What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2023-05-11 compared with 2023-02-14 · 364 added, 237 removed, 539 unchanged (53% of the section changed)

2 unchanged sentences

Consolidated Balance Sheets

September 30,

Current assets

4 unchanged sentences

Trade receivables - related party

Trade receivables, net

Inventory –net of allowance for inventory obsolescence

6 unchanged sentences

Note receivable - related party

Liabilities & Stockholders’ Equity (Deficit)

Liabilities & Stockholders’ Equity

Current liabilities

1 unchanged sentence

Accounts payable - related party

Accounts payable

Short-term liabilities

9 unchanged sentences

Long-term lease liabilities

Notes payable

Mortgage payable

6 unchanged sentences

Shareholders’ equity

Preferred stock , $ 0.001 par value, 10,000,000 shares authorized, Series 1, 3,000,000 shares authorized, 2,183,463 shares issued

and 2,119,363 shares outstanding as of December 31, 2022 and 2,079,122 shares issued and 2,015,022 shares outstanding as of

September 30, 2022 (liquidation value of $ 10 per share)

Series C, 100,000 shares authorized, 50,000 shares issued and outstanding at December 31, 2022 and September 30, 2022

Preferred stock, value

Common stock, $ 0.001 par value, 50,000,000 shares authorized, 793,727 shares issued and outstanding at

December 31, 2022 and 754,711 shares issued and outstanding at September 30, 2022

Preferred stock , $ 0.001 par value, 10,000,000 shares authorized, Series 1, 3,000,000 shares authorized, 2,183,463 shares issued and 2,119,363 shares outstanding as of March 31, 2023 and 2,079,122 shares issued and 2,015,022 shares outstanding as of September 30, 2022 (liquidation value of $ 10 per share)

Series C, 100,000 shares authorized, 50,000 shares issued and outstanding at March 31 31, 2023 and September 30, 2022

Common stock, $ 0.001 par value, 50,000,000 shares authorized, 828,570 shares issued and outstanding at March 31, 2023 and 754,711 shares issued and outstanding at September 30, 2022

Additional paid-in capital

Retained earnings (accumulated deficit)

Accumulated deficit

( 61,801,025 )

( 54,929,020 )

Treasury stock, 64,100 shares of Series 1 Preferred Stock at December 31, 2022 and September 30, 2022

Accumulated other comprehensive income (loss)

Treasury stock, 64,100 shares of Series 1 Preferred Stock at March 31, 2023 and September 30, 2022

Accumulated other comprehensive income

Total Cemtrex stockholders’ equity

4 unchanged sentences

Consolidated Statements of Operations

December 31, 2022

December 31, 2021

For the three months ended

December 31, 2022

December 31, 2021

For the six months ended

Cost of revenues

3 unchanged sentences

Total operating expenses

Operating loss

Operating income/(loss)

( 2,894,222 )

( 1,546,563 )

( 6,192,821 )

Other income/(expense)

2 unchanged sentences

( 1,313,483 )

Total other income/(expense), net

( 2,463,372 )

( 2,715,887 )

Total other expense, net

( 1,222,561 )

( 2,103,951 )

( 1,694,827 )

Net loss before income taxes

1 unchanged sentence

( 3,650,514 )

( 7,887,648 )

Income tax benefit/(expense)

2 unchanged sentences

( 3,650,514 )

Loss from discontinued operations, net of tax

( 7,887,648 )

Income/(loss) from discontinued operations, net of tax

( 3,225,389 )

( 1,444,098 )

Less loss in noncontrolling interest

( 4,801,923 )

( 6,875,903 )

( 9,331,746 )

Less income/(loss) in noncontrolling interest

Net loss attributable to Cemtrex, Inc.

1 unchanged sentence

$ ( 4,721,247 )

Loss Per Share-Basic & Diluted

$ ( 6,872,005 )

$ ( 9,199,198 )

Income (loss) per share - Basic & Diluted

Continuing Operations

1 unchanged sentence

Weighted Average Number of Shares-Basic & Diluted

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

Consolidated Statements Comprehensive Income/(Loss)

December 31, 2022

December 31, 2021

Weighted Average Number of Shares-Diluted

Consolidated Statements of Comprehensive Loss

For the three months ended

December 31, 2022

December 31, 2021

For the six months ended

Other comprehensive income (loss)

1 unchanged sentence

$ ( 4,801,923 )

Foreign currency translation (loss)/income

$ ( 6,875,903 )

$ ( 9,331,746 )

Foreign currency translation loss

Comprehensive loss

1 unchanged sentence

( 6,969,552 )

Less comprehensive loss attributable to noncontrolling interest

( 9,471,877 )

Less comprehensive (loss) income attributable to noncontrolling interest

Comprehensive loss attributable to Cemtrex, Inc.

