What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2024-08-14 compared with 2024-05-14 · 676 added, 418 removed, 665 unchanged (62% of the section changed)

2 unchanged sentences

Consolidated Balance Sheets

and cash equivalents

receivables, net

receivables, net - related party

expenses and other current assets

Current assets

and equipment, net

operating lease assets

receivable, net - related party

Cash and cash

Restricted cash

Trade receivables, net

- related party

Trade receivables, net

Inventory, net

Contract assets, net

expenses and other current assets

Total current assets

Property and equipment, net

Right-of-use operating lease assets

Royalties receivable, net - related party

Note receivable, net - related party

& Stockholders’ Equity

payable - related party

line of credit

maturities of long-term liabilities

lease liabilities - short-term

from customers

Current liabilities

Accounts payable

Accounts payable - related

Accounts payable

Sales tax payable

Revolving line of credit

Current maturities of long-term

Operating lease liabilities

Deposits from customers

Accrued expenses

Contract liabilities

Deferred revenue

Total current liabilities

Long-term liabilities

Revenue - long-term

Long-term debt

Long-term operating lease

Other long-term liabilities

Deferred Revenue - long-term

long-term liabilities

and contingencies

Stockholders’

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

authorized, Series 1, 3,000,000 shares authorized, 2,408,053 shares issued and 2,272,002 shares outstanding as of March 31, 2024 and 2,293,016

shares issued and 2,228,916 shares outstanding as of September 30, 2023 (liquidation value of $ 10 per share)

Series C, 100,000 shares authorized, 50,000 shares

issued and outstanding at March 31, 2024 and September 30, 2023

Commitments and contingencies

Stockholders’ equity

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

shares authorized,

Series 1, 3,000,000 shares authorized, 2,456,827

shares issued and 2,392,727 shares outstanding as of June 30, 2024 and 2,293,016 shares issued and 2,228,916 shares outstanding as

of September 30, 2023 (liquidation value of $ 10 per share)

Series C, 100,000 shares authorized, 50,000

shares issued and outstanding at June 30, 2024 and September 30, 2023

Preferred stock value

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

authorized, 1,055,636 shares issued and outstanding at March 31, 2024 and 1,045,783 shares issued and outstanding at September 30, 2023

paid-in capital

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

shares authorized, 16,352,270 shares issued and outstanding at June 30, 2024 and 1,045,783 shares issued and outstanding at September

Additional paid-in capital

Accumulated deficit

( 75,787,626 )

( 64,125,895 )

Treasury stock, 136,051 shares of Series 1 Preferred

Stock at March 31, 2024 and 64,100 shares of Series 1 Preferred Stock at September 30, 2023

Treasury stock, 64,100 shares of Series 1

Preferred Stock at June 30, 2024, and September 30, 2023

other comprehensive income

6 unchanged sentences

the three months ended

the six months ended

and administrative

the nine months ended

Cost of revenues

Operating expenses

General and administrative

and development

4 unchanged sentences

( 1,492,789 )

(expense)/income

income/(expense), net

Other (expense)/income

Other (expense)/income,

Interest expense

( 1,254,185 )

1 unchanged sentence

( 3,717,557 )

other (expense)/income, net

Loss on excess fair value

( 7,255,528 )

loss before income taxes

( 7,255,528 )

in fair value of warrant liability

Total other expense, net

( 5,902,493 )

( 1,219,533 )

from Continuing operations

( 6,855,804 )

( 3,323,484 )

Net loss before income

( 9,082,009 )

Income/(loss)

from discontinued operations, net of tax

( 1,165,759 )

1 unchanged sentence

( 4,816,273 )

Loss from Continuing

( 9,149,303 )

(loss)/income in noncontrolling interest

( 1,185,400 )

( 12,043,882 )

( 4,835,914 )

(Loss)/income from discontinued

operations, net of tax

( 3,212,108 )

( 9,139,319 )

( 1,172,119 )

( 12,012,943 )

( 8,048,022 )

noncontrolling interest

loss attributable to Cemtrex, Inc.

3 unchanged sentences

$ ( 8,018,529 )

(Loss)/income

per share - Basic & Diluted

Average Number of Shares-Basic & Diluted

(Loss)/income per share - Basic & Diluted

Weighted Average Number of Shares-Basic

Consolidated Statements of Comprehensive Loss

the three months ended

the six months ended

the nine months ended

comprehensive loss

3 unchanged sentences

$ ( 8,048,022 )

currency translation loss

currency translation gain/(loss)

Comprehensive

2 unchanged sentences

( 12,127,374 )

comprehensive income/(loss) attributable to noncontrolling interest

( 8,119,201 )

Comprehensive

loss attributable to noncontrolling interest

Comprehensive

loss attributable to Cemtrex, Inc.

7 unchanged sentences

1 Preferred Stock

Stock Series 1

Stock Series C

Comprehensive

14 unchanged sentences

currency translation loss

of treasury stock

attributable to noncontrolling interest

( 1,473,211 )

at March 31, 2024

$ ( 66,806,600 )

$ ( 217,996 )

currency translation loss

paid in Series 1 preferred shares

Issuance of common stock

Exercise of prefunded

Exercise of Series

of treasury stock

3 unchanged sentences

( 8,981,026 )

at March 31, 2024

at June 30, 2024

$ ( 75,787,626 )

3 unchanged sentences

Consolidated Statement of Stockholders’ Equity (Continued)

Stock Series 1

Stock Series C

Comprehensive

13 unchanged sentences

$ ( 148,291 )

Balance, value

$ ( 61,206,231 )

$ ( 148,291 )

currency translation loss

3 unchanged sentences

issued to pay for services

at March 31, 2023

$ ( 61,801,025 )

$ ( 148,291 )

at March 31, 2023

$ ( 61,801,025 )

$ ( 148,291 )

Balance, value

currency translation gain/(loss)

paid in Series 1 preferred shares

issued to pay notes payable

Income/(loss)

attributable to noncontrolling interest

issued to pay for services

( 1,146,524 )

at June 30, 2023

$ ( 62,947,549 )

$ ( 148,291 )

$ ( 62,947,549 )

$ ( 148,291 )

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

1 unchanged sentence

Consolidated Statements of Cash Flows

the six months ended

Flows from Operating Activities

the nine months ended

Flows from Operating Activities

$ ( 12,012,943 )

$ ( 8,048,022 )

to reconcile net loss to net cash used by operating activities

and amortization

on disposal of property and equipment

lease expense

Income tax expense

expense paid in equity shares

payable paid in equity shares

interest on notes payable

royalty income

on marketable securities

of original issue discounts on notes payable

of loan origination costs

in operating assets and liabilities net of effects from acquisition of

subsidiaries:

Adjustments to reconcile net loss to net cash

used by operating activities

Depreciation and amortization

(Gain)/loss on disposal of property

and equipment

Noncash lease expense

Bad debt expense

Share-based compensation

Interest expense paid in

equity shares

Accounts payable paid in

equity shares

Accrued interest on notes

Non-cash royalty income

Amortization of original

issue discounts on notes payable

Amortization of loan origination

Loss on excess fair value

Changes in fair value of

warrant liability

( 2,807,890 )

Changes in operating assets and liabilities net of effects from acquisition

of subsidiaries:

Trade receivables

( 2,108,384 )

receivables - related party

expenses and other current assets

payable - related party

lease liabilities

from customers

taxes payable

cash used by operating activities - continuing operations

Trade receivables - related

Contract assets

Prepaid expenses and other

current assets

Accounts payable

( 1,588,439 )

Accounts payable - related

Sales tax payable

Operating lease liabilities

Deposits from customers

Accrued expenses

Contract liabilities

Deferred revenue

Income taxes payable

Net cash used by operating

activities - continuing operations

( 2,076,477 )

( 5,394,048 )

cash provided by operating activities - discontinued operations

2 unchanged sentences

( 2,919,185 )

Flows from Investing Activities

of property and equipment

from sale of property and equipment

in MasterpieceVR

Cash Flows from Investing

Purchase of property and equipment

Proceeds from sale of property and equipment

Royalties on related party revenues

Investment in MasterpieceVR

cash used by investing activities

Flows from Financing Activities

on revolving line of credit

Cash Flows from Financing

Proceeds on revolving line of credit

Payments on revolving line of credit

( 24,025,081 )

Payments on debt

( 7,818,405 )

on Paycheck Protection Program Loans

on bank loans

of treasury stock

( 1,260,837 )

Payments on Paycheck Protection Program Loans

Proceeds on bank loans

Purchases of treasury stock

Proceeds from offerings

Expenses on offerings

cash provided by/(used by) financing activities

of currency translation

decrease in cash, cash equivalents, and restricted cash

( 1,280,991 )

Effect of currency translation

Net increase/(decrease) in cash, cash equivalents,

and restricted cash

( 4,935,441 )

cash equivalents, and restricted cash at beginning of period

Cash, cash equivalents,

and restricted cash at beginning of period

cash equivalents, and restricted cash at end of period

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

and cash equivalents

cash, cash equivalents, and restricted cash

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

1 unchanged sentence

Consolidated Statements of Cash Flows (Continued)

Disclosure of Cash Flow Information:

paid during the period for interest

paid during the period for income taxes, net of refunds

Schedule of Non-Cash Investing and Financing Activities

issued to pay notes payable

of fixed asset purchase

in right of use asset

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

Cash and cash equivalents

cash, cash equivalents, and restricted cash

Supplemental Disclosure of Cash Flow Information:

Cash paid during the period for interest

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

Supplemental Schedule of Non-Cash Investing and Financing Activities

Shares issued to pay notes payable

Financing of fixed asset purchase

Purchase of property and equipment through vendor financing

Investment in right of use asset

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

40 unchanged sentences

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:

purchase price allocation presented below compares the preliminary allocation which was 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, compared to the final

consideration transferred 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

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Proforma adjustments

for the three months ended March 31, 2023, includes $ 63,900 of depreciation expense from acquired fixed assets, $ 32,460 of interest expense

on the debt used in the acquisition, and $ 41,331 of income tax expense.

Proforma adjustments for the six months ended March 31, 2023,

for the three months ended June 30, 2023, includes $ 63,900 of depreciation expense from acquired fixed assets, $ 31,500 of interest expense

on the debt used in the acquisition, and $ 20,739 of income tax benefit.

Proforma adjustments for the nine months ended June 30, 2023,

includes $ 191,700 of depreciation expense from acquired fixed assets, $ 97,359 of interest expense on the debt used in the acquisition,

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SCHEDULE OF PRO FORMA FINANCIAL INFORMATION

three months ended

six months ended

for the three months ended

for the six months ended

( 1,463,553 )

( 7,855,584 )

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

24 unchanged sentences

through privately negotiated transactions and through an open market program.

Subsequent to the balance sheet date, these shares were

On April 8, 2024, these shares were

The Company’s Series 1 Preferred Stock was delisted from the NASDAQ Capital Market on January 22, 2024.

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

Nasdaq filed a Form 25 on March 21, 2024.

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.

Nasdaq filed a Form 25 on March 21, 2024 and the

deregistration of the Company’s Series 1 Preferred Stock under Section 12(b) of the Exchange Act became effective for 90 days after

filing of the Form 25.

June 14, 2024, 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 meets 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 notification letter also disclosed that in the event the Company

does not regain compliance with the Minimum Bid Price Requirement by December 11, 2024, the Company may be eligible for additional time.

To qualify for additional time, the Company would be required to meet the continued listing requirement for market value of publicly

held shares and all other initial listing standards for The Nasdaq Capital Market, with the exception of the bid price requirement, and

would need to provide written notice of its intention to cure the deficiency during the second compliance period, by effecting a reverse

stock split, if necessary.

2024 Equity Financing

May 1, 2024, the Company entered into an underwriting agreement with Aegis Capital Corp., in connection with a firm commitment underwritten

public offering (the “Offering”), providing for the issuance of (i) 554,705 units (the “Common Units”), each

consisting of one share of common stock of the Company (“Common Stock”), a warrant to purchase one share of common stock

at an exercise price of $0.85 per share, which warrant will expire on the two-and-a-half year anniversary of the original issuance date

(the “Series A Warrants”), and a warrant to purchase one share of common stock at an exercise price of $0.85 per share, which

warrant will expire on the five-year anniversary of the original issuance date (the “Series B Warrants”);

and (ii) 11,210,000

pre-funded units (the “Pre-funded Units”), each consisting of one pre-funded warrant to purchase one share of common stock

(the “Pre-funded Warrants”), a Series A Warrant and a Series B Warrant.

The purchase price of each Unit was $0.85, and the

purchase price of each Pre-Funded Unit was $0.849.

The Pre-Funded Warrants are immediately exercisable and may be exercised at any time

until all of the Pre-Funded Warrants are exercised in full.

addition, the Company granted the Underwriter a 45-day option to purchase additional 1,764,705 shares of common stock and/or Pre-Funded

Warrants, representing up to 15 % of the number of common stock and Pre-Funded Warrants sold in the Offering, and/or additional 1,764,705

Series A Warrants representing up to 15 % of the Series A Warrants sold in the Offering, and/or additional 1,764,705 Series B Warrants

representing up to 15 % of the Series B Warrants sold in the Offering to cover over-allotments, if any.

The Offering closed on

An aggregate of 11,764,705 Units (which includes 554,705 shares of common stock) , 11,210,000 Pre-Funded Units (which

includes 11,210,000 Pre-Funded Warrants) , and a Series A Warrant and

a Series B Warrant were sold in the Offering.

On May 3, 2024, the Underwriter partially exercised its over-allotment

option with respect to 1,764,705 Series A Warrants and 1,764,705 Series B Warrants.

The aggregate gross proceeds to the Company were

approximately $ 10,035,293 , before deducting underwriting discounts and other issuance expenses of $ 995,333 recorded under the caption “ Other(expense)/income, net ” on the Company’s Condensed Consolidated Statements of Operations.

The underwriting discounts

and other issuance expenses were expensed since the Series A, Series B, and Pre-Funded Warrants were each determined to be liabilities

and recorded at their fair value.

2024 Warrants

Company evaluated the Series A, Series B, and Prefunded Warrants (collectively, the “Warrants”) in accordance with the guidance

at ASC 480, Distinguishing Liabilities from Equity and ASC 815-40, Derivatives and Hedging, and determined that the Warrants are

precluded from being considered indexed to the entity’s own stock, resulting in the Warrants being classified as a liability.

fair value of the Series A Warrants was determined based on the stock price on issuance of $ 0.277 multiplied by the total number of shares

of common stock issuable upon exercise of the Series A alternative cashless exercise.

