What changed in this filing

/stocks — the workspaceLOADING

Item 1. Business

2022-01-21 compared with 2021-01-05 · 191 added, 168 removed, 18 unchanged (95% of the section changed)

1 unchanged sentence

multi-industry technology company.

The Company has expanded in a wide range of sectors, including smart technologies, virtual

and augmented realities, industrial solutions, and intelligent security systems.

Unless the context requires otherwise, all references

to “we”, “our”, “us”, “Company”, “registrant”, “Cemtrex”

or “management”

The Company has expanded in a wide range of sectors, including smart technologies, virtual and augmented

realities, industrial solutions, and intelligent security systems.

Unless the context requires otherwise, all references to “we”,

“our”, “us”, “Company”, “registrant”, “Cemtrex” or “management”

refer to Cemtrex, Inc.

and its subsidiaries.

Company continuously assesses the composition of its portfolio businesses to ensure it is aligned with its strategic objectives

and positioned to maximize growth and return in the coming years.

During fiscal 2018, the Company made a strategic decision to

exit its Electronics Manufacturing group by selling all companies in that business segment on August 15, 2019.

Accordingly, the

Company has reported the results of the Electronics Manufacturing business as discontinued operations in the Consolidated Statements

of Operations and in the Consolidated Balance Sheets.

These changes have been applied for all periods presented.

During fiscal

2019, the Company also reached a strategic decision to exit the environmental products business, which was part of the Industrial

Services Segment.

Accordingly, the Company has reported the results of the environmental control products business as discontinued

operations in the Consolidated Statements of Operations and in the Consolidated Balance Sheets.

the Company has two business segments, consisting of (i) Advanced Technologies (AT) and (ii) Industrial Services (IS).

The Company continuously assesses the composition of its portfolio businesses to ensure it is aligned with its strategic objectives and

positioned to maximize growth and return in the coming years.

During fiscal 2019, the Company reached a strategic decision to exit

the environmental products business, which was part of the Industrial Services Segment.

Accordingly, the Company has reported the results

of the environmental control products business as discontinued operations in the Consolidated Statements of Operations and in the Consolidated

Balance Sheets.

Company presently has two business segments,

consisting of (i) Advanced Technologies (AT) and (ii) Industrial Services (IS).

Technologies (AT)

Cemtrex’s

Advanced Technologies segment delivers cutting-edge technologies in the Internet of Things (IoT) and Smart Devices, such as the

Through the Company’s advanced engineering and product design, the Company delivers Virtual Reality (VR) and

Augmented Reality (AR) solutions that provide higher productivity, progressive design and impactful experiences for consumer products,

and various commercial and industrial applications.

The Company is in the process of developing virtual reality applications for

commercialization over the next couple years.

AT business segment also includes the Company’s majority owned subsidiary, Vicon Industries, which provides end-to-end security

solutions to meet the toughest corporate, industrial and governmental security challenges.

Vicon’s products include browser-based

video monitoring systems and analytics-based recognition systems, cameras, servers, and access control systems for every

aspect of security and surveillance in industrial and commercial facilities, federal prisons, hospitals, universities, schools,

and federal and state government offices.

Vicon provides cutting edge, mission critical security and video surveillance solutions

utilizing Artificial Intelligence (AI) based data algorithms.

Advanced Technologies segment operates several brands that deliver cutting-edge software and hardware technologies:

Industries – Vicon Industries, a majority owned subsidiary, provides end-to-end video security solutions to meet the toughest

corporate, industrial and governmental security challenges.

Vicon’s products include browser-based video monitoring systems

and analytics-based recognition systems, cameras, servers, and access control systems for every aspect of security and surveillance

in industrial and commercial facilities, federal prisons, hospitals, universities, schools, and federal and state government offices.

Vicon provides cutting edge, mission critical security and video surveillance solutions utilizing Artificial Intelligence (AI) based

data algorithms.

– SmartDesk is focused on reinventing the workspace through developing state-of-the-art, modern, fully integrated, workplace

XR (“CXR”) – CXR is focused on realizing the potential of the metaverse.

CXR delivers Virtual Reality (VR)

and Augmented Reality (AR) solutions that provide higher productivity, progressive design and impactful experiences for consumer

products, and various commercial and industrial applications.

The Company is in the process of developing virtual reality applications

for commercialization in the metaverse over the next couple years.

CXR also invests in emerging startups focused on building best

in class solutions for the metaverse.

Driver Interactive (“VDI”) – VDI provides innovative driver training simulation solutions for effective and

engaging learning for all ages and skills.

