What changed in this filing

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Item 1. Financial Statements

2024-02-14 compared with 2023-08-10 · 551 added, 626 removed, 346 unchanged (77% of the section changed)

2 unchanged sentences

Consolidated Balance Sheets

and cash equivalents

receivables, net

receivables, net - related party

receivables, net

expenses and other current assets

current assets

Cash and equivalents

Restricted cash

Short-term investments

Trade receivables, net

Trade receivables - related

Trade receivables, net

Inventory –net of

allowance for inventory obsolescence

Prepaid expenses and other

of discontinued operations

Total current assets

Property and equipment, net

Right-of-use assets

Royalties receivable - related party

Note receivable - related party

and equipment, net

operating lease assets

receivable, net- related party

receivable, net - related party

& Stockholders’ Equity

Current liabilities

Accounts payable

Accounts payable - related

Accounts payable

Short-term liabilities,

net of unamortized original issue discounts

payable - related party

line of credit

maturities of long-term liabilities

lease liabilities - short-term

Deposits from customers

Accrued expenses

Deferred revenue

Accrued income taxes

of discontinued operations

Total current liabilities

from customers

current liabilities

payable to bank

operating lease liabilities

long-term liabilities

Loans payable to bank

Long-term lease liabilities

Notes payable

Mortgage payable

Other long-term liabilities

Paycheck Protection Program

Protection Program Loans

Revenue - long-term

long-term liabilities

Total liabilities

Commitments and contingencies

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

Accumulated deficit

and contingencies

Stockholders’

stock , $ 0.001 par value, 10,000,000 shares authorized, Series 1, 3,000,000 shares authorized, 2,408,053 shares issued and 2,343,953

shares outstanding as of December 31, 2023 and 2,293,016 shares issued and 2,228,916 shares outstanding as of September 30, 2023

(liquidation value of $ 10 per share)

C, 100,000 shares authorized, 50,000 shares issued and outstanding at December 31, 2023 and September 30, 2023

Preferred stock, value

stock, $ 0.001 par

value, 50,000,000 shares

authorized, 1,055,636 shares

issued and outstanding at December 31, 2023 and 1,045,783

shares issued and outstanding at September 30, 2023

paid-in capital

( 65,333,389 )

( 64,125,895 )

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

liabilities and shareholders’ equity

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

other comprehensive income

Cemtrex stockholders’ equity

Non-controlling

liabilities and stockholders’ equity

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

1 unchanged sentence

Consolidated Statements of Operations

For the three months ended

For the nine months ended

Cost of revenues

Operating expenses

General and administrative

the three months ended

and administrative

and development

operating expenses

income/(loss)

( 1,951,436 )

( 1,492,789 )

( 7,724,118 )

Other income/(expense)

( 1,254,185 )

( 3,717,557 )

( 3,641,432 )

Total other (expense)/income,

( 1,219,533 )

( 3,323,484 )

Net loss before income

( 1,165,759 )

( 4,816,273 )

(expense)/income

income/(expense), net

( 1,128,234 )

tax benefit/(expense)

(Loss)/income from Continuing

other (expense)/income, net

( 1,145,317 )

loss before income taxes

( 1,243,644 )

( 3,096,753 )

Income/(loss) from discontinued

operations, net of tax

from Continuing operations

( 1,314,395 )

( 3,096,753 )

Income/(loss)

from discontinued operations, net of tax

( 3,239,621 )

1 unchanged sentence

( 6,336,374 )

Less loss in noncontrolling

loss in noncontrolling interest

loss attributable to Cemtrex, Inc.

1 unchanged sentence

$ ( 6,277,211 )

$ ( 8,018,529 )

$ ( 9,879,991 )

Income (loss) per share - Basic & Diluted

Weighted Average Number of Shares-Basic

Income/(loss) per share -

Basic & Diluted

Average Number of Shares-Basic & Diluted

Consolidated Statements of Comprehensive Loss

For the three months ended

For the nine months ended

Other comprehensive loss

$ ( 1,172,119 )

$ ( 731,702 )

the three months ended

comprehensive loss

$ ( 1,303,903 )

$ ( 6,336,374 )

currency translation gain/(loss)

currency translation gain

Comprehensive

1 unchanged sentence

( 6,112,805 )

( 10,404,459 )

comprehensive income attributable to noncontrolling interest

Comprehensive loss attributable

to Cemtrex, Inc.

$ ( 1,175,244 )

$ ( 983,491 )

Comprehensive

loss attributable to Cemtrex, Inc.

