What changed in this filing

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Item 9A. Controls and Procedures

2022-01-21 compared with 2021-01-05 · 1497 added, 1537 removed, 401 unchanged (88% of the section changed)

1 unchanged sentence

Controls and Procedures

maintain “disclosure controls and procedures,”

as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange

Act of 1934, as amended (the “Exchange Act”), that are designed to ensure that information required to be disclosed

by us in reports we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods

specified in the Commission’s rules and forms, and that such information is accumulated and communicated to our management,

including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding

required disclosure.

In designing and evaluating our disclosure controls and procedures, management recognized that disclosure

controls and procedures, no matter how well conceived and operated, can provide only reasonable assurance of achieving the desired

control objectives, and we necessarily are required to apply our judgment in evaluating the cost-benefit relationship of possible

disclosure controls and procedures.

management, including our principal executive officer and principal financial officer, evaluated the effectiveness of the design

and operation of our disclosure controls and procedures as of September 30, 2020, and concluded that the disclosure controls

and procedures were not effective, because certain deficiencies involving internal controls constituted material weaknesses as

discussed below.

The material weaknesses identified did not result in the restatement of any previously reported financial statements

or any other related financial disclosure, nor does management believe that it had any effect on the accuracy of our financial

statements for the current reporting period.

Management’s

maintain “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange

Act of 1934, as amended (the “Exchange Act”), that are designed to ensure that information required to be disclosed by us

in reports we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified

in the Commission’s rules and forms, and that such information is accumulated and communicated to our management, including our

principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.

In designing and evaluating our disclosure controls and procedures, management recognized that disclosure controls and procedures, no

matter how well conceived and operated, can provide only reasonable assurance of achieving the desired control objectives, and we necessarily

are required to apply our judgment in evaluating the cost-benefit relationship of possible disclosure controls and procedures.

Our management,

including our principal executive officer and principal accounting officer, conducted an evaluation of the effectiveness of our internal

control over financial reporting using the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission

(“COSO”) in Internal Control—Integrated Framework (2013).

Based on its evaluation, our management concluded that as

of September 30, 2021, there are material weaknesses in our internal control over financial reporting.

The material weaknesses relates

to the Company lacking sufficient, qualified, accounting personnel and the associated sufficient processes and systems.

of qualified accounting personal resulted in the Company lacking entity level controls around the review of period-end reporting processes,

accounting policies and public disclosures.

Additionally, the Company’s current processes and systems do not provide for necessary,

timely reconciliation of certain accounts and sufficient consideration regarding recoverability of certain assets.

These deficiencies

are common in small companies, similar to us, with limited personnel.

Annual Report on Internal Control Over Financial Reporting

management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is

defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act.

Our internal control system was designed to provide reasonable assurance

regarding the reliability of financial reporting and the preparation of financial statements for external purposes, in accordance

Because of inherent limitations, a system of internal control over financial reporting may not prevent or detect misstatements.

Additionally, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become

inadequate due to change in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined

in Rules 13a-15(f) and 15d-15(f) of the Exchange Act.

Our internal control system was designed to provide reasonable assurance regarding

the reliability of financial reporting and the preparation of financial statements for external purposes, in accordance with GAAP.

of inherent limitations, a system of internal control over financial reporting may not prevent or detect misstatements.

Additionally,

projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate due to change

in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

management, including our principal executive officer and principal accounting officer, conducted an evaluation of the effectiveness

of our internal control over financial reporting using the criteria set forth by the Committee of Sponsoring Organizations of

the Treadway Commission (“COSO”) in Internal Control—Integrated Framework (2013).

Based on its evaluation, our

management concluded that as of September 30, 2020 there is a material weakness in our internal control over financial reporting.

The material weakness relates to the Company lacking sufficient, qualified, accounting personnel.

The shortage of qualified accounting

personal resulted in the Company lacking entity level controls around the review of period-end reporting processes, accounting

policies and public disclosures.

This deficiency is common in small companies, similar to us, with limited personnel.

order to mitigate the material weakness, the Board of Directors has assigned a priority to the short-term and long-term improvement

of our internal control over financial reporting.

Our Board of Directors will work with management to continuously review controls

and procedures to identified deficiencies and implement remediation within our internal controls over financial reporting and

our disclosure controls and procedures.

annual report does not include an attestation report of the Company’s registered public accounting firm regarding internal

control over financial reporting.

Management’s report was not subject to attestation by the Company’s registered public

accounting firm pursuant to Commission rules that permit the Company to provide only management’s report in this annual

report shall not be deemed to be filed for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities

of that section, and is not incorporated by reference into any filing of the Company, whether made before or after the date hereof,

regardless of any general incorporation language in such filing.

of our internal control over financial reporting using the criteria set forth by the Committee of Sponsoring Organizations of the Treadway

Commission (“COSO”) in Internal Control—Integrated Framework (2013).

Based on its evaluation, our management concluded

that as of September 30, 2021, there is a material weakness in our internal control over financial reporting.

The material weakness relates

to the Company lacking sufficient, qualified, accounting personnel.

The shortage of qualified accounting personal resulted in the Company

lacking entity level controls around the review of period-end reporting processes, accounting policies and public disclosures.

This deficiency

is common in small companies, similar to us, with limited personnel.

order to mitigate the material weakness, the Board of Directors has assigned a priority to the short-term and long-term improvement of

our internal control over financial reporting.

Our Board of Directors will work with management to continuously review controls and procedures

to identified deficiencies and implement remediation within our internal controls over financial reporting and our disclosure controls

and procedures.

annual report does not include an attestation report of the Company’s registered public accounting firm regarding internal control

over financial reporting.

Management’s report was not subject to attestation by the Company’s registered public accounting

firm pursuant to Commission rules that permit the Company to provide only management’s report in this annual report.

report shall not be deemed to be filed for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities of that

section, and is not incorporated by reference into any filing of the Company, whether made before or after the date hereof, regardless

of any general incorporation language in such filing.

in Internal Control Over Financial Reporting

3 unchanged sentences

DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

of the date of this Annual Report, the members of our Board of Directors and Executive Officers are:

Name and Address

Positions and Offices

Chairman of the Board of Directors, President,

276 Greenpoint Avenue, Suite 208

Chief Executive Officer, & Director

Brooklyn, NY 11222

Priscilla Popov

Chief Financial Officer

276 Greenpoint Avenue, Suite 208

Brooklyn, NY 11222

Raju Panjwani

276 Greenpoint Avenue, Suite 208

Brooklyn, NY 11222

276 Greenpoint Avenue, Suite 208

Brooklyn, NY 11222

Metodi Filipov

276 Greenpoint Avenue, Suite 208

Brooklyn, NY 11222

Occupations and Business Experience of Directors and Executive Officers

following is a brief account of the business experience of the Company’s directors:

Govil is the Company’s Chairman since June 2014, and the Chief Executive Officer and President since December 2011.

been working at Cemtrex since 2008, initially as a field engineer, subsequently moving into sales and management roles as Vice

President of Operations.

Saagar was recently recognized as a Forbes’

30 Under 30 in 2016, Business Insiders #17 on Top 100

of Silicon Alley in 2015, and Top 40 Under 40 by Stony Brook University in 2014.

Saagar Govil has a B.E.

in Materials Engineering

from Stony Brook University, N.Y.

and studied business at Harvard Business School.

Govil’s experience and deep understanding

of the operations of the Company allow him to make valuable contributions to the Board.

Popov has been appointed Cemtrex’s Chief Financial Officer on September 30, 2020, where she is responsible for the Company’s

financial planning, accounting, tax, and business process functions.

Priscilla has over 20 years of extensive knowledge in Accounting,

Finance, Administration, and Operations.

During her career, she held numerous executive-level positions with increasing responsibilities

and has directed highly skilled financial management teams to support and achieve overall corporate goals and objectives.

has proven track record in financial management, evaluating financial management systems and implementing process improvements,

and driving efficiency.

Priscilla joined the Company in 2020 and prior to joining Cemtrex, she held senior accounting positions

at Videri, Bulgari, and Sotheby’s.

Priscilla holds a B.S.

in Accounting from Brooklyn College and an MBA in Administration,

Finance from New York Institute of Technology.

Panjwani was appointed to the Board on April 22, 2015.

He is an accomplished executive with over 35 years of experience, including

20 years on Wall Street, and 20 years as an entrepreneur and business builder.

Raju was a Managing Director with Morgan Stanley,

where he spent 18 years in several senior roles in risk management, audit, strategy and being the Chief Operating Officer and

Country Head for the Firm’s India office.

Since leaving Morgan Stanley in 2005, Mr.

Panjwani has considerable experience

in emerging Asian markets, with a reputation built on focused execution, high integrity and strong relationships.

He has worked

with many companies in the United States and India and negotiated complex joint ventures, mergers & acquisitions, and capital

raises, particularly within the technology sector.

Panjwani is a CPA in New York State and spent several years with Price

Waterhouse and other accounting firms prior to joining Morgan Stanley.

Panjwani’s accounting background and extensive

knowledge of finance and commerce allow him to make valuable contributions to the Board.

Verma was appointed as a director of the Company on December 2, 2019 and is the Audit Committee chairman.

Verma has over 21

years of diversified IT and software development experience and is Chief Operating Officer of a privately held Seva Technologies

Inc., an Information Technology consulting firm since 2009.

Verma has BS in Computer science and has extensive and diversified

management and financial operations experience in a variety of technology industries.

Filipov was appointed to the Board on February 9, 2018 and is an entrepreneur and technology executive with over 25 years of experience

creating, operating and driving growth for technology companies.

He has a proven track record of identifying business opportunities

and building compelling products.

Metodi was formerly VP of Operations at Cemtrex from 2008 to 2010.

After Cemtrex, Mr.

served as Managing Director of Bianor, a mobile consulting company providing solutions for enterprise clients.

There, he led the

development and implementation of innovative mobile products in industries including aviation, pharmaceutical and entertainment.

Metodi co-founded Flipps Media, an OTT video distribution platform positioned to be an alternative to traditional cable pay-per-view

Before Bianor, he served as product lead for Raritan, a data center technology organization, where he was an integral

part of the transition team that led the company to becoming a global IT service management solutions provider.

Prior to joining

Filipov served as VP of Operations at ISS, a security products company.

There, he successfully managed product development

and contract manufacturing across continents.

Filipov has extensive experience delivering superior solutions with a focus

on optimized efficiency and productivity.

of our directors or officers is a director in any other reporting companies.

None of our directors or officers has been affiliated

with any company that has filed for bankruptcy within the last ten years.

The Company is not aware of any proceedings to which

any of the Company’s officers or directors, or any associate of any such officer or director, is a party adverse to the

Company or any of the Company’s subsidiaries or has a material interest adverse to it or any of its subsidiaries.

director of the Company serves for a term of one year or until the successor is elected at the Company’s annual shareholders’

meeting and is qualified, subject to removal by the Company’s shareholders.

Each officer serves, at the pleasure of the

board of directors, for a term of one year and until the successor is elected at the annual meeting of the board of directors

and is qualified.

of the Board of Directors

the fiscal year ended September 30, 2020 (“Fiscal 2020”), the Board of Directors held four meetings.

No Director attended

less than 75% of the aggregate of the total number of meetings of the Board of Directors.

Board of Directors currently has one standing committee:

The Audit Committee.

a “Controlled Company”

as such term is defined under NASDAQ Listing Rule 5615, the Company is not required to have

a Compensation Committee.

Audit Committee, which has been established in accordance with requirements of Section 3(a)(58)(A) of the Exchange Act, is comprised

of the following independent directors:

Sunny Verma (Chair), Raju Panjwani and Metodi Filipov.

The Board of Directors has determined

that each member of the Audit Committee:

(i) is independent, (ii) meets the financial literacy requirements of the Nasdaq Rules,

and (iii) meets the enhanced independence standards established by the SEC.

In addition, the Board has determined that Mr.

qualifies as an “audit committee financial expert”

as that term is defined in Item 407(d)(5)(ii) of Regulation S-K

promulgated under the Exchange Act by the SEC.

Audit Committee is primarily concerned with the integrity of our financial statements, the independence, qualifications and performance

of our independent registered public accounting firm, and our compliance with legal requirements.

The Audit Committee operates

under a written charter approved by the Board of Directors and the Audit Committee that reflects standards and requirements adopted

by the SEC and NASDAQ.

indicated in its charter, the Audit Committee’s duties include selecting and engaging our independent registered public

accounting firm;

reviewing the scope of the audit to be conducted by our independent registered public accounting firm;

our independent registered public accounting firm and reviewing the results of its audit;

reviewing our financial reporting processes,

including the accounting principles and practices followed and the financial information provided to shareholders and others;

overseeing our internal control over financial reporting and disclosure controls and procedures;

and serving as our legal compliance

Company does not currently have a standing nominating committee or a formal nominating committee charter.

As a “Controlled

Company”

as such term is defined by NASDAQ Listing Rule 5615 the Company is not required to have a Nominating Committee.

Currently, the independent members of the Board (Messrs.

Panjwani, Verma and Filipov), rather than a nominating committee, approve

or recommend to the full Board those persons to be nominated.

The Board believes that the current method of nominating directors

is appropriate because it allows each independent board member input into the nomination process and does not unnecessarily restrict

the input that might be provided from an independent director who could be excluded from a committee.

Currently, three of the

four Directors are independent.

Furthermore, the Board has adopted by resolution a director nomination policy.

The purpose of

the policy is to describe the process by which candidates for inclusion in the Company’s recommended slate of director nominees

are selected.

The director nomination policy is administered by the Board.

Many of the benefits that would otherwise come from

a written committee charter are provided by this policy.

the ordinary course, absent special circumstances or a change in the criteria for Board membership, the incumbent directors who

continue to be qualified for Board service and are willing to continue as directors are re-nominated.

If the Board thinks it is

in the best interest of the Company to nominate a new individual for director in connection with an annual meeting of shareholders,

or if a vacancy occurs between annual shareholder meetings, the Board will seek potential candidates for Board appointments who

meet the criteria for selection as a nominee and have the specific qualities or skills being sought.

Director candidates will

be selected based on input from members of the Board, senior management of the Company and, if deemed appropriate, a third-party

for Board membership must possess the background, skills and expertise to make significant contributions to the Board, to the

Company and its shareholders.

Desired qualities to be considered include substantial experience in business or administrative

breadth of knowledge about issues affecting the Company;

and ability and willingness to contribute special competencies

to Board activities.

Board of Directors intends to review the director nomination policy from time to time to consider whether modifications to the

policy may be advisable as the Company’s needs and circumstances evolve, and as applicable legal or listing standards change.

The Board may amend the director nomination policy at any time.

Board will consider director candidates recommended by shareholders and will evaluate such director candidates in the same manner

in which it evaluates candidates recommended by other sources, as described above.

Recommendations must be in writing and mailed

to Cemtrex, Inc., 276 Greenpoint Avenue, Suite 208, Brooklyn, NY 11222, Attention:

Corporate Secretary, and include all information

regarding the candidate as would be required to be included in a proxy statement filed pursuant to the proxy rules promulgated

by the SEC if the candidate were nominated by the Board of Directors (including such candidate’s written consent to being

named in the proxy statement as a nominee and to serving as a director if elected).

The shareholder giving notice must provide

(i) his or her name and address, as they appear on the Company’s books, and (ii) the number of shares of the Company which

are beneficially owned by such shareholder.

The Company may require any proposed nominee to furnish such other information it

may require to be set forth in a shareholder’s notice of nomination which pertains to the nominee.

members of the Board receive quarterly compensation of $2,500.

Additionally, we reimburse our directors for expenses incurred

in connection with attending board meetings.

Trading Policy

recognize that the Company’s executive officers and directors may sell shares from time to time in the open market to realize

value to meet financial needs and diversify their holdings, particularly in connection with exercises of stock options.

transactions are required to comply with the Company’s insider trading policy.

16 (a) Beneficial Ownership Reporting Compliance of the Securities Exchange Act

16(a) of the Exchange Act requires directors, executive officers and persons who beneficially own more than 10% of our common

stock (collectively, “Reporting Persons”) to file initial reports of ownership and reports of changes in ownership

of our common stock with the SEC.

Reporting Persons are required by SEC regulations to furnish us with copies of all Section 16(a)

reports they file.

To our knowledge, based solely on our review of the copies of such reports received or written representations

from certain Reporting Persons that no other reports were required, we believe that during the year ended September 30, 2020 all

Reporting Persons timely complied with all applicable filing requirements.

Communications

with Directors

Shareholders,

associates of the Company and other interested parties may communicate directly with the Board of Directors, with the non-management

Directors or with a specific Board member, by writing to the Board (or the non-management Directors or a specific Board member)

and delivering the communication in person or mailing it to:

Board of Directors, Privileged & Confidential, c/o Saagar Govil,

CEO, Cemtrex, Inc., 276 Greenpoint Avenue, Suite 208, Brooklyn, NY 11222.

Correspondence will be discussed at the next scheduled

meeting of the Board of Directors, or as indicated by the urgency of the matter.

From time to time, the Board of Directors may

change the process by which shareholders may communicate with the Board of Directors or its members.

Any changes in this process

will be posted on the Company’s website or otherwise publicly disclosed.

Company has an ongoing commitment to good governance and business practices.

In furtherance of this commitment, we regularly monitor,

and are briefed by outside counsel on, developments in the area of corporate governance and securities law and review our policies

and procedures in light of such developments.

We comply with the rules and regulations promulgated by the SEC and implement other

corporate governance practices we believe are in the best interests of the Company and the shareholders.

have adopted a code of ethics as of June 28, 2016 that applies to our principal executive officer, principal financial officer,

and principal accounting officer as well as our employees.

Our standards are in writing and are posted on our website.

The following

is a summation of the key points of the Code of Ethics we adopted:

and ethical conduct, including ethical handling of actual or apparent conflicts of interest between personal and professional

relationships;

fair, accurate, timely, and understandable disclosure reports and documents that a small business issuer files with, or submits

to, the Commission and in other public communications made by our Company;

compliance with applicable government laws, rules and regulations;

prompt internal reporting of violations of the code to an appropriate person or persons identified in the code;

Accountability

for adherence to the code.

Leadership and Structure

Govil, our Chief Executive Officer, also serves as Chairman of the Board of Directors.

The Board believes that the Company and

its shareholders are best served by having the Chief Executive Officer also serve as Chairman of the Board.

The Board also believes

that this structure is appropriate in light of the size of our Company and corresponding size of our Board and the complexity

of our business.

We believe that Mr.

Govil is best positioned to develop agendas that ensure that our Board’s time and attention

are focused on the matters that are most critical to us.

incorporate the information this item requires by referring to the information under the captions Proposal No.

Election of Directors

and Corporate Governance in our proxy statement for our 2022 annual stockholders’ meeting (“2022 Proxy Statement”),

which we will file with the SEC pursuant to Regulation 14A.

EXECUTIVE COMPENSATION

compensation discussion addresses all compensation awarded to, earned by, or paid to the Company’s named executive officers

(“NEO”), which currently consists of Saagar Govil, the Chairman, Chief Executive Officer, President and Secretary,

and Aron Govil, former Executive Director and CFO, Aron Govil retired from Cemtrex on September 30, 2020.

As of December

23, 2020, Saagar Govil is currently earning compensation from the Company.

Set forth below is the aggregate compensation for services

rendered in all capacities to us during our fiscal years ended September 30, 2019, and 2020 by our executive officers.

PRINCIPAL AND POSITION

Chairman od the Board

Chief Executive Officer,

and President

FormerExecutive Director and

Chief Financial Officer

the aggregate amount of the fair value of stock option awards on the grant date calculated in accordance with Financial Accounting

Standards Board Accounting Standards Codification Topic 718 (“FASBASC Topic 718”), rather than actual amounts

to be realized by the named executive officer and disregarding any forfeitures based upon exercise price.

TO SUMMARY COMPENSATION TABLE

this time, we do not have an employment agreement with Saagar Govil, though the Company may enter into such an agreement with

him on terms and conditions usual and customary for the industry.

All amounts paid to our officers in fiscal year end 2020 were

approved by the Company’s board of directors.