Strong – Bravo Strong is a gaming and content studio working to building games and experiences for the metaverse.

tech (formerly Cemtrex Labs) – good tech provides mobile, web, and enterprise software application development services

for startups to large enterprises.

Services (IS)

Cemtrex’s

IS segment, offers single-source expertise and services for rigging, millwrighting, in plant maintenance, equipment erection,

relocation, and disassembly to diversified customers.

We install high precision equipment in a wide variety of industrial markets

like automotive, printing & graphics, industrial automation, packaging, and chemicals among others.

We are a leading provider

of reliability-driven maintenance and contracting solutions for the machinery, packaging, printing, chemical, and other manufacturing

The focus is on customers seeking to achieve greater asset utilization and reliability to cut costs and increase production

from existing assets, including small projects, sustaining capital, turnarounds, maintenance, specialty welding services, and

high-quality scaffolding.

IS segment operates through a brand, Advanced Industrial Services (“AIS”), that, offers single-source expertise and services

for rigging, millwrighting, in plant maintenance, equipment erection, relocation, and disassembly to diversified customers.

high precision equipment in a wide variety of industrial markets like automotive, printing & graphics, industrial automation, packaging,

and chemicals among others.

We are a leading provider of reliability-driven maintenance and contracting solutions for the machinery,

packaging, printing, chemical, and other manufacturing markets.

The focus is on customers seeking to achieve greater asset utilization

and reliability to cut costs and increase production from existing assets, including small projects, sustaining capital, turnarounds,

maintenance, specialty welding services, and high-quality scaffolding.

Impacts of COVID-19 on our Business

current COVID-19 pandemic has impacted our business operations and the results of our operations in this fiscal year, primarily

with delays in expected orders by many customers and new product development, including newer versions of surveillance software

since our technical facility in Pune, India has been under lock down.

current COVID-19 pandemic has impacted our business operations and the results of our operations in this fiscal year, primarily with

delays in expected orders by many customers and new product development, including newer versions of surveillance software since our

technical facility in Pune, India has been under lock down on multiple occasions.

Overall bookings level in the IS segment of our business

is down by more than 20%, however our AT segment has experienced relatively less slow down.

In addition, due to delays in certain

supply chain areas, the expected launch times of our new products and new versions has resulted in delays of several months.

were down by more than 20%, however our AT segment has experienced relatively less slow down.

In addition, due to delays in certain supply

chain areas, the expected launch times of our new products and new versions has resulted in delays of several months.

broader implications of COVID-19 on our results from operations going forward remains uncertain.

The COVID-19 pandemic has the

potential to cause adverse effects to our customers, suppliers or business partners in locations that have or will experience

more pronounced disruptions, which could result in a reduction to future revenue and manufacturing output as well as delays in

our new product development activities.

However, on the other hand, opportunities in the video surveillance field have been growing

for Vicon products.

extent of the pandemic’s effect on our operational and financial performance will depend in large part on future developments,

The COVID-19 pandemic has the potential

to cause adverse effects to our customers, suppliers or business partners in locations that have or will experience more pronounced disruptions,

which could result in a reduction to future revenue and manufacturing output as well as delays in our new product development activities.

However, on the other hand, opportunities in the video surveillance field have been growing for Vicon products.

extent of the pandemics effect on our operational and financial performance will depend in large part on future developments,

which cannot be reasonably estimated at this time.

Future developments include the duration, scope and severity of the pandemic,

the actions taken to contain or mitigate its impact both within and outside the jurisdictions where we operate, the impact on

governmental programs and budgets, the development of treatments or vaccines, and the resumption of widespread economic activity.

Due to the inherent uncertainty of the unprecedented and rapidly evolving situation, we are unable to predict with any confidence

the likely impact of the COVID-19 pandemic on our future operations.

intend to continue utilizing our resource capabilities to deliver exceptional value for our customers, shareholders, and employees.

Our focus is to grow in markets where we see significant long-term opportunity to create an attractive return on shareholder equity.

We leverage our engineering, manufacturing expertise and strong customer relationships to develop new cutting-edge technologies

and advanced products that solve technological challenges faced by our customers.

We thoroughly analyze new product opportunities

by considering projected demand for the product or service, and expected operating costs, and then only pursue those opportunities

which we believe will contribute to earnings growth in the future.

In addition, we believe our senior management team has substantial

business and technical experience to enable us to pursue our business strategies.

Company believes its ability to attract and retain new customers comes from their ongoing commitment to understanding its customers’

business performance requirements and our expertise in meeting or exceeding these requirements and enhancing their competitive

edge through cutting edge technology.