1 unchanged sentence

$ ( 5,082,222 )

$ ( 6,973,450 )

$ ( 9,604,425 )

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

1 unchanged sentence

Consolidated Statement of Stockholders’ Equity

Preferred Stock Series

Common Stock Par

Preferred Stock

Treasury Stock,

64,100 shares of

Par Value $0.001

Comprehensive

Stockholders’

Balance at September 30, 2022

at September 30, 2022

$ ( 54,929,020 )

$ ( 148,291 )

Foreign currency translation gain/(loss)

Foreign currency translation

Share-based compensation

Shares issued to pay notes payable

Dividends paid in Series 1 preferred shares

Income/(loss) attributable to noncontrolling interest

Shares issued to pay notes

Dividends paid in Series 1

preferred shares

Income/(loss) attributable

to noncontrolling interest

( 6,277,211 )

Balance at December 31, 2022

at December 31, 2022

$ ( 61,206,231 )

$ ( 148,291 )

Foreign currency translation

Share-based compensation

Additional rounding shares

issued for reverse stock split

Income/(loss) attributable

to noncontrolling interest

Shares issued to pay for services

at March 31, 2023

$ ( 61,801,025 )

$ ( 148,291 )

balance value

$ ( 61,801,025 )

$ ( 148,291 )

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

1 unchanged sentence

Consolidated Statement of Stockholders’ Equity (Continued)

Preferred Stock Series

Common Stock Par

Preferred Stock

Treasury Stock,

64,100 shares of

Par Value $0.001

Comprehensive

Stockholders’

Balance at September 30, 2021

at September 30, 2021

$ ( 41,908,062 )

$ ( 148,291 )

balance, value

Foreign currency translation

Share-based compensation

Shares issued to pay notes

Dividends paid in Series 1

preferred shares

Income/(loss) attributable

to noncontrolling interest

( 4,477,951 )

Foreign currency translation gain/(loss)

Share-based compensation

Shares issued to pay notes payable

Dividends paid in Series 1 preferred shares

Income/(loss) attributable to noncontrolling interest

at December 31, 2021

$ ( 46,386,013 )

$ ( 148,291 )

Balance at December 31, 2021

Foreign currency translation

Share-based compensation

Shares issued with note payable

Income/(loss) attributable

to noncontrolling interest

( 4,721,247 )

balance, value

at March 31, 2022

( 51,107,260 )

at March 31, 2022

( 51,107,260 )

2 unchanged sentences

Consolidated Statements of Cash Flows

For the three months ended

For the six months ended

Cash Flows from Operating Activities

1 unchanged sentence

$ ( 9,331,746 )

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

Adjustments to reconcile net loss to net cash used by operating activities

Depreciation and amortization

(Gain)/loss on disposal of property and equipment

Loss on disposal of property and equipment

Noncash lease expense

Change in allowance for doubtful accounts

Bad debt expense

Share-based compensation

Interest expense paid in equity shares

Accounts payable paid in equity shares

Accrued interest on notes payable

Amortization of original issue discounts on notes payable

Gain on marketable securities

Gain/(loss) on marketable securities

Discharge of Paycheck Protection Program Loans

16 unchanged sentences

( 7,596,110 )

Net cash provided/(used) by operating activities - discontinued operations

Net cash provided by operating activities - discontinued operations

Net cash used by operating activities

4 unchanged sentences

Proceeds from sale of property and equipment

Investment in MasterpieceVR

Proceeds from sale of marketable securities

Purchase of marketable securities

( 4,626,862 )

Net cash used by investing activities - continuing operations

( 5,425,408 )

Net cash provided by investing activities - discontinued operations

Net cash provided/(used) by investing activities

Net cash used by investing activities

( 5,427,757 )

Cash Flows from Financing Activities

Proceeds from notes payable

Payments on notes payable

Payments on Paycheck Protection Program Loans

Payments on bank loans

Net cash used by financing activities

Net cash (used)/provided by financing activities

Effect of currency translation

13 unchanged sentences

Cash paid during the period for interest

Cash paid during the period for income taxes

Cash paid during the period for income taxes, net of refunds

Supplemental Schedule of Non-Cash Investing and Financing Activities

Shares issued to pay notes payable

Shares issued in connection with note payable

Investment in right of use asset

3 unchanged sentences

1 – ORGANIZATION AND PLAN OF OPERATIONS

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

multi-industry company.

The Company currently operates in two areas:

industrial services, and intelligent security systems.

context requires otherwise, all references to “we”, “our”, “us”, “Company”, “registrant”,

“Cemtrex” or “management” refer to Cemtrex, Inc.

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

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

“registrant”, “Cemtrex” or “management” refer to Cemtrex, Inc.

and its subsidiaries.

the first quarter of fiscal year 2023, The Company reorganized its reporting segments to be in line with its current structure.

now has three business segments, consisting of (i) Security (ii) Industrial Services and (iii) Cemtrex Corporate.

Security segment operates under the Vicon Industries brand.

Vicon Industries, Inc.

(“Vicon”), a majority owned subsidiary,

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

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 innovative, mission critical security and video surveillance solutions

utilizing Artificial Intelligence (AI) based data algorithms.