The Company does not currently have “key man”

life insurance on

GRANTS IN THE LAST FISCAL YEAR

OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR END OPTION/SAR VALUES

EQUITY AWARDS AT FISCAL YEAR-END

following table presents information regarding our NEOs’

unexercised options to purchase Common Stock as of September 30,

Option Awards

Number of Securities Underlying

Unexercised Options Exercisable

Option Exercise Price

Option Expiration Date

incorporate the information this item requires by referring to the information under the caption Executive Compensation in our

2022 Proxy Statement, which we will file with the SEC pursuant to Regulation 14A.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

following table sets forth certain information known to us with respect to the beneficial ownership of our common stock as of

December 23, 2020 by:

persons who are beneficial owners of five percent (5%) or more of our common stock;

of our directors;

of our executive officers;

current directors and executive officers as a group.

as otherwise indicated, and subject to applicable community property laws, the persons named in the table below have sole voting

and investment power with respect to all shares of common stock held by them.

of December 30, 2020, 17,968,177 shares of Common Stock were issued and outstanding.

In addition, there were 1,000,000

shares of Series A Preferred Stock outstanding which are entitled to vote 17,798,764 shares in the aggregate, all of which

are held by Aron Govil, 100,000 shares of Series C Preferred Stock outstanding which are entitled to vote 176,401,615

shares in the aggregate, all of which is held by Saagar and Aron Govil and 2,156,784 shares of Series 1 Preferred Stock

outstanding which are entitled to vote 4,313,568 shares in the aggregate.

Accordingly, a total of 216,136,486 shares may be voted

at the Annual Meeting.

Priscilla Popov has been appointed Cemtrex’s Chief Financial Officer on September 29, 2020, but

she does not own any shares in the Company.

ownership is determined in accordance with the rules of the SEC.

In computing the number of shares beneficially owned by a person

and the percentage ownership of that person, shares of common stock subject to options held by that person that are currently

exercisable or exercisable within 60 days of December 23, 2020 are deemed outstanding.

Such shares, however, are not deemed as

of December 23, 2020 outstanding for the purpose of computing the percentage ownership of any other person.

Name and Address

Percentage of

Title of Class

Beneficial Owner

Executive Director

276 Greenpoint Avenue, Suite 208

Chief Financial Officer

Brooklyn, NY 11222

Retired 9/30/2020

Preferred Stock

Executive Director

276 Greenpoint Avenue, Suite 208

Chief Financial Officer

Brooklyn, NY 11222

Retired 9/30/2020

Preferred Stock

Executive Director

276 Greenpoint Avenue, Suite 208

Chief Financial Officer

Brooklyn, NY 11222

Retired 9/30/2020

Preferred Stock

Chairman of the Board,

276 Greenpoint Avenue, Suite 208

Chief Executive Officer,

(88,201 votes

Brooklyn, NY 11222

and President

Chairman of the Board,

276 Greenpoint Avenue, Suite 208

Chief Executive Officer,

Brooklyn, NY 11222

and President

Preferred Stock

Chairman of the Board,

276 Greenpoint Avenue, Suite 208

Chief Executive Officer,

Brooklyn, NY 11222

and President

All directors and executive officers

as a group (5 persons)

Less than one percent of outstanding shares.

as otherwise noted herein, the percentage is determined on the basis of 17,968,177 shares of our Common Stock outstanding

plus securities deemed outstanding pursuant to Rule 13d-3 promulgated under the Securities Exchange Act of 1934, as amended

(the “Exchange Act”).

Under Rule 13d-3, a person is deemed to be a beneficial owner of any security owned by certain

family members and any security of which that person has the right to acquire beneficial ownership within 60 days, including,

without limitation, shares of our common stock subject to currently exercisable options.

percentage is based on the 17,968,177 shares of our Common Stock outstanding, the 17,798,764 votes that the Series A Preferred

Stock is entitled to vote, the 216,136,486 votes that the Series C Preferred Stock is entitled to vote, and the 4,313,568

votes that the Series 1 Preferred Stock is entitled to vote based on 2 votes per share.

Series A Preferred Stock was issued by the Company to Aron Govil, the Company’s former CFO and Executive Director, in

conjunction with the settlement of the debenture issued as consideration for the purchase of Griffin Filters, Inc.

Pursuant to the Certificate of Designation of the Series A Preferred Stock, each issued and outstanding share of Series A

Preferred Stock is entitled to the number of votes per share equal to the result of:

(i) the number of shares of Common

Stock issued and outstanding at the time of such vote multiplied by 1.01;

divided by (ii) the total number of Series A Preferred

Stock issued and outstanding at the time of such vote, at each meeting of shareholders of the Company with respect to any

and all matters presented to the shareholders of the Company for their action or consideration, including the election of

The shares of Series A Preferred Stock held by Aron Govil represent 100% of the total Series A Preferred Stock

issued and outstanding.

Series C Preferred Stock was issued by the Company to Aron Govil, the Company’s former CFO and Executive Director as

part of the employment agreement with Mr.

Govil upon his appointment to CFO.

On July 10, 2020, Aron Govil transferred 50,000

shares of the Series C Preferred Stock to Saagar Govil.

Pursuant to the Certificate of Designation of the Series C Preferred

Stock, each issued and outstanding share of Series C Preferred Stock are entitled to the number of votes per share

equal to the result of (i) the total number of shares of Common Stock outstanding at the time of such vote multiplied by 10.01,

and divided by (ii) the total number of shares of Series C Preferred Stock outstanding at the time of such vote, at each meeting

of our shareholders with respect to any and all matters presented to our shareholders for their action or consideration, including

the election of directors.

245,833 shares included in exercisable options by Aron Govil and 491,667 shares included

in exercisable options by Saagar Govil.

of actual amount of Common Stock and Series A, Series C and Series 1 Preferred Stock owned.

incorporate the information this item requires by referring to the information under the caption Security Ownership of Certain Beneficial

Owners and Management in our 2022 Proxy Statement, which we will file with the SEC pursuant to Regulation 14A.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE

of our directors or officers is a director in any other reporting companies.

None of our directors or officers has been affiliated

with any company that has filed for bankruptcy within the last ten years.

The Company is not aware of any proceedings to which

any of the Company’s officers or directors, or any associate of any such officer or director, is a party adverse to the

Company or any of the Company’s subsidiaries or has a material interest adverse to it or any of its subsidiaries.

director of the Company serves for a term of one year or until the successor is elected at the Company’s annual shareholders’

meeting and is qualified, subject to removal by the Company’s shareholders.

Each officer serves, at the pleasure of the

board of directors, for a term of one year and until the successor is elected at the annual meeting of the board of directors

and is qualified.

Board of Directors has determined that each of Messrs.

Panjwani, Verma and Filipov are independent in accordance with NASDAQ rules.

To determine independence, the Board of Directors adopted and applied the categorical standards of independence included in NASDAQ

Listing Rule 5605(a)(2), which include a series of objective tests, such as that the director is not an employee of the Company

and has not engaged in various types of business dealings with the Company.

Board oversees Company functions in an effort to assure that Company assets are properly safeguarded, that appropriate financial

and other controls are maintained, and that the Company’s business is conducted prudently and in compliance with applicable

laws, regulations and ethical standards.

the Board is responsible for risk oversight, Company management is responsible for managing risk.

The Company has a robust internal

process and a strong internal control environment to identify and manage risks and to communicate with the Board.

The Board monitors

and evaluates the effectiveness of the internal controls and the risk management program at least annually.

Management communicates

routinely with the Board and individual Directors on the significant risks identified and how they are being managed.

are free to, and often do, communicate directly with senior management.

with Related Persons

Technologies, Inc.

is owned by Aron Govil, a beneficial owner of the Company.

August 31, 2019, the Company entered into an Asset Purchase Agreement for the sale of Griffin Filters, LLC to Ducon Technologies,

Inc., which Aron Govil, then, the Company’s CFO, is President, for total consideration of $550,000.

As of September 30,

2020, and 2019, there was $1,432,798 and $771,519 in receivables due from Ducon Technologies, Inc., respectively.

On May 1, 2020,

Company invested $500,000 in a registered S-1 stock offering of Telidyne Inc., an OTC listed company, by purchasing 166,667

shares of common stock at $3.00 per share.

Telidyne Inc.

is controlled by the Company’s former CFO and Executive

Director, Aron Govil.

On September 30, 2020, the Company decided to withdraw its investment, the transaction was

cancelled, and all proceeds were returned.

incorporate the information this item requires by referring to the information under the captions Proposal No.

Election of Directors

and Corporate Governance in our 2022 Proxy Statement, which we will file with the SEC pursuant to Regulation 14A.

PRINCIPAL ACCOUNTANT FEES AND SERVICES

following table sets forth the aggregate fees billed to the Company for the years ended September 30, 2020 and 2019

by Haynie & Company the Company’s independent auditor:

Audit-Related Fees

the fiscal year ended September 30, 2019, the company incurred fees for tax services of $61,400, provided by Wiss and Company.

the fiscal year ended September 30, 2020, the company incurred fees for tax services of $67,314, provided by Wiss and Company.

15 EXHIBITS AND FINANCIAL STATEMENTS

Financial Statements and Notes to the Consolidated Financial Statements

incorporate the information this item requires by referring to the information under the caption Proposal No.

Ratification of Appointment

of Independent Registered Public Accounting Firm in our 2022 Proxy Statement, which we will file with the SEC pursuant to Regulation

ITEM 15 EXHIBITS AND FINANCIAL STATEMENTS

Financial Statements and Notes to the Consolidated Financial

Index to Consolidated Financial Statements on page F-1 at beginning of attached financial statements.

Purchase Agreement regarding the stock of Advanced Industrial Services, Inc., AIS Leasing Company, AIS Graphic Services, Inc.,

and AIS Energy Services, LLC, Dated December 15, 2015.

Purchase agreement between Periscope GmbH and ROB Centrex Assets UG, ROB Cemtrex Automotive GmbH, and ROB Cemtrex Logistics

of Incorporation of the Company.(1)

Laws of the Company.(1)

of Amendment of Certificate of Incorporation, dated September 29, 2006.(1)

of Amendment of Certificate of Incorporation, dated March 30, 2007.(1)

of Amendment of Certificate of Incorporation, dated May 16, 2007.(1)

of Amendment of Certificate of Incorporation, dated August 21, 2007.(1)

of Amendment of Certificate of Incorporation, dated April 3, 2015.(3)

of Designation of the Series A Preferred Shares, dated September 8, 2009.(2)

of Designation of the Series 1 Preferred Stock.(11)

of Amendment of Certificate of Incorporation, dated September 7, 2017 (12)

of Designations of Series B Redeemable Convertible Preferred Stock.(21)

of Correction to the Certificate of Amendment to the Amended and Restated Certificate of Incorporation, as amended, of Cemtrex,

Certificate of Designation of the Series 1 Preferred Shares, dated March 30, 2020.(16)

Stock Purchase Agreement regarding the stock of Advanced Industrial Services, Inc., AIS Leasing Company, AIS Graphic Services, Inc., and AIS Energy Services, LLC, Dated December 15, 2015.

Asset Purchase agreement between Periscope GmbH and ROB Centrex Assets UG, ROB Cemtrex Automotive GmbH, and ROB Cemtrex Logistics GmbH.

Certificate of Incorporation of the Company.(1)

By Laws of the Company.(1)

Certificate of Amendment of Certificate of Incorporation, dated September 29, 2006.(1)

Certificate of Amendment of Certificate of Incorporation, dated March 30, 2007.(1)

Certificate of Amendment of Certificate of Incorporation, dated May 16, 2007.(1)

Certificate of Amendment of Certificate of Incorporation, dated August 21, 2007.(1)

Certificate of Amendment of Certificate of Incorporation, dated April 3, 2015.(3)

Certificate of Designation of the Series A Preferred Shares, dated September 8, 2009.(2)

Certificate of Designation of the Series 1 Preferred Stock.(11)

Certificate of Amendment of Certificate of Incorporation, dated September 7, 2017 (12)

Certificate of Correction to the Certificate of Amendment to the Amended and Restated Certificate of Incorporation, as amended, of Cemtrex, Inc (6)

Amended Certificate of Designation of the Series 1 Preferred Shares, dated March 30, 2020.(16)

Certificate of Amendment of Certificate of Incorporation, dated July 29, 2020 (20)

of Subscription Rights Certificate.

of Series 1 Preferred Stock Certificate.

of Series 1 Warrant.

of Common Stock Purchase Warrant, dated March 22, 2019.

Dealer-Manager

Agreement between Cemtrex, Inc.

and Advisory Group Equity Services, Ltd.

doing business as RHK Capital.dated November 21,

At-The-Market

Offering Agreement dated January 28, 2019, by and among Cemtrex, Inc.

and Advisory Group Equity Services, Ltd.

doing business

as RHK Capital.(9)

Purchase Agreement by and between Intercostal Capital, dated July 1, 2019 and Cemtrex, Inc., (13)

transfer and purchase agreement between Cemtrex, Ltd., Cemtrex, Inc.

and Finvest GmbH i.G., Dennis Wenz, and Laura Wenz.,

dated August 15, 2019 (15)

of the Term Loan Agreement between Vicon and NIL Funding, dated March 4, 2020.(17)

Agreement, dated April 22, 2020 between Centrex, Inc.

Certificate of Correction of Certificate of Incorporation, dated July 29, 2021, filed October 7, 2020 (9)

Form of Subscription Rights Certificate.

Form of Series 1 Preferred Stock Certificate.

Form of Series 1 Warrant.

Form of Common Stock Purchase Warrant, dated March 22, 2019.

Amendment of the Term Loan Agreement between Vicon and NIL Funding, dated March 4, 2020.(17)

Consulting Agreement, dated April 22, 2020 between Centrex, Inc.

and Adtron, Inc.

Purchase Agreement dated June 1, 2020 (18)

Purchase Agreement dated June 9, 2020 (19)

Code of Business Ethics.(4)

of the Registrant

Certification

of Chief Executive Officer as required by Rule 13a-14 or 15d-14 of the Exchange Act, as adopted Pursuant to Section 302 of

the Sarbanes-Oxley Act of 2002.

Certification

of Vice President of Finance and Principal Financial Officer as required by Rule 13a-14 or 15d-14 of the Exchange Act, as

adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

Certification

of Chief Executive Officer Pursuant to 18 U.S.C.

Securities Purchase Agreement dated June 1, 2020 (18)

Securities Purchase Agreement dated June 9, 2020 (19)

Settlement Agreement and Release between Cemtrex, Inc.

and Aron Govil dated February 26, 2021 (13)

Corporate Code of Business Ethics.(4)

Subsidiaries of the Registrant

Consent of Grassi & Co, CPAs, P.C., Independent Registered Public Accounting Firm

Certification of Chief Executive Officer as required by Rule 13a-14 or 15d-14 of the Exchange Act, as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

Certification of Vice President of Finance and Principal Financial Officer as required by Rule 13a-14 or 15d-14 of the Exchange Act, as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

Certification of Chief Executive Officer Pursuant to 18 U.S.C.

1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act 0f of 2002.

Certification

of Vice President of Finance and Principal Financial Officer Pursuant to 18 U.S.C.

1350, as adopted pursuant to Section 906

of the Sarbanes-Oxley Act 0f of 2002.

Certification of Vice President of Finance and Principal Financial Officer Pursuant to 18 U.S.C.

1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act 0f of 2002.

Instance Document

11 unchanged sentences

by reference from Form 8-K/A filed on November 24, 2017.

by reference from Form 8-K filed on November 21, 2018.

by reference from Form 8-K filed on January 28, 2019.

by reference from Form 8-K/A filed on September 26, 2016.

by reference from Form 10-Q filed on May 28, 2021.

by reference from Form S-1 filed on August 29, 2016 and as amended on November 4, 2016, November 23, 2016, and December 7, 2016.

1 unchanged sentence

by reference from Form 8-K filed on September 8, 2017.

by reference from Form 10-K filed on July 2, 2019.

by reference from Form 8-K filed on February 26, 2021.

by reference from Form 8-K filed on March 22, 2019.

by reference from Form 8-K filed on August 21, 2019.

Intentionally

by reference from Form 8-K filed on April 1, 2020.

2 unchanged sentences

by reference from Form 8-K filed on June 12, 2020.

by reference from Form 10-K filed on January 5, 2021.

FORM 10-K SUMMARY

to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report

to be signed on its behalf by the undersigned, thereunto duly authorized.

of the Board, CEO,

& Secretary (Principal Executive Officer)

Priscilla Popov

CFO (Principal

Financial and Accounting Officer)

to the requirements of the Securities and Exchange Act of 1934, this report has been signed below by the following persons on

behalf of the registrant and in the capacities and on the dates indicated.

of the Board, CEO,

& Secretary (Principal Executive Officer)

to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed

on its behalf by the undersigned, thereunto duly authorized.

January 21, 2022

Priscilla Popov

(Principal Financial and Accounting Officer)

Saagar Govil,

Chairman of the Board, CEO,

President & Secretary (Principal Executive Officer)

January 21, 2022

Raju Panjwani

Christopher C.

CFO (Principal Financial and

to the requirements of the Securities and Exchange Act of 1934, this report has been signed below by the following persons on behalf

of the registrant and in the capacities and on the dates indicated.

January 21, 2022

Saagar Govil,

Chairman of the Board, CEO,

President & Secretary (Principal Executive Officer)

January 21, 2022

Christopher C.

CFO (Principal Financial and

January 21, 2022

Manpreet Singh

Manpreet Singh,

January 21, 2022

Metodi Filipov

to the Consolidated Financial Statements

of Independent Registered Public Accounting Firm

Balance Sheets at September 30, 2020 and 2019

Statements of Operations and Comprehensive Income for the Fiscal Years Ended September 30, 2020 and 2019

Statements of Shareholders’

Equity for the Fiscal Years Ended September 30, 2020 and 2019

Statement of Cash Flows for Fiscal Years Ended September 30, 2020 and 2019

Metodi Filipov,

/s/ Chris Wagner

Chris Wagner,

to the Consolidated Financial Statements

and Subsidiaries

Report of Independent Registered Public Accounting Firm

Balance Sheets at September 30, 2021 and 2020 (Restated)

Statements of Operations and Comprehensive Income for the Fiscal Years Ended September 30, 2021 and 2020 (Restated)

Statements of Shareholders’ Equity for the Fiscal Years Ended September 30, 2021 and 2020 (Restated)

Statement of Cash Flows for Fiscal Years Ended September 30, 2021 and 2020 (Restated)

Notes to the Consolidated Financial Statements

OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

the Board of Directors and

Stockholders of Cemtrex, Inc.

of Cemtrex Inc.

and Subsidiaries

on the Financial Statements

have audited the accompanying consolidated balance sheets of Cemtrex, Inc.

(the Company) as of September 30, 2020 and 2019, and

the related consolidated statements of operations and comprehensive income, stockholders’

equity, and cash flows for each

of the years ended September 30, 2020 and 2019, and the related notes (collectively referred to as the financial statements).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of

September 30, 2020 and 2019, and the results of its operations and its cash flows for each of the years ended September 30, 2020

and 2019, in conformity with accounting principles generally accepted in the United States of America.

financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on

the Company’s financial statements based on our audits.

We are a public accounting firm registered with the Public Company

Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance

with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the

have audited the accompanying balance sheets of Cemtrex, Inc.

and Subsidiaries (the Company) as of September 30, 2021 and 2020 (restated),

and the related statements of operations and comprehensive income, shareholders’ equity, and cash flows for each of the years in

the two-year period ended September 30, 2021, and the related notes (collectively referred to as the financial statements).

In our opinion,

the financial statements present fairly, in all material respects, the financial position of the Company as of September 30, 2021 and

2020 (restated), and the results of its operations and its cash flows for each of the years in the two-year period ended September 30,

2021, in conformity with accounting principles generally accepted in the United States of America.

of Financial Statements

discussed in Note 2 to the financial statements, the Company’s financial statements as of and for the year ended September 30,

2020 have been restated to correct certain misstatements.

financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s

financial statements based on our audits.

We are a public accounting firm registered with the Public Company Accounting Oversight Board

(United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S.

federal securities

laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit

to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error

The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial

As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but

not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.

