What changed in this filing

/stocks — the workspaceLOADING

Item 9A. Controls and Procedures

2022-12-28 compared with 2022-01-21 · 1299 added, 1197 removed, 701 unchanged (78% of the section changed)

9 unchanged sentences

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

Our management,

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

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

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

Based on its evaluation, our management concluded that as

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

The material weaknesses relates

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

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

accounting policies and public disclosures.

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

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

These deficiencies

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

on an evaluation under the supervision and with the participation of our management, our principal executive officer and principal financial

officer have concluded that our disclosure controls and procedures were not effective as of September 30, 2022 due to the material weaknesses

described below.

Annual Report on Internal Control Over Financial Reporting

11 unchanged sentences

Based on its evaluation, our management concluded

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

The material weakness relates

to the Company lacking sufficient, qualified, accounting personnel.

The shortage of qualified accounting personal resulted in the Company

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

This deficiency

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

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

our internal control over financial reporting.

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

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

and procedures.

that as of September 30, 2022, that our internal control over financial reporting were not effective and there are material weaknesses

in our internal control over financial reporting.

The material weaknesses relate to the Company lacking sufficient, qualified, accounting

The shortage of qualified accounting personnel resulted in the Company lacking entity level controls around the review of

period-end reporting processes, accounting policies and public disclosures.

Additionally, the Company’s current processes and systems

do not provide for necessary timely reconciliation of certain accounts and sufficient consideration regarding recoverability of certain

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

order to mitigate the material weaknesses, the Company has implemented measures that they believe have mitigated these weaknesses but

has not had sufficient time to fully test these measures.

These measures include;

(i) updating our accounting software to ensure tighter

control over entries and providing improved data for timely reconciliation of certain accounts, and (ii) engaged a third-party accounting

firm to provide review of period-end reporting processes, accounting policies and public disclosures

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

6 unchanged sentences

in Internal Control Over Financial Reporting

was no change in our internal control over financial reporting that occurred in the year ended September 30, 2021, that has materially

affected, or is reasonably likely to materially affect, our internal control over financial reporting.

the year ended September 30, 2022, The Company engaged a third-party accounting firm to assist with entity level controls around the

review of period-end reporting processes, accounting policies and public disclosures that is reasonably likely to materially affect our

internal control over financial reporting.

OTHER INFORMATION

DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

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

Election of Directors

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

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

and Executive Officers of the Registrant

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

of the Board of Directors,President,

Greenpoint Avenue, Suite 208

Executive Officer, & Director

Chief Financial Officer

Greenpoint Avenue, Suite 208

Occupations and Business Experience of Directors and Executive Officers

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

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

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

of Operations.

Saagar was recently recognized as a Forbes’ 30 Under 30 in 2016, Business Insiders #17 on Top 100 of Silicon Alley

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

Saagar Govil has a B.E.

in Materials Engineering from Stony Brook University

and completed the PLD program at Harvard Business School.

Wyckoff was appointed Cemtrex’s Interim Chief Financial Officer on January 28, 2021, where he is responsible for the Company’s

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

Wyckoff has been with Cemtrex since March of 2014 when he joined

as the Manager of Financial Reporting and since January of 2019 has served as the Company’s Corporate Controller.

Prior to joining

Wyckoff was the Controller at Vaso Corporation (formerly Vasomedical, Inc.) a medical device distribution company based

in Plainview, NY.

Wyckoff has nearly 20 years of private accounting experience and holds a B.S.

in Accounting from SUNY College at

Old Westbury.

Kwon was appointed to the as a director on September 28, 2021 and is presently the President and Chief Procurement Officer of H Mart.

Brian has extensive operations experience in purchasing, distribution, logistics, IT, HR, and e-commerce from his time at H-Mart.

has completed the Harvard Business School General Management Program.

Singh was appointed as a director on November 1, 2021 and is currently the founder and Chief Investment Officer of Singh Capital Partners

(SCP), a multifamily office that directs investments into venture capital, real estate, and growth equity.

SCP invests capital on behalf

of Fortune 500 CXOs, Unicorn founders and operators and has executed investments in North America, Europe and Asia.

He serves on the

numerous non-profit and private company boards including AcquCo, US Inspect, Embrace Software, Snowball Industries, Shukr Investments,

Suburban Hospital (John Hopkins Medicine) and Dingman Center at the Smith School of Business.

He is a CFA charterholder and Manpreet

received his MBA from the Wharton School of Business in Entrepreneurship, Finance, and Real Estate.

He also holds a B.S.

in Finance with

a citation in Entrepreneurship from the University of Maryland, College Park.

Singh’s extensive knowledge of finance allow

him to make valuable contributions to the Board.

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

creating, operating and driving growth for technology companies.

He has a proven track record of identifying business opportunities and

building compelling products.

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

After Cemtrex, Mr.

Filipov served as

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

There, he led the development and

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

Metodi co-founded Flipps

Media, an OTT video distribution platform positioned to be an alternative to traditional cable pay-per-view systems.

Before Bianor, he

served as product lead for Raritan, a data center technology organization, where he was an integral part of the transition team that

led the company to becoming a global IT service management solutions provider.

Prior to joining Raritan, Mr.

Filipov served as VP of

Operations at ISS, a security products company.

There, he successfully managed product development and contract manufacturing across

Filipov has extensive experience delivering superior solutions with a focus on optimized efficiency and productivity.

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

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

Each officer serves, at the pleasure of the board of

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

of the Board of Directors

the fiscal year ended September 30, 2022 (“Fiscal 2022”), the Board of Directors held four meetings.

in Certain Legal Proceedings

the past 10 years, other than as set forth below, none of our current directors, nominees for directors or current executive officers

has been involved in any legal proceeding identified in Item 401(f) of Regulation S-K, including:

Any petition under the Federal bankruptcy laws or any state insolvency law filed by or against, or a receiver, fiscal agent or similar

officer was appointed by a court for the business or property of such person, or any partnership in which he or she was a general partner

at or within two years before the time of such filing, or any corporation or business association of which he or she was an executive

officer at or within two years before the time of such filing;

Any conviction in a criminal proceeding or being named a subject of a pending criminal proceeding (excluding traffic violations and other

minor offenses);

Being subject to any order, judgment, or decree, not subsequently reversed, suspended, or vacated, of any court of competent jurisdiction,

permanently or temporarily enjoining him or her from, or otherwise limiting, the following activities:

Acting as a futures commission merchant, introducing broker, commodity trading advisor, commodity pool operator, floor broker, leverage

transaction merchant, any other person regulated by the Commodity Futures Trading Commission, or an associated person of any of the foregoing,

or as an investment adviser, underwriter, broker or dealer in securities, or as an affiliated person, director or employee of any investment

company, bank, savings and loan association or insurance company, or engaging in or continuing any conduct or practice in connection

with such activity;

Engaging in any type of business practice;

Engaging in any activity in connection with the purchase or sale of any security or commodity or in connection with any violation of

Federal or State securities laws or Federal commodities laws;

Being subject to any order, judgment or decree, not subsequently reversed, suspended or vacated, of any Federal or State authority barring,

suspending or otherwise limiting for more than 60 days the right of such person to engage in any type of business regulated by the Commodity

Futures Trading Commission, securities, investment, insurance or banking activities, or to be associated with persons engaged in any

such activity;

Being found by a court of competent jurisdiction in a civil action or by the SEC to have violated any Federal or State securities law,

and the judgment in such civil action or finding by the Commission has not been subsequently reversed, suspended, or vacated;

Being found by a court of competent jurisdiction in a civil action or by the Commodity Futures Trading Commission to have violated any

Federal commodities law, and the judgment in such civil action or finding by the Commodity Futures Trading Commission has not been subsequently

reversed, suspended or vacated;

Being subject to, or a party to, any Federal or State judicial or administrative order, judgment, decree, or finding, not subsequently

reversed, suspended or vacated, relating to an alleged violation of:

Any Federal or State securities or commodities law or regulation;

Any law or regulation respecting financial institutions or insurance companies including, but not limited to, a temporary or permanent

injunction, order of disgorgement or restitution, civil money penalty or temporary or permanent cease-and-desist order, or removal or

prohibition order;

Any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity;

Being subject to, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory organization

(as defined in Section 3(a)(26) of the Exchange Act (15 U.S.C.

78c(a)(26))), any registered entity (as defined in Section 1(a)(29) of

the Commodity Exchange Act (7 U.S.C.

1(a)(29))), or any equivalent exchange, association, entity or organization that has disciplinary

authority over its members or persons associated with a member.

subsection titled “Settlement with the Securities and Exchange Commission” under Item 1.

Business of this Annual Report on

Form 10-K, which is incorporated herein by reference.

Board of Directors currently has one standing committee:

The Audit Committee.

a “Controlled Company” as such term is defined under NASDAQ Listing Rule 5615, the Company is not required to have a Compensation

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

of the following independent directors:

Metodi Filipov (Chair), Brian Kwon, and Manpreet Singh.

The Board of Directors has determined

that each member of the Audit Committee:

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

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

In addition, the Board has determined that Mr.

Filipov qualifies

as an “audit committee financial expert” as that term is defined in Item 407(d)(5)(ii) of Regulation S-K promulgated under

the Exchange Act by the SEC.

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

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

The Audit Committee operates under

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

SEC and NASDAQ.

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

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

overseeing our independent

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

reviewing our financial reporting processes, including the

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

overseeing our internal

control over financial reporting and disclosure controls and procedures;

and serving as our legal compliance committee.

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

As a “Controlled Company”

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

Currently, the independent

members of the Board (Messrs.

Kwon, Singh, Wagner, and Filipov), rather than a nominating committee, approve or recommend to the full

Board those persons to be nominated.

The Board believes that the current method of nominating directors is appropriate because it allows

each independent board member input into the nomination process and does not unnecessarily restrict the input that might be provided

from an independent director who could be excluded from a committee.

Currently, three of the five Directors are independent.

the Board has adopted by resolution a director nomination policy.

The purpose of the policy is to describe the process by which candidates

for inclusion in the Company’s recommended slate of director nominees are selected.

The director nomination policy is administered

by the Board.

Many of the benefits that would otherwise come from a written committee charter are provided by this policy.

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

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

If the Board thinks it is in the best interest

of the Company to nominate a new individual for director in connection with an annual meeting of shareholders, or if a vacancy occurs

between annual shareholder meetings, the Board will seek potential candidates for Board appointments who meet the criteria for selection

as a nominee and have the specific qualities or skills being sought.

Director candidates will be selected based on input from members

of the Board, senior management of the Company and, if deemed appropriate, a third-party search firm.

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

and its shareholders.

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

of knowledge about issues affecting the Company;

and ability and willingness to contribute special competencies to Board activities.

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

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

may amend the director nomination policy at any time.

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

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

Recommendations must be in writing and mailed to Cemtrex,

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

Corporate Secretary, and include all information regarding the

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

were nominated by the Board of Directors (including such candidate’s written consent to being named in the proxy statement as a

nominee and to serving as a director if elected).

The shareholder giving notice must provide (i) his or her name and address, as they

appear on the Company’s books, and (ii) the number of shares of the Company which are beneficially owned by such shareholder.

Company may require any proposed nominee to furnish such other information it may require to be set forth in a shareholder’s notice

of nomination which pertains to the nominee.

members of the Board receive quarterly compensation of $5,000 and stock options.

Additionally, we reimburse our directors for expenses

incurred in connection with attending board meetings.

Trading Policy

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

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

All such transactions

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

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

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

“Reporting Persons”) to file initial reports of ownership and reports of changes in ownership of our common stock with the

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

To our knowledge,

based solely on our review of the copies of such reports received or written representations from certain Reporting Persons that no other

reports were required, we believe that during the year ended September 30, 2021 all Reporting Persons timely complied with all applicable

filing requirements.

Communications

with Directors

Shareholders,

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

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

the communication in person or mailing it to:

Board of Directors, Privileged & Confidential, c/o Saagar Govil, CEO, Cemtrex, Inc.,

276 Greenpoint Avenue, Suite 208, Brooklyn, NY 11222.

Correspondence will be discussed at the next scheduled meeting of the Board of

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

From time to time, the Board of Directors may change the process by which shareholders

may communicate with the Board of Directors or its members.

Any changes in this process will be posted on the Company’s website

or otherwise publicly disclosed.

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

In furtherance of this commitment, we regularly monitor,

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

procedures in light of such developments.

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

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

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

as our employees.

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

The following is a summation of the key points of the Code

of Ethics we adopted:

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

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

Commission and in other public communications made by our Company;

compliance with applicable government laws, rules and regulations;

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

Accountability

for adherence to the code.

Leadership and Structure

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

The Board believes that the Company and its shareholders

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

The Board also believes that this structure

is appropriate in light of the size of our Company and corresponding size of our Board and the complexity of our business.

Govil is best positioned to develop agendas that ensure that our Board’s time and attention are focused on the matters

that are most critical to us.

EXECUTIVE COMPENSATION

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

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

compensation discussion addresses all compensation awarded to, earned by, or paid to the Company’s named executive officers (“NEO”),

which currently consists of Saagar Govil, the Chairman, Chief Executive Officer, President and Secretary, and Paul J.

