What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2022-05-16 compared with 2022-02-18 · 334 added, 300 removed, 511 unchanged (55% of the section changed)

2 unchanged sentences

Consolidated Balance Sheets

September 30,

Current assets

3 unchanged sentences

Trade receivables, net

Trade receivables - related

Inventory –net of

allowance for inventory obsolescence

Prepaid expenses and other

Trade receivables - related party

Inventory –net of allowance for inventory obsolescence

Prepaid expenses and other assets

Total current assets

1 unchanged sentence

Right-of-use assets

& Stockholders’ Equity (Deficit)

Liabilities & Stockholders’ Equity (Deficit)

Current liabilities

13 unchanged sentences

Other long-term liabilities

Paycheck Protection Program

Paycheck Protection Program Loans

Deferred Revenue - long-term

3 unchanged sentences

Shareholders’ equity

Preferred stock , $ 0.001

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 December 31, 2021 and September 30, 2021

Preferred stock , $ 0.001 par value, 10,000,000 shares authorized, Series 1, 3,000,000 shares authorized, 1,979,753 shares issued

and outstanding as of March 31, 2022 and 1,885,151 shares issued and outstanding as of September 30, 2021 (liquidation value of $ 10

Series C, 100,000 shares authorized, 50,000 shares issued and outstanding at March 31, 2022 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

Common stock, $ 0.001 par value, 50,000,000 shares authorized, 24,673,210 shares issued and outstanding at March 31, 2022 and

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

Additional paid-in capital

Retained earnings (accumulated

Retained earnings (accumulated deficit)

( 51,107,260 )

1 unchanged sentence

Treasury stock at cost

Accumulated other comprehensive

income (loss)

Total Cemtrex stockholders’

Accumulated other comprehensive income (loss)

Total Cemtrex stockholders’ equity

Non-controlling interest

Total liabilities and shareholders’

Total liabilities and shareholders’ equity

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

1 unchanged sentence

Consolidated Statements of Operations and Comprehensive Income/(Loss)

March 31, 2022

March 31, 2021

March 31, 2022

March 31, 2021

For the three months ended

For the six months ended

March 31, 2022

March 31, 2021

March 31, 2022

March 31, 2021

Cost of revenues

1 unchanged sentence

General and administrative

and development

operating expenses

income/(loss)

Research and development

Total operating expenses

Operating income/(loss)

( 3,819,337 )

( 1,962,598 )

( 7,873,860 )

( 4,008,549 )

Other income/(expense)

Settlement Agreement - Related Party

Interest Expense

( 1,317,517 )

Total other income/(expense),

loss before income taxes

( 2,722,986 )

( 1,458,017 )

tax benefit/(expense)

Total other income/(expense), net

( 1,457,886 )

Net loss before income taxes

( 4,801,923 )

( 9,331,746 )

Income tax benefit/(expense)

Net income/(loss)

1 unchanged sentence

( 9,331,746 )

Less income/(loss) in

noncontrolling interest

income/(loss) attributable to Cemtrex, Inc.

Less loss in noncontrolling interest

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

$ ( 4,721,247 )

4 unchanged sentences

$ ( 9,331,746 )

currency translation gain/(loss)

Comprehensive

income/(loss)

Foreign currency translation loss

Defined benefit plan actuarial gain

Comprehensive income/(loss)

( 5,001,546 )

( 9,471,877 )

comprehensive income/(loss) attributable to noncontrolling interest

Comprehensive income/(loss)

attributable to Cemtrex, Inc.