Those standards require that we plan and perform the audit to obtain

reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

As part of our audits,

we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion

on the effectiveness of the Company’s internal control over financial reporting.

Accordingly, we express no such opinion.

audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to

error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence

regarding the amounts and disclosures in the financial statements.

Our audits also included evaluating the accounting principles

used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audits provide a reasonable basis for our opinion.

Haynie & Company

Salt Lake City, Utah

January 4, 2021

have served as the Company’s auditor since 2018

audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error

or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding

the amounts and disclosures in the financial statements.

Our audits also included evaluating the accounting principles used and significant

estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audits

provide a reasonable basis for our opinion.

Audit Matters

critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated

or required to be communicated to the audit committee and that:

(1) relate to accounts or disclosures that are material to the financial

statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters

does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit

matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

of the matter

September 30, 2021, the Company had approximately $7.8 million of goodwill.

As discussed in Note 1 to the consolidated financial statements,

goodwill is tested annually for impairment at the reporting unit level, or more frequently if impairment indicators arise.

In accordance

with the FASB revised guidance on “Testing of Goodwill for Impairment,” a company first has the option to assess qualitative

factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount.

the company decides, as a result of its qualitative assessment, that it is more-likely-than- not that the fair value of a reporting unit

is less than its carrying amount, the quantitative impairment test is mandatory.

Otherwise, no further testing is required.

The quantitative

impairment test consists of a two- step goodwill impairment test.

The first step compares the fair value of each reporting unit to its

carrying amount.

If the fair value of each reporting unit exceeds its carrying amount, goodwill is not considered to be impaired and

the second step will not be required.

If the carrying amount of a reporting unit exceeds its fair value, the second step compares the

implied fair value of goodwill to the carrying value of a reporting unit’s goodwill.

The implied fair value of goodwill is determined

in a manner similar to accounting for a business combination with the allocation of the assessed fair value determined in the first step

to the assets and liabilities of the reporting unit.

The excess of the fair value of the reporting unit over the amounts assigned to

the assets and liabilities is the implied fair value of goodwill.

This allocation process is only performed for purposes of evaluating

goodwill impairment and does not result in an entry to adjust the value of any assets or liabilities.

An impairment loss is recognized

for any excess in the carrying value of goodwill over the implied fair value of goodwill.

the Company’s goodwill impairment analyses was complex and highly judgmental due to the nature of qualitive assessment and, where

necessary, the significant estimation required to determine the fair value of the reporting units.

In particular, the fair value estimate

was sensitive to significant assumptions, such as future operating results, cash flows and the weighted average cost of capital.

significant assumptions are forward looking and could be materially affected by future market or economic conditions.

we addressed the matter

obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Company’s goodwill

impairment evaluation process, including controls over management’s review of the significant assumptions described above.

audit procedures to test the Company’s goodwill impairment analyses included evaluating the reasonableness of management’s

qualitative assessments and in certain instances the estimated fair value of the Company’s reporting units.

In evaluating estimated

fair value of reporting units we, among others, evaluated management’s significant assumptions described above and used within

the fair value method, and tested the completeness and accuracy of the underlying data.

We engaged our valuation specialists to assist

in assessing fair valuation methodologies utilized in the Company’s goodwill impairment analyses.

We compared certain significant

assumptions to existing market information and, where relevant, to the plans of the Company, including management’s expectations

with regard to the Company’s business model, customer base, product mix and other relevant factors.

We assessed the historical

accuracy of management’s projected cash flows, where applicable, and performed sensitivity analyses of the significant assumptions

to evaluate the changes in the fair value of the reporting units that would result from changes in the assumptions.

We involved our valuation

specialists to assist in evaluating the discount rates, which included comparison of the selected discount rates to the Company’s

weighted average cost of capital and the risk associated with projected cash flows.

Finally, we assessed the adequacy of the disclosures

in the consolidated financial statements.

of Long-lived assets

of the matter

the fourth quarter of 2021, the Company made the strategic decision to abandon certain assets that were held for sale associated with

its fiscal 2019 decision to exit the environmental products business.

As further described in note 5, the Company recorded a long-lived

asset impairment charge of $8.3M.

the Company’s long-lived asset impairment analysis was complex and highly judgmental due to the significant qualitative judgment

required to determine the realization of the long-lived asset group.

we addressed the matter

obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Company’s long-lived

asset impairment evaluation process, including controls over management’s review of the significant assumptions described above.

audit procedures to evaluate the measurement of the Company’s long-lived asset impairment loss included, among others, evaluating

the reasonableness of management’s significant assumptions.

We also reviewed historical reports of a third-party valuation specialists

to establish an understanding of the assets being considered and their ability to be marketed for sale given the length of time such

assets have been idle, the geography of such assets and the current economic and social conditions in that environment.

we evaluated the Company’s disclosures related to the matters described above.

of the matter

of September 30, 2021, the Company has approximately $5.6M of inventory.

As discussed in note 1, inventory is valued at the lower of

cost or market.

The Company reduces inventory for the diminution of value, resulting from product obsolescence, damage or other issues

affecting marketability.

We determined valuation of inventory to be a critical audit matter based on the high degree of management judgment

necessary is assessing allowances for obsolesce.

we addressed the matter

obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Company’s inventory

valuation process, including controls over management’s review of the significant assumptions described above.

audit procedures included:

observation of inventory in the Company’s warehouse locations;

company’s analysis on a sample basis of parts of inventory in the context of the company’s

valuation assertion.

correspondence and other documentation with respect to inventory disposal/destruction.

cost assertions by review source documentation of inventory purchases;

slow-moving reports provided by management;

subsequent sales data;

● Retrospective

review of prior year estimates;

procedures including margin analyses.

we evaluated the Company’s disclosures related to the matters described above.

& Co, CPAs, P.C.

have served as the Company’s auditor since 2021.

Jericho, New York

and Subsidiaries

BALANCE SHEETS

September 30,

and equivalents

receivables, net

receivables - related party

–net of allowance for inventory obsolescence

expenses and other assets

current assets

Cash and equivalents

Restricted cash

Short-term investments

Accounts receivables, net

Accounts receivables - related party

Notes receivable - short-term

Inventory –net of allowance for inventory obsolescence

Prepaid expenses and other assets

Total current assets

Property and equipment, net

Right-of-use assets

Assets held for sale

Notes receivable - long-term

Deferred tax asset

Liabilities & Stockholders’

and equipment, net

held for sale

& Stockholders’ Equity (Deficit)

liabilities - short-term

from customers

current liabilities

Accounts payable

Current portion of long-term liabilities

Lease liabilities - short-term

Deposits from customers

Accrued expenses

Deferred revenue

Accrued income taxes

Total current liabilities

payable to bank

lease liabilities

long-term liabilities

Loans payable to bank, net of current portion

Long-term lease liabilities, net of current portion

Notes payable, net of current portion

Mortgage payable, net of current portion

Other long-term liabilities

Series 1 preferred stock dividends payable

Paycheck Protection Program Loans

Deferred revenue - long-term

Total long-term liabilities

Total liabilities

Commitments and contingencies

Stockholders’

Preferred stock , $0.001 par value, 10,000,000 shares authorized,

Series 1, 3,000,000 shares authorized, 2,156,784 shares issued and outstanding as of September

30, 2020 and 2,110,718 shares issued and outstanding as of September 30, 2019 (liquidation value of $10 per share)

Series A, 1,000,000 shares authorized, issued and outstanding at September 30, 2020 and September 30, 2019

Series C, 100,000 shares authorized, issued and outstanding at September 30, 2020

Common stock, $0.001 par value, 40,000,000 shares authorized, 17,622,539 shares issued and

outstanding at September 30, 2020 and 3,962,790 shares issued and outstanding at September 30, 2019

Additional paid-in capital

Accumulated deficit

Protection Program Loans

Revenue - long-term

long-term liabilities

and contingencies

Shareholders’

stock , $ 0.001 par value, 10,000,000 shares authorized,

1, 3,000,000 shares authorized, 1,885,151 shares issued and outstanding as of September 30, 2021 and 2,156,784 shares issued and

outstanding as of September 30, 2020 (liquidation value of $ 10 per share)

A, 1,000,000 shares authorized, zero shares issued and outstanding at September 30, 2021 and 1,000,000 shares issued and outstanding

at September 30, 2020

C, 100,000 shares authorized, 50,000 shares issued and outstanding at September 30, 2021 and 100,000 shares issued and outstanding

at September 30, 2020

stock, $ 0.001 par value, 50,000,000 shares authorized, 20,782,194 shares issued and outstanding at September 30, 2021 and 17,622,539

shares issued and outstanding at September 30, 2020

paid-in capital

earnings (accumulated deficit)

( 41,908,062 )

( 34,100,067 )

Treasury stock at cost

Accumulated other comprehensive income

Cemtrex stockholders’

Non-controlling interest

Total liabilities and stockholders’

stock at cost

other comprehensive income (loss)

Cemtrex stockholders’ equity

Non-controlling

liabilities and shareholders’ equity

accompanying notes are an integral part of these consolidated financial statements.

1 unchanged sentence

STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

For the year ended

September 30, 2020

September 30, 2019

Cost of revenues

the year ended

and administrative

and development

operating expenses

General and administrative

Research and development

Total operating expenses

Operating loss

Other income (expense)

Loss on equity interests

Interest expense

Total other expense, net

Net loss before income taxes

income/(loss)

( 8,741,820 )

Income tax benefit/(expense)

Loss from continuing operations

( 4,569,811 )

Loss from discontinued operations, net of tax

income/(expense)

Agreement - Related Party

( 2,921,345 )

( 4,607,453 )

Less income in noncontrolling interest

other income/(expense), net

( 2,786,424 )

loss before income taxes

( 7,356,235 )

Preferred dividends

Net loss available to Cemtrex, Inc.

tax benefit/(expense)

( 2,073,835 )

from Continuing operations

( 9,430,070 )

Other comprehensive income

Foreign currency translation gain

Other comprehensive income attribitable to noncontrolling

Comprehensive income

Comprehensive loss

from discontinued operations, net of tax

( 8,280,047 )

income/(loss)

( 7,886,269 )

Loss Per Share-Basic

Continuing Operations

Discontinued Operations

Loss Per Share-Diluted

Continuing Operations

Discontinued Operations

Weighted Average Number of Shares-Basic

Weighted Average Number of Shares-Diluted

( 10,242,965 )

income/(loss) in noncontrolling interest

income/(loss) attributable to Cemtrex, Inc.

$ ( 7,807,995 )

$ ( 10,470,081 )

income/(loss)

$ ( 7,886,269 )

$ ( 10,242,965 )

comprehensive income/(loss)

currency translation gain/(loss)

benefit plan actuarial gain/(loss)

Comprehensive

income/(loss)

( 6,802,274 )

( 10,185,326 )

Other Comprehensive income (Loss) attributable to noncontrolling interest

comprehensive income/(loss) attributable to noncontrolling interest

Comprehensive

income/(loss) attributable to Cemtrex, Inc.

$ ( 6,880,548 )

$ ( 9,958,210 )

Income/(loss)

Per Share-Basic

Income/(loss)

Per Share-Basic- Continuing operations

Income/(loss) Per

Share-Basic - Discontinued operations

Income/(loss)

Per Share-Diluted- Continuing operations

Income/(loss)

Per Share-Diluted

Income/(loss) Per

Share-Diluted - Discontinued operations

Average Number of Shares-Basic

Average Number of Shares-Diluted

accompanying notes are an integral part of these consolidated financial statements.

and Subsidiaries

STATEMENTS OF SHAREHOLDERS’

Stock Series 1

Stock Series A

STATEMENTS OF SHAREHOLDERS’ EQUITY

Stock Series C

Comprehensive

Stockholders’

Balance at September 30, 2019

Stockholders’

at September 30, 2020, as reported

$ ( 33,172,690 )

Foreign currency translation gain

Share-based compensation

Shares issued for goods and services

Shares sold in Securities Purchase Agreements,

net of offering costs

Shares issued to pay notes payable

Dividends paid in Series 1 preferred shares

Income in noncontrolling interest

Purchase of treasury stock

Accrued dividends

Cancellation of Shares not issued in 2019 ATM

Retirement of treasury stock

Balance at September 30, 2020

$ ( 148,291 )

( 3,091,570 )

( 1,870,671 )

at September 30, 2020, as restated

$ ( 34,100,067 )

$ ( 148,291 )

currency translation gain/(loss)

benefit plan actuarial gain/(loss)

compensation, shares

issued for goods and services

issued for goods and services, shares

sold in Securities Purchase Agreements, net of offering costs

sold in Securities Purchase Agreement net of offering costs, shares

of treasury stock

of Shares not issued in 2019 ATM offering

of Shares not issued in 2019 ATM offering, shares

of treasury stock

of treasury stock, shares

issued to pay notes payable

paid in Series 1 preferred shares

Income/(loss) attributable to noncontrolling

options surrendered in settelment agreement

( 1,000,000.00 )

( 3,672,645 )

( 3,674,165 )

( 7,807,995 )

at September 30, 2021

$ ( 41,908,062 )

$ ( 148,291 )

accompanying notes are an integral part of these consolidated financial statements.

and Subsidiaries

STATEMENTS OF SHAREHOLDERS’

Stock Series 1

Stock Series A

STATEMENTS OF SHAREHOLDERS’ EQUITY

Stock Series C

Comprehensive

Stockholders’

at September 30, 2018

Foreign currency

translation gain

Stockholders’

at September 30, 2019, as reported

$ ( 20,067,685 )

$ ( 1,002,030 )

$ ( 3,562,301 )

$ ( 3,605,517 )

at September 30, 2019, as restated

$ ( 23,629,986 )

Foreign currency translation

Share-based compensation

Shares issued in

Subscription Rights Offering

Shares issued to

pay notes payable

Dividends paid in

Series 1 preferred shares

Shares issued in

trust for ATM Offering

Shares sold in ATM

Series B Conversion

Reverse split rounding

Discount on Series

B (deemed dividend)

Increase in noncontrolling

interest through

consolidation accounting

Shares sold in Securities

Purchase Agreement

Income in noncontrolling

Shares issued for goods and

Shares sold in Securities Purchase

Agreements, net of offering costs

Shares issued to pay notes

Dividends paid in Series 1

preferred shares

Income/(loss)

attributable to noncontrolling interest

Purchase of treasury stock

Cancellation of Shares not

issued in 2019 ATM offering

Retirement of treasury stock

( 10,470,081 )

at September 30, 2019

at September 30, 2020, as restated

( 34,100,067 )

2 unchanged sentences

STATEMENTS OF CASH FLOWS

For the year ended

Cash Flows from Operating Activities

the year ended

Flows from Operating Activities

income/(loss)

$ ( 7,886,269 )

$ ( 10,242,965 )

Net loss from discontinued operations

loss from discontinued operations

( 8,280,047 )

Net loss from continuing operations

loss from continuing operations

( 9,430,070 )

Adjustments to reconcile net loss to net cash provided/(used) by operating activities:

Depreciation and amortization

Gain/(loss) on disposal of property & equipment

Amortization of right-of-use assets

Change in allowance for inventory obsolescence

Change in allowance for doubtful accounts

Amortization of original issue discounts on notes payable

Share-based compensation

Interest expense paid in equity shares

Income tax expense/(benefit)

Loss on equity interests

Changes in operating assets and liabilities net of effects from acquisition of subsidiaries:

Accounts receivable

Accounts receivable - related party

Prepaid expenses and other curent asstets

Other liabilities

Accounts payable

Operating lease liabilities

Deposits from customers

Accrued expenses

Deferred revenue

Income taxes payable

Net cash used by operating activities - continuing operations

Net cash provided/(used) by operating activities

- discontinued operations

Net cash provided/(used) by operating activities

Cash Flows from Investing Activities

Net change in self-insured benefit deposits

Purchase of property and equipment

Purchase of marketable securities

Payments received on notes receivable

Net cash provided/(used) by investing activities - continuing operations

Net cash provided by investing activities - discontinued

Net cash provided/(used) by investing activities

Cash Flows from Financing Activities

Proceeds from notes payable

Payments on notes payable

Issuance of notes receivable

Proceeds on bank loans

Payments on bank loans

Proceeds from securities purchase agreements

Expenses on securities purchase agreements

Proceeds from at-the-market offerings

Expenses on at-the-market offerings

Proceeds from the issuance of Series B Preferred Stock

Expenses from the issuance of Series B Preferred Stock

Settlement of Series B Preferred Stock in cash

Revolving line of credit

Purchases of treasury stock

Payments on capital lease liabilities

Net cash provided/used by financing activities - continuing operations

Net cash used by financing activities - discontinued

Net cash provided/(used) by financing activities

to reconcile net loss to net cash provided/(used) by operating activities:

and amortization

on disposal of property and equipment

of right-of-use assets

in allowance for doubtful accounts

tax expense/ (benefit)

expense paid in equity shares

interest on notes payable

of original issue discounts on notes payable

on marketable securities

( 2,612,847 )

Effect of currency translation

Net increase in cash, cash equivalents, and restricted cash

Cash, cash equivalents, and restricted cash at beginning of period

Cash, cash equivalents, and

restricted cash at end of period

Balance Sheet Accounts Included in

Agreement - Related Party

( 3,674,165 )

of Paycheck Protection Program Loans

( 5,320,485 )

in operating assets and liabilities net of effects from acquisition of

subsidiaries:

receivable - related party

expenses and other current assets

( 1,411,653 )

lease liabilities

from customers

taxes payable

cash used by operating activities - continuing operations

( 10,051,165 )

( 3,347,846 )

Net cash provided/(used) by

operating activities - discontinued operations

cash used by operating activities

( 10,051,165 )

( 3,786,202 )

Flows from Investing Activities

of property and equipment

( 1,069,283 )

( 1,566,014 )

in Virtual Driver Interactive

( 1,075,428 )

in MasterpieceVR

from sale of marketable securities

of marketable securities

( 7,991,709 )

( 30,607,931 )

of treasury stock

cash provided/(used) by investing activities

( 2,432,500 )

Flows from Financing Activities

from notes payable

on notes payable

( 2,220,257 )

( 1,225,969 )

received on notes receivable

on bank loans

( 1,261,035 )

from Paycheck Protection Program Loans

from securities purchase agreements

on capital lease liabilities

on securities purchase agreements

line of credit

cash provided by financing activities - continuing operations

cash used by financing activities - discontinued operations

cash provided by financing activities

of currency translation

increase in cash, cash equivalents, and restricted cash

( 4,764,332 )

cash equivalents, and restricted cash at beginning of period

cash equivalents, and restricted cash at end of period

Sheet Accounts Included in Cash, Cash Equivalents, and Restricted Cash

and equivalents

cash, cash equivalents, and restricted cash

Cash and equivalents

Restricted cash

Total cash, cash equivalents,

and restricted cash

accompanying notes are an integral part of these consolidated financial statements.

1 unchanged sentence

STATEMENTS OF CASH FLOWS

Supplemental Disclosure of Cash Flow

Supplemental Disclosure of Cash Flow Information:

Cash paid during the period for interest

Cash paid during the period for income taxes

Supplemental Schedule of Non-Cash Investing

and Financing Activities

Investment in Vicon Technologies

Stock issued to pay for products and/or services

Stock issued to pay notes payable

Dividends paid in equity shares

$ ( 358,876 )

Supplemental Schedule of Non-Cash Investing and Financing Activities

Investment in Virtual Driver Interactive

issued to pay for products and/or services

issued to pay notes payable

Loan from bank to acquire building

accompanying notes are an integral part of these consolidated financial statements.

1 unchanged sentence

TO CONSOLIDATED FINANCIAL STATEMENTS

1 – ORGANIZATION

was incorporated in 1998, in the state of Delaware and has evolved through strategic acquisitions and internal growth into a leading

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).

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.

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.

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

– SmartDesk is focused on reinventing the workspace through developing state-of-the-art,

modern, fully integrated, workplace solutions.

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.

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.

and Subsidiaries

Services (IS)

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.

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 $ 175,428 .

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,

and $ 200,000

plus accumulated interest on October 26, 2022.

Additionally, the Company paid contingent consideration of $ 175,428

There is no further contingent consideration

specified in the purchase agreement.