Under the alternative cashless exercise, the Holder

is entitled to receive three times the normal number of shares issued in a cashless exercise.

The Series A Holder may only execute the

alternative cashless exercise after Stockholder Approval (and received June 17, 2024);

at the time of issuance, Stockholder Approval

was deemed perfunctory and almost certain to occur, and the most likely settlement option would be through the alternative cashless exercise.

As such, upon issuance, the total fair value of the Series A Warrants was $ 11,242,940 , which was based on 40,588,230 common shares issuable

under the alternative cashless exercise.

The measurement of fair value of the Series B Warrants were determined utilizing a Black-Scholes

model considering all relevant assumptions current at the date of issuance (i.e., share price of $ 0.277 , exercise price of

$ 0.85 , term of five years , volatility of 132 %, risk-free rate of 4.5 %, and expected dividend rate of 0 %).

The grant date fair value of

these Series B Warrants was estimated to be $ 2,942,711 on May 3, 2024, and such

warrants were classified as liabilities.

Due to the nominal exercise price, the fair value of the Prefunded Warrants was based

on the intrinsic value of each Warrant on the grant date.

The intrinsic value was calculated based on the May 3, 2024, stock price of

$ 0.277 and the strike price of $ 0.001 , resulting in a total fair value of $ 3,093,960 .

The total fair value of the Warrants upon issuance

was $ 17,279,611 .

Given that the gross proceeds received of $ 10,024,083 was less than the total fair value of the liability classified

Warrants, the Company recorded a loss on excess fair value of $ 7,255,527 at issuance.

Concern Considerations

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

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 six months ending March 31, 2024, of $ 2,894,579 and has debt obligations over the next year of $ 18,105,429

and working capital of $ 10,300,384 , that raise substantial doubt with respect to the Company’s ability to continue as a going concern.

current debt indicates 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 $ 2,916,120

in cash and cash equivalents as of March 31, 2024.

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

fund operations, which as of March 31, 2024, has available capacity of $ 980,766 ,

(ii) continually reevaluated its pricing model on our Vicon brand to improve margins on those products, (iii) entered into an

underwriting agreement in connection with underwritten public offering, the aggregate gross proceeds to the Company were

approximately $ 10,035,000 ,

before deducting underwriting discounts and other estimated expenses payable by the Company, and (iv) entered into a Standstill

Agreement with Streeterville Capital, LLC (“Streeterville”) in which Streeterville agreed not to seek to redeem any

portion of its two outstanding notes with the Company for a period of one year expiring on April 30, 2025, in

exchange, the Company agreed to pay to Streeterville the greater of $ 4,000,000

or fifty percent ( 50 %)

of the net proceeds the Company receives from the sale of any of its common stock or preferred stock during the Standstill

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, 2024, of $ 12,043,882

and has current liabilities of $ 14,004,886

and working capital of $ 12,400,461 along

with negative operating cash flows of $ 2,076,477 that raise substantial doubt with respect to the Company’s ability to

continue as a going concern.

Company’s working capital may not be sufficient to cover operating costs which indicates 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.

has $7,620,225 in cash and cash equivalents and restricted cash as of June 30, 2024.

Additionally, the Company has (i) secured a line

of credit for its Vicon brand to fund operations, which as of June 30, 2024, has available capacity of $2,269,675, (ii) continually reevaluated

its pricing model on our Vicon brand to improve margins on those products, (iii) entered into a Standstill Agreement with Streeterville

Capital, LLC (“Streeterville”) in which Streeterville agreed not to seek to redeem any portion of its two outstanding notes

with the Company for a period of one year expiring on April 30, 2025 in exchange, the Company agreed to pay to Streeterville the greater

of $4,000,000 or fifty percent (50%) of the net proceeds the Company receives from the sale of any of its common stock or preferred stock

during the Standstill Period.

To date, the Company has paid Streeterville $4,588,897 under this agreement.

the event additional capital is raised through equity offerings and/or debt is satisfied with equity, it may have a dilutive effect on

5 unchanged sentences

working capital needs.

As of March 31, 2024, the Company did not have adequate cash or available liquidity/available capacity on our

lines of credit to meet our short or long-term needs.

With the subsequent public offering, the Company has the ability to meet its debt

obligations for the next twelve months.

As of June 30, 2024, the Company may not have adequate cash or available liquidity/available capacity on our lines

of credit to meet our operational needs.

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

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

Reclassifications

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

These reclassifications had no effect on

the reported results of operations.

An adjustment has been made to the Condensed Consolidated Balance Sheet for September 30, 2023 and

the Condensed Consolidated Statements of Cash Flows for the nine months ended June 30, 2023.

The reclassification was to the caption

“Short-term investments” which has been reclassified to “Prepaid expenses and other current assets” on the Consolidated

Balance Sheet and “Gain/(loss) on marketable securities to “Prepaid expenses and other current assets” on the Condensed

Consolidated Statements of Cash Flows.

of an Immaterial Error in Previously Issued Financial Statements

to the issuance of our financial statements for the quarter ended June 30, 2023, an immaterial error was identified and has been corrected

in our historical information related to the calculation of earnings per share.

The original calculation did not take into account the

fair value of the Series 1 Preferred Stock dividends declared during the period.

effects of the correction to the individual effected line items in our Consolidated Statement of Operations are as follows:

SCHEDULE OF ERROR CORRECTIONS AND PRIOR PERIOD ADJUSTMENTS

the three months ended June 30, 2023

previously reported

per share - Basic & Diluted

the six months ended June 30, 2023

previously reported

per share - Basic & Diluted

Accounting Policies

1 unchanged sentence

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

Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s

specific terms and applicable authoritative guidance in ASC 480 (Topic 480, Distinguishing Liabilities from Equity) and ASC 815 (Topic

815, Derivatives and Hedging).

The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480,

meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification

under ASC 815, including whether the warrants are indexed to our own common shares and whether the warrant holders could potentially

require “net cash settlement” in a circumstance outside of our control, among other conditions for equity classification.

This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent

quarterly period end date while the warrants are outstanding.

issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component

of additional paid-in capital at the time of issuance.

For issued or modified warrants that do not meet all the criteria for equity classification,

the warrants are required to be recorded as a liability at their initial fair value on the date of issuance, and each balance sheet date

Changes in the estimated fair value of the warrants are recognized as a non-cash gain or loss in the Company’s condensed

consolidated statements of operations.

Adopted Accounting Pronouncements

10 unchanged sentences

and there has been no material change to the condensed consolidated financial statements.

The following table illustrates

the effect of implementation of Update 2016-13 on the condensed consolidated balance sheet:

following table illustrates the effect of implementation of Update 2016-13 on the current expected credit losses

for the following line items on the condensed consolidated balance sheet:

OF EFFECT IMPLEMENTATION ON CONDENSED CONSOLIDATED BALANCE SHEET

October 1, 2023

under ASC 326

September 30,

2023 Pre-ASC 326

Impact of ASC

Trade receivables, net

1, 2023 As reported under ASC 326

30, 2023 Pre-ASC 326 Adoption

of ASC 326 Adoption

Trade receivables,

Contract assets, net

Royalties receivable, net - related party

Note receivable, net - related party

Royalties receivable, net

- related party

Note receivable, net -

related party

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

8 unchanged sentences

such as guarantees or insurance.