Industrial Services segment operates under the brand, Advanced Industrial Services (“AIS”), that offers single-source expertise

the first quarter of fiscal year 2023, The Company reorganized its reporting segments to be in line with its current structure consisting

of (i) Security (ii) Industrial Services and (iii) Cemtrex Corporate.

Security segment operates under the brand of its majority owned subsidiary, Vicon Industries, Inc.

(“Vicon”), which, provides

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

Vicon’s products

include browser-based video monitoring systems and analytics-based recognition systems, cameras, servers, and access control systems

for every aspect of security and surveillance in industrial and commercial facilities, federal prisons, hospitals, universities, schools,

and federal and state government offices.

Vicon provides innovative, mission critical security and video surveillance solutions utilizing

Artificial Intelligence (AI) based data algorithms.

Industrial Services segment operates under the brand, Advanced Industrial Services (“AIS”), which offers single-source expertise

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

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

AIS installs 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 machinery,

AIS is a leading provider of reliability-driven maintenance and contracting solutions for machinery,

packaging, printing, chemical, and other manufacturing markets.

11 unchanged sentences

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;

and should 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.

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 ;

○ $ 1,600,000

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.

1 unchanged sentence

and agreements.

Stock Reverse Stock Split

January 25, 2023, the company completed a 35:1 reverse stock split on its common stock.

1 unchanged sentence

adjusted for this reverse split.

of cure period

of cure period and Subsequent Compliance

1 Preferred Stock

July 29, 2022, the Company received a notification letter from the Listing Qualifications Department of The Nasdaq Stock Market LLC (“Nasdaq”)

notifying the Company that, because the closing bid price for the Company’s Series 1 preferred stock listed on Nasdaq was below

$ 1.00 for 30 consecutive trading days, the Company no longer met the minimum bid price requirement for continued listing on The Nasdaq

Capital Market under Nasdaq Marketplace Rule 5550(a)(2), requiring a minimum bid price of $ 1.00 per share (the “Minimum Bid Price

Requirement”).

January 26, 2023, the Company received a notification letter from the Listing Qualifications Department of Nasdaq notifying the Company

that, it had been granted an additional 180 days or until July 24, 2023, to regain compliance with the Minimum Bid Price Requirement

on its Series 1 Preferred stock.

Rule Compliance

based on the Company meeting the continued listing requirement for market value of publicly held shares and all other applicable requirements

for initial listing on the Capital Market with the exception of the bid price requirement, and the Company’s written notice of

its intention to cure the deficiency during the second compliance period by effecting a reverse stock split, if necessary.

Company intends to continue actively monitoring the bid price for its Series 1 preferred stock between now and July 24, 2023 and will

consider available options to resolve the deficiency and regain compliance with the Minimum Bid Price Requirement.

January 24, 2022, the Company received a notification letter from the Listing Qualifications Department of Nasdaq notifying the Company

that, because the closing bid price for the Company’s common stock listed on Nasdaq was below $ 1.00 for 30 consecutive trading

days, the Company no longer met the minimum bid price requirement for continued listing on The Nasdaq Capital Market under Nasdaq Marketplace

Rule 5550(a)(2), requiring a minimum bid price of $ 1.00 per share (the “Minimum Bid Price Requirement”).

July 26, 2022, the Company received a notification letter from the Listing Qualifications Department of The Nasdaq Stock Market LLC Nasdaq

notifying the Company that, it had been granted an additional 180 days or until January 23, 2023, to regain compliance with the Minimum

Bid Price Requirement based on the Company meeting the continued listing requirement for market value of publicly held shares and all

other applicable requirements for initial listing on the Capital Market with the exception of the bid price requirement, and the Company’s

written notice of its intention to cure the deficiency during the second compliance period by effecting a reverse stock split, if necessary.

January 26, 2023, the Company received a notification letter from the Listing Qualifications Department of Nasdaq notifying the Company

that it has not regained compliance with Listing Rule 5550(a)(2) and accordingly would be delisted from the Capital Market.

then requested and had been granted a hearing to occur on March 16, 2023, appealing this determination to a Hearings Panel (the “Panel”),

pursuant to the procedures set forth in the Nasdaq Listing Rule 5800 Series.

February 8, 2023, the Company received a notification letter from the Listing Qualifications Department of Nasdaq notifying the Company

2 unchanged sentences

common stock will continue to be listed and traded on The Nasdaq Stock Market.

The hearing scheduled for March 16, 2023 before the Hearings

Panel has been cancelled.

Concern Considerations

17 unchanged sentences

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

continuing operations for the first quarter of fiscal year 2023 of $ 3,096,753 and has debt obligations over the next year of $ 17,099,485

and working capital deficit of $ 469,270 , that raise substantial doubt with respect to the Company’s ability to continue as a going

our working capital deficit 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 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 has effected a 35:1 reverse stock split on our common stock to remain trading on the Nasdaq Capital Markets, and improve

our ability to potentially raise capital through equity offerings that we 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.

