What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2022-02-18 compared with 2021-08-16 · 100 added, 157 removed, 71 unchanged (78% of the section changed)

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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.

Accounting Policies and Estimates

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and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended September 30,

of Operations - For the three months ending June 30, 2021, and 2020

revenue for the three months ended June 30, 2021, and 2020 was $10,326,431 and $8,440,867, respectively, an increase of $1,885,564, or

Loss from operations for the three months ended June 30, 2021, was $2,300,269 compared to $2,399,802 for the three months ended

June 30, 2020, a decrease on the loss of $99,533, or 4%.

Total revenue for the quarter increased, as compared to total revenue in the

same period last year, due to shutdowns and limited operations of businesses due to the COVID-19 crisis.

Loss from operations decreased

due to increased revenues as a result of the COVID-19 crisis during the same period last year.

Advanced Technologies segment revenues for the three months ended June 30, 2021, increased by $868,534 or 17% to $5,845,958 from $4,977,424

for the three months ended June 30, 2020.

This increase is mainly due to an improvement in economic climate from the impact of the COVID-19

crisis during the same period last year.

Industrial Services segment revenues for the three months ended June 30, 2021, increased by $1,017,030 or 29%, to $4,480,473 from $3,463,443

for the three months ended June 30, 2020.

This increase is mainly due to an improvement in economic climate from the impact of the COVID-19

crisis during the same period last year.

Profit for the three months ended June 30, 2021, was $4,127,716 or 40% of revenues as compared to gross profit of $3,279,852 or 39% of

revenues for the three months ended June 30, 2020.

Gross profit increased in the three months ended June 30, 2021, compared to the three

months ended June 30, 2020, due to increased revenues.

The Company’s gross profit margins vary from product to product and from

customer to customer.

of Operations – For the three months ending December 31, 2021, and 2020

revenue for the three months ended December 31, 2021, and 2020 was $10,672,489 and $8,836,076, respectively, an increase of $1,863,413,

Loss from operations for the three months ended December 31, 2021, was $4,054,523 compared to $2,045,951 for the three months

ended December 31, 2020, an increase on the loss of $2,008,572, or 98%.

Total revenue for the quarter increased, as compared to total

revenue in the same period last year, due to shutdowns and limited operations of businesses due to the COVID-19 crisis during the same

period last year.

Loss from operations increased due to increased expenses related to personnel costs, travel, and research and development

Advanced Technologies segment revenues for the three months ended December 31, 2021, increased by $945,648 or 20% to $5,618,517 from

$4,672,869 for the three months ended December 31, 2020.

This increase is mainly due to an improvement in economic climate from the impact

of the COVID-19 crisis during the same period last year.

Industrial Services segment revenues for the three months ended December 31, 2021, increased by $890,765 or 21%, to $5,053,972 from $4,163,207

for the three months ended December 31, 2020.

This increase is mainly due to an improvement in economic climate from the impact of the

COVID-19 crisis during the same period last year.

Profit for the three months ended December 31, 2021, was $3,869,194 or 36% of revenues as compared to gross profit of $4,005,470 or 45%

of revenues for the three months ended December 31, 2020.

Gross profit decreased in the three months ended December 31, 2021, compared

to the three months ended December 31, 2020, due to increased cost of revenues.

The Company’s gross profit margins vary from product

to product and from customer to customer.

and Administrative Expenses

and administrative expenses for the three months ended June 30, 2021, increased $322,301 or 6% to $5,670,019 from $5,347,718 for the

three months ended June 30, 2031.

General and administrative expenses as a percentage of revenue was 55% and 63% of revenues for the

three-month periods ended June 30, 2021, and 2020.

The decrease in General and Administrative Expenses as a percentage of revenue is

the increase in revenues from the same quarter last year and the increase on a dollar per dollar basis is the result of increased legal,

travel, marketing and sales expenses.

and administrative expenses for the three months ended December 31, 2021, increased $1,194,808 or 22% to $6,612,004 from $5,417,196 for

the three months ended December 31, 2020.

General and administrative expenses as a percentage of revenues was 62% and 61%

of revenues for the three-month periods ended December 31, 2021, and 2020, respectively.

The increase in general and administrative

expenses is the result of increased personnel, travel, marketing and sales expenses.

and Development Expenses

and Development expenses for the three months ended June 30, 2021, was $757,966 compared to $331,936 for the three months ended June

Research and Development expenses are primarily related to the Advanced Technologies Segment’s development of proprietary

technology and further developments of the SmartDesk and Artificial Intelligence (AI) and next generation solutions associated with security

and surveillance systems software.

and Development expenses for the three months ended December 31, 2021, was $1,311,713 compared to $634,225 for the three months ended

December 31, 2020.

Research and Development expenses are primarily related to the Advanced Technologies Segment’s development of

proprietary technology and further developments of the SmartDesk and Artificial Intelligence (AI) and next generation solutions associated

with security and surveillance systems software.

