UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

_____________



FORM10-Q



(Mark One)[ X ]Quarterly Report Under Section 13 or 15(d) of the Securities Exchange Act of 1934For the quarterly period ended March 31, 2011[    ]Transition Report Under Section 13 or 15(d) of the Securities Exchange Act of 1934For the transition period from  to




Commission File Number: 333-135585



Cleartronic, Inc.

(Exact name of registrant as specified in its charter)



Florida                                                    65-0958798

(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.)



8000 North Federal Highway, Boca Raton, Florida                                       33487

(Address of principal executive offices)                                                  (Zip Code)



561-939-3300

(Registrants telephone number, including area code)





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



Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes  X _    No __ __



Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ___  No __



Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.



Large accelerated filer ____

Accelerated filer ____

Non-accelerated filer ____

Smaller reporting company _X_



Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).   Yes ___   No _X_



APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY

PROCEEDINGS DURING THE PRECEDING FIVE YEARS:



Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes ___ No ___



APPLICABLE ONLY TO CORPORATE ISSUERS:



Indicate the number of shares outstanding of each of the issuers classes of common stock, as of the latest practicable date: 132,307,758 shares as of May
 12 , 2011.





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PART I - FINANCIAL INFORMATION



Item 1. Financial Statements



CLEARTRONIC, INC. AND SUBSIDIARYCONDENSED CONSOLIDATED BALANCE SHEETSASSETSMarch 31,September 30,20112010(Unaudited)**(Audited)**Current assets:Cash$      268,790$       22,348Accounts receivable, net25,6105,019Inventory63,99051,076Prepaid expenses and other current assets14,75632,407Total current assets373,146110,850Property and equipment, net17,90525,270Total assets$      391,051$      136,120LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)Current liabilities:Accounts payable228,693243,887Accrued expenses144,93479,950Deferred revenue, current portion22,2198,503Notes payable - stockholders119,806121,180Total current liabilities515,652453,520Long Term LiabilitiesNotes payable - stockholders25,00025,000Deferred revenue, net of current portion10,0031,063Total long term liabilities35,00326,063Total liabilities550,655479,583Stockholders' equity (deficit):Preferred stock - $.001 par value; 200,000,000 shares authorized,900,000 and 250,000 shares issued and outstanding, respectvely900250Common stock - $.001 par value; 1,250,000,000 shares authorized,132,307,758 and 132,307,758 issued and outstanding, respectively132,308132,308Additional paid-in capital6,656,9026,007,553Accumulated Deficit(6,949,714)(6,483,574)Total stockholders' equity (deficit)(159,604)(343,463)Total liabilities and stockholders' equity (deficit)$      391,051$      136,120




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



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CLEARTRONIC, INC. AND SUBSIDIARY(Unaudited)Condensed Consolidated Statements of OperationsFor the threeFor the threeFor the sixFor the sixmonths endedmonths endedmonths endedmonths endedMarch 31, 2011March 31, 2010March 31, 2011March 31, 2010Revenue$      128,358$        23,127$      308,800$        90,291Cost of Revenue68,44211,040154,53743,387Gross Profit59,91612,087154,26346,904Operating Expenses:Selling expenses41,40134,44075,87849,677Administrative expenses237,599215,325446,112374,284Research and development29,07221,98555,47066,861Depreciation3,3936,6897,36414,540Total Operating Expenses311,465278,439584,824505,362Other (Expenses)(19,493)(19,167)(35,580)(30,327)Net loss(271,042)(285,519)(466,141)(488,785)(Loss) per Common Share$         (0.002)$         (0.003)$         (0.004)$         (0.005)(Loss) per Common Sharebasic and diluted$         (0.002)$         (0.003)$         (0.004)$         (0.005)Weighted Average ofShares Outstanding -basic and diluted132,307,758101,677,485132,307,75889,596,677