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

continuing operations for the first half of fiscal year 2023 of $ 6,872,005 and has debt obligations over the next year of $ 16,441,488

and working capital of $ 108,939 , that raise substantial doubt with respect to the Company’s ability to continue as a going concern.

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 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 has effected a 35:1 reverse stock split on our common stock to remain trading on the Nasdaq Capital Markets, and improve our ability

to potentially raise capital through equity offerings that we 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.

The Company currently does not have adequate

cash to meet our short or long-term needs.

34 unchanged sentences

Issued Accounting Standards

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.

June 2016, the FASB issued Accounting Standards Update No.

2016-13, Financial Instruments – Credit Losses (Topic 326):

of Credit Losses on Financial Instruments (“Update 2016-13”).

Update 2016-13 replaced the incurred loss model with an expected

loss model, which is referred to as the current expected credit loss (“CECL”) model.

The CECL model is applicable to the

measurement of credit losses on financial assets measured at amortized cost, including but not limited to trade receivables.

business entities, the new standard became effective for annual reporting periods beginning after December 15, 2022, including interim

periods within that reporting period.

The Company is currently evaluating the impact of this ASU

on our financial statements.

October 2021, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2021-08,

“Business Combinations (Topic 805):

Accounting for Contract Assets and Contract Liabilities from Contracts with Customers (“ASU

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.

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.

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.

The Company is 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):

12 unchanged sentences

after December 15, 2023, with early adoption permitted.

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

The Company is 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.

effect on the accompanying condensed consolidated financial statements.

3 – DISCONTINUED OPERATIONS

to the on-going losses and risk associated with the SmartDesk business the Company has valued the royalty and SAFE agreement associated with

the SmartDesk sale at $ 0 and considers such consideration to be a gain contingency.

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, which include

the brand SmartDesk, and Cemtrex XR, Inc., which include the brands Cemtrex XR, Virtual Driver Interactive, Bravo Strong, and good tech

(formerly Cemtrex Labs), to Mr.

to the on-going losses and risk associated with the SmartDesk business the Company has valued the royalty and SAFE agreement associated

with the SmartDesk sale at $ 0 and considers such consideration to be a gain contingency.

on sales projections for Cemtrex XR, Inc., the Company does not believe that it will exceed the sales levels required to exceed the $ 820,000

1 unchanged sentence

In accordance with ASC 310 – Receivables, the

Company has discounted the royalties due and has recognized $ 660,621

of royalties due and will amortize the remaining amount over the period the royalties are due.

following table summarizes the loss on the sale:

Company has discounted the royalties due and during the six-month ended March 31, 2023, has recognized $ 678,330 of royalties due and

will amortize the remaining amount over the period the royalties are due.

following table summarizes the loss on the sale recorded during the three months ended December 31, 2022, included in Income/(loss) from

discontinued operations, net of tax in the accompanying condensed consolidated statement of Operations:

SUMMARY OF LOSS ON SALE

16 unchanged sentences

$ ( 2,455,341 )

and liabilities included within discontinued operations on the Company’s Condensed Consolidated Balance Sheets at December 31,

and liabilities included within discontinued operations on the Company’s Condensed Consolidated Balance Sheets at March 31, 2023

and September 30, 2022 are as follows;

OF ASSETS AND LIABILITIES INCLUDED WITHIN DISCONTINUED OPERATIONS

SCHEDULE OF ASSETS AND LIABILITIES INCLUDED WITHIN DISCONTINUED OPERATIONS

September 30,

16 unchanged sentences

Total liabilities

the first quarter of fiscal 2023, Vicon completed the closure of its discontinued operating entity Vicon Systems, Ltd.

located in Israel.

The Company received funds related to benefit obligations of $ 96,095 , which at the time of operational closure were not guaranteed to

be retrievable.

The company paid $ 7,010 in consulting fees for assistance in retrieving these funds.

The net amount of $ 89,085 is recognized

on the Company’s Condensed Consolidated Income Statement as part of the Loss on Discontinued Operations.

from discontinued operations, net of tax and the loss on sale of discontinued operations, net of tax, of Cemtrex Advanced Technologies,

and Cemtrex XR, Inc., sold during the first quarter of fiscal year 2023, which are presented in total as discontinued operations,

net of tax in the Company’s Condensed Consolidated Statements of Operations for the three-month periods ended December 31, 2022

net of tax in the Company’s Condensed Consolidated Statements of Operations for the three and six month periods ended March 31,

2023 and 2022, are as follows:

Three months ended December 31,

Three months ended

Six months ended

Total net sales

1 unchanged sentence

Operating, selling, general and administrative expenses

Other expenses

Other (income)/expenses

Income (loss) from discontinued operations

( 1,444,098 )

Amortization of discounted royalties

1 unchanged sentence

( 2,455,341 )

Adjustment of benefit obligation

Income tax provision

1 unchanged sentence

$ ( 685,140 )

the quarter ended December 31, 2022, Vicon completed the closure of its discontinued operating entity Vicon Systems, Ltd.

