What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2022-02-18 compared with 2021-08-16 · 395 added, 577 removed, 416 unchanged (70% of the section changed)

10 unchanged sentences

allowance for inventory obsolescence

expenses and other assets

Prepaid expenses and other

Total current assets

Property and equipment,

Property and equipment, net

Right-of-use assets

Assets held for sale

& Stockholders’ Equity (Deficit)

6 unchanged sentences

Deferred revenue

Accrued income taxes

Total current liabilities

6 unchanged sentences

Paycheck Protection Program

Revenue - long-term

long-term liabilities

Deferred Revenue - long-term

Total long-term liabilities

Total liabilities

Commitments and contingencies

1 unchanged sentence

Preferred stock , $ 0.001

par value, 10,000,000 shares authorized,

Series 1, 3,000,000 shares

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

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

Series A, 1,000,000 shares

authorized, zero shares issued and outstanding at June 30, 2021 and 1,000,000 shares issued and outstanding at September 30, 2020

par value, 10,000,000 shares authorized, Series 1, 3,000,000 shares authorized, 1,979,753 shares issued and outstanding as of December

31, 2021 and 1,885,151 shares issued and outstanding as of September 30, 2021 (liquidation value of $ 10 per share)

Series C, 100,000 shares

authorized, 50,000 shares issued and outstanding at June 30, 2021 and 100,000 shares issued and outstanding at September 30, 2020

Common stock, $ 0.001 par

value, 50,000,000 shares authorized, 18,711,463 shares issued and outstanding at June 30, 2021 and 17,622,539 shares issued and outstanding

at September 30, 2020

authorized, 50,000 shares issued and outstanding at December 31, 2021 and September 30, 2021

Preferred stock , Value

Common stock, $ 0.001

par value, 50,000,000

shares authorized, 23,673,210

shares issued and outstanding at December 31, 2021 and 20,782,194

shares issued and outstanding at September 30, 2021

Additional paid-in capital

3 unchanged sentences

Treasury stock at cost

other comprehensive income (loss)

Cemtrex stockholders’ equity

Non-controlling

liabilities and shareholders’ equity

Accumulated other comprehensive

income (loss)

Total Cemtrex stockholders’

Non-controlling interest

Total liabilities and shareholders’

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

1 unchanged sentence

Consolidated Statements of Operations and Comprehensive Income/(Loss)

the three months ended

the nine months ended

For the three months ended

Cost of revenues

6 unchanged sentences

( 2,045,951 )

( 6,308,818 )

( 2,519,212 )

Other income/(expense)

Settlement Agreement -

Related Party

( 1,405,469 )

( 1,891,026 )

( 3,812,921 )

Total other income/(expense),

( 1,823,967 )

( 2,982,670 )

loss before income taxes

2 unchanged sentences

tax benefit/(expense)

income/(loss)

Net income/(loss)

( 4,529,823 )

( 1,732,858 )

income in noncontrolling interest

Less income/(loss) in

noncontrolling interest

income/(loss) attributable to Cemtrex, Inc.

1 unchanged sentence

$ ( 1,692,611 )

income/(loss)

Other comprehensive income/(loss)

Net income/(loss)

$ ( 4,529,823 )

$ ( 1,732,858 )

Other comprehensive income/(loss)

Foreign currency translation

benefit plan actuarial gain/(loss)

Comprehensive income/(loss)

currency translation gain/(loss)

Comprehensive

income/(loss)

( 4,470,331 )

1 unchanged sentence

comprehensive income/(loss) attributable to noncontrolling interest

Comprehensive

income/(loss) attributable to Cemtrex, Inc.

Comprehensive income/(loss)

attributable to Cemtrex, Inc.

$ ( 4,418,459 )

2 unchanged sentences

Income/(loss) Per Share-Diluted

Weighted Average Number

of Shares-Basic

Weighted Average Number

of Shares-Diluted

Weighted Average Number of Shares-Basic

Weighted Average Number of Shares-Diluted

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

1 unchanged sentence

Consolidated Statement of Stockholders’ Equity

(Unaudited/Restated)

Stock Series 1

2 unchanged sentences

Stockholders’

at September 30, 2020, as reported

$ ( 33,172,690 )

$ ( 148,291 )

( 3,091,570 )

( 1,515,495 )

at September 30, 2020, as restated

at September 30, 2021

$ ( 41,908,062 )