Wyckoff, Interim

As of December 23, 2022, Saagar Govil and Paul J.

Wyckoff are currently earning compensation from the Company.

named Interim CFO on January 28, 2022.

Set forth below is the aggregate compensation for services rendered in all capacities to us during

our fiscal years ended September 30, 2021, and 2022 by our executive officers.

PRINCIPAL AND POSITION

Executive Officer, and President

Chief Financial Officer

FormerExecutive

Financial Officer

Priscilla Popov

Chief Financial Officer

Option Awards Column in the table above reflects the aggregate grant date fair value of the award granted in the year noted.

see Options/SAR Grants in the Last Fiscal Year below for more information relating to this option grant.

TO SUMMARY COMPENSATION TABLE

this time, we do not have an employment agreement with Saagar Govil or Paul J.

Wyckoff, though the Company may enter into such an agreement

with them on terms and conditions usual and customary for the industry.

All amounts paid to our officers in fiscal year end 2022 were

approved by the Company’s board of directors.

The Company does not currently have “key man” life insurance on Mr.

GRANTS IN THE LAST FISCAL YEAR

April 28, 2022, the Company granted Brian Kwon, Manpreet Singh, Chris Wagner, and Metodi Filipov, all Directors of the Company, stock

options for 102,565 shares each, 410,260 in the aggregate.

These options have an exercise price of $0.39 per share, which vest over one

year, and expire after five years.

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

EQUITY AWARDS AT FISCAL YEAR-END

following table presents information regarding our NEOs’ unexercised options to purchase Common Stock as of September 30, 2022:

of Securities

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

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

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

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

23, 2022, by:

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

of our directors;

of our executive officers;

current directors and executive officers as a group.

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

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

of December 23, 2022, 27,778,856 shares of Common Stock were issued and outstanding.

In addition, there were 50,000 shares of Series

C Preferred Stock outstanding which are entitled to vote 278,066,349 shares in the aggregate, all of which is held by Saagar Govil and

2,119,363 shares of Series 1 Preferred Stock outstanding which are entitled to vote 4,238,726 shares in the aggregate.

Accordingly, a

total of 310,083,931 shares may be voted at the Annual Meeting.

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

In computing the number of shares beneficially owned by a person and

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

or exercisable within 60 days of December 23, 2022, are deemed outstanding.

Such shares, however, are not deemed as of December 23, 2022,

outstanding for the purpose of computing the percentage ownership of any other person.

Beneficial Owner

of the Board,

Greenpoint Avenue, Suite 208

Executive Officer,

of the Board,

Greenpoint Avenue, Suite 208

Executive Officer,

of the Board,

Greenpoint Avenue, Suite 208

Executive Officer,

Chief Financial

Greenpoint Avenue, Suite 208

directors and executive officers

a group (3 persons)

than one percent of outstanding shares.

as otherwise noted herein, the percentage is determined on the basis of 27,778,856 shares of our Common Stock outstanding plus securities

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

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

security of which that person has the right to acquire beneficial ownership within 60 days, including, without limitation, shares

of our common stock subject to currently exercisable options.

percentage is based on the 27,778,856 shares of our Common Stock outstanding, the 278,066,349 votes that the Series C Preferred Stock

is entitled to vote, and the 4,238,726 votes that the Series 1 Preferred Stock is entitled to vote based on 2 votes per share.

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

are entitled to the number of votes per share equal to the result of (i) the total number of shares of Common Stock outstanding at

the time of such vote multiplied by 10.01, and divided by (ii) the total number of shares of Series C Preferred Stock outstanding

at the time of such vote, at each meeting of our shareholders with respect to any and all matters presented to our shareholders for

their action or consideration, including the election of directors.

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

As described above each share of Series C is entitled

to 5,561.33 votes.

Series 1 Preferred Stock is entitled to 2 votes per share.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE

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

Election of Directors

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

from the following, there have been no transactions since October 1, 2020 to which we have been a party, including transactions in which

the amount involved in the transaction exceeds the lesser of $120,000 or 1% of the average of our total assets at year-end for the last

two completed fiscal years, and in which any of our directors, executive officers or, to our knowledge, beneficial owners of more than

5% of our capital stock or any member of the immediate family of any of the foregoing persons had or will have a direct or indirect material

interest, other than equity and other compensation, termination, change in control and other arrangements, which are described elsewhere

in this Annual Report on Form 10-K.

On August 31, 2019, the Company

entered into an Asset Purchase Agreement for the sale of Griffin Filters, LLC to Ducon Technologies, Inc., which Aron Govil, the Company’s

Founder and former CFO, for total consideration of $550,000.

As of September 30, 2022, and September 30, 2021, there was $19,133 payable

due to Ducon Technologies, Inc.

and $1,487,155 in receivables due from Ducon Technologies, Inc., respectively.

The Company has negotiated

a payment agreement surrounding the sale of Griffin Filters, LLC and other liabilities due to Cemtrex, Inc.

totaling $761,585.

This agreement

is in the form of a secured promissory note earning interest at a rate of 5% per annum and matures on July 31, 2024.

Receivables due as

of September 30, 2022, of $708,512 represents the amount due from Ducon to Cemtrex Technologies Pvt.

the Company’s subsidiary

based in India has been written off to bad debt and appears on the Company’s consolidated statements of operations and comprehensive

income/(loss) under general and administrative expenses.

February 23, 2021, Cemtrex’s Board of Directors determined that certain transactions between Cemtrex Inc.

and First Commercial,

a company owned by former Executive Director, former Controlling Shareholder and former CFO, Aron Govil, were incorrectly handled and

accounted for.

total amount of disputed transfers was approximately $7,100,000 and occurred in fiscal year 2017 in the amount of $5,600,000 and in fiscal

year 2018 in the amount of $1,500,000.

Cemtrex did not find any other such transfers during this period or thereafter, upon further review

of the Company’s records.

the Company’s investigation into this matter, the Company has determined that there were inaccuracies in the Company’s financial

The financials for the periods 2017 and 2018 were incorrect corresponding to the amounts that were incorrectly accounted

for, and subsequent years were affected by the roll forward effects of these entries.

The Company found unsupported advertising expenses

in the amount of approximately $400,000 on Cemtrex Inc’s income statement for fiscal year 2018 and found that approximately $5,700,000

of intangible assets and $975,000 of research and development expenses, as translated 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 the second quarter of fiscal year 2021.

The gain of $3,674,165

is reported as Settlement Agreement – Related Party on the Company’s 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 Consolidated Balance Sheets and Consolidated

Statements of Operations and Comprehensive Income/(Loss).

PRINCIPAL ACCOUNTANT FEES AND SERVICES

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

Ratification of Appointment

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

ITEM 15 EXHIBITS AND FINANCIAL STATEMENTS

Financial Statements and Notes to the Consolidated Financial

following table sets forth the aggregate fees billed to the Company for the years ended September 30, 2022 and 2021 by Grassi Co.

Public Accountants the Company’s independent auditor:

Audit-Related Fees

AND FINANCIAL STATEMENTS

Statements and Notes to the Consolidated Financial Statements

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

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

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

Certificate of Incorporation of the Company.(1)

By Laws of the Company.(1)

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

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

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

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

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

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

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

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

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

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

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

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

Form of Subscription Rights Certificate.

Form of Series 1 Preferred Stock Certificate.

Form of Series 1 Warrant.

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

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

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

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

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

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

of Incorporation of the Company.(1)

Laws of the Company.(1)

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

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

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

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

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

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

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

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

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

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

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

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

of Subscription Rights Certificate.

of Series 1 Preferred Stock Certificate.

of Series 1 Warrant.

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

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

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

and Adtron, Inc.

Securities Purchase Agreement dated June 1, 2020 (18)

Securities Purchase Agreement dated June 9, 2020 (19)

Settlement Agreement and Release between Cemtrex, Inc.

Purchase Agreement dated June 1, 2020 (18)

Purchase Agreement dated June 9, 2020 (19)

Agreement and Release between Cemtrex, Inc.

and Aron Govil dated February 26, 2021 (13)

Corporate Code of Business Ethics.(4)

Subsidiaries of the Registrant

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

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

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

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

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

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

Purchase Agreement dated February 22, 2022 (15)

of the Term Loan Agreement between Vicon and NIL Funding, dated March 30, 2022.

Code of Business Ethics.(4)

of the Registrant

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

Certification

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

Certification

of Interim Chief Financial Officer and Principal Financial Officer as required by Rule 13a-14 or 15d-14 of the Exchange Act, as adopted

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

Certification

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

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

Instance Document

Taxonomy Extension Schema

Taxonomy Extension Calculation Linkbase

Taxonomy Extension Definition Linkbase

Taxonomy Extension Label Linkbase

Taxonomy Extension Presentation Linkbase

Certification

of Interim Chief Financial Officer and Principal Financial Officer Pursuant to 18 U.S.C.

1350, as adopted pursuant to Section 906

of the Sarbanes-Oxley Act 0f of 2002.

pursuant to Section 8A of the Securities Act – dated September 30, 2022.

XBRL Instance Document

XBRL Taxonomy Extension Schema

XBRL Taxonomy Extension Calculation Linkbase

XBRL Taxonomy Extension Definition Linkbase

XBRL Taxonomy Extension Label Linkbase

XBRL Taxonomy Extension Presentation Linkbase

Page Interactive Data File (embedded within the Inline XBRL document)

by reference from Form 10-12G filed on May 22, 2008.

12 unchanged sentences

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

Intentionally

by reference from Form 10-Q filed on May 16, 2022.

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

3 unchanged sentences

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

by reference from Form 8-K filed on October 4, 2022.

FORM 10-K SUMMARY

1 unchanged sentence

on its behalf by the undersigned, thereunto duly authorized.

January 21, 2022

Saagar Govil .

Chairman of the Board, CEO,

President & Secretary (Principal Executive Officer)

January 21, 2022

Christopher C.

of the Board, CEO,

& Secretary (Principal Executive Officer)

CFO (Principal Financial and

1 unchanged sentence

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

January 21, 2022

Saagar Govil .

Chairman of the Board, CEO,

President & Secretary (Principal Executive Officer)

January 21, 2022

Christopher C.

of the Board, CEO,

& Secretary (Principal Executive Officer)

CFO (Principal Financial and

January 21, 2022

Manpreet Singh

Manpreet Singh,

January 21, 2022

Metodi Filipov

Metodi Filipov,

/s/ Chris Wagner

Chris Wagner,

to the Consolidated Financial Statements

Report of Independent Registered Public Accounting Firm

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

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

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

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

Notes to the Consolidated Financial Statements

of Independent Registered Public Accounting Firm

the Board of Directors and

of Cemtrex Inc.

Balance Sheets at September 30, 2022 and 2021

Statements of Operations and Comprehensive Income for the Fiscal Years Ended September 30, 2022 and 2021

Statements of Shareholders’ Equity for the Fiscal Years Ended September 30, 2022 and 2021

Statement of Cash Flows for Fiscal Years Ended September 30, 2022 and 2021

to the Consolidated Financial Statements

and Subsidiaries

OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and

Stockholders of Cemtrex, Inc.

and Subsidiaries

on the Financial Statements

have audited the accompanying balance sheets of Cemtrex, Inc.

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

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

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

In our opinion,

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

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

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

of Financial Statements

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

2020 have been restated to correct certain misstatements.

We have audited the accompanying consolidated balance sheets of Cemtrex,

and Subsidiaries (the Company) as of September 30, 2022 and 2021, and the related consolidated statements of operations and comprehensive

income, stockholders’ equity, and cash flows for each of the years in the two-year period ended September 30, 2022, and the related

notes (collectively referred to as the financial statements).

In our opinion, the financial statements present fairly, in all material

respects, the financial position of the Company as of September 30, 2022 and 2021, and the results of its operations and its cash flows

for each of the years in the two-year period ended September 30, 2022, in conformity with accounting principles generally accepted in

the United States of America.

Substantial Doubt Regarding the Company’s

Ability to Continue as a Going Concern

The accompanying financial statements have been prepared assuming

that the Company will continue as a going concern.

As described in Note 1 to the financial statements, the Company has sustained net losses

and has significant short-term debt obligations, which raise substantial doubt about its ability to continue as a going concern.

plans in regard to these matters are described in Note 1.

The consolidated financial statements do not include any adjustments that might

result from the outcome of this uncertainty.

Our opinion is not modified with respect to this matter.

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

30 unchanged sentences

of the matter

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

As discussed in Note 1 to the consolidated financial statements,

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

In accordance

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

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

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

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

At September 30, 2022, the Company had approximately $4.5 million

As discussed in Note 1 to the consolidated financial statements, goodwill is tested annually for impairment at the reporting

unit level, or more frequently if impairment indicators arise.

In accordance with the FASB revised guidance on “Testing of Goodwill

for Impairment,” a company first has the option to assess qualitative factors to determine whether it is more likely than not that

the fair value of a reporting unit is less than its carrying amount.

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

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

test is mandatory.

Otherwise, no further testing is required.