$ ( 979,730 )

3 unchanged sentences

Consolidated Statement of Stockholders’ Equity

Preferred Stock

Comprehensive

Stockholders’

Treasury Stock,

Additional Paid-in

Series 1 Preferred

other Comprehensive

Cemtrex Stockholders’

Non- controlling

Comprehensive

Stockholders’

at September 30, 2023

1 unchanged sentence

$ ( 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

currency translation gain

paid in Series 1 preferred shares

Income/(loss)

attributable to noncontrolling interest

issued to pay for services

( 1,207,494 )

3 unchanged sentences

$ ( 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 )

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 .

1 unchanged sentence

Consolidated Statement of Stockholders’ Equity (Continued)

Preferred Stock

Treasury Stock,

Series 1 Preferred

Comprehensive

Non- controlling

Stockholders’Equity

Stockholders’

at September 30, 2022

1 unchanged sentence

$ ( 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

$ ( 54,929,020 )

$ ( 148,291 )

at December 31, 2021

$ ( 46,386,013 )

$ ( 148,291 )

Foreign currency translation

Share-based compensation

Shares issued with note payable

Income/(loss) attributable

to noncontrolling interest

( 4,721,247 )

at March 31, 2022

$ ( 51,107,260 )

$ ( 148,291 )

currency translation gain

issued to pay notes payable

paid in Series 1 preferred shares

Income/(loss)

attributable to noncontrolling interest

( 6,277,211 )

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

at December 31, 2022

$ ( 61,206,231 )

5 unchanged sentences

Consolidated Statements of Cash Flows

For the nine months ended

Cash Flows from Operating Activities

$ ( 8,048,022 )

$ ( 10,063,448 )

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

Depreciation and amortization

Loss on disposal of property and equipment

Noncash lease expense

Bad debt expense (recovery)

Share-based compensation

Income tax expense/ (benefit)

Interest expense paid in equity shares

Accrued interest on notes payable

Amortization of original issue discounts on notes payable

Gain/(loss) on marketable securities

( 2,234,478 )

Discharge of Paycheck Protection Program Loans

Changes in operating assets and liabilities net of effects from acquisition of subsidiaries:

Trade receivables

the three months ended

Flows from Operating Activities

$ ( 1,303,903 )

Trade receivables - related party

$ ( 6,336,374 )

Prepaid expenses and other current assets

Accounts payable

Accounts payable - related party

Operating lease liabilities

Deposits from customers

Accrued expenses

Deferred revenue

Income taxes payable

Other liabilities

Net cash used by operating activities - continuing operations

to reconcile net loss to net cash used by operating activities

and amortization

on disposal of property and equipment

lease expense

expense paid in equity shares

Accounts payable paid in equity shares

interest on notes payable

royalty income

of original issue discounts on notes payable

of loan origination costs

Changes in operating

assets and liabilities net of effects from acquisition of subsidiaries:

( 1,541,371 )

receivables - related party

expenses and other current assets

( 2,072,392 )

Net cash provided by operating activities - discontinued operations

Net cash used by operating activities

payable - related party

lease liabilities

from customers

taxes payable

cash used by operating activities - continuing operations

( 3,139,073 )

( 5,872,310 )

Cash Flows from Investing Activities

Purchase of property and equipment

Proceeds from sale of property and equipment

Investment in MasterpieceVR

Proceeds from sale of marketable securities

Purchase of marketable securities

cash provided by operating activities - discontinued operations

cash used by operating activities

( 3,139,073 )

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 debt

( 3,370,884 )

Payments on Paycheck Protection Program Loans

Payments on bank loans

Net cash provided by financing activities - continuing operations

Flows from Investing Activities

of property and equipment

from sale of property and equipment

from sale of marketable securities

in MasterpieceVR

cash used by by investing activities - continuing operations

cash provided by investing activities - discontinued operations

cash used by investing activities

Flows from Financing Activities

on revolving line of credit

( 8,371,144 )

Net cash used by financing activities - discontinued operations

Net cash (used)/provided by financing activities

( 2,204,743 )

Effect of currency translation

Net decrease in cash, cash equivalents, and restricted cash

on Paycheck Protection Program Loans

on bank loans

cash provided by/(used by) financing activities

of currency translation

decrease in cash, cash equivalents, and restricted cash

( 2,531,284 )

( 4,332,586 )

Cash, cash equivalents, and restricted cash at beginning of period

Cash, cash equivalents, and restricted cash at end of period

Balance Sheet Accounts Included in Cash, Cash Equivalents, and Restricted Cash

Cash and equivalents

Less cash attributed to discontinued operations

Restricted cash

Total cash, cash equivalents, and restricted cash

cash attributed to discontinued operations

cash equivalents, and restricted cash at beginning of period

cash equivalents, and restricted cash at end of period

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

1 unchanged sentence

Consolidated Statements of Cash Flows (Continued)

Sheet Accounts Included in Cash, Cash Equivalents, and Restricted Cash

and cash equivalents

cash, cash equivalents, and restricted cash

Disclosure of Cash Flow Information:

4 unchanged sentences

issued to pay notes payable

of property and equipment through vendor financing

issued in connection with note payable

of fixed asset purchase

in right of use asset

7 unchanged sentences

and its subsidiaries.

