What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2023-08-10 compared with 2023-05-11 · 260 added, 191 removed, 712 unchanged (39% of the section changed)

7 unchanged sentences

Trade receivables, net

Trade receivables - related party

Trade receivables - related

Trade receivables, net

Inventory –net of allowance for inventory obsolescence

Prepaid expenses and other assets

Assets of discontinued operations

Inventory –net of

allowance for inventory obsolescence

Prepaid expenses and other

of discontinued operations

Total current assets

3 unchanged sentences

Note receivable - related party

Liabilities & Stockholders’ Equity

& Stockholders’ Equity

Current liabilities

Accounts payable

Accounts payable - related party

Accounts payable - related

Accounts payable

Short-term liabilities,

net of unamortized original issue discounts

Lease liabilities - short-term

3 unchanged sentences

Accrued income taxes

Liabilities of discontinued operations

of discontinued operations

Total current liabilities

5 unchanged sentences

Other long-term liabilities

Paycheck Protection Program Loans

Deferred Revenue - long-term

Total long-term liabilities

Paycheck Protection Program

Revenue - long-term

long-term liabilities

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, 2,183,463 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

Stockholders’ equity

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

shares authorized, Series 1, 3,000,000 shares authorized, 2,293,016 shares issued and 2,228,916 shares outstanding as of June 30,

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 June 30, 2023 and September 30, 2022

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

shares authorized, 957,760 shares issued and outstanding at June 30, 2023 and 754,711 shares issued and outstanding at September

Additional paid-in capital

2 unchanged sentences

( 54,929,020 )

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

Treasury stock, 64,100

shares of Series 1 Preferred Stock at June 30, 2023 and September 30, 2022

Accumulated other comprehensive

Total Cemtrex stockholders’

Non-controlling interest

Total liabilities and shareholders’ equity

liabilities and shareholders’ equity

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

2 unchanged sentences

For the three months ended

For the six months ended

For the nine months ended

Cost of revenues

1 unchanged sentence

General and administrative

Research and development

Total operating expenses

Operating income/(loss)

and development

operating expenses

income/(loss)

( 1,531,297 )

2 unchanged sentences

Other income/(expense)

Interest expense

( 1,254,185 )

1 unchanged sentence

( 3,641,432 )

( 2,715,887 )

Total other expense, net

( 1,222,561 )

Total other (expense)/income,

( 1,219,533 )

( 3,323,484 )

Net loss before income taxes

Net loss before income

( 1,165,759 )

1 unchanged sentence

( 8,028,990 )

Income tax benefit/(expense)

Loss from Continuing operations

tax benefit/(expense)

(Loss)/income from Continuing

( 1,185,400 )

1 unchanged sentence

( 7,781,049 )

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

Income/(loss) from discontinued

operations, net of tax

( 3,212,108 )

3 unchanged sentences

( 10,063,448 )

Less income/(loss) in noncontrolling interest

Net loss attributable to Cemtrex, Inc.

Less loss in noncontrolling

loss attributable to Cemtrex, Inc.

$ ( 1,146,524 )

3 unchanged sentences

Income (loss) per share - Basic & Diluted

Continuing Operations

Discontinued Operations

Weighted Average Number of Shares-Basic & Diluted

Weighted Average Number of Shares-Diluted

Weighted Average Number of Shares-Basic

Consolidated Statements of Comprehensive Loss

For the three months ended

For the six months ended

Other comprehensive income (loss)

For the nine months ended

Other comprehensive loss

$ ( 1,172,119 )

2 unchanged sentences

$ ( 10,063,448 )

Foreign currency translation loss

Comprehensive loss

currency translation gain/(loss)

Comprehensive

( 1,149,649 )

1 unchanged sentence

( 10,404,459 )

Less comprehensive (loss) income attributable to noncontrolling interest

Comprehensive loss attributable to Cemtrex, Inc.

comprehensive income attributable to noncontrolling interest

Comprehensive loss attributable

to Cemtrex, Inc.

$ ( 1,175,244 )

8 unchanged sentences

Treasury Stock,

64,100 shares of

Comprehensive

Stockholders’

Additional Paid-in

Series 1 Preferred

other Comprehensive

Cemtrex Stockholders’

Non- controlling

at September 30, 2022

23 unchanged sentences

$ ( 148,291 )

balance value

Foreign currency translation

Share-based compensation

Dividends paid in Series 1

preferred shares

Shares issued to pay notes

Income/(loss) attributable

to noncontrolling interest

Shares issued to pay for services

( 1,146,524 )

at June 30, 2023

$ ( 62,947,549 )

$ ( 148,291 )

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

4 unchanged sentences

Treasury Stock,64,100

64,100 shares of

Series 1 Preferred

Comprehensive

Stockholders’

Non- controlling

Stockholders’Equity

at September 30, 2021

22 unchanged sentences

$ ( 51,107,260 )

at March 31, 2022

$ ( 148,291 )

$ ( 51,107,260 )

$ ( 148,291 )

Foreign currency translation

Share-based compensation

Shares issued to pay notes

Dividends paid in Series 1

preferred shares

Income/(loss) attributable

to noncontrolling interest

at June 30, 2022

$ ( 51,788,053 )

$ ( 148,291 )

$ ( 51,788,053 )

$ ( 148,291 )

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

1 unchanged sentence

Consolidated Statements of Cash Flows

For the six months ended

For the nine months ended

Cash Flows from Operating Activities

5 unchanged sentences

Noncash lease expense

Bad debt expense

Bad debt expense (recovery)

Share-based compensation

Income tax expense/ (benefit)

Interest expense paid in equity shares

Accounts payable paid in equity shares

Accrued interest on notes payable

1 unchanged sentence

Gain/(loss) on marketable securities

( 2,234,478 )

Discharge of Paycheck Protection Program Loans

5 unchanged sentences

Prepaid expenses and other current assets

Other liabilities

Accounts payable

5 unchanged sentences

Income taxes payable

Other liabilities

Net cash used by operating activities - continuing operations

12 unchanged sentences

( 10,214,044 )

Net cash used by investing activities - continuing operations

( 5,425,408 )

Net cash provided by investing activities - discontinued operations

Net cash used by investing activities

( 5,427,757 )

Net cash (used in)/provided by investing activities - continuing operations

Net cash used by investing activities - discontinued operations

Net cash (used in)/provided by investing activities

Cash Flows from Financing Activities

Proceeds from notes payable

Payments on notes payable

Payments on debt

( 1,176,763 )

Payments on Paycheck Protection Program Loans

Payments on bank loans

Net cash provided by financing activities - continuing operations

( 1,280,991 )

Net cash used by financing activities - discontinued operations

Net cash (used)/provided by financing activities

( 1,280,991 )

Effect of currency translation

6 unchanged sentences

Cash and equivalents

Less cash attributed to discontinued operations

Restricted cash

3 unchanged sentences

Consolidated Statements of Cash Flows (Continued)

Supplemental Disclosure of Cash Flow Information:

Cash paid during the period for interest

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

Disclosure of Cash Flow Information:

paid during the period for interest

paid during the period for income taxes, net of refunds

Schedule of Non-Cash Investing and Financing Activities

issued to pay for services

issued to pay notes payable

of property and equipment through vendor financing

issued in connection with note payable

in right of use asset

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

35 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;

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;

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.

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 ;

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

in SAFE (common equity) at any subsequent fundraising or exit above $5M with a $10M cap.

5 unchanged sentences

adjusted for this reverse split.

of cure period and Subsequent Compliance

of Delisting, Extension of cure period, and Subsequent Compliance

1 Preferred Stock

9 unchanged sentences

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

July 25, 2023, the Company received a Notice of Staff Determination from the Listing Qualifications Department of Nasdaq notifying the

Company that its Series 1 Preferred Stock had not gained compliance and would be suspended from trading at the opening of business on

August 3, 2023.

The Company has requested a hearing regarding the delisting that has been scheduled for September 14, 2023, which

will stay the suspension and filing of Form 25-NSE with the Securities and Exchange Commission.

Company intends to continue actively monitoring the bid price for its Series 1 preferred stock between now and the hearing date and will

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

35 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 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.

continuing operations for the nine months ending June 30, 2023 of $ 4,835,914 and has debt obligations over the next year of $ 17,185,167

and working capital deficit of $ 967,489 , that raise substantial doubt with respect to the Company’s ability to continue as a going

our working capital and current debt indicate a substantial doubt regarding the Company’s ability to continue as a going concern,

39 unchanged sentences

The Company evaluates its estimates and assumptions on an ongoing basis.

prior year amounts have been reclassified for consistency with the current year presentation.