1 unchanged sentence

currency translation gain/(loss)

benefit plan actuarial gain/(loss)

Shares issued to pay accounts

payable, shares

Shares sold in Securities Purchase

Agreements, net of offering costs

Shares sold in Securities Purchase

Agreements, net of offering costs, shares

granted to pay notes payable

granted to pay notes payable, shares

issued to pay notes payable

Shares issued for services

Shares issued for services, shares

Purchase of treasury stock

in noncontrolling interest

and options surrendered in settelment agreement

and options surrendered in settelment agreement, shares

paid in Series 1 preferred shares

income/(loss) attributable to noncontrolling interest

Comprehensive

income/(loss) attributable to noncontrolling interest

Noncontrolling interest

Income/(loss)

attributable to noncontrolling interest

( 4,477,951 )

3 unchanged sentences

$ ( 148,291 )

currency translation gain/(loss)

benefit plan actuarial gain/(loss)

issued to pay notes payable

in noncontrolling interest

and options surrendered in settelment agreement

( 1,000,000.00 )

( 3,672,645 )

( 3,674,165 )

at March 31, 2021

$ ( 31,758,563 )

$ ( 148,291 )

currency translation gain/(loss)

paid in Series 1 preferred shares

granted to pay notes payable

in noncontrolling interest

at June 30, 2021

$ ( 30,660,550 )

$ ( 148,291 )

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

1 unchanged sentence

Consolidated Statement of Stockholders’ Equity (Continued)

(Unaudited/Restated)

Preferred Stock

Stock Series 1

Stock Series A

Stock Series C

Comprehensive

Stockholders’

at September 30, 2019

$ ( 23,676,887 )

Foreign currency translation

Share-based compensation

Shares issued to pay accounts

Shares sold in Securities Purchase

Agreements, net of offering costs

Stock issued to pay notes payable

Dividends paid in Series 1

preferred shares

Net income/(loss) attributable

to noncontrolling interest

Comprehensive income/(loss)

attributable to noncontrolling interest

at December 31, 2019

$ ( 23,732,505 )

Foreign currency translation

Share-based compensation

Shares sold in Securities Purchase

Agreements, net of offering costs

Stock issued to pay notes payable

Shares issued for services

Purchase of treasury stock

Noncontrolling interest

( 1,599,101 )

at March 31, 2020

at September 30, 2020, as restated

$ ( 34,100,067 )

$ ( 148,291 )

Foreign currency translation

Share-based compensation

Shares sold in Securities Purchase

Agreements, net of offering costs

Stock issued to pay notes payable

Shares issued for services

Noncontrolling interest

balance, value

$ ( 34,100,067 )

$ ( 148,291 )

currency translation gain/(loss)

issued to pay notes payable

paid in Series 1 preferred shares

Income/(loss)

attributable to noncontrolling interest

( 1,692,611 )

at June 30, 2020

at December 31, 2020

( 35,792,678 )

balance, value

( 35,792,678 )

2 unchanged sentences

Consolidated Statements of Cash Flows

(Unaudited/Restated)

the nine months ended June 30,

Flows from Operating Activities

income/(loss)

For the three

Flows from Operating Activities

Net income/(loss)

$ ( 4,529,823 )

Adjustments to reconcile

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

$ ( 1,732,858 )

Adjustments to reconcile net loss to net cash

provided/(used) by operating activities:

Depreciation and amortization

Gain on disposal of property

and equipment

on disposal of property and equipment

Amortization of right-of-use

1 unchanged sentence

doubtful accounts

Share-based compansation

Share-based compensation

Income tax expense/ (benefit)

4 unchanged sentences

issue discounts on notes payable

Gain on marketable securities

( 2,407,841 )

Settlement Agreement -

Related Party

( 3,674,165 )

Discarge of Paycheck Protection

Gain/loss on marketable

Discharge of Paycheck Protection

Program Loans

( 3,349,700 )

Changes in operating assets

and liabilities net of effects from acquisition

of subsidiaries:

Changes in operating assets

and liabilities net of effects from acquisition of subsidiaries:

Changes in operating assets and liabilities

net of effects from acquisition of subsidiaries:

Accounts receivable

1 unchanged sentence

( 1,428,411 )

( 1,384,453 )

Prepaid expenses and other

curent asstets

( 1,017,337 )

current assets

Other liabilities

Accounts payable

( 1,205,851 )

