What changed in this filing

/stocks — the workspaceLOADING

Item 1. Business

2022-12-28 compared with 2022-01-21 · 89 added, 83 removed, 126 unchanged (58% of the section changed)

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

multi-industry technology company.

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

realities, industrial solutions, and intelligent security systems.

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

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

refer to Cemtrex, Inc.

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

and its subsidiaries.

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

positioned to maximize growth and return in the coming years.

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

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

Accordingly, the Company has reported the results

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

Balance Sheets.

Company presently has two business segments,

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

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

Technologies (AT)

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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.

Vicon’s products include 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

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Impacts of COVID-19 on our Business

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

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

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

Overall bookings level in the IS segment of our business

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

In addition, due to delays in certain supply

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

COVID-19 pandemic impacted our business operations and the results of our operations during fiscal years 2022 and 2021, primarily with

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

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

Overall bookings level in our business were down by more than

20%, compared to fiscal 2021 levels during certain periods.

Bookings and revenue have largely recovered in this calendar year compared

to last year.

However, due to ongoing delays in certain supply chain areas, the expected launch times of our new products and new versions

has resulted in delays of several months.

These supply chain issues have also affected the Company’s ability to obtain inventory

for our current bookings, and the Company has implemented a buildup of inventory levels to remain competitive and keep backlog orders

at a minimum.

Additionally, increased costs and the need to increase wages to retain talent may cause our gross margin percentages to

shrink and our operational costs to rise.

In response to these increased costs, the Company has implemented an ongoing review of our

pricing to cover these additional costs while remaining competitive.

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

The COVID-19 pandemic has the potential

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

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

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

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

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 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

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

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

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

Due to the inherent uncertainty of the unprecedented and

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

of Virtual Driver Interactive

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

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

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

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

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

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

Results for VDI will be reported under the AT segment.

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

This note carries interest of 5% and is payable in

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

due on October 26, 2022.

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

There is no further

contingent consideration specified in the purchase agreement.

The Company has accounted for this acquisition as a business combination

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

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

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

up to a valuation cap, as defined.

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

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

recorded at cost.

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

Future developments include 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.

with the Securities and Exchange Commission

September 30, 2022, acting pursuant to an offer of settlement submitted by the Company, the U.S.

Securities and Exchange Commission (“SEC”)

issued an order pursuant to Section 8A of the Securities Act, directing the Company to cease and desist from committing or causing any

violations and any future violations of Section 17(a) of the Securities Act and Section 10(b) of the Exchange Act and Rule 10b-5 thereunder

(the “SEC Order”).

SEC Order also directed Mr.

Saagar Govil to cease and desist from committing or causing any violations and any future violations of Section

17(a)(3) of the Securities Act.

SEC found that, as a result of its conduct, which was neither admitted nor denied, the Company violated Section 17(a) of the Securities

Act and Section 10(b) of the Exchange Act and Rule 10b-5 thereunder, which prohibit fraudulent conduct in the offer or sale of securities

and in connection with the purchase or sale of securities.

SEC also found that, as a result of his conduct, which was neither admitted nor denied, Mr.

Govil violated Section 17(a)(3) of the Securities

Act, which makes it illegal to engage in any transaction, practice, or course of business which operates or would operate as a fraud

or deceit upon the purchaser.

addition to the above cease and desists, the Company undertook to not publicly announce that it has partnered with another company or

that another company has become a customer of the Company without providing prior written notice, including a copy of the announcement

text, to the businessperson at the other company responsible for that company’s relationship with the Company.

the Company received a civil monetary penalty of two million two hundred thousand dollars ($2,200,000) in the aggregate that must be

paid to the SEC.

Govil also received a civil monetary penalty of three hundred and fifty thousand dollars ($350,000) in the aggregate

that must be paid to the SEC.

The company and Mr.

Govil have remitted the payments as of September 30, 2022.

The SEC Order can be accessed

at www.sec.gov.

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

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

We aim to grow in markets where we see

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

Generally, these markets are high growth markets

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

In these markets we seek to build or acquire

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

We take a long term

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

believe our ability to attract and retain

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

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

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

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

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

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

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

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

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

We aim to grow in markets where we see significant

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

Generally, these markets are high growth markets that are

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

In these markets we seek to build or acquire businesses

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

We take a long-term approach with

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

believe our ability to attract and retain new customers comes from our ongoing commitment to understanding our customers’ business

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

cutting edge technology.

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

of our customer’s goals, challenges, strategies, operations, and products to ultimately provide the best solutions for them.

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

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

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

We constantly

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

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

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

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due to COVID-19.

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

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

on any one or a few suppliers.

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

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

Company employs approximately 385 full-time employees and approximately 3 part-time employees as of December 15, 2022, including 175

engaged in engineering, 95 in manufacturing & field service and 118 in administrative, sales and marketing functions.

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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-K

Item 1. Business