Less comprehensive loss attributable to noncontrolling interest

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

$ ( 5,082,222 )

7 unchanged sentences

Consolidated Statement of Stockholders’ Equity

Stock Series 1

Stock Series C

Preferred Stock Series 1

Preferred Stock Series A

Preferred Stock Series C

Common Stock Par

Par Value $0.001

Comprehensive

Stockholders’

at September 30, 2021

Balance at September 30, 2021

$ ( 41,908,062 )

$ ( 148,291 )

currency translation gain/(loss)

issued to pay notes payable

paid in Series 1 preferred shares

Income/(loss)

attributable to noncontrolling interest

Foreign currency translation gain/(loss)

Share-based compensation

Shares issued to pay notes payable

Dividends paid in Series 1 preferred shares

Income/(loss) attributable to noncontrolling interest

( 4,477,951 )

at December 31, 2021

Balance at December 31, 2021

$ ( 46,386,013 )

$ ( 148,291 )

Foreign currency translation gain/(loss)

$ ( 199,623 )

Share-based compensation

Shares issued with note payable

Income/(loss) attributable to noncontrolling interest

$ ( 4,721,247 )

( 4,721,247 )

Balance at March 31, 2022

( 51,107,260 )

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

1 unchanged sentence

Consolidated Statement of Stockholders’ Equity (Continued)

Stock Series 1

Stock Series A

Stock Series C

Preferred Stock Series 1

Preferred Stock Series A

Preferred Stock Series C

Common Stock Par

Par Value $0.001

Comprehensive

Stockholders’

at September 30, 2020, as restated

Balance at September 30, 2020, as restated

$ ( 34,100,067 )

$ ( 148,291 )

balance, value

Foreign currency translation gain/(loss)

Share-based compensation

Shares issued to pay notes payable

Dividends paid in Series 1 preferred shares

Income/(loss) attributable to noncontrolling interest

( 1,692,611 )

currency translation gain/(loss)

issued to pay notes payable

paid in Series 1 preferred shares

Income/(loss)

attributable to noncontrolling interest

Balance at December 31, 2020

( 35,792,678 )

Foreign currency translation gain/(loss)

Defined benefit plan actuarial gain/(loss)

Share-based compensation

Shares issued to pay notes payable

Income in noncontrolling interest

Shares and options surrendered in settelment agreement

( 1,000,000 )

at December 31, 2020

( 3,672,645 )

balance, value

( 3,674,165 )

Net income/(loss)

Balance at March 31, 2021

( 33,338,546 )

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

1 unchanged sentence

Consolidated Statements of Cash Flows

Flows from Operating Activities

For the three

Flows from Operating Activities

Cash Flows from Operating Activities

For the six months ended

Cash Flows from Operating Activities

Net income/(loss)

$ ( 9,331,746 )

$ ( 1,732,858 )

Adjustments to reconcile net loss to net cash

provided/(used) by operating activities:

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

Depreciation and amortization

on disposal of property and equipment

Amortization of right-of-use

Change in allowance for

doubtful accounts

Loss on disposal of property and equipment

Amortization of right-of-use assets

Change in allowance for doubtful accounts

Share-based compensation

Income tax expense/ (benefit)

Interest expense paid in

equity shares

Accrued interest on notes

Amortization of original

issue discounts on notes payable

Gain/loss on marketable

Discharge of Paycheck Protection

Program Loans

Changes in operating assets and liabilities

net of effects from acquisition of subsidiaries:

Interest expense paid in equity shares

Accrued interest on notes payable

Amortization of original issue discounts on notes payable

Gain on marketable securities

( 1,869,338 )

Discharge of Paycheck Protection Program Loans

Settlement Agreement - Related Party

( 3,674,165 )

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

Accounts receivable

Accounts receivable - related

Accounts receivable - related party

( 1,409,367 )

Prepaid expenses and other

current assets

Prepaid expenses and other current assets

Other liabilities

4 unchanged sentences

Deferred revenue

taxes payable

cash used by operating activities

Income taxes payable

Net cash used by operating activities

( 7,235,840 )

( 2,856,654 )

Flows from Investing Activities

Cash Flows from Investing Activities

Purchase of property and equipment

3 unchanged sentences

Proceeds from sale of marketable securities

Purchase of marketable

Purchase of marketable securities

( 4,626,862 )

cash used by investing activities

Flows from Financing Activities

Payments on notes payable

( 4,845,903 )

on bank loans

cash used by financing activities

Net cash used by investing activities

( 5,654,515 )

Cash Flows from Financing Activities

Proceeds from notes payable

Payments on notes payable

( 2,070,257 )