The Company received funds of $ 96,095 , which at the time of operational closure were not guaranteed to be retrievable.

paid $ 7,010 in consulting fees for assistance in retrieving these funds.

The net amount of $ 89,085 is recognized on the Company’s

Condensed Consolidated Income Statement as part of the Loss on Discontinued Operations.

$ ( 3,225,389 )

$ ( 1,444,098 )

4 – LOSS PER COMMON SHARE

4 unchanged sentences

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

For the three months

ended December 31, 2022, and 2021, the following items were excluded from the computation of diluted net loss per common share as their

effect is anti-dilutive:

For the three and six

months ended March 31, 2023, and 2022, the following items were excluded from the computation of diluted net loss per common share as

their effect is anti-dilutive:

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

For the three months ended

Warrants to purchase shares

For the six months ended

5 – SEGMENT INFORMATION

1 unchanged sentence

reports and evaluates financial information for three current segments:

Security segment, Industrial Services segment and the Corporate

the Security segment, Industrial Services segment and the Corporate

following tables summarize the Company’s segment information:

SCHEDULE OF SEGMENT INFORMATION

Three months ended December 31, 2022

Industrial Services

Three months ended March 31, 2023

months ended March 31, 2023

Industrial Services

Cost of revenues

3 unchanged sentences

Research and development

Operating loss

Operating income/(loss)

$ ( 827,367 )

$ ( 705,365 )

$ ( 1,846,230 )

$ ( 1,546,563 )

Other income/(expense)

1 unchanged sentence

$ ( 958,634 )

Three months ended December 31, 2021

$ ( 2,267,317 )

$ ( 2,103,951 )

Three months ended March 31, 2022

months ended March 31, 2022

Industrial Services

Cost of revenues

3 unchanged sentences

Research and development

Operating loss

Operating (loss)/income

$ ( 1,808,879 )

1 unchanged sentence

$ ( 2,894,222 )

$ ( 3,981,454 )

$ ( 2,127,208 )

$ ( 6,192,821 )

Other income/(expense)

$ ( 1,159,805 )

$ ( 1,222,561 )

$ ( 2,442,723 )

$ ( 1,694,827 )

September 30,

7 unchanged sentences

with the plan.

These funds, as required by the plan are restricted in nature and amounted to $ 1,601,723 at December 31, 2022 and $ 1,577,915

These funds, as required by the plan are restricted in nature and amounted to $ 645,297 at March 31, 2023 and $ 1,577,915

at September 30, 2022.

11 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

to continue as a going concern.

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

Company’s fair value assets at March 31, 2023 and September 30, 2022, are as follows.

SCHEDULE OF FAIR VALUE OF ASSETS

16 unchanged sentences

Allowance for doubtful accounts

Accounts receivables,

Accounts receivables, net, total

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 the required

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

9 – INVENTORY, NET

11 unchanged sentences

10 – PREPAID AND OTHER CURRENT ASSETS

December 31, 2022, the Company had prepaid and other current assets consisting of prepayments on inventory purchases of $ 1,445,861 , costs

March 31, 2023, the Company had prepaid and other current assets consisting of prepayments on inventory purchases of $ 665,525 , costs

and estimated earnings in excess of billings on uncompleted contracts of $ 794,416 , and other current assets of $ 1,128,459 .

15 unchanged sentences

Property and equipment, net

expense for the three months ended December 31, 2022, and 2021 were $ 530,830 , and $ 262,833 , respectively.

expense for the three months ended March 31, 2023, and 2022 were $ 209,053

and $ 347,494 ,

respectively.

Depreciation expense for the six months ended March 31, 2023, were $ 448,388 ,

and $ 610,327 ,

respectively.

12 – OTHER ASSETS

of December 31, 2022, the Company had other assets of $ 1,546,101 which was comprised of rent security of $ 62,041 , a strategic investment

of March 31, 2023, the Company had other assets of $ 1,584,910 which was comprised of rent security of $ 199,088 , a strategic investment

in MasterpieceVR of $ 1,000,000 (see below), and other assets of $ 385,822 .

9 unchanged sentences

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

No impairment has been recorded for the quarter ended December

No impairment has been recorded for the three and six months

ended March 31, 2023.

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, for total consideration of $ 550,000 .

On July 31, 2022, the Company

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

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 .

of December 31, 2022, and September 30, 2022, there was $ 19,034 and $ 19,133 payable due to Ducon Technologies, Inc., respectively.

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 .

On July 31, 2022, the Company 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 .

of March 31, 2023, and September 30, 2022, there was $ 3,368 and $ 19,133 payable due to Ducon Technologies, Pvt Ltd., respectively.

of $ 708,512 that represented the amount due from Ducon to Cemtrex Technologies Pvt.

5 unchanged sentences

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

The Note matured and was due in full on February 26, 2023 , and bore interest at 9 % per annum and was secured

by all of Mr.

Govil’s assets.

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

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.