The allowance for credit losses was immaterial as of March 31, 2024.

The following table illustrates

the current expected credit losses activity for the six months ended March 31, 2024:

The allowance for credit losses was immaterial as of June 30, 2024.

following table illustrates the current expected credit losses activity for the nine months ended June 30, 2024:

OF EXPECTED CREDIT LOSSES ACTIVITY

October 1, 2023

March 31, 2024

Trade receivables, net

Trade receivables, net - related party

For the nine months ended

Trade receivables,

Trade receivables, net

- related party

Trade receivables, net

Contract assets, net

Royalties receivable, net - related party

Note receivable, net - related party

Royalties receivable, net

- related party

Note receivable, net -

related party

Issued Accounting Pronouncements Not Yet Effective

46 unchanged sentences

In accordance with ASC 310 – Receivables, the

Company has discounted the royalties due and has recognized $ 13,282 during the three-month periods ended March 31, 2024, and 2023, and

$ 26,563 , and $ 17,709 , during the six-month periods ended March 31, 2024, and 2023, respectively, and will amortize the remaining amount

over the period the royalties are due.

Company has discounted the royalties due and has recognized $ 13,282 , and $ 14,724 during the three-month periods ended June 30, 2024,

and 2023, respectively, and $ 39,845 , and $ 33,875 , during the nine-month periods ended June 30, 2024, and 2023, respectively, and will

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

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

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

SUMMARY OF LOSS ON SALE

OF LOSS ON SALE INCLUDED IN INCOME/(LOSS) FROM DISCONTINUED OPERATIONS

Purchase Price

4 unchanged sentences

Inventory, net

Prepaid expenses and other assets

Property and equipment, net

Prepaid expenses and other

Property and equipment,

Total Assets Sold

Liabilities Transferred

1 unchanged sentence

Short-term liabilities

Long-term liabilities

Liabilities Transferred

Total Liabilities Transferred

Net assets sold

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

Pretax loss on sale

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

$ ( 2,455,341 )

of March 31, 2024, and September 30, 2023, there were no assets or liabilities included within discontinued operations on the Company’s

of June 30, 2024, and September 30, 2023, there were no assets or liabilities included within discontinued operations on the Company’s

Condensed Consolidated Balance Sheets.

9 unchanged sentences

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

of tax in the Company’s Condensed Consolidated Statements of Operations for the three and six month periods ended March 31, 2024

of tax in the Company’s Condensed Consolidated Statements of Operations for the three and nine month periods ended June 30, 2024

and 2023, are as follows:

SCHEDULE OF FINANCIAL STATEMENTS INCLUDED WITHIN DISCONTINUED OPERATIONS

Three months ended March 31,

Six months ended March 31,

Three months ended

Nine months ended

Total net sales

Cost of sales

Operating, selling, general and administrative expenses

Operating, selling, general and administrative

Other (income)/expenses

5 unchanged sentences

Income tax provision

Discontinued operations, net of tax

Discontinued operations,

$ ( 3,212,108 )

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

the three and six months ended March 31, 2024 and 2023:

the three and nine months ended June 30, 2024 and 2023:

OF DISAGGREGATION OF REVENUE RECOGNITION

March 31, 2024

March 31, 2023

March 31, 2024

March 31, 2023

For the three months ended

For the six months ended

March 31, 2024

March 31, 2023

March 31, 2024

March 31, 2023

the three months ended

the nine months ended

Point-in-time

Revenue performance obligation percentage

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 six

months ended March 31, 2024, and 2023, the following items were excluded from the computation of diluted net loss per common share as

For the three and nine

months ended June 30, 2024, and 2023, 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 six months ended

For the three months ended

the three and six months ended March 31, 2024 and 2023, loss per share basic and diluted for continuing operations are calculated as

For the six months ended

Anti-dilutive shares

the three and nine months ended June 30, 2024 and 2023, loss per share basic and diluted for continuing operations are calculated as

SCHEDULE OF LOSS PER SHARE BASIC AND DILUTED

FOR CONTINUING OPERATION

FOR CONTINUING OPERATIONS

For the three months

For the six months

For the nine months

Loss from Continuing operations

5 unchanged sentences

Preferred stock dividends

Net loss applicable to common shareholders

Net loss applicable

to common shareholders

( 9,043,525 )

1 unchanged sentence

( 11,745,185 )

Weighted Average Number of Shares-Basic & Diluted

Loss per share - Basic & Diluted - Continuing Operations

( 4,865,141 )

Weighted Average Number of Shares-Basic

Loss per share - Basic & Diluted - Continuing

accordance with ASC 260-45-13, the common shares underlying the Series A Warrants under the alternative cashless exercise have been included

in the calculation of the weighted average shares.

6 – SEGMENT INFORMATION

3 unchanged sentences

OF SEGMENT INFORMATION

Industrial Services

ended March 31, 2024

months ended March 31, 2023

Industrial Services

Cost of revenues

Operating expenses

Sales, general, and administrative

Depreciation and amortization

Research and development

Operating income/(loss)

months ended June 30, 2024

months ended June 30, 2023

general, and administrative

and amortization

and development

(loss)/income

$ ( 2,101,247 )

1 unchanged sentence

$ ( 3,179,516 )

Other income/(expense)

( 1,032,183 )

income/(expense)

$ ( 119,813 )

2 unchanged sentences

$ ( 282,857 )

Industrial Services

ended March 31, 2024

ended March 31, 2023

Reportable Segments

Industrial Services

Cost of revenues

Operating expenses

$ ( 929,395 )

$ ( 1,219,533 )

months ended June 30, 2024

months ended June 30, 2023

and administrative

general, and administrative

Depreciation and amortization

Research and development

Operating (loss)/income

and amortization

and development

(loss)/income

$ ( 3,632,172 )

4 unchanged sentences

$ ( 1,492,789 )

Other income/(expense)

income/(expense)

$ ( 392,707 )

11 unchanged sentences

with the plan.

These funds, as required by the plan are restricted in nature and amounted to $ 1,072,416 at March 31, 2024, and $ 919,652

These funds, as required by the plan are restricted in nature and amounted to $ 1,052,028 at June 30, 2024, and $ 919,652

at September 30, 2023.

The Company has $ 100,000 in restricted cash held in escrow pending final disbursement of expenses related to the

Heisey acquisition as of March 31, 2024 and September 30, 2023.

The Company has $ 100,000 in restricted cash held in escrow related to projects that are still bonded through Heisey

as of June 30, 2024.

8 – FAIR VALUE MEASUREMENTS

23 unchanged sentences

to continue as a going concern.

Company’s fair value assets at March 31, 2024, and September 30, 2023, are as follows.

SCHEDULE OF FAIR VALUE OF ASSETS

Quoted Prices

Identical Assets

Investment in marketable securities

(included in short-term investments)

Company’s fair value liabilities at June 30, 2024, are as follows.