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 reality.

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,

Concern Considerations

Company has incurred substantial losses over the past two fiscal years and has debt obligations over the next fiscal year that

raise going concern considerations.

The Company has raised capital and will continue to reduce expenses through the use of (i)

issuance of notes and subsequent settlement of such notes with equity, (ii) equity offering to qualified investors and at-the-market

offerings, (iii) review and improve our business processes for more efficiency, (iv) sale or reallocation of fixed assets held

from exited business segments to raise capital or increase revenue in continuing business segments, (v) development of additional

products for the Advanced Technologies segment to increase revenues, (vi) cost reductions to improve overall profitability in

all segments.

The Company believes that these going concern considerations have been alleviated by management’s plans.

Company has incurred substantial losses over the past two fiscal years and has debt obligations over the next fiscal year that raise

substantial doubt with respect to the Company’s ability to continue as a going concern.

The Company has raised capital and will

continue to reduce expenses through (i) issuance of notes and subsequent settlement of such notes with equity, (ii) equity offering to

qualified investors and at-the-market offerings, (iii) review and improvement of our business processes for more efficiency, (iv) sale

or reallocation of fixed assets held from exited business segments to raise capital or increase revenue in continuing business segments,

(v) development of additional products for the Advanced Technologies segment to increase revenues, (vi) cost reductions to improve overall

profitability in all segments.

The Company believes that substantial doubt has been alleviated by management’s plans and that it

has sufficient working capital to sustain operations for at least the next twelve months.

2 – BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

of Presentation and Use of Estimates

Management of the Company is responsible for the selection and use of appropriate accounting policies and the appropriateness

of accounting policies and their application.

Critical accounting policies and practices are those that are both most important

to the portrayal of the Company’s financial condition and results and require management’s most difficult, subjective,

or complex judgments, often as a result of the need to make estimates about the effects of matters that are inherently uncertain.

The Company’s significant and critical accounting policies and practices are disclosed below as required by generally accepted

accounting principles.

Management of the Company is responsible for the selection and use of appropriate accounting policies and the appropriateness of accounting

policies and their application.

Critical accounting policies and practices are those that are both most important to the portrayal of

the Company’s financial condition and results and require management’s most difficult, subjective, or complex judgments,

often as a result of the need to make estimates about the effects of matters that are inherently uncertain.

The Company’s significant

and critical accounting policies and practices are disclosed below as required by generally accepted accounting principles.

of Presentation

accompanying consolidated financial statements and related notes have been prepared in accordance with accounting principles generally

accepted in the United States of America (“U.S.

GAAP”).

accepted in the United States of America (“U.S.

and Subsidiaries

Company elected September 30 as its fiscal year-end date.

preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates

and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities

at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period.

Such estimates

include, but are not limited to, provisions for doubtful accounts receivable, net realizable value of inventory, warranty obligations,

income tax accruals, deferred tax valuation and assessments of the recoverability of the Company’s long-lived assets.

results could differ from those estimates.

and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities at the

date of the financial statements, and the reported amounts of revenues and expenses during the reporting period.

Such estimates include,

but are not limited to, provisions for doubtful accounts receivable, net realizable value of inventory, warranty obligations, income

tax accruals, deferred tax valuation and assessments of the recoverability of the Company’s long-lived assets.

Actual results could

differ from those estimates.

of Consolidation

consolidated financial statements include the accounts of the Company, its wholly-owned subsidiaries, Cemtrex Advanced Technologies

Inc., Cemtrex Ltd., Cemtrex Technologies Pvt.

consolidated financial statements include the accounts of the Company, its wholly owned subsidiaries, Cemtrex Advanced Technologies Inc.,

Cemtrex XR Inc., Cemtrex Technologies Pvt.

Ltd., and Advanced Industrial Services, Inc.

and the Company’s majority-owned

subsidiary Vicon Industries, Inc.

and its subsidiaries, Telesite USA, Vicon Industries Ltd., Vicon Deutschland GmbH, and Vicon

Systems, Ltd.

and the Company’s majority owned subsidiary

Vicon Industries, Inc.

and its subsidiary, Vicon Systems, Ltd.

All inter-company balances and transactions have been eliminated in consolidation.

Value, Recoverability and Impairment of Long-Lived Assets

Company’s long-lived assets, which include property and equipment and intangible assets, are reviewed for impairment whenever

events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.

Company assesses the recoverability of its long-lived assets by comparing the projected undiscounted net cash flows associated

with the related long-lived asset or group of long-lived assets over their remaining estimated useful lives against their respective

carrying amounts.

Company’s long-lived assets, which include property and equipment and intangible assets, are reviewed for impairment whenever events

or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.

Company assesses the recoverability of its long-lived assets by comparing the projected undiscounted net cash flows associated with the

related long-lived asset or group of long-lived assets over their remaining estimated useful lives against their respective carrying

Impairment, if any, is based on the excess of the carrying amount over the fair value of those assets.

value is generally determined using the asset’s expected future discounted cash flows or market value, if readily determinable.

When long-lived assets are determined to be recoverable, but the newly determined remaining estimated useful lives are shorter

than originally estimated, the net book values of the long-lived assets are depreciated over the newly determined remaining estimated

useful lives.

Fair value is generally

determined using the asset’s expected future discounted cash flows or market value, if readily determinable.

When long-lived assets

are determined to be recoverable, but the newly determined remaining estimated useful lives are shorter than originally estimated, the

net book values of the long-lived assets are depreciated over the newly determined remaining estimated useful lives.

impairment charges, if any, is included in operating expenses in the accompanying statements of operations.

and Subsidiaries

Company considers all highly liquid investments with maturities of three months or less at the time of purchase to be cash equivalents.

1 unchanged sentence

receivable are recorded at the invoiced amount, net of an allowance for doubtful accounts.

The Company performs on-going credit

evaluations of its customers and adjusts credit limits based upon payment history and the customer’s current credit worthiness,

as determined by the review of their current credit information;

and determines the allowance for doubtful accounts based on historical

write-off experience, customer specific facts and general economic conditions that may affect a client’s ability to pay.

balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery

is considered remote.

The Company determines when receivables are past due or delinquent based on how recently payments have been

Company has $340,848 and $606,051 allowance for doubtful accounts at September 30, 2020 and 2019, respectively.

Company does not have any off-balance-sheet credit exposure to its customers at September 30, 2020 or 2019.

The Company performs on-going credit evaluations

of its customers and adjusts credit limits based upon payment history and the customer’s current credit worthiness, as determined

by the review of their current credit information;

and determines the allowance for doubtful accounts based on historical write-off experience,

customer specific facts and general economic conditions that may affect a client’s ability to pay.

balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered

The Company determines when receivables are past due or delinquent based on how recently payments have been received.

and Subsidiaries

Company has $ 178,992

and $ 340,848

allowance for doubtful accounts at September

30, 2021, and 2020, respectively.

Company does no t have any off-balance-sheet credit exposure to its customers at September 30, 2021, or 2020.

and Cost of Goods Sold

Company values inventory, consisting of finished goods, at the lower of cost or market.

Cost is determined on the first-in and

first- out (“FIFO”) method.

The Company reduces inventory for the diminution of value, resulting from product obsolescence,

damage or other issues affecting marketability, equal to the difference between the cost of the inventory and its estimated market

Factors utilized in the determination of estimated market value include (i) current sales data and historical return rates,

(ii) estimates of future demand, and (iii) competitive pricing pressures.

Cost is determined on the first-in and first-

out (“FIFO”) method.

The Company reduces inventory for the diminution of value, resulting from product obsolescence, damage

or other issues affecting marketability, equal to the difference between the cost of the inventory and its estimated market value.

utilized in the determination of estimated market value include (i) current sales data and historical return rates, (ii) estimates of

future demand, and (iii) competitive pricing pressures.

Company classifies inventory markdowns in the income statement as a component of cost of goods sold.

These markdowns are estimates,

which could vary significantly from actual requirements if future economic conditions, customer demand or competition differ from

expectations.

was $4,575,193 and $3,938,212 in inventory obsolescence at September 30, 2020 and 2019, respectively.

The increase in inventory

obsolescence is due to the addition of slow moving and out of date products.

These markdowns are estimates, which

could vary significantly from actual requirements if future economic conditions, customer demand or competition differ from expectations.

was $ 1,921,001 and

$ 4,575,193 in

inventory obsolescence reserve at September 30, 2021, and 2020, respectively.

The decrease in inventory obsolescence is

due to the disposal of out-of-date products.

and Equipment

1 unchanged sentence

Expenditures for major additions and betterments are capitalized.

Maintenance and repairs are

charged to operations as incurred.

Depreciation of property and equipment is computed by the straight-line method over the estimated

useful lives of the respective assets, shown in the table below;

Maintenance and repairs are charged

to operations as incurred.

Depreciation of property and equipment is computed by the straight-line method over the estimated useful lives

of the respective assets, shown in the table below;

Estimated Useful Life

2 unchanged sentences

Machinery and equipment

sale or retirement of property and equipment, the related cost and accumulated depreciation are removed from the accounts and any gain

or loss is reflected in statements of operations.

is tested for impairment annually as of September 30.

If circumstances change during interim periods between annual tests that would

more likely than not reduce the fair value of a reporting unit below its carrying value, the Company will test goodwill for impairment.

Factors that would necessitate an interim goodwill impairment assessment include prolonged negative industry or economic trends, or significant

under-performance relative to expected, historical or projected future operating results.

Management uses judgment to determine whether

to use a qualitative analysis or a quantitative fair value measurement for its goodwill impairment testing.

The Company’s fair value

measurement approach combines the income and market valuation techniques for each of the Company’s reporting units that carry goodwill.

These valuation techniques use estimates and assumptions including, but not limited to, the determination of appropriate market comparables,

projected future cash flows (including timing and profitability), discount rate reflecting the risk inherent in future cash flows, perpetual

growth rate, and projected future economic and market conditions.

As permitted, if the reporting unit fails the impairment test, the

Financial Accounting Standards Board (“FASB”) issued an Accounting Standard Update (“ASU”) removing step two from

the goodwill impairment test.

If a reporting unit fails the quantitative impairment test, impairment expense is immediately recorded

as the difference between the reporting unit’s fair value and carrying value.

The Company adopted this standard effective October 1,

and Subsidiaries

sale or retirement of property and equipment, the related cost and accumulated depreciation are removed from the accounts and

any gain or loss is reflected in statements of operations.

represents the excess of cost over the fair value of net assets of businesses acquired.

The Company accounts for goodwill under

the guidance of the ASC Topic 350, “Intangibles:

Goodwill and Other”.

Goodwill acquired in a purchase business combination

and determined to have an indefinite useful life is not amortized, but instead tested for impairment, at least annually, in accordance

with this guidance.

The recoverability of goodwill is subject to an annual impairment test or whenever an event occurs or circumstances

change that would more likely than not result in an impairment.

The Company tests goodwill for impairment at the reporting unit

level on an annual basis as of September 30 and between annual tests when an event occurs or circumstances change that could indicate

that the asset might be impaired.

In accordance with the FASB revised guidance on “Testing of Goodwill for Impairment,”

a company first has the option to assess qualitative factors to determine whether it is more likely than not that the fair value

of a reporting unit is less than its carrying amount.

If the company decides, as a result of its qualitative assessment, that

it is more-likely-than- not that the fair value of a reporting unit is less than its carrying amount, the quantitative impairment

test is mandatory.

Otherwise, no further testing is required.

The quantitative impairment test consists of a two-step goodwill

impairment test.

The first step compares the fair value of each reporting unit to its carrying amount.

If the fair value of each

reporting unit exceeds its carrying amount, goodwill is not considered to be impaired and the second step will not be required.

If the carrying amount of a reporting unit exceeds its fair value, the second step compares the implied fair value of goodwill

to the carrying value of a reporting unit’s goodwill.

The implied fair value of goodwill is determined in a manner similar

to accounting for a business combination with the allocation of the assessed fair value determined in the first step to the assets

and liabilities of the reporting unit.

The excess of the fair value of the reporting unit over the amounts assigned to the assets

and liabilities is the implied fair value of goodwill.

This allocation process is only performed for purposes of evaluating goodwill

impairment and does not result in an entry to adjust the value of any assets or liabilities.

An impairment loss is recognized

for any excess in the carrying value of goodwill over the implied fair value of goodwill.

the years ended September 30, 2020, and 2019, there was no impairment of the Company’s goodwill.

October 1, 2019, the Company adopted ASU 2016-02 (Topic 842), “Leases”.

ASU 2016-02 requires that a lessee recognize

the assets and liabilities that arise from operating leases.

A lessee should recognize in the statement of financial position

a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying

asset for the lease term.

For leases with a term of 12 months or less, a lessee is permitted to make an accounting policy election

by class of underlying asset not to recognize lease assets and lease liabilities.

In transition, lessees and lessors may use the

effective date method and elected certain practical expedients allowing the Company not to reassess:

the years ended September 30, 2021, and 2020, there was no impairment of the Company’s goodwill.

October 1, 2019, the Company adopted ASU 2016-02 (Topic 842), “Leases”.

ASU 2016-02 requires that a lessee recognize the

assets and liabilities that arise from operating leases.

A lessee should recognize in the statement of financial position a liability

to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease

For leases with a term of 12 months or less, a lessee is permitted to make an accounting policy election by class of underlying

asset not to recognize lease assets and lease liabilities.

In transition, lessees and lessors may use the effective date method and elected

certain practical expedients allowing the Company not to reassess:

expired or existing contracts contain leases under the new definition of a lease;

1 unchanged sentence

previously capitalized initial direct costs would qualify for capitalization under Topic 842.

Company also made the accounting policy decision not to recognize lease assets and liabilities for leases with a term of 12 months

Company also made the accounting policy decision not to recognize lease assets and liabilities for leases with a term of 12 months or

financial statements shall include disclosures of material related party transactions, other than compensation arrangements, expense

allowances, and other similar items in the ordinary course of business.

However, disclosure of transactions that are eliminated

in the preparation of consolidated or combined financial statements is not required in those statements.

The disclosures shall

the nature of the relationship(s) involved b.

description of the transactions, including transactions to which no

amounts or nominal amounts were ascribed, for each of the periods for which income statements are presented, and such other information

deemed necessary to an understanding of the effects of the transactions on the financial statements;

the dollar amounts of

transactions for each of the periods for which income statements are presented and the effects of any change in the method of

establishing the terms from that used in the preceding period;

amounts due from or to related parties as of the date of

each balance sheet presented and, if not otherwise apparent, the terms and manner of settlement.

and Subsidiaries

However, disclosure of transactions that are eliminated in the

preparation of consolidated or combined financial statements is not required in those statements.

The disclosures shall include:

nature of the relationship(s) involved b.

description of the transactions, including transactions to which no amounts or nominal amounts

were ascribed, for each of the periods for which income statements are presented, and such other information deemed necessary to an understanding

of the effects of the transactions on the financial statements;

the dollar amounts of transactions for each of the periods for which

income statements are presented and the effects of any change in the method of establishing the terms from that used in the preceding

amounts due from or to related parties as of the date of each balance sheet presented and, if not otherwise apparent,

the terms and manner of settlement.

and Contingencies

Company follows subtopic 450-20 of the FASB Accounting Standards Codification to report accounting for contingencies.

conditions may exist as of the date the consolidated financial statements are issued, which may result in a loss to the Company,

but which will only be resolved when one or more future events occur or fail to occur.

The Company assesses such contingent liabilities,

and such assessment inherently involves an exercise of judgment.

In assessing loss contingencies related to legal proceedings

that are pending against the Company or unasserted claims that may result in such proceedings, the Company evaluates the perceived

merits of any legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected

to be sought therein.

Certain conditions

may exist as of the date the consolidated financial statements are issued, which may result in a loss to the Company, but which will

only be resolved when one or more future events occur or fail to occur.

The Company assesses such contingent liabilities, and such assessment

inherently involves an exercise of judgment.

In assessing loss contingencies related to legal proceedings that are pending against the

Company or unasserted claims that may result in such proceedings, the Company evaluates the perceived merits of any legal proceedings

or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein.

the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability

can be estimated, then the estimated liability would be accrued in the Company’s consolidated financial statements.

assessment indicates that a potential material loss contingency is not probable but is reasonably possible, or is probable but

cannot be estimated, then the nature of the contingent liability, and an estimate of the range of possible losses, if determinable

and material, would be disclosed.

contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the guarantees would

be disclosed.

Management does not believe, based upon information available at this time, that these matters will have a material

adverse effect on the Company’s consolidated financial position, results of operations or cash flows.

However, there is

no assurance that such matters will not materially and adversely affect the Company’s business, financial position, and

results of operations or cash flows.

can be estimated, then the estimated liability would be accrued in the Company’s consolidated financial statements.

If the assessment

indicates that a potential material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated,

then the nature of the contingent liability, and an estimate of the range of possible losses, if determinable and material, would be

and Subsidiaries

contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the guarantees would be disclosed.

Management does not believe, based upon information available at this time, that these matters will have a material adverse effect on

the Company’s consolidated financial position, results of operations or cash flows.

However, there is no assurance that such matters

will not materially and adversely affect the Company’s business, financial position, and results of operations or cash flows.

October 1, 2018, the Company adopted ASU 2014-09, Revenue from Contracts with Customers (Topic 606), using the modified retrospective

transition method.

Management determined that there was no cumulative effect adjustment to the consolidated financial statements

and the adoption of the standard did not require any adjustments to the consolidated financial statements for prior periods.

the guidance of the standard, revenue represents the amount received or receivable for goods and services supplied by the Company

to its customers.

Company recognizes revenue at the time a good or service is transferred to a customer and the customer obtains

control of that good or receives the service performed.

Most of the Company’s sales arrangements with customers are short-term

in nature involving single performance obligations related to the delivery of goods or repair of equipment and generally provide

for transfer of control at the time of shipment to the customer.

The Company generally permits returns of product or repaired

equipment due to defects;

however, returns are historically insignificant.

accordance with the authoritative guidance issued by the FASB on revenue recognition, the Company recognizes revenue from cost

reimbursable contracts based on the services provided, typically represented by man-hours worked, and is measured by reference

to agreed charge-out rates or to the estimated total contract revenue.

Revenue from long-term fixed price contracts is recognized

using the percentage-of-completion method, measured by reference to physical completion or the ratio of costs incurred to total

estimated contract costs.

If the outcome of a contract cannot be estimated reliably, as may be the case in the initial stages

of completion of the contract, revenue is recognized only to the extent of the costs incurred that are expected to be recoverable.

If a contract is expected to be loss-making, the expected amount of the loss is recognized immediately in the income statement.

Revenue from short-term contracts is recognized when delivery has occurred, and collection of the resulting receivable is deemed

Timing of revenue recognition may differ from the timing of invoicing to customers.

Management determined that there was no cumulative effect adjustment to the consolidated financial statements and

the adoption of the standard did not require any adjustments to the consolidated financial statements for prior periods.

Under the guidance

of the standard, revenue represents the amount received or receivable for goods and services supplied by the Company to its customers.

Company recognizes revenue at the time a good or service is transferred to a customer and the customer obtains control of that good or

receives the service performed.

Most of the Company’s sales arrangements with customers are short-term in nature involving single

performance obligations related to the delivery of goods or repair of equipment and generally provide for transfer of control at the

time of shipment to the customer.

The Company generally permits returns of product or repaired equipment due to defects;

however, returns

are historically insignificant.

Billing terms vary by customer and product but generally do not exceed 90 days.

accordance with the authoritative guidance issued by the FASB on revenue recognition, the Company recognizes revenue from cost reimbursable

contracts based on the services provided, typically represented by man-hours worked, and is measured by reference to agreed charge-out

rates or to the estimated total contract revenue.

Revenue from long-term fixed price contracts is recognized using the percentage-of-completion

method, measured by reference to physical completion or the ratio of costs incurred to total estimated contract costs.

If the outcome

of a contract cannot be estimated reliably, as may be the case in the initial stages of completion of the contract, revenue is recognized

only to the extent of the costs incurred that are expected to be recoverable.

If a contract is expected to be loss-making, the expected

amount of the loss is recognized immediately in the income statement.