Operating lease liabilities

7 unchanged sentences

Flows from Investing Activities

Purchase of property and

( 1,113,658 )

( 4,541,537 )

Investment in Virtual Driver

( 1,075,428 )

Purchase of property and equipment

Proceeds from sale of property and equipment

Investment in MasterpieceVR

Investment in related party

Proceeds from sale of marketable

Purchase of marketable securities

( 6,290,747 )

Proceeds from sale of marketable securities

Purchase of marketable

( 3,569,760 )

Purchases of treasury stock

Receivable - Related party

cash used by investing activities

( 5,990,926 )

Flows from Financing Activities

Proceeds from notes payable

Payments on notes payable

( 1,275,000 )

Proceeds on bank loans

Payments on bank loans

Proceeds from Paycheck Protection

Program Loans

Proceeds from securities

purchase agreements

Payments on capital lease

Expenses on securities purchase

line of credit

cash provided/(used) by financing activities

on bank loans

cash used by financing activities

( 1,629,708 )

Effect of currency translation

Net increase in cash, cash

equivalents, and restricted cash

Net decrease in cash, cash equivalents,

and restricted cash

( 5,277,121 )

cash equivalents, and restricted cash at beginning of period

( 3,383,247 )

Cash, cash equivalents,

and restricted cash at beginning of period

cash equivalents, and restricted cash at end of period

1 unchanged sentence

Cash and equivalents

Restricted cash

cash, cash equivalents, and restricted cash

2 unchanged sentences

Consolidated Statements of Cash Flows (Continued)

(Unaudited/Restated)

Supplemental Disclosure

of Cash Flow Information:

Disclosure of Cash Flow Information:

during the period for interest

5 unchanged sentences

Stock issued to pay

for products and/or services

Stock issued to pay

notes payable

5 unchanged sentences

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”

refer to Cemtrex, Inc.

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.

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

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

Technologies (AT)

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

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 its own 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

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

based data algorithms.

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

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

corporate, industrial and governmental security challenges.

Vicon’s products include browser-based video monitoring systems

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

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

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

data algorithms.

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

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

CXR delivers Virtual Reality (VR)

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

products, and various commercial and industrial applications.

The Company is in the process of developing virtual reality applications

for commercialization in the metaverse over the next couple years.

CXR also invests in emerging startups focused on building best

in class solutions for the metaverse.

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

engaging learning for all ages and skills.

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

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

for startups to large enterprises.

Services (IS)

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 markets.

on customers seeking to achieve greater asset utilization and reliability to cut costs and increase production from existing assets,

including small projects, sustaining capital, turnarounds, maintenance, specialty welding services, and high-quality scaffolding.

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

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

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

and chemicals among others.

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

packaging, printing, chemical, and other manufacturing markets.

The focus is on customers seeking to achieve greater asset utilization

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

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

of Virtual Driver Interactive

5 unchanged sentences

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

Result 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 in May 2021.

There is no further contingent consideration specified

in the purchase agreement.

The Company has accounted for this acquisition as a business combination and is in the process of calculating

the allocation of purchase price.

All amounts paid have been included in goodwill in the accompanying condensed consolidated balance

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

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

up to a valuation cap, as defined.

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

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

the fair value method.

No impairment has been recorded for the three and nine months ended June 30, 2021.

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.

The Company has accounted for this acquisition as a business combination and has allocated the purchase

price as follows, $ 876,820

to proprietary software, $ 39,992

to inventory, and $ 598,391

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 period ended December

Impacts of COVID-19 on our Business

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

delays in expected orders by many customers and new product development.

Overall bookings level in both business segments have been impacted.

In addition, due to delays in certain supply chain areas, the expected launch times of our new products and new versions of existing

products have been delayed for several months.

We are also starting to see the costs of certain components that are facing shortages,

increase in price which may affect gross margins.

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

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

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

Overall bookings level in the IS segment of our business

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

Bookings and revenue are starting to show

signs of recovery in this fiscal quarter compared to the same period last year.

However, due to delays in certain supply chain areas,

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

Additionally, increased prices

and the need to increase wages to retain talent may cause our gross margin percentages to shrink and our operational costs to

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

The COVID-19 pandemic has the potential

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

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

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

which cannot be reasonably estimated at this time.

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

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

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

Due to the inherent

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

COVID-19 pandemic on our future operations.