We work closely with our customers from an operational and senior executive level to achieve

a deep understanding of our customer’s goals, challenges, strategies, operations, and products to ultimately provide the

best solutions for them.

continue to seek and execute additional strategic acquisitions and focus on expanding our products and services as well as entering

into new markets.

We believe that the diversity of our products & services and our ability to deliver full solutions to a

variety of end markets provides us with multiple sources of stable growth and a competitive advantage relative to other players

in the industry.

We constantly look for opportunities to gain new customers and penetrate geographic locations and end markets

or acquire new product or service opportunities through acquisitions that are operationally and financially beneficial for the

However, there can be no assurance that we will succeed in our strategies.

Future developments include the duration, scope and severity of the pandemic, the

emergence of new virus variants that are more contagious or harmful than prior variants, the actions taken to contain or mitigate its

impact both within and outside the jurisdictions where we operate, the impact on governmental programs and budgets, the development of

treatments or vaccines, and the resumption of widespread economic activity.

Due to the inherent uncertainty of the unprecedented and

rapidly evolving situation, we are unable to predict with any confidence the likely impact of the COVID-19 pandemic on our future operations.

of Virtual Driver Interactive

October 26, 2020, the company acquired Virtual Driver Interactive (“VDI”), a California based provider of innovative driver

training simulation solutions for a purchase price of $1,339,774 plus contingent consideration of $175,429.

over 10 years, VDI has been known for its effective and engaging driver training systems, designed for users of all ages and skill levels.

The Company offers comprehensive training for new teen and novice drivers, along with advanced training for corporate fleets and truck

VDI’s wide range of training courses and system options provide customers with highly portable, affordable and effective

solutions, all while focusing on the dangers of distracted driving.

Results for VDI will be reported under the AT segment.

Company paid $900,000 in cash and issued a Note payable in the amount of $439,774.

This note carries interest of 5% and is payable in

two installments of $239,774 plus accumulated interest on October 26, 2021, which was made, and $200,000 plus accumulated interest

due on October 26, 2022.

Additionally, the Company paid contingent consideration of $175,429 in May 2021.

There is no further

contingent consideration specified in the purchase agreement.

The Company has accounted for this acquisition as a business combination

and has allocated the purchase price as follows, $876,820 to proprietary software, $39,992 to inventory, and $598,391 to goodwill.

November 13, 2020, Cemtrex made a $500,000 investment via a simple agreement for future equity(“SAFE”) in MasterpieceVR.

The SAFE provides that the Company will automatically receive shares of the entity based on the conversion rate of future equity rounds

up to a valuation cap, as defined.

MasterpieceVR is a software company that is developing software for content creation using virtual

The investment is included in other assets in the accompanying balance sheet and the Company accounts for this investment and

recorded at cost.

No impairment has been recorded for the year ended September 30, 2021.

focus is to utilize our resources and capabilities to build brands and businesses in areas where we see unique opportunities to create

exceptional value for our customers, shareholders, and employees over the long term.

We aim to grow in markets where we see

significant long-term opportunity to create an attractive return on shareholder equity.

Generally, these markets are high growth markets

that are changing due to innovation, new technologies, or other industry shifts taking place.

In these markets we seek to build or acquire

businesses that have attractive gross margins, strong opportunities for customer retention, and are asset light.

We take a long term

approach with our strategies and seek returns over five years or longer time horizons.

believe our ability to attract and retain

new customers comes from our ongoing commitment to understanding our customers’ business performance requirements

and our expertise in meeting or exceeding these requirements and enhancing their competitive advantage through cutting edge technology.

We work closely with our customers from an operational and senior executive level to achieve a deep understanding of our customer’s

goals, challenges, strategies, operations, and products to ultimately provide the best solutions for them.

continue to seek and execute additional strategic acquisitions and focus on expanding our products and services as well as entering into

We believe that the diversity of our products & services and our ability to deliver full solutions to a variety of end

markets provides us with multiple sources of income and growth and a competitive advantage relative to other players in the industry.

We constantly look for opportunities to gain new customers and penetrate geographic locations and end markets or acquire new product

or service opportunities through acquisitions that are operationally and financially beneficial for the Company.

Company is not dependent on, nor expects to become dependent on, any one or a limited number of suppliers.

The Company buys

parts and components to assemble and manufacture its equipment and products.

The Company also utilizes sub-suppliers and

third-party vendors to procure from or fabricate its components based on its design, engineering and specifications.

Company also enters into subcontracts for field installation, which the Company supervises;

and the Company manages all

technical, physical and commercial aspects of the performance of the Company contracts.