Revenue from short-term contracts is recognized when delivery has

occurred, and collection of the resulting receivable is deemed probable.

Timing of revenue recognition may differ from the timing of

invoicing to customers.

Billing terms vary by customer and product but generally do not exceed 90 days

Company records a liability when receiving cash in advance of delivering goods or services to the customer.

This liability is

reversed against the receivable recognized when those goods or services are delivered

and Subsidiaries

This liability is reversed

against the receivable recognized when those goods or services are delivered.

The amounts were $ 2,472,137 , $ 1,965,155 , and $ 1,769,380 ,

for the years ended September 30, 2021, 2020, and 2019 respectively.

Company provides for the estimated cost of product warranties at the time revenue is recognized.

While the Company engages in

product quality programs and processes, including monitoring and evaluating the quality of its component suppliers, its warranty

obligation is affected by product failure rates, material usage and service delivery costs incurred in correcting a product failure.

Should actual product failure rates, material usage or service delivery costs differ from its estimates, revisions to the estimated

warranty liability may be required.

and Handling Costs

Company accounts for shipping and handling fees in accordance with paragraph 605-45 of the FASB Accounting Standards Codification.

Amounts charged to customers for shipping products are included in revenues, the related costs are classified in cost of goods

sold as incurred.

While the Company engages in product

quality programs and processes, including monitoring and evaluating the quality of its component suppliers, its warranty obligation is

affected by product failure rates, material usage and service delivery costs incurred in correcting a product failure.

Should actual

product failure rates, material usage or service delivery costs differ from its estimates, revisions to the estimated warranty liability

may be required.

and Subsidiaries

Tax Provision

Company accounts for income taxes under ASC 740-10, which requires recognition of deferred tax assets and liabilities for the

expected future tax consequences of events that have been included in the financial statements or tax returns.

Under this method,

deferred tax assets and liabilities are based on the differences between the financial statement and tax bases of assets and liabilities

using enacted tax rates in effect for the year in which the differences are expected to reverse.

Deferred tax assets are reduced

by a valuation allowance to the extent management concludes it is more likely than not that the assets will not be realized.

tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those

temporary differences are expected to be recovered or settled.

The effect on deferred tax assets and liabilities of a change in

tax rates is recognized in the Consolidated Statements of Operations and Comprehensive Income in the period that includes the

enactment date.

Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position

will be sustained on examination by the taxing authorities, based on the technical merits of the position.

The tax benefits recognized

in the financial statements from such a position should be measured based on the largest benefit that has a greater than fifty

(50) percent likelihood of being realized upon ultimate settlement.

The Company will accrue for interest and penalties on income

taxes when there is a likelihood that they will occur and can be reasonably estimated.

Company accounts for income taxes under ASC 740-10, which requires recognition of deferred tax assets and liabilities for the expected

future tax consequences of events that have been included in the financial statements or tax returns.

Under this method, deferred tax

assets and liabilities are based on the differences between the financial statement and tax bases of assets and liabilities using enacted

tax rates in effect for the year in which the differences are expected to reverse.

Deferred tax assets are reduced by a valuation allowance

to the extent management concludes it is more likely than not that the assets will not be realized.

Deferred tax assets and liabilities

are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected

to be recovered or settled.

The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the Consolidated

Statements of Operations and Comprehensive Income in the period that includes the enactment date.

Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be

sustained on examination by the taxing authorities, based on the technical merits of the position.

The tax benefits recognized in the

financial statements from such a position should be measured based on the largest benefit that has a greater than fifty (50) percent

likelihood of being realized upon ultimate settlement.

The Company will accrue for interest and penalties on income taxes when there

is a likelihood that they will occur and can be reasonably estimated.

estimated future tax effects of temporary differences between the tax basis of assets and liabilities are reported in the accompanying

consolidated balance sheets, as well as tax credit carrybacks and carry-forwards.

consolidated balance sheets, as well as tax credit carrybacks and carryforwards.

The Company periodically reviews the recoverability

of deferred tax assets recorded on its consolidated balance sheets and provides valuation allowances as management deems necessary.

makes judgments as to the interpretation of the tax laws that might be challenged upon an audit and cause changes to previous

estimates of tax liability.

In addition, the Company operates within multiple taxing jurisdictions including the United States,

India, and The United Kingdom, and is subject to audit in these jurisdictions.

In management’s opinion, adequate

provisions for income taxes have been made for all years.

If actual taxable income by tax jurisdiction varies from estimates,

additional allowances or reversals of reserves may be necessary.

makes judgments as to the interpretation of the tax laws that might be challenged upon an audit and cause changes to previous estimates

of tax liability.

In addition, the Company operates within multiple taxing jurisdictions including the United States, India, and The

United Kingdom, and is subject to audit in these jurisdictions.

In management’s opinion, adequate provisions for income taxes have

been made for all years.

If actual taxable income by tax jurisdiction varies from estimates, additional allowances or reversals of reserves

may be necessary.

Tax Positions

the years ended September 30, 2020 and 2019, the Company did not take any uncertain tax positions and had no adjustments to its

income tax liabilities or benefits.

The Company will record any interest and/or penalties arising from uncertain tax provisions

when they are likely to occur and reasonably estimable.

the years ended September 30, 2021, and 2020, the Company did not take any uncertain tax positions and had no adjustments to its income

tax liabilities or benefits.

The Company will record any interest and/or penalties arising from uncertain tax provisions when they are

likely to occur and reasonably estimable.

for Share-Based Compensation

Company follows ASC 718 (“Share-Based Payment”), which requires that all share-based payments to employees, including

stock options, stock appreciation rights (SARs) and common stock share awards, be recognized as compensation expense in the consolidated

financial statements based on their fair values and over the requisite service period.

and Subsidiaries

fair value for options granted was determined at the date of grant using a Black-Scholes valuation model and the straight-line

attribution approach using the following weighted average assumptions:

The risk-free interest rate used in the Black-Scholes valuation

method is based on the implied yield currently available in U.S.

Company follows ASC 718 (“Share-Based Payment”), which requires that all share-based payments to employees, including stock

options, stock appreciation rights (SARs) and common stock share awards, be recognized as compensation expense in the consolidated financial

statements based on their fair values and over the requisite service period.

fair value for options granted was determined at the date of grant using a Black-Scholes valuation model and the straight-line attribution

approach using the following weighted average assumptions:

The risk-free interest rate used in the Black-Scholes valuation method is

based on the implied yield currently available in U.S.

Treasury securities at maturity with an equivalent term.

than a one-time dividend paid in fiscal year 2017, the Company never declared or paid any cash dividends and does not currently

expect to do so in the future.

Expected volatility is based on the annualized daily historical volatility of the Company’s

stock over a representative period.

The weighted-average expected life represents the period over which stock-based awards are

expected to be outstanding and was determined based on a number of factors, including historical weighted average and projected

holding periods for the remaining unexercised shares, the contractual terms of the Company’s stock-based awards, vesting

schedules and expectations of future employee behavior.

Other than a one-time

dividend paid in fiscal year 2017, the Company never declared or paid any cash dividends and does not currently expect to do so in the

Expected volatility is based on the annualized daily historical volatility of the Company’s stock over a representative

The weighted-average expected life represents the period over which stock-based awards are expected to be outstanding and was

determined based on a number of factors, including historical weighted average and projected holding periods for the remaining unexercised

shares, the contractual terms of the Company’s stock-based awards, vesting schedules and expectations of future employee behavior.

Income (Loss) per Common Share

net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of shares of common

stock outstanding during the period.

Diluted net income per common share is computed by dividing net income by the weighted average

number of shares of common stock and potentially dilutive outstanding shares of common stock during the period to reflect the

potential dilution that could occur from common shares issuable through contingent share arrangements, stock options and warrants.

As of September 30, 2020, and 2019, the following items were excluded from the computation of diluted net loss per common share

as their effect is anti-dilutive:

For the years ended

September 30,

Warrants to purchase shares

net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of shares of common stock

outstanding during the period.

Diluted net income per common share is computed by dividing net income by the weighted average number

of shares of common stock and potentially dilutive outstanding shares of common stock during the period to reflect the potential dilution

that could occur from common shares issuable through contingent share arrangements, stock options and warrants.

As of September 30, 2021,

and 2020, the following items were excluded from the computation of diluted net loss per common share as their effect is anti-dilutive:

SCHEDULE OF COMPUTATION OF DILUTED NET LOSS PER COMMON SHARE AS ANTI-DILUTIVE EFFECT

the year ended

to purchase shares

and Subsidiaries

Currency Translation Gain and Comprehensive Income (Loss)

countries in which the Company operates, and the functional currency is other than the U.S.

dollar, assets and liabilities are

translated using published exchange rates in effect at the consolidated balance sheet date.

Revenues and expenses and cash flows

are translated using an approximate weighted average exchange rate for the period.

Resulting translation adjustments are recorded

as a component of accumulated other comprehensive income on the accompanying consolidated balance sheet.

For the years ending

September 30, 2020 and September 30, 2019, comprehensive loss includes a gain of $22,295 and a gain of $1,279,301, respectively,

which were entirely from foreign currency translation.

of and for the year ended September 30, 2020 the Company used the following exchange rates.

Exchange rate at

December 31, 2019

dollar, assets and liabilities are translated

using published exchange rates in effect at the consolidated balance sheet date.

Revenues and expenses and cash flows are translated

using an approximate weighted average exchange rate for the period.

Resulting translation adjustments are recorded as a component of

accumulated other comprehensive income on the accompanying consolidated balance sheet.

For the years ending September 30, 2021, and September

30, 2020, comprehensive loss includes a gain of $ 996,100

and $ 57,639 ,

respectively, which were entirely from foreign currency translation.

of and for the year ended September 30, 2021, and 2020 the Company used the following exchange rates.

SCHEDULE OF FOREIGN CURRENCY EXCHANGE RATE

exchange rate

For the three months ended

December 31, 2019

Exchange rate at

September 30, 2020

For the year ended

September 30, 2020

Great Britain Pound

and Subsidiaries

the year ended

Britain Pound

Flows Reporting

Company adopted uses the indirect or reconciliation method (“Indirect method”) as to report net cash flow from operating

activities by adjusting net income to reconcile it to net cash flow from operating activities by removing the effects of (a) all

deferrals of past operating cash receipts and payments and all accruals of expected future operating cash receipts and payments

and (b) all items that are included in net income that do not affect operating cash receipts and payments.

The Company reports

the reporting currency equivalent of foreign currency cash flows, using the current exchange rate at the time of the cash flows

and the effect of exchange rate changes on cash held in foreign currencies is reported as a separate item in the reconciliation

of beginning and ending balances of cash and cash equivalents and separately provides information about investing and financing

activities not resulting in cash receipts or payments in the period.

Company adopted uses the indirect or reconciliation method (“Indirect method”) as to report net cash flow from operating

activities by adjusting net income to reconcile it to net cash flow from operating activities by removing the effects of (a) all deferrals

of past operating cash receipts and payments and all accruals of expected future operating cash receipts and payments and (b) all items

that are included in net income that do not affect operating cash receipts and payments.

The Company reports the reporting currency equivalent

of foreign currency cash flows, using the current exchange rate at the time of the cash flows and the effect of exchange rate changes

on cash held in foreign currencies is reported as a separate item in the reconciliation of beginning and ending balances of cash and

cash equivalents and separately provides information about investing and financing activities not resulting in cash receipts or payments

in the period.

Company will evaluate subsequent events through the date when the financial statements were issued.

It is the Company’s

policy to disclose subsequent information that it feels is important to the context of the financial statements.

Reclassifications

reclassifications have been made to prior period amounts to conform to the current period presentation.

It is the Company’s policy

to disclose subsequent information that it feels is important to the context of the financial statements.

and Subsidiaries

Issued Accounting Pronouncements Not Yet Effective

Goodwill and Other - Internal-Use Software

August 2018, the FASB issued No.

ASU 2018-15, which addresses a customer’s accounting for implementation costs incurred

in a cloud computing arrangement that is a service contract.

Under the new standard, customers will apply the same criteria for

capitalizing implementation costs as they would for an arrangement that has a software license.

ASU 2018-15 is effective for annual

reporting periods beginning after December 15, 2019, including interim periods within those annual reporting periods, with early

adoption permitted.

As of September 30, 2020, the Company does not have significant implementation costs incurred in a cloud computing

arrangement that is a service contract and therefore upon adoption the impact of the new standard on its consolidated financial

statements and related disclosures is not expected to be material.

All future implementation costs in such arrangements will be

capitalized and amortized over the life of the arrangement, which may have a material impact in those future periods if such costs

are material.

August 2018, the FASB issued ASU No.

2018-13, which changes the fair value measurement disclosure requirements of ASC 820.

2018-13 will be effective for annual reporting periods beginning after December 15, 2019, including interim periods within

those annual reporting periods, with early adoption permitted for any eliminated or modified disclosures upon issuance of

Upon adoption, the new standard will eliminate certain disclosure requirements in the Company’s consolidated financial

Instruments –

Credit Losses

June 2016, the FASB issued ASU No.

2016-13, Financial Instruments-Credit Losses (Topic 326) , which requires entities

to measure all expected credit losses for financial assets held at the reporting date based on historical experience, current

conditions, and reasonable and supportable forecasts.

This replaces the existing incurred loss model and is applicable to the

measurement of credit losses on financial assets measured at amortized cost.

ASU 2016-13 is effective for smaller reporting companies

for annual reporting periods beginning after December 15, 2022, including interim periods within those annual reporting periods,

with early adoption permitted.

The Company is currently evaluating the impact of the new standard on its consolidated financial

statements and related disclosures.

other Accounting Standards Updates issued but not yet effective are not expected to have a material effect on the Company’s

future consolidated financial statements or related disclosures.

August 5, 2020, the Financial Accounting Standards Board (FASB) issued accounting standards update (ASU) No.

2020-06, Debt—Debt

with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic

amendments in the ASU remove certain separation models for convertible debt instruments and convertible preferred stock that require

the separation of a convertible debt instrument into a debt component and an equity or derivative component.

The ASU also amends the

derivative scope exception guidance for contracts in an entity’s own equity.

The amendments remove three settlement conditions

that are required for equity contracts to qualify for the derivative scope exception.

addition to the above, the ASU expands disclosure requirements for convertible instruments and simplifies areas of the guidance for diluted

earnings-per-share calculations that are impacted by the amendments.

ASU is effective for public business entities that meet the definition of a Securities and Exchange Commission (SEC) filer, excluding

smaller reporting companies as defined by the SEC, for fiscal years beginning after December 15, 2021.

Early adoption is permitted.

FASB noted that an entity should adopt the guidance as of the beginning of its annual fiscal year.

The standard is effective for the

Company beginning in fiscal year October 1, 2022.

may elect to adopt the amendments through either a modified retrospective method of transition or a fully retrospective method of transition.

If an entity has convertible instruments that include a down round feature, early adoption of the ASU is permitted for fiscal years beginning

after December 15, 2020.

2016-13 Measurement of Credit Losses on Financial Instrument is effective for fiscal years beginning after December 15, 2022.

not expected to apply to the Company as financial instruments giving rise to credit risk are not utilized by the Company.

May 2021, the FASB issued ASU 2021-04, Earnings Per Share (Topic 260), Debt-Modifications and Extinguishments (Subtopic 470-50), Compensation-Stock

Compensation (Topic 718), and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40).

The new ASU addresses

issuer’s accounting for certain modifications or exchanges of freestanding equity-classified written call options.

This amendment

is effective for all entities, for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years.

Early adoption is permitted.

The Company is currently evaluating the impact this new guidance will have on its financial statements

Company does not believe that any other recently issued but not yet effective accounting pronouncements, if adopted, would have a material

effect on the accompanying consolidated financial statements.

3 – RESTATEMENTS OF FINANCIAL STATEMENTS

February 23, 2021, Cemtrex’s Board of Directors determined that certain transactions between Cemtrex Inc.

and First Commercial,

a company owned by former Executive Director, former Controlling Shareholder and former CFO, Aron Govil, were incorrectly handled and

accounted for.

total amount of disputed transfers was approximately $ 7,100,000 and occurred in fiscal year 2017 in the amount of $ 5,600,000 and in fiscal

year 2018 in the amount of $ 1,500,000 .

Cemtrex did not find any other such transfers during this period or thereafter, upon further review

of the Company’s records.

the Company’s investigation into this matter, the Company has determined that there were inaccuracies in the Company’s financial

The financials for the periods 2017 and 2018 were incorrect corresponding to the amounts that were incorrectly accounted

for, and subsequent years were affected by the roll forward effects of these entries.

The Company found unsupported advertising expenses

in the amount of approximately $ 400,000 on Cemtrex Inc’s income statement for fiscal year 2018 and found that approximately $ 5,700,000

of intangible assets and $ 975,000 of research and development expenses, as translated at from Indian Rupee at the time, were recorded

on Cemtrex India’s financial statements in fiscal year 2018 and could not be substantiated.

The total amount of unsubstantiated

transfers recorded by Cemtrex India, and the unsupported advertising expense recorded by Cemtrex, Inc.

sums to $ 7,100,000 , corresponding

with the total amount in question regarding First Commercial transfers during fiscal years 2017 and 2018.

and Subsidiaries

part of the restatement investigation, it was determined that the Company did not follow GAAP in the treatment of its Series 1 Preferred

The Company currently has a deficit in retained earnings and in accordance with guidance has reversed the accrual for dividends

payable and placed the amount of the accrual back into retained earnings.

In response to

the above discussed restatements, the Company revisited its fiscal year 2020 financial statements.

As a result, the following items have

been restated, (i) inventory valuation, recognition of discontinued operations, accrued expenses, and accounts payable of the Company’s

subsidiary Vicon Industries, Inc., (ii) fixed asset valuation and deferred revenue of the Company’s subsidiary Advanced Industrial

Services, Inc., some of these valuation error dates to prior to acquisition of each entity.

and Adjusting Entries

Company has determined that these transactions are not material in the years that they occurred and conclude that prior financial reports

can be relied upon.

The Company’s determination is based on the following:

The adjustments do not cause any changes to the previously

reported cash and debt balances as of the end of each of the periods in FY 2019 and 2020.

The adjustments also do not cause any changes

to revenues in any of the prior periods.

In addition, the Company expects to maintain compliance with its debt covenants based on a preliminary

review of the covenants for all the impacted periods.

The Company has also determined that the adjustments have little effect on the

trend of earnings over the last three fiscal years.

In 2017 the operations of the Company were vastly different with both the environmental

and circuit board manufacturing segments accounting for approximately 75% of revenues.

These businesses are now either sold or discontinued.

The current reported 2017 financial statements of the Company do not give an accurate representation of the Company today because only

16% of the $120M business operations are still a part of current operations.

table below represents the balances of the affected accounts on the Condensed Consolidated Balance Sheets as of September 30, 2020, the

Condensed Consolidated Statements of Operations and Comprehensive Income/(Loss) for the year ended September 30, 2020, Condensed Consolidated

Statement of Stockholders’ Equity, and the Condensed Consolidated Statements of Cash Flows for the year ended September 30, 2020.

Consolidated Balance Sheets

SCHEDULE OF CONDENSED CONSOLIDATED BALANCE SHEETS

as reported on September 30, 2020

of net value of intangible assets

resulting from reaudit of Fiscal Year 2020 Financial Statements

of net value of inventory

of net value of fixed assets

effect of restatement adjustments

on amounts transferred to First Commercial

effect of currency translation

balance at September 30, 2020

and equivalents

expenses and other assets

$ ( 362,307 )

and equipment, net

$ ( 2,597,185 )

$ ( 987,901 )

–net of allowance for inventory obsolescence

$ ( 1,847,349 )

$ ( 285,460 )

$ ( 153,958 )

long-term liabilities

$ ( 295,138 )

1 preferred stock dividends payable

$ ( 1,081,690 )

paid-in capital

$ ( 3,091,570 )

earnings (accumulated deficit)

$ ( 33,172,690 )

$ ( 7,100,000 )

$( 34,100,067 )

other comprehensive income

Consolidated Statements of Operations and Comprehensive Income/(Loss)

SCHEDULE OF CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME/(LOSS)

For the year ended

September 30, 2020

Previously reported

Net loss available to Cemtrex, Inc.