The COVID-19 pandemic and the resulting

supply chain issues and inflation has the potential to cause adverse effects to our customers, suppliers or business partners in locations

that have or will experience more pronounced disruptions, which could result in a reduction to future revenue and manufacturing output

as well as delays in our new product development activities.

However, opportunities in the video surveillance field

have been growing for Vicon products.

extent of the pandemics effect on our operational and financial performance will depend in large part on future developments, which cannot

be reasonably estimated at this time.

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

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

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

or vaccines, and the resumption of widespread economic activity.

Due to the inherent uncertainty of the unprecedented and rapidly evolving

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

2 – INTERIM STATEMENT PRESENTATION

2 unchanged sentences

statements and the notes thereto included in the Annual Report on Form 10-K for the year ended September 30, 2021, of Cemtrex Inc.

accompanying condensed consolidated balance sheet has been derived from the audited consolidated financial statements and the notes thereto

included in the Annual Report on Form 10-K for the year ended September 30, 2020, adjusted and restated as further discussed in Note

2 of these financial statements.

Additionally, the Condensed Consolidated Statements of Operations and Comprehensive Income/(Loss), the

Condensed Consolidated Statement of Stockholders’ Equity, the Condensed Consolidated Statements of Cash Flows, and notes to the

financial statements related to the results of the three- and nine-month periods ended June 30, 2020, have been restated.

accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally

9 unchanged sentences

preparation of financial statements in conformity with U.S.

GAAP requires management to make estimates and assumptions that affect the

reported amounts of assets and liabilities as of the date of the condensed consolidated financial statements, the disclosure of contingent

GAAP requires management to make estimates and assumptions that affect

the reported amounts of assets and liabilities as of the date of the condensed consolidated financial statements, the disclosure of contingent

assets and liabilities in the condensed consolidated financial statements and the accompanying notes, and the reported amounts of revenues,

5 unchanged sentences

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

Inc., Cemtrex Ltd., Cemtrex Technologies Pvt.

Ltd., Griffin Filters, LLC, Cemtrex XR Inc., and Advanced Industrial Services, Inc.

the Company’s majority owned subsidiary Vicon Industries, Inc.

and its subsidiaries, Telesite USA, IQInVision, Vicon Industries

Ltd., and Vicon Systems, Ltd.

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

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.j

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.

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.

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 three and nine months ended June 30, 2020, Condensed

Consolidated Statement of Stockholders’ Equity, and the Condensed Consolidated Statements of Cash Flows for the nine months ended

June 30, 2020.

Consolidated Balance Sheets

SCHEDULE OF CONDENSED CONSOLIDATED BALANCE SHEETS

as reported on September 30, 2020

of net value of intangible assets

effect of derecognition of expenses

on amounts transferred to First Commercial

effect of currency translation

balance at September 30, 2020

Property and equipment, net

$ ( 2,597,185 )

Series 1 preferred stock dividends payable

$ ( 1,081,690 )

Additional paid-in capital

$ ( 3,091,570 )

Retained earnings (accumulated deficit)

$ ( 33,172,690 )

$ ( 7,100,000 )

$( 32,520,084 )

Accumulated other comprehensive income

Consolidated Statements of Operations and Comprehensive Income/(Loss)

SCHEDULE OF CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME/(LOSS)

For the three months ended

Net Income income/(loss) attributable

to Cemtrex, Inc.

$ ( 4,454,617 )

$ ( 4,195,676 )

Foreign currency translation gain/(loss)

$ ( 156,354 )

Loss Per Share-Basic

Loss Per Share-Diluted

For the nine months ended

Net loss available to Cemtrex,

$ ( 6,658,086 )

$ ( 5,850,395 )

Foreign currency translation gain

Loss Per Share-Basic

Loss Per Share-Diluted

Consolidated Statement of Stockholders’ Equity

SCHEDULE OF CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY

For the nine months ended

Retained earnings (accumulated

deficit) at September 30, 2019

$ ( 20,067,685 )

$ ( 3,609,202 )

$ ( 23,676,887 )

Net income/(loss)

$ ( 8,744,636 )

$ ( 5,850,395 )

Retained earnings (accumulated deficit) at

June 30, 2020

$ ( 28,812,321 )

$ ( 714,961 )

$ ( 29,527,282 )

Accumulated other comprehensive income/(loss)at

September 30, 2019

Comprehensive income/(loss)

Accumulated other comprehensive income/(loss)

at June 30, 2020

Additional paid-in capital

$ ( 2,067,370 )

Consolidated Statements of Cash Flows

SCHEDULE OF CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

For the nine months ended

$ ( 6,506,774 )

$ ( 5,699,083 )

Depreciation and amortization

$ ( 815,731 )

Net cash used by operating activities

$ ( 3,377,687 )

$ ( 3,385,727 )

Effect of currency translation

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).