The quantitative

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

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

carrying amount.

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

the second step will not be required.

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

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

The implied fair value of goodwill is determined

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

to the assets and liabilities of the reporting unit.

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

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

This allocation process is only performed for purposes of evaluating

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

An impairment loss is recognized

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

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

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

In particular, the fair value estimate

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

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

we addressed the matter

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

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

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

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

In evaluating estimated

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

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

We engaged our valuation specialists to assist

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

We compared certain significant

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

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

We assessed the historical

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

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

We involved our valuation

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

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

Finally, we assessed the adequacy of the disclosures

in the consolidated financial statements.

of Long-lived assets

of the matter

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

its fiscal 2019 decision to exit the environmental products business.

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

asset impairment charge of $8.3M.

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

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

The quantitative impairment test consists of a two-step goodwill impairment

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

If the fair value of each reporting unit exceeds

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

If the carrying amount of a reporting

unit exceeds its fair value, the second step compares the implied fair value of goodwill to the carrying value of a reporting unit’s

The implied fair value of goodwill is determined in a manner similar to accounting for a business combination with the allocation

of the assessed fair value determined in the first step to the assets and liabilities of the reporting unit.

The excess of the fair value

of the reporting unit over the amounts assigned to the assets and liabilities is the implied fair value of goodwill.

This allocation process

is only performed for purposes of evaluating goodwill impairment and does not result in an entry to adjust the value of any assets or

An impairment loss is recognized for any excess in the carrying value of goodwill over the implied fair value of goodwill.

Auditing the Company’s goodwill impairment analyses was complex

and highly judgmental due to the nature of qualitive assessment and, where necessary, the significant estimation required to determine

the fair value of the reporting units.

In particular, the fair value estimate was sensitive to significant assumptions, such as future

operating results, cash flows and the weighted average cost of capital.

These significant assumptions are forward looking and could be

materially affected by future market or economic conditions.

we addressed the matter

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

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

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

the reasonableness of management’s significant assumptions.

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

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

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

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

We obtained an understanding, evaluated the design and tested the

operating effectiveness of controls over the Company’s goodwill impairment evaluation process, including controls over management’s

review of the significant assumptions described above.

Our audit procedures to test the Company’s goodwill impairment

analyses included evaluating the reasonableness of management’s qualitative assessments and in certain instances the estimated fair

value of the Company’s reporting units.

In evaluating estimated fair value of reporting units we, among others, evaluated management’s

significant assumptions described above and used within the fair value method, and tested the completeness and accuracy of the underlying

We engaged our valuation specialists to assist in assessing fair valuation methodologies utilized in the Company’s goodwill

impairment analyses.

We compared certain significant assumptions to existing market information and, where relevant, to the plans of the

Company, including management’s expectations with regard to the Company’s business model, customer base, product mix and other

relevant factors.

We assessed the historical accuracy of management’s projected cash flows, where applicable, and performed sensitivity

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

in the assumptions.

We involved our valuation specialists to assist in evaluating the discount rates, which included comparison of the

selected discount rates to the Company’s weighted average cost of capital and the risk associated with projected cash flows.

we assessed the adequacy of the disclosures in the consolidated financial statements .

of the matter

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

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

cost or market.

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

affecting marketability.

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

necessary is assessing allowances for obsolesce.

As of September 30, 2022, the Company has approximately $9.5M of inventory.

As discussed in note 1, inventory is valued at the lower of cost or market.

The Company reduces inventory for the diminution of value,

resulting from product obsolescence, damage or other issues affecting marketability.

We determined valuation of inventory to be a critical

audit matter based on the high degree of management judgment necessary is assessing allowances for obsolesce.

we addressed the matter

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

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

audit procedures included:

observation of inventory in the Company’s warehouse locations;

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

valuation assertion.

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

cost assertions by review source documentation of inventory purchases;

slow-moving reports provided by management;

subsequent sales data;

● Retrospective

review of prior year estimates;

procedures including margin analyses.

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

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

audit procedures included, physical observation of inventory in the Company’s warehouse locations, examined the company’s

analysis on a sample basis of parts of inventory in the context of the company’s valuation assertion, validating cost assertions

by review source documentation of inventory purchases, reviewing slow-moving reports provided by management, reviewing subsequent sales

data, retrospective review of prior year estimates, and analytical procedures including margin analyses.

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

1 unchanged sentence

have served as the Company’s auditor since 2021.

Jericho, New York

Auditor PCAOB ID Number 606

and Subsidiaries

BALANCE SHEETS

and equivalents

receivables, net

receivables - related party

–net of allowance for inventory obsolescence

expenses and other assets

Current assets

and equipment, net

held for sale

Cash and equivalents

Restricted cash

Short-term investments

Trade receivables, net

Trade receivables - related

Inventory –net of

allowance for inventory obsolescence

expenses and other assets

Total current assets

Property and equipment, net

Right-of-use assets

Note receivable - related party

& Stockholders’ Equity (Deficit)

liabilities - short-term

from customers

Current liabilities

payable to bank

lease liabilities

Accounts payable

Accounts payable - related party

Short-term liabilities

Lease liabilities - short-term

Deposits from customers

Accrued expenses

Deferred revenue

Total current liabilities

Long-term liabilities

Protection Program Loans

Loans payable to bank

Long-term lease liabilities

Notes payable

Mortgage payable

Other long-term liabilities

Paycheck Protection Program

Revenue - long-term

long-term liabilities

and contingencies

Shareholders’

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

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

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

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

at September 30, 2020

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

at September 30, 2020

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

shares issued and outstanding at September 30, 2020

paid-in capital

earnings (accumulated deficit)

Total liabilities

Commitments and contingencies

Shareholders’ equity

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

shares authorized, Series 1, 3,000,000 shares authorized, 2,079,122 shares issued and 2,015,022 shares outstanding as of September

30, 2022 and 1,885,151 shares issued and 1,821,051 shares 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 September 30, 2022 and September 30, 2021

Preferred stock, value

Common stock, $ 0.001 par value, 50,000,000

shares authorized, 26,413,296 shares issued and outstanding at September 30, 2022 and 20,782,194 shares issued and outstanding at

September 30, 2021

Additional paid-in capital

Retained earnings (accumulated

( 54,929,020 )

( 41,908,062 )

stock at cost

Treasury stock, 64,100

shares of Series 1 Preferred Stock at September 30, 2022 and 2021

other comprehensive income (loss)

4 unchanged sentences

and Subsidiaries

STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

the year ended

and administrative

and development

Cost of revenues

Operating expenses

income/(loss)

( 8,741,820 )

General and administrative

Research and development

operating expenses

( 16,868,361 )

income/(expense)

Agreement - Related Party

( 8,741,820 )

Other income/(expense)

Settlement Agreement -

Related Party

( 3,897,719 )

other income/(expense), net

( 2,921,345 )

loss before income taxes

Total other income/(expense),

(loss)/income before income taxes

( 13,500,787 )

tax benefit/(expense)

( 2,073,835 )

from Continuing operations

(Loss)/Income from Continuing

( 13,292,242 )

from discontinued operations, net of tax

Loss from discontinued

operations, net of tax

( 8,280,047 )

income/(loss)

( 13,292,242 )

( 7,886,269 )

income/(loss) in noncontrolling interest

income/(loss) attributable to Cemtrex, Inc.

Less loss in noncontrolling

Net loss attributable to Cemtrex, Inc.

$ ( 13,020,958 )

$ ( 7,807,995 )

income/(loss)

Other comprehensive income/(loss)

$ ( 13,292,242 )

$ ( 7,886,269 )

comprehensive income/(loss)

currency translation gain/(loss)

benefit plan actuarial gain/(loss)

Comprehensive

income/(loss)

Foreign currency translation

(loss)/income

benefit plan actuarial gain

Comprehensive loss

( 13,811,169 )

( 6,802,274 )

Other Comprehensive income (Loss) attributable to noncontrolling interest

comprehensive income/(loss) attributable to noncontrolling interest

Comprehensive

income/(loss) attributable to Cemtrex, Inc.

comprehensive loss attributable to noncontrolling interest

Comprehensive loss attributable to Cemtrex, Inc.

$ ( 13,539,885 )

$ ( 6,724,000 )

Income/(loss)

Per Share-Basic

Income/(loss)

Per Share-Basic- Continuing operations

Income/(loss) Per

Share-Basic - Discontinued operations

Income/(loss)

Per Share-Diluted- Continuing operations

Income/(loss)

Per Share-Diluted

Income/(loss) Per

Share-Diluted - Discontinued operations

Average Number of Shares-Basic

Average Number of Shares-Diluted

Income/(loss) Per Share-Basic

Income/(loss) Per Share-Diluted

Weighted Average Number of Shares-Basic

Weighted Average Number of Shares-Diluted

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

and Subsidiaries

STATEMENTS OF SHAREHOLDERS’ EQUITY

Stock Series C

Comprehensive

Stockholders’

at September 30, 2020, as reported

$ ( 33,172,690 )

$ ( 148,291 )

( 3,091,570 )

( 1,870,671 )

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)

compensation, shares

issued for goods and services

issued for goods and services, shares

sold in Securities Purchase Agreements, net of offering costs

sold in Securities Purchase Agreement net of offering costs, shares

of treasury stock

of Shares not issued in 2019 ATM offering

of Shares not issued in 2019 ATM offering, shares

of treasury stock

of treasury stock, shares

issued to pay notes payable

issued with note payable

paid in Series 1 preferred shares

Income/(loss) attributable to noncontrolling

options surrendered in settelment agreement

( 1,000,000.00 )

( 3,672,645 )

( 3,674,165 )

Income/(loss)

attributable to noncontrolling interest

issued to pay for services

( 13,020,958 )

2 unchanged sentences

( 54,929,020 )

$ ( 148,291 )

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

1 unchanged sentence

STATEMENTS OF SHAREHOLDERS’ EQUITY

Stock Series C

Comprehensive

Stockholders’

at September 30, 2019, as reported

$ ( 20,067,685 )

at September 30, 2020, as restated

$ ( 34,100,067 )

$ ( 148,291 )

balance, value

$ ( 34,100,067 )

at September 30, 2019, as restated

$ ( 148,291 )

Foreign currency translation

Share-based compensation

Shares issued for goods and

Shares sold in Securities Purchase

Agreements, net of offering costs

Shares issued to pay notes

Dividends paid in Series 1

preferred shares

currency translation gain/(loss)

benefit plan actuarial gain/(loss)

issued to pay notes payable

paid in Series 1 preferred shares

Income/(loss)

attributable to noncontrolling interest

Purchase of treasury stock

Cancellation of Shares not

issued in 2019 ATM offering

Retirement of treasury stock

and options surrendered in settelment agreement

( 1,000,000.00 )

( 3,672,645 )

at September 30, 2020, as restated

( 3,674,165 )

( 7,807,995 )

at September 30, 2021

$ ( 41,908,062 )

$ ( 148,291 )

balance, value

$ ( 41,908,062 )

$ ( 148,291 )

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

1 unchanged sentence

STATEMENTS OF CASH FLOWS

the year ended

For the twelve

Flows from Operating Activities

income/(loss)

$ ( 13,292,242 )

$ ( 7,886,269 )

loss from discontinued operations

Net loss from discontinued

( 8,280,047 )

loss from continuing operations

Net loss from continuing operations

( 13,292,242 )

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

and amortization

on disposal of property and equipment

of right-of-use assets

in allowance for doubtful accounts

tax expense/ (benefit)

expense paid in equity shares

interest on notes payable

of original issue discounts on notes payable

on marketable securities

Adjustments to reconcile net income/(loss)

to net cash used by operating activities

Depreciation and amortization

Loss on disposal of property

and equipment

Noncash lease expense

Goodwill Impairment

Change in allowance for

doubtful accounts

Loss on write off of related party receivables

Share-based compensation

Income tax expense/ (benefit)

Interest expense paid in

equity shares

Accounts payable paid in equity shares

Accrued interest on notes

Amortization of original

issue discounts on notes payable

Gain on marketable securities

( 8,399,152 )

Agreement - Related Party

( 2,612,847 )

of Paycheck Protection Program Loans

Discharge of Paycheck Protection

Program Loans

( 5,320,485 )

in operating assets and liabilities net of effects from acquisition of

subsidiaries:

receivable - related party

expenses and other current assets

Settlement Agreement -

Related Party

( 3,674,165 )

lease liabilities

from customers

taxes payable

cash used by operating activities - continuing operations

Changes in operating assets and liabilities

net of effects from acquisition of subsidiaries:

Trade receivables

Trade receivables - related

( 3,874,395 )

Prepaid expenses and other

current assets

( 1,411,653 )

Net cash provided/(used) by

operating activities - discontinued operations

Other liabilities

Accounts payable

Accounts payable - related party

Operating lease liabilities

Deposits from customers

Accrued expenses

Deferred revenue

taxes payable

cash used by operating activities

2 unchanged sentences

Flows from Investing Activities

of property and equipment

( 1,069,283 )