Accordingly, the note and associated gain is not presented on the Company’s Condensed

Consolidated Balance Sheets and Condensed Consolidated Statements of Operations.

On April 27, 2023, the Company and Mr.

Govil signed an amendment to the note, extending the maturity

date one year to February 28, 2024 .

Govil also signed an affidavit confessing judgment in the event of a default on the Note.

the Company believes the note to be fully collectible, in accordance with ASC 450-30, Gain Contingencies, the Company determined the

gain was not to be recognized until the note is paid.

Accordingly, the note and associated gain is not presented on the Company’s

Condensed Consolidated Balance Sheets and Condensed Consolidated Statements of Operations.

November 22, 2022, the Company entered into two Asset Purchase Agreements and one Simple Agreement for Future Equity (“SAFE”)

2 unchanged sentences

Govil (see NOTE 1).

of December 31, 2022, there was $ 383,710 in trade receivables due from these companies.

$ 107,910 of these receivables are related to

costs paid by Cemtrex related to payroll during the transition of employees to the new company.

The remaining $ 275,800 are related to

services provided by Cemtrex Technologies Pvt.

of March 31, 2023, there was $ 408,464 in trade receivables due from these companies.

Of these receivables $ 123,812 are related to costs

paid by Cemtrex related to payroll during the transition of employees to the new company.

The remaining $ 284,652 are related to services

provided by Cemtrex Technologies Pvt.

in the normal course of business.

of December 31, 2022, there were royalties receivable from the sale of Cemtrex, XR, Inc.

of March 31, 2023, there were royalties receivable from the sale of Cemtrex, XR, Inc.

of $ 678,330 .

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The weighted average remaining term of our operating leases was

approximately 3.6 years at December 31, 2022 and 4.3 years at December 31, 2021.

approximately 3.3 years at March 31, 2023 and 3.0 years at March 31, 2022.

Lease liabilities were $ 2,297,293 with $ 732,680 classified

as short-term at December 31, 2022, and $ 2,576,963 with $ 754,495 , classified as short-term at September 30, 2022.

The weighted average

discount rate used to measure lease liabilities was approximately 5.6 % at December 31, 2022 and 6.6 % at December 31, 2021.

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

as short-term at March 31, 2023, and $ 2,576,963 with $ 754,495 , classified as short-term at September 30, 2022.

The weighted average discount

rate used to measure lease liabilities was approximately 5.66 % at March 31, 2023 and March 31, 2022.

The Company used the rate implicit

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

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

reconciliation of undiscounted cash flows to operating lease liabilities recognized in the condensed consolidated balance sheet at December

reconciliation of undiscounted cash flows to operating lease liabilities recognized in the condensed consolidated balance sheet at March

31, 2023, is set forth below:

6 unchanged sentences

Discounted lease payments

costs for the three months ended December 31, 2022 and 2021 are set forth below.:

costs for the three and six months ended March 31, 2023 and 2022 are set forth below.:

SCHEDULE OF LEASE COSTS

For the three months ended

For the six months ended

Finance lease costs

2 unchanged sentences

15 – LINES OF CREDIT AND LONG-TERM LIABILITIES

following table outlines the Company’s lines of credit and liabilities.

January 12, 2023, the Company entered into a standstill agreement with Streeterville Capital, LLC.

The lender has agreed to refrain and

forbear temporarily from making redemptions under the notes for a period ending on April 12, 2023.

In addition, the company has agreed

to an increase of the outstanding balance of the note issued on September 30, 2021 for the original amount of $ 5,755,000 by $ 148,000 ,

and the outstanding balance of the note issued on February 22, 2022 for the original amount of $ 9,205,000 by $ 303,422 .

The aggregate

amount of $ 451,422 has been recorded as interest expense on the Company’s Consolidated Condensed Statement of Operations and Condensed

Consolidated Statements of Cash Flow.

February 15, 2023, the Company and Fulton Bank agreed to an amendment to the Master Agreement Regarding Financial Covenants and Financial

Deliverables dated September 22, 2020.

March 3, 2023, the Company and NIL Funding agreed at an amendment to the term loan agreement dated September 18, 2018.

This agreement

amends the maturity date to December 31, 2024 and amends the interest rate to 11.5 %.

Additionally, the Company paid $ 10,000 in fees and

made an additional principal payment of $ 100,000 on March 29, 2023 and is required to make another additional principal payment of $ 100,000

on or before March 29, 2024.

The Company has accounted for this amendment as a debt modification.

May 3, 2023, the Company and Streeterville Capital, LLC.

agreed to an amendment to the note issued on September 30, 2021 for the original

amount of $ 5,755,000 .

The agreement extends the maturity date to June 30, 2024 , in exchange for a fee of 5 % of the outstanding balance

or approximately $ 252,912 added to the outstanding balance of the note.

The Company has accounted for this amendment as a debt modification.

following table outlines the Company’s lines of credit and secured liabilities.