Inc., Cemtrex Technologies Pvt.

Ltd., Cemtrex XR Inc., and Advanced Industrial Services, Inc.

and the Company’s majority owned

subsidiary Vicon Industries, Inc.

and its subsidiary, Vicon Industries Ltd.

All inter-company balances and transactions have been

eliminated in consolidation.

Pronouncements

3 unchanged sentences

Issued Accounting Standards

December 2019, the FASB issued amended guidance, Simplifying the Accounting for Income Taxes, to remove certain exceptions to the general

principles from ASC 740 - Income Taxes , and to improve consistent application of U.S.

GAAP for other areas of ASC 740 by clarifying

and amending existing guidance.

The guidance is effective for the Company on October 1, 2021;

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.

is currently evaluating the effect the guidance will have on its consolidated financial statement disclosures, results of operations

and financial position.

March 2020, the FASB issued ASU No.

2020-04, Reference Rate Reform (Topic 848):

Facilitation of the Effects of Reference Rate Reform

on Financial Reporting (“ASU No.

The update provides optional guidance for a limited period to ease the potential

burden in accounting for (or recognizing the effects of) contract modifications on financial reporting caused by reference rate reform.

ASU 2020-04 is effective for all entities as of March 12, 2020, through December 31, 2022.

The Company adopted this guidance in the second

quarter of 2020.

The adoption of this guidance had no impact on the Company’s Condensed Consolidated Financial Statements or the

related disclosures.

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 – LOSS PER COMMON SHARE

4 unchanged sentences

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

For the three and nine

months ended June 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 EXCLUDED FROM COMPUTATION OF DILUTED NET LOSS PER COMMON SHARE AS ANTI-DILUTIVE

For the three months

ended December 31, 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

For the three months ended

For the nine months ended

Warrants to purchase shares

Net loss per common share anti-dilutive effect

4 – SEGMENT INFORMATION

19 unchanged sentences

$ ( 1,842,346 )

$ ( 5,185,944 )

$ ( 1,686,680 )

( 1,122,874 )

operating loss

1 unchanged sentence

$ ( 2,045,951 )

$ ( 6,308,818 )

$ ( 2,519,212 )

Other income/(expense)

1 unchanged sentence

$ ( 424,252 )

$ ( 2,868,033 )

( 1,487,133 )

other expense

$ ( 475,300 )

$ ( 2,982,670 )

Depreciation and Amortization

1 unchanged sentence

depreciation and amortization

September 30,

Identifiable Assets

Advanced Technologies

Industrial Services

5 – FAIR VALUE MEASUREMENTS

23 unchanged sentences

to continue as a going concern.

Company’s fair value assets at June 30, 2021, are as follows.

Company’s fair value assets at December 31, 2021 and September 30, 2021, are as follows.

SCHEDULE OF FAIR VALUE OF ASSETS

Prices in Active

in marketable securities

in short-term investments)

in MasterpieceVR

in Other assets)

Quoted Prices

Identical Assets

Investment in marketable securities

short-term investments)

Quoted Prices

Identical Assets

September, 30

Investment in marketable securities

(included in short-term investments)

6 – RESTRICTED CASH

3 unchanged sentences

with the plan.

These funds, as required by the plan are restricted in nature and amounted to $ 1,533,458 as of June 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 .

These funds, as required by the plan are restricted in nature and amounted to $ 1,476,037

at December 31, 2021 and $ 1,601,932 at Spentember 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

as of December 31, 2021 and Sepetmber 30, 2021 .

7 – ACCOUNTS RECEIVABLE, NET

28 unchanged sentences

Computers and software

Trade show display

Machinery and equipment

Property and equipment, gross

Accumulated depreciation

2 unchanged sentences

Property and equipment,

expense for the three and nine months ended June 30, 2021, and 2020 were $ 292,182 and $ 972,186 , and $ 472,279 and $ 1,351,247 , respectively.

expense for the three months ended December 31, 2021, and 2020 were $ 262,833 and $ 360,578

842, “Leases”, requires that a lessee recognize the assets and liabilities that arise from operating leases.