Payments on bank loans

Proceeds from Paycheck Protection Program Loans

Net cash provided/(used) by financing activities

Effect of currency translation

Net decrease in cash, cash equivalents,

and restricted cash

Net decrease in cash, cash equivalents, and restricted cash

( 6,406,018 )

( 3,721,531 )

Cash, 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

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 Cash, Cash Equivalents, and Restricted Cash

Cash and equivalents

Restricted cash

cash, cash equivalents, and restricted cash

Total cash, cash equivalents, and restricted cash

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

1 unchanged sentence

Consolidated Statements of Cash Flows (Continued)

Disclosure of Cash Flow Information:

during the period for interest

Cash paid during the

period for income taxes

Schedule of Non-Cash Investing and Financing Activities

Investment in Virtual

Driver Interactive

Stock issued to pay

notes payable

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 Virtual Driver Interactive

Stock issued to pay notes payable

Shares issued in connection with note payable

Financing of right of use assets

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

4 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.

41 unchanged sentences

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.

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 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 and on January 19, 2022 made an additional $ 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

2 unchanged sentences

the Company accounts for this investment and recorded at cost.

No impairment has been recorded for the period ended December

No impairment has been recorded for the period ended March 31, 2022.

Impacts of COVID-19 on our Business

9 unchanged sentences

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

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

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

3 unchanged sentences

as well as delays in our new product development activities.

However, opportunities in the video surveillance field

have been growing for Vicon products.

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

21 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,

10 unchanged sentences

and its subsidiary, Vicon Industries Ltd.

All inter-company balances and transactions have been

eliminated in consolidation.

All inter-company balances and transactions have been eliminated

in consolidation.

Pronouncements

21 unchanged sentences

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

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:

For the three and six

months ended March 31, 2022, and 2021, 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 six months ended

Warrants to purchase shares

16 unchanged sentences

Advanced Technologies

Industrial Services

Total revenues

Advanced Technologies

Operating loss

Industrial Services

Total gross profit

Operating income/(loss)

Advanced Technologies

1 unchanged sentence

$ ( 1,693,377 )

operating loss

$ ( 9,826,559 )

$ ( 3,535,723 )

Industrial Services

Total operating loss

$ ( 3,819,337 )

$ ( 1,962,598 )

$ ( 7,873,860 )

$ ( 4,008,549 )

Other income/(expense)

1 unchanged sentence

$ ( 963,668 )

other expense

$ ( 1,387,920 )

Industrial Services

Total other expense

$ ( 982,586 )

$ ( 1,457,886 )

Depreciation and Amortization

Advanced Technologies

depreciation and amortization

Industrial Services

Total 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 December 31, 2021 and September 30, 2021, are as follows.

Company’s fair value assets at March 31, 2022 and September 30, 2021, are as follows.

SCHEDULE OF FAIR VALUE OF ASSETS

2 unchanged sentences

Investment in marketable securities

short-term investments)

(included in short-term investments)

Quoted Prices

3 unchanged sentences

(included in short-term investments)

Fair value assets

6 – RESTRICTED CASH

3 unchanged sentences

with the plan.

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 .

These funds, as required by the plan are restricted in nature and amounted to $ 1,502,490 at March 31, 2022 and $ 1,601,932

at 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 as of March 31, 2022 and September 30, 2021.

7 – ACCOUNTS RECEIVABLE, NET

3 unchanged sentences

Accounts receivable

Allowance for doubtful

Allowance for doubtful accounts

Accounts receivables,

9 unchanged sentences

Inventory, gross

Allowance for

inventory obsolescence

Allowance for inventory obsolescence

( 1,816,800 )

( 1,921,001 )

Inventory –net

of allowance for inventory obsolescence

Inventory –net of allowance for inventory obsolescence

9 – PROPERTY AND EQUIPMENT

10 unchanged sentences

( 11,536,854 )

Property and equipment,

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

Property and equipment, net

expense for the three months ended March 31, 2022, and 2021 were $ 599,850 ,

respectively, and for the six months ended March 31, 2022, and 2021 were $ 862,683 ,

respectively.