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



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CLEARTRONIC, INC. AND SUBSIDIARY(Unaudited)Condensed Consolidated Statements of Cash FlowsFor the sixFor the sixmonths endedmonths endedMarch 31, 2011March 31, 2010NET LOSS$        (466,141)$        (488,785)Adjustments to reconcile net loss to net cash used inoperating activities:Depreciation7,36514,540Common stock and warrants issued for services-118,750Loss on settlement and disposal of assets-4,220Amortization of notes payable discount93717,942(Increase) decrease in assets:Accounts receivable(20,591)(165)Inventory(12,914)(27,339)Prepaid expenses and other current assets16,714(8,333)Increase (decrease) in liabilities:Accounts payable(15,194)(40,095)Accrued expenses64,98495,269Deferred revenue22,656(9,626)Net Cash Used in Operating Activities(402,184)(323,622)Cash Flows From Investing Activities:Purchase of property and equipment-(4,004)Net Cash Provided by Investing Activities:-(4,004)Cash Flows From Financing ActivitiesPrincipal payments on notes payable(1,374)-Proceeds from notes payable, net39,900Proceeds from issuance of common stock and warrants-300,000Proceeds from issuance of preferred stock650,000-Net Cash Provided by Financing Activities648,626339,900Net Increase In Cash246,44212,274Cash - Beginning of Period22,3488,273Cash - End of Period$         268,790$           20,547SUPPLEMENTAL CASH FLOW INFORMATION:Cash paid for interest$           11,781$            6,313




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





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CLEARTRONIC, INC. AND SUBSIDIARY

Notes to Condensed Consolidated Financial Statements

March 31, 2011

NOTE 1   -

ORGANIZATION



Cleartronic, Inc.  (the Company) was incorporated in Florida on November 15, 1999. The Company was originally formed as a website developer under the name Menu Sites, Inc., which ceased operations in 2002. In 2005, the Company became a provider of Voice Over Internet Protocol (VOIP) services and re-seller of international pre-paid telecommunication services through Interactive Media Technologies, Inc., (IMT), a related party, and was renamed GlobalTel IP, Inc. In August 2008, the Company ceased re-selling international pre-paid telecommunication services and sold back to IMT certain VoIP assets and began to transition its remaining VoIP business into managed unified group communication operations and development of VoIP related products and services.



In November 2007, the Company formed, as Florida corporations, two wholly-owned subsidiaries: Gulf Telco, Inc. and VoiceInterop, Inc. VoiceInterop, Inc. is the operating subsidiary of the Company and Gulf Telco, Inc. is currently inactive. In May 2008, the Company changed its name to Cleartronic, Inc. The Company now 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. The Company introduced its (patent pending) line of AudioMate360 IP gateway appliances in 2008 and continues to develop an Application Service Provider solution for voice interoperability to be marketed as a hosted interoperability solution for potential customers.



NOTE 2   -

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES



PRINCIPLES OF CONSOLIDATION



The accompanying unaudited interim consolidated financial statements contain the consolidated accounts of Cleartronic, Inc., and VoiceInterop, Inc.. All material intercompany transactions and balances have been eliminated.



BASIS OF PRESENTATION



The accompanying unaudited interim consolidated financial statements have been prepared in accordance with United States generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q of Regulation S-K. They may not include all information and footnotes required by United States generally accepted accounting principles for complete financial statements. However, except as disclosed herein, there have been no material changes in the information disclosed in the notes to the financial statements for the year ended September 30, 2010 included in the Companys Annual Report on Form 10-K filed with the United States Securities and Exchange Commission. The unaudited interim consolidated financial statements should be read in conjunction with those financial statements included in the Form 10-K. In the opinion of management, all adjustments considered necessary for a fair presentation, consisting solely of normal and recurring adjustments have been made. Operating results for the three months ended March 31, 2011 are not necessarily indicative of the results that may be expected for the fiscal year ending September 30, 2011.

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Cleartronic, Inc. and Subsidiary

Notes to Condensed Consolidated Financial Statements

March 31, 2011



USE OF ESTIMATES



In preparing the financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the balance sheet and operations for the reporting period. Although these estimates are based on managements knowledge of current events and actions it may undertake in the future, they may ultimately differ from actual results.