20 unchanged sentences

Company entered into a financing lease for a single vehicle in the Industrial services segment with a term of 3 years.

The Company enters

The Company entered

into operating leases for its facilities in New York, United Kingdom, and India, as well as for vehicles for use in our Industrial Services

7 unchanged sentences

Finance leases

Lease liabilities - current

Lease liabilities - net of current portion

Finance leases

Lease liabilities - net

of current portion

reconciliation of undiscounted cash flows to finance and operating lease liabilities recognized in the condensed consolidated balance

sheet at June 30, 2021, is set forth below:

sheet at December 31, 2021, is set forth below:

SCHEDULE OF RECONCILIATION OF UNDISCOUNTED CASH FLOWS TO FINANCE AND OPERATING LEASE LIABILITIES

6 unchanged sentences

SCHEDULE OF LEASE COSTS

Three months ended

Finance lease costs:

7 unchanged sentences

Cash paid for amounts included

in the measurement of lease liabilities:

measurement of lease liabilities:

Operating leases

7 unchanged sentences

11 – PREPAID AND OTHER CURRENT ASSETS

June 30, 2021, the Company had prepaid and other current assets consisting of prepayments on inventory purchases of $ 397,056 , other current

assets of $ 1,767,311 .

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 $ 1,087,009 .

December 31, 2021, the Company had prepaid and other current assets consisting of prepayments on inventory purchases of $ 467,093 ,

and other current assets of $ 2,260,418 .

On September 30, 2021, the Company had prepaid and other current assets consisting of prepayments on inventory purchases of $ 298,707 ,

and other current assets of $ 2,286,945 .

12 – OTHER ASSETS

of June 30, 2021, the Company had other assets of $ 1,094,429 which was comprised of rent security of $ 248,160 , a strategic investment

of December 31, 2021, the Company had other assets of $ 697,624 which was comprised of rent security of $ 96,320 , a strategic investment

in MasterpieceVR of $ 500,000 , and other assets of $ 101,304 .

As of September 30, 2021, the Company had other assets of $ 697,240 which

was comprised of rent security deposits of $ 294,553 and other assets of $ 449,654 .

was comprised of rent security deposits of $ 84,362 , Investment in Masterpiece VR valued at $ 500,000 , and other assets of $ 112,878 .

13 – RELATED PARTY TRANSACTIONS

1 unchanged sentence

which Aron Govil, the Company’s Founder and former CFO, is President, for total consideration of $ 550,000 .

As of June 30, 2021,

and September 30, 2020, there was $ 1,515,820 and $ 1,432,209 in receivables due from Ducon Technologies, Inc., respectively.

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

see Note 2 for further transactions relating to Aron Govil.

As of December 31, 2021, and September 30, 2021, there was $ 1,492,321

and $ 1,487,155

in receivables due from Ducon Technologies, Inc.,

respectively.

December 31, 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.

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 statements.

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 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

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).

14 – 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 ( 2.09 %

as of June 30, 2021).

At June 30, 2021, there was no outstanding balance on this line of credit.

The line carries an interest of LIBOR plus 2.00 %

per annum ( 2.078 %

as of December 31, 2021 and 2.075 % as

of September 30, 2021).

At December 31, 2021 and

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 February 1.

payable to bank

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.

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.

of the proceeds went to direct purchase of AIS.

This loan carries interest of LIBOR plus 2.25 % per

annum ( 2.34 % as of June 30, 2021) and is payable on December 15, 2022 .

This loan carries loan covenants which the Company was in compliance

with as of June 30, 2021.

December15, 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 ( 2.09 % as of June 30, 2021) and was fully paid on

December 15, 2020 .

This loan carries interest of LIBOR plus 2.25 %

per annum ( 2.328 %

as of December 31, 2021 and 2.325 %

as of September 30, 2021) and is payable on December

This loan carries loan covenants which the Company was in compliance with as of December 31, 2021.

The outstanding

balance on this loan was $ 977,808

and $ 1,218,680 ,

on December 31, 2021, and September 30, 2021, respectively.

This loan is 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 ( 2.09 % as of June 30, 2021) and is payable on May 1, 2023 .

loan carries loan covenants which the Company was in compliance with as of June 30, 2021.

