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, 2009 COMPARED TO THE THREE MONTHS ENDED
MARCH 31, 2008

The Company's net loss from continuing operations decreased approximately 91% to $53,817 during the three months ended March 31, 2009 as compared to $619,650 for the three months ended March 31, 2008. The primary reasons for this decrease were higher revenues and aggressive reduction of selling and administrative expenses.

Revenues

Revenues increased approximately eleven fold to $682,028 for the three months ended March 31, 2009 as compared to $60,021 for the three months ended March 31, 2008. Approximately 71% of the increase was attributable to the recognition of approximately $486,000 in software sales previously recorded as deferred revenue. The remainder of the increase was primarily due to increased sales of equipment and software. During the fiscal year ended September 30, 2008, the Company entered into a unified communications contract with a customer for which delivery and installation is not yet complete. As a result, the Company has not recognized all of the revenue relating to the contract. As of March 31, 2009 the Company has allocated approximately $376,000 of the software portion of the contract to deferred revenue because delivery of equipment included in the contract with the software had not yet been completed.

Cost of Revenues

Cost of revenues was $446,813 for the three months ended March 31, 2009 as compared to $42,014 for the three months ended March 31, 2008. Due to increased sales of unified communications software and equipment the Company incurred substantial increased costs for both software and equipment. The Company recorded approximately $330,000 in prepaid costs related to recognized deferred revenues during the period.

Operating Expenses

Operating expenses for the three months ended March 31, 2009 were $279,600 compared to $619,650 for the three months ended March 31, 2008, a decrease of approximately 54%. This decrease resulted from less spending on sales and marketing efforts and aggressive cost cutting of salaries, consulting fees and other miscellaneous operating expenses by management. The Company intends to continue to try and reduce operating expenses.

Loss from Continuing Operations

Loss from continuing operations for the three months ended March 31, 2009 was $53,817 compared to a loss of $606,257 for the three months ended March 31, 2008. The decrease in loss from operations in 2009 versus 2008 was due to the Company's increased sales of its products and services and an improvement in gross profit margins from approximately 30% in the three months ended March 31, 2007 to approximately 34% for the three months ended March 31, 2009.

Loss from Discontinued Operations

Loss from discontinued operations was nil for the three months ended March 31, 2009 and $82 for the three months ended March 31, 2008, due to the Company's complete exit from providing VoIP services.

Net Loss Applicable to Common Stock

Net loss applicable to common stock was $53,817 for the three months ended March 31, 2009 compared to a net loss of $606,609 for the three months ended March 31, 2008. Net loss per common share was $0.001 and $0.018 for the three months ended March 31, 2009 and 2008, respectively.

FOR THE SIX MONTHS ENDED MARCH 31, 2009 COMPARED TO THE SIX MONTHS ENDED MARCH
31, 2008

The Company's net loss decreased to $207,607 during the six months ended March 31, 2009 when compared to a loss of $953,053 for the six months ended March 31, 2008. The primary reasons for this decrease were increased revenues, larger gross margins and aggressive cutting of administrative expenses.

Revenues

Revenues from current operations were $1,061,182 for the six months ended March 31, 2009 as compared to $242,589 for the six months ended March 31, 2008. The increase was due to the fact that the Company was seeking to expand its unified communications business. Revenues from discontinued operations were nil for the six months ended March 31, 2009 and 2008 respectively.

Cost of Revenues

Cost of revenues was $679,673 for the six months ended March 31, 2009, as compared to $181,772 for the six months ended March 31, 2008. Due to increased sales of unified communications software and equipment the Company incurred substantial increased costs for both software and equipment. Gross profits were $381,509 and $60,817 for the six months ended March 31, 2009 and 2008 respectively.

Operating Expenses

Operating expenses for the six months ended March 31, 2009 were $576,826 compared to $1,005,806 for the six months ended March 31, 2008. This decrease was primartily a result of aggressive cutting of administrative expenses.

Loss from Operations

Loss from operations for the six months ended March 31, 2009 was $207,607 compared to a loss of $978,188 for the six months ended March 31, 2009. This decrease in loss from operations in 2009 versus 2008 was due primarily to the Company's ability to increase revenue, improve gross margins and cut administrative expenses.

Loss from Discontinued Operations

Loss from discontinued operations was nil or the six months ended March 31, 2009 and $25,153 for the six months ended March 31, 2008, due to the Company's complete exit from providing VoIP services.

Net Loss Applicable to Common Stock

Net loss applicable to common stock was $207,607 for the six months ended March 31, 2009 compared to a net loss of $978,188 for the six months ended March 31, 2008. Net loss per common share was $0.004 and $0.029 for the six months ended March 31, 2009 and 2008, respectively.

LIQUIDITY AND CAPITAL RESOURCES

Net cash used in operating activities was $32,929 for the three months ended March 31, 2009 compared to $398,935 for the three months ended March 31, 2008, due to a decrease in net loss for the period and recognition of $491,775 in deferred revenue.

The Company's net cash from investing activities was $0 for the three months ended March 31, 2009 compared to $9,002 for the three months ended March 31, 2008.

The Company's net cash provided by financing activities was $43,725 for the three months ended March 31, 2009 compared to $370,709 for the three months ended March 31, 2008. The decrease was due to decreased debt and equity financing activity.

The Company's 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.

The Company has incurred losses since its inception, and continues to require additional capital to fund operations and development. As such, the Company's ability to pay its 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.

The Company believes that in order to fund its business plan, it will need approximately $500 thousand in new equity or debt capital. In the past, in addition to revenues and deferred revenues, the Company has obtained funds from the private sale of its debt and equity securities. The Company intends to continue to seek private financing from its existing stockholders and others.

The costs to operate the Company's current business are approximately $65,000 per month. In order for the Company to cover its monthly operating expenses, we would have to generate revenues of approximately $195,000 per month. Accordingly, in the absence of revenues, the Company will need to secure $65,000 in equity or debt capital each month to cover its overhead expenses. In order to remain in business for one year without any revenues the Company would need to secure $780,000 in equity or debt capital. If the Company is unsuccessful in securing sufficient capital or revenues, the Company would have to cease business in approximately 60 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.