ACCOUNTS RECEIVABLE



The Company provides an allowance for uncollectible accounts based upon a periodic review and analysis of outstanding accounts receivable balances. Uncollectible receivables are charged to the allowance when deemed uncollectible. Recoveries of accounts previously written off are used to credit the allowance account in the periods in which the recoveries are made.



The Company has an Accounts Receivable Purchase and Security Agreement with Bridgeport Capital Resources of Birmingham, AL. Under the terms of the agreement the Company sells certain acceptable accounts receivable to Bridgeport Capital at a discount to the receivable face value. Discounts can range between 2.25 and 6.25 percent depending on the length of time the receivable remains outstanding.



CONCENTRATION OF CREDIT RISK



The Company currently maintains cash balances at one banking institution. FDIC deposit insurance has temporarily increased from $100,000 to $250,000 per depositor through December 31, 2013. The Company did not have cash balances in excess of the FDIC limits at March 31, 2011 and September 30, 2010.



RESEARCH AND DEVELOPMENT COSTS



The Company expenses research and development costs as incurred.  For the three months ending March 31, 2011 and 2010, the Company had $29,072 and $21,985 in research and development costs, respectively. For the six months ending March 31, 2011 and 2010, the Company had $55,470 and $66,861 in research and development costs, respectively.



REVENUE RECOGNITION AND DEFERRED REVENUES



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.



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.



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Cleartronic, Inc. and Subsidiary

Notes to Condensed Consolidated Financial Statements

March 31, 2011





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.



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.



Installation and integration services are recognized upon completion.



EARNINGS PER SHARE



Basic income (loss) per common share is calculated using the weighted average number of shares outstanding during the periods reported. Diluted earnings per share include the weighted average effect of all dilutive securities outstanding during the periods presented. Diluted per share loss is the same as basic per share loss when there is a loss from continuing operations. Accordingly, for purposes of dilutive earnings per share, the Company excluded the effect of warrants and options as of March 31, 2011 and 2010 and there were 22,336,265 and 16,976,759 options and warrants outstanding, respectively.



FAIR VALUE OF FINANCIAL INSTRUMENTS



The Companys financial instruments consist primarily of cash, accounts receivable, accounts payable, accrued expenses and notes payable. The carrying amounts of such financial instruments approximate their respective estimated fair value due to the short-term maturities and approximate market interest rates of these instruments.



INVENTORY



Inventory consists of components held for assembly and finished goods held for resale or to be utilized for installation in projects. Inventory is valued at lower of cost or market on a first-in, first-out basis. The Companys policy is to record a reserve for technological obsolescence or slow-moving inventory items. No reserve was made for inventory balances as of March 31, 2011.



PROPERTY AND EQUIPMENT



Property and equipment are recorded at cost. For financial statement purposes depreciation of property and equipment iscomputed using the straight-linemethod over the estimated useful lives of the asset.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.

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Cleartronic, Inc. and Subsidiary

Notes to Condensed Consolidated Financial Statements

March 31, 2011





STOCK-BASED COMPENSATION



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. SFAS 123R 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.



ADVERTISING COSTS



Advertising costs are expensed as incurred. The Company had advertising costs of $6,496 during the three months ended March 31, 2011 and $10,172 during the three months ended March 31, 2010.  For the six months ending March 31, 2011 and 2010, the Company had $11,030 and $22,435 in advertising costs, respectively.



NOTE 3   -

GOING CONCERN



The Company's financial statements are prepared using accounting principles generally accepted in the United States of America applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has not yet established an ongoing source of revenues sufficient to cover its operating costs and allow it to continue as a going concern.  The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable.  If the Company is unable to obtain adequate capital, it could be forced to cease operations.



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.





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Cleartronic, Inc. and Subsidiary

Notes to Condensed Consolidated Financial Statements

March 31, 2011



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. The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.



NOTE 4   -

EQUITY TRANSACTIONS



Preferred Stock



In March 2011, the Company issued 400,000 shares of Series A Convertible Preferred Stock to one shareholder for $400,000.



NOTE 5 -

RELATED PARTY TRANSACTIONS



The Company leases its office space from another entity that is also a stockholder. Rent expense paid to the related party was $19,577 and $26,011 for the three months ended March 31, 2011 and 2010, respectively. For the six months ending March 31, 2011 and 2010, rent expense paid to the related party was $43,398 and $51,945, respectively.