Income/(Expense)

income/(expense) for the third quarter of fiscal 2021, was $3,468,649 as compared to $(1,823,967) for the third quarter of fiscal 2020.

Other income/(expense) for the three months ended June 30, 2021, included the following one-time items (i) other income resulting from

the forgiveness of our PPP loans of $3,349,700.

Additionally, the company had realized and unrealized gains on marketable securities

income/(expense) for the first quarter of fiscal 2022, was $(475,300) as compared to $342,047 for the first quarter of fiscal 2021.

income/(expense) for the three months ended December 31, 2021, included the gain on the forgiveness of our PPP

loans of $971,500.

for Income Taxes

the third quarter of fiscal 2021, the Company recorded an income tax provision of $40,759 compared to $7,658 for the third quarter of

the first quarter of fiscal 2022, the Company did not record an income tax provision compared to $28,954 for the first quarter

of fiscal 2021.

The provision for income tax is based upon the projected income tax from the Company’s various U.S.

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income/(loss) attributable to Cemtrex, Inc.

Company had a net income attributable to Cemtrex, Inc.

Company had a net loss attributable to Cemtrex, Inc.

shareholders of $4,477,951, or 42% of revenues, for the three month period ended

June 30, 2021, as compared to a net loss attributable to Cemtrex, Inc.

shareholders of $4,195,676 or 50% of revenues, for the three months

ended June 30, 2020.

Net income/(loss) attributable to Cemtrex, Inc.

shareholders increased in the third quarter as compared to the same

period last year was primarily due to other income items mentioned above.

of Operations - For the nine months ending June 30, 2021, and 2020

revenue for the nine months ended June 30, 2021, and 2020 was $28,422,892 and $32,774,797, respectively, a decrease of $4,351,905, or

Loss from operations for the nine months ended June 30, 2021, was $6,308,818 compared to $2,519,212 for the nine months ended June

30, 2020, an increase on the loss of $3,789,606, or 150%.

Total revenue for the period decreased, as compared to total revenue in the

same period last year, due to shutdowns and limited operations of businesses due to the COVID-19 crisis during the first two quarters

of fiscal year 2021.

Loss from operations increased due to decreased revenues due to shutdowns and limited operations of businesses due

to the COVID-19 crisis during the first two quarters of fiscal year 2021.

Advanced Technologies segment revenues for the nine months ended June 30, 2021, decreased by $2,382,816 or 13% to $16,006,241 from $18,389,057

for the nine months ended June 30, 2020.

This decrease is mainly due to shutdowns and limited operations of businesses due to the COVID-19

crisis during the first two quarters of fiscal year 2021.

Industrial Services segment revenues for the nine months ended June 30, 2021, decreased by $1,969,089 or 14%, to $12,416,651 from $14,385,740

for the nine months ended June 30, 2020.

This decrease is mainly due to shutdowns and limited operations of businesses due to the COVID-19

crisis during the first two quarters of fiscal year 2021.

Profit for the nine months ended June 30, 2021, was $12,062,070 or 42% of revenues as compared to gross profit of $13,974,442 or 43%

of revenues for the nine months ended June 30, 2020.

Gross profit decreased in the nine months ended June 30, 2021, compared to the nine

months ended June 30, 2020, due to lower revenues.

The Company’s gross profit margins vary from product to product and from customer

and Administrative Expenses

and administrative expenses for the nine months ended June 30, 2021, increased $957,001 or 6% to $16,337,200 from $15,380,199 for the

nine months ended June 30, 2020.

General and administrative expenses as a percentage of revenue was 57% and 47% of revenues for the nine-month

periods ended June 30, 2021, and 2020.

The increase in General and Administrative Expenses as a percentage of revenue is the reduction

in revenues from the same period last year and the increase on a dollar per dollar basis is the result of increased personnel, legal

and accounting fees, and marketing and sales expenses.

and Development Expenses

and Development expenses for the nine months ended June 30, 2021, was $2,033,688 compared to $1,113,455 for the nine months ended June

Research and Development expenses are primarily related to the Advanced Technologies Segment’s development of proprietary

technology and further developments of the SmartDesk and Artificial Intelligence (AI) and next generation solutions associated with security

and surveillance systems software.

Income/(Expense)

income/(expense) for the first three quarters of fiscal 2021 was $8,315,729 as compared to $(2,982,670) for the first three quarters

of fiscal 2020.

Other income/(expense) for the nine months ended June 30, 2021, included the following one-time items (i) the settlement

with Aron Govil (see Note 2), generated other income of $3,674,165, (ii) employee retention credits of $736,899 (iii) other income resulting

from the forgiveness of our PPP loans of $3,349,700.

Additionally, the company had realized and unrealized gains on marketable securities

of $2,407,647.

for Income Taxes

the first three quarters of fiscal 2021 the Company recorded an income tax provision of $168,190 compared to $197,201 for the first three

quarters of fiscal 2020.