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.

Company’s reporting segments consist of Security and Industrial Services.

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

16 unchanged sentences

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

Corporate segment is the holding company of our other two segments.

of former Cemtrex Brands

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.

November 22, 2022, the Company completed the above disposition for the following consideration.

comprised of:

in cash payable at Closing;

royalty of all revenues on the Business to be paid 90 days after the end of each calendar

year for the next three years;

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 ;

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.

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.

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

SCHEDULE OF BUSINESS ACQUISITION OF TANGIBLE AND INTANGIBLE ASSETS AND LIABILITIES

Consideration

consideration transferred

Price Allocation:

and equipment

consideration transferred

pro forma summary below presents the results of operations as if the Heisey acquisition occurred on October 1, 2022.

Proforma adjustments

for the three months ended December 31, 2022, includes $ 63,900 of depreciation expense from acquired fixed assets, $ 33,400 of interest

expense on the debt used in the acquisition.

The pro forma summary uses estimates and assumptions based on information available at the

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 the Company’s future consolidated results of operations.

SCHEDULE OF PRO FORMA FINANCIAL INFORMATION

( 6,440,203 )

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

Company’s Board of Directors, excluding Saagar Govil who abstained from all voting on these agreements, approved these actions

and agreements.

Stock Reverse Stock Split

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 Delisting, Extension of cure period, and Subsequent Compliance

1 Preferred Stock

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 Ltd.

The mortgage carries interest at the Secured Overnight Financing Rate (SOFR) plus 2.8 % and matures

on September 30, 2043 .

Notices for Listing Deficiencies

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

3 unchanged sentences

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

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.

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.

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

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

1 unchanged sentence

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

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.

On September 8, 2023, 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 19, 2024.

has announced a special meeting of Series 1 Preferred stock shareholders was scheduled for December 26, 2023, to approve the reverse

On December 26, 2023, the meeting was adjourned to December 29, 2023, due to insufficient votes represented by proxy or

virtually in person to constitute a quorum for the transaction of business at the Special Meeting.

On December 29, 2023, there were still

insufficient votes represented by proxy or virtually in person to constitute a quorum thus the resolution did not pass.

to the balance sheet date, the Company has bought back 71,951 shares for $ 69,705 under the Share Repurchase Program approved on August

22, 2023, that allows the Company to repurchase shares of the Series 1 Preferred Stock through various means, including through privately

negotiated transactions and through an open market program.

The Company’s Series 1 Preferred Stock was delisted from the NASDAQ

Capital Market on January 22, 2024.

The Series 1 Preferred Stock is now quoted on the OTC Markets under the symbol “CETXP”.

Concern Considerations

17 unchanged sentences

Company has incurred substantial losses of $ 9,196,875 and $ 13,020,958 for fiscal years 2023 and 2022, respectively, and has losses on

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,

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

continuing operations for the three months ending December 31, 2023, of $ 1,314,395 and has current liabilities of $ 28,696,123

and working capital deficit of $ 2,284,787 , that raise substantial doubt with respect to the Company’s ability to continue as a

going concern.

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.

The Company has approximately $ 2.84 million

in cash as of December 31, 2023.

Additionally, the Company has (i) secured a line of credit for its Vicon brand to fund operations, which

as of December 31, 2023, has available capacity of $ 1,642,676 , (ii) sold unprofitable brands, reducing the cash required to maintain

those brands, (iii) continually reevaluate our pricing model on our Vicon brand to improve margins on those products, and (iv) 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

if successful, would be sufficient to meet the capital demands of our current operations for at least the next twelve months, there is

no guarantee that we will succeed.

2 unchanged sentences

The Company currently does not have adequate

cash to meet our short or long-term needs.

The condensed consolidated financial statements do not include any adjustments relating to

this uncertainty.

cash or available liquidity/available capacity on our lines of credit to meet our short or long-term needs.

Absent an ability to raise

additional outside capital and restructure or refinance all or a portion of our debt, the Company will be unable to meet its obligations

as they become due over the next twelve months beyond the issuance date.

condensed consolidated financial statements do not include any adjustments relating to this uncertainty.

2 – INTERIM STATEMENT PRESENTATION

24 unchanged sentences

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., 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

Accounting Policies

1 unchanged sentence

includes a summary of the significant accounting policies used in the preparation of the consolidated financial statements.

Issued Accounting Standards

Adopted Accounting Pronouncements

June 2016, the FASB issued Accounting Standards Update No.

7 unchanged sentences

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.

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.

On October 1, 2023, the Company implemented this standard and there has been no material change

to the financial statements.

Company estimates credit losses associated with our accounts receivable portfolio segment using an expected credit loss model, which

utilizes an aging schedule methodology based on historical information and adjusted for asset-specific considerations, current economic

conditions and reasonable and supportable forecasts.

Company will utilize the Probability-of-default method for financing receivables and loans.

Expected credit losses are determined by

multiplying the probability of default (i.e., the probability the asset will default within the given time frame) by the loss given default

(the percentage of the asset not expected to be collected because of default).

The Company considers sources of repayment associated

with a financial asset when determining its credit losses, including collection against the collateral and certain embedded credit enhancements,

such as guarantees or insurance.

The allowance for credit losses were immaterial as of December 31, 2023.

Issued Accounting Pronouncements Not Yet Effective

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

13 unchanged sentences

The Company is currently evaluating the impact of this ASU on our financial statements.

November 2023, the FASB issued ASU 2023-07, “Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures”

(“ASU 2023-07”), which enhances the disclosures required for operating segments in the Company’s annual and interim

consolidated financial statements.

ASU 2023-07 is effective for the Company for annual reporting for fiscal 2025 and for interim period

reporting beginning in fiscal 2026 on a retrospective basis.

Early adoption is permitted.

The Company is currently evaluating the impact

of our pending adoption of ASU 2023-07 on our consolidated financial statements.

December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740):

Improvements to Income Tax Disclosures,” which requires

public entities to disclose consistent categories and greater disaggregation of information in the rate reconciliation and for income

It also includes certain other amendments to improve the effectiveness of income tax disclosures.

The guidance is effective

for financial statements issued for annual periods beginning after December 15, 2024, with early adoption permitted.

The Company is required

to adopt this standard prospectively in fiscal year 2026 for the annual reporting period ending September 30, 2026.

The Company is currently

in the process of evaluating the impact of adoption on its Consolidated Financial Statements.

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

10 unchanged sentences

In accordance with ASC 310 – Receivables, the

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.

Company has discounted the royalties due and during the three-month periods ended December 31, 2023, and 2022, has recognized $ 13,282 ,

and $ 4,427 , respectively, 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

1 unchanged sentence

SUMMARY OF LOSS ON SALE

Purchase Price

Less cash and cash equivalents transferred

Less liabilities assumed

cash and cash equivalents transferred

liabilities assumed

Net purchase price

Accounts receivable, net

Inventory, net

Prepaid expenses and other

Property and equipment,

Total Assets Sold

receivable, net

expenses and other assets

and equipment, net

Liabilities Transferred

Accounts payable

Short-term liabilities

Total Liabilities Transferred

Net assets sold

Pretax loss on sale

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

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 June 30, 2023,

and September 30, 2022, are as follows;

SCHEDULE OF ASSETS AND LIABILITIES INCLUDED WITHIN DISCONTINUED OPERATIONS

Current assets

Cash and equivalents

Trade receivables, net

Inventory –net of allowance for inventory

Prepaid expenses and other assets

Total current assets

Property and equipment, net

Current liabilities

Accounts payable

Short-term liabilities

Deposits from customers

Accrued expenses

Total current liabilities

Long-term liabilities

Deferred revenue

Total long-term liabilities

Total liabilities

of December 31, 2023, and September 30, 2023, there were no assets or liabilities included within discontinued operations on the Company’s

Condensed Consolidated Balance Sheets.

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

5 unchanged sentences

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 and nine month periods ended June 30,

2023 and 2022, are as follows:

Three months ended

Nine months ended

Total net sales

Income/(loss)

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

Technologies, Inc.

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, 2023 and 2022, are as follows:

SCHEDULE OF FINANCIAL STATEMENTS INCLUDED WITHIN DISCONTINUED OPERATIONS

the three months ended

Cost of sales

Operating, selling, general and administrative

Other (income)/expenses

Income (loss) from discontinued operations

( 2,282,399 )

Amortization of discounted royalties

Loss on sale of discontinued operations

( 2,455,341 )

Adjustment of benefit obligation

Income tax provision

Discontinued operations,

$ ( 838,301 )

selling, general and administrative expenses

(income)/expenses

(loss) from discontinued operations

of discounted royalties

on sale of discontinued operations

( 2,455,341 )

of benefit obligation

tax provision

operations, net of tax

$ ( 3,239,621 )

following table illustrates the approximate disaggregation of the Company’s revenue based off timing of revenue recognition for

the three months ended December 31, 2023 and 2022:

OF DISAGGREGATION OF REVENUE RECOGNITION

the three months ended

Point-in-time

5 – 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 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:

For the three months

ended December 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

For the nine months ended

5 – SEGMENT INFORMATION

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

reports and evaluates financial information for three current segments:

the Security segment, Industrial Services segment and the Corporate

following tables summarize the Company’s segment information:

OF SEGMENT INFORMATION

Industrial Services

Three months ended June 30, 2023

Nine months ended June 30, 2023

Industrial Services

Cost of revenues

Operating expenses

Sales, general, and administrative

Depreciation and amortization

Research and development

Operating income/(loss)

$ ( 1,032,183 )

$ ( 623,577 )

the three months ended

the three months ended December 31, 2023 and 2022, loss per share basic and diluted for continuing operations are calculated as follows:

SCHEDULE OF LOSS PER SHARE BASIC AND DILUTED

FOR CONTINUING OPERATION

the three months

from Continuing operations

$ ( 1,314,395 )

$ ( 3,096,753 )

Other income/(expense)

loss in noncontrolling interest

stock dividends

loss applicable to common shareholders

( 1,217,986 )

( 3,037,590 )

Average Number of Shares-Basic & Diluted

per share - Basic & Diluted - Continuing Operations

6 – SEGMENT INFORMATION

Company reports and evaluates financial information for two reportable segments:

the Security segment and the Industrial Services

following tables summarize the Company’s reportable segment information and corporate expenses:

OF SEGMENT INFORMATION

Reportable Segments

and administrative

and amortization

and development

(loss)/income

$ ( 787,638 )

1 unchanged sentence

$ ( 738,372 )

Industrial Services

Three months ended June 30, 2022

Nine months ended June 30, 2022

Industrial Services

Cost of revenues

Operating expenses

Sales, general, and administrative

Depreciation and amortization

Research and development

Operating (loss)/income

$ ( 1,215,112 )

1 unchanged sentence

$ ( 1,951,436 )

income/(expense)

$ ( 134,261 )

1 unchanged sentence

$ ( 262,867 )

Other income/(expense)

$ ( 505,272 )

2 unchanged sentences

$ ( 1,145,317 )

Identifiable Assets

Industrial Services

7 – RESTRICTED CASH

3 unchanged sentences

with the plan.

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

These funds, as required by the plan are restricted in nature and amounted to $ 1,181,516 at December 31, 2023, and $ 1,019,652

at September 30, 2023.

24 unchanged sentences

to continue as a going concern.

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

OF FAIR VALUE OF ASSETS

Quoted Prices

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

SCHEDULE OF FAIR VALUE OF ASSETS

Identical Assets

Investment in marketable securities

(included in short-term investments)

Fair value assets

Quoted Prices

in marketable securities (included in short-term investments)

Identical Assets

September 30,

Investment in marketable securities

(included in short-term investments)

Fair value assets

in marketable securities (included in short-term investments)

9 – TRADE RECEIVABLES, NET

receivables, net consist of the following:

OF TRADE RECEIVABLES, NET

September 30,

Trade receivables

Allowance for doubtful

SCHEDULE OF TRADE RECEIVABLES, NET

for credit losses

Accounts receivables,

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 payments.

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

10 – PREPAID EXPENSES AND OTHER CURRENT ASSETS

expenses and other current assets consist of the following:

SUMMARY OF PREPAID AND OTHER CURRENT ASSETS

origination costs

and GST tax receivable

expenses and other current assets total

11 – INVENTORY, NET

net, consist of the following:

OF INVENTORY, NET

September 30,

Raw materials

Work in progress

Finished goods

Inventory, gross

Allowance for

inventory obsolescence

( 1,088,377 )

net consisted of the following:

SCHEDULE OF INVENTORY, NET

Inventory, net

of allowance for inventory obsolescence

10 – PREPAID AND OTHER CURRENT ASSETS

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

Company maintained an allowance for obsolete inventories of $ 502,528 and $ 618,021 at December 31, 2023 and September 30, 2023, respectively.

12 – PROPERTY AND EQUIPMENT

and equipment are summarized as follows:

OF PROPERTY AND EQUIPMENT

September 30,

Building and leasehold improvements

Furniture and office equipment

Computers and software

Machinery and equipment

SUMMARY OF PROPERTY AND EQUIPMENT

and leasehold improvements

and office equipment

and equipment

Property and equipment, gross

2 unchanged sentences

( 10,490,114 )

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.

and equipment, net

expense for the three months ended December 31, 2023, and 2022, was $ 368,301 and $ 530,830 , respectively and is recorded in general and

administrative expenses on the Company’s Condensed consolidated statements of operations.

13 – GOODWILL

in the carrying amount of goodwill, by segment, are as follows:

SCHEDULE OF GOODWILL BY SEGMENT

Industrial Services

at September 30, 2023

at December 31, 2023

of December 31, 2023, and September 30, 2023, accumulated impairment losses of $ 3,316,000 related to the Security segment have been recorded.

14 – OTHER ASSETS

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

for future equity (“SAFE”) in MasterpieceVR.

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

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

MasterpieceVR is a software company that

is developing software for content creation using virtual reality.

The investment is included in other assets in the accompanying balance

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

No impairment has been recorded for the 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

November 13, 2020, Cemtrex made a $ 500,000 investment, on January 19, 2022, made an additional $ 500,000 investment, and on July 18, 2023,

and October 5, 2023, made an additional $ 100,000 investment on each date via a simple agreement for future equity (“SAFE”)

in MasterpieceVR.

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

future equity rounds up to a valuation cap, as defined.

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

using virtual reality.

The investment is recorded at cost and is included in other assets in the accompanying Condensed consolidated

balance sheets.

No impairment has been recorded for the three months ended December 31, 2023.

assets consisted of the following:

SCHEDULE OF OTHER ASSETS

in Masterpiece VR

Demonstration

equipment supplied to resellers

15 – ACCRUED EXPENSES

expenses consisted of the following:

SCHEDULE OF ACCRUED EXPENSES

expenses total

16 – DEFERRED REVENUE

Company’s deferred revenue as of and for the three months ended December 31, 2023, and 2022, were as follows:

SCHEDULE OF DEFERRED REVENUE

the three months ended

revenue at beginning of period

software revenues

revenue at end of period

current portion

deferred revenue at end of period

For the three months ended December 31, 2023 and 2022, the Company recognized revenue of $ 608,843 and $ 506,185 , respectively, that was

previously included in the beginning balance of deferred revenues.

17 – CONTRACT ASSETS AND LIABILITIES

contracts typically provide for a schedule of billings on percentage of completion of specific tasks inherent in the fulfillment of the

Company’s performance obligation(s).

The schedules for such billings usually do not precisely match the schedule on which costs

are incurred.

As a result, contract revenue recognized in the statements of operations can and usually does differ from amounts that

can be billed to the customer at any point during the contract.

Amounts by which cumulative contract revenue recognized on a contract

as of a given date exceeds cumulative billings and unbilled receivables to the customer under the contract are reflected as a current

asset in the balance sheets under the caption “Contract assets.” Amounts by which cumulative billings to the customer under

a contract as of a given date exceed cumulative contract revenue recognized are reflected as a current liability in the balance sheets

under the caption “Contract liabilities.” Conditional retainage represents the portion of the contract price withheld until

the work is substantially complete for assurance of the Company’s obligations to complete the job.

following is a summary of the Company’s uncompleted contracts:

SCHEDULE OF CONTRACT ASSETS AND LIABILITIES

incurred on uncompleted contracts

billings to date

( 14,216,138 )

( 4,811,777 )

Net billings in excess of costs, Ending balance

$ ( 886,706 )

in the accompanying balance sheet under the following captions

in excess, net

retainage, net

contract assets , net

contract liabilities

$ ( 988,725 )

$ ( 980,319 )

in the accompanying balance sheet under the following captions

Contract assets, net

Costs in excess, net

Total contract assets, net

Contract liabilities

Billings in excess

( 1,407,878 )

Total contract liabilities

$ ( 1,407,878 )

$ ( 369,890 )

the three months ended December 31, 2023 and 2022, the Company recognized revenue of $ 791,161 and $ 352,847 , respectively, that was

previously included in the beginning balance of contract liabilities.

18 – RELATED PARTY TRANSACTIONS

2 unchanged sentences

On July 31, 2022, the Company negotiated

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

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

totaling $ 761,585 .

1 unchanged sentence

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 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.

the Company’s subsidiary based in India

were written off to bad debt in fiscal year 2022.

February 26, 2021, the Company entered into a Settlement Agreement and Release with Aron Govil regarding transactions Cemtrex’s

Board of Directors determined were incorrectly handled and accounted for.

Govil executed a secured promissory note (the “Note”)

in the amount of $ 1,533,280 .

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.

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.

of December 31, 2023, and September 30, 2023, there was $ 3,811

payable due to Ducon Technologies, Pvt Ltd., which is also owned by Aron Govil, respectively.

of December 31, 2023, and September 30, 2023, there was $ 638,207 and $ 637,208 receivable due from Ducon Technologies, Pvt Ltd., respectively.

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

1 unchanged sentence

Inc., which include the brands SmartDesk, Cemtrex XR, Virtual Driver Interactive, Bravo Strong, and good tech (formerly Cemtrex Labs),

Govil (see NOTE 1).

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 and some subscription services that are set

Cemtrex XR, Inc.

was purchased for $ 890,000 comprised of $ 75,000 in cash and 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, Mr.

Govil shall be obligated to pay the difference between $820,000 and the royalties paid.

The first Royalty payment is due by March 30, 2024.

Cemtrex Advanced Technologies, Inc.

was purchased for $10,000 in cash, 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, and $1,600,000 in SAFE (common

equity) at any subsequent fundraising or exit above $5,000,000 with a $10,000,000 cap.

Subsequent to the sale of Cemtrex Advanced Technologies,

the business has ceased operations.

The company has recognized no gain in relation to the 5 % royalties.

of December 31, 2023, there was $ 638,485 in trade receivables due from these companies.

Of these receivables $ 133,778 are related to

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

up on auto pay with a credit card.

2 unchanged sentences

course of business.

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

As of December 31, 2023, there were $ 64,919 in payables due to these companies.

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

of $ 708,174 ,

of which $ 220,000 is considered short-term and is presented on the Company’s Condensed Consolidated Balance Sheet under the

caption “Trade receivables, net – related party”.

Company is party to contracts where we lease property from others under contracts classified as operating leases.

2 unchanged sentences

The weighted average remaining term of our operating leases was

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

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

approximately 2.75 years

at December 31, 2023, and 3

years at September 30, 2023.

Lease liabilities were $ 2,155,559

with $ 728,875

classified as short-term at December 31, 2023,

and $ 2,348,689 with

classified as short-term at September 30, 2023.

The weighted average discount rate used to measure lease liabilities was approximately

at December 31, 2023, and September 30, 2023.

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.

Cash used by operating leases were $ 193,130 , and $ 132,963 for the three months ended December 31, 2023 and 2022.

The Company has elected not to recognize lease assets and liabilities for leases with a term of 12 months or less.

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

Short-term rent expense was $ 1,800 for the three months ended December 31, 2023.

Company’s security segment leases approximately 1,037 square feet of office space in Clovis, CA on a month-to-month lease at a

rent of $ 5,487 per month.

Short-term rent expense was $ 16,461 for the three months ended December 31, 2023.

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

31, 2023, is set forth below:

OF RECONCILIATION OF UNDISCOUNTED CASH FLOWS TO OPERATING LEASE LIABILITIES

Years ending September 30,

Operating Leases

2027 & Thereafter

Undiscounted lease payments

Amount representing interest

Discounted lease payments

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

ending September 30,

lease payments

representing interest

lease payments

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

OF LEASE COSTS

For the three months ended

For the nine months ended

Operating lease costs

Total lease cost

the three months ended

Short-term lease costs

20 – LINES OF CREDIT AND LONG-TERM 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.

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.

line of credit

October 5, 2023, the Company obtained a revolving line of credit in the amount of $ 5,000,000

from Pathward, N.A..

The interest rate will be a rate which is equal to three percentage points ( 3 %)

in excess of that rate shown in the Wall Street Journal as the prime rate (the “Effective Rate”) and matures twenty-four

months from the closing date.

This loan is secured by the Company’s eligible accounts receivable and eligible finished goods

The Company’s ability to borrow against the line of credit is limited by the value of the eligible assets.

December 31, 2023, the Company had enough eligible assets to access the full credit line.

The Company was in compliance with all

loan covenants as of December 31, 2023.

The funds were used to pay the NIL Funding term loan and will fund operations of the Vicon

As of December 31, 2023, this loan had a balance of $ 3,357,324 ,

with $ 54,400

of unamortized loan origination fees, which is included in “Prepaid expenses” on the accompanying Condensed Consolidated

Balance Sheet.

There were $ 1,642,676

in available funds as of December 31, 2023.

August 31, 2023, the Company and Streeterville Capital, LLC entered into a standstill agreement for the two notes held by Streeterville

Capital, LLC.

The terms of this agreement are the earlier of (a) the date that is ninety (90) days from the Effective Date, and (b) the

date that the Company completes an equity offering on either Form S-1 or Form S-3 (the “Standstill Period”), Streeterville

Capital, LLC will not seek to redeem any portion of the Notes, and (c) the Company agrees to prepay to Lender fifty percent (50%) of

the net proceeds received by Borrower in connection with all equity financings until such time as Borrower has raised at least $ 5,000,000

in aggregate net proceeds.

following table outlines the Company’s secured liabilities:

OF LINES OF CREDIT AND LIABILITIES

September 30,

Interest Rate

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 % ( 7.46 % 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.

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.

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 June 30, 2023.

This loan is secured by certain assets of the Company.

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 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 .

For the purchase of VDI.

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 June 30, 2023 and September 30, 2022 respectively.

Note payable - $ 9,205,000 .

Bank - $ 360,000 fund equipment for AIS.

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

This loan is secured

by certain assets of the Company.

plus 2.37 % ( 7.75 % as of December 31, 2023 and 7.68 % as of September 30, 2023).

Bank mortgage $ 2,476,000 .

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

This loan is secured by the

underlying asset.

plus 2.62 % ( 8.00 % on December 31, 2023 and ( 7.93 % on September 30, 2023).

Bank (HEISEY) - $ 1,200,000 mortgage loan;

requires monthly principal and interest payments through August 1, 2043 with a final payment

of remaining principal on September 1, 2043;

The loan is collateralized by 615 Florence Street and 740 Barber Street and guaranteed

by AIS and Cemtrex.

plus 2.80 % per annum ( 8.18 % as of December 31, 2023 and 8.11 % as of September 30, 2023).

Bank (HEISEY) - $ 2,160,000 .

promissory note related to purchase of Heisey;

requires 84 monthly principal and interest payments;

note is collateralized by the Heisey assets and guaranteed by the Parent;

matures in 2030.

plus 2.80 % per annum ( 8.18 % as of December 31, 2023 and 8.11 % as of September 30, 2023).

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 , as of December 31, 2023 and September 30, 2023.

payable - $ 9,205,000 .

Less original issue discount $ 1,200,000 and legal fees $ 5,000 ,net cash received $ 8,000,000 .

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

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

28,572 shares of

common stock valued at $ 700,400 recognized as additional original issue discount.

Unamortized original issue discount balance of

$ 0 as of December 31, 2023 and September 30, 2023.

Payable - $ 240,000 For the purchase of Heisey Mechanical, Ltd.

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

of September 30, 2023.

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.

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

Bank Auto Loan - $ 28,331 , for the purchase of automobile at India office.

Monthly payments of ₹ 65,179 ($ 784.89 as translated

as of December 31, 2023).

Automobile is collateral for this loan.

Total secured liabilities

Current maturities

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Unamortized original issue discount

( 1,305,778 )

Lines of credit and secured liabilities, Long Term

liabilities, Long Term

21 – STOCKHOLDERS’ EQUITY

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

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.

As of December 31, 2023, and September 30, 2023,

there were 2,458,053 and 2,343,016 shares issued and 2,393,953 and 2,278,916 shares outstanding, respectively.

1 Preferred Stock

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

the three months ended December 31, 2023, 115,037 shares of Series 1 Preferred Stock were issued to pay dividends to holders of Series

1 Preferred Stock.

of December 31, 2023, and September 30, 2023, there were 2,408,053 and 2,293,016 shares of Series 1 Preferred Stock issued and 2,343,953

and 2,228,916 shares of Series 1 Preferred Stock outstanding, respectively.

C Preferred Stock

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

of December 31, 2023, and September 30, 2023, 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 June 30, 2023, there were 957,760 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.

All share and per share data have been retroactively

adjusted for this reverse split.

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

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 .

As of December 31, 2023, there were 1,055,636 shares

issued and outstanding and at September 30, 2023, there were 1,045,783 shares issued and outstanding.

the three months ended December 31, 2023, 9,853 shares of the Company’s common stock have been issued in exchange for services

valued at $ 40,000 .

22 – SHARE-BASED COMPENSATION

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

over a period of two years.

the three months ended December 31, 2023, and 2022, the Company recognized $ 7,557 and $ 39,842 of share-based compensation expense on

its outstanding options, respectively.

As of December 31, 2023, $ 55,748 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 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.

the three months ended December 31, 2023, no options were granted, cancelled, or forfeited.

23 – COMMITMENTS AND CONTINGENCIES

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 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 Industrial Services segment 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 .

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

2 unchanged sentences

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 .

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

time to time, the Company and its subsidiaries are involved in legal proceedings that are incidental to the operation of our business.

The Company continues to defend vigorously against all claims.

Although the ultimate outcome of any legal matter cannot be predicted

with certainty, based on present information, including assessment of the merits of the particular claim, as well as current accruals

and insurance coverage, the Corporation does not expect that such legal proceedings will have a material adverse impact on its condensed

consolidated financial statements.

24 – SUBSEQUENT EVENTS

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 .

from NASDAQ Capital Market and Repurchase of Series 1 Preferred Stock

to the balance sheet date, the Company has bought back 71,951 shares for $ 69,705 under the Share Repurchase Program approved on August

22, 2023, that allows the Company to repurchase shares of the Series 1 Preferred Stock through various means, including through privately

negotiated transactions and through an open market program.

This action proved ineffective to meet the Minimum Bid Price Requirement.

Company’s Series 1 Preferred Stock was suspended from the Nasdaq Capital Market on January 22, 2024.

The Series 1 Preferred Stock

is now quoted on the OTC Markets under the symbol “CETXP.”

informed the Company that Nasdaq will complete the delisting by filing a Form 25 Notification of Delisting with the SEC following the

lapse of applicable appeal periods.

The Company does not intend to appeal the Panel’s decision.

After the Form 25 is filed, the

delisting will become effective 10 days later.

The deregistration of the Company’s Series 1 Preferred Stock under Section 12(b)

of the Exchange Act will be effective for 90 days, or such shorter period as the SEC may determine, after filing of the Form 25.

of Registration Statement on Form S-1

January 17, 2024, the Company filed a preliminary Prospectus on Form S-1 to register shares of our common stock and common stock warrants

for sale through a placement agent.

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