NOTE 6 -

SUBSEQUENT EVENTS



In May 2009, the FASB issued accounting guidance now codified as FASB ASC Topic 855, Subsequent Events,which establishes general standards of accounting for, and disclosures of, events that occur after the balance sheet date but before financial statements are issued or are available to be issued. FASB ASC Topic 855 is effective for interim or fiscal periods ending after June 15, 2009. Accordingly, we adopted the provisions of FASB ASC Topic 855 on June 30, 2009.  The Company has evaluated subsequent events for the period from March 31, 2011, the date of these financial statements, through May 12, 2011, the date of issuance of these condensed, consolidated financial statements.



Majority Shareholder Approval



In April 2011, the holders of a majority of the voting stock of the Company voted, adopted and approved three  resolutions by unamimous written consent.



The resolutions increased the number of authorized shares of common stock of the Company from 750,000,000 shares to 1,250,000,000 shares and the Board of Directors to change the name of the Company to a new name at the full discretion of the Board and such authorization shall remain in place through September 30, 2011.



The resolution also authorized the Company to establish the  2011 Equity Incentive Plan and each of its terms and conditions.



In April 2011 the Company issued 8,581,446 shares of the Company's common stock to two consultants for services valued at approximately $53,000 and the
Company issued 2,372,409 shares of the Company's common stock to preferred shareholder in lieu of paying a cash dividend of approximately $23,000.



In May, 2011, one shareholder exchanged 17,400,000 of the Company's common stock for 174,000 shares of the Company's Series A Convertible Preferred Stock.



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Item 2.  Managements Discussion and Analysis or Plan of Operation.



Overview



Cleartronic, Inc. (the Company, formerly GlobalTel IP, Inc.) was incorporated in Florida on November 15, 1999. Originally formed as a website developer, the Company ceased operations in 2002. In 2005, the Company commenced operations as a provider of Voice Over Internet Protocol (VoIP) services. In 2007, the Company elected to exit the international VoIP business and concentrate on providing unified group communication solutions. The Company, through its wholly owned subsidiary, VoiceInterop, Inc., now designs, sells and installs unified group communication solutions for public and private enterprises and is developing an Application Service Provider solution for voice interoperability.



FOR THE THREE MONTHS ENDED MARCH 31, 2011 COMPARED TO THE THREE MONTHS ENDED MARCH 31, 2010



Revenues



Revenues increased  to $128,358 for the three months ended March 31, 2011 as compared to $23,127 for the three months ended March 31, 2010.  The increase was due to an increase in sales of equipment and software due to increased sales of unified communications solutions.



Cost of Revenues



Cost of revenues was $68,442 for the three months ended March 31, 2011 as compared to $11,040 for the three months ended March 31, 2010. The increase was due to increased costs of hardware and software used in sales of unified communications solutions.



Operating Expenses



Operating expenses for the three months ended March 31, 2011 were $311,465 compared to $278,439 for the three months ended March 31, 2010.  For the three months ended March 31, 2011, selling expenses increased $6,961 or approximately 10%, administrative expenses increased $22,274 or approximately 10% and research and development expenses increased $7,087 or approximately 30%.



Loss from Operations



The Companys net loss from  operations decreased  to $271,042 during the three months ended March 31, 2011 as compared to $285,519 for the three months ended March 31, 2010. The reason for this slight decrease was due to an increase in revenue for the period and an increase in operating expenses of approximately 10% .  Net loss per common share was $0.002 and $0.003 for the three months ended March 31, 2011 and 2010, respectively.





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FOR THE SIX MONTHS ENDED MARCH 31, 2011 COMPARED TO THE SIX MONTHS ENDED MARCH 31, 2010



Revenues



Revenues from operations were $308,800 for the six months ended March 31, 2011 as compared to $90,291 for the six months ended March 31, 2010. The increase was primarily due to an increase  in sales of equipment and software due to increased sales of unified communications solutions.



Cost of Revenues



Cost of revenues was $154,537 for the six months ended March 31, 2011, as compared to $43,837 for the six months ended March 31, 2010.  Due to increased sales of unified communications software and equipment the Company incurred   increased costs for both software and equipment. Gross profits were $154,623 and $46,094 for the six months ended March 31, 2011 and 2010 respectively.



Operating Expenses



Operating expenses for the six months ended March 31, 2011 were $584,824 compared to $505,362 for the six months ended March 31, 2010. This increase  was due to a significant increase in  selling and administrative expenses which did not offset reduced expenses for research and development and depreciation.



Loss from Operations



The Companys net loss increased to $466,141 during the six months ended March 31, 2011 as  compared to a loss of $488,785 for the six months ended March 31, 2010. The primary reasons for this decrease were increased revenue from the sale of unified communication solutions.  Net loss per common share was $0.004 and $0.005 for the six months ended March 31, 2011 and 2010, respectively.



LIQUIDITY AND CAPITAL RESOURCES



Net cash used in operating activities was $402,184 for the six  months ended March 31, 2011 compared to $323,622 for the six months ended March 31, 2010, due to a increase in accounts receivable, inventory and deferred revenue.



Net cash used in investing activities was nil for the six months ended March 31, 2011 compared to $4,004 used in investing activities for the six months ended March 31, 2010.



Net cash provided by financing activities was $648,626 for the six months ended March 31, 2011 compared to $339,900 for the six months ended March 31, 2010. The increase was due to increased equity financing from the sale of preferred stock.





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Our obligations are being met on a month-to-month basis as cash becomes available. There can be no assurance that the Companys present flow of cash will be sufficient to meet current and future obligations.



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



We believe that in order to fund our business plan, we will need approximately $1 million in new equity or debt capital. In the past, in addition to revenues and deferred revenues, we have obtained funds from the private sale of our debt and equity securities. We intend to continue to seek private financing from existing stockholders and others.



The costs to operate our current business are approximately $100,000  per month. In order for us  to cover our monthly operating expenses, we would have to generate revenues of approximately $225,000 per month. Accordingly, in the absence of revenues, we will need to secure $100,000 in equity or debt capital each month to cover our overhead expenses. In order to remain in business for one year without any revenues we would need to secure $1,200,000 in equity or debt capital. If we are unsuccessful in securing sufficient capital or revenues, we would have to cease business in approximately 90 days.



FORWARD-LOOKING STATEMENTS



The information set forth in this Managements Discussion and Analysis contains certain forward-looking statements, including, among others (i) expected changes in the Companys revenues and profitability, (ii) prospective business opportunities and (iii) its strategy for financing its business. Forward-looking statements are statements other than historical information or statements of current condition. Some forward-looking statements may be identified by use of terms such as believes, anticipates, intends or expects. These forward-looking statements relate to the Companys plans, objectives and expectations for future operations. Although the Company believes that its expectations with respect to the forward-looking statements are based upon reasonable assumptions within the bounds of its knowledge of its business and operations, in light of the risks and uncertainties inherent in all future projections, the inclusion of forward-looking statements in this prospectus should not be regarded as a representation that the Companys objectives or plans will be achieved. In light of the risks and uncertainties, there can be no assurance that actual results, performance or achievements will not differ materially from any future results, performance or achievements expressed or implied by such forward-looking statements. The foregoing review of important factors should not be construed as exhaustive. The Company undertakes no obligation to release publicly the results of any future revisions it may make to forward-looking statements to reflect events or circumstances after the date of this prospectus or to reflect the occurrence of unanticipated events.



Item 3. Quantitative and Qualitative Disclosures About Market Risk.



Not applicable.





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Item 4. Controls and Procedures.



An evaluation was conducted by the registrants chief executive officer (CEO) and principal financial officer (PFO) of the effectiveness of the design and operation of the registrants disclosure controls and procedures as of March 31, 2011. Based on that evaluation, the CEO and PFO concluded that the registrants controls and procedures were effective as of such date to ensure that information required to be disclosed in the reports that the registrant files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms. If the registrant develops new business or engages or hires a chief financial officer or similar financial expert, the registrant intends to review its disclosure controls and procedures.