OF FAIR VALUE OF LIABILITIES

Quoted Prices

Identical Assets

September 30,

Investment in marketable securities

(included in short-term investments)

Warrant liabilities

September 30, 2023, the Company had no fair value liabilities.

summary of the warrant liabilities activity for the nine months ended June 30, 2024, is as follows:

SCHEDULE OF THE WARRANT LIABILITIES ACTIVITY

Warrant Liabilities at September 30, 2023

Warrants Issued

Warrants Exercised

( 3,179,110 )

( 4,043,324 )

Fair market revaluation

( 2,221,206 )

( 2,807,890 )

Warrant Liabilities at June 30, 2024

9 – TRADE RECEIVABLES, NET

3 unchanged sentences

Trade receivables

Allowance for credit losses

Allowance for credit

Accounts receivables,

3 unchanged sentences

expenses and other current assets consist of the following:

SUMMARY OF PREPAID AND OTHER CURRENT ASSETS

March 31, 2024

September 30, 2023

OF PREPAID EXPENSES AND OTHER CURRENT ASSETS

Prepaid expenses

1 unchanged sentence

Deferred costs

Short-term investments

Loan origination costs

1 unchanged sentence

VAT and GST tax receivable

Prepaid expenses and other current assets total

expenses and other current assets total

11 – INVENTORY, NET

5 unchanged sentences

Finished goods

Inventory, net

Company maintained an allowance for obsolete inventories of $ 502,577 and $ 618,021 at March 31, 2024 and September 30, 2023, respectively.

Company maintained an allowance for obsolete inventories of $ 501,836 and $ 618,021 at June 30, 2024 and September 30, 2023, respectively.

12 – PROPERTY AND EQUIPMENT

10 unchanged sentences

( 10,490,114 )

Property and equipment, net

expense for the three and six months ended March 31, 2024 and 2023, was $ 304,889 and $ 673,190 , and $ 209,053 and $ 448,388 , respectively

Property and equipment,

expense for the three and nine months ended June 30, 2024 and 2023, was $ 325,451 and $ 998,641 , and $ 249,881 and $ 698,269 , respectively

and is recorded in cost of revenues and general and administrative expenses on the Company’s condensed consolidated statements

3 unchanged sentences

OF GOODWILL BY SEGMENT

Industrial Services

Balance at September 30, 2023

Balance at March 31, 2024

of March 31, 2024, and September 30, 2023, accumulated impairment losses of $ 3,316,000 related to the Security segment have been recorded.

Purchase price allocation adjustment

Balance at June 30, 2024

of June 30, 2024, and September 30, 2023, accumulated impairment losses of $ 3,316,000 related to the Security segment have been recorded.

14 – OTHER ASSETS

8 unchanged sentences

balance sheets.

No impairment has been recorded for the three and six months ended March 31, 2024.

No impairment has been recorded for the three and nine months ended June 30, 2024.

assets consisted of the following:

OF OTHER ASSETS

March 31, 2024

September 30, 2023

Rental deposits

1 unchanged sentence

Other deposits

Demonstration equipment supplied to resellers

Other assets total

Demonstration equipment

supplied to resellers

15 – ACCRUED EXPENSES

1 unchanged sentence

OF ACCRUED EXPENSES

March 31, 2024

September 30, 2023

Accrued expenses

2 unchanged sentences

Accrued warranty

Accrued expenses total

expenses total

16 – DEFERRED REVENUE

Company’s deferred revenue as of and for the three and six months ended March 31, 2024, and 2023, were as follows:

Company’s deferred revenue as of and for the three and nine months ended June 30, 2024, and 2023, were as follows:

OF DEFERRED REVENUE

For the three months ended

For the six months ended

March 31, 2024

March 31, 2023

March 31, 2024

March 31, 2023

Deferred revenue at beginning of period

For the nine months ended

Deferred revenue at beginning of

Net additions:

1 unchanged sentence

Recognized as revenue:

Deferred software revenues

software revenues

( 1,066,753 )

( 2,044,584 )

Deferred revenue at end of period

( 2,184,458 )

Deferred revenue at

end of period

current portion

Long-term deferred revenue at end of period

the three and six months ended March 31, 2024 and 2023, the Company recognized revenue of $ 608,808 , and $ 483,296 , and $ 1,043,281 and

Long-term deferred revenue

at end of period

the three and nine months ended June 30, 2024 and 2023, the Company recognized revenue of $ 571,660 , and $ 1,364,475 , and $ 4 42,040 and

$ 1 , 040,221 , respectively, that was previously included in the beginning balance of deferred revenues.

14 unchanged sentences

OF CONTRACT ASSETS AND LIABILITIES

March 31, 2024

September 30, 2023

Costs incurred on uncompleted contracts

Estimated gross profit

Applicable billings to date

Applicable billings

( 15,111,577 )

( 14,850,020 )

Net billings in excess of costs, Ending balance

the three and six months ended March 31, 2024 and 2023, the Company recognized revenue of $ 95,759 and $ 9,030 , and $ 886,920 and $ 361,887 ,

(billings in excess of costs)/earnings in excess of billings, Ending balance

$ ( 786,546 )

the three and nine months ended June 30, 2024 and 2023, the Company recognized revenue of $ 18,625 and $ 0 , and $ 905,319 and $ 369,835 ,

respectively, that was previously included in the beginning balance of contract liabilities.

following table summarizes the net activity of the contract assets and contract liabilities for the three- and six-month periods ended

June 30, 2024 and 2023.

OF CONTRACT ASSETS AND CONTACT LIABILITIES

June 30, 2024

June 30, 2023

June 30, 2024

June 30, 2023

For the three months ended

For the nine months ended

June 30, 2024

June 30, 2023

June 30, 2024

June 30, 2023

Costs and Estimated Earnings in Excess of Billings on Uncompleted Contracts

Contract asset, beginning balance

Changes in revenue billed, contract price or cost estimates

Contract asset, net, ending balance

Billings in Excess of Costs and Estimated Earnings on Uncompleted Contracts

Contract liability, beginning balance

( 1,899,409 )

$ ( 924,856 )

$ ( 369,890 )

Changes in revenue billed, contract price or cost estimates

Contract liability, ending balance

$ ( 1,901,606 )

$ ( 738,962 )

$ ( 1,901,606 )

$ ( 738,962 )

Net Billings in Excess of Costs and Estimated Earnings on Uncompleted Contracts

Net billings in excess of costs, beginning balance

$ ( 130,440 )

Changes in revenue billed, contract price or cost estimates

$ ( 1,545,428 )

Net billings in excess of costs, ending balance

$ ( 786,546 )

$ ( 172,447 )

$ ( 786,546 )

$ ( 172,447 )

18 – RELATED PARTY TRANSACTIONS

5 unchanged sentences

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

As of March 31,

2024, $ 64,808 of accrued interest has been recorded as an expected credit loss against this note.

of March 31, 2024, and September 30, 2023, there was $ 3,798 and $ 3,806 payable due to Ducon Technologies, Pvt Ltd., which is also owned

by Aron Govil, respectively.

of March 31, 2024, and September 30, 2023, there was $ 635,956 and $ 637,208 receivable due from Ducon Technologies, Pvt Ltd., respectively.

As of June 30, 2024,

the principle amount of $ 761,585 and $ 74,776 of accrued interest has been recorded as an allowance for expected credit loss against this note.

of June 30, 2024, and September 30, 2023, there was $ 3,797 and $ 3,806 in payables due to Ducon Technologies, Pvt Ltd., which is also

owned by Aron Govil, respectively.

of June 30, 2024, and September 30, 2023, there was $ 0

and $ 637,208

in receivables due from Ducon Technologies, Pvt Ltd., respectively.

During the three months ended June 30, 2024, the Company recorded an allowance for

expected credit loss of $ 635,803 on the receivables due from Ducon Technologies, Pvt Ltd.