To date, the Company has not

experienced major difficulties either in obtaining fabricated components and other materials and parts or in obtaining

qualified subcontractors for installation work, however, there have been some delays in certain components due to

The Company seeks to have many sources of supply for each of its major requirements in order to avoid

significant dependence on any one or a few suppliers.

However, the supply of materials or other items could be disrupted by

natural disasters, international trade tariffs, wars, pandemics, disputes and or other events.

Despite market price

volatility for certain requirements and materials pricing pressures at some of our businesses, the raw materials and various

purchased components needed for the Company’s products have generally been available in sufficient

The Company buys parts and

components to assemble and manufacture its equipment and products.

The Company also utilizes sub-suppliers and third-party vendors to

procure from or fabricate its components based on its design, engineering and specifications.

The Company also enters into subcontracts

for field installation, which the Company supervises;

and the Company manages all technical, physical and commercial aspects of the performance

of the Company contracts.

To date, the Company has not experienced major difficulties either in obtaining fabricated components and other

materials and parts or in obtaining qualified subcontractors for installation work, however, there have been some delays in certain components

due to COVID-19.

The Company seeks to have many sources of supply for each of its major requirements to avoid significant dependence

on any one or a few suppliers.

However, the supply of materials or other items could be disrupted by natural disasters, international

trade tariffs, wars, pandemics, disputes and or other events.

Despite market price volatility for certain requirements and materials

pricing pressures at some of our businesses, the raw materials and various purchased components needed for the Company’s products

have generally been available in sufficient quantities.

In some instances, lead times have extended beyond normal due to logistic delays

and labor shortages occurring globally.

Company faces substantial competition in each of its products & services and principal markets.

Most of its competitors are

larger and have greater financial resources than the Company;

Most of its competitors are larger

and have greater financial resources than the Company;

several are divisions of multi-national companies.

The Company competes

on the basis of price, engineering and technological expertise, know-how and the quality of its products, systems and services.

Additionally, the Company’s management believes that the successful delivery, installation and performance of the Company’s

products and systems is a key factor in gaining business as customers typically prefer to make significant purchases from a company

with a solid performance history.

The Company competes on the

basis of price, engineering and technological expertise, know-how and the quality of its products, systems and services.

Additionally,

the Company’s management believes that the successful delivery, installation and performance of the Company’s products and

systems is a key factor in gaining business as customers typically prefer to make significant purchases from a company with a solid performance

Company obtains virtually all its contracts through competitive bidding.

Although price is an important factor and may in some

cases be the governing factor, it is not always determinative, and contracts are often awarded on the basis of the efficiency

or reliability of products, past performance records, and the engineering and technical expertise of the bidder.

Several companies

market products that compete directly with Company’s products.

Other companies offer products that potential customers may

consider to be acceptable alternatives to Company’s products and services.

The Company faces direct competition from companies

with far greater financial, technological, manufacturing and personnel resources.

Although price is an important factor and may in some cases

be the governing factor, it is not always determinative, and contracts are often awarded on the basis of the efficiency or reliability

of products, past performance records, and the engineering and technical expertise of the bidder.

Several companies market products that

compete directly with Company’s products.

Other companies offer products that potential customers may consider to be acceptable

alternatives to Company’s products and services.

The Company faces direct competition from companies with far greater financial,

technological, manufacturing and personnel resources.

the years, the Company has developed proprietary technologies that give it an edge in competing with its competitors.

Company relies on a combination of trade secrets and know-how to protect its intellectual property.

The Company currently has

multiple patents and patent claims that it owns.

Additionally, the Company has multiple patent applications pending related

to the development of SmartDesk and will pursue those patents based upon its financial resources.

Cemtrex continues to invest

in research and development with intention of developing proprietary technology and intellectual property as allowed by its financial

Company sells its products globally and relies on direct sales force, manufacturing representatives, distributors, integrators

and installers, commission sales agents, magazine advertisements, internet advertising, trade shows, trade directories and catalogue

listings to market its products and services.

The Company uses independent manufacturing representatives in the United States

and throughout the world, backed by its sales management and technical professionals.

The Company’s arrangements with independent

sales representatives accord each a defined territory within which to sell some or all of its products and systems, provide for

the payment of agreed-upon sales commissions or wholesale pricing and are terminable at will.

The Company’s sales representatives

do not have authority to execute contracts on the Company’s behalf.

Company’s sales representatives also serve as ongoing liaison function between the Company and its customers during

the installation phase of the products and systems and address customers’

questions or concerns arising thereafter.

Company selects representatives based upon industry reputation, prior sales performance including number of prospective leads

generated and sales closure rates, and the breadth of territorial coverage, among other criteria.

Thus, the Company

relies on a combination of trade secrets and know-how to protect its intellectual property.

The Company currently has multiple patents

and patent claims that it owns.

Additionally, the Company has multiple patent applications pending related to the development of SmartDesk

and will pursue those patents based upon its financial resources.

Cemtrex continues to invest in research and development with intention

of developing proprietary technology and intellectual property as allowed by its financial resources.

AND MARKETING

Company sells its products globally and depending on the brand, relies on direct sales force, manufacturing representatives, distributors,

integrators and installers, commission sales agents, magazine advertisements, internet advertising, trade shows, trade directories and

catalogue listings, e-commerce, to market its products and services.

The Company’s arrangements with sales representatives accord

each a defined territory or market within which to sell some or all of its products and systems, provide for the payment of agreed-upon

sales commissions or wholesale pricing and are terminable at will.

The Company’s sales representatives do not have authority to

execute contracts on the Company’s behalf.

Company’s sales representatives also serve as ongoing liaison function between the Company and its customers during the installation

phase of the products and systems and address customers’ questions or concerns arising thereafter.

The Company selects representatives

based upon industry reputation, prior sales performance including number of prospective leads generated and sales closure rates, and

the breadth of territorial coverage, among other criteria.

inquiries received from potential customers are referred to the engineering personnel.

Thereafter, the Company’s sales and

engineering personnel jointly prepare a budget proposal, or a final bid.

The period between initial customer contact and issuance

of an order is generally between two and twelve months.

Thereafter, the Company’s sales and engineering

personnel jointly prepare a budget proposal, or a final bid.

The period between initial customer contact and issuance of an order is

generally between two and twelve months.

Company has been selling its SmartDesk directly from its website whereby customers can place orders and make payments.

The Company has been marketing SmartDesk through direct to consumer internet channels, including social media sites

such as Facebook and Instagram as well as showcasing the product at several trade shows.

The Company plans to continue its marketing

efforts for the SmartDesk by marketing the product to enterprise clients and increase its overall marketing and sales efforts

in online media.

Company’s principal customers in its AT segment are generally consumers, government agencies or commercial businesses.

Company’s principal customers in its IS segment include businesses engaged in manufacturing, chemical, packaging, printing,

electronics, automotive, construction, and metallurgical processing.

Historically, most of the customers have purchased individual

products or systems which, in many instances, operate in conjunction with products and systems supplied by others.

No one single

customer accounts for more than 10% of its annual sales.

The Company has

been marketing SmartDesk through direct-to-consumer internet channels, including social media sites such as Facebook and Instagram as

well as showcasing the product at several trade shows.

The Company plans to continue its marketing efforts for the SmartDesk by marketing

the product to enterprise clients and increase its overall marketing and sales efforts in online media.

Company’s principal customers in its AT segment are generally consumers, government agencies or commercial businesses.

The Company’s

principal customers in its IS segment include businesses engaged in manufacturing, chemical, packaging, printing, electronics, automotive,

construction, and metallurgical processing.

Historically, most of the customers have purchased individual products or systems which,

in many instances, operate in conjunction with products and systems supplied by others.

No one single customer accounts for more than

10% of its annual sales.

the AT segment, the Company is responsible for the design, production, supply, and delivery of products to its customers.

to satisfy customer orders, the Company must consistently meet production deadlines and maintain a high standard of quality.

Company currently maintains different types of insurance, including general liability and property coverage.

The Company also

maintains product liability insurance with respect to its products and equipment.

Management believes that the insurance coverage

that it has is adequate for its current business needs.

Company employs approximately 284 full-time employees and approximately 10 part-time employees as of December 30, 2020,

including 101 engaged in engineering, 101 in manufacturing & field service and 92 in administrative, sales and marketing functions.

Company’s operations are subject to certain foreign, federal, state and local regulatory requirements relating to, among

others, environmental, waste management, labor and health and safety matters.

Management believes that the Company’s business

is operated in material compliance with all such regulations.

satisfy customer orders, the Company must consistently meet production deadlines and maintain a high standard of quality.

Company currently maintains different types of insurance, including general property coverage, and directors & officers’ insurance.

The Company also maintains product liability insurance with respect to its products and equipment.

Management believes that the insurance

coverage that it has is adequate for its current business needs.

Company employs approximately 344 full-time employees and approximately 35 part-time employees as of January 6, 2022, including

172 engaged in engineering, 96 in manufacturing & field service and 110 in administrative, sales and marketing functions.

Company’s operations are subject to certain foreign, federal, state and local regulatory requirements relating to, among others,

environmental, waste management, labor and health and safety matters.

Management believes that the Company’s business is operated

in material compliance with all such regulations.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business