In December 2008, holders of a majority of the Company’s outstanding common stock authorized an amendment to the Company’s Articles of Incorporation to authorize 200,000,000 shares of preferred stock $.001 par value on terms and conditions to be determined by the Company’s board of directors.

Common Stock

In October 2008 the Company issued 262,500 shares of common stock to a financial consultant, a related party, for services rendered valued at approximately $7,900.  An officer and shareholder converted $24,000 in accrued salary to 800,000 shares of common stock.

In December 2008 the Company issued 2,000,000 shares of common stock to the financial consultant, a related party, in exchange for services rendered and the cancellation of existing warrants to this financial consultant. The services were valued at approximately $45,000. The Company also extended the expiration date of warrants issued to certain shareholders to December 31, 2012.

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NOTE 6 -

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 $25,223 and $15,950 for the three months ended December 31, 2008 and 2007, respectively.

NOTE 7 -     DISCONTINUED OPERATIONS

In August 2007, the Company sold certain hardware and software to Interactive Media Technologies, Inc. (“IMT”), a related party. The hardware and software was integral to the Company’s ability to provide pre-paid VOIP telecommunication services. As a result of the sale, the Company effectively exited that specific line of business and reported results no longer include any revenues or expenses from VoIP operations.

The Company recognized sales from telecommunications services as services were provided. Services consisted primarily of VoIP telecommunication measured in units of time and therefore the primary criterion for the recognition of revenues was the usage of time by customers.  Cost of revenue included the cost of capacity associated with the revenue recognized within the corresponding time period.

The components of the loss from discontinued operations, net of income taxes, are presented below for the three months ended December 31, 2008 and 2007 respectively.

NOTE 8 -

SUBSEQUENT EVENTS

In January 2008, the Company issued 750,000 shares of its common stock to an outside consultant for services rendered.

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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 DECEMBER 31, 2008 COMPARED TO THE THREE MONTHS ENDED DECEMBER 31, 2007

The Company’s net loss from continuing operations decreased approximately 57% to $157,790 during the three months ended December 31, 2008 as compared to $374,578 for the three months ended December 31, 2007. The primary reasons for this decrease were higher revenues and aggressive reduction of selling and administrative expenses.

Revenues

Revenues increased approximately 107% to $379,154 for the three months ended December 31, 2008 as compared to $182,568 for the three months ended December 31, 2007. The increase was primarily due to increased sales of equipment and software. A portion of the increase was also attributable to the recognition of  approximately $143,000 in software sales previously recorded as deferred revenue. 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 December 31, 2008 the Company has allocated approximately $863,000 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 $232,860 for the three months ended December 31, 2008 as compared to $145,246 for the three months ended December 31, 2007, an increase of approximately 60%. The increase was due to increased sales of unified communications solutions. The Company recognized approximately, $98,000 in prepaid costs related to recognized deferred revenues during the period.

Operating Expenses

Operating expenses for the three months ended December 31, 2008 were $294,030 compared to $398,852 for the three months ended December 31, 2007, a decrease of approximately 26%. This decrease resulted from less spending on sales and marketing efforts and aggressive cost cutting of operating expenses by management. The Company intends to continue to try and reduce operating expenses.

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Loss from Continuing Operations

Loss from continuing operations for the three months ended December 31, 2008 was $153,790 compared to a loss of $364,692 for the three months ended December 31, 2007. The decrease in loss from operations in 2008 versus 2007 was due to the Company’s increased sales of its products and services and an improvement in gross profit margins from approximately 20% in the three months ended December 31, 2007 to approximately 38% for the three months ended December 31, 2008.

Loss from Discontinued Operations

Loss from discontinued operations was $0 for the three months ended December 31, 2008 and $6,886 for the three months ended December 31, 2007, due to the Company’s complete exit from providing VoIP services.

Net Loss Applicable to Common Stock

Net loss applicable to common stock was $153,266 for the three months ended December 31, 2008 compared to a net loss of $364,692 for the three months ended December 31, 2007. Net loss per common share was $0.003 and $0.012 for the three months ended December 31, 2008 and 2007, respectively.

LIQUIDITY AND CAPITAL RESOURCES

Net cash used in operating activities was $17,483 for the three months ended December 31, 2008 compared to $378,246 for the three months ended December 31, 2007, due to a decrease in net loss for the period and recognition of $130,619 in deferred revenue.

The Company’s net cash from investing activities was $1,845 for the three months ended December 31, 2008 compared to $19,692 net cash used in investing activities for the three months ended December 31, 2007. The decrease in cash provided is due to less proceeds from the sale of assets from discontinued operations in 2008 as compared to 2007.

The Company’s net cash provided by financing activities was $5,525 for the three months ended December 31, 2008 compared to $226,786 for the three months ended December 31, 2007. 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.

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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 $1 million 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 $80,000 per month. In order for the Company to cover its monthly operating expenses, we would have to generate revenues of approximately $230,000 per month. Accordingly, in the absence of revenues, the Company will need to secure $80,000 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 $960,000 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.

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Item 3. Quantitative and Qualitative Disclosures About Market Risk.

Not applicable.

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 December 31, 2008. 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.

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PART II - OTHER INFORMATION

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

In October 2008 the registrant issued 262,500 shares of common stock to a financial consultant for services rendered valued at approximately $7,900 and an officer and shareholder converted $24,000 in accrued salary to 800,000 shares of common stock.

In December 2008 the registrant issued 2,000,000 shares of common stock to the financial consultant for services rendered and the cancellation of previously issued warrants for the purchase of an aggregate of 242,500 shares of the registrant’s common stock. The weighted average exercise price of the warrants was $0.20 per share and the warrants would have expired on dates ranging from December 31, 2010 to December 31, 2013. The services were valued at approximately $45,000.

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.

Item 4. Submission of Matters to a Vote of Security Holders.

 On December 18, 2008, the holders of a then majority of the Company’s outstanding common stock consented in writing to an amendment to its Articles of Incorporation to change its authorized capitalization to 750,000,000 shares of common stock, $.001 par value and 200,000,000 shares of preferred stock, $.001 par value. Before the issuance of any preferred stock, the Company’s Board of Directors will determine the preferences, limitations, and relative rights of the preferred stock or one or more series within the preferred stock. The amendment was previously approved by the Company’s Board of Directors.

The Company has not yet amended its Articles of Incorporation to reflect such authorized capitalization although it intends to do so shortly.

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Item 6.  Exhibits.

__________________________________

(1)

Filed as an exhibit to the registrant’s registration statement on Form SB-2 and hereby incorporated by reference.

(2)

Filed as an exhibit to Amendment No. 6 to the registrant’s registration statement on Form S-1 and hereby incorporated by reference.

(3)

Filed herewith.

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.

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