This loan carries interest of LIBOR plus 2.00 % per annum ( 2.078 % as of December 31, 2021 and 2.075 % as of September 30,

2021) and is payable on May 1, 2023 .

This loan carries loan covenants which the Company was in compliance with as of December 31, 2021.

The outstanding balance on this loan was $ 133,008 and $ 149,914 , on December 31, 2021, and September 30, 2021, respectively.

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 ( 2.44 % as of June 30, 2021) and is payable on May

This loan carries loan covenants which the Company was in compliance with as of June 30, 2021.

December 23, 2019, 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 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 was satisfied on November 2, 2020.

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 $ 5,00 0, the Company

received $ 1,495,000 in cash.

This note was satisfied on January 21, 2021.

This loan carries interest of LIBOR plus 2.25 % per annum ( 2.328 % as of December 31, 2021 and 2.325 % as of September

30, 2021) and is payable on May 1, 2023 .

This loan carries loan covenants which the Company was in compliance with as of December 31,

The outstanding balance on this loan was $ 234,821 and $ 258,060 , on December 31, 2021, and September 30, 2021, respectively.

loan is secured by the assets of the Company

September 30, 2020, the Company, issued a note payable to an independent private lender in the amount of $ 4,605,000 .

This note 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 8.85 % and matures on March

This note carries loan covenants which the Company is in compliance with as of June 30, 2021.

This note carries interest of 8 %

and matures on March

After deduction of an original issue

discount of 600,000

and legal fees of $ 5,000 ,

the Company received $ 4,000,000

As of December 31, 2021, and September

30, 2021, this note had a balance of $ 0

and $ 2,256,448 ,

respectively.

As of December 31, 2021, and September 30, 2021, this note had unamortized original issue discount balance of $ 0 and

$ 200,000 , 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

As of December 31, 2021, and September

30, 2021, this note had a balance of $ 5,248,855

and $ 5,005,000 ,

respectively.

As of December 31, 2021, and September 30, 2021, this note had unamortized original issue discount balance of $ 625,000

and $ 750,000 , respectively

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.

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 December 31, 2021.

As of December 31, 2021, and September 30, 2021, this note had a balance of

and $ 3,604,743 ,

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 ( 2.59 % as of June 30, 2021) and is payable on January 28, 2040 .

carries loan covenants similar to covenants on The Company’s other loans from Fulton Bank.

As of June 30, 2021, the Company was

in compliance with these covenants.

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 ( 2.578 %

as of December 31, 2021 and 2.575 %

as of September 30, 2021) and is payable on January

This loan carries loan covenants similar

to covenants on the Company’s other loans from Fulton Bank.

As of December 31, 2021, the Company was in compliance with

these covenants.

As of December 31, 2021, and September 30, 2021, this mortgage had a balance of $ 2,314,141

and $ 2,339,114 ,

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.

These loans bear interest of 1 % 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.

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 $ 710,046 .

In April and June of 2021 $ 3,156,700 and $ 193,000 of these loans were forgiven and included in other income on the consolidated

statement of operations and comprehensive income (loss).

January 24, 2021, and April 17, 2021, subsidiaries of the company received additional $ 1,970,785 and $ 971,500 , respectively, of Paycheck

Protection Program funds as part of the second Paycheck Protection Program for which the subsidiary qualifies due to the decrease in

These loans bear interest of 1 % and mature in five years.

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

These loans bear interest of 2 %

and mature in two years.

The Company has applied for

and received loan forgiveness under the provisions of the CARES Act for $ 6,291,985 .

The remaining loan of $ 121,400

is recorded under Paycheck Protection Program

Loans on our Condensed Consolidated Balance Sheet as of December 31, 2021, net of the short-term portion of $ 60,700 .

The issuing bank determined that this loan qualifies for loan forgiveness, however the Company is awaiting final approval from

the Small Business Administration.

15 – STOCKHOLDERS’ EQUITY

Company is authorized to issue 10,000,000 shares of Preferred Stock, $ 0.001 par value.

As of June 30, 2021, and September 30, 2020, there

were 1,935,151 and 3,256,784 shares issued and outstanding, respectively.

As of December 31, 2021, and September 30, 2021,

there were 2,029,753 and 1,935,151 shares issued and outstanding, respectively.