Purchase of property and equipment

( 1,844,620 )

in Virtual Driver Interactive

( 1,069,283 )

in MasterpieceVR

from sale of marketable securities

of marketable securities

Proceeds from sale of property and equipment

Investment in MasterpieceVR

Investment in Virtual Driver Interactive

( 1,075,428 )

Proceeds from sale of marketable securities

Purchase of marketable

( 19,901,897 )

of treasury stock

cash provided/(used) by investing activities

( 7,991,709 )

cash provided by investing activities

Flows from Financing Activities

from notes payable

on notes payable

Proceeds from notes payable

Payments on notes payable

( 1,751,763 )

( 2,220,257 )

received on notes receivable

on bank loans

Payments on capital lease liabilities

Payments on bank loans

( 1,225,700 )

from Paycheck Protection Program Loans

from securities purchase agreements

on capital lease liabilities

on securities purchase agreements

line of credit

cash provided by financing activities - continuing operations

cash used by financing activities - discontinued operations

( 1,261,035 )

Proceeds from Paycheck Protection Program Loans

cash provided by financing activities

of currency translation

increase in cash, cash equivalents, and restricted cash

Effect of currency translation

Net decrease in cash, cash equivalents, and

restricted cash

( 4,460,840 )

cash equivalents, and restricted cash at beginning of period

( 4,764,332 )

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

and equivalents

Cash and equivalents

cash, cash equivalents, and restricted cash

2 unchanged sentences

STATEMENTS OF CASH FLOWS

Supplemental Disclosure of Cash Flow Information:

Cash paid during the period for interest

Cash paid during the period for income taxes

Disclosure of Cash Flow Information:

during the period for interest

Cash paid during the

period for income taxes

$ ( 358,876 )

Supplemental Schedule of Non-Cash Investing and Financing Activities

Investment in Virtual Driver Interactive

issued to pay for products and/or services

issued to pay notes payable

Loan from bank to acquire building

Schedule of Non-Cash Investing and Financing Activities

Investment in Virtual

Driver Interactive

Shares issued to pay

notes payable

Shares issued in connection

with note payable

Investment in right of

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

and Subsidiaries

TO CONSOLIDATED FINANCIAL STATEMENTS

2 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”

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.

During fiscal 2019, the Company reached a strategic decision

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

Accordingly, the Company has reported

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

in the Consolidated Balance Sheets.

Company presently has two

business segments, consisting of (i) Advanced

Technologies (AT) and (ii) Industrial Services (IS).

Technologies (AT)

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

Industries – Vicon Industries, a majority owned subsidiary, provides end-to-end video

security solutions to meet the toughest corporate, industrial and governmental security challenges.

Vicon’s products include browser-based video monitoring systems and analytics-based

recognition systems, cameras, servers, and access control systems for every aspect of security

and surveillance in industrial and commercial facilities, federal prisons, hospitals, universities,

schools, and federal and state government offices.

Vicon provides cutting edge, mission critical

security and video surveillance solutions utilizing Artificial Intelligence (AI) based data

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

modern, fully integrated, workplace solutions.

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

CXR delivers Virtual Reality (VR) and Augmented Reality (AR) solutions that provide higher

productivity, progressive design and impactful experiences for consumer products, and various

commercial and industrial applications.

The Company is in the process of developing virtual

reality applications for commercialization in the metaverse over the next couple years.

also invests in emerging startups focused on building best in class solutions for the metaverse.

Driver Interactive (“VDI”) – VDI provides innovative driver training

simulation solutions for effective and engaging learning for all ages and skills.

Strong – Bravo Strong is a gaming and content studio working to building games

and experiences for the metaverse.

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

application development services for startups to large enterprises.

and Subsidiaries

Services (IS)

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

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

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

and chemicals among others.

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

packaging, printing, chemical, and other manufacturing markets.

The focus is on customers seeking to achieve greater asset utilization

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

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

of Virtual Driver Interactive

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

training simulation solutions for a purchase price of $ 1,339,774 plus contingent consideration of $ 175,428 .

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

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

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

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

Results for VDI will be reported under the AT segment.

Company paid $ 900,000

in cash and issued a Note payable in the amount

of $ 439,774 .

This note carries interest of 5 %

and is payable in two installments of $ 239,774

plus accumulated interest on October 26, 2021,

and $ 200,000

plus accumulated interest on October 26, 2022.

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

There is no further contingent consideration

specified in the purchase agreement.

has accounted for this acquisition as a business combination and has allocated the purchase price as follows, $ 876,820 to proprietary

software, $ 39,992 to inventory, and $ 598,391 to goodwill.

November 13, 2020, Cemtrex made a $ 500,000

investment via a simple agreement for future

equity(“SAFE”) in MasterpieceVR.

The SAFE provides that the Company will automatically receive shares of the entity based

on the conversion rate of future equity rounds up to a valuation cap, as defined.

MasterpieceVR is a software company that is developing

software for content creation using virtual reality.

The investment is included in other assets in the accompanying balance sheet and

the Company accounts for this investment and recorded at cost.

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

Impacts of COVID-19 on our Business

COVID-19 pandemic impacted our business operations and the results of our operations during fiscal years 2020 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.

Bookings and revenue have 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 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 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

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.

Concern Considerations

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

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

The Company has raised capital and will

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

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

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

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

profitability in all segments.

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

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

accompanying consolidated financial statements of the Company have been prepared assuming the Company will continue as a going concern

and in accordance with generally accepted accounting principles in the United States of America.

The going concern basis of presentation

assumes that the Company will continue in operation one year after the date these financial statements are issued and will be able to

realize its assets and discharge its liabilities and commitments in the normal course of business.

Pursuant to the requirements of the

ASC 205, management must evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about

the Company’s ability to continue as a going concern for one year from the date these financial statements are issued.

evaluation does not take into consideration the potential mitigating effect of management’s plans that have not been fully implemented

or are not within control of the Company as of the date the financial statements are issued.

When substantial doubt exists under this

methodology, management evaluates whether the mitigating effect of its plans sufficiently alleviates substantial doubt about the Company’s

ability to continue as a going concern.

The mitigating effect of management’s plans, however, is only considered if both (1) it

is probable that the plans will be effectively implemented within one year after the date that the financial statements are issued, and

(2) it is probable that the plans, when implemented, will mitigate the relevant conditions or events that raise substantial doubt about

the entity’s ability to continue as a going concern within one year after the date that the financial statements are issued.

The Company has incurred substantial losses of $ 13,020,958 and $ 7,807,995 for fiscal years 2022 and 2021, respectively, and has debt obligations

over the next fiscal year of $ 18,200,521 and working capital of $ 4,687,881 , that raise substantial doubt with respect to the Company’s ability

to continue as a going concern.

While our working capital

and current debt indicate a substantial doubt regarding the Company’s ability to continue as a going concern, the Company has historically,

from time to time, satisfied and may continue to satisfy certain short-term liabilities through the issuance of common stock, thus reducing

our cash requirement to meet our operating needs.

Additionally, the Company has recently sold unprofitable brands, reducing the cash required

to maintain those brands, reevaluated our pricing model on our Vicon brand to improve margins on those products, and is working to effect

a reverse stock split on our common stock to remain trading on the Nasdaq Capital Markets, and improve our ability to raise capital through

equity offerings and reduce the number of shares the Company may use to satisfy debt.

In the event additional capital is raised through

equity offerings and/or debt is satisfied with equity, it may have a dilutive effect on our existing stockholders.

While the Company believes

these plans are sufficient to meet the capital demands of our current operations for at least the next twelve months, the is no guarantee

that we will succeed.

Overall, there is no guarantee

that cash flow from our existing or future operations and any external capital that we may be able to raise will be sufficient to meet

our working capital needs.

We currently do not have adequate cash to meet our short or long-term needs.

The consolidated financial statements

do not include any adjustments relating to this uncertainty.

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.

2 – BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

9 unchanged sentences

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

and Subsidiaries

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

3 unchanged sentences

Such estimates include,

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

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

Actual results could

differ from those estimates.

but are not limited to, provisions for doubtful trade receivables, net realizable value of inventory, warranty obligations,

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

Actual results

could differ from those estimates.

of Consolidation

19 unchanged sentences

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

Receivable and Allowance for Doubtful Accounts

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

Receivables and Allowance for Doubtful Accounts

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

The Company performs on-going credit evaluations

3 unchanged sentences

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

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

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

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

and Subsidiaries

Company has $ 178,992

Company reserved for $ 252,688

and $ 178,992

allowance for doubtful accounts at September

30, 2021, and 2020, respectively.

within its allowance for doubtful accounts at September 30, 2022, and 2021, respectively.

Company does no t have any off-balance-sheet credit exposure to its customers at September 30, 2022, or 2021.

1 unchanged sentence

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

Cost is determined on the first-in and first-

out (“FIFO”) method.

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

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

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

future demand, and (iii) competitive pricing pressures.

Cost is determined on the average cost method.

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

equal to the difference between the cost of the inventory and its estimated market value.

Factors utilized in the determination of estimated

market value include (i) current sales data and historical return rates, (ii) estimates of future demand, and (iii) competitive pricing

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

1 unchanged sentence

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

was $ 1,921,001 and

$ 4,575,193 in

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

The decrease in inventory obsolescence is

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

was $ 1,088,377 and $ 1,921,001 in inventory obsolescence reserve at September 30, 2022, and 2021, respectively.

The decrease in inventory

obsolescence is due to the sale and/or disposal of out-of-date products.

and Equipment

5 unchanged sentences

of the respective assets, shown in the table below;

OF PROPERTY PLANT AND EQUIPMENT

Estimated Useful Life

11 unchanged sentences

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

The Company’s fair value

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

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

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

growth rate, and projected future economic and market conditions.

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

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

the goodwill impairment test.

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

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

The Company adopted this standard effective October 1,

and Subsidiaries

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

The Company’s fair

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

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

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

flows, perpetual growth rate, and projected future economic and market conditions.

As permitted, if the reporting unit fails the impairment

test, the Financial Accounting Standards Board (“FASB”) issued an Accounting Standard Update (“ASU”) removing

step two from the goodwill impairment test.

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

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

The Company adopted this standard effective

October 1, 2020.

the year ended September 30, 2022, an impairment of the Company’s goodwill of $ 3,316,000 was recorded and for the year ended September

30,2021, there was no impairment of the Company’s 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 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 June 30,

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

25 unchanged sentences

and Contingencies

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

The Company follows topic Accounting

Standards Codification (“ASC”) Topic 450-20, Contingencies , to report accounting for contingencies.

Certain conditions

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

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

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

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

The Company assesses such contingent liabilities, and such assessment

8 unchanged sentences

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

and Subsidiaries

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

32 unchanged sentences

invoicing to customers.

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

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

1 unchanged sentence

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

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

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

The amounts were $ 2,558,591 , and $ 2,472,137 , for the years

ended September 30, 2022, 2021 respectively, recorded at Deferred revenue.

Additionally, the company recorded Deposits from customers

of $ 198,178 , and $ 536,220 , for the years ended September 30, 2022, and 2021 respectively.

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

5 unchanged sentences

may be required.

and Subsidiaries

Tax Provision

11 unchanged sentences

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

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

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

The tax benefits recognized in the

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

likelihood of being realized upon ultimate settlement.

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

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

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

15 unchanged sentences

likely to occur and reasonably estimable.

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

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

The tax benefits recognized in the

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

likelihood of being realized upon ultimate settlement.

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

likelihood that they will occur and can be reasonably estimated.

for Share-Based Compensation

22 unchanged sentences

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

the year ended

to purchase shares

and Subsidiaries

For the twelve months ended

Warrants to purchase shares

Currency Translation Gain and Comprehensive Income (Loss)

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

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

dollar, assets and liabilities are translated

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

Revenues and expenses and cash flows are translated

using an approximate weighted average exchange rate for the period.

Revenues and expenses and cash flows are translated using an approximate weighted average exchange rate for the period.

Resulting translation adjustments are recorded as a component of

1 unchanged sentence

For the years ending September 30, 2022, and September

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

and $ 57,639 ,

respectively, which were entirely from foreign currency translation.

30, 2021, comprehensive loss includes a loss of $ 518,927 and a gain of $ 996,100 , respectively, which were entirely from foreign currency

of and for the year ended September 30, 2022, and 2021 the Company used the following exchange rates.

SCHEDULE OF FOREIGN CURRENCY EXCHANGE RATE

exchange rate

For the three months ended

the year ended

Britain Pound

Approximate weighted

average exchange rate

Exchange rate at

For the year ended

Exchange rate at

For the year ended

Great Britain Pound

Reclassifications

Certain reclassifications have been made to prior period amounts to

conform to the current period presentation.

This had no effect on the Company’s statement of operations or retained earnings.

Flows Reporting

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

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

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

6 unchanged sentences

in the period.

Company will evaluate subsequent events through the date when the financial statements were issued.

It is the Company’s policy

to disclose subsequent information that it feels is important to the context of the financial statements.

and Subsidiaries

Issued Accounting Pronouncements Not Yet Effective

August 5, 2020, the Financial Accounting Standards Board (FASB) issued accounting standards update (ASU) No.