OF LINES OF CREDIT AND LIABILITIES

2 unchanged sentences

Fulton Bank line of credit $ 3,500,000 - The terms of this line of credit are subject to the bank’s review annually on February 1.

Secured Overnight Financing Rate (“SOFR”) plus 2.37 % ( 6.67 % as of December 31, 2022 and 5.35 % as of September 30, 2022)

Secured Overnight Financing Rate (“SOFR”) plus 2.37 % ( 7.24 % as of March 31, 2023 and 5.35 % as of September 30, 2022)

Fulton Bank loan $ 5,250,000 for the purchase of AIS $ 5,000,000 of the proceeds went to the direct purchase of AIS.

The Company was in compliance with loan covenants as of March 31, 2023.

This loan is secured by certain assets of the Company.

SOFR plus 2.37 %( 6.67 % as of December 31, 2022 and 5.35 % as of September 30, 2022)

SOFR plus 2.37 %( 7.24 % as of March 31, 2023 and 5.35 % as of September 30, 2022)

Fulton Bank loan $ 400,000 fund equipment for AIS.

The Company was in compliance with loan covenants as of December 31, 2022.

The Company was in compliance with loan covenants as of March 31, 2023.

This loan is secured by certain assets of the Company.

SOFR plus 2.37 % ( 6.67 % as of December 31, 2022 and 5.35 % as of September 30, 2022)

SOFR plus 2.37 % ( 7.24 % as of March 31, 2023 and 5.35 % as of September 30, 2022)

Fulton Bank - $ 360,000 fund equipment for AIS.

The Company was in compliance with loan covenants as of December 31, 2022.

The Company was in compliance with loan covenants as of March 31, 2023.

This loan is secured by certain assets of the Company.

SOFR plus 2.37 % ( 6.67 % as of December 31, 2022 and 5.35 % as of September 30, 2022).

SOFR plus 2.37 % ( 7.24 % as of March 31, 2023 and 5.35 % as of September 30, 2022).

Fulton Bank mortgage $ 2,476,000 .

The Company was in compliance with loan covenants as of December 31, 2022.

SOFR plus 2.62 % ( 6.92 % as of December 31, 2022 and 5.6 % as of September 30, 2022).

The Company was in compliance with loan covenants as of March 31, 2023.

SOFR plus 2.62 % ( 7.49 % as of March 31, 2023 and 5.6 % as of September 30, 2022).

Note payable - $ 439,774 .

1 unchanged sentence

Payable in two installments on October 26, 2021, and October 26, 2022.

Note payable - $ 5,755,000 - Less original issue discount $ 750,000 and legal fees $ 5,000 , net cash received $ 5,000,000 Unamortized original issue discount balance of $ 125,000 and $ 250,000 , as of December 31, 2022 and September 30, 2022respectively.

Note payable - $ 5,755,000 - Less original issue discount $ 750,000 and legal fees $ 5,000 , net cash received $ 5,000,000 Unamortized original issue discount balance of $ 0 and $ 250,000 , as of March 31, 2023 and September 30, 2022 respectively.

Note payable - $ 9,205,000 .

1 unchanged sentence

28,572 shares of common stock valued at $ 700,400 recognized as additional original issue discount.

Unamortized original issue discount balance of $ 739,044 and$ 1,064,778 as of December 31, 2022 and September 30, 2022 respectivly.

Term Loan Agreement with NIL Funding Corporation (“NIL”) - $ 5,600,000 The Company was in compliance with loan covenants as of December 31, 2022.

Unamortized original issue discount balance of $ 422,311 and $ 1,064,778 as of March 31, 2023 and September 30, 2022 respectivly.

Term Loan Agreement with NIL Funding Corporation (“NIL”) - $ 5,600,000 The Company was in compliance with loan covenants as of March 31, 2023.

Paycheck Protection Program loan - $ 121,400 - The issuing bank determined that this loan qualifies for loan forgiveness;

however the Company is awaiting final approval from the Small Business Administration.

Total Notes Payable

Total lines of credit and secured liabilities

Current maturities

1 unchanged sentence

( 16,894,743 )

Notes Payable, Long Term

Unamortized original issue discount

( 1,305,778 )

Lines of credit and secured liabilities, Long Term

16 – SHAREHOLDERS’ EQUITY

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

As of December 31, 2022, and September 30, 2022,

As of March 31, 2023, and September 30, 2022,

there were 2,233,463 and 2,129,122 shares issued and 2,169,363 and 2,065,022 shares outstanding, respectively.

1 Preferred Stock

the three months ended December 31, 2022, 104,341 shares of Series 1 Preferred Stock were issued to pay dividends to holders of Series

1 Preferred Stock.

of December 31, 2022, and September 30, 2022, there were 2,183,463 and 2,079,122 shares of Series 1 Preferred Stock issued and 2,119,363

the six months ended March 31, 2023, 104,341 shares of Series 1 Preferred Stock were issued to pay dividends to holders of Series 1 Preferred

of March 31, 2023, and September 30, 2022, there were 2,183,463 and 2,079,122 shares of Series 1 Preferred Stock issued and 2,119,363

and 2,015,022 shares of Series 1 Preferred Stock outstanding, respectively.