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

30 unchanged sentences

Finance leases

Lease liabilities - current

Operating leases

Lease liabilities - net of current portion

Finance leases

Lease liabilities - net

of current portion

Operating leases

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

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

sheet at March 31, 2022, is set forth below:

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

September 30,

Years ending September 30,

Finance leases

Operating Leases

2026 & Thereafter

Undiscounted lease payments

representing interest

lease payments

Amount representing interest

Discounted lease payments

disclosures of lease data are set forth below:

SCHEDULE OF LEASE COSTS

Three months ended

Six months ended

March 31, 2022

March 31, 2021

Finance lease costs:

of finance lease assets

Depreciation of finance lease assets

Interest on lease liabilities

Operating lease costs:

Amortization of right-of-use

on lease liabilities

Amortization of right-of-use assets

Interest on lease liabilities

Total lease cost

Other information:

Cash paid for amounts included

measurement of lease liabilities:

Cash paid for amounts included in the measurement of lease liabilities:

Operating leases

Weighted-average remaining lease term - finance

leases (months)

Weighted-average remaining lease term - operating

leases (months)

Finance leases

Weighted-average remaining lease term - finance leases (months)

Weighted-average remaining lease term - operating leases (months)

Weighted-average discount rate - finance leases

Weighted-average discount rate - operating

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

11 – PREPAID AND OTHER CURRENT ASSETS

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 .

March 31, 2022, the Company had prepaid and other current assets consisting of prepayments on inventory purchases of $ 630,165 ,

costs and estimated earnings in excess of billings on uncompleted contracts of $ 1,102,347 , and other current assets of $ 1,635,131 .

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 .

costs and estimated earnings in excess of billings on uncompleted contracts of $ 1,148,243 , and other current assets of $ 1,138,702 .

12 – OTHER ASSETS

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 $ 84,362 , Investment in Masterpiece VR valued at $ 500,000 , and other assets of $ 112,878 .

of March 31, 2022, the Company had other assets of $ 1,280,386

which was comprised of rent security of $ 90,791 ,

a strategic investment in MasterpieceVR of $ 1,000,000 ,

and other assets of $ 189,585 .

As 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 .

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 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.

As of March 31, 2022,

and September 30, 2021, there was $ 1,472,514 and $ 1,487,155 in receivables due from Ducon Technologies, Inc., respectively.

31, 2022, $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.

6 unchanged sentences

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

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 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.

14 unchanged sentences

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.

Company recognized the gain with respect to the surrendered Securities during the second quarter of fiscal year 2021.

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).

is reported as Settlement Agreement – Related Party on the Company’s Condensed Consolidated Statements of Operations and

Comprehensive Income/(Loss).

discussed above, Mr.

10 unchanged sentences

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 ( 2.078 %

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.

The line carries an interest of LIBOR plus 2.00 % per annum ( 2.783 %

as of March 31, 2022 and 2.075 % as of September 30, 2021).

At March 31, 2022 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

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.

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.

$ 5,000,000 of the proceeds went to direct purchase of AIS.

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 carries interest of LIBOR plus 2.25 % per

annum ( 3.033 % as of March 31, 2022 and 2.325 % as of September 30, 2021) and is payable on December 15, 2022 .

This loan carries loan covenants

which the Company was in compliance with as of March 31, 2022.

The outstanding balance on this loan was $ 735,494 and $ 1,218,680 , on March

31, 2022, and September 30, 2021, respectively.

This loan is secured by the assets of the Company.

1 unchanged sentence

Services, Inc.

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,

This loan carries interest of LIBOR plus 2.00 % per annum ( 2.783 % as of March 31, 2022 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

This loan carries loan covenants which the Company was in compliance with as of March 31, 2022.

The outstanding

balance on this loan was $ 106,799 and $ 149,914 , on March 31, 2022, and September 30, 2021, 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 ( 2.328 % as of December 31, 2021 and 2.325 % as of September

This loan carries interest of LIBOR plus 2.25 % per annum ( 3.033 % as of March 31, 2022 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

This loan carries loan covenants which the Company was in compliance with as of March 31, 2022.

The outstanding balance on this loan was $ 220,630 and $ 258,060 , on March 31, 2022, and September 30, 2021, respectively.

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

This note carried interest of 8 %

and matured on March

After deduction of an original issue

2 unchanged sentences

the Company received $ 4,000,000

As of December 31, 2021, and September

As of March 31, 2022, and September

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

1 unchanged sentence

respectively.

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

$ 200,000 , respectively

As of March 31, 2022, and September 31, 2021, this note had unamortized original issue discount balance of $ 0

and $ 200,000 ,

September 30, 2021, the Company, issued a note payable to an independent private lender in the amount of $ 5,755,000 .

5 unchanged sentences

the Company received $ 5,000,000

As of December 31, 2021, and September

As of March 31, 2022, and September

30, 2021, this note had a balance of $ 5,992,502

1 unchanged sentence

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

As of March 31, 2022, and September 31, 2021, this note had unamortized original issue discount balance of $ 500,000

and $ 750,000 ,

respectively.

February 22, 2022, the Company, issued a note payable to an independent private lender in the amount of $ 9,205,000 .

This note carries interest of 8 %

and matures on August

After deduction of an original issue

discount of $ 1,200,000

and legal fees of $ 5,000 ,

the Company received $ 8,000,000

Additionally, the Company issued 1,000,000

shares of its common stock to the lender.

fair market value of the stock of $ 700,400

was recognized as interest expense on the Company’s

Condensed Consolidated Statement of Operations and Comprehensive Income/(Loss).

As of March 31, 2022, this note had a balance of $ 9,280,989 .

As of March 31, 2022, this note had unamortized original issue discount balance of $ 1,066,667 .

March 30, 2022, 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.

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 30, 2023 .

This note carries loan covenants which the

Company is in compliance with as of March 31, 2022.

As of March 31, 2022, and September 30, 2021, this note had a balance of $ 2,954,743

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 ( 2.578 %

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.

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 ( 3.283 % as of March 31, 2022 and 2.575 % as of September 30, 2021) 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 March 31, 2022, the Company was in compliance with these covenants.

As of March 31, 2022, and September 30, 2021, this mortgage

had a balance of $ 2,228,945 and $ 2,339,114 , respectively.

Protection Program Loans

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.

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 has applied for and

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

The remaining loan of $ 121,400 has been modified with

a maturity date of May 5, 2025 and payments starting in June of 2022 and is recorded under Paycheck Protection Program Loans on our Condensed

Consolidated Balance Sheet as of March 31, 2022, net of the short-term portion of $ 18,210 .

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 December 31, 2021, and September 30, 2021,

As of March 31, 2022, and September 30, 2021,

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

1 Preferred Stock

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,

the six months ended March 31, 2022, 94,602 shares of Series 1 Preferred Stock were issued to pay dividends to holders of Series 1 Preferred

of March 31, 2022, and September 30, 2021, there were 1,979,753 and 1,885,151 shares of Series 1 Preferred Stock issued and outstanding,

respectively.

7 unchanged sentences

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

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

of March 31, 2022, 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 December 31, 2021, there were 23,673,210 shares

As of March 31, 2022, there were 24,673,210 shares

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

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.

the six months ended March 31, 2022, 2,891,016 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.

An additional 1,000,000

shares were issued in connection with a note payable issued on February 22, 2022.

16 – SHARE-BASED COMPENSATION

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 .

the six months ended March 31, 2022, and 2021, the Company recognized $ 72,417 and $ 65,317 of share-based compensation expense on its

outstanding options, respectively.

As of March 31, 2022, $ 174,318 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 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 has its corporate headquarters in New York City with a 12-month lease of 2,500 square feet of office space at a rate of $ 10,000

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

11 unchanged sentences

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

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.

April and May of 2022, the Company issued an aggregate of 1,590,086 shares of common stock to settle $ 600,000 of notes payable, and $ 105,053

of excess value of shares issued recorded as interest expense.

April 7, 2022, 99,369 shares of Series 1 Preferred Stock were issued to pay dividends to holders of Series 1 Preferred Stock.

of the Series 1 Preferred Stock are entitled to receive dividends at the rate of 10 % annually, based on the $ 10.00 per share Preference

Amount, payable semiannually.

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