2020-06, Debt—Debt

with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic

amendments in the ASU remove certain separation models for convertible debt instruments and convertible preferred stock that require

the separation of a convertible debt instrument into a debt component and an equity or derivative component.

The ASU also amends the

derivative scope exception guidance for contracts in an entity’s own equity.

The amendments remove three settlement conditions

that are required for equity contracts to qualify for the derivative scope exception.

addition to the above, the ASU expands disclosure requirements for convertible instruments and simplifies areas of the guidance for diluted

earnings-per-share calculations that are impacted by the amendments.

ASU is effective for public business entities that meet the definition of a Securities and Exchange Commission (SEC) filer, excluding

smaller reporting companies as defined by the SEC, for fiscal years beginning after December 15, 2021.

Early adoption is permitted.

FASB noted that an entity should adopt the guidance as of the beginning of its annual fiscal year.

The standard is effective for the

Company beginning in fiscal year October 1, 2022.

may elect to adopt the amendments through either a modified retrospective method of transition or a fully retrospective method of transition.

If an entity has convertible instruments that include a down round feature, early adoption of the ASU is permitted for fiscal years beginning

after December 15, 2020.

2016-13 Measurement of Credit Losses on Financial Instrument is effective for fiscal years beginning after December 15, 2022.

not expected to apply to the Company as financial instruments giving rise to credit risk are not utilized by the Company.

May 2021, the FASB issued ASU 2021-04, Earnings Per Share (Topic 260), Debt-Modifications and Extinguishments (Subtopic 470-50), Compensation-Stock

Compensation (Topic 718), and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40).

The new ASU addresses

issuer’s accounting for certain modifications or exchanges of freestanding equity-classified written call options.

This amendment

is effective for all entities, for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years.

Early adoption is permitted.

The Company is currently evaluating the impact this new guidance will have on its financial statements

October 2021, the FASB issued ASU 2021-08, “Business Combinations (Topic 805):

Accounting for Contract Assets and Contract Liabilities

from Contracts with Customers (“ASU No.

2021-08 will require companies to apply the definition of a

performance obligation under ASC Topic 606 to recognize and measure contract assets and contract liabilities (i.e., deferred revenue)

relating to contracts with customers that are acquired in a business combination.

Under current U.S.

GAAP, an acquirer generally recognizes

assets acquired and liabilities assumed in a business combination, including contract assets and contract liabilities arising from revenue

contracts with customers, at fair value on the acquisition date.

2021-08 will result in the acquirer recording acquired contract

assets and liabilities on the same basis that would have been recorded by the acquiree before the acquisition under ASC Topic 606.

2021-08 is effective for fiscal years beginning after December 15, 2022, with early adoption permitted.

We are currently evaluating

the impact of this ASU on our financial statements.

June 30, 2022, the FASB issued ASU 2022- 03 Fair Value Measurement (Topic 820):

Fair Value Measurement of Equity Securities Subject

to Contractual Sale Restrictions (“ASU 2022-03”), which (1) clarifies the guidance in ASC 8202 on the fair value measurement

of an equity security that is subject to a contractual sale restriction and (2) requires specific disclosures related to such an equity

Under current guidance, stakeholders have observed diversity in practice related to whether contractual sale restrictions should

be considered in the measurement of the fair value of equity securities that are subject to such restrictions.

On the basis of interpretations

of existing guidance and the current illustrative example in ASC 820-10-55-52 of a restriction on the sale of an equity instrument, some

entities use a discount for contractual sale restrictions when measuring fair value, while others view the application of such a discount

to be inconsistent with the principles of ASC 820.

To reduce the diversity in practice and increase the comparability of reported financial

information, ASU 2022-03 clarifies this guidance and amends the illustrative example.

2022-03 is effective for fiscal years beginning

after December 15, 2023, with early adoption permitted.

We are currently evaluating the impact of this ASU on our financial statements.

Company does not believe that any other recently issued but not yet effective accounting pronouncements, if adopted, would have a material

effect on the accompanying consolidated financial statements.

3 – RESTATEMENTS OF FINANCIAL STATEMENTS

February 23, 2021, Cemtrex’s Board of Directors determined that certain transactions between Cemtrex Inc.

and First Commercial,

a company owned by former Executive Director, former Controlling Shareholder and former CFO, Aron Govil, were incorrectly handled and

accounted for.

total amount of disputed transfers was approximately $ 7,100,000 and occurred in fiscal year 2017 in the amount of $ 5,600,000 and in fiscal

year 2018 in the amount of $ 1,500,000 .

Cemtrex did not find any other such transfers during this period or thereafter, upon further review

of the Company’s records.

the Company’s investigation into this matter, the Company has determined that there were inaccuracies in the Company’s financial

The financials for the periods 2017 and 2018 were incorrect corresponding to the amounts that were incorrectly accounted

for, and subsequent years were affected by the roll forward effects of these entries.

The Company found unsupported advertising expenses

in the amount of approximately $ 400,000 on Cemtrex Inc’s income statement for fiscal year 2018 and found that approximately $ 5,700,000

of intangible assets and $ 975,000 of research and development expenses, as translated at from Indian Rupee at the time, were recorded

on Cemtrex India’s financial statements in fiscal year 2018 and could not be substantiated.

The total amount of unsubstantiated

transfers recorded by Cemtrex India, and the unsupported advertising expense recorded by Cemtrex, Inc.

sums to $ 7,100,000 , corresponding

with the total amount in question regarding First Commercial transfers during fiscal years 2017 and 2018.

and Subsidiaries

part of the restatement investigation, it was determined that the Company did not follow GAAP in the treatment of its Series 1 Preferred

The Company currently has a deficit in retained earnings and in accordance with guidance has reversed the accrual for dividends

payable and placed the amount of the accrual back into retained earnings.

In response to

the above discussed restatements, the Company revisited its fiscal year 2020 financial statements.

As a result, the following items have

been restated, (i) inventory valuation, recognition of discontinued operations, accrued expenses, and accounts payable of the Company’s

subsidiary Vicon Industries, Inc., (ii) fixed asset valuation and deferred revenue of the Company’s subsidiary Advanced Industrial

Services, Inc., some of these valuation error dates to prior to acquisition of each entity.

and Adjusting Entries

Company has determined that these transactions are not material in the years that they occurred and conclude that prior financial reports

can be relied upon.

The Company’s determination is based on the following:

The adjustments do not cause any changes to the previously

reported cash and debt balances as of the end of each of the periods in FY 2019 and 2020.

The adjustments also do not cause any changes

to revenues in any of the prior periods.

In addition, the Company expects to maintain compliance with its debt covenants based on a preliminary

review of the covenants for all the impacted periods.

The Company has also determined that the adjustments have little effect on the

trend of earnings over the last three fiscal years.

In 2017 the operations of the Company were vastly different with both the environmental

and circuit board manufacturing segments accounting for approximately 75% of revenues.

These businesses are now either sold or discontinued.

The current reported 2017 financial statements of the Company do not give an accurate representation of the Company today because only

16% of the $120M business operations are still a part of current operations.

table below represents the balances of the affected accounts on the Condensed Consolidated Balance Sheets as of September 30, 2020, the

Condensed Consolidated Statements of Operations and Comprehensive Income/(Loss) for the year ended September 30, 2020, Condensed Consolidated

Statement of Stockholders’ Equity, and the Condensed Consolidated Statements of Cash Flows for the year ended September 30, 2020.

Consolidated Balance Sheets

SCHEDULE OF CONDENSED CONSOLIDATED BALANCE SHEETS

as reported on September 30, 2020

of net value of intangible assets

resulting from reaudit of Fiscal Year 2020 Financial Statements

of net value of inventory

of net value of fixed assets

effect of restatement adjustments

on amounts transferred to First Commercial

effect of currency translation

balance at September 30, 2020

and equivalents

expenses and other assets

$ ( 362,307 )

and equipment, net

$ ( 2,597,185 )

$ ( 987,901 )

–net of allowance for inventory obsolescence

$ ( 1,847,349 )

$ ( 285,460 )

$ ( 153,958 )

long-term liabilities

$ ( 295,138 )

1 preferred stock dividends payable

$ ( 1,081,690 )

paid-in capital

$ ( 3,091,570 )

earnings (accumulated deficit)

$ ( 33,172,690 )

$ ( 7,100,000 )

$( 34,100,067 )

other comprehensive income

Consolidated Statements of Operations and Comprehensive Income/(Loss)

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

For the year ended

September 30, 2020

Previously reported

Net loss available to Cemtrex, Inc.

$ ( 13,105,005 )

$ ( 10,470,081 )

Cost of revenues

General and administrative

$ ( 1,206,938 )

Preferred dividends

$ ( 3,171,230 )

Loss Per Share-Basic

Loss Per Share-Diluted

and Subsidiaries

Consolidated Statement of Stockholders’ Equity

SCHEDULE OF CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY

For the year ended

September 30, 2020

Previously reported

Retained earnings (accumulated deficit) at September 30, 2019

$ ( 20,067,685 )

$ ( 3,562,301 )

$ ( 23,629,986 )

Dividends pad in series preferred shares

$ ( 2,089,540 )

Accrued dividends

$ ( 1,081,690 )

Net income/(loss)

$ ( 9,706,659 )

$ ( 763,422 )

$ ( 10,470,081 )

Retained earnings (accumulated deficit) at September 30, 2020

$ ( 33,172,690 )

$ ( 927,377 )

$ ( 34,100,067 )

Accumulated other comprehensive income/(loss)at September 30, 2019

Foreign currency translation gain

Income in noncontrolling interest

Accumulated other comprehensive income/(loss) at September 30, 2020

Additional paid-in capital at September 30, 2019

$ ( 1,002,030 )

Additional paid-in capital at September 30, 2020

$ ( 3,091,570 )

Non-controlling interst of Vicon at September 30, 2019

Income in noncontrolling interest

Non-controlling interst of Vicon at September 30, 2020

Consolidated Statements of Cash Flows

SCHEDULE OF CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

the year ended

September 30, 2020

Previously reported

$ ( 9,706,659 )

$ ( 536,306 )

$ ( 10,242,965 )

Depreciation and amortization

$ ( 594,317 )

$ ( 1,586,651 )

Accrued expenses

$ ( 499,527 )

$ ( 174,265 )

$ ( 673,792 )

Net cash used by operating activities - continuing operations

$ ( 3,786,202 )

$ ( 3,347,846 )

February 26, 2021, the Company entered into a Settlement Agreement and Release with Aron Govil regarding these transactions.

part of the Settlement Agreement, Mr.

Govil was required to pay the Company consideration with a total value of $ 7,100,000 (the “Settlement

Amount”) by entering into the Agreement.

The Settlement Amount was satisfied in a combination of Mr.

Govil forfeiting certain Preferred

Stock and outstanding options and executing a secured note in the amount of $ 1,533,280 .

The Independent Board of Directors in coordination

with Management concluded the settlement represented fair value.

March 2021, Mr.

Govil returned to the Company 1,000,000 shares of Series A Preferred Stock, 50,000 Shares of Series C Preferred Stock,

469,949 shares of Series 1 Preferred Stock, and forfeited all outstanding options to purchase shares of commons stock (collectively,

the “Securities”).

For the purposes of accounting recognition, the Company determined the fair value of the Series A, Series

C, and Series 1 Preferred stock based on the closing trading value of the Series 1 Preferred Stock on the date of the agreement.

options surrendered were valued using the Black-Scholes option pricing model.

Company recognized the gain with respect to the surrendered Securities during this reporting period.

The gain of $ 3,674,165 is reported

as Settlement Agreement - Related Party on the Company’s Condensed Consolidated Statements of Operations and Comprehensive Income/(Loss).

discussed above, Mr.

Govil also executed a secured promissory note (the “Note”) in the amount of $ 1,533,280 .

The Note matures

and is due in full in two years and bears interest at 9% per annum and is secured by all of Mr.

Govil’s assets.

agreed to sign an affidavit confessing judgment in the event of a default on the Note.

While the Company believes the note is fully collectible,

in accordance with ASC 450-30, Gain Contingencies, the Company determined the gain will not be recognized until the note is paid.

the note and associated gain is not presented on the Company’s Condensed Consolidated Balance Sheets and Condensed Consolidated

Statements of Operations and Comprehensive Income/(Loss).

and Subsidiaries

4 PURCHASED ASSETS AND INVESTMENTS

February 21, 2020, the Company purchased 71,429

shares for $ 500,000 .

Company now owns approximately 95% of Vicon’s outstanding shares of common stock .

5 – DISCONTINUED OPERATIONS

fiscal 2019, the Company reached a strategic decision to exit the environmental products business, which was part of Industrial

Services group.