Management is aware that there is a lack of segregation of duties due to the small number of employees dealing with general administrative and financial matters. However, at this time management has decided that considering the abilities of the employees now involved and the control procedures in place, the risk associated with such lack of segregation is low and the potential benefits of adding employees to clearly segregate duties do not justify the substantial expenses associated with such increases. Management may reevaluate this situation as circumstances dictate.



The was no change in the registrant's internal control over financial reporting identified in connection with the evaluation required by paragraph (d) of Rule 13a15 or Rule 15d15 under the Securities Exchange Act of 1934 that occurred during the registrant's last fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting.



Item 4T. Controls and Procedures.



Reference is made to the response to Item 4 above.







PART II - OTHER INFORMATION



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



In March 2011, the Company sold 400,000 shares of Series A Convertible Preferred stock for cash proceeds of $400,000.



There were no principal underwriters.



The registrant claimed exemption from the registration provisions of the Securities Act of 1933 with respect to the securities pursuant to Section 4(2) thereof inasmuch as no public offering was involved. The shares were not offered or sold by means of: (i) any advertisement, article, notice or other communication published in any newspaper, magazine or similar medium, or broadcast over television or radio, (ii) any seminar or meeting whose attendees have been invited by any general solicitation or general advertising, or (iii) any other form of general solicitation or advertising and the purchases were made for investment and not with a view to distribution. Each of the purchasers was, at the time of the purchasers respective purchase, an accredited investor, as that term is defined in Regulation D under the Securities Act of 1933, and had access to sufficient information concerning the registrant and the offering.







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Item 6.  Exhibits.



|     |                                                           |                                                                               | 
|---- | --------------------------------------------------------- | ----------------------------------------------------------------------------- | 
|     | 3.01                                                      | Articles of Incorporation.(1)                                                
|     | 3.02                                                      | Articles of Amendment to Articles of Incorporation filed March 12, 2001. (1) 
|     | 3.03                                                      | Articles of Amendment to Articles of Incorporation filed October 4, 2004. (1)
|     | 3.04                                                      | Articles of Amendment to Articles of Incorporation filed March 31, 2005. (1) 
|     | 3.05                                                      | Articles of Amendment to Articles of Incorporation filed May 9, 2008. (2)    
|     | 3.06                                                      | Articles of Amendment to Articles of Incorporation filed June 28, 2010. (3)  
|     | 3.07                                                      | Articles of Amendment to Articles of Incorporation filed May 6, 2011. (4)    
|     | 3.08                                                      | Bylaws. (1)                                                                  
|31.1 | Rule 13a-14(a)/14d-14(a) Certification of Larry Reid. (5)
|31.2 | Rule 13a-14(a)/14d-14(a) Certification of Larry Reid. (5)
|32.1 | Section 1350 Certification of Larry Reid (5)             

__________________________________

(1)

Filed as an exhibit to the registrants registration statement on Form SB-2 filed with the Securities and Exchange Commission on July 3, 2006 and hereby incorporated by reference.

(2)

Filed as an exhibit to Amendment No. 6 to the registrants registration statement on Form S-1 filed with the Securities and Exchange Commission on May 28, 2008 and hereby incorporated by reference.

(3)

Filed as an exhibit to the registrant's quarterly report on Form 10-Q filed with the Securities and Exchange Commission on February 14, 2011 and hereby incorporated by reference.

(4)

Filed as an exhibit to the registrant's current report on Form 8-K filed with the Securities and Exchange Commission on May 6, 2011 and hereby incorporated by reference.

(5)

Filed herewith.



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SIGNATURES



In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.



|                   |                   |                                                                                                    
|------------------ | ----------------- | ---------------------------------------------------------------------------------------------------
|                   | CLEARTRONIC, INC.
|                   |                  
|                   |                  
|Date: May 12, 2011 | By:               | /s/ Larry Reid                                                                                     
|                   |                   | Larry Reid
Principal Executive Officer and Principal Financial Officer and Chief Accounting Officer











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