The provision for income tax is based upon the projected income tax from the Company’s various U.S.

international subsidiaries that are subject to their respective income tax jurisdictions and the Company’s projected ability to

utilize net loss carryforwards.

income/(loss) attributable to Cemtrex, Inc.

Company had a net income attributable to Cemtrex, Inc.

shareholders of $1,859,534, or 7% of revenues, for the nine-month period ended

June 30, 2021, as compared to a net loss attributable to Cemtrex, Inc.

shareholders of $5,850,395 or 18% of revenues, for the nine months

ended June 30, 2020.

Net income/(loss) attributable to Cemtrex, Inc.

shareholders increased in the first three quarters as compared to

the same period last year was primarily due to other income items mentioned above.

December 31, 2021, as compared to a net loss attributable to Cemtrex, Inc.

shareholders of $1,692,611 or 19% of revenues, for

the three months ended December 31, 2020.

Net loss attributable to Cemtrex, Inc.

shareholders increased in the first quarter as compared

to the same period last year was primarily due to costs of revenues and operating expenses mentioned above.

Company’s business and operations have not been materially affected by inflation during the periods for which financial information

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and Capital Resources

capital was $18,176,331 at June 30, 2021, compared to $23,285,122 at September 30, 2020.

capital was $12,801,113 at December 31, 2021, compared to $15,088,892 at September 30, 2021.

This includes cash and equivalents and restricted

cash of $14,570,345 at June 30, 2021, and $21,072,859 at September 30, 2020, respectively.

cash of $11,972,430 at December 31, 2021, and $17,186,323 at September 30, 2021.

The decrease in working capital was primarily

due to the reduction of the Company’s cash and equivalents, and trade receivables during the first and second quarters of fiscal

receivable decreased $1,452,581 or 22% to $5,234,216 at June 30, 2021, from $6,686,797 at September 30, 2020.

due to the Company’s use of cash to build inventory and pay down liabilities during the first quarter of fiscal year 2022.

receivable decreased $2,263,147 or 29% to $5,547,749 at December 31, 2021, from $7,810,896 at September 30, 2021.

The decrease in accounts

receivable is attributable to lower revenues in the first three quarters of fiscal year 2021 due to the COVID-19 crisis.

increased $1,875,591 or 28% to $8,669,397 at June 30, 2021, from $6,793,806 at September 30, 2020.

The increase inventories is attributable

to the purchase of inventories for new products the Company plans to ship in the future.

activities used $6,178,550 cash for the nine months ended June 30, 2021, compared to using $3,385,727 cash for the nine months ended

June 30, 2020.

The decrease in operating cash flows was primarily due to the effect of the settlement agreement with Aron Govil and the

discharge of the Company’s PPP loans.

activities provided $154,326 of cash for the nine months ended June 30, 2021, compared to using cash of $5,990,926 during the nine-month

period ended June 30, 2020.

Investing activities for the first quarter of fiscal year 2021 were driven by the Company’s investment

in Virtual Driver Interactive, MasterpieceVR Software, purchase of fixed assets, and marketable securities transactions.

activities used $180,219 of cash in the nine-month period ended June 30, 2021, as compared to providing cash of $20,663,535 in the nine-month

period ended June 30, 2020.

Financing activities were primarily driven by payments on bank loans and notes payable and proceeds from

the second round of Paycheck Protection Program loans.

believe that our cash on hand and cash generated by operations is sufficient to meet the capital demands of our current operations during

the 2021 fiscal year (ending September 30, 2021).

receivable is attributable to collections of receivables from the last quarter of fiscal year 2021 and lower revenues in this quarter

and compared to the fourth quarter of fiscal year 2021.

increased $1,428,411 or 25% to $7,085698 at December 31, 2021, from $5,657,287 at September 30, 2021.

The increase in inventories

is attributable to the purchase of inventories for new products the Company plans to ship in the future.

Cash used by operating

activities for the three months ended December 31, 2021 and 2021 was $4,352,702 and $1,078,052 respectively.

The decrease in operating

cash flows was primarily due to purchases on inventory and payment of accounts payable and accrued expenses.

Cash used by investment

activities for the three months ended December 31, 2021 and 2020 was $291,666 and $675,487, respectively.

Investing activities for

the first quarter of fiscal year 2022 were driven by the Company’s purchase of fixed assets.

Cash used by financing

activities for the three months ended December 31, 2021 and 2020 was $632,753 and $1,629,708, respectively.

Financing activities

were primarily driven by payments on bank loans and notes.

believe that our cash on hand and cash generated by operations is sufficient to meet the capital demands of our current operations for

fiscal year 2022 (ending September 30, 2022).

Any major increases in sales, particularly in new products, may require substantial

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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 2. Management’s Discussion and Analysis