1 Preferred Stock

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 nine months ended June 30, 2021, 198,316 shares of Series 1 Preferred Stock were issued to pay dividends to holders of Series 1 Preferred

the nine-month period ended June 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 2).

of June 30, 2021, and September 30, 2020, there were 1,885,151 and 2,156,784 shares of Series 1 Preferred Stock issued and outstanding,

the three months ended December 31, 2021, 94,602

shares of Series 1 Preferred Stock were issued

to pay dividends to holders of Series 1 Preferred Stock.

of December 31, 2021, and September 30, 2021, there were 1,979,753 and 1,885,151 shares of Series 1 Preferred Stock issued and outstanding,

respectively.

A Preferred stock

the nine-month period ended June 30, 2021, the Company retired 1,000,000 shares of Series A Preferred Stock surrendered by Aron Govil

as part of the settlement agreement (see Note 2).

of June 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

6 unchanged sentences

to our shareholders for their action or consideration, including the election of directors.

the nine-month period ended June 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 2).

of June 30, 2021, and September 30, 2020, there were 50,000 and 100,000 shares of Series C Preferred Stock issued and outstanding, respectively.

of December 31, 2021, and September 30, 2021, there were 50,000 shares of Series C Preferred Stock issued and outstanding.

Company is authorized to issue 50,000,000 shares of common stock, $ 0.001 par value.

As of June 30, 2021, there were 18,711,463 shares

As of December 31, 2021, there were 23,673,210 shares

issued and outstanding and at September 30, 2021, there were 20,782,194 shares issued and outstanding.

the nine months ended June 30, 1,088,924 shares of the Company’s common stock have been issued to satisfy $ 550,000 of notes payable,

$ 191,556 in accrued interest, and $ 465,772 of excess value of shares issued recorded as interest expense.

On June 30, 2021, 318,218 shares

were granted to satisfy $ 400,000 of notes payable and $ 80,509 of excess value of shares recorded as interest expense.

These shares were

issued on July 2, 2021.

Surrendered in Settlement

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.

the three months ended December 31, 2021, 2,981,016 shares of the Company’s common stock have been issued to satisfy $ 2,112,500

of notes payable, $ 353,978 in accrued interest, and $ 821,593 of excess value of shares issued recorded as interest expense.

16 – SHARE-BASED COMPENSATION

the nine months ended June 30, 2021, and 2020, the Company recognized $ 110,904 and $1 67,212 of share-based compensation expense on its

outstanding options, respectively.

As of June 30, 2021, $ 401,690 of unrecognized share-based compensation expense is expected to be recognized

over a period of five years.

the three months ended December 31, 2021, and 2020, the Company recognized $ 45,371 and $ 16,071 of share-based compensation expense on

its outstanding options, respectively.

As of December 31, 2021, $ 314,043 of unrecognized share-based compensation expense is expected

to be recognized over a period of four years .

Future compensation amounts will be adjusted for any change in estimated forfeitures.

17 – 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 $ 117,000 of lease expense for this lease, for the nine months ended June 30, 2021.

Company has its corporate headquarters in 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.

Company’s IS segment owns approximately 25,000 square feet of warehouse space in Manchester, PA and approximately 43,000 square

2 unchanged sentences

PA from a third party in a three-year lease at a monthly rent of $ 4,555 expiring on August 31, 2022 .

The Company has paid $ 40,995 for

this lease, for the nine months ended June 30, 2021.

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 , the Company has paid $ 58,077 for this lease,

for the nine months ended June 30, 2021, (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 , the Company paid $ 258,471 for this property,

during the nine months ended June 30, 2021 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 2026 , the Company has paid $ 65,961 for this lease for the nine months ended June 30, 2021.

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 , 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 2026 .

18 – SUBSEQUENT EVENTS

2 unchanged sentences

following subsequent events have occurred and require recognition or disclosure in the condensed consolidated financial statements.

July of 2021, the Company issued 2,070,731 shares of common stock to satisfy $ 2,837,814 worth of notes payable and accrued interest.

January 28, 2022, Christopher C.

Moore was dismissed from his position as Chief Financial Officer and Paul J.

Wyckoff was appointed Cemtrex’s

Interim Chief Financial Officer.

February 2, 2022, the Company invested an additional $ 500,000 investment via a simple agreement for future equity(“SAFE”)

in MasterpieceVR.

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-Q

Item 1. Financial Statements