These reclassifications had no effect on

the reported results of operations.

condensed consolidated financial statements include the accounts of the Company, its wholly owned subsidiaries, Cemtrex Technologies

Ltd., Advanced Industrial Services, Inc., and the Company’s majority owned subsidiary Vicon Industries, Inc.

and its subsidiary,

Vicon Industries Ltd.

All inter-company balances and transactions have been eliminated in consolidation.

Ltd., Advanced Industrial Services, Inc., Advanced Industrial Leasing, Inc., and the Company’s majority owned subsidiary

Vicon Industries, Inc.

and its subsidiary, Vicon Industries Ltd.

All inter-company balances and transactions have been eliminated in

consolidation.

Pronouncements

12 unchanged sentences

periods within that reporting period.

The Company is 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.

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

41 unchanged sentences

In accordance with ASC 310 – Receivables, the

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

Company has discounted the royalties due and during the nine-month ended June 30, 2023, has recognized $ 691,611 of royalties due and

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

8 unchanged sentences

Inventory, net

Prepaid expenses and other assets

Property and equipment, net

Prepaid expenses and other

Property and equipment,

Total Assets Sold

2 unchanged sentences

Short-term liabilities

Long-term liabilities

Total Liabilities Transferred

Net assets sold

Pretax loss on sale of Cemtrex Advanced Technologies, Inc, and Cemtrex XR, Inc.Companies

Pretax loss on sale

of Cemtrex Advanced Technologies, Inc, and Cemtrex XR, Inc.Companies

$ ( 2,455,341 )

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

and liabilities included within discontinued operations on the Company’s Condensed Consolidated Balance Sheets at June 30, 2023,

and September 30, 2022, are as follows;

SCHEDULE OF ASSETS AND LIABILITIES INCLUDED WITHIN DISCONTINUED OPERATIONS

September 30,

Current assets

1 unchanged sentence

Trade receivables, net

Inventory –net of allowance for inventory obsolescence

Inventory –net of allowance for inventory

Prepaid expenses and other assets

20 unchanged sentences

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 and six month periods ended March 31,

net of tax in the Company’s Condensed Consolidated Statements of Operations for the three and nine month periods ended June 30,

2023 and 2022, are as follows:

Three months ended

Six months ended

Nine months ended

Total net sales

Cost of sales

Operating, selling, general and administrative expenses

Operating, selling, general and administrative

Other (income)/expenses

6 unchanged sentences

Income tax provision

Discontinued operations, net of tax

Discontinued operations,

$ ( 838,301 )

7 unchanged sentences

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

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

For the three and nine

months ended June 30, 2023, and 2022, the following items were excluded from the computation of diluted net loss per common share as

their effect is anti-dilutive:

1 unchanged sentence

For the three months ended

For the six months ended

For the nine months ended

5 – SEGMENT INFORMATION

3 unchanged sentences

following tables summarize the Company’s segment information:

SCHEDULE OF SEGMENT INFORMATION

OF SEGMENT INFORMATION

Industrial Services

Three months ended March 31, 2023

months ended March 31, 2023

Three months ended June 30, 2023

Nine months ended June 30, 2023

Industrial Services

15 unchanged sentences

$ ( 3,196,712 )

Three months ended March 31, 2022

months ended March 31, 2022

$ ( 3,323,484 )

Industrial Services

Three months ended June 30, 2022

Nine months ended June 30, 2022

Industrial Services

Cost of revenues

15 unchanged sentences

$ ( 304,872 )

September 30,

Identifiable Assets

Industrial Services

Discontinued operations

6 – RESTRICTED CASH

3 unchanged sentences

with the plan.

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

These funds, as required by the plan are restricted in nature and amounted to $ 805,237 at June 30, 2023, and $ 1,577,915

at September 30, 2022.

24 unchanged sentences

to continue as a going concern.

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

SCHEDULE OF FAIR VALUE OF ASSETS

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

OF FAIR VALUE OF ASSETS

Quoted Prices

14 unchanged sentences

Trade receivables

Allowance for doubtful accounts

Accounts receivables, net, total

Allowance for doubtful

Accounts receivables,

receivables include amounts due for shipped products and services rendered.

2 unchanged sentences

net, consist of the following:

SCHEDULE OF INVENTORY, NET

OF INVENTORY, NET

September 30,

3 unchanged sentences

Inventory, gross

Allowance for inventory obsolescence

( 1,025,989 )

Allowance for

inventory obsolescence

( 1,088,377 )

Inventory –net of allowance for inventory obsolescence

Inventory –net

of allowance for inventory obsolescence

10 – PREPAID AND OTHER CURRENT ASSETS

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 .

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 $ 1,187,067 .

and other current assets consisting of the following:

OF PREPAID AND OTHER CURRENT ASSETS

Prepaid expenses

Prepaid inventory

Deferred costs

Prepaid income taxes

VAT & GST tax receivable

Contract assets

expenses and other assets total

11 – PROPERTY AND EQUIPMENT

and equipment are summarized as follows:

SUMMARY OF PROPERTY AND EQUIPMENT

OF PROPERTY AND EQUIPMENT

September 30,

7 unchanged sentences

( 10,572,033 )

Property and equipment, net

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.

Property and equipment,

expense for the three months ended June 30, 2023, and 2022, were $ 249,881 and $ 427,811 , respectively.

Depreciation expense for the nine

months ended June 30, 2023, and 2022, were $ 698,269 , and $ 1,038,138 , respectively.

12 – OTHER ASSETS

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 .

As of September 30, 2022, the Company had other assets of $ 1,399,745

which was comprised of rent security deposits of $ 204,388 , Investment in Masterpiece VR valued at $ 1,000,000 , and other assets of $ 195,357 .

November 13, 2020, Cemtrex made a $ 500,000 investment and on January 19, 2022, made an additional $ 500,000 investment via a simple agreement

6 unchanged sentences

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

No impairment has been recorded for the three and six months

ended March 31, 2023.

No impairment has been recorded for the three and nine months

ended June 30, 2023.

assets consist of the following:

OF OTHER ASSETS

Rental deposits

Investment in Masterpiece VR

Other deposits

Demonstration equipment

supplied to resellers

13 – RELATED PARTY TRANSACTIONS

6 unchanged sentences

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 June 30, 2023, and September 30, 2022, there was $ 3,372 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.

20 unchanged sentences

Govil (see NOTE 1).

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

of June 30, 2023, there was $ 578,388 in trade receivables due from these companies.

Of these receivables $ 131,922 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 March 31, 2023, there were royalties receivable from the sale of Cemtrex, XR, Inc.

paid by Cemtrex related to payroll during the transition of employees to the new company and some subscription services that are set

up on auto pay with a credit card.

The remaining $ 446,466 is related to services provided by Cemtrex Technologies Pvt.

in the normal

course of business.

of June 30, 2023, there were royalties receivable from the sale of Cemtrex, XR, Inc.

of $ 691,611 .

3 unchanged sentences

The weighted average remaining term of our operating leases was

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 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.

approximately 3 years at June 30, 2023, and 3 years at June 30, 2022.

Lease liabilities were $ 2,213,341 with $ 716,896 classified as short-term

at June 30, 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 5.64 % at June 30, 2023, and 5.66 % at June 30, 2022.

The Company used the rate implicit

1 unchanged sentence

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 March

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 per month.

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

30, 2023, is set forth below:

SCHEDULE OF RECONCILIATION OF UNDISCOUNTED CASH FLOWS TO OPERATING LEASE LIABILITIES

OF RECONCILIATION OF UNDISCOUNTED CASH FLOWS TO OPERATING LEASE LIABILITIES

Years ending September 30,

4 unchanged sentences

Discounted lease payments

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

SCHEDULE OF LEASE COSTS

costs for the three and nine months ended June 30, 2023, and 2022 are set forth below.:

OF LEASE COSTS

For the three months ended

For the six months ended

Finance lease costs

For the nine months ended

Operating lease costs

15 unchanged sentences

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.

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.

5 unchanged sentences

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

April 3, 2023, The Company and SeKureID Solutions Corp., entered into a software license agreement, where the company obtained the right

to use source code for its security products in exchange for $ 1,125,000 payable in (15) fifteen equal monthly installments of $ 75,000 .

The current balance of $ 900,000 is presented on the Condensed Consolidated Balance Sheets as of June 30, 2023, under Short-term liabilities,

net of unamortized original issue discounts.

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

3 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 % ( 7.24 % as of March 31, 2023 and 5.35 % as of September 30, 2022)

Secured Overnight Financing Rate (“SOFR”) plus 2.37 % ( 7.46 % as of June 30, 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 %( 7.24 % as of March 31, 2023 and 5.35 % as of September 30, 2022)

SOFR plus 2.37 %( 7.46 % as of June 30, 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 March 31, 2023.

This loan is secured by certain assets of the Company.

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

SOFR plus 2.37 % ( 7.46 % as of June 30, 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 March 31, 2023.

The Company was in compliance with loan covenants as of June 30, 2023.

This loan is secured by certain assets of the Company.

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

SOFR plus 2.37 % ( 7.46 % as of June 30, 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 March 31, 2023.

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

The Company was in compliance with loan covenants as of June 30, 2023.

This loan is secured by the underlying asset

SOFR plus 2.62 % ( 7.71 % as of June 30, 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 $ 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 $ 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.

Unamortized original issue discount balance of $ 105,578 and $ 1,064,778 as of June 30, 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 June 30, 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.

Software License Agreement - $ 1,125,000 , for the purchase of software source code for use in our Security segment products

Total lines of credit and secured liabilities

5 unchanged sentences

Lines of credit and secured liabilities, Long Term

16 – SHAREHOLDERS’ EQUITY

16 – STOCKHOLDERS’ EQUITY

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

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.

As of June 30, 2023, and September 30, 2022, there

were 2,343,016 and 2,129,122 shares issued and 2,278,916 and 2,065,022 shares outstanding, respectively.

1 Preferred Stock

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

the nine months ended June 30, 2023, 213,894 shares of Series 1 Preferred Stock were issued to pay dividends to holders of Series 1 Preferred

of June 30, 2023, and September 30, 2022, there were 2,293,016 and 2,079,122 shares of Series 1 Preferred Stock issued and 2,228,916

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

C Preferred Stock

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

of June 30, 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

As of June 30, 2023, there were 957,760 shares issued

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

3 unchanged sentences

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 .

the nine months ended June 30, 2023, 161,718 shares of the Company’s common stock have been issued to satisfy $ 487,716 of notes

payable, $ 662,284 in accrued interest, and $ 276,151 of excess value of shares issued recorded as interest expense.

the nine months ended June 30, 2023, 22,017 shares of the Company’s common stock have been issued in exchange for services valued

at $ 141,872 .

17 – SHARE-BASED COMPENSATION

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

the nine months ended June 30, 2023, and 2022, the Company recognized $ 93,313 and $ 111,402 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.

As of June 30, 2023, $ 76,831 of unrecognized share-based compensation expense is expected to be recognized

over a period of two years.

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

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

the nine months ended June 30, 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’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

43,000 square feet of office and warehouse space in York, PA.

The IS segment also leases approximately 15,500 square feet of warehouse

space in Emigsville, PA from a third party in a three-year lease at a monthly rent of $ 4,555 expiring on August 31, 2025 .

The Industrial Services segment also leases approximately 15,500 square

feet of warehouse space in Emigsville, PA from a third party in a three-year lease at a monthly rent of $ 4,555 expiring on August 31,

Company’s Security segment leases (i) approximately 6,700 square feet of office and warehouse space in Pune, India from a third

5 unchanged sentences

19 – SUBSEQUENT EVENTS

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.

Mechanical Acquisition

July 1, 2023, the Company completed the acquisition of a service contractor and steel fabricator that specializes in industrial and water

treatment markets, Heisey Mechanical, Ltd.

(“Heisey”) based in Columbia, Pennsylvania to expand the Company’s Industrial

Services segment.

total consideration given by Cemtrex to the shareholder of Heisey for full control, was approximately $ 2,400,000 with $ 2,160,000 in cash,

$ 240,000 in a seller’s note.

Cemtrex funded the transaction with a $ 2,160,000 term loan from Fulton Bank.

Approximately $ 25,000

in acquisition costs will be capitalized.

The real estate the business occupies is expected to be purchased later for $ 1,500,000 .

July 25, 2023, the Company received a Notice of Staff Determination from the Listing Qualifications Department of Nasdaq notifying the

Company that its Series 1 Preferred Stock had not gained compliance and would be suspended from trading at the opening of business on

August 3, 2023.

The Company has requested a hearing regarding the delisting that has been scheduled for September 15, 2023, which will

stay the suspension and filing of Form 25-NSE with the Securities and Exchange Commission.

shares issued

July 31, 2023, the Company issued an aggregate of 32,488 shares of common stock to settle $ 200,000 of notes payable and accrued interest,

and $ 25,792 of excess value of shares issued recorded as interest expense.

July 6, 2023, the Company issued an aggregate of 1,686 shares of common stock in exchange for services valued at $ 7,500 .

August 4, 2023, the Company issued an aggregate of 6,400 shares of common stock in exchange for services valued at $ 45,625 .

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