Accordingly, the Company has reported the results of the environmental control products business as discontinued operations

in the Consolidated Statements of Operations and in the Consolidated Balance Sheets.

fiscal 2021, the Company made the final determination on it inactive entities and have written off all assets and liabilities of these

and liabilities included within discontinued operations on the Company’s Consolidated Balance Sheets at September 30, 2021 and

2020 are as follows;

SCHEDULE OF DISPOSAL GROUPS, INCLUDING DISCONTINUED OPERATIONS

September 30,

receivables - related party

current assets

and equipment, net

held for sale

and Subsidiaries

from discontinued operations, net of tax and the loss on sale of discontinued operations, net of tax, of Centrex, LTD, IQInVision, Vicon Deutschland GmbH, Vicon Systems Ltd., and Griffin Filters are presented in total as

discontinued operations, net of tax in the Company’s Consolidated Statements of Operations for the years ended September 30,

are as follows:

Year ended September 30,

Total net sales

Cost of sales

Operating, selling, general and administrative expenses

Other expenses

Income (loss) from discontinued operations

( 8,280,047 )

Loss on sale of discontinued operations

Income tax provision

Discontinued operations, net of tax

$ ( 8,280,047 )

$ ( 812,895 )

3 – SEGMENT AND GEOGRAPHIC INFORMATION

Company reports and evaluates financial information for two segments:

Advanced Technologies (AT) segment, and the Industrial Services

(IS) segment.

The AT segment develops smart devices and provides progressive design and development solutions to create impactful experiences

for mobile, web, virtual and augmented reality, wearables and television as well as providing cutting edge, mission critical security

and video surveillance.

The IS segment offers single-source expertise and services for rigging, millwrighting, in plant maintenance,

equipment erection, relocation, and disassembly to diversified customers in USA in industries such as:

chemical, steel, printing, construction,

& petrochemical.

and Subsidiaries

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

Technologies (AT)

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 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.

following tables summarize the Company’s segment information:

SCHEDULE OF SEGMENT INFORMATION

For the years ended

September 30,

For the years

Revenues from external customers

Advanced Technologies

Industrial Services

Total revenues

Advanced Technologies

Industrial Services

Total gross profit

Operating loss

Operating income/(loss)

Advanced Technologies

1 unchanged sentence

$ ( 9,793,851 )

Industrial Services

( 3,333,086 )

Total operating loss

operating loss

$ ( 16,868,361 )

2 unchanged sentences

Advanced Technologies

$ ( 2,588,609 )

Industrial Services

Total other expense

$ ( 2,786,424 )

other expense

Depreciation and Amortization

Advanced Technologies

Industrial Services

Total depreciation and amortization

September 30,

depreciation and amortization

Identifiable Assets

Advanced Technologies

Industrial Services

Discontinued operations

and Subsidiaries

Company generates revenue from product sales and services from its subsidiaries located in the United States, The United Kingdom, and

1 unchanged sentence

SCHEDULE OF REVENUE FROM PRODUCT SALES AND SERVICES FROM ITS SUBSIDIARIES

September 30,

Long-lived Assets

the year ended

United States

United Kingdom

United States

United Kingdom

4 – FAIR VALUE MEASUREMENTS

10 unchanged sentences

investments and investment funds.

We measure trading securities investments and investment funds at quoted market prices as they are

traded in an active market with sufficient volume and frequency of transactions.

The Company measures trading securities investments and investment funds at quoted market prices as

they are traded in an active market with sufficient volume and frequency of transactions.

2 — Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability,

9 unchanged sentences

ability to continue as a going concern.

and Subsidiaries

Company’s fair value assets for the years ended September 30, 2022, and 2021, are as follows;

1 unchanged sentence

Quoted Prices

Identical Assets

September 30,

Investment in marketable securities

(included in short-term investments)

Quoted Prices in Active

(included in short-term

Quoted Prices

Identical Assets

September, 30

Investment in marketable securities

(included in short-term investments)

(included in short-term

5 – RESTRICTED CASH

subsidiary of the Company participates in a consortium in order to self-insure group care coverage for its employees.

The plan is administrated

by Benecon Group and the Company makes monthly deposits in a trust account to cover medical claims and any administrative costs associated

with the plan.

These funds, as required by the plan are restricted in nature and amounted to $ 1,601,932 as of September 30, 2021.

Additionally,

the Company has a standby letter of credit for deposit on a building lease and payable against.

a money market account, the amount of

the standby letter of credit is $ 157,415 .

9 – ACCOUNTS RECEIVABLE, NET

receivable, net consists of the following:

SCHEDULE OF ACCOUNTS RECEIVABLE, NET

September 30,

administrated by Benecon Group and the Company makes monthly deposits in a trust account to cover medical claims and any

administrative costs associated with the plan.

These funds, as required by the plan are restricted in nature and amounted to $ 1,577,915

and $ 1,601,932 as

of September 30, 2022 and 2021, respectively.

Additionally, the Company had 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 was $ 517,415 as of September 30, 2021.

6 – TRADE RECEIVABLES, NET

receivables, net consists of the following:

OF TRADE RECEIVABLES, NET

September 30,

Accounts receivable

Allowance for doubtful accounts

Trade receivables

Allowance for doubtful

Accounts receivables,

receivable include amounts due for shipped products and services rendered.

for doubtful accounts include estimated losses resulting from the inability of our customers to make required payments.

receivables include amounts due for shipped products and services rendered.

for doubtful accounts includes estimated losses resulting from the inability of our customers to make required

7 – PREPAID AND OTHER CURRENT ASSETS

September 30, 2022, the Company had prepaid and other current assets consisting of prepayments on inventory purchases of $ 414,997 ,

costs and estimated earnings in excess of billings on uncompleted contracts of $ 781,819 ,

accrued income taxes refunds on foreign operations of $ 37,761 , and prepaid expenses and other current assets of $ 1,340,528 .

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

costs and estimated earnings in excess of billings on uncompleted contracts of $ 1,148,243 ,

and other current assets of $ 1,138,702 .

8 – INVENTORY, NET

7 unchanged sentences

Inventory, gross

Allowance for inventory obsolescence

Allowance for

inventory obsolescence

( 1,088,377 )

( 1,921,001 )

Inventory –net of allowance for inventory obsolescence

and Subsidiaries

Inventory –net

of allowance for inventory obsolescence

9 – PROPERTY AND EQUIPMENT

6 unchanged sentences

Computers and software

Trade show display

Machinery and equipment

Property and equipment, gross

Accumulated depreciation

1 unchanged sentence

( 11,536,854 )

Property and equipment, net

Property and equipment,

Company completed the annual impairment test of property and equipment and determined that there was no impairment as the fair value

2 unchanged sentences

property and equipment totaled approximately $ 1,862,690

and $ 1,865,726 for

fiscal years ended September 30, 2021, and 2020, respectively.

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

A lessee should

recognize in the statement of financial position a liability to make lease payments (the lease liability) and a right-of-use asset representing

its right to use the underlying asset for the lease term.

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

an accounting policy election by class of underlying asset not to recognize lease assets and lease liabilities.

In transition, lessees

and lessors are required to recognize and measure leases at either the effective date (the “effective date method”) or the

beginning of the earliest period presented (the “comparative method”) using a modified retrospective approach.

effective date method, the Company’s comparative period reporting is unchanged.

In contrast, under the comparative method, the

Company’s date of initial application is the beginning of the earliest comparative period presented, and the Topic 842 transition

guidance is then applied to all comparative periods presented.

Further, under either transition method, the standard includes certain

practical expedients intended to ease the burden of adoption.

The Company adopted ASC 842 October 1, 2019, using the effective date method

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

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

classification for expired or existing leases;

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

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

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

The Company enters

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

and $ 1,335,189

for fiscal years ended September 30, 2022, and 2021, respectively recorded as general and administrative expenses on the Company’s consolidated statement of operations and comprehensive

income/(loss).

10 - OTHER ASSETS

of September 30, 2022, the Company had other assets of $ 1,473,980

which was comprised of rent security deposits of $ 204,388 ,

Investment in Masterpiece VR valued at $ 1,000,000

(see below), and other assets of $ 269,592 .

As of September 30, 2021, the Company had other assets of rent security deposits of $ 84,362 ,

Investment in Masterpiece VR valued at $ 500,000

(see below), and other assets of $ 112,878 .

On 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 software for content creation using virtual reality.

The investment is included in other assets in

the accompanying balance sheet and the Company accounts for this investment and recorded at cost.

No impairment has been recorded

for the year ended September 30, 2022.

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

Industrial Services segment.

The operating lease terms range from 2 to 7 years.

The Company excluded the renewal option on its applicable facility leases

from the calculation of its right-of-use assets and lease liabilities.

and Subsidiaries

The Company excluded the renewal option on its applicable

facility leases from the calculation of its right-of-use assets and lease liabilities.

and operating lease liabilities consist of the following:

4 unchanged sentences

Finance leases

Operating leases

Lease liabilities - net of current portion

Finance leases

Operating leases

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

reconciliation of undiscounted cash flows to operating lease liabilities recognized in the Consolidated Balance

Sheet at September 30, 2022, is set forth below:

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

Years ending September 30,

Finance leases

Operating Leases

September 30,

2027 & Thereafter

Undiscounted lease payments

Amount representing interest

Discounted lease payments

representing interest

lease payments

disclosures of lease data are set forth below:

SCHEDULE OF LEASE COSTS

For the year ended

September 30, 2021

September 30, 2020

For the years ended

Finance lease costs:

Depreciation of finance lease assets

Interest on lease liabilities

of finance lease assets

on lease liabilities

Operating lease costs:

Amortization of right-of-use assets

Interest on lease liabilities

Total lease cost

lease expense

Other information:

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

Cash paid for amounts included

in the measurement of lease liabilities:

Operating leases

Finance leases

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

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

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 leases

and Subsidiaries

Weighted-average discount rate - operating

Company used the rate implicit in the lease, where known, or its incremental borrowing rate as the rate used to discount the future lease

13 – PREPAID AND OTHER CURRENT ASSETS

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 .

On September 30, 2020, the Company had prepaid and

other current assets consisting of prepayments on inventory purchases of $ 101,308 ,

and other current assets of $ 1,074,467 .

14 - OTHER ASSETS

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

which was comprised of rent security deposits

of $ 84,362 ,

Investment in Masterpiece VR valued at $ 500,000 ,

and other assets of $ 112,878 .

As of September 30, 2020, the Company had other assets of $ 381,900

which was comprised of rent security deposits.

12 – 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 ( 2.075 %

The line carried interest of LIBOR plus 2.00 % per annum ( 2.075 %

as of September 30, 2021).

On June 10, 2022, the Company and Fulton Bank agreed to an amendment of the line of credit to carry interest

at the Secured Overnight Financing Rate (“SOFR”) plus 2.37 % per annum ( 5.35 % as of September 30, 2022).

At September 30,

there was no outstanding balance on this line of credit.

The terms of this line of credit are subject to the bank’s review annually

on February1.

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.

of the proceeds went to direct purchase of AIS.

This loan carries interest of LIBOR plus 2.25 %

per annum ( 2.325 %

as of September 30, 2021, and 4.23 % as of

September 30, 2020) and is payable on December

This loan carries loan covenants which

the Company was in compliance with as of September 30, 2021.

The outstanding balance on this loan was $ 1,218,680 and $ 2,164,584 ,

on September 30, 2021, and 2020, respectively.

This loan is secured by the assets of the Company.

On May 1, 2018, the Company

acquired a loan from Fulton Bank in the amount of $ 400,000

in order to fund new equipment for Advanced Industrial Services, Inc.

This loan carries interest of LIBOR plus 2.00 %

in order to fund the purchase of Advanced Industrial Services, Inc.

of the proceeds went to the direct purchase of AIS.

This loan carried interest of LIBOR plus 2.25 %

per annum ( 2.325 %

as of September 30, 2020) and is payable on May

This loan carries loan covenants which the Company was in compliance with as of September 30, 2020.

The outstanding

balance on this loan was $ 58,897

on September 30, 2020.

On September 30, 2021, this loan was fully paid.

This loan was secured by the assets of the Company.

May 1, 2018, the Company acquired a loan from Fulton Bank in the amount of $ 400,000

in order to fund new equipment for Advanced Industrial

Services, Inc.

This loan carries interest of LIBOR plus 2.00 %

as of September 30, 2021).

On June 10, 2022, The Company and Fulton Bank agreed to an amendment of the loan to carry interest at

SOFR plus 2.37 %

per annum ( 5.35 %

as of September 30, 2021, and 3.98 % as of

September 30, 2020) and is payable on May

This loan carries loan covenants which

the Company was in compliance with as of September 30, 2021.

The outstanding balance on this loan was $ 149,914 and $ 246,673 ,

on September 30, 2021, and 2020, respectively.

This loan is secured by the assets of the Company.

January 28, 2020, the Company acquired a loan from Fulton Bank in the amount of $ 360,000

in order to fund new equipment for Advanced Industrial

as of September 30, 2022).

This loan is payable on December 15, 2022.

This loan carries loan covenants which the Company was in

compliance with as of September 30, 2022.

The outstanding balance on this loan was $ 247,284

and $ 1,218,680 ,

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

This loan is secured by certain 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 2.25 %

per annum ( 2.325 %

as of September 30, 2021, and 4.23 % as

of September 30, 2020) and is payable on May

This loan carries loan covenants which

the Company was in compliance with as of September 30, 2021.

The outstanding balance on this loan was $ 258,060 and $ 331,535 ,

on September 30, 2021, and 2020, respectively.

This loan is secured by the assets of the Company.

December 23, 2019, the Company, issued a note payable to an independent private lender in the amount of $ 1,725,000 .

This note carries interest of 8 %

and matures on June

After deduction of an original issue

discount of $ 225,000

and legal fees of $ 5,000 ,

the Company received $ 1,495,000

As of September 30, 2021, this note

was fully satisfied.

As of September 30, 2020, the balance on this note was $ 620,754 .

April 24, 2020, the Company, issued a note payable to an independent private lender in the amount of $ 1,725,000 .

This note carries interest of 8 %

and matures on October

After deduction of an original issue

discount of $ 225,000

and legal fees of $ 5,000 ,

the Company received $ 1,495,000

As of September 30, 2021, this note

was fully satisfied.

As of September 30, 2020, this note had a balance of $ 1,787,033 .

and Subsidiaries

This loan carried interest of LIBOR plus 2.00 % per annum ( 2.075 % as of September 30, 2021).

On June 10, 2022, The Company

and Fulton Bank agreed to an amendment of the loan to carry interest at SOFR plus 2.37 % per annum ( 5.35 % as of September 30, 2022).

loan is payable on May 1, 2023.

This loan carries loan covenants which the Company was in compliance with as of September 30, 2022.

outstanding balance on this loan was $ 63,281 and $ 149,914 , on September 30, 2022, and September 30, 2021, respectively.

secured by certain 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 carried interest of LIBOR plus 2.25 % per annum ( 2.325 % as of September 30, 2021).

On June 10, 2022,

The Company and Fulton Bank agreed to an amendment of the loan to carry interest at SOFR plus 2.37 % per annum ( 5.35 % as of September

This loan is payable on May 1, 2023.

This loan carries loan covenants which the Company was in compliance with as of September

The outstanding balance on this loan was $ 183,839 and $ 258,060 , on September 30, 2022, and September 30, 2021, respectively.

This loan is secured by certain 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 carried

interest of 8 % and matured 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.

As of September 30, 2022, and September 30, 2021, this note had a balance of $ 0 and $ 2,256,448 ,

respectively.

As of September 30, 2022, and September 31, 2021, this note had unamortized original issue discount balance of $ 0 and $ 200,000 ,

October 26, 2020, the Company issued a Note payable in the amount of $ 439,774 for the purchase of VDI.

This note carried interest of

5 % and was payable in two installments on October 26, 2021, and October 26, 2022.

As of September 30, 2022, and September 30, 2021, this

note had a balance of $ 219,370 and $ 460,377 , respectively.

As of the date of this report, all principal and accrued interest on this note

have been paid.

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 30, 2023 .

After deduction of an original issue discount of $ 750,000 and legal fees of $ 5,000 , the

Company received $ 5,000,000 in cash.

As of September 30, 2022, and September 30, 2021, this note had a balance of $ 4,943,929 and $ 5,005,000 ,

respectively.

As of September 30, 2022, and September 31, 2021, this note had unamortized original issue discount balance of $ 250,000

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 March

and matures on August

After deduction of an original issue

2 unchanged sentences

the Company received $ 8,000,000

As of September 30, 2021, and 2020,

this note had a balance of $ 2,456,448 , and $ 4,605,000 , respectively.

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

This note carries interest of 8 %

and matures on March

After deduction of an original

issue discount of 750,000 and

legal fees of $ 5,000 ,

the Company received $ 5,000,000 in

One September 30, 2021, this note had a balance of 5,775,000 .

March 3, 2020, Vicon, a subsidiary of the Company amended the $ 5,600,000

Term Loan Agreement with NIL Funding Corporation

Upon closing, $ 500,000

of outstanding borrowings were repaid to NIL,

additionally, another $ 500,000

is to be paid in one year.

The Agreement requires

monthly payments of accrued interest that began on October 1, 2018.

This note carries interest of 8.85 %

and matures on March

This note carries loan covenants which

the Company is in compliance with as of September 30, 2021.

On September 30, 2021, and 2020, this note had a balance of $ 3,604,743 ,

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 an additional original issue

discount and will be amortized over the life of the loan.

As of September 30, 2022, this note had a balance of $ 9,738,632 .

As of September 30, 2022, this note had unamortized original issue discount balance of $ 1,064,778 .

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 September 30, 2022.

As of September 30, 2022, and September 30, 2021, this note had a balance of

$ 2,804,743 and $ 3,604,743 , respectively.

1 unchanged sentence

purchase price of $ 3,381,433 .

The Company paid $ 905,433

in cash and acquired a mortgage from Fulton Bank

in the amount of $ 2,476,000 .

This mortgage carries interest of LIBOR plus 2.50 %

per annum and is payable on January

This loan carries loan covenants similar

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

As of September 30, 2021, the Company was in compliance with these

The outstanding balance on this mortgage was $ 2,339,114 and $ 2,355,542 , on September 30, 2021, and 2020, respectively.

The Company paid $ 905,433 in cash and acquired a mortgage from Fulton Bank in the amount of $ 2,476,000 .

This mortgage carried interest of LIBOR plus 2.50 % per annum ( 2.575 % as of September 30, 2021).

On June 10, 2022, The Company and Fulton

Bank agreed to an amendment of the mortgage to carry interest at SOFR plus 2.62 % per annum ( 5.6 % as of September 30, 2022).

This mortgage

is payable on January 28, 2040 .

This loan carries loan covenants similar to covenants on the Company’s other loans from Fulton

As of September 30, 2022, the Company was in compliance with these covenants.

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

this mortgage had a balance of $ 2,245,664 and $ 2,339,114 , respectively.

Protection Program Loans

3 unchanged sentences

The Company has applied for and

received loan forgiveness under the provisions of the CARES Act for $ 6,291,985 with $ 971,500 being subsequent to September 30, 2021.

These loans are recorded under Paycheck Protection Program Loans on our Condensed Consolidated Balance Sheet as of September 30, 2020,

net of the short-term portion of $ 1,032,200 , of which $ 971,500 has been forgiven.

received loan forgiveness under the provisions of the CARES Act for $ 6,291,985 , recorded as other income on the Company’s consolidated statement

of operations and comprehensive income/(loss).

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 Consolidated Balance Sheet as of September 30, 2022, net of the short-term portion of $ 24,280 .

The issuing bank determined that this

loan qualifies for loan forgiveness;

however the Company is awaiting final approval from the Small Business Administration.

maturities of our long-term debt over the next 5 years are as follows:

OF ESTIMATED MATURITIES OF LONG TERM DEBT

Fulton Bank - $ 5,250,000

Fulton Bank - $ 400,000

Fulton Bank - $ 360,000

Fulton Bank - Mortgage payable

Notes Payable (1)

Net of unamortized original issue discounts of $ 950,000

Bank - $ 5,250,000

Bank - $ 400,000

Bank - $ 360,000

Bank - Mortgage payable

13 – RELATED PARTY TRANSACTIONS

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

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

As of September 30,

2021, and September 30, 2020, there was $ 1,487,155 and $ 1,432,209 in receivables due from Ducon Technologies, Inc., respectively.

September 30, 2021, $500,000 of the balance due is for the sale of Griffin, which was due in February 2021, and the remaining balance

are various receivables with various due dates within the next fiscal year.

The Company is currently negotiating a payment agreement

surrounding all these amounts due.

and Subsidiaries

see Note 3 for further transactions relating to Aron Govil.

May 1, 2020, Company invested $ 500,000 in a registered S-1 stock offering of Telidyne Inc., an OTC listed company, by purchasing 166,667

shares of common stock at $ 3.00 per share.

Telidyne Inc.

is controlled by the Company’s former CFO and Executive Director, Aron

On September 30, 2020, the Company decided to withdraw its investment, the transaction was cancelled, and all proceeds were returned.

July 31, 2022 the Company negotiated a payment agreement surrounding the sale of Griffin Filters, LLC and other liabilities due to Cemtrex,

from Aron Govil, the Company’s Founder and former Director totaling $761,585 .

This agreement is in the form of a secured promissory

note earning interest at a rate of 5 % per annum and matures on July 31, 2024 .

See Item 13 of Part III of this report for more information regarding transactions related to Aron Govil.

14 – SHAREHOLDERS’ EQUITY

5 unchanged sentences

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

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

there were 2,129,122 and 1,935,151 shares issued and 2,065,022 and 1,871,051 shares outstanding, respectively.

A Preferred stock

8 unchanged sentences

Series A Preferred Stock has no liquidation value or preference.

the twelve-month periods ended September 30, 2021, the Company retired 1,000,000 shares of Series A Preferred Stock.

of September 30, 2021, and September 30, 2020, there were zero and 1,000,000 shares of Series A Preferred Stock issued and outstanding,

respectively.

Series A Preferred Stock has no redemption rights.

the twelve-month period ended September 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 Item 13 of Part III of this report for more details.

of September 30, 2022, and September 30, 2021, there were no shares of Series A Preferred Stock issued and outstanding.

C Preferred Stock

6 unchanged sentences

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

the year ended September 30, 2020, 100,000 shares of Series C Preferred Stock were issued to Aron Govil, Executive former Director and

CFO of the Company as part of his employment agreement.

In order to determine the fair market value of these shares the Company used

the closing price of its Series 1 preferred stock of $ 0.95 on October 3, 2019.

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

of the Series C Preferred Stock to Saagar Govil.

and Subsidiaries

the year ended September 30, 2021, the Company retired 50,000

shares of Series C Preferred Stock surrendered

by Aron Govil as part of the settlement agreement (see Note 3).

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

respectively.

The Series C Preferred Stock has

no liquidation value or preference.

The Series C Preferred Stock has

no redemption rights.

the year ended September 30, 2020, 100,000

shares of Series C Preferred Stock were issued to Aron Govil, Executive former Director and CFO of the Company as part of his

employment agreement.

In order to determine the fair market value of these shares (estimated to be $ 0.95 per share), the Company

used the closing price of its Series 1 preferred stock of $ 0.95

on October 3, 2019.

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

shares of the Series C Preferred Stock to Saagar Govil.

the year ended September 30, 2021, the Company retired 50,000 shares of Series C Preferred Stock surrendered by Aron Govil as part of

the settlement agreement.

See Item 13 of Part III of this report for more details.

of September 30, 2022, and September 30, 2021, there were 50,000 shares of Series C Preferred Stock issued and outstanding.

1 Preferred Stock

3 unchanged sentences

Series 1 Preferred, valued at their liquidation preference.

The Series 1 Preferred will rank senior to the common stock with respect

The Series 1 Preferred rank senior to the common stock with respect

to dividends.

Dividends will be entitled to be paid prior to any dividend to the holders of our common stock.

Series 1 Preferred will have a liquidation preference of $ 10 per share, equal to its purchase price.

Series 1 Preferred has a liquidation preference of $ 10 per share, equal to its purchase price.

In the event of any liquidation,

2 unchanged sentences

A preferred stock and our common stock.

The holders of Series 1 Preferred will have preference over the holders of our common stock on

The holders of Series 1 Preferred have preference over the holders of our common stock on

any liquidation, dissolution or winding up of our company.

The holders of Series 1 Preferred will also have preference over the holders

The holders of Series 1 Preferred also have preference over the holders

of our Series A preferred stock.

16 unchanged sentences

to all of our existing and future indebtedness.

and Subsidiaries

Shares of Series 1 Preferred may

be redeemed, in whole or in part, at the option of the Corporation, by the Corporation by giving notice of such redemption at any time.

Notice of redemption may be given either by mailing notice to the holders of record or by public announcement, by press release or otherwise.

If notice is given by public announcement, by press release or otherwise, such notice shall be effective as of the date of such announcement,

regardless of whether notice is also mailed or otherwise given to holders of record.

The redemption price for any shares of Series 1 Preferred

to be redeemed (the “Redemption Price”) shall be payable in cash, out of funds legally available therefor, and shall be equal

to the Preference Amount, plus any accrued but unpaid dividends.

If fewer than all of the outstanding shares of Series 1 Preferred are

to be redeemed at any time, the Corporation may choose to redeem shares proportionally from all holders, or may choose the shares to be

redeemed by lot or by any other equitable method.

March 30, 2020, the Company amended the Certificate of Designation (the “Amended Certificate of Designation”) for our Series

2 unchanged sentences

shares under the designation for our Series 1 Preferred Stock from 3,000,000 shares to 4,000,000 shares.

the year ended September 30, 2021, 198,316 shares of Series 1 Preferred Stock were issued to pay dividends to holders of Series 1 Preferred

the year ended September 30, 2021, the Company retired 469,949

shares of Series 1 Preferred Stock surrendered

by Aron Govil as part of the settlement agreement (see Note 3).

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

the year ended September 30, 2022 and 2021, 193,971 and 198,316 shares of Series 1 Preferred Stock were issued to pay dividends to holders

of Series 1 Preferred Stock.

respectively.

the fiscal year ended September 30, 2020, the Company purchased 235,133 shares of its Series 1 Preferred Stock on the open market at

an average price per share of $ 1.92 , for an aggregate cost of approximately $ 338,775 , as part of its ongoing share repurchase program

announced earlier.

The Company retired 171,033 shares worth $ 190,484 during fiscal 2020.

the year ended September 30, 2021, the Company retired 469,949 shares of Series 1 Preferred Stock surrendered by Aron Govil as part of

the settlement agreement.

See Item 13 of Part III of this report for more details.

of September 30, 2022, and September 30, 2021, there were 2,079,122 and 1,885,151 shares of Series 1 Preferred Stock issued and 2,015,022

and 1,821,051 shares outstanding, respectively.

The Company currently holds 64,100 shares of Series 1 Stock in Treasury stock.

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

1 unchanged sentence

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

the fiscal year ended September 30, 2021, we issued 3,159,655

shares of common stock to satisfy $ 5,025,651

notes payable and accumulated interest.

the fiscal years ended September 30, 2020, 6,530,473 shares of the Company’s common stock have been issued to satisfy $ 8,737,125

of notes payable and accumulated interest.

fiscal year 2020, the Company issued 6,643,872 shares of the Company’s common stock for $ 12,462,648 in gross proceeds in various

subscription rights offerings.

After deducting offering expenses of $ 840,728 the Company received $ 11,621,920 in net proceeds (see below).

fiscal year 2020, the Company issued 513,358 shares in exchange for $ 532,788 worth of goods and services.

fiscal year 2020, the Company cancelled 27,954 shares that were issued in trust for an ATM offering in the prior fiscal year that were

are currently 433,965 shares of our common stock issuable upon the exercise of our publicly traded Series 1 warrants that have an exercise

price of $ 50.48 per share.

the years ended September 30, 2021, and 2020, none of our outstanding Series 1 Warrants have been exercised.

Rights Offering

January 24, 2020, the “Company entered into a Subscription Agreement relating to the public offering of 500,000 shares (the “Shares”)

of the Company’s common stock, par value $ 0.001 per share, all of which were sold by the Company (the “Offering”) to

an accredited investor.

The Offering price of the Shares was $ 1.50 per share for gross proceeds of $ 750,000 .

After deducting offering

expenses of $ 37,500 the Company received $ 712,500 in net proceeds.

and Subsidiaries

February 26, 2020, the “Company entered into a Subscription Agreement relating to the public offering of 347,000 shares (the “Shares”)

of the Company’s common stock, par value $ 0.001 per share, all of which were sold by the Company (the “Offering”) to

an accredited investor.

The Offering price of the Shares was $ 1.30 per share for gross proceeds of $ 451,100 .

After deducting offering

expenses of $ 2,500 the Company received $ 448,600 in net proceeds.

June 1, 2020, the “Company entered into a Subscription Agreement relating to the public offering of 3,055,556 shares (the “Shares”)

of the Company’s common stock, par value $ 0.001 per share, all of which were sold by the Company (the “Offering”) to

accredited investors.

The Offering price of the Shares was $ 1.80 per share for gross proceeds of $ 5,500,000 .

After deducting offering

expenses of $ 395,000 the Company received $ 5,105,000 in net proceeds.

June 9, 2020, the “Company entered into a Subscription Agreement relating to the public offering of 2,402,923 shares (the “Shares”)

of the Company’s common stock, par value $ 0.001 per share, all of which were sold by the Company (the “Offering”) to

accredited investors.

The Offering price of the Shares was $ 2.24 per share for gross proceeds of $ 5,382,548 .

After deducting offering

expenses of $ 386,778 the Company received $ 4,995,769 in net proceeds.

the fiscal year ended September 30, 2022, we issued 5,481,102 shares of common stock to satisfy $ 4,688,524 of notes payable and accumulated

the fiscal year ended September 30, 2021, we issued 3,159,655 shares of common stock to satisfy $ 5,025,651 of notes payable and accumulated

fiscal year 2022, the Company issued 150,000 shares in exchange for $ 50,000 worth of services.

January 31, 2022, warrants to purchase 433,965 shares of our common stock (issuable upon the exercise of our publicly traded Series 1 warrants), at

an exercise price of $ 50.48 per share expired.

the years ended September 30, 2022, and 2021, no outstanding Series 1 Warrants were exercised.

15 – SHARE-BASED COMPENSATION

2 unchanged sentences

These options have an exercise price of $ 1.90 per share, which vested upon grant and they expire after

seven years .

Additionally, Mr.

10 unchanged sentences

Govil, all his options were cancelled.

January 6, 2021, the Company granted to Christopher C.

January 6, 2021, the Company granted Christopher C.

Moore, the Company’s CFO, a stock option for 150,000 shares.

1 unchanged sentence

have an exercise price of $ 1.58 per share, which vest over five years , and they expire after five years.

These options were cancelled

Moore’s departure from the Company.

April 28, 2022, the Company granted Brian Kwon, Manpreet Singh, Chris Wagner, and Metodi Filipov, all Directors of the Company, stock

options for 102,565 shares each, 410,260 in the aggregate.

These options have an exercise price of $ 0.39 per share, which vest over one

year , and expire after five years.

following weighted-average assumptions were used to estimate the fair value of the common stock option liability for the options granted

to Christopher C.

to Brian Kwon, Manpreet Singh, Chris Wagner, and Metodi Filipov;

OF FAIR VALUE STOCK OPTION WEIGHTED AVERAGE ASSUMPTIONS

January 6, 2021

Expected term

Risk-free interest rate

Expected volatility

Expected dividend yield

and Subsidiaries

interest rate

dividend yield

the years ended September 30, 2022, and 2021 the Company recognized $ 155,505 and $ 156,419 of share-based compensation expense on its

3 unchanged sentences

OF STOCK OPTIONS ACTIVITY

Number of Options

Weighted Average Exercise Price

Weighted Average Remaining Contractual Term (in years)

Aggregate Intrinsic Value

Outstanding at September 30, 2019

Options granted

Options exercised

Options forfeited

Options cancelled

Outstanding at September 30, 2020

Options granted

Options exercised

Options forfeited

Options cancelled

Outstanding at September 30, 2021

Exercisable at September 30, 2021

Average Exercise Price

Average Remaining Contractual Term (in years)

Intrinsic Value

at September 30, 2021

at September 30, 2022

Vested and exercisable

at September 30, 2022

16 – 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

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

per month expiring on February 28, 2023.

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 $ 5,099 expiring on August 31, 2025 .

Company’s AT segment leases (i) approximately 6,700

square feet of office and warehouse space in

Pune, India from a third party in an five year lease at a monthly rent of $ 6,453

(INR 456,972 )

expiring on February

28, 2024 , (ii) approximately 30,000

square feet of office and warehouse space in

Hauppauge, New York from a third party in a seven-year

lease at a monthly rent of $ 28,719

expiring on March

31, 2027 , (iii) approximately 4,570 square

feet of office space in El Dorado Hills, California in a 63 month lease assumed by the company upon the acquisition of VDI expiring on

November 30, 2022 , and (iv) approximately 9,400

square feet of office and warehouse space in

Hampshire, England in a fifteen-year lease with at a monthly rent of $ 7,329

which expires on March

24, 2031 and contains provisions to terminate

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 $ 5,810 (INR 456,972 ) expiring on February 28, 2024 , (ii) approximately 30,000 square feet of

office and warehouse space in Hauppauge, New York from a third party in a seven-year lease at a monthly rent of $ 28,719 expiring on March

31, 2027 , (iii) approximately 4,570 square feet of office space in El Dorado Hills, California in a 63 month lease assumed by the company

upon the acquisition of VDI at a monthly rent of $ 7,077 expiring on November 30, 2022 , and (iv) approximately 9,400 square feet of office

and warehouse space in Hampshire, England in a fifteen-year lease with at a monthly rent of $ 9,821 (£ 7,669 ) which expires on March

24, 2031 and contains provisions to terminate in 2026 .

17 – INCOME TAXES

5 unchanged sentences

sourced earnings.

At September 30, 2021,

the Company had approximately $ 37,099,262 of federal and $ 13,726,364 of state net operating losses.

The net operating loss carryforwards,

if not utilized, will begin to expire in 2036 for federal purposes and in 2036 for state purposes.

The company is currently reviewing

net operating losses for Section 382 limitation purposes and will make any required adjustments to the net operating losses at the completion

of the study.

September 30, 2022, the Company had approximately $ 70,061,515 of federal and $ 34,312,917 of state net operating losses.

The net operating

loss carryforwards, if not utilized, will begin to expire in 2036 for federal purposes and in 2036 for state purposes .

The company is

currently reviewing net operating losses for Section 382 limitation purposes and will make any required adjustments to the net operating

losses at the completion of the study.

following is a geographical breakdown of loss before the provision for income taxes:

OF (LOSS) INCOME BEFORE PROVISION FOR TAX

Year ended September 30,

ended September 30,

$ ( 12,103,393 )

Loss before provision for income taxes

( 1,397,394 )

and Subsidiaries

before provision for income taxes

$ ( 13,500,787 )

provision for income taxes consisted of the following:

OF PROVISION FOR INCOME TAXES

Current (benefit)/provision

(benefit)/provision

current (benefit)/provision

deferred provision

Total (benefit)/provision

for income taxes

Effective Income tax rate

(benefit)/provision for income taxes

$ ( 208,545 )

Income tax rate

following is a reconciliation of the effective income tax rate to the federal and state statutory rates:

OF EFFECTIVE INCOME TAX RATE RECONCILIATION

For the Fiscal Year

September 30, 2021

September 30, 2020

the Fiscal Year

statutory rate

State statutory rate

Foreign tax rate differential

Change in valuation allowance

Effect of change in rates

Permanent differences

Effective rate

and Subsidiaries

taxes, net of federal

tax rate differential

in valuation allowance

settlement payment

loan forgiveness

components of our deferred tax assets and liabilities are summarized as follows:

OF DEFERRED TAX ASSETS AND LIABILITIES

September 30, 2021

September 30, 2020

operating loss carryforwards

(interest expense)

gross deferred taxes

( 20,895,094 )

( 9,491,650 )

deferred tax assets

Net operating loss carryforwards

Prepaid expenses

Allowance for bad debt

Goodwill amortization

Non-qualified stock options

Warrants (interest expense)

Warranty Reserve

Foreign Tax Credits

Total gross deferred taxes

Valuation allowance

Tax Liabilities:

and other Reserves

( 1,165,010 )

Net deferred tax assets

deferred tax liabilities

Inventory and other Reserves

Prepaid expenses

Goodwill amortization

Research and development expenses

Gain/loss on fixed asset disposal

Total deferred tax liabilities

Total deferred tax assets (liabilities)

( 2,306,274 )

( 2,119,939 )

deferred tax assets (liabilities)

18– SUBSEQUENT EVENTS

2 unchanged sentences

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

of Payroll Protection Plan Loan

November 2021, $ 971,500 in Payroll Protection Plan Loans were forgiven.

shares issued for dividend

October 18, 2021, the Company issued 94,602 shares of its Series 1 Preferred Stock for dividends.

October 7, 2022, the Company issued 104,341 shares of its Series 1 Preferred Stock to for dividends.

The dividend was paid to shareholders

of record as of September 30, 2022 .

of subsidiaries to related party

On November 22, 2022, the “Company

entered into two Asset Purchase Agreements and one Simple Agreement for Future Equity (“SAFE”) with the Company’s CEO,

Saagar Govil, to secure the sale of the subsidiaries Cemtrex Advanced Technologies, Inc, and Cemtrex XR, Inc., which include the brands

SmartDesk, Cemtrex XR, Virtual Driver Interactive, Bravo Strong, and good tech (formerly Cemtrex Labs), to Mr.

Govil, which are consolidated

into the Company’s Consolidated Balance Sheet in this report.

November 22, 2022, the Company completed the above disposition for the following consideration.

comprised of:

in cash payable at Closing;

royalty of all revenues on the Business to be paid 90 days after the end of each calendar year for the next three years;

the total sum of royalties due be less than $ 820,000 at the end of the three-year period, Purchaser shall be obligated to pay the

difference between $ 820,000 and the royalties paid .

Advanced Technologies, Inc.

in cash payable at Closing

royalty of all revenues on the Business to be paid 90 days after the end of each calendar year for the next 5 years ;

in SAFE (common equity) at any subsequent fundraising or exit above $5M with a $10M cap .

Company’s Board of Directors, excluding Saagar Govil who abstained from all voting on these agreements, approved these actions

and agreements.

shares issued subsequent to financial statements date

October 2021, 2,891,016 shares of common stock were issued to satisfy $ 2,466,478 of notes payable and accumulated interest.

December 16, 2022, 1,365,560 shares of common stock were issued to satisfy $ 200,000 of notes payable and accumulated interest.

Reverse stock split

On December 13, 2022,

the Company’s Board of Directors approved, and stockholders holding at least a majority of the issued and outstanding shares of

our classes of voting stock have approved, by written consent in lieu of a special meeting:

an amendment to our Certificate of Incorporation

to authorize a reverse split of the Company’s outstanding shares of common stock, par value $ 0.001 per share, with a split ratio

of between 1 for 10 and 1 for 100 , which will be determined by the Board of Directors at any time or times for a period of 12 months after

the date of the written consent.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures