap:AccountsReceivableNetCurrent contextRef="AsOf2016-09-30" unitRef="USD" decimals="0"> 24000 </us-gaap:AccountsReceivableNetCurrent>
<us-gaap:AccountsReceivableNetCurrent contextRef="AsOf2017-09-30" unitRef="USD" decimals="0"> 96495 </us-gaap:AccountsReceivableNetCurrent>
<us-gaap:CashAndCashEquivalentsAtCarryingValue contextRef="AsOf2016-09-30" unitRef="USD" decimals="0"> 3103 </us-gaap:CashAndCashEquivalentsAtCarryingValue>
<us-gaap:CashAndCashEquivalentsAtCarryingValue contextRef="AsOf2017-09-30" unitRef="USD" decimals="0"> 25994 </us-gaap:CashAndCashEquivalentsAtCarryingValue>
<us-gaap:CashAndCashEquivalentsAtCarryingValue contextRef="AsOf2015-09-30" unitRef="USD" decimals="0"> 6156 </us-gaap:CashAndCashEquivalentsAtCarryingValue>
<us-gaap:FiniteLivedIntangibleAssetsNet contextRef="AsOf2016-09-30" unitRef="USD" decimals="0"> 240332 </us-gaap:FiniteLivedIntangibleAssetsNet>
<us-gaap:FiniteLivedIntangibleAssetsNet contextRef="AsOf2017-09-30" unitRef="USD" xsi:nil="true"/>
<us-gaap:FiniteLivedIntangibleAssetsNet contextRef="AsOf2017-09-30_us-gaap_FairValueInputsLevel1Member" unitRef="USD" xsi:nil="true"/>
<us-gaap:FiniteLivedIntangibleAssetsNet contextRef="AsOf2017-09-30_us-gaap_FairValueInputsLevel2Member" unitRef="USD" xsi:nil="true"/>
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<p style="text-align: justify; margin-top: 0pt; margin-bottom: -12pt"><b>NOTE 3 -</b><b>GOING CONCERN</b></p><br /> <p style="text-align: justify; margin: 0pt"> </p> <p style="text-align: justify; margin: 0pt; padding-left: 63.35pt">During the years ended September 30, 2017 and 2016, and since inception, the Company has experienced cash flow problems. From time-to-time, the Company has experienced difficulties meeting its obligations as they became due. As reflected in the accompanying consolidated financial statements, the Company incurred net losses from operations of approximately $860,000 for the year ended September 30, 2017 and had working capital deficit of approximately $679,000 for the year ended September 30, 2017. The Company also had an accumulated deficit of approximately $15,500,000 and a stockholders’ deficit of approximately $655,000 at September 30, 2017.These matters raise substantial doubt about the Company’s ability to continue as a going concern.</p> <p style="text-align: justify; margin: 0pt; padding-left: 63.35pt">  </p> <p style="text-align: justify; margin: 0pt; line-height: 13pt; padding-left: 63.35pt">The Company believes the acquisition of the ReadyOp software platform along with the Collabria client list, will allow the Company to generate additional income through the sale of ReadyOp software and will result  in expanding the distribution of the AudioMate AM360 line of IP gateway devices. In order to continue as a going concern, the Company will need, among other things, additional capital resources.  Management is currently seeking funding from significant shareholders and outside funding sources sufficient to meet its minimal operating expenses.   However, management cannot provide any assurances that the Company will be successful in accomplishing any of its plans.</p> <p style="text-align: justify; margin: 0pt"> </p> <p style="text-align: justify; margin: 0pt; line-height: 13pt; padding-left: 63.35pt">The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually secure other sources of financing and attain profitable operations. </p> <p style="text-align: justify; margin: 0pt"> </p> <p style="text-align: justify; margin: 0pt; padding-left: 63.35pt">The consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts and classifications of liabilities that might be necessary if the Company is unable to continue as a going concern.</p>
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<p style="text-align: justify; margin-top: 0pt; margin-bottom: -12pt"><b>NOTE 7 - </b><b>EQUITY TRANSACTIONS</b></p><br /> <p style="text-align: justify; margin: 0pt"> </p> <p style="text-align: justify; margin: 0pt; padding-left: 63.35pt"><b><i> </i></b></p> <p style="text-align: justify; margin: 0pt; padding-left: 63.35pt"><b><i> </i></b></p> <p style="text-align: justify; margin: 0pt; padding-left: 63.35pt"><b><i>Preferred Stock</i></b></p> <p style="text-align: justify; margin: 0pt"> </p> <p style="text-align: justify; margin: 0pt; padding-left: 63.35pt">In June 2010, the Board of Directors voted to amend the Company’s Articles of Incorporation in order to authorize the issuance of 200 million shares of Preferred Stock with a par value of $0.00001 per share. Concurrently, the Board designated the preferred stock as Series A Convertible Preferred Stock. Among other things, the Certificate of Designation of Series A Convertible Preferred (i) authorizes 1,250,000 shares of the Corporation’s preferred stock to be designated “Series A Convertible Preferred Stock (ii) is convertible into the Company's common stock after two years at a conversion price of $0.01 per share at the holder's option (iii) each holder of Series A Preferred Stock is entitled to receive cumulative dividends, payable quarterly in either cash or equivalent shares of common stock at the rate of 8% of $1.00 per annum on each outstanding share of Series A Preferred then held by such Series A Preferred Holder, on a pro rata basis.</p> <p style="text-align: justify; margin: 0pt"> </p> <p style="text-align: justify; margin: 0pt; padding-left: 63.35pt">In August 2012, the Board of Directors voted to amend the Company’s Articles of Incorporation to designate the Series B Preferred Stock setting forth the rights and preferences of the Series B Preferred Stock. Among other things, the Certificate of Designation (i) authorizes 10 (ten) shares of the Corporations preferred stock to be designated as Series B Preferred Stock; (ii)grants no conversion rights to the holders of the Series B Preferred Stock; (iii) provides the holders of Series B Preferred Stock shall vote with the holders of the Corporation’s common stock and any class or series of capital stock of the Corporation hereafter created; and (iv) provides that if at least on 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 (2) times the sum of: i) the total number of shares of Common Stock which are issued and outstanding at the time of voting, plus ii)the total number of shares of any Preferred Stocks which are issued and outstanding at the time of voting. </p> <p style="text-align: justify; margin: 0pt"> </p> <p style="text-align: justify; margin: 0pt; padding-left: 63.35pt">In October 2012, the Board of Directors voted to amend the Company’s Articles of Incorporation to designate the Series C and Series D Convertible Preferred Stock setting forth the rights and preferences of the Series C and D Convertible Preferred Stock, par value $.00001 per share. Among other things, the Certificate of Designation for the Series C Preferred (i) authorizes fifty million (50,000,000) shares of the Corporation’s preferred stock to be designated as “Series C Convertible Preferred Stock”; (ii) grants conversion rights to the holders of the Series C Preferred Stock; (iii) provides that each share of Series C Preferred Stock shall ten votes for any election or other vote placed before the shareholders of the Corporation; (iv) provides for anti-dilutive rights; (v) provides for liquidation rights; (vi) establishes the initial price at $2.50 per share; (vii) entitles the holder of the Series C Preferred Stock to receive dividends when, as and if declared by the Board of Directors. Among other things, the Certificate of Designation for the Series D Preferred (i) authorizes ten million (10,000,000) shares of the Corporation’s preferred stock to be designated as “Series D Convertible Preferred Stock”; (ii) grants conversion rights to the holders of the Series D Preferred Stock; (iii) provides that each share of Series D Preferred Stock shall ten votes for any election or other vote placed before the shareholders of the Corporation; (iv) provides for anti-dilutive rights; (v) provides for liquidation rights; (vi) establishes the initial price at $5.00 per share; (vii) entitles the holder of the Series D Preferred Stock to receive dividends when, as and if declared by the Board of Directors.                                                                                                                   </p> <p style="text-align: justify; margin: 0pt"> </p> <p style="text-align: justify; margin: 0pt; padding-left: 63.35pt"><i>Preferred Share Designations</i></p> <p style="text-align: justify; margin: 0pt; padding-left: 63.35pt"> </p> <p style="text-align: justify; margin: 0pt; padding-left: 63.35pt">In December 2013, the Board of Directors voted to amend the Company’s Articles of Incorporation to change the conversion rights of the Series C and Series D Convertible Preferred Stock. Each share of the Series C and Series D Preferred Stock is convertible into five shares of common stock. </p> <p style="text-align: justify; margin: 0pt"> </p> <p style="text-align: justify; margin: 0pt; padding-left: 63.35pt">In October 2016, the Board of Directors voted to amend the Company’s Articles of Incorporation to designate the Series E Convertible Preferred Stock setting forth the rights and preferences of the Series E Convertible Preferred Stock, par value $.00001 per share. Among other things, the Certificate of Designation for the Series E Preferred (i) authorizes ten million (10,000,000) shares of the Corporation’s preferred stock to be designated as “Series E Convertible Preferred Stock”; (ii) grants conversion rights to the holders of the Series E Preferred Stock; (iii) provides that each share of Series E Preferred Stock shall be ten votes for any election or other vote placed before the shareholders of the Corporation; (iv) provides for anti-dilutive rights; (v) provides for liquidation rights; (vi) establishes the initial price at $1.00 per share; (vii) entitles the holder of the Series C Preferred Stock to receive dividends when, as and if declared by the Board of Directors. </p> <p style="text-align: justify; margin: 0pt"> </p> <p style="text-align: justify; margin: 0pt; padding-left: 63.35pt">As of September 30, 2017 and 2016, the cumulative arrearage of undeclared dividends for Series A Preferred stock totaled $44,949 and $6,656, respectively</p> <p style="text-align: justify; margin: 0pt"> </p> <p style="text-align: justify; margin: 0pt; padding-left: 63pt"><b><i>Common Stock</i></b></p> <p style="text-align: justify; margin: 0pt"> </p> <p style="text-align: justify; margin: 0pt; line-height: 14pt; padding-left: 63pt">On September 13, 2012, the Board of Directors voted to increase the Company’s authorized shares of common stock to 5,000,000,000 shares and to decrease the par value to $.00001 per share.</p> <p style="text-align: justify; margin: 0pt"> </p> <p style="text-align: justify; margin: 0pt; padding-left: 63.35pt">In December 2015, two shareholders converted 7,280 shares of Series C Convertible Preferred stock into 36,400 shares of common stock. </p> <p style="text-align: justify; margin: 0pt; padding-left: 63.35pt"> </p> <p style="text-align: justify; margin: 0pt; padding-left: 63.35pt"><i>Common stock issued for cash</i></p> <p style="text-align: justify; margin: 0pt"> </p> <p style="text-align: justify; margin: 0pt; padding-left: 63.35pt">In May 2016, an investor cancelled a subscription agreement to purchase 16,500 shares of common stock for $990.</p> <p style="text-align: justify; margin: 0pt"> </p> <p style="text-align: justify; margin: 0pt; padding-left: 63.35pt">In December 2015, a shareholder purchased 250,000 shares of common stock for $5,000 in cash.</p> <p style="text-align: justify; margin: 0pt; padding-left: 63.35pt"> </p> <p style="text-align: justify; margin: 0pt; padding-left: 63.35pt"><i>Common Stock Issued for Conversion of Notes and Note Payable</i></p> <p style="text-align: justify; margin: 0pt"> </p> <p style="margin: 0pt; padding-left: 63.35pt">During the year ended September 30, 2016, a Convertible Note holder converted a $10,000 in principal of a Convertible note into 847,458 shares of the Company's common stock.</p> <p style="margin: 0pt"> </p> <p style="margin: 0pt; padding-left: 63.35pt">During the year ended September 30, 2016, a shareholder converted $10,000 of a Note Payable into 500,000 shares of common stock.</p> <p style="margin: 0pt"> </p> <p style="margin: 0pt; padding-left: 63.35pt">During the year ended September 30, 2016 a Convertible Note holder converted a $25,000 Convertible note and $6,111 of accrued interest into 4,906,565 shares of common stock.</p> <p style="margin: 0pt"> </p> <p style="text-align: justify; margin: 0pt; padding-left: 63.35pt"><i>Preferred stock issued for cash</i></p> <p style="text-align: justify; margin: 0pt"> </p> <p style="text-align: justify; margin: 0pt; padding-left: 63.35pt">In November 2016, the Company sold 525,746 shares of Series A Convertible Preferred stock to a private investor and director for $262,873 in cash.</p> <p style="margin: 0pt"> </p> <p style="text-align: justify; margin: 0pt; padding-left: 63.35pt"><i>Preferred stock issued for acquisition of assets</i></p> <p style="text-align: justify; margin: 0pt"> </p> <p style="text-align: justify; margin: 0pt; padding-left: 64.8pt">In November, 2016, the Board of Directors approved the Asset Purchase Agreement between the Company and Collabria LLC (“Collabria”). Under the terms of the Agreement, the Company acquired all of the intellectual property of Collabria, including its ReadyOp command, control and communication platform trade named ReadyOp (the “ReadyOp Platform”). In addition, the Company acquired Collabria’s customer base (“Collabria Client List”). The Company assumed no liabilities of Collabria under this Agreement. The terms of the Agreement called for the Company to issue 3,000,000 (Three million) shares of restricted Series E Convertible Preferred stock to Collabria with a fair value of $292,240. Shares of the Series E Convertible Preferred have the following conversion rights and provisions: After a period of two (2) years following the date of issuance, each one (1) share of Series E Preferred shall be convertible into one hundred (100) shares of fully paid and non-assessable Common Stock at the sole option of the holder of Series E Preferred. </p> <p style="text-align: justify; margin: 0pt; padding-left: 64.8pt"> </p> <p style="text-align: justify; margin: 0pt; padding-left: 63.35pt"><b><i>Consultant Stock Plans</i></b></p> <p style="text-align: justify; margin: 0pt; padding-left: 63.35pt"> </p> <p style="text-align: justify; margin: 0pt; padding-left: 63.35pt">During the year ended September 30, 2011, the Company adopted the Cleartronic, Inc. 2011 Consultant Stock Plan to assist the Company in obtaining and retaining the services of persons providing consulting services to the Company. In April 2011, the Company filed a registration statement with the Securities and Exchange Commission registering 6,666 shares of the Company's common stock for issuance under the plan.  </p> <p style="text-align: center; margin: 0pt"><br /></p> <p style="text-align: justify; margin: 0pt; padding-left: 63.35pt">The following table summarizes information about stock options outstanding at September 30, 2017 and 2016:</p> <p style="text-align: center; margin: 0pt"><br /></p> <div align="center"> <table cellspacing="0" style="font-size: 10pt"> <tr> <td style="width: 189px"></td> <td style="width: 18px"></td> <td style="width: 81px"></td> <td style="width: 18px"></td> <td style="width: 108px"></td></tr> <tr> <td style="width: 252px; vertical-align: top"> <p style="text-align: justify; margin: 0pt"><br /></p></td> <td style="width: 24px; vertical-align: top"> </td> <td colspan="3" style="width: 277px; vertical-align: top; border-bottom: rgb(0, 0, 0) 0.5pt solid"> <p style="text-align: center; margin: 0pt">Stock Options</p></td></tr> <tr> <td style="width: 252px; vertical-align: top"> </td> <td style="width: 24px; vertical-align: top"> </td> <td style="width: 108px; vertical-align: top; border-bottom: rgb(0, 0, 0) 0.5pt solid"> <p style="text-align: center; margin: 0pt">Options</p></td> <td style="width: 24px; vertical-align: top"> </td> <td style="width: 145px; vertical-align: top; border-bottom: rgb(0, 0, 0) 0.5pt solid"> <p style="text-align: center; margin: 0pt">Wtd. Avg.      Exercise Price</p></td></tr> <tr> <td style="width: 252px; vertical-align: top"> <p style="text-align: justify; margin: 0pt">Outstanding at September 30, 2015</p> <p style="text-align: justify; margin: 0pt">Granted/Issued</p> <p style="text-align: justify; margin: 0pt">Exercised</p> <p style="text-align: justify; margin: 0pt">Expired/Canceled</p></td> <td style="width: 24px; vertical-align: top"> </td> <td style="width: 108px; vertical-align: top"> <p style="text-align: right; margin: 0pt">167</p> <p style="text-align: right; margin: 0pt">--</p> <p style="text-align: right; margin: 0pt">--</p> <p style="text-align: right; margin: 0pt; padding-bottom: 3pt; border-bottom: rgb(0, 0, 0) 0.5pt solid">(167) </p></td> <td style="width: 24px; vertical-align: top"> <div align="right"></div></td> <td style="width: 145px; vertical-align: top"> <p style="text-align: right; margin: 0pt">$90.00</p> <p style="text-align: right; margin: 0pt">--</p> <p style="text-align: right; margin: 0pt">--</p> <p style="text-align: right; margin: 0pt; padding-bottom: 3pt; border-bottom: rgb(0, 0, 0) 0.5pt solid">(90.00)</p></td></tr> <tr> <td style="width: 252px; vertical-align: top"> <p style="text-align: justify; margin: 0pt">Outstanding at September 30, 2016</p></td> <td style="width: 24px; vertical-align: top"> </td> <td style="width: 108px; vertical-align: top"> <p style="text-align: right; margin: 0pt">--</p></td> <td style="width: 24px; vertical-align: top"> <div align="right"></div></td> <td style="width: 145px; vertical-align: top"> <p style="text-align: right; margin: 0pt">--</p></td></tr> <tr> <td style="width: 252px; vertical-align: top"> <p style="text-align: justify; margin: 0pt">Granted/Issued</p></td> <td style="width: 24px; vertical-align: top"> </td> <td style="width: 108px; vertical-align: top"> <p style="text-align: right; margin: 0pt">--</p></td> <td style="width: 24px; vertical-align: top"> <div align="right"></div></td> <td style="width: 145px; vertical-align: top"> <p style="text-align: right; margin: 0pt">--</p></td></tr> <tr> <td style="width: 252px; vertical-align: top"> <p style="text-align: justify; margin: 0pt">Exercised</p></td> <td style="width: 24px; vertical-align: top"> </td> <td style="width: 108px; vertical-align: top"> <p style="text-align: right; margin: 0pt">--</p></td> <td style="width: 24px; vertical-align: top"> <div align="right"></div></td> <td style="width: 145px; vertical-align: top"> <p style="text-align: right; margin: 0pt">--</p></td></tr> <tr> <td style="width: 252px; vertical-align: top"> <p style="text-align: justify; margin: 0pt">Expired/Cancelled</p></td> <td style="width: 24px; vertical-align: top"> </td> <td style="width: 108px; vertical-align: top; border-bottom: rgb(0, 0, 0) 0.5pt solid"> <p style="text-align: right; margin: 0pt">--</p></td> <td style="width: 24px; vertical-align: top"> <div align="right"></div></td> <td style="width: 145px; vertical-align: top; border-bottom: rgb(0, 0, 0) 0.5pt solid"> <p style="text-align: right; margin: 0pt">--</p></td></tr> <tr> <td style="width: 252px; vertical-align: top"> <p style="text-align: justify; margin: 0pt">Outstanding at September, 30 2017</p></td> <td style="width: 24px; vertical-align: top"> </td> <td style="width: 108px; vertical-align: top"> <p style="text-align: right; margin: 0pt">--</p></td> <td style="width: 24px; vertical-align: top"> <div align="right"></div></td> <td style="width: 145px; vertical-align: top"> <p style="text-align: right; margin: 0pt">--</p></td></tr></table></div> <p style="text-align: justify; margin: 0pt"><br /></p> <p style="text-align: justify; margin: 0pt; padding-left: 63.35pt"> During the year ended September 30, 2016, the Company granted no options, no options were exercised and 167 options expired or were cancelled. During the year ended September 30, 2017, the Company granted no options, no options were exercised and no options expired or were cancelled.</p> <p style="text-align: justify; margin: 0pt"> </p> <p style="text-align: justify; margin: 0pt; padding-left: 63.35pt">No outstanding options were held by officers as of September 30, 2017, and September 30, 2016.</p>
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<p style="text-align: justify; margin: 0pt; padding-left: 64.1pt"><b>ASSET ACQUISITION</b></p> <p style="text-align: justify; margin: 0pt"> </p> <p style="text-align: justify; margin: 0pt; padding-left: 63.35pt">In November 2016, the Company acquired the ReadyOp software platform and the Collabria customer base from Collabria LLC. In exchange for these assets the Company issued 3,000,000 shares of restricted Series E Convertible Preferred stock valued at $292,240.  This valuation was based on internal calculations and validated by a third party valuation expert. The ReadyOp software platform was valued at $195,600 to be amortized over three years, amortization expense recognized for the year ended September 30, 2017 was $54,333. The Collabria customer base was valued at $96,640 to be amortized over two years, amortization expense recognized for the year ended September 30, 2017 was $40,267.</p>
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<p style="text-align: justify; margin: 0pt; padding-left: 63.35pt"><b>ORGANIZATION</b></p> <p style="text-align: justify; margin: 0pt"> </p> <p style="text-align: justify; margin: 0pt; padding-left: 63.7pt">Cleartronic, Inc. (the “Company”) was incorporated in the state of Florida on November 15, 1999. </p> <p style="text-align: justify; margin: 0pt"> </p> <p style="text-align: justify; margin: 0pt; padding-left: 63.7pt">The Company, through one of its wholly owned subsidiaries VoiceInterop, Inc., designs, builds and installs unified group communication solutions, including unique hardware and customized software, for public and private enterprises and markets those services and products under the VoiceInterop brand name. </p> <p style="text-align: justify; margin: 0pt"> </p> <p style="text-align: justify; margin: 0pt; padding-left: 63.7pt">In November 2016, the Company cancelled its Licensing Agreement with Collabria LLC of Tampa, Florida (”Collabria”) and acquired all of the intellectual property related to  Collabria’s command and control software, trade-named ReadyOp. along with Collabria’s client list. In exchange for these assets the Company issued Collabria 3,000,000 share of the Company’s Series E Convertible Preferred stock. The Company assumed none of Collabria’s liabilities. In September 2014, the Company formed ReadyOp Communications, Inc. (a Florida corporation), as a wholly owned subsidiary to facilitate the marketing of ReadyOp software. The Company’s two operating subsidiaries are VoiceInterop, Inc. and ReadyOp Communications, Inc.</p> <p style="text-align: justify; margin: 0pt"> </p> <p style="text-align: justify; margin: 0pt; padding-left: 63.7pt">The Company’s two operating subsidiaries are Voiceinterop, Inc. and ReadyOp Communications, Inc.</p>
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<p style="text-align: justify; margin: 0pt; text-indent: 63.7pt"><b>CONCENTRATION OF CREDIT RISK</b></p> <p style="text-align: justify; margin: 0pt"> </p> <p style="text-align: justify; margin: 0pt; padding-left: 63.35pt">The Company currently maintains cash balances at one FDIC-insured banking institution. Deposits held in noninterest-bearing transaction accounts are insured up to a maximum of $250,000 at all FDIC-insured institutions. At September 30, 2017 and 2016, the Company had no cash balances above the FDIC-insured limit, respectively.</p>
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<us-gaap:ScheduleOfDeferredTaxAssetsAndLiabilitiesTableTextBlock contextRef="From2016-10-01to2017-09-30">
<p style="text-align: justify; margin: 0pt; padding-left: 63.7pt">Significant components of the Company’s net deferred income tax assets at September 30, 2017 and 2016, respectively are as follows:  </p> <p style="text-align: center; margin: 0pt"> </p> <div align="center"> <table cellspacing="0" style="font-size: 10pt"> <tr> <td style="width: 306px"></td> <td style="width: 9px"></td> <td style="width: 9px"></td> <td style="width: 79px"></td> <td style="width: 3px"></td> <td style="width: 39px"></td> <td style="width: 7px"></td> <td style="width: 74px"></td> <td style="width: 8px"></td></tr> <tr> <td style="width: 306px; background-color: rgb(255, 255, 255)"> <p style="text-align: center; margin: 0pt"> </p></td> <td style="width: 9px; background-color: rgb(255, 255, 255)"> <p style="text-align: center; margin: 0pt"> </p></td> <td colspan="2" style="border-bottom: rgb(0, 0, 0) 1pt solid; background-color: rgb(255, 255, 255)"> <p style="text-align: center; margin: 0pt"> <b>2017</b></p></td> <td style="width: 3px; background-color: rgb(255, 255, 255)"> <p style="text-align: center; margin: 0pt"> </p></td> <td style="width: 39px; background-color: rgb(255, 255, 255)"> <p style="text-align: center; margin: 0pt"> </p></td> <td colspan="2" style="border-bottom: rgb(0, 0, 0) 1pt solid; background-color: rgb(255, 255, 255)"> <p style="text-align: center; margin: 0pt"><b>2016</b></p></td> <td style="width: 8px; border-bottom: rgb(0, 0, 0) 1pt solid; background-color: rgb(255, 255, 255)"> <p style="margin: 0pt"> </p></td></tr> <tr> <td style="width: 306px; background-color: rgb(255, 255, 255)"> <p style="margin: 0pt"> </p></td> <td style="width: 9px; background-color: rgb(255, 255, 255)"> <p style="margin: 0pt"> </p></td> <td style="width: 9px; background-color: rgb(255, 255, 255)"> <p style="margin: 0pt"> </p></td> <td style="width: 79px; background-color: rgb(255, 255, 255)"> <p style="text-align: right; margin: 0pt"> </p></td> <td style="width: 3px; background-color: rgb(255, 255, 255)"> <p style="margin: 0pt"> </p></td> <td style="width: 39px; background-color: rgb(255, 255, 255)"> <p style="margin: 0pt"> </p></td> <td style="width: 7px; background-color: rgb(255, 255, 255)"> <p style="margin: 0pt"> </p></td> <td style="width: 74px; background-color: rgb(255, 255, 255)"> <p style="margin: 0pt"> </p></td> <td style="width: 8px; background-color: rgb(255, 255, 255)"> <p style="margin: 0pt"> </p></td></tr> <tr> <td style="width: 306px; background-color: rgb(255, 255, 255)"> <p style="margin: 0pt"> Amortization and impairment of license agreement</p></td> <td style="width: 9px; background-color: rgb(255, 255, 255)"> <p style="margin: 0pt"> </p></td> <td style="width: 9px; background-color: rgb(255, 255, 255)"> <p style="text-align: right; margin: 0pt">$</p></td> <td style="width: 79px; background-color: rgb(255, 255, 255)"> <p style="text-align: right; margin: 0pt">    529,503</p></td> <td style="width: 3px; background-color: rgb(255, 255, 255)"> <p style="text-align: right; margin: 0pt"> </p></td> <td style="width: 39px; background-color: rgb(255, 255, 255)"> <p style="text-align: right; margin: 0pt"> </p></td> <td style="width: 7px; background-color: rgb(255, 255, 255)"> <p style="text-align: right; margin: 0pt">$</p></td> <td style="width: 74px; background-color: rgb(255, 255, 255)"> <p style="text-align: right; margin: 0pt">     582,500</p></td> <td style="width: 8px; background-color: rgb(255, 255, 255)"> </td></tr> <tr> <td style="width: 306px; background-color: rgb(255, 255, 255)"> <p style="margin: 0pt">Allowance for doubtful account</p></td> <td style="width: 9px; background-color: rgb(255, 255, 255)"> </td> <td style="width: 9px; background-color: rgb(255, 255, 255)"> </td> <td style="width: 79px; background-color: rgb(255, 255, 255)"> <p style="text-align: right; margin: 0pt">          750</p></td> <td style="width: 3px; background-color: rgb(255, 255, 255)"> <div align="right"></div></td> <td style="width: 39px; background-color: rgb(255, 255, 255)"> <p style="text-align: right; margin: 0pt">             </p></td> <td style="width: 7px; background-color: rgb(255, 255, 255)"> <div align="right"></div></td> <td style="width: 74px; background-color: rgb(255, 255, 255)"> <p style="text-align: right; margin: 0pt">            750</p></td> <td style="width: 8px; background-color: rgb(255, 255, 255)"> </td></tr> <tr> <td style="width: 306px; background-color: rgb(255, 255, 255)"> <p style="margin: 0pt">Net operating loss carryforward</p></td> <td style="width: 9px; background-color: rgb(255, 255, 255)"> </td> <td style="width: 9px; background-color: rgb(255, 255, 255)"> </td> <td style="width: 79px; background-color: rgb(255, 255, 255)"> <p style="text-align: right; margin: 0pt">  <u>4,909,891</u></p></td> <td style="width: 3px; background-color: rgb(255, 255, 255)"> <div align="right"></div></td> <td style="width: 39px; background-color: rgb(255, 255, 255)"> <div align="right"></div></td> <td style="width: 7px; background-color: rgb(255, 255, 255)"> <div align="right"></div></td> <td style="width: 74px; background-color: rgb(255, 255, 255)"> <p style="text-align: right; margin: 0pt">   <u>4,560,033</u></p></td> <td style="width: 8px; background-color: rgb(255, 255, 255)"> </td></tr> <tr> <td style="width: 306px; background-color: rgb(255, 255, 255)"> <p style="margin: 0pt">Net deferred income tax asset</p></td> <td style="width: 9px; background-color: rgb(255, 255, 255)"> <p style="margin: 0pt"> </p></td> <td style="width: 9px; background-color: rgb(255, 255, 255)"> <p style="margin: 0pt"> </p></td> <td style="width: 79px; background-color: rgb(255, 255, 255)"> <p style="text-align: right; margin: 0pt">  5,440,144</p></td> <td style="width: 3px; background-color: rgb(255, 255, 255)"> <p style="text-align: right; margin: 0pt"> </p></td> <td style="width: 39px; background-color: rgb(255, 255, 255)"> <p style="text-align: right; margin: 0pt"> </p></td> <td style="width: 7px; background-color: rgb(255, 255, 255)"> <p style="text-align: right; margin: 0pt"> </p></td> <td style="width: 74px; background-color: rgb(255, 255, 255)"> <p style="text-align: right; margin: 0pt">   5,143,283 </p></td> <td style="width: 8px; background-color: rgb(255, 255, 255)"> <p style="margin: 0pt"> </p></td></tr> <tr> <td style="width: 306px; background-color: rgb(255, 255, 255)"> <p style="margin: 0pt">Less: valuation allowance</p></td> <td style="width: 9px; background-color: rgb(255, 255, 255)"> <p style="margin: 0pt"> </p></td> <td style="width: 9px; background-color: rgb(255, 255, 255)"> <p style="margin: 0pt">  </p></td> <td style="width: 79px; background-color: rgb(255, 255, 255)"> <p style="text-align: right; margin: 0pt"> <u>(5,440,144)</u></p></td> <td style="width: 3px; background-color: rgb(255, 255, 255)"> <p style="text-align: right; margin: 0pt"> </p></td> <td style="width: 39px; background-color: rgb(255, 255, 255)"> <p style="text-align: right; margin: 0pt"> </p></td> <td style="width: 7px; background-color: rgb(255, 255, 255)"> <p style="text-align: right; margin: 0pt"> </p></td> <td style="width: 74px; background-color: rgb(255, 255, 255)"> <p style="text-align: right; margin: 0pt"><u>(5,143,283) </u></p></td> <td style="width: 8px; background-color: rgb(255, 255, 255)"> <p style="margin: 0pt"> </p></td></tr> <tr> <td style="width: 306px; background-color: rgb(255, 255, 255)"> <p style="margin: 0pt">Total deferred income tax assets</p></td> <td style="width: 9px; background-color: rgb(255, 255, 255)"> <p style="margin: 0pt"> </p></td> <td style="width: 9px; border-bottom: rgb(0, 0, 0) 2pt double; background-color: rgb(255, 255, 255)"> <p style="text-align: right; margin: 0pt">$</p></td> <td style="width: 79px; border-bottom: rgb(0, 0, 0) 2pt double; background-color: rgb(255, 255, 255)"> <p style="text-align: right; margin: 0pt">0.00</p></td> <td style="width: 3px; background-color: rgb(255, 255, 255)"> <p style="text-align: right; margin: 0pt"> </p></td> <td style="width: 39px; background-color: rgb(255, 255, 255)"> <p style="text-align: right; margin: 0pt"> </p></td> <td style="width: 7px; border-bottom: rgb(0, 0, 0) 2pt double; background-color: rgb(255, 255, 255)"> <p style="text-align: right; margin: 0pt">$</p></td> <td style="width: 74px; border-bottom: rgb(0, 0, 0) 2pt double; background-color: rgb(255, 255, 255)"> <p style="text-align: right; margin: 0pt">0.00</p></td> <td style="width: 8px; background-color: rgb(255, 255, 255)"> <p style="margin: 0pt"> </p></td></tr></table></div>
</us-gaap:ScheduleOfDeferredTaxAssetsAndLiabilitiesTableTextBlock>
<us-gaap:ScheduleOfEffectiveIncomeTaxRateReconciliationTableTextBlock contextRef="From2016-10-01to2017-09-30">
<p style="text-align: justify; margin: 0pt; padding-left: 63.7pt">A reconciliation of the Federal and respective State income tax rate as a percentage of income before taxes is as follows:</p> <p style="text-align: center; margin: 0pt"><br /></p> <div align="center"> <table cellspacing="0" style="font-size: 10pt"> <tr> <td style="width: 179px"></td> <td style="width: 18px"></td> <td style="width: 16px"></td> <td style="width: 43px"></td> <td style="width: 2px"></td> <td style="width: 5px"></td> <td style="width: 51px"></td> <td style="width: 1px"></td></tr> <tr> <td style="width: 239px; background-color: rgb(255, 255, 255)"> <p style="text-align: center; margin: 0pt"> </p></td> <td style="width: 24px; background-color: rgb(255, 255, 255)"> <p style="text-align: center; margin: 0pt"> </p></td> <td colspan="2" style="width: 79px; border-bottom: rgb(0, 0, 0) 1pt solid; background-color: rgb(255, 255, 255)"> <p style="text-align: center; margin: 0pt">      <b>2017</b></p></td> <td style="width: 3px; background-color: rgb(255, 255, 255)"> <p style="text-align: center; margin: 0pt"> </p></td> <td colspan="2" style="width: 76px; border-bottom: rgb(0, 0, 0) 1pt solid; background-color: rgb(255, 255, 255)"> <p style="text-align: center; margin: 0pt"><b>    2016</b></p></td> <td style="width: 2px; border-bottom: rgb(0, 0, 0) 1pt solid; background-color: rgb(255, 255, 255)"> <p style="margin: 0pt"> </p></td></tr> <tr> <td style="width: 239px; background-color: rgb(255, 255, 255)"> <p style="margin: 0pt"> </p></td> <td style="width: 24px; background-color: rgb(255, 255, 255)"> <p style="margin: 0pt"> </p></td> <td style="width: 22px; background-color: rgb(255, 255, 255)"> <p style="margin: 0pt"> </p></td> <td style="width: 57px; background-color: rgb(255, 255, 255)"> <p style="text-align: right; margin: 0pt"> </p></td> <td style="width: 3px; background-color: rgb(255, 255, 255)"> <p style="margin: 0pt"> </p></td> <td style="width: 7px; background-color: rgb(255, 255, 255)"> <p style="margin: 0pt"> </p></td> <td style="width: 68px; background-color: rgb(255, 255, 255)"> <p style="margin: 0pt"> </p></td> <td style="width: 2px; background-color: rgb(255, 255, 255)"> <p style="margin: 0pt"> </p></td></tr> <tr> <td style="width: 239px; background-color: rgb(255, 255, 255)"> <p style="margin: 0pt">Federal statutory income tax rate</p></td> <td style="width: 24px; background-color: rgb(255, 255, 255)"> <p style="margin: 0pt"> </p></td> <td style="width: 22px; background-color: rgb(255, 255, 255)"> </td> <td style="width: 57px; background-color: rgb(255, 255, 255)"> <p style="text-align: right; margin: 0pt">32.13%</p></td> <td style="width: 3px; background-color: rgb(255, 255, 255)"> <p style="margin: 0pt"> </p></td> <td style="width: 7px; background-color: rgb(255, 255, 255)"> </td> <td style="width: 68px; background-color: rgb(255, 255, 255)"> <p style="text-align: right; margin: 0pt">32.13%</p></td> <td style="width: 2px; background-color: rgb(255, 255, 255)"> <p style="margin: 0pt"> </p></td></tr> <tr> <td style="width: 239px; background-color: rgb(255, 255, 255)"> <p style="margin: 0pt">State taxes, net of federal benefit</p></td> <td style="width: 24px; background-color: rgb(255, 255, 255)"> <p style="margin: 0pt"> </p></td> <td style="width: 22px; border-bottom: rgb(0, 0, 0) 0pt solid; background-color: rgb(255, 255, 255)"> <p style="margin: 0pt"> </p></td> <td style="width: 57px; border-bottom: rgb(0, 0, 0) 0pt solid; background-color: rgb(255, 255, 255)"> <p style="text-align: right; margin: 0pt"><u>5.5%</u></p></td> <td style="width: 3px; background-color: rgb(255, 255, 255)"> <p style="margin: 0pt"> </p></td> <td style="width: 7px; border-bottom: rgb(0, 0, 0) 0pt solid; background-color: rgb(255, 255, 255)"> <p style="margin: 0pt"> </p></td> <td style="width: 68px; border-bottom: rgb(0, 0, 0) 0pt solid; background-color: rgb(255, 255, 255)"> <p style="text-align: right; margin: 0pt"><u> 5.5%</u></p></td> <td style="width: 2px; background-color: rgb(255, 255, 255)"> <p style="margin: 0pt"> </p></td></tr> <tr> <td style="width: 239px; background-color: rgb(255, 255, 255)"> <p style="margin: 0pt">Effective rate for deferred tax asset</p></td> <td style="width: 24px; background-color: rgb(255, 255, 255)"> <p style="margin: 0pt"> </p></td> <td style="width: 22px; background-color: rgb(255, 255, 255)"> <p style="margin: 0pt"> </p></td> <td style="width: 57px; background-color: rgb(255, 255, 255)"> <p style="text-align: right; margin: 0pt"> </p> <p style="text-align: right; margin: 0pt"><u>37.63%</u><b>  </b></p></td> <td style="width: 3px; background-color: rgb(255, 255, 255)"> <p style="margin: 0pt"> </p></td> <td style="width: 7px; border-bottom: rgb(0, 0, 0) 1pt solid; background-color: rgb(255, 255, 255)"></td> <td style="width: 68px; background-color: rgb(255, 255, 255)"> <p style="text-align: right; margin: 0pt"> </p> <p style="text-align: right; margin: 0pt"><u>37.63%</u></p></td> <td style="width: 2px; background-color: rgb(255, 255, 255)"> </td></tr> <tr> <td style="width: 239px; background-color: rgb(255, 255, 255)"> <p style="margin: 0pt">Less: Valuation allowance</p></td> <td style="width: 24px; background-color: rgb(255, 255, 255)"> <p style="margin: 0pt"> </p></td> <td style="width: 22px; background-color: rgb(255, 255, 255)"> </td> <td style="width: 57px; background-color: rgb(255, 255, 255)"> <p style="text-align: right; margin: 0pt"><u>(37.63%)</u></p></td> <td style="width: 3px; background-color: rgb(255, 255, 255)"> <p style="margin: 0pt"> </p></td> <td style="width: 7px; background-color: rgb(255, 255, 255)"> <p style="margin: 0pt"> </p></td> <td style="width: 68px; background-color: rgb(255, 255, 255)"> <p style="text-align: right; margin: 0pt">    <u>(37.63%)</u></p></td> <td style="width: 2px; background-color: rgb(255, 255, 255)"> <p style="margin: 0pt"> </p></td></tr> <tr> <td style="width: 239px; background-color: rgb(255, 255, 255)"> <p style="margin: 0pt">Effective income tax rate</p></td> <td style="width: 24px; background-color: rgb(255, 255, 255)"> <p style="margin: 0pt"> </p></td> <td style="width: 22px; background-color: rgb(255, 255, 255)"> </td> <td style="width: 57px; border-bottom: rgb(0, 0, 0) 2pt double; background-color: rgb(255, 255, 255)"> <p style="text-align: right; margin: 0pt">0.0%</p></td> <td style="width: 3px; background-color: rgb(255, 255, 255)"> <p style="margin: 0pt"> </p></td> <td style="width: 7px; background-color: rgb(255, 255, 255)"> </td> <td style="width: 68px; border-bottom: rgb(0, 0, 0) 2pt double; background-color: rgb(255, 255, 255)"> <p style="text-align: right; margin: 0pt">0.0%</p></td> <td style="width: 2px; background-color: rgb(255, 255, 255)"> <p style="margin: 0pt"> </p></td></tr></table></div>
</us-gaap:ScheduleOfEffectiveIncomeTaxRateReconciliationTableTextBlock>
<clri:ScheduleOfMinimumRoyaltyPaymentsTableTextBlock contextRef="From2016-10-01to2017-09-30">
<p style="text-align: justify; margin: 0pt; line-height: 14pt; padding-left: 63.35pt">The company agreed to pay USFRF a royalty of 3% for sales of all Licensed Products and Licensed Processes and agreed to pay USFRF minimum royalty payments as follows:</p> <p style="text-align: center; margin: 0pt; line-height: 14pt"><br /></p> <div align="center"> <table cellspacing="0" style="font-size: 10pt"> <tr> <td style="width: 45px"></td> <td style="width: 30px"></td></tr> <tr> <td style="width: 61px; vertical-align: top"> <p style="text-align: justify; margin: 0pt; line-height: 14pt">Payment</p></td> <td style="width: 41px; vertical-align: top"> <p style="text-align: justify; margin: 0pt; line-height: 14pt">Year</p></td></tr> <tr> <td style="width: 61px; vertical-align: top"> <p style="text-align: justify; margin: 0pt; line-height: 14pt">$1,000</p></td> <td style="width: 41px; vertical-align: top"> <p style="text-align: justify; margin: 0pt; line-height: 14pt">2019</p></td></tr> <tr> <td style="width: 61px; vertical-align: top"> <p style="text-align: justify; margin: 0pt; line-height: 14pt">$4,000</p></td> <td style="width: 41px; vertical-align: top"> <p style="text-align: justify; margin: 0pt; line-height: 14pt">2020</p></td></tr> <tr> <td style="width: 61px; vertical-align: top"> <p style="text-align: justify; margin: 0pt; line-height: 14pt">$8,000</p></td> <td style="width: 41px; vertical-align: top"> <p style="text-align: justify; margin: 0pt; line-height: 14pt">2021</p></td></tr></table></div> <p style="text-align: center; margin: 0pt; line-height: 14pt; text-indent: 8.65pt; padding-left: 63.35pt">  -and every year thereafter on the same date, for the life of the agreement.</p>
</clri:ScheduleOfMinimumRoyaltyPaymentsTableTextBlock>
<us-gaap:FairValueByBalanceSheetGroupingTextBlock contextRef="From2016-10-01to2017-09-30">
<p style="text-align: left; padding-left: 63.7pt; margin-top: 7.5pt; margin-bottom: 0pt">The Company’s fair value hierarchy for intangible assets as of September 20, 2017 and 2016, respectively, was as follows:</p> <div align="center"> <table cellspacing="0" style="font-size: 10pt"> <tr> <td style="width: 169px"></td> <td style="width: 12px"></td> <td style="width: 14px"></td> <td style="width: 52px"></td> <td style="width: 12px"></td> <td style="width: 12px"></td> <td style="width: 14px"></td> <td style="width: 36px"></td> <td style="width: 12px"></td> <td style="width: 14px"></td> <td style="width: 44px"></td> <td style="width: 12px"></td> <td style="width: 14px"></td> <td style="width: 52px"></td></tr> <tr> <td colspan="14" style="width: 638px; vertical-align: bottom"> <p style="margin: 0pt"> </p></td></tr> <tr> <td style="width: 226px"> </td> <td style="width: 17px; vertical-align: bottom"> </td> <td style="width: 19px; vertical-align: bottom"> </td> <td style="width: 69px; vertical-align: bottom"> </td> <td style="width: 17px; vertical-align: bottom"> </td> <td style="width: 17px; vertical-align: bottom"> </td> <td style="width: 19px; vertical-align: bottom"> </td> <td style="width: 48px; vertical-align: bottom"> </td> <td style="width: 17px; vertical-align: bottom"> </td> <td style="width: 19px; vertical-align: bottom"> </td> <td style="width: 59px; vertical-align: bottom"> </td> <td style="width: 17px; vertical-align: bottom"> </td> <td style="width: 19px; vertical-align: bottom"> </td> <td style="width: 69px; vertical-align: bottom"> </td></tr> <tr> <td rowspan="2" style="width: 226px"> </td> <td rowspan="2" style="width: 17px"> </td> <td colspan="2" style="width: 89px"> <p style="text-align: center; margin: 0pt"><b>September 30,</b></p></td> <td rowspan="2" style="width: 17px"> </td> <td rowspan="2" style="width: 17px"> </td> <td colspan="2" style="width: 68px"> </td> <td rowspan="2" style="width: 17px"> </td> <td colspan="2" style="width: 79px"> </td> <td rowspan="2" style="width: 17px"> </td> <td colspan="2" style="width: 89px"> </td></tr> <tr> <td colspan="2" style="width: 89px; border-bottom: rgb(0, 0, 0) 0.5pt solid"> <p style="text-align: center; margin: 0pt"><b>2017</b></p></td> <td colspan="2" style="width: 68px; border-bottom: rgb(0, 0, 0) 0.5pt solid"> <p style="text-align: center; margin: 0pt"><b>Level 1</b></p></td> <td colspan="2" style="width: 79px; border-bottom: rgb(0, 0, 0) 0.5pt solid"> <p style="text-align: center; margin: 0pt"><b>Level 2</b></p></td> <td colspan="2" style="width: 89px; border-bottom: rgb(0, 0, 0) 0.5pt solid"> <p style="text-align: center; margin: 0pt"><b>Level 3</b></p></td></tr> <tr> <td style="width: 226px"> <p style="margin: 0pt"><b>Intangible assets</b></p></td> <td style="width: 17px"> <p style="margin: 0pt"> </p></td> <td style="width: 19px"> <p style="margin: 0pt"> </p></td> <td style="width: 69px"> <p style="margin: 0pt"> </p></td> <td style="width: 17px"> <p style="margin: 0pt"> </p></td> <td style="width: 17px"> <p style="margin: 0pt"> </p></td> <td style="width: 19px"> <p style="margin: 0pt"> </p></td> <td style="width: 48px"> <p style="margin: 0pt"> </p></td> <td style="width: 17px"> <p style="margin: 0pt"> </p></td> <td style="width: 19px"> <p style="margin: 0pt"> </p></td> <td style="width: 59px"> <p style="margin: 0pt"> </p></td> <td style="width: 17px"> <p style="margin: 0pt"> </p></td> <td style="width: 19px"> <p style="margin: 0pt"> </p></td> <td style="width: 69px"> <p style="margin: 0pt"> </p></td></tr> <tr> <td style="width: 226px"> <p style="margin: 0pt">Licensing agreement, net of amortization</p></td> <td style="width: 17px"> <p style="margin: 0pt"> </p></td> <td style="width: 19px"> <p style="margin: 0pt">$</p></td> <td style="width: 69px"> <p style="text-align: right; margin: 0pt">                 -   </p></td> <td style="width: 17px"> <p style="margin: 0pt"> </p></td> <td style="width: 17px"> <p style="margin: 0pt"> </p></td> <td style="width: 19px"> <p style="margin: 0pt">$</p></td> <td style="width: 48px"> <p style="text-align: right; margin: 0pt">           -   </p></td> <td style="width: 17px"> <p style="margin: 0pt"> </p></td> <td style="width: 19px"> <p style="margin: 0pt">$</p></td> <td style="width: 59px"> <p style="text-align: right; margin: 0pt">               -   </p></td> <td style="width: 17px"> <p style="margin: 0pt"> </p></td> <td style="width: 19px"> <p style="margin: 0pt">$</p></td> <td style="width: 69px"> <p style="text-align: right; margin: 0pt">                 -   </p></td></tr> <tr> <td style="width: 226px"> <p style="margin: 0pt">ReadyOp software platform, net of amortization</p></td> <td style="width: 17px"> <p style="margin: 0pt"> </p></td> <td style="width: 19px"> <p style="margin: 0pt"> </p></td> <td style="width: 69px"> <p style="text-align: right; margin: 0pt">       141,270 </p></td> <td style="width: 17px"> <p style="margin: 0pt"> </p></td> <td style="width: 17px"> <p style="margin: 0pt"> </p></td> <td style="width: 19px"> <p style="margin: 0pt"> </p></td> <td style="width: 48px"> <p style="text-align: right; margin: 0pt">           -   </p></td> <td style="width: 17px"> <p style="margin: 0pt"> </p></td> <td style="width: 19px"> <p style="margin: 0pt"> </p></td> <td style="width: 59px"> <p style="text-align: right; margin: 0pt">               -   </p></td> <td style="width: 17px"> <p style="margin: 0pt"> </p></td> <td style="width: 19px"> <p style="margin: 0pt"> </p></td> <td style="width: 69px"> <p style="text-align: right; margin: 0pt">       141,270 </p></td></tr> <tr> <td style="width: 226px"> <p style="margin: 0pt">ReadyOp customer list, net of amortization</p></td> <td style="width: 17px"> <p style="margin: 0pt"> </p></td> <td style="width: 19px; border-bottom: rgb(0, 0, 0) 1pt solid"> <p style="margin: 0pt"> </p></td> <td style="width: 69px; border-bottom: rgb(0, 0, 0) 1pt solid"> <p style="text-align: right; margin: 0pt">         56,370 </p></td> <td style="width: 17px"> <p style="margin: 0pt"> </p></td> <td style="width: 17px"> <p style="margin: 0pt"> </p></td> <td style="width: 19px; border-bottom: rgb(0, 0, 0) 1pt solid"> <p style="margin: 0pt"> </p></td> <td style="width: 48px; border-bottom: rgb(0, 0, 0) 1pt solid"> <p style="text-align: right; margin: 0pt">           -   </p></td> <td style="width: 17px"> <p style="margin: 0pt"> </p></td> <td style="width: 19px; border-bottom: rgb(0, 0, 0) 1pt solid"> <p style="margin: 0pt"> </p></td> <td style="width: 59px; border-bottom: rgb(0, 0, 0) 1pt solid"> <p style="text-align: right; margin: 0pt">               -   </p></td> <td style="width: 17px"> <p style="margin: 0pt"> </p></td> <td style="width: 19px; border-bottom: rgb(0, 0, 0) 1pt solid"> <p style="margin: 0pt"> </p></td> <td style="width: 69px; border-bottom: rgb(0, 0, 0) 1pt solid"> <p style="text-align: right; margin: 0pt">         56,370 </p></td></tr> <tr> <td style="width: 226px"> <p style="margin: 0pt">Total</p></td> <td style="width: 17px"> <p style="margin: 0pt"> </p></td> <td style="width: 19px; border-bottom: rgb(0, 0, 0) 3pt double"> <p style="margin: 0pt">$</p></td> <td style="width: 69px; border-bottom: rgb(0, 0, 0) 3pt double"> <p style="text-align: right; margin: 0pt">       197,640 </p></td> <td style="width: 17px"> <p style="margin: 0pt"> </p></td> <td style="width: 17px"> <p style="margin: 0pt"> </p></td> <td style="width: 19px; border-bottom: rgb(0, 0, 0) 3pt double"> <p style="margin: 0pt">$</p></td> <td style="width: 48px; border-bottom: rgb(0, 0, 0) 3pt double"> <p style="text-align: right; margin: 0pt">           -   </p></td> <td style="width: 17px"> <p style="margin: 0pt"> </p></td> <td style="width: 19px; border-bottom: rgb(0, 0, 0) 3pt double"> <p style="margin: 0pt">$</p></td> <td style="width: 59px; border-bottom: rgb(0, 0, 0) 3pt double"> <p style="text-align: right; margin: 0pt">               -   </p></td> <td style="width: 17px"> <p style="margin: 0pt"> </p></td> <td style="width: 19px; border-bottom: rgb(0, 0, 0) 3pt double"> <p style="margin: 0pt">$</p></td> <td style="width: 69px; border-bottom: rgb(0, 0, 0) 3pt double"> <p style="text-align: right; margin: 0pt">       197,640 </p></td></tr> <tr> <td style="width: 226px"> </td> <td style="width: 17px; vertical-align: bottom"> </td> <td style="width: 19px; vertical-align: bottom"> </td> <td style="width: 69px; vertical-align: bottom"> </td> <td style="width: 17px; vertical-align: bottom"> </td> <td style="width: 17px; vertical-align: bottom"> </td> <td style="width: 19px; vertical-align: bottom"> </td> <td style="width: 48px; vertical-align: bottom"> </td> <td style="width: 17px; vertical-align: bottom"> </td> <td style="width: 19px; vertical-align: bottom"> </td> <td style="width: 59px; vertical-align: bottom"> </td> <td style="width: 17px; vertical-align: bottom"> </td> <td style="width: 19px; vertical-align: bottom"> </td> <td style="width: 69px; vertical-align: bottom"> </td></tr> <tr> <td rowspan="2" style="width: 226px"> </td> <td rowspan="2" style="width: 17px"> </td> <td colspan="2" style="width: 89px"> <p style="text-align: center; margin: 0pt"><b>September 30,</b></p></td> <td rowspan="2" style="width: 17px"> </td> <td rowspan="2" style="width: 17px"> </td> <td colspan="2" style="width: 68px"> </td> <td rowspan="2" style="width: 17px"> </td> <td colspan="2" style="width: 79px"> </td> <td rowspan="2" style="width: 17px"> </td> <td colspan="2" style="width: 89px"> </td></tr> <tr> <td colspan="2" style="width: 89px; border-bottom: rgb(0, 0, 0) 0.5pt solid"> <p style="text-align: center; margin: 0pt"><b>2016</b></p></td> <td colspan="2" style="width: 68px; border-bottom: rgb(0, 0, 0) 0.5pt solid"> <p style="text-align: center; margin: 0pt"><b>Level 1</b></p></td> <td colspan="2" style="width: 79px; border-bottom: rgb(0, 0, 0) 0.5pt solid"> <p style="text-align: center; margin: 0pt"><b>Level 2</b></p></td> <td colspan="2" style="width: 89px; border-bottom: rgb(0, 0, 0) 0.5pt solid"> <p style="text-align: center; margin: 0pt"><b>Level 3</b></p></td></tr> <tr> <td style="width: 226px"> <p style="margin: 0pt"><b>Intangible assets</b></p></td> <td style="width: 17px"> <p style="margin: 0pt"> </p></td> <td style="width: 19px"> <p style="margin: 0pt"> </p></td> <td style="width: 69px"> <p style="margin: 0pt"> </p></td> <td style="width: 17px"> <p style="margin: 0pt"> </p></td> <td style="width: 17px"> <p style="margin: 0pt"> </p></td> <td style="width: 19px"> <p style="margin: 0pt"> </p></td> <td style="width: 48px"> <p style="margin: 0pt"> </p></td> <td style="width: 17px"> <p style="margin: 0pt"> </p></td> <td style="width: 19px"> <p style="margin: 0pt"> </p></td> <td style="width: 59px"> <p style="margin: 0pt"> </p></td> <td style="width: 17px"> <p style="margin: 0pt"> </p></td> <td style="width: 19px"> <p style="margin: 0pt"> </p></td> <td style="width: 69px"> <p style="margin: 0pt"> </p></td></tr> <tr> <td style="width: 226px"> <p style="margin: 0pt">Licensing agreement, net of amortization</p></td> <td style="width: 17px"> <p style="margin: 0pt"> </p></td> <td style="width: 19px"> <p style="margin: 0pt">$</p></td> <td style="width: 69px"> <p style="text-align: right; margin: 0pt">       240,332 </p></td> <td style="width: 17px"> <p style="margin: 0pt"> </p></td> <td style="width: 17px"> <p style="margin: 0pt"> </p></td> <td style="width: 19px"> <p style="margin: 0pt">$</p></td> <td style="width: 48px"> <p style="text-align: right; margin: 0pt">           -   </p></td> <td style="width: 17px"> <p style="margin: 0pt"> </p></td> <td style="width: 19px"> <p style="margin: 0pt">$</p></td> <td style="width: 59px"> <p style="text-align: right; margin: 0pt">               -   </p></td> <td style="width: 17px"> <p style="margin: 0pt"> </p></td> <td style="width: 19px"> <p style="margin: 0pt">$</p></td> <td style="width: 69px"> <p style="text-align: right; margin: 0pt">       240,332 </p></td></tr> <tr> <td style="width: 226px"> <p style="margin: 0pt">ReadyOp software platform, net of amortization</p></td> <td style="width: 17px"> <p style="margin: 0pt"> </p></td> <td style="width: 19px"> <p style="margin: 0pt"> </p></td> <td style="width: 69px"> <p style="text-align: right; margin: 0pt">                 -   </p></td> <td style="width: 17px"> <p style="margin: 0pt"> </p></td> <td style="width: 17px"> <p style="margin: 0pt"> </p></td> <td style="width: 19px"> <p style="margin: 0pt"> </p></td> <td style="width: 48px"> <p style="text-align: right; margin: 0pt">           -   </p></td> <td style="width: 17px"> <p style="margin: 0pt"> </p></td> <td style="width: 19px"> <p style="margin: 0pt"> </p></td> <td style="width: 59px"> <p style="text-align: right; margin: 0pt">               -   </p></td> <td style="width: 17px"> <p style="margin: 0pt"> </p></td> <td style="width: 19px"> <p style="margin: 0pt"> </p></td> <td style="width: 69px"> <p style="text-align: right; margin: 0pt">                 -   </p></td></tr> <tr> <td style="width: 226px"> <p style="margin: 0pt">ReadyOp customer list, net of amortization</p></td> <td style="width: 17px"> <p style="margin: 0pt"> </p></td> <td style="width: 19px; border-bottom: rgb(0, 0, 0) 1pt solid"> <p style="margin: 0pt"> </p></td> <td style="width: 69px; border-bottom: rgb(0, 0, 0) 1pt solid"> <p style="text-align: right; margin: 0pt">                 -   </p></td> <td style="width: 17px"> <p style="margin: 0pt"> </p></td> <td style="width: 17px"> <p style="margin: 0pt"> </p></td> <td style="width: 19px; border-bottom: rgb(0, 0, 0) 1pt solid"> <p style="margin: 0pt"> </p></td> <td style="width: 48px; border-bottom: rgb(0, 0, 0) 1pt solid"> <p style="text-align: right; margin: 0pt">           -   </p></td> <td style="width: 17px"> <p style="margin: 0pt"> </p></td> <td style="width: 19px; border-bottom: rgb(0, 0, 0) 1pt solid"> <p style="margin: 0pt"> </p></td> <td style="width: 59px; border-bottom: rgb(0, 0, 0) 1pt solid"> <p style="text-align: right; margin: 0pt">               -   </p></td> <td style="width: 17px"> <p style="margin: 0pt"> </p></td> <td style="width: 19px; border-bottom: rgb(0, 0, 0) 1pt solid"> <p style="margin: 0pt"> </p></td> <td style="width: 69px; border-bottom: rgb(0, 0, 0) 1pt solid"> <p style="text-align: right; margin: 0pt">                 -   </p></td></tr> <tr> <td style="width: 226px"> <p style="margin: 0pt">Total</p></td> <td style="width: 17px"> <p style="margin: 0pt"> </p></td> <td style="width: 19px; border-bottom: rgb(0, 0, 0) 3pt double"> <p style="margin: 0pt">$</p></td> <td style="width: 69px; border-bottom: rgb(0, 0, 0) 3pt double"> <p style="text-align: right; margin: 0pt">       240,332 </p></td> <td style="width: 17px"> <p style="margin: 0pt"> </p></td> <td style="width: 17px"> <p style="margin: 0pt"> </p></td> <td style="width: 19px; border-bottom: rgb(0, 0, 0) 3pt double"> <p style="margin: 0pt">$</p></td> <td style="width: 48px; border-bottom: rgb(0, 0, 0) 3pt double"> <p style="text-align: right; margin: 0pt">           -   </p></td> <td style="width: 17px"> <p style="margin: 0pt"> </p></td> <td style="width: 19px; border-bottom: rgb(0, 0, 0) 3pt double"> <p style="margin: 0pt">$</p></td> <td style="width: 59px; border-bottom: rgb(0, 0, 0) 3pt double"> <p style="text-align: right; margin: 0pt">               -   </p></td> <td style="width: 17px"> <p style="margin: 0pt"> </p></td> <td style="width: 19px; border-bottom: rgb(0, 0, 0) 3pt double"> <p style="margin: 0pt">$</p></td> <td style="width: 69px; border-bottom: rgb(0, 0, 0) 3pt double"> <p style="text-align: right; margin: 0pt">       240,332 </p></td></tr> <tr> <td style="width: 226px; vertical-align: bottom"> </td> <td style="width: 17px; vertical-align: bottom"> </td> <td style="width: 19px; vertical-align: bottom"> </td> <td style="width: 69px; vertical-align: bottom"> </td> <td style="width: 17px; vertical-align: bottom"> </td> <td style="width: 17px; vertical-align: bottom"> </td> <td style="width: 19px; vertical-align: bottom"> </td> <td style="width: 48px; vertical-align: bottom"> </td> <td style="width: 17px; vertical-align: bottom"> </td> <td style="width: 19px; vertical-align: bottom"> </td> <td style="width: 59px; vertical-align: bottom"> </td> <td style="width: 17px; vertical-align: bottom"> </td> <td style="width: 19px; vertical-align: bottom"> </td> <td style="width: 69px; vertical-align: bottom"> </td></tr></table></div>
</us-gaap:FairValueByBalanceSheetGroupingTextBlock>
<us-gaap:OperatingLeasesFutureMinimumPaymentsDueInTwoYears contextRef="AsOf2017-09-30" unitRef="USD" decimals="0"> 43560 </us-gaap:OperatingLeasesFutureMinimumPaymentsDueInTwoYears>
<us-gaap:OperatingLeasesFutureMinimumPaymentsDueInThreeYears contextRef="AsOf2017-09-30" unitRef="USD" decimals="0"> 7260 </us-gaap:OperatingLeasesFutureMinimumPaymentsDueInThreeYears>
<clri:FutureRoyaltyMinimumPaymentsDueInTwoYears contextRef="AsOf2017-09-30_custom_SouthernFloridaResearchFoundationMember" unitRef="USD" decimals="0"> 1000 </clri:FutureRoyaltyMinimumPaymentsDueInTwoYears>
<clri:FutureRoyaltyMinimumPaymentsDueInThreeYears contextRef="AsOf2017-09-30_custom_SouthernFloridaResearchFoundationMember" unitRef="USD" decimals="0"> 4000 </clri:FutureRoyaltyMinimumPaymentsDueInThreeYears>
<clri:FutureRoyaltyMinimumPaymentsDueInFourYears contextRef="AsOf2017-09-30_custom_SouthernFloridaResearchFoundationMember" unitRef="USD" decimals="0"> 8000 </clri:FutureRoyaltyMinimumPaymentsDueInFourYears>
<us-gaap:LicenseCosts contextRef="From2016-10-01to2017-09-30_custom_SouthernFloridaResearchFoundationMember" unitRef="USD" decimals="0"> 3000 </us-gaap:LicenseCosts>
<us-gaap:ReimbursementRevenue contextRef="From2016-10-01to2017-09-30_custom_SouthernFloridaResearchFoundationMember" unitRef="USD" decimals="2"> 7253.5 </us-gaap:ReimbursementRevenue>
<clri:PercentageOfRightToPurchaseSecurities contextRef="From2016-10-01to2017-09-30_custom_SouthernFloridaResearchFoundationMember" unitRef="Pure" decimals="INF"> 0.05 </clri:PercentageOfRightToPurchaseSecurities>
<us-gaap:OperatingLeasesRentExpenseNet contextRef="From2015-10-01to2016-09-30" unitRef="USD" decimals="0"> 42454 </us-gaap:OperatingLeasesRentExpenseNet>
<us-gaap:OperatingLeasesRentExpenseNet contextRef="From2016-10-01to2017-09-30" unitRef="USD" decimals="0"> 60258 </us-gaap:OperatingLeasesRentExpenseNet>
<clri:AmortizedValue contextRef="AsOf2017-09-30_custom_ReadyOpPlatformMember" unitRef="USD" decimals="0"> 195600 </clri:AmortizedValue>
<clri:AmortizedValue contextRef="AsOf2017-09-30_custom_CollabriaClientMember" unitRef="USD" decimals="0"> 96640 </clri:AmortizedValue>
<clri:NumberOfAmortizedYearOver contextRef="From2016-10-01to2017-09-30_custom_ReadyOpPlatformMember"> P3Y </clri:NumberOfAmortizedYearOver>
<clri:NumberOfAmortizedYearOver contextRef="From2016-10-01to2017-09-30_custom_CollabriaClientMember"> P2Y </clri:NumberOfAmortizedYearOver>
<us-gaap:CashFDICInsuredAmount contextRef="AsOf2017-09-30" unitRef="USD" decimals="0"> 250000 </us-gaap:CashFDICInsuredAmount>
<us-gaap:ConvertiblePreferredStockSharesIssuedUponConversion contextRef="AsOf2016-09-30_us-gaap_SeriesCPreferredStockMember" unitRef="Shares" decimals="INF"> 12816875 </us-gaap:ConvertiblePreferredStockSharesIssuedUponConversion>
<us-gaap:ConvertiblePreferredStockSharesIssuedUponConversion contextRef="AsOf2016-09-30_us-gaap_SeriesDPreferredStockMember" unitRef="Shares" decimals="INF"> 3354520 </us-gaap:ConvertiblePreferredStockSharesIssuedUponConversion>
<us-gaap:ConvertiblePreferredStockSharesIssuedUponConversion contextRef="AsOf2017-09-30_us-gaap_SeriesCPreferredStockMember" unitRef="Shares" decimals="INF"> 12816875 </us-gaap:ConvertiblePreferredStockSharesIssuedUponConversion>
<us-gaap:ConvertiblePreferredStockSharesIssuedUponConversion contextRef="AsOf2017-09-30_us-gaap_SeriesDPreferredStockMember" unitRef="Shares" decimals="INF"> 3354520 </us-gaap:ConvertiblePreferredStockSharesIssuedUponConversion>
<us-gaap:ConvertiblePreferredStockSharesIssuedUponConversion contextRef="AsOf2017-09-30_us-gaap_SeriesAPreferredStockMember" unitRef="Shares" decimals="INF"> 4075000 </us-gaap:ConvertiblePreferredStockSharesIssuedUponConversion>
<us-gaap:ConvertiblePreferredStockSharesReservedForFutureIssuance contextRef="AsOf2017-09-30_us-gaap_SeriesAPreferredStockMember" unitRef="Shares" decimals="INF"> 525746 </us-gaap:ConvertiblePreferredStockSharesReservedForFutureIssuance>
<us-gaap:AdvertisingExpense contextRef="From2015-10-01to2016-09-30" unitRef="USD" decimals="0"> 4275 </us-gaap:AdvertisingExpense>
<us-gaap:AdvertisingExpense contextRef="From2016-10-01to2017-09-30" unitRef="USD" decimals="0"> 6850 </us-gaap:AdvertisingExpense>
<us-gaap:IntangibleAssetsNetExcludingGoodwill contextRef="AsOf2016-09-30" unitRef="USD" decimals="0"> 240332 </us-gaap:IntangibleAssetsNetExcludingGoodwill>
<us-gaap:IntangibleAssetsNetExcludingGoodwill contextRef="AsOf2017-09-30" unitRef="USD" decimals="0"> 197640 </us-gaap:IntangibleAssetsNetExcludingGoodwill>
<us-gaap:IntangibleAssetsNetExcludingGoodwill contextRef="AsOf2017-09-30_us-gaap_FairValueInputsLevel1Member" unitRef="USD" xsi:nil="true"/>
<us-gaap:IntangibleAssetsNetExcludingGoodwill contextRef="AsOf2017-09-30_us-gaap_FairValueInputsLevel2Member" unitRef="USD" xsi:nil="true"/>
<us-gaap:IntangibleAssetsNetExcludingGoodwill contextRef="AsOf2017-09-30_us-gaap_FairValueInputsLevel3Member" unitRef="USD" decimals="0"> 197640 </us-gaap:IntangibleAssetsNetExcludingGoodwill>
<us-gaap:IntangibleAssetsNetExcludingGoodwill contextRef="AsOf2016-09-30_us-gaap_FairValueInputsLevel1Member" unitRef="USD" xsi:nil="true"/>
<us-gaap:IntangibleAssetsNetExcludingGoodwill contextRef="AsOf2016-09-30_us-gaap_FairValueInputsLevel2Member" unitRef="USD" xsi:nil="true"/>
<us-gaap:IntangibleAssetsNetExcludingGoodwill contextRef="AsOf2016-09-30_us-gaap_FairValueInputsLevel3Member" unitRef="USD" decimals="0"> 240332 </us-gaap:IntangibleAssetsNetExcludingGoodwill>
<us-gaap:IncreaseDecreaseInOtherLoans contextRef="From2016-10-01to2017-09-30" unitRef="USD" decimals="0"> 679000 </us-gaap:IncreaseDecreaseInOtherLoans>
<us-gaap:DeferredTaxAssetsTaxDeferredExpenseReservesAndAccruals contextRef="AsOf2017-09-30" unitRef="USD" decimals="0"> 13000000 </us-gaap:DeferredTaxAssetsTaxDeferredExpenseReservesAndAccruals>
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<us-gaap:DeferredTaxAssetsTaxDeferredExpenseReservesAndAccrualsImpairmentLosses contextRef="AsOf2016-09-30" unitRef="USD" decimals="0"> 582500 </us-gaap:DeferredTaxAssetsTaxDeferredExpenseReservesAndAccrualsImpairmentLosses>
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<us-gaap:DebtInstrumentConvertibleBeneficialConversionFeature contextRef="D2015-04-07_To_2015-05-07_ConvertibleNotesPayableMember" unitRef="USD" decimals="0"> 31000 </us-gaap:DebtInstrumentConvertibleBeneficialConversionFeature>
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</xbrli:xbrl>


12 Subsequent Filings that Reference this Filing

  As Of               Filer                 Filing    For·On·As Docs:Size             Issuer                      Filing Agent

 5/06/24  Cleartronic, Inc.                 10-Q        3/31/24   45:3.4M                                   Yes International/FA
 2/14/24  Cleartronic, Inc.                 10-Q       12/31/23   45:3M                                     Yes International/FA
12/21/23  Cleartronic, Inc.                 10-K        9/30/23   49:3.7M                                   Yes International/FA
 8/14/23  Cleartronic, Inc.                 10-Q        6/30/23   42:3.8M                                   Yes International/FA
 5/12/23  Cleartronic, Inc.                 10-Q        3/31/23   44:3.2M                                   Yes International/FA
 4/28/23  Cleartronic, Inc.                 10-K/A      9/30/22    3:55K                                    Yes International/FA
 2/13/23  Cleartronic, Inc.                 10-Q       12/31/22   42:2.5M                                   Yes International/FA
12/29/22  Cleartronic, Inc.                 10-K        9/30/22   51:3.3M                                   Yes International/FA
12/29/21  Cleartronic, Inc.                 10-K        9/30/21   58:4.5M                                   Yes International/FA
 2/18/21  Cleartronic, Inc.                 10-K        9/30/20   59:3.5M                                   Yes International/FA
 5/14/18  SEC                               UPLOAD6/12/18    1:35K  Cleartronic, Inc.
 3/06/18  SEC                               UPLOAD6/12/18    1:134K Cleartronic, Inc.
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