C Preferred Stock

of December 31, 2022, and September 30, 2022, there were 50,000 shares of Series C Preferred Stock issued and outstanding.

of March 31, 2023, and September 30, 2022, there were 50,000 shares of Series C Preferred Stock issued and outstanding.

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

As of March 31, 2023, there were 828,570 shares issued

and outstanding and at September 30, 2022, there were 754,711 shares issued and outstanding.

January 25, 2023, the Company completed a 35:1 reverse stock split on its common stock.

1 unchanged sentence

adjusted for this reverse split.

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

As of December 31, 2022, there were 793,727 shares

issued and outstanding and at September 30, 2022, there were 754,711 shares issued and outstanding.

the three months ended December 31, 2022, 39,016 shares of the Company’s common stock have been issued to satisfy $ 31,331 of notes

payable, $ 168,669 in accrued interest, and $ 32,145 of excess value of shares issued recorded as interest expense.

On February 2, 2023, 19,314 shares were issued for rounding shares of the reverse stock split.

the six months ended March 31, 2023, 39,016 shares of the Company’s common stock have been issued to satisfy $ 31,331 of notes payable,

$ 168,669 in accrued interest, and $ 32,145 of excess value of shares issued recorded as interest expense.

the three and six months ended March 31, 2023, 15,529 shares of the Company’s common stock have been issued in exchange for services

valued at $ 102,500 .

17 – SHARE-BASED COMPENSATION

the three months ended December 31, 2022, and 2021, the Company recognized $ 39,842 and $ 45,371 of share-based compensation expense on

its outstanding options, respectively.

As of December 31, 2022, $ 152,433 of unrecognized share-based compensation expense is expected

to be recognized over a period of four years.

the six months ended March 31, 2023, and 2022, the Company recognized $ 66,577 and $ 72,417 of share-based compensation expense on its

outstanding options, respectively.

As of March 31, 2023, $ 103,557 of unrecognized share-based compensation expense is expected to be

recognized over a period of two years and six months.

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

the three months ended December 31, 2022, options to purchase 2,931 shares of the Company’s common stock at an exercise price of

$ 13.65 per share were cancelled.

the six months ended March 31, 2023, options to purchase 2,931 shares of the Company’s common stock at an exercise price of $ 13.65

per share and options to purchase 2,858 shares of the Company’s common stock at an exercise price of $ 40.95 per share were cancelled.

18 – COMMITMENTS AND CONTINGENCIES

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 corporate segment leases approximately 100

square feet of office space in Brooklyn, NY on a month-to-month lease at a rent of $ 600

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

5 unchanged sentences

feet of office and warehouse space in Hauppauge, New York from a third party in a seven-year lease at a monthly rent of $ 28,719 expiring

on March 31, 2027 , and (iii) approximately 9,400 square feet of office and warehouse space in Hampshire, England in a fifteen-year lease

with at a monthly rent of $ 7,329 (£ 5,771 ) which expires on March 24, 2031 and contains provisions to terminate in 2026.

on March 31, 2027 , (iii) approximately 9,400 square feet of office and warehouse space in Hampshire, England in a fifteen-year lease

with at a monthly rent of $ 7,329 (£ 5,771 ) which expires on March 24, 2031 and contains provisions to terminate in 2026 , and (iv)

approximately 280 square feet of office space in Clovis, CA on a month-to-month lease at a monthly rent of $ 1,504 .

19 – SUBSEQUENT EVENTS

January 25, 2023, the company completed a 35:1 reverse stock split on its common stock.

All share and per share data have been retroactively

adjusted for this reverse split.

of cure period

January 26, 2023, the Company received a notification letter from the Listing Qualifications Department of Nasdaq notifying the Company

that, it had been granted an additional 180 days or until July 24, 2023, to regain compliance with the Minimum Bid Price Requirement

on its Series 1 Preferred stock.

Rule Compliance

February 8, 2023, the Company received a notification letter from the Listing Qualifications Department of Nasdaq notifying the Company

that it has regained compliance with Listing Rule 5550(a)(2) and is in compliance with all applicable listing standards.

The Company’s

common stock will continue to be listed and traded on The Nasdaq Stock Market.

The hearing scheduled for March 16, 2023 before the Hearings

Panel has been cancelled.

April 6, 2023, 109,553 shares of Series 1 Preferred Stock were issued to pay dividends to holders of Series 1 Preferred Stock.

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

Amount, payable semiannually.

April 13, 2023, the Company issued an aggregate of 20,226 shares of common stock to settle $ 150,000 of notes payable and accrued interest,

and $ 53,069 of excess value of shares issued to be recorded as interest expense.

May 4, 2023, the Company issued an aggregate of 36,740 shares of common stock to settle $ 275,000 of notes payable and accrued interest,

and $ 87,256 of excess value of shares issued to be recorded as interest expense.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements