What changed in this filing

/stocks — the workspaceLOADING

Item 1. Business

2023-12-28 compared with 2022-12-28 · 274 added, 210 removed, 5 unchanged (99% of the section changed)

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

technology company.

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

industrial solutions, and intelligent security systems.

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

“us”, “Company”, “registrant”, “Cemtrex” or “management” refer to Cemtrex,

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 company.

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

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

and its 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 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

During 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.

Cemtrex’s 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

Vicon provides innovative, mission critical security and video surveillance solutions utilizing Artificial Intelligence (AI)

based data algorithms.

Industrial Services

Cemtrex’s 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.

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

high precision equipment in a wide variety of industrial markets like automotive, printing and 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.

Impacts of COVID-19 on our Business

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

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

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

Overall bookings level in our business were down by more than

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

Bookings and revenue have largely recovered in this calendar year compared

to last year.

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

has resulted in delays of several months.

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

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

at a minimum.

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

shrink and our operational costs to rise.

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

pricing to cover these additional costs while remaining competitive.

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

The COVID-19 pandemic and the resulting

supply chain issues and inflation has the potential to cause adverse effects to our customers, suppliers or business partners in locations

that have or will experience more pronounced disruptions, which could result in a reduction to future revenue and manufacturing output

as well as delays in our new product development activities.

However, opportunities in the video surveillance field have been growing

for Vicon products.

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

which cannot be reasonably estimated at this time.

Future developments include the emergence of new virus variants that are more contagious

or harmful than prior variants, the actions taken to contain or mitigate its impact both within and outside the jurisdictions where we

operate, the impact on governmental programs and budgets, the development of treatments or vaccines, and the resumption of widespread

economic activity.

Due to the inherent uncertainty of the unprecedented and rapidly evolving situation, we are unable to predict with

any confidence the likely impact of the COVID-19 pandemic on our future operations.

with the Securities and Exchange Commission

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

Securities and Exchange Commission (“SEC”)

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

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

(the “SEC Order”).

SEC Order also directed Mr.

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

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

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

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

and in connection with the purchase or sale of securities.

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

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

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

or deceit upon the purchaser.

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

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

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

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

paid to the SEC.

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

that must be paid to the SEC.

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

Cemtrex Corporate

Cemtrex’s Corporate segment

is the holding company of our other two segments.

Recent Developments

Sale of former Cemtrex Brands

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, 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.

On November 22, 2022, the Company completed the above

disposition for the following consideration.

Cemtrex XR, Inc.

$895,000 comprised of:

$75,000 in cash payable at Closing;

5% 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.

Cemtrex Advanced Technologies, Inc.

$10,000 in cash payable at Closing;

5% 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 $5,000,000 with a $10,000,000 cap.

The Company’s Board of Directors,

excluding Saagar Govil who abstained from all voting on these agreements, approved these actions and agreements.

Acquisition of Heisey Mechanical

July 1, 2023, the Company under AIS, completed the acquisition of a leading service contractor and steel fabricator that specializes

in industrial and water treatment markets, Heisey Mechanical, Ltd.

(“Heisey”) based in Columbia, Pennsylvania for

$2,400,000 plus adjustments for the outstanding contract assets and liabilities of $393,291.

The real estate of the business was

purchased at fair market value on August 30, 2023, for $1,500,000 in a separate transaction.

provides the water treatment industry with a variety of fabricated vessels and equipment including ASME pressure vessels, heat exchangers,

mix tanks, reactors, and other specialized fabricated equipment.

Additionally, the contracting team assists with installation and service

of fabricated items.

The company has over 33,000 square feet of manufacturing floor space in its facility and an experienced staff of

fabricators, welders, and field mechanics.

The purchase price allocation

presented below is still preliminary but has been developed based on an estimate of fair values of Heisey’s identifiable tangible

and intangible assets acquired and liabilities assumed as of July 1, 2023.

The final allocation of the purchase price will be determined

within one year from the closing date of the Heisey acquisition.

The consideration transferred

and preliminary allocation of Heisey’s tangible and intangible assets and liabilities, are as follows:

Consideration Transferred:

Seller’s note

Financed amount

Total consideration transferred

Purchase Price Allocation:

Contract assets

Machinery and equipment

Contract liabilities

Accrued expenses

Total consideration transferred

The pro forma summary below presents

the results of operations as if the Heisey acquisition occurred on October 1, 2021.

Proforma adjustments for the twelve months ended September

30, 2023, includes $127,800 of depreciation expense from acquired fixed assets, $127,883 of interest expense on the debt used in the acquisition.

Proforma adjustments for the twelve months ended September 30, 2022, includes $255,600 of depreciation expense from acquired fixed assets,

$81,140 of interest expense on the debt used in the acquisition.

The pro forma summary uses estimates and assumptions based on information

available at the time.

Management believes the estimates and assumptions to be reasonable; however, actual results may have differed

significantly from this pro forma financial information.

The pro forma information does not reflect any cost savings, operating synergies

or revenue enhancements that might have been achieved from combining the operations.

The unaudited pro forma summary is provided for illustrative

purposes only and does not purport to represent the Company’s actual consolidated results of operations had the acquisition been

completed as of the date presented, nor should it be considered indicative of Cemtrex’s future consolidated results of operations.

For the year ended

September 30, 2023

September 30, 2022

(13,038,817 )

On August 30, 2023, the Company

acquired a mortgage in the amount of $1,200,000 from Fulton Bank to finance the purchase of the properties formerly owned by Heisey Mechanical

The mortgage carries interest at the Secured Overnight Financing Rate (SOFR) plus 2.8% and matures on September 30, 2043.

Common Stock Reverse Stock Split

On 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

Notice of Delisting, Extension of cure period,

and Subsequent Compliance

Series 1 Preferred Stock

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”).

On 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 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.

On September 8, 2023, Cemtrex Inc.

(the “Company”) received a letter from the Nasdaq Hearings Panel (“Panel”)

informing the Company that the Panel has granted the Company a temporary exception to regain compliance with The Nasdaq Stock Market LLC’s

(“Nasdaq” or the “Exchange”) Listing Rule 5555(a)(1) (the “Bid Price Rule”) by no later than January

The Company has announced a special meeting of Series 1 Preferred stock shareholders scheduled for December 26, 2023, to approve

the reverse stock split.

On December 26, 2023, the Company held the meeting but failed to establish a quorum and has adjourned the meeting

to December 29, 2023.

On 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”).

On 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.

On 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.

The Company 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.

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.

Settlement with the Securities and Exchange Commission

On 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”).

The 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

The 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.

The 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.

In 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.

Also, 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.

received a civil monetary penalty of three hundred and fifty thousand dollars ($350,000) in the aggregate that must be paid to the SEC.

The Company and Mr.

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

The SEC Order can be accessed

at www.sec.gov.

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

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

We aim to grow in markets where we see significant

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

Generally, these markets are high growth markets that are

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

In these markets we seek to build or acquire businesses

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

We take a long-term approach with

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

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

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

cutting edge technology.

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

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

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

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

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

We constantly

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

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

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

The Company buys parts and

components to assemble and manufacture its equipment and products.

The Company also utilizes sub-suppliers and third-party vendors to

procure from or fabricate its components based on its design, engineering, and specifications.

The Company also enters into subcontracts

for field installation, which the Company supervises;

and the Company manages all technical, physical and commercial aspects of the performance

of the Company contracts.

To date, the Company has not experienced major difficulties either in obtaining fabricated components and other

materials and parts or in obtaining qualified subcontractors for installation work, however, there have been some delays in certain components

due to COVID-19.

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

on any one or a few suppliers.

However, the supply of materials or other items could be disrupted by natural disasters, international

trade tariffs, wars, pandemics, disputes and or other events.

Despite market price volatility for certain requirements and materials

pricing pressures at some of our businesses, the raw materials and various purchased components needed for the Company’s products

have generally been available in sufficient quantities.

In some instances, lead times have extended beyond normal due to logistic delays

and labor shortages occurring globally.

Company faces substantial competition in each of its products & services and principal markets.

Most of its competitors are larger

and have greater financial resources than the Company;

several are divisions of multi-national companies.

The Company competes on the

basis of price, engineering and technological expertise, know-how and the quality of its products, systems and services.

Additionally,

the Company’s management believes that the successful delivery, installation and performance of the Company’s products and

systems is a key factor in gaining business as customers typically prefer to make significant purchases from a company with a solid performance

Company obtains virtually all its contracts through competitive bidding.

Although price is an important factor and may in some cases

be the governing factor, it is not always determinative, and contracts are often awarded on the basis of the efficiency or reliability

of products, past performance records, and the engineering and technical expertise of the bidder.

Several companies market products that

compete directly with Company’s products.

Other companies offer products that potential customers may consider to be acceptable

alternatives to Company’s products and services.

The Company faces direct competition from companies with far greater financial,

technological, manufacturing and personnel resources.

the years, the Company has developed proprietary technologies that give it an edge in competing with its competitors.

Thus, the Company

relies on a combination of trade secrets and know-how to protect its intellectual property.

The Company currently has multiple patents

and patent claims that it owns.

Additionally, the Company has multiple patent applications pending related to the development of SmartDesk

and will pursue those patents based upon its financial resources.

Cemtrex continues to invest in research and development with intention

of developing proprietary technology and intellectual property as allowed by its financial resources.

and Marketing

Company sells its products globally and depending on the brand, relies on direct sales force, manufacturing representatives, distributors,

integrators and installers, commission sales agents, magazine advertisements, internet advertising, trade shows, trade directories and

catalogue listings, e-commerce, to market its products and services.

The Company’s arrangements with sales representatives accord

each a defined territory or market within which to sell some or all of its products and systems, provide for the payment of agreed-upon

sales commissions or wholesale pricing and are terminable at will.

The Company’s sales representatives do not have authority to

execute contracts on the Company’s behalf.

Company’s sales representatives also serve as ongoing liaison function between the Company and its customers during the installation

phase of the products and systems and address customers’ questions or concerns arising thereafter.

The Company selects representatives

based upon industry reputation, prior sales performance including number of prospective leads generated and sales closure rates, and

the breadth of territorial coverage, among other criteria.

inquiries received from potential customers are referred to the engineering personnel.

Thereafter, the Company’s sales and engineering

personnel jointly prepare a budget proposal, or a final bid.

The period between initial customer contact and issuance of an order is

generally between two and twelve months.

Company has been selling its SmartDesk directly from its website whereby customers can place orders and make payments.

The Company has

been marketing SmartDesk through direct-to-consumer internet channels, including social media sites such as Facebook and Instagram as

well as showcasing the product at several trade shows.

The Company plans to continue its marketing efforts for the SmartDesk by marketing

the product to enterprise clients and increase its overall marketing and sales efforts in online media.

Company’s principal customers in its AT segment are generally consumers, government agencies or commercial businesses.

The Company’s

principal customers in its IS segment include businesses engaged in manufacturing, chemical, packaging, printing, electronics, automotive,

construction, and metallurgical processing.

Historically, most of the customers have purchased individual products or systems which,

in many instances, operate in conjunction with products and systems supplied by others.

No one single customer accounts for more than

10% of its annual sales.

the AT segment, the Company is responsible for the design, production, supply, and delivery of products to its customers.

satisfy customer orders, the Company must consistently meet production deadlines and maintain a high standard of quality.

Company currently maintains different types of insurance, including general property coverage, and directors & officers’ insurance.

The Company also maintains product liability insurance with respect to its products and equipment.

Management believes that the insurance

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

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

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

Company’s operations are subject to certain foreign, federal, state and local regulatory requirements relating to, among others,

environmental, waste management, labor and health and safety matters.

Management believes that the Company’s business is operated

in material compliance with all such regulations.

The SEC Order can be accessed at www.sec.gov.

Business Strategy

Our focus is to utilize our resources

and capabilities to build brands and businesses in areas where we see unique opportunities to create exceptional value for our customers,

shareholders, and employees over the long term.

We aim to grow in markets where we see significant long-term opportunity to create an

attractive return on shareholder equity.

Generally, these markets are high growth markets that are changing due to innovation, new technologies,

or other industry shifts taking place.

In these markets we seek to build or acquire businesses that have attractive gross margins, strong

opportunities for customer retention, and are asset light.

We take a long-term approach with our strategies and seek returns over five

years or longer time horizons.

We believe our ability to attract

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

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

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

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

We continue to seek and execute

additional strategic acquisitions and focus on expanding our products and services as well as entering new markets.

We believe that the

diversity of our products and services and our ability to deliver full solutions to a variety of end markets provides us with multiple

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

We constantly look for opportunities

to gain new customers and penetrate geographic locations and end markets or acquire new product or service opportunities through acquisitions

that are operationally and financially beneficial for the Company.

The Company is not solely dependent

on, nor expects to become overtly dependent on, any one or a limited number of suppliers.

The Company also utilizes sub-suppliers and

third-party vendors to procure from or fabricate its components based on its design, engineering, and specifications.

The Company also

enters into subcontracts for field installation, which the Company supervises;

and the Company manages all technical, physical and commercial

aspects of the performance of the Company contracts.

The Company competes on the basis

of price, engineering and technological expertise, know-how and the quality of its products, systems and services.

Additionally, the Company’s

management believes that the successful delivery, installation and performance of the Company’s products and systems is a key factor

in gaining business as customers typically prefer to make significant purchases from a company with a solid performance history.

The Company obtains virtually

all its contracts through competitive bidding.

Although price is an important factor and may in some cases be the governing factor, it

is not always determinative, and contracts are often awarded on the basis of the efficiency or reliability of products, past performance

records, and the engineering and technical expertise of the bidder.

Several companies market products that compete directly with Company’s

Other companies offer products that potential customers may consider to be acceptable alternatives to Company’s products

and services.

Intellectual Property

Over the years, the Company has

developed proprietary technologies that give it an edge in competing with its competitors.

Thus, the Company relies on a combination of

trade secrets and know-how to protect its intellectual property.

The Company currently has multiple patents and patent claims that it

Cemtrex continues to invest in research and development with the intention of developing proprietary technology and intellectual

property as allowed by its financial resources.

Sales and Marketing

The Company sells its products

globally and depending on the brand, relies on direct sales force, manufacturing representatives, distributors, integrators and installers,

commission sales agents, magazine advertisements, internet advertising, trade shows, trade directories and catalogue listings, e-commerce,

to market its products and services.

The Company’s arrangements with sales representatives accord each a defined territory or market

within which to sell some or all of its products and systems, provide for the payment of agreed-upon sales commissions or wholesale pricing

and are terminable at will.

The Company’s sales representatives do not have authority to execute contracts on the Company’s

The Company’s sales representatives

also serve as an ongoing liaison function between the Company and its customers during the installation phase of the products and systems

and address customers’ questions or concerns arising thereafter.

The Company selects representatives based upon industry reputation,

prior sales performance including number of prospective leads generated and sales closure rates, and the breadth of territorial coverage,

among other criteria.

Technical inquiries received from

potential customers are referred to the engineering personnel.

Thereafter, the Company’s sales and engineering personnel jointly

prepare a budget proposal, or a final bid.

The period between initial customer contact and issuance of an order is generally between two

and twelve months.

The Company’s principal

customers in its Security segment are generally system integrators or channel partners who then sell our products and solutions to our

end customers including, government agencies or commercial businesses.

Historically, most of the customers have purchased individual products

or systems which, in many instances, operate in conjunction with products and systems supplied by others.

The Company’s principal

customers in its Industrial Services segment include businesses engaged in manufacturing, chemical, packaging, printing, electronics,

automotive, construction, and metallurgical processing.

No one single customer accounts for more than 10% of its annual sales.

For the Security segment, the

Company is responsible for the design, production, supply, and delivery of products to its customers.

In order to satisfy customer orders,

in both segments, the Company must consistently meet production deadlines and maintain a high standard of quality.

The Company currently maintains

different types of insurance, including general property coverage, and directors and officers’ insurance.

The Company also maintains

product liability insurance with respect to its products and equipment.

Management believes that the insurance coverage that it has is

adequate for its current business needs.

The Company employs approximately

328 full-time employees and approximately 5 part-time employees as of the date of this Annual Report, including 118 engaged in engineering,

129 in manufacturing and field service and 86 in administrative, sales and marketing functions.

Government Regulation

The Company’s operations

are subject to certain foreign, federal, state and local regulatory requirements relating to, among others, environmental, waste management,

labor and health and safety matters.

Management believes that the Company’s business is operated in material compliance with all

such regulations.

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

What changed 10-K

Item 1. Business