$ ( 13,105,005 )

$ ( 10,470,081 )

Cost of revenues

General and administrative

$ ( 1,206,938 )

Preferred dividends

$ ( 3,171,230 )

Loss Per Share-Basic

Loss Per Share-Diluted

and Subsidiaries

Consolidated Statement of Stockholders’ Equity

SCHEDULE OF CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY

For the year ended

September 30, 2020

Previously reported

Retained earnings (accumulated deficit) at September 30, 2019

$ ( 20,067,685 )

$ ( 3,562,301 )

$ ( 23,629,986 )

Dividends pad in series preferred shares

$ ( 2,089,540 )

Accrued dividends

$ ( 1,081,690 )

Net income/(loss)

$ ( 9,706,659 )

$ ( 763,422 )

$ ( 10,470,081 )

Retained earnings (accumulated deficit) at September 30, 2020

$ ( 33,172,690 )

$ ( 927,377 )

$ ( 34,100,067 )

Accumulated other comprehensive income/(loss)at September 30, 2019

Foreign currency translation gain

Income in noncontrolling interest

Accumulated other comprehensive income/(loss) at September 30, 2020

Additional paid-in capital at September 30, 2019

$ ( 1,002,030 )

Additional paid-in capital at September 30, 2020

$ ( 3,091,570 )

Non-controlling interst of Vicon at September 30, 2019

Income in noncontrolling interest

Non-controlling interst of Vicon at September 30, 2020

Consolidated Statements of Cash Flows

SCHEDULE OF CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

the year ended

September 30, 2020

Previously reported

$ ( 9,706,659 )

$ ( 536,306 )

$ ( 10,242,965 )

Depreciation and amortization

$ ( 594,317 )

$ ( 1,586,651 )

Accrued expenses

$ ( 499,527 )

$ ( 174,265 )

$ ( 673,792 )

Net cash used by operating activities - continuing operations

$ ( 3,786,202 )

$ ( 3,347,846 )

February 26, 2021, the Company entered into a Settlement Agreement and Release with Aron Govil regarding these transactions.

part of the Settlement Agreement, Mr.

Govil was required to pay the Company consideration with a total value of $ 7,100,000 (the “Settlement

Amount”) by entering into the Agreement.

The Settlement Amount was satisfied in a combination of Mr.

Govil forfeiting certain Preferred

Stock and outstanding options and executing a secured note in the amount of $ 1,533,280 .

The Independent Board of Directors in coordination

with Management concluded the settlement represented fair value.

March 2021, Mr.

Govil returned to the Company 1,000,000 shares of Series A Preferred Stock, 50,000 Shares of Series C Preferred Stock,

469,949 shares of Series 1 Preferred Stock, and forfeited all outstanding options to purchase shares of commons stock (collectively,

the “Securities”).

For the purposes of accounting recognition, the Company determined the fair value of the Series A, Series

C, and Series 1 Preferred stock based on the closing trading value of the Series 1 Preferred Stock on the date of the agreement.

options surrendered were valued using the Black-Scholes option pricing model.

Company recognized the gain with respect to the surrendered Securities during this reporting period.

The gain of $ 3,674,165 is reported

as Settlement Agreement - Related Party on the Company’s Condensed Consolidated Statements of Operations and Comprehensive Income/(Loss).

discussed above, Mr.

Govil also executed a secured promissory note (the “Note”) in the amount of $ 1,533,280 .

The Note matures

and is due in full in two years and bears interest at 9% per annum and is secured by all of Mr.

Govil’s assets.

agreed to sign an affidavit confessing judgment in the event of a default on the Note.

While the Company believes the note is fully collectible,

in accordance with ASC 450-30, Gain Contingencies, the Company determined the gain will not be recognized until the note is paid.

the note and associated gain is not presented on the Company’s Condensed Consolidated Balance Sheets and Condensed Consolidated

Statements of Operations and Comprehensive Income/(Loss).

and Subsidiaries

4 PURCHASED ASSETS AND INVESTMENTS

March 23, 2018, in a private resale transaction, Cemtrex purchased 3,643 (7,284,824 prior to a 2,000-1 reverse stock split) shares

of common stock and a warrant to purchase an additional 750 (1,500,000 prior to a 2,000-1 reverse stock split) shares of common

stock of Vicon Industries, Inc.

VCON), (“Vicon”), from a former Vicon shareholder NIL Funding Corporation,

pursuant to the terms of a Securities Purchase Agreement.

Cemtrex’s purchase of the Vicon Industries common stock and warrant

resulted in its beneficial ownership of approximately 46% of the outstanding shares of common stock of Vicon.

Cemtrex purchased

the shares of common stock and warrant of Vicon Industries in exchange for 126,579 shares of Cemtrex common stock.

Following the

closing of the transaction, Saagar Govil, Cemtrex’s Chairman and Chief Executive Officer, and Aron Govil, Cemtrex’s

Executive Director, joined the Vicon Industries Board of Directors and Saagar Govil assumed the position of Chief Executive Officer

of Vicon Industries.

Following the resignation of all other Board members by January 2019, the Company gained the ability to exercise

significant management control over the operations of Vicon.

Because of this increased management ability, and pursuant to GAAP,

the Company has consolidated the accounts of Vicon into its financial statements beginning as of January 14, 2019.

Prior to January

14, 2019, the Company reported its 48% ownership of Vicon as an asset with a balance of $1,356,495 and was using the equity method

of accounting for this asset.

At January 14, 2019, the fair market value of the Company’s investment in Vicon was determined

to be $527,089 and the Company reported as other expense a loss of $829,406, to adjust the carrying value to fair value under

Upon recording the fair value of the assets and liabilities of Vicon, $1,893,075 was recorded as Goodwill.

2019, the Company acquired 7,500 (15,000,000 prior to a 2,000-1 reverse stock split) shares of Vicon common stock in exchange

for $300,000 owed by Vicon to the Company for services provided.

On February 21, 2020, the Company purchased 71,429

February 21, 2020, the Company purchased 71,429

shares for $ 500,000 .

The Company now owns approximately 95% of Vicon’s outstanding shares of common stock.

Company now owns approximately 95% of Vicon’s outstanding shares of common stock .

5 – DISCONTINUED OPERATIONS

FROM ENVIRONMENTAL BUSINESS

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

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

Services group.

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.

and liabilities included within discontinued operations on the Company’s Consolidated Balance Sheets at September 30, 2020

and 2019 are as follows;

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.

fiscal 2021, the Company made the final determination on it inactive entities and have written off all assets and liabilities of these

and liabilities included within discontinued operations on the Company’s Consolidated Balance Sheets at September 30, 2021 and

2020 are as follows;

SCHEDULE OF DISPOSAL GROUPS, INCLUDING DISCONTINUED OPERATIONS

September 30,

receivables - related party

current assets

Trade receivables - related party

Total current assets

Property and equipment, net

Assetss held for sale

Current liabilities

Accounts payable

Total liabilities

and equipment, net

held for sale

and Subsidiaries

from discontinued operations, net of tax and the loss on sale

of discontinued operations, net of tax, of the ROB Cemtrex Companies and Griffin Filters business, sold during fiscal year

2019, which are presented in total as discontinued operations, net of tax in the Company’s Consolidated Statements of

Operations for the years ended September 30, are as follows:

from discontinued operations, net of tax and the loss on sale of discontinued operations, net of tax, of Centrex, LTD, IQInVision, Vicon Deutschland GmbH, Vicon Systems Ltd., and Griffin Filters are presented in total as

discontinued operations, net of tax in the Company’s Consolidated Statements of Operations for the years ended September 30,

are as follows:

Year ended September 30,

4 unchanged sentences

Income (loss) from discontinued operations

( 8,280,047 )

Loss on sale of discontinued operations

2 unchanged sentences

$ ( 8,280,047 )

$ ( 812,895 )

6 – SEGMENT AND GEOGRAPHIC INFORMATION

2 unchanged sentences

(IS) segment.

The AT segment develops smart devices and provides progressive design and development solutions to create impactful

experiences for mobile, web, virtual and augmented reality, wearables and television as well as providing cutting edge, mission

critical security and video surveillance.

The IS segment offers single-source expertise and services for rigging, millwrighting,

in plant maintenance, equipment erection, relocation, and disassembly to diversified customers in USA in industries such as:

steel, printing, construction, & petrochemical.

The AT segment develops smart devices and provides progressive design and development solutions to create impactful experiences

for mobile, web, virtual and augmented reality, wearables and television as well as providing cutting edge, mission critical security

and video surveillance.

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

equipment erection, relocation, and disassembly to diversified customers in USA in industries such as:

chemical, steel, printing, construction,

& petrochemical.

and Subsidiaries

following tables summarize the Company’s segment information:

SCHEDULE OF SEGMENT INFORMATION

For the years ended

12 unchanged sentences

Industrial Services

( 1,290,938 )

Total operating loss

1 unchanged sentence

$ ( 4,569,811 )

Other expense

Other income/(expense)

Advanced Technologies

$ ( 2,588,609 )

$ (4,441,385 )

Industrial Services

1 unchanged sentence

$ ( 2,786,424 )

$ (4,848,211 )

Depreciation and Amortization

2 unchanged sentences

Total depreciation and amortization

September 30,

Identifiable Assets

Advanced Technologies

Industrial Services

Discontinued operations

and Subsidiaries

Company generates revenue from product sales and services from its subsidiaries located in the United States, The United Kingdom,

Company generates revenue from product sales and services from its subsidiaries located in the United States, The United Kingdom, and

Revenue and long-lived asset information for the Company is as follows:

SCHEDULE OF REVENUE FROM PRODUCT SALES AND SERVICES FROM ITS SUBSIDIARIES

September 30,

Long-lived Assets

7 – FAIR VALUE MEASUREMENTS

1 unchanged sentence

between market participants at the measurement date.

A three-level hierarchy is applied to prioritize the inputs to valuation

techniques used to measure fair value.

The hierarchy gives the highest priority to unadjusted quoted prices in active markets

for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements).

A three-level hierarchy is applied to prioritize the inputs to valuation techniques

used to measure fair value.

The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets

or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements).

three levels of the fair value hierarchy under the guidance for fair value measurements are described below:

Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting

entity has the ability to access at the measurement date.

Our Level 1 assets include cash equivalents, banker’s acceptances,

trading securities investments and investment funds.

We measure trading securities investments and investment funds at quoted

market prices as they are traded in an active market with sufficient volume and frequency of transactions.

1 — Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity

has the ability to access at the measurement date.

Our Level 1 assets include cash equivalents, banker’s acceptances, trading securities

investments and investment funds.

We measure trading securities investments and investment funds at quoted market prices as they are

traded in an active market with sufficient volume and frequency of transactions.

2 — Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability,

either directly or indirectly.

If the asset or liability has a specified contractual term, a Level 2 input must be observable

for substantially the full term of the asset or liability.

Level 3 inputs are unobservable inputs for the asset or liability in which there is little, if any, market activity

for the asset or liability at the measurement date.

Level 3 assets and liabilities include cost method investments, goodwill,

intangible assets, and property, plant and equipment, which are measured at fair value using a discounted cash flow approach when

they are impaired.

Quantitative information for Level 3 assets and liabilities reviewed at each reporting period includes indicators

of significant deterioration in the earnings performance, credit rating, asset quality, business prospects of the investee, and

financial indicators of the investee’s ability to continue as a going concern.

If the asset or liability has a specified contractual term, a Level 2 input must be observable for substantially

the full term of the asset or liability.

3 — Level 3 inputs are unobservable inputs for the asset or liability in which there is little, if any, market activity for the

asset or liability at the measurement date.

Level 3 assets and liabilities include cost method investments, goodwill, intangible assets,

and property, plant and equipment, which are measured at fair value using a discounted cash flow approach when they are impaired.

information for Level 3 assets and liabilities reviewed at each reporting period includes indicators of significant deterioration in

the earnings performance, credit rating, asset quality, business prospects of the investee, and financial indicators of the investee’s

ability to continue as a going concern.

and Subsidiaries

Company’s fair value assets for the years ended September 30, 2020 and 2019 are as follows;

Quoted Prices

Identical Assets

September 30,

Investment in marketable securities (included in short-term investments)

Company’s fair value assets for the years ended September 30, 2021, and 2020, are as follows;

SCHEDULE OF FAIR VALUE OF ASSETS

Quoted Prices

Identical Assets

Investment in marketable securities

(included in short-term investments)

Quoted Prices in Active

September 30,

Investment in marketable securities (included in short-term investments)

Company’s investments are actively traded in the stock and bond markets.

Therefore, there is either a realized gain or

loss that is recorded when a sale happens.

For the fiscal year ended September 30, 2020 the Company had sales of equity

securities which yielded gross realized gains of $1,663,311 and gross realized losses of $28,229.

Investment in marketable securities

(included in short-term investments)

8 – RESTRICTED CASH

subsidiary of the Company participates in a consortium in order to self-insure group care coverage for its employees.

is administrated by Benecon Group and the Company makes monthly deposits in a trust account to cover medical claims and any administrative

costs associated with the plan.

These funds, as required by the plan are restricted in nature and amounted to $1,582,798

and $1,088,091 as of September 30, 2020 and 2019, respectively.

The Company also records a liability for claims that have been

incurred but not recorded at the end of each year.

The amount of the liability is determined by Benecon Group.

The liability recorded

in accrued expenses amounted to $98,056 and $118,889 as of September 30, 2020 and 2019, respectively.

The plan is administrated

by Benecon Group and the Company makes monthly deposits in a trust account to cover medical claims and any administrative costs associated

with the plan.

These funds, as required by the plan are restricted in nature and amounted to $ 1,601,932 as of September 30, 2021.

Additionally,

the Company has a standby letter of credit for deposit on a building lease and payable against.

a money market account, the amount of

the standby letter of credit is $ 157,415 .

9 – ACCOUNTS RECEIVABLE, NET

receivable, net consists of the following:

SCHEDULE OF ACCOUNTS RECEIVABLE, NET

September 30,

Accounts receivable

Allowance for doubtful accounts

Accounts receivables,

receivable include amounts due for shipped products and services rendered.

for doubtful accounts include estimated losses resulting from the inability of our customers to make required payments.

and Subsidiaries

10 – INVENTORY, NET

net of reserves, consist of the following:

SCHEDULE OF INVENTORY, NET

September 30,

3 unchanged sentences

Finished goods

Inventory, gross

Allowance for inventory obsolescence

Inventory –net of allowance for inventory obsolescence

( 1,921,001 )

( 5,800,000 )

Inventory –net of allowance for inventory obsolescence

and Subsidiaries

11 – PROPERTY AND EQUIPMENT

and equipment are summarized as follows:

SUMMARY OF PROPERTY AND EQUIPMENT

September 30,

9 unchanged sentences

Property and equipment, net

Company completed the annual impairment test of property and equipment and determined that there was no impairment as the fair

value of property and equipment, substantially exceeded their carrying values at September 30, 2019.

Depreciation and amortization

of property and equipment totaled approximately $2,898,399 and $3,013,986 for fiscal years ended September 30, 2020 and 2019,

respectively.

September 30, 2020, the Company has $8,323,321 net value of property and equipment reported on the Consolidated Balance Sheet

as Assets held for sale.

842, “Leases”, requires that a lessee recognize the assets and liabilities that arise from operating leases.

should recognize in the statement of financial position a liability to make lease payments (the lease liability) and a right-of-use

asset representing its right to use the underlying asset for the lease term.

For leases with a term of 12 months or less, a lessee

is permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and lease liabilities.

In transition, lessees and lessors are required to recognize and measure leases at either the effective date (the “effective

date method”) or the beginning of the earliest period presented (the “comparative method”) using a modified

retrospective approach.

Under the effective date method, the Company’s comparative period reporting is unchanged.

under the comparative method, the Company’s date of initial application is the beginning of the earliest comparative period

presented, and the Topic 842 transition guidance is then applied to all comparative periods presented.

Further, under either transition

method, the standard includes certain practical expedients intended to ease the burden of adoption.

The Company adopted ASC 842

October 1, 2019 using the effective date method and elected certain practical expedients allowing the Company not to reassess:

whether expired

or existing contracts contain leases under the new definition of a lease;

lease classification

for expired or existing leases;

whether previously

capitalized initial direct costs would qualify for capitalization under Topic 842.

and Subsidiaries

Company also made the accounting policy decision not to recognize lease assets and liabilities for leases with a term of 12 months

Company completed the annual impairment test of property and equipment and determined that there was no impairment as the fair value

of property and equipment, substantially exceeded their carrying values at September 30, 2021.

Depreciation and amortization of

property and equipment totaled approximately $ 1,335,189

and $ 1,865,726 for

fiscal years ended September 30, 2021, and 2020, respectively.

842, “Leases”, requires that a lessee recognize the assets and liabilities that arise from operating leases.

A lessee should

recognize in the statement of financial position a liability to make lease payments (the lease liability) and a right-of-use asset representing

its right to use the underlying asset for the lease term.

For leases with a term of 12 months or less, a lessee is permitted to make

an accounting policy election by class of underlying asset not to recognize lease assets and lease liabilities.

In transition, lessees

and lessors are required to recognize and measure leases at either the effective date (the “effective date method”) or the

beginning of the earliest period presented (the “comparative method”) using a modified retrospective approach.

effective date method, the Company’s comparative period reporting is unchanged.

In contrast, under the comparative method, the

Company’s date of initial application is the beginning of the earliest comparative period presented, and the Topic 842 transition

guidance is then applied to all comparative periods presented.

Further, under either transition method, the standard includes certain

practical expedients intended to ease the burden of adoption.

The Company adopted ASC 842 October 1, 2019, using the effective date method

and elected certain practical expedients allowing the Company not to reassess:

expired or existing contracts contain leases under the new definition of a lease;

classification for expired or existing leases;

previously capitalized initial direct costs would qualify for capitalization under Topic 842.

Company also made the accounting policy decision not to recognize lease assets and liabilities for leases with a term of 12 months or

Company entered into a financing lease for a single vehicle in the Industrial services segment with a term of 3 years.

enters into operating leases for its facilities in New York, United Kingdom, and India, as well as for vehicles for use in our

Industrial Services segment.

The Company enters

into operating leases for its facilities in New York, United Kingdom, and India, as well as for vehicles for use in our Industrial Services

The operating lease terms range from 2 to 7 years.

The Company excluded the renewal option on its

applicable facility leases from the calculation of its right-of-use assets and lease liabilities.

The Company excluded the renewal option on its applicable facility leases

from the calculation of its right-of-use assets and lease liabilities.

and Subsidiaries

and operating lease liabilities consist of the following:

SUMMARY OF FINANCE AND OPERATING LEASE LIABILITIES

September 30,

6 unchanged sentences

Operating leases

reconciliation of undiscounted cash flows to finance and operating lease liabilities recognized in the condensed consolidated

balance sheet at September 30, 2020 is set forth below:

reconciliation of undiscounted cash flows to finance and operating lease liabilities recognized in the condensed consolidated balance

sheet at September 30, 2021, is set forth below:

SCHEDULE OF RECONCILIATION OF UNDISCOUNTED CASH FLOWS TO FINANCE AND OPERATING LEASE LIABILITIES

Years ending September 30,

1 unchanged sentence

Operating Leases

2026 & Thereafter

Undiscounted lease payments

1 unchanged sentence

Discounted lease payments

and Subsidiaries

disclosures of lease data are set forth below:

SCHEDULE OF LEASE COSTS

For the year ended

September 30, 2021

September 30, 2020

Finance lease costs:

13 unchanged sentences

Weighted-average discount rate - operating leases

Company used the rate implicit in the lease, where known, or its incremental borrowing rate as the rate used to discount the future

lease payments.

and Subsidiaries

Company used the rate implicit in the lease, where known, or its incremental borrowing rate as the rate used to discount the future lease

13 – PREPAID AND OTHER CURRENT ASSETS

1 unchanged sentence

and other current assets of $ 2,286,945 .

On September 30, 2019, the Company had prepaid and other current assets consisting of

prepayments on inventory purchases of $530,447, and other current assets of $925,318.

On September 30, 2020, the Company had prepaid and

other current assets consisting of prepayments on inventory purchases of $ 101,308 ,

and other current assets of $ 1,074,467 .

14 - OTHER ASSETS

of September 30, 2020, the Company had other assets of $744,207 which was comprised of rent security deposits of $294,553,

other assets of $449,654.

As of September 30, 2019, the Company had other assets of $497,857 which was comprised of rent security

deposits of $127,246, other assets of $370,611.

and Subsidiaries

of September 30, 2021, the Company had other assets of $ 697,240

which was comprised of rent security deposits

of $ 84,362 ,

Investment in Masterpiece VR valued at $ 500,000 ,

and other assets of $ 112,878 .

As of September 30, 2020, the Company had other assets of $ 381,900

which was comprised of rent security deposits.

15 – LINES OF CREDIT AND LONG-TERM LIABILITIES

Company currently has a line of credit with Fulton Bank for $ 3,500,000 .

The line carries an interest of LIBOR

plus 2.00% per annum (3.98% as of September 30, 2020).

At September 30, 2020 there was no outstanding balance on this line of

The line carries an interest of LIBOR plus 2.00 %

per annum ( 2.075 %

as of September 30, 2021).

At September 30, 2021,

there was no outstanding balance on this line of credit.

The terms of this line of credit are subject to the bank’s review annually

on February1.

payable to bank

December 15, 2015, the Company acquired a loan from Fulton Bank in the amount of $5,250,000 in order to fund the purchase of

Advanced Industrial Services, Inc.

December15, 2015, the Company acquired a loan from Fulton Bank in the amount of $ 5,250,000

in order to fund the purchase of Advanced Industrial

Services, Inc.

of the proceeds went to direct purchase of AIS.

This loan carries interest of

LIBOR plus 2.25% per annum (4.23% as of September 30, 2020) and is payable on December 15, 2022.

This loan carries loan

covenants which the Company was in compliance with as of September 30, 2020.

December 15, 2015, the Company acquired a loan from Fulton Bank in the amount of $620,000 in order to fund the operations of

Advanced Industrial Services, Inc.

This loan carries interest of LIBOR plus 2.00% per annum (3.98% as of September 30, 2020)

and is payable on December 15, 2020.

This loan carries loan covenants which the Company was in compliance with as of

September 30, 2020.

May 1, 2018, the Company acquired a loan from Fulton Bank in the amount of $400,000 in order to fund new equipment for Advanced

Industrial Services, Inc.

This loan carries interest of LIBOR plus 2.00% per annum (3.98% as of September 30, 2020) and is payable

on May 1, 2023.

This loan carries loan covenants which the Company was in compliance with as of September 30, 2020.

January 28, 2020, the Company acquired a loan from Fulton Bank in the amount of $360,000 in order to fund new equipment for Advanced

Industrial Services, Inc.

This loan carries interest of LIBOR plus 2.25% per annum (4.23% as of September 30, 2019) and is payable

on May 1, 2023.

This loan carries interest of LIBOR plus 2.25 %

per annum ( 2.325 %

as of September 30, 2021, and 4.23 % as of

September 30, 2020) and is payable on December

This loan carries loan covenants which

the Company was in compliance with as of September 30, 2021.

The outstanding balance on this loan was $ 1,218,680 and $ 2,164,584 ,

on September 30, 2021, and 2020, respectively.

This loan is secured by the assets of the Company.

On May 1, 2018, the Company

acquired a loan from Fulton Bank in the amount of $ 400,000

in order to fund new equipment for Advanced Industrial Services, Inc.

This loan carries interest of LIBOR plus 2.00 %

per annum ( 3.98 %

as of September 30, 2020) and is payable on May

This loan carries loan covenants which the Company was in compliance with as of September 30, 2020.

The outstanding

balance on this loan was $ 58,897

on September 30, 2020.

On September 30, 2021, this loan was fully paid.

This loan was secured by the assets of the Company.

May 1, 2018, the Company acquired a loan from Fulton Bank in the amount of $ 400,000

in order to fund new equipment for Advanced Industrial

Services, Inc.

This loan carries interest of LIBOR plus 2.00 %

per annum ( 2.075 %

as of September 30, 2021, and 3.98 % as of

September 30, 2020) and is payable on May

This loan carries loan covenants which

the Company was in compliance with as of September 30, 2021.

The outstanding balance on this loan was $ 149,914 and $ 246,673 ,

on September 30, 2021, and 2020, respectively.

This loan is secured by the assets of the Company.

January 28, 2020, the Company acquired a loan from Fulton Bank in the amount of $ 360,000

in order to fund new equipment for Advanced Industrial

Services, Inc.

This loan carries interest of LIBOR plus 2.25 %

per annum ( 2.325 %

as of September 30, 2021, and 4.23 % as

of September 30, 2020) and is payable on May

This loan carries loan covenants which

the Company was in compliance with as of September 30, 2021.

The outstanding balance on this loan was $ 258,060 and $ 331,535 ,

on September 30, 2021, and 2020, respectively.

This loan is secured by the assets of the Company.

December 23, 2019, the Company, issued a note payable to an independent private lender in the amount of $ 1,725,000 .

carries interest of 8% and matures on June 23, 2021.

After deduction of an original issue discount of $225,000 and legal fees

of $5,000, the Company received $1,495,000 in cash.

This note carries interest of 8 %

and matures on June

After deduction of an original issue

discount of $ 225,000

and legal fees of $ 5,000 ,

the Company received $ 1,495,000

As of September 30, 2021, this note

was fully satisfied.

As of September 30, 2020, the balance on this note was $ 620,754 .

April 24, 2020, the Company, issued a note payable to an independent private lender in the amount of $ 1,725,000 .

This note carries

interest of 8% and matures on October 24, 2021.

After deduction of an original issue discount of $225,000 and legal fees of $5,000,

the Company received $1,495,000 in cash.

This note carries interest of 8 %

and matures on October

After deduction of an original issue

discount of $ 225,000

and legal fees of $ 5,000 ,

the Company received $ 1,495,000

As of September 30, 2021, this note

was fully satisfied.

As of September 30, 2020, this note had a balance of $ 1,787,033 .

and Subsidiaries

September 30, 2020, the Company, issued a note payable to an independent private lender in the amount of $ 4,605,000 .

carries interest of 8% and matures on March 30, 2022.

After deduction of an original issue discount of 600,000 and legal fees

of $5,000, the Company received $4,000,000 in cash.

March 3, 2020, Vicon, a subsidiary of the Company amended the $5,600,000 Term Loan Agreement with NIL Funding Corporation (“NIL”).

Upon closing, $500,000 of outstanding borrowings were repaid to NIL, additionally, another $500,000 is to be paid in one year.

The Agreement requires monthly payments of accrued interest that began on October 1, 2018.

This note carries interest of 8 %

and matures on March

This note carries loan covenants which the Company is in compliance with as of September 30, 2020.

January 28, 2020, the Company’s subsidiary, Advanced Industrial Services, Inc., completed the purchase of two buildings

for a total purchase price of $3,381,433.

The Company paid $905,433 in cash and acquired a mortgage from Fulton Bank in the amount

of $2,476,000.

This mortgage carries interest of LIBOR plus 2.50% per annum and is payable on January 28, 2040.

This loan carries

loan covenants similar to covenants on The Company’s other loans from Fulton Bank.

As of September 30, 2020, the Company

was in compliance with these covenants.

and Subsidiaries

After deduction of an original issue

discount of 600,000

and legal fees of $ 5,000 ,

the Company received $ 4,000,000

As of September 30, 2021, and 2020,

this note had a balance of $ 2,456,448 , and $ 4,605,000 , respectively.

September 30, 2021, the Company, issued a note payable to an independent private lender in the amount of $ 5,755,000 .

This note carries interest of 8 %

and matures on March

After deduction of an original

issue discount of 750,000 and

legal fees of $ 5,000 ,

the Company received $ 5,000,000 in

One September 30, 2021, this note had a balance of 5,775,000 .

March 3, 2020, Vicon, a subsidiary of the Company amended the $ 5,600,000

Term Loan Agreement with NIL Funding Corporation

Upon closing, $ 500,000

of outstanding borrowings were repaid to NIL,

additionally, another $ 500,000

is to be paid in one year.

The Agreement requires

monthly payments of accrued interest that began on October 1, 2018.

This note carries interest of 8.85 %

and matures on March

This note carries loan covenants which

the Company is in compliance with as of September 30, 2021.

On September 30, 2021, and 2020, this note had a balance of $ 3,604,743 ,

and 4,625,000 , respectively.

January 28, 2020, the Company’s subsidiary, Advanced Industrial Services, Inc., completed the purchase of two buildings for a total

purchase price of $ 3,381,433 .

The Company paid $ 905,433

in cash and acquired a mortgage from Fulton Bank

in the amount of $ 2,476,000 .

This mortgage carries interest of LIBOR plus 2.50 %

per annum and is payable on January

This loan carries loan covenants similar

to covenants on The Company’s other loans from Fulton Bank.

As of September 30, 2021, the Company was in compliance with these

The outstanding balance on this mortgage was $ 2,339,114 and $ 2,355,542 , on September 30, 2021, and 2020, respectively.

Protection Program Loans

April and May of 2020, the Company and its subsidiaries applied for and were granted $3,471,100 in Paycheck Protection Program

loans under the CARES Act.

April and May of 2020, and January and April of 2021, the Company and its subsidiaries applied for and were granted $ 6,413,385 in Paycheck

Protection Program loans under the CARES Act.

These loans bear interest of 2 % and mature in two years.

The Company will apply for and fully expects

these loans to be forgiven under the provisions of the CARES Act and any subsequent legislation that may be applicable.

loans are recorded under Paycheck Protection Program Loans on our Condensed Consolidated Balance Sheet as of September 30, 2020,

net of the short-term portion of $1,301,663.

The Company has applied for and

received loan forgiveness under the provisions of the CARES Act for $ 6,291,985 with $ 971,500 being subsequent to September 30, 2021.

These loans are recorded under Paycheck Protection Program Loans on our Condensed Consolidated Balance Sheet as of September 30, 2020,

net of the short-term portion of $ 1,032,200 , of which $ 971,500 has been forgiven.

maturities of our long-term debt over the next 5 years are as follows;

Fulton Bank - $5,250,000

OF ESTIMATED MATURITIES OF LONG TERM DEBT

Fulton Bank - $ 5,250,000

3 unchanged sentences

Notes Payable (1)

Net of unamortized original issue discounts

Net of unamortized original issue discounts of $ 950,000

16 – RELATED PARTY TRANSACTIONS

August 31, 2019, the Company entered into an Asset Purchase Agreement for the sale of Griffin Filters, LLC to Ducon Technologies,

Inc., which Aron Govil, the Company’s CFO, is President, for total consideration of $550,000.

August 31, 2019, the Company entered into an Asset Purchase Agreement for the sale of Griffin Filters, LLC to Ducon Technologies, Inc.,

which Aron Govil, the Company’s Founder and Former CFO, is President, for total consideration of $ 550,000 .

As of September 30,

and 2019, there was $1,432,209 and $771,519 in receivables due from Ducon Technologies, Inc., respectively.

At September 30,

2020, $500,000 of the balance due is for the sale of Griffin, due in February 2021, and the remaining balance are various receivables

with various due dates within the next fiscal year.

On May 1, 2020,

Company invested $500,000 in a registered S-1 stock offering of Telidyne Inc., an OTC listed company, by purchasing 166,667

2021, and September 30, 2020, there was $ 1,487,155 and $ 1,432,209 in receivables due from Ducon Technologies, Inc., respectively.

September 30, 2021, $500,000 of the balance due is for the sale of Griffin, which was due in February 2021, and the remaining balance

are various receivables with various due dates within the next fiscal year.

The Company is currently negotiating a payment agreement

surrounding all these amounts due.

and Subsidiaries

see Note 3 for further transactions relating to Aron Govil.

May 1, 2020, Company invested $ 500,000 in a registered S-1 stock offering of Telidyne Inc., an OTC listed company, by purchasing 166,667

shares of common stock at $ 3.00 per share.

Telidyne Inc.

is controlled by the Company’s former CFO and Executive

Director, Aron Govil.

On September 30, 2020, the Company decided to withdraw its investment, the transaction was

cancelled, and all proceeds were returned.

SHAREHOLDERS’

July 27, 2020, the Company amended the Company’s Certificate of Incorporation (the “Amended Certificate of Incorporation”)

which was duly approved by the Company’s Board of Directors and duly adopted by the Company’s shareholders increasing

the number of authorized shares of all classes of stock from 30,000,000 shares to 50,000,000 shares with 40,000,000 designated

as Common Stock and 10,000,000 designated as Preferred Stock.

is controlled by the Company’s former CFO and Executive Director, Aron

On September 30, 2020, the Company decided to withdraw its investment, the transaction was cancelled, and all proceeds were returned.

17 – SHAREHOLDERS’ EQUITY

July 27, 2020, the Company amended the Company’s Certificate of Incorporation (the “Amended Certificate of Incorporation”)

which was duly approved by the Company’s Board of Directors and duly adopted by the Company’s shareholders increasing the

number of authorized shares of all classes of stock from 30,000,000 shares to 60,000,000 shares with 50,000,000 designated as Common

Stock and 10,000,000 designated as Preferred Stock.

Company is authorized to issue 10,000,000 shares of Preferred Stock, $ 0.001 par value.

2 unchanged sentences

A Preferred stock

issued and outstanding Series A Preferred Share shall be entitled to the number of votes per share equal to the result

(i) the number of shares of common stock of the Company issued and outstanding at the time of such vote multiplied by 1.01;

divided by (ii) the total number of Series A Preferred Shares issued and outstanding at the time of such vote, at each meeting

of shareholders of the Company with respect to any and all matters presented to the shareholders of the Company for their action

or consideration, including the election of directors.

Holders of Series A Preferred Shares shall vote together with the holders

of Common Shares as a single class.

and Subsidiaries

issued and outstanding Series A Preferred Share shall be entitled to the number of votes per share equal to the result of:

(i) the number

of shares of common stock of the Company issued and outstanding at the time of such vote multiplied by 1.01;

divided by (ii) the total

number of Series A Preferred Shares issued and outstanding at the time of such vote, at each meeting of shareholders of the Company with

respect to any and all matters presented to the shareholders of the Company for their action or consideration, including the election

of directors.

Holders of Series A Preferred Shares shall vote together with the holders of Common Shares as a single class.

Series A Preferred Stock has no liquidation value or preference.

the twelve-month periods ended September 30, 2020 and 2019, the Company did not issue any Series A Preferred Stock.

of September 30, 2020, and September 30, 2019, there were 1,000,000 shares of Series A Preferred Stock issued and outstanding,

the twelve-month periods ended September 30, 2021, the Company retired 1,000,000 shares of Series A Preferred Stock.

of September 30, 2021, and September 30, 2020, there were zero and 1,000,000 shares of Series A Preferred Stock issued and outstanding,

respectively.

C Preferred Stock

October 3, 2019, pursuant to Article IV of our Articles of Incorporation, our Board of Directors voted to designate a class of

preferred stock entitled Series C Preferred Stock, consisting of up to one hundred thousand (100,000) shares, par value $0.001.

Under the Certificate of Designation, holders of Series C Preferred Stock are entitled to the number of votes per share

equal to the result of (i) the total number of shares of Common Stock outstanding at the time of such vote multiplied by 10.01,

and divided by (ii) the total number of shares of Series C Preferred Stock outstanding at the time of such vote, at each meeting

of our shareholders with respect to any and all matters presented to our shareholders for their action or consideration, including

the election of directors.

the year ended September 30, 2020, 100,000 shares of Series C Preferred Stock were issued to Aron Govil, Executive former Director

and CFO of the Company as part of his employment agreement.

In order to determine the fair market value of these shares the Company

used the closing price of its Series 1 preferred stock of $0.95 on October 3, 2019.

On July 10, 2020, Aron Govil transferred 50,000

shares of the Series C Preferred Stock to Saagar Govil.

of September 30, 2020, there were 100,000 shares of Series C Preferred Stock issued and outstanding.

October 3, 2019, pursuant to Article IV of our Articles of Incorporation, our Board of Directors voted to designate a class of preferred

stock entitled Series C Preferred Stock, consisting of up to one hundred thousand ( 100,000 ) shares, par value $ 0.001 .

Under the Certificate

of Designation, holders of Series C Preferred Stock are entitled to the number of votes per share equal to the result of (i) the total

number of shares of Common Stock outstanding at the time of such vote multiplied by 10.01, and divided by (ii) the total number of shares

of Series C Preferred Stock outstanding at the time of such vote, at each meeting of our shareholders with respect to any and all matters

presented to our shareholders for their action or consideration, including the election of directors.

the year ended September 30, 2020, 100,000 shares of Series C Preferred Stock were issued to Aron Govil, Executive former Director and

CFO of the Company as part of his employment agreement.

In order to determine the fair market value of these shares the Company used

the closing price of its Series 1 preferred stock of $ 0.95 on October 3, 2019.

On July 10, 2020, Aron Govil transferred 50,000 shares

of the Series C Preferred Stock to Saagar Govil.

and Subsidiaries

the year ended September 30, 2021, the Company retired 50,000

shares of Series C Preferred Stock surrendered

by Aron Govil as part of the settlement agreement (see Note 3).

of September 30, 2021, and September 30, 2020, there were 50,000 and 100,000 shares of Series C Preferred Stock issued and outstanding,

respectively.

1 Preferred Stock

of the Series 1 Preferred will be entitled to receive cumulative cash dividends at the rate of 10% of the purchase price per year,

payable semiannually on the last day of March and September in each year.

Dividends may also be paid, at our option, in additional

shares of Series 1 Preferred, valued at their liquidation preference.

The Series 1 Preferred will rank senior to the common stock

with respect to dividends.

of the Series 1 Preferred will be entitled to receive cumulative cash dividends at the rate of 10% of the purchase price per year, payable

semiannually on the last day of March and September in each year.

Dividends may also be paid, at our option, in additional shares of

Series 1 Preferred, valued at their liquidation preference.

The Series 1 Preferred will rank senior to the common stock with respect

to dividends.

Dividends will be entitled to be paid prior to any dividend to the holders of our common stock.

1 unchanged sentence

In the event of any liquidation,

dissolution or winding up of our company, any amounts remaining available for distribution to stockholders after payment of all

liabilities of our company will be distributed first to the holders of Series 1 Preferred, and then pari passu to the holders

of the Series A preferred stock and our common stock.

The holders of Series 1 Preferred will have preference over the holders

of our common stock on any liquidation, dissolution or winding up of our company.

The holders of Series 1 Preferred will also

have preference over the holders of our Series A preferred stock.

as otherwise provided in the certificate of designation, preferences and rights or as required by law, the Series 1 Preferred

will vote together with the shares of our common stock (and not as a separate class) at any annual or special meeting of stockholders.

Except as required by law, each holder of shares of Series 1 Preferred will be entitled to two votes for each share of Series

1 Preferred held on the record date as though each share of Series 1 Preferred were 2 shares of our common stock.

Holders of the

Series 1 Preferred will vote as a class on any amendment altering or changing the powers, preferences or special rights of the

Series 1 Preferred so as to affect them adversely.

and Subsidiaries

dissolution or winding up of our company, any amounts remaining available for distribution to stockholders after payment of all liabilities

of our company will be distributed first to the holders of Series 1 Preferred, and then pari passu to the holders of the Series

A preferred stock and our common stock.

The holders of Series 1 Preferred will have preference over the holders of our common stock on

any liquidation, dissolution or winding up of our company.

The holders of Series 1 Preferred will also have preference over the holders

of our Series A preferred stock.

as otherwise provided in the certificate of designation, preferences and rights or as required by law, the Series 1 Preferred will vote

together with the shares of our common stock (and not as a separate class) at any annual or special meeting of stockholders.

required by law, each holder of shares of Series 1 Preferred will be entitled to two votes for each share of Series 1 Preferred held

on the record date as though each share of Series 1 Preferred were 2 shares of our common stock.

Holders of the Series 1 Preferred will

vote as a class on any amendment altering or changing the powers, preferences or special rights of the Series 1 Preferred so as to affect

them adversely.

Series 1 Preferred will not be convertible into or exchangeable for shares of our common stock or any other security.

Series 1 Preferred will rank with respect to distribution rights upon our liquidation, winding-up or dissolution and dividend

rights, as applicable:

to our Series A preferred stock, common stock and any other class of capital stock we issue in the future unless the terms

of that stock provide that it ranks senior to any or all of the Series 1 Preferred;

a parity with any class of capital stock we issue in the future the terms of which provide that it will rank on a parity with

any or all of the Series 1 Preferred;

to each class of capital stock issued in the future the terms of which expressly provide that such capital stock will rank

senior to the Series 1 Preferred and the common stock;

Series 1 Preferred will rank with respect to distribution rights upon our liquidation, winding-up or dissolution and dividend rights,

as applicable:

to our Series A preferred stock, common stock and any other class of capital stock we issue in the future unless the terms of that

stock provide that it ranks senior to any or all of the Series 1 Preferred;

a parity with any class of capital stock we issue in the future the terms of which provide that it will rank on a parity with any

or all of the Series 1 Preferred;

to each class of capital stock issued in the future the terms of which expressly provide that such capital stock will rank senior

to the Series 1 Preferred and the common stock;

to all of our existing and future indebtedness.

March 30, 2020, the Company amended the Certificate of Designation (the “Amended Certificate of Designation”) for

our Series 1 Preferred Stock (the “Series 1 Stock”).

The Amended Certificate of Designation increased the number of

authorized preferred shares under the designation for our Series 1 Preferred Stock from 3,000,000 shares to 4,000,000 shares.

of September 30, 2020, and 2019 there were 2,156,784 and 2,110,718 shares of Series 1 Preferred Stock issued and outstanding,

and Subsidiaries

March 30, 2020, the Company amended the Certificate of Designation (the “Amended Certificate of Designation”) for our Series

1 Preferred Stock (the “Series 1 Stock”).

The Amended Certificate of Designation increased the number of authorized preferred

shares under the designation for our Series 1 Preferred Stock from 3,000,000 shares to 4,000,000 shares.

the year ended September 30, 2021, 198,316 shares of Series 1 Preferred Stock were issued to pay dividends to holders of Series 1 Preferred

the year ended September 30, 2021, the Company retired 469,949

shares of Series 1 Preferred Stock surrendered

by Aron Govil as part of the settlement agreement (see Note 3).

of September 30, 2021, and September 30, 2020, there were 1,885,151 and 2,156,784 shares of Series 1 Preferred Stock issued and outstanding,

respectively.

the fiscal years ended September 30, 2020 and 2019, 217,099 and 196,550 shares of Series 1 Preferred Stock were issued to pay

$2,089,540 and $1,965,500 worth of dividends to holders of Series 1 Preferred Stock, respectively.

the fiscal years ended September 30, 2020, the Company purchased 235,133 shares of its Series 1 Preferred Stock on the open market

at an average price per share of $1.92, for an aggregate cost of approximately $338,775, as part of its ongoing share repurchase

program announced earlier.

the fiscal year ended September 30, 2020, the Company purchased 235,133 shares of its Series 1 Preferred Stock on the open market at

an average price per share of $ 1.92 , for an aggregate cost of approximately $ 338,775 , as part of its ongoing share repurchase program

announced earlier.

The Company retired 171,033 shares worth $ 190,484 during fiscal 2020.

Company is authorized to issue 50,000,000 shares of common stock, $ 0.001 par value.

As of September 30, 2020, there were 17,622,539

shares issued and outstanding and at September 30, 2019, there were 3,962,790 shares issued and outstanding.

the fiscal years ended September 30, 2020 and 2019, 6,530,473 and 1,847,832 shares of the Company’s common stock have been

issued to satisfy $8,737,125 and $5,047,569 of notes payable and accumulated interest, respectively.

fiscal year 2020, the Company issued 6,643,872 shares of the Company’s common stock for $12,462,648 in gross proceeds in

various subscription rights offerings.

After deducting offering expenses of $840,728 the Company received $11,621,920 in net

proceeds (see below).

As of September 30, 2021, there were 20,782,194 shares

issued and outstanding and at September 30, 2020, there were 17,622,539 shares issued and outstanding.

the fiscal year ended September 30, 2021, we issued 3,159,655

shares of common stock to satisfy $ 5,025,651

notes payable and accumulated interest.

the fiscal years ended September 30, 2020, 6,530,473 shares of the Company’s common stock have been issued to satisfy $ 8,737,125

of notes payable and accumulated interest.

fiscal year 2020, the Company issued 6,643,872 shares of the Company’s common stock for $ 12,462,648 in gross proceeds in various

subscription rights offerings.

After deducting offering expenses of $ 840,728 the Company received $ 11,621,920 in net proceeds (see below).

fiscal year 2020, the Company issued 513,358 shares in exchange for $ 532,788 worth of goods and services.

fiscal year 2020, the Company cancelled 27,954 shares that were issued in trust for an ATM offering in the prior fiscal year that

were not sold.

and Subsidiaries

are currently 433,965 shares of our common stock issuable upon the exercise of our publicly traded Series 1 warrants that have

an exercise price of $50.48 per share.

fiscal year 2020, the Company cancelled 27,954 shares that were issued in trust for an ATM offering in the prior fiscal year that were

are currently 433,965 shares of our common stock issuable upon the exercise of our publicly traded Series 1 warrants that have an exercise

price of $ 50.48 per share.

the years ended September 30, 2021, and 2020, none of our outstanding Series 1 Warrants have been exercised.

Rights Offering

December 4, 2019, the “Company entered into a Subscription Agreement relating to the public offering of 338,393 shares (the

“Shares”) of the Company’s common stock, par value $0.001 per share, all of which were sold by the Company (the

“Offering”) to an accredited investor.

January 24, 2020, the “Company entered into a Subscription Agreement relating to the public offering of 500,000 shares (the “Shares”)

of the Company’s common stock, par value $ 0.001 per share, all of which were sold by the Company (the “Offering”) to

an accredited investor.

The Offering price of the Shares was $ 1.50 per share for gross proceeds of $ 750,000 .

After deducting offering expenses of $18,950 the Company received $360,050 in net proceeds.

January 24, 2020, the “Company entered into a Subscription Agreement relating to the public offering of 500,000 shares (the

“Shares”) of the Company’s common stock, par value $0.001 per share, all of which were sold by the Company (the

“Offering”) to an accredited investor.

After deducting offering

expenses of $ 37,500 the Company received $ 712,500 in net proceeds.

and Subsidiaries

February 26, 2020, the “Company entered into a Subscription Agreement relating to the public offering of 347,000 shares (the “Shares”)

of the Company’s common stock, par value $ 0.001 per share, all of which were sold by the Company (the “Offering”) to

an accredited investor.

The Offering price of the Shares was $ 1.30 per share for gross proceeds of $ 451,100 .

After deducting offering expenses of $37,500 the Company received $712,500 in net proceeds.

February 26, 2020, the “Company entered into a Subscription Agreement relating to the public offering of 347,000 shares

(the “Shares”) of the Company’s common stock, par value $0.001 per share, all of which were sold by the Company

(the “Offering”) to an accredited investor.

The Offering price of the Shares was $1.30 per share for gross proceeds

After deducting offering expenses of $2,500 the Company received $448,600 in net proceeds.

June 1, 2020, the “Company entered into a Subscription Agreement relating to the public offering of 3,055,556 shares (the

“Shares”) of the Company’s common stock, par value $0.001 per share, all of which were sold by the Company (the

“Offering”) to accredited investors.

After deducting offering

expenses of $ 2,500 the Company received $ 448,600 in net proceeds.

June 1, 2020, the “Company entered into a Subscription Agreement relating to the public offering of 3,055,556 shares (the “Shares”)

of the Company’s common stock, par value $ 0.001 per share, all of which were sold by the Company (the “Offering”) to

accredited investors.

The Offering price of the Shares was $ 1.80 per share for gross proceeds of $ 5,500,000 .

After deducting offering expenses of $395,000 the Company received $5,105,000 in net proceeds.

June 9, 2020, the “Company entered into a Subscription Agreement relating to the public offering of 2,402,923 shares (the

“Shares”) of the Company’s common stock, par value $0.001 per share, all of which were sold by the Company (the

“Offering”) to accredited investors.

After deducting offering

expenses of $ 395,000 the Company received $ 5,105,000 in net proceeds.

June 9, 2020, the “Company entered into a Subscription Agreement relating to the public offering of 2,402,923 shares (the “Shares”)

of the Company’s common stock, par value $ 0.001 per share, all of which were sold by the Company (the “Offering”) to

accredited investors.

The Offering price of the Shares was $ 2.24 per share for gross proceeds of $ 5,382,548 .

After deducting offering expenses of $386,778 the Company received $4,995,769 in net proceeds.

After deducting offering

expenses of $ 386,778 the Company received $ 4,995,769 in net proceeds.

18 – SHARE-BASED COMPENSATION

September 25, 2019, the Company cancelled all outstanding options granted to Saagar Govil, the Company’s Chairman and CEO

and granted a stock option for 400,000 shares.

These options have an exercise price of $1.90 per share, which vested upon grant

and they expire after seven years.

September 25, 2019, the Company cancelled all outstanding options granted to Saagar Govil, the Company’s Chairman and CEO and granted

a stock option for 400,000 shares.

These options have an exercise price of $ 1.90 per share, which vested upon grant and they expire after

seven years .

Additionally, Mr.

Govil was granted additional future options;

100,000 shares of the Corporation’s common stock, CETX at an exercise price of $1.92 per share on September 25,

100,000 shares of the Corporation’s common stock, CETX at an exercise price of $2.30 per share on September 25, 2023;

100,000 shares of the Corporation’s common stock, CETX at an exercise price of $2.76 per share on September 25,

and Subsidiaries

September 25, 2019, the Company granted to Aron Govil, the Company’s former Executive Director and CFO, a stock option for

200,000 shares.

100,000 shares of the Corporation’s common stock, CETX at an exercise price of $ 1.92 per share on September 25,

100,000 shares of the Corporation’s common stock, CETX at an exercise price of $ 2.30 per share on September 25, 2023 ;

100,000 shares of the Corporation’s common stock, CETX at an exercise price of $ 2.76 per share on September 25,

September 25, 2019, the Company granted to Aron Govil, the Company’s former Executive Director and CFO, a stock option for 200,000

These options have an exercise price of $ 1.90 per share, which vested upon grant and they expire after seven years .

Govil’s retirement his outstanding options that were vested remain available to him until they expire.

Govil’s

remaining options are;

25,000 shares of the Corporation’s common stock, CETX at an exercise price of $1.92 per share on September 25,

12,500 shares of the Corporation’s common stock, CETX at an exercise price of $2.30 per share on September 25, 2023;

8,333 shares of the Corporation’s common stock, CETX at an exercise price of $2.76 per share on September 25,

following weighted-average assumptions were used to estimate the fair value of the common stock option liability at September

September 30, 2019

25,000 shares of the Corporation’s common stock, CETX at an exercise price of $ 1.92 per share on September 25,

12,500 shares of the Corporation’s common stock, CETX at an exercise price of $ 2.30 per share on September 25, 2023 ;

8,333 shares of the Corporation’s common stock, CETX at an exercise price of $ 2.76 per share on September 25, 2025 .

part of the settlement agreement with Mr.

Govil, all his options were cancelled.

January 6, 2021, the Company granted to Christopher C.

Moore, the Company’s CFO, a stock option for 150,000 shares.

These options

have an exercise price of $ 1.58 per share, which vest over five years , and they expire after five years.

following weighted-average assumptions were used to estimate the fair value of the common stock option liability for the options granted

to Christopher C.

OF FAIR VALUE STOCK OPTION WEIGHTED AVERAGE ASSUMPTIONS

January 6, 2021

Expected term

2 unchanged sentences

Expected dividend yield

the years ended September 30, 2020 and 2019 the Company recognized $191,416 and $622,232 of share-based compensation expense

on its outstanding options, respectively.

of September 30, 2020, there was $64,278 of total unrecognized compensation cost related to non-vested stock options, which is

expected to be recognized over a weighted-average period of 4 years.

Average Exercise Price

Average Remaining Contractual Term

Intrinsic Value

and Subsidiaries

the years ended September 30, 2021, and 2020 the Company recognized $ 156,419 and $ 191,416 of share-based compensation expense on its

outstanding options, respectively.

of September 30, 2021, there was $ 359,415 of total unrecognized compensation cost related to non-vested stock options, which is expected

to be recognized over a weighted-average period of 4 years.

OF STOCK OPTIONS ACTIVITY

Number of Options

Weighted Average Exercise Price

Weighted Average Remaining Contractual Term (in years)

Aggregate Intrinsic Value

Outstanding at September 30, 2019

11 unchanged sentences

19 – COMMITMENTS AND CONTINGENCIES

Company has moved its corporate activities to New York City with a month to month lease of 2,500 square feet of office space at

a rate of $13,000 per month.

The Company has recognized $143,000 of lease expense for this lease, for the year ended September

Company’s IS segment owns approximately 25,000 square feet of warehouse space in Manchester, PA and approximately 43,000

square feet of office and warehouse space in York, PA.

The IS segment also leases approximately 15,500 square feet of warehouse

space in Emigsville, PA from a third party in a three-year lease at a monthly rent of $4,555 expiring on August 31, 2022.

Company has recognized $54,660 of lease expense for this lease, for the year ended September 30, 2020.

and Subsidiaries

Company’s AT segment leases (i) approximately 6,700 square feet of office and warehouse space in Pune, India from a third

party in an five year lease at a monthly rent of $6,453 (INR456,972) expiring on February 28, 2024, the Company has recognized

$77,436 of lease expense for this lease, for the year ended September 30, 2020, (ii) approximately 27,000 square feet of office

and warehouse space in Hauppauge, New York from a third party in a seven-year lease at a monthly rent of $28,719 expiring on March

31, 2027, the Company recognized $152,880 of lease expense for prior lease on this property, in the six months ended March 31,

2020, and has recognized $139,721 of lease expense for the current lease during the six months ended September 30, 2020 and (iii)

approximately 9,400 square feet of office and warehouse space in Hampshire, England in a fifteen-year lease with at a monthly

rent of $7,329 (£5,771) which expires on March 24, 2031 and contains provisions to terminate in 2021 and 2026, the Company

has recognized $87,948 of lease expense for this lease for the year ended September 30, 2020.

Tax Cuts and Jobs Act (the “Tax Act”) was enacted on December 22, 2017.

Company has moved its corporate activities to New York City with a month-to-month lease of 2,500

square feet of office space at a rate of $ 13,000

Company’s IS segment owns approximately 25,000 square feet of warehouse space in Manchester, PA and approximately 43,000 square

feet of office and warehouse space in York, PA.

The IS segment also leases approximately 15,500 square feet of warehouse space in Emigsville,

PA from a third party in a three-year lease at a monthly rent of $ 4,555 expiring on August 31, 2022 .

Company’s AT segment leases (i) approximately 6,700

square feet of office and warehouse space in

Pune, India from a third party in an five year lease at a monthly rent of $ 6,453

(INR 456,972 )

expiring on February

28, 2024 , (ii) approximately 30,000

square feet of office and warehouse space in

Hauppauge, New York from a third party in a seven-year

lease at a monthly rent of $ 28,719

expiring on March

31, 2027 , (iii) approximately 4,570 square

feet of office space in El Dorado Hills, California in a 63 month lease assumed by the company upon the acquisition of VDI expiring on

November 30, 2022 , and (iv) approximately 9,400

square feet of office and warehouse space in

Hampshire, England in a fifteen-year lease with at a monthly rent of $ 7,329

which expires on March

24, 2031 and contains provisions to terminate

20 – INCOME TAXES

Tax Cuts and Jobs Act (the “Tax Act”) was enacted on December 22, 2017.

The Tax Act reduces the maximum U.S.

corporate tax rate from 35% to 21%, allows net operating losses incurred in 2018 and beyond to be carried forward indefinitely,

allows alternative minimum tax carryforwards to be partially refunded, beginning in 2018, and fully refunded by 2021, and creates

new taxes on certain foreign sourced earnings.

federal corporate

tax rate from 35 % to 21 % , allows net operating losses incurred in 2018 and beyond to be carried forward indefinitely, allows alternative

minimum tax carryforwards to be partially refunded, beginning in 2018, and fully refunded by 2021, and creates new taxes on certain foreign

sourced earnings.

At September 30, 2021,

the Company had approximately $ 37,099,262 of federal and $ 13,726,364 of state net operating losses.

The net operating loss carryforwards,

if not utilized, will begin to expire in 2036 for federal purposes and in 2036 for state purposes.

The company is currently reviewing

net operating losses for Section 382 limitation purposes and will make any required adjustments to the net operating losses at the completion

of the study.

following is a geographical breakdown of loss before the provision for income taxes:

OF (LOSS) INCOME BEFORE PROVISION FOR TAX

Year ended September 30,

$ ( 6,422,704 )

$ (10,774,136 )

Loss before provision for income

$ (6,819,929 )

Loss before provision for income taxes

$ ( 7,356,235 )

and Subsidiaries

provision for income taxes consisted of the following:

September 30, 2020

September 30, 2019

OF PROVISION FOR INCOME TAXES

Current (benefit)/provision

Total current (benefit)/provision

current (benefit)/provision

Deferred provision

Total deferred provision

$ (1,343,562 )

Total (benefit)/provision for income taxes

$ (1,335,584 )

deferred provision

Total (benefit)/provision

for income taxes

Effective Income tax rate

and Subsidiaries

following is a reconciliation of the effective income tax rate to the federal and state statutory rates:

OF EFFECTIVE INCOME TAX RATE RECONCILIATION

For the Fiscal Year

7 unchanged sentences

Effect of change in rates

Nondeducttible expenses

Permanent differences

Effective rate

and Subsidiaries

components of our deferred tax assets and liabilities are summarized as follows:

OF DEFERRED TAX ASSETS AND LIABILITIES

September 30, 2021

4 unchanged sentences

Allowance for bad debt

Goodwill amortization

Non-qualified stock options

Warrants (interest expense)

Accrued compensation

Warranty Reserve

Unearned revenue

Foreign Tax Credits

Total gross deferred taxes

1 unchanged sentence

( 22,720,711 )

(15,292,817 )

Net deferred tax assets

Deferred Tax Liabilities:

Accrued vacation

Inventory and other Reserves

Prepaid expenses

4 unchanged sentences

Total deferred tax assets (liabilities)

and Subsidiaries

21– SUBSEQUENT EVENTS

2 unchanged sentences

subsequent events have occurred and require recognition or disclosure in the consolidated financial statements.

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.

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

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

fleets and truck drivers.

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.

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, and $200,000 plus accumulated interest on October

of Payroll Protection Plan Loan

November 2021, $ 971,500 in Payroll Protection Plan Loans were forgiven.

shares issued for dividend

October 6, 2020, the Company issued 108,169 shares of its Series 1 Preferred Stock to for the dividends that were accrued

for the September 30, 2020 dividend payment.

The dividend was paid to shareholders of record as of September 30, 2020 .

October 18, 2021, the Company issued 94,602 shares of its Series 1 Preferred Stock for dividends.

The dividend was paid to shareholders

of record as of September 30, 2021 .

shares issued subsequent to financial statements date.

November 3, 2020, the Company issued 345,648 shares of common stock to satisfy $323,517 worth of notes payable and accumulated

Investment in MasterpieceVR

November 13, 2020, Cemtrex made an equity investment of $500,000 in MasterpieceVR and the investment represents roughly an 8%

stake in MasterpieceVR.

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

Currently, creative professionals worldwide are challenged in creating 3D visual content because existing software is

too complex and slow to use, creating a significant unmet market.

Thanks to advances in machine learning and virtual reality,

MasterpieceVR’s software platform is the first end to end solution to enable any creative professional to make 3D content

fast and easy.

Masterpiece Studio has partnered with leading technology companies and its software is used by a host of the world’s

major studios.

October 2021, 2,891,016 shares of common stock were issued to satisfy $ 2,466,478 of notes payable and accumulated interest.

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 9A. Controls and Procedures