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

14 unchanged sentences

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

the three and six months ended March 31, 2024, the Company wrote off $ 94,027 in trade receivables, related party and $ 59,703 in trade

the three and nine months ended June 30, 2024, the Company wrote off $ 94,027 in trade receivables, related party and $ 59,703 in trade

payables, related party related to the Cemtrex Advanced Technologies, Inc.

successor company, SmartDesk, Inc.

of March 31, 2024, there was $ 583,340 in trade receivables due from the Cemtrex XR successor company, CXR, Inc.

of June 30, 2024, there was $ 755,198 in trade receivables due from the Cemtrex XR successor company, CXR, Inc.

Of these receivables $ 60,444

$ 60,628 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.

The remaining $ 522,712 is related to services provided by Cemtrex Technologies

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.

$ 235,408 is the remaining balance on the first-year royalties on CXR, Inc.’s revenues.

The remaining $ 459,162 is related to services provided by Cemtrex Technologies Pvt.

in the normal course of business.

As of March 31, 2024, there were $ 5,416 in payables due to CXR Inc.

of March 31, 2024, there were royalties receivable from the sale of Cemtrex, XR, Inc.

of $ 700,456 ,

of which $ 260,407

is considered short-term and is presented on the Company’s Condensed Consolidated Balance Sheet under the caption “Trade

receivables, net – related party”.

of June 30, 2024, there were royalties receivable from the sale of Cemtrex, XR, Inc.

of $ 688,738 , of which $ 235,408 is considered short-term

and is presented on the Company’s Condensed Consolidated Balance Sheet under the caption “Trade receivables, net –

related party”.

On April 13, 2024, the Company and CXR, Inc.

agreed to structured payments on the

first-year royalties with full payment being made by December 31, 2024.

The Company has taken a $ 10,000

allowance for expected credit losses against these royalties.

agreed to structured payments on the first-year royalties with full

payment being made by December 31, 2024.

The Company has taken a $ 10,000 allowance for expected credit losses against these royalties.

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 3.5 years at March 31, 2024, and 3 years at September 30, 2023.

approximately 3.16 years at June 30, 2024, and 3 years at September 30, 2023.

The weighted average discount rate used to measure lease

liabilities was approximately 6.45 % at March 31, 2024, and 5.66 % at September 30, 2023.

liabilities was approximately 6.54 % at June 30, 2024, and 5.66 % at September 30, 2023.

The Company used the rate implicit in the lease,

3 unchanged sentences

rent of $ 600 per month.

Short-term rent expense was $ 3,600 for the six months ended March 31, 2024, and $ 600 for the six months ended

March 31, 2023.

Short-term rent expense was $ 5,400 for the nine months ended June 30, 2024, and $ 2,400 for the nine months ended

June 30, 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 $ 30,362 for the six months ended March 31, 2024.

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

Short-term rent expense was $ 43,941 for the nine months ended June 30, 2024.

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

30, 2024, is set forth below:

1 unchanged sentence

Years ending September

Operating Leases

Undiscounted lease payments

Amount representing interest

Discounted lease payments

costs for the three and six months ended March 31, 2024, and 2023 are set forth below:

representing interest

lease payments

short-term operating lease liabilities

operating lease liabilities

costs for the three and nine months ended June 30, 2024, and 2023 are set forth below:

OF LEASE COSTS

For the three months ended

For the six months ended

For the nine months ended

Operating lease costs:

Short-term lease costs

Total lease cost

Operating lease

20 – LINES OF CREDIT AND LONG-TERM LIABILITIES

8 unchanged sentences

by the value of the eligible assets.

As of 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 March 31, 2024.

The funds were used to pay the NIL Funding term loan and

will fund operations of the Vicon entity.

As of March 31, 2024, this loan had a balance of $ 4,019,234 , with $ 36,267 of unamortized loan

origination fees, which is included in “Prepaid expenses” on the accompanying Condensed Consolidated Balance Sheet.

were $ 980,766 in available funds as of March 31, 2024.

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.

As of June 30, 2024, the Company had enough eligible assets to access the full credit line.

Company was in compliance with all loan covenants as of June 30, 2024.

The funds were used to pay the NIL Funding term loan and will

fund operations of the Vicon entity.

As of June 30, 2024, this loan had a balance of $ 2,730,325 , with $ 18,133 of unamortized loan origination

fees, which is included in “Prepaid expenses” on the accompanying Condensed Consolidated Balance Sheet.

There were $ 2,269,675

in available funds as of June 30, 2024.

August 31, 2023, the Company and Streeterville Capital, LLC (“Streeterville”) 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.

April 30, 2024, the Company entered into a Standstill Agreement with Streeterville Capital, LLC (“Streeterville”) in which

Streeterville agreed not to seek to redeem any portion of its two outstanding notes with the Company for a period of one year expiring

on April 30, 2025, with $ 239,813 classified as short-term, and in exchange, the Company agreed to pay to Streeterville the greater of $ 4,000,000 or fifty percent ( 50 %) of the

net proceeds the Company receives from the sale of any of its common stock or preferred stock during the Standstill Period.

the Company has paid Streeterville $ 4,588,897 under this agreement.

following table outlines the Company’s secured liabilities:

OF LINES OF CREDIT AND LIABILITIES

September 30,

Interest Rate

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

The Company was in compliance with loan covenants as of March 31, 2024.

Fulton Bank - $360,000 fund equipment

The Company was in compliance with loan covenants as of June 30, 2024.

This loan is secured by certain assets of the Company.

SOFR plus 2.37 % ( 7.71 % as of March 31, 2024 and 7.68 % as of September 30, 2023).

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

The Company was in compliance with loan covenants as of March 31, 2024.

SOFR plus 2.37% (7.7% as of June 30, 2024 and 7.68%

as of September 30, 2023).

Fulton Bank - $ 360,000 fund equipment

The Company was in compliance with loan covenants as of June 30, 2024.

This loan is secured by certain assets of the Company.

SOFR plus 2.37 % ( 7.71 % as of March 31, 2024 and 7.68 % as of September 30, 2023).

SOFR plus 2.37 % ( 7.7 % as of June 30, 2024 and 7.68 %

as of September 30, 2023).

Fulton Bank mortgage $ 2,476,000 .

The Company was in compliance with loan covenants as of March 31, 2024.

was in compliance with loan covenants as of June 30, 2024.

This loan is secured by the underlying asset.

SOFR plus 2.62 % ( 7.96 % on March 31, 2024 and ( 7.93 % on September 30, 2023).

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

SOFR plus 2.62 % ( 7.95 % on June 30, 2024 and

( 7.93 % on September 30, 2023).

Fulton Bank (HEISEY) - $ 1,200,000 mortgage

requires monthly principal and interest payments through August 1, 2043 with a final payment of remaining principal on September

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

SOFR plus 2.80 % per annum ( 8.14 % as of March 31, 2024 and 8.11 % as of September 30, 2023).

SOFR plus 2.80 % per annum ( 8.13 % as of June 30, 2024 and 8.11 % as of

September 30, 2023).

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

promissory note related to purchase of Heisey;

note related to purchase of Heisey;

requires 84 monthly principal and interest payments ;

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

The note is collateralized by the Heisey

assets and guaranteed by the Parent;

matures in 2030.

SOFR plus 2.80 % per annum ( 8.14 % as of March 31, 2024 and 8.11 % as of September 30, 2023).

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 , as of March 31, 2024 and September 30, 2023.

SOFR plus 2.80 % per annum ( 8.13 % as of June 30, 2024 and 8.11 % as of

September 30, 2023).

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 , as of June

30, 2024 and September 30, 2023.

Note 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 $ 0 as of March 31, 2024 and September 30, 2023.

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

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

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

Monthly payments of ₹ 65,179 ($ 784.89 as translated as of March 31, 2024).

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 $ 0 as of June 30, 2024 and September 30, 2023.

Note Payable - $ 240,000 For the purchase of

Heisey Mechanical, Ltd.

Term Loan Agreement with NIL Funding Corporation

(“NIL”) - $ 5,600,000 The Company was in compliance with loan covenants as of September 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

HDFC Bank Auto Loan

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

Monthly payments of ₹ 65,179 ($ 781.93 as translated as of June 30,

Automobile is collateral for this loan.

This loan was paid off prior to the maturity date.

Current maturities

( 14,507,711 )

Long-term debt

21 – STOCKHOLDERS’ EQUITY

3 unchanged sentences

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.

The Form 25 was filed on March

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.

the six months ended March 31, 2024, 115,037 shares of Series 1 Preferred Stock were issued to pay dividends to holders of Series 1 Preferred

the six months ended March 31, 2024, the Company has bought back 71,951 shares into treasury 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.

of March 31, 2024, and September 30, 2023, there were 2,408,053 and 2,293,016 shares of Series 1 Preferred Stock issued and 2,272,002

filed a Form 25 on March 21, 2024.

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

Act became effective 90 days after filing of the Form 25.

the nine months ended June 30, 2024, 235,762 shares of Series 1 Preferred Stock were issued to pay dividends to holders of Series 1 Preferred

the nine months ended June 30, 2024, the Company has bought back and later cancelled 71,951 shares into treasury 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.

of June 30, 2024, and September 30, 2023, there were 2,456,827 and 2,293,016 shares of Series 1 Preferred Stock issued and 2,392,727

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

the six months ended March 31, 2024, 9,853 shares of the Company’s common stock have been issued in exchange for services valued

the nine months ended June 30, 2024, 33,189 shares of the Company’s common stock have been issued in exchange for services valued

at $ 129,000 .

the nine months ended June 30, 2023, 11,764,705

shares of common stock were issued for the exercise of 11,210,000 prefunded warrants and 554,705

shares of common stock as part of the May 2024 Equity Financing described below.

the nine months ended June 30, 2024, 3,508,593 shares of common stock were issued for the exercise of 1,169,531 Series A Warrants under

the Alternative Cashless Exercise option.

2024 Equity Financing

May 1, 2024, the Company entered into an underwriting agreement with Aegis Capital Corp., in connection with a firm commitment underwritten

public offering (the “Offering”), providing for the issuance of (i) 554,705 units (the “Common Units”), each

consisting of one share of common stock of the Company (“Common Stock”), a warrant to purchase one share of common stock

at an exercise price of $0.85 per share, which warrant will expire on the two-and-a-half year anniversary of the original issuance date

(the “Series A Warrants”), and a warrant to purchase one share of common stock at an exercise price of $0.85 per share, which

warrant will expire on the five-year anniversary of the original issuance date (the “Series B Warrants”);

and (ii) 11,210,000

pre-funded units (the “Pre-funded Units”), each consisting of one pre-funded warrant to purchase one share of common stock

(the “Pre-funded Warrants”), a Series A Warrant and a Series B Warrant.

The purchase price of each Unit was $0.85, and the

purchase price of each Pre-Funded Unit was $0.849.

The Pre-Funded Warrants are immediately exercisable and may be exercised at any time

until all of the Pre-Funded Warrants are exercised in full.

addition, the Company granted the Underwriter a 45-day option to purchase additional 1,764,705 shares of common stock and/or Pre-Funded

Warrants, representing up to 15 % of the number of common stock and Pre-Funded Warrants sold in the Offering, and/or additional 1,764,705

Series A Warrants representing up to 15 % of the Series A Warrants sold in the Offering, and/or additional 1,764,705 Series B Warrants

representing up to 15 % of the Series B Warrants sold in the Offering to cover over-allotments, if any.

The Offering closed on

An aggregate of 11,764,705 Units (which includes 554,705 shares of common stock) , 11,210,000 Pre-Funded Units (which

includes 11,210,000 Pre-Funded Warrants) , and a Series A Warrant and

a Series B Warrant were sold in the Offering.

On May 3, 2024, the Underwriter partially exercised its over-allotment

option with respect to 1,764,705 Series A Warrants and 1,764,705 Series B Warrants.

The aggregate gross proceeds to the Company were

$ 10,035,293 , before deducting underwriting discounts and other issuance expenses of $ 1,133,166 .

The underwriting discounts and other

issuance expenses were expensed since the Series A, Series B, and Pre-Funded Warrants were each determined to be liabilities and recorded

at their fair value.

2024 Warrants

Company evaluated the Series A, Series B, and Prefunded Warrants (collectively, the “Warrants”) in accordance with the guidance

at ASC 480, Distinguishing Liabilities from Equity and ASC 815-40, Derivatives and Hedging, and determined that the Warrants are

precluded from being considered indexed to the entity’s own stock, resulting in the Warrants being classified as a liability.

fair value of the Series A Warrants was determined based on the stock price on issuance of $ 0.277 multiplied by the total number of shares

of common stock issuable upon exercise of the Series A alternative cashless exercise.

Under the alternative cashless exercise, the Holder

is entitled to receive three times the normal amount of shares issued in a cashless exercise.

The Series A Holder may only execute the

alternative cashless exercise after Stockholder Approval (and received June 17, 2024);

at the time of issuance, Stockholder Approval

was deemed perfunctory and almost certain to occur, and the most likely settlement option would be through the alternative cashless exercise.

As such, upon issuance, the total fair value of the Series A Warrants was $ 11,242,940 , which was based on 40,588,230 units issued under

the alternative cashless exercise.

The measurement of fair value of the Series B Warrants were determined utilizing a Black-Scholes model

considering all relevant assumptions current at the date of issuance (i.e., share price of $ 0.277 , exercise price of $ 0.85 ,

term of five years , volatility of 132 %, risk-free rate of 4.5 %, and expected dividend rate of 0 %).

The grant date fair value of these

Series B Warrants was estimated to be $ 2,942,711 on May 3, 2024, and such warrants were classified as liabilities.

Due to the nominal

exercise price, the fair value of the Prefunded Warrants was based on the intrinsic value of each Warrant on the grant date.

The intrinsic

value was calculated based on the May 3, 2024, stock price of $ 0.277 and the strike price of $ 0.001 , resulting in a total fair value

of $ 3,093,960 .

The total fair value of the Warrants upon issuance was $ 17,279,611 .

Given that the gross proceeds received of $ 10,024,083

was less than the total fair value of the liability classified Warrants, the Company recorded a loss on excess fair value of $ 7,255,527

following table summarizes information about shares issuable under warrants outstanding as of June 30, 2024.

SHARES ISSUABLE UNDER WARRANTS OUTSTANDING

Shares Outstanding

Average Exercise Price

Average Remaining Contractual Term (in years)

Outstanding at September 30, 2023

Warrants granted

Warrants exercised

( 14,718,593 )

Warrants forfeited

Warrants cancelled

Outstanding at June 30, 2024

Exercisable at June 30, 2024

22 – SHARE-BASED COMPENSATION

the three and six months ended March 31, 2024, and 2023, the Company recognized $ 7,558 and $ 26,735 and $ 15,116 and $ 66,577 of share-based

the three and nine months ended June 30, 2024, and 2023, the Company recognized $ 7,559 and $ 22,675 and $ 26,736 and $ 93,313 of share-based

compensation expense on its outstanding options, respectively.

As of March 31, 2024, $ 48,189 of unrecognized share-based compensation

As of June 30, 2024, $ 40,630 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

the six months ended March 31, 2024, no options were granted, cancelled, or forfeited.

the nine months ended June 30, 2024, no options were granted, cancelled, or forfeited.

23 – COMMITMENTS AND CONTINGENCIES

6 unchanged sentences

24 – SUBSEQUENT EVENTS

April 5, 2024, 120,725 shares of Series 1 Preferred Stock were issued to pay dividends to holders of Series 1 Preferred Stock.

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

Amount, payable semiannually.

April 8, 2024, the Company issued an aggregate of 1,946 shares of common stock in exchange for services valued at $ 9,000 .

April 8, 2024, the Company cancelled 71,951 shares of Series 1 Preferred Stock that were in Treasury Stock.

April 13, 2024, the Company and CXR, Inc.

agreed to structured payments on the first-year royalties with full payment being made by December

April 30, 2024, the Company entered into a Standstill Agreement (the “Agreement”) with Streeterville Capital, LLC (“Streeterville”).

Pursuant to the Agreement, Streeterville agreed not to seek to redeem any portion of its two outstanding notes with the Company, dated

September 20, 2021 and February 22, 2022, for a period of one year (the “Standstill Period”) and Streeterville further agreed

to extend the maturity dates on the notes to June 30, 2025 and February 22, 2026, respectively.

In exchange, the Company agreed to pay

to Streeterville the greater of $ 4,000,000 or fifty percent ( 50 %) of the net proceeds the Company receives from the sale of any of its

common stock or preferred stock during the Standstill Period.

Any payments made will be deemed payments under the notes.

On May 6, 2024,

the Company paid $ 4,588,897 pursuant to the Agreement.

agreement and public offering

May 1, 2024, the Company entered into an underwriting agreement (the “Underwriting Agreement”) with Aegis Capital Corp.

“Underwriter”), in connection with a firm commitment underwritten public offering (the “Offering”) of (i) 554,705

units (the “Common Units”), each consisting of one share of common stock of the Company (“common stock”), a warrant

to purchase one share of common stock at an exercise price of $.085 per share or pursuant to an alternative cashless exercise option

(described below), which warrant will expire on the two-and-a-half year anniversary of the original issuance date (the “Series

A Warrants”) and a warrant to purchase one share of common stock at an exercise price of $0.85 per share, which warrant will expire

on the five-year anniversary of the original issuance date (the “Series B Warrants” and together with the Series A Warrants,

the “Warrants”);

and (ii) 11,210,000 pre-funded units (the “Pre-funded Units” and together with the Common Units,

the “Units”), each consisting of one pre-funded warrant to purchase one share of common stock (the “Pre-funded Warrants”),

a Series A Warrant and a Series B Warrant.

The purchase price of each Unit was $0.85, and the purchase price of each Pre-Funded Unit

was $0.849 (which is equal to the public offering price per Common Unit to be sold in the Offering minus $0.001).

The Pre-Funded Warrants

are immediately exercisable and may be exercised at any time until all of the Pre-Funded Warrants are exercised in full.

addition, the Company granted the Underwriter a 45-day option to purchase additional 1,764,705 shares of common stock and/or Pre-Funded

Warrants, representing up to 15 % of the number of common stock and Pre-Funded Warrants sold in the Offering, and/or additional 1,764,705

Series A Warrants representing up to 15 % of the Series A Warrants sold in the Offering, and/or additional 1,764,705 Series B Warrants

representing up to 15 % of the Series B Warrants sold in the Offering solely to cover over-allotments, if any.

Offering closed on May 3, 2024.

An aggregate of 11,764,705 Units (which includes 554,705 shares of common stock) and 11,210,000 Pre-Funded

Units (which includes 11,210,000 Pre-Funded Warrants) were sold in the Offering.

On May 3, 2024, the Underwriter partially exercised

its over-allotment option with respect to 1,764,705 Series A Warrants and 1,764,705 Series B Warrants.

The aggregate gross proceeds to

the Company were approximately $ 10,035,000 , before deducting underwriting discounts and other estimated expenses payable by the Company.

the terms of the Underwriting Agreement, the Underwriter received an underwriting discount of 7.0% to the public offering price for the

In addition, the Company agreed to (a) pay a non-accountable expense allowance to the Underwriter equal to 0.5% of the gross proceeds

received in this Offering and (b) to reimburse the Underwriter for certain out-of-pocket expenses, including, but not limited to, up

to $100,000 for reasonable legal fees and disbursements for the Underwriter’s counsel.

of First Refusal

to certain conditions, the Company has granted the Underwriter the right of first refusal with respect to certain transactions and for

the duration described below.

for the period beginning on the closing of the Offering and ending fifteen (15) months after the commencement of sales in the offering,

the Company or any of its subsidiaries (a) decides to finance or refinance any indebtedness, the Underwriter (or any affiliate designated

by the Underwriter) shall have the right to act as sole book-runner, sole manager, sole placement agent or sole agent with respect to

such financing or refinancing;

or (b) decides to raise funds by means of a public offering (including at-the-market facility) or a private

placement or any other capital raising financing of equity, equity-linked or debt securities, the Underwriter (or any affiliate designated

by the Underwriter) shall have the right to act as sole book-running manager, sole underwriter or sole placement agent for such financing.

If the Underwriter or one of its affiliates decides to accept any such engagement, the agreement governing such engagement will contain,

among other things, provisions for customary fees and terms for transactions of similar size and nature, including indemnification, which

are appropriate to such a transaction.

Notwithstanding

the foregoing, the decision to accept the engagement shall be made by the Underwriter or one of its affiliates, by a written notice to

the Company, within ten (10) days of the receipt of the Company’s notification of financing needs, including a detailed term sheet.

The Underwriter’s determination of whether in any case to exercise its right of first refusal will be strictly limited to the terms

on such term sheet, and any waiver of such right of first refusal shall apply only to such specific terms.

If the Underwriter waives

its right of first refusal, any deviation from such terms shall void the waiver and require the Company to seek a new waiver from the

right of first refusal.

August 2, 2024, we filed a Certificate of Amendment to our Certificate of Incorporation with the Secretary of State of Delaware to increase

our authorized shares of common stock from 50,000,000 shares to 70,000,000 shares, par value $ 0.001 per share.

July 22, 2024, the Board of Directors of the Company approved, and the holders of an excess of a majority of the outstanding shares of

our classes of voting stock of the Company have executed a written consent in lieu of a special meeting approving a Certificate of Amendment

to our Certificate of Incorporation to authorize a reverse split of our outstanding shares of common stock, par value $ 0.001 per share,

with a split ratio of between 1 for 10 and 1 for 20 , which will be determined by the Board of Directors at any time or times for a period

of 12 months after the date of the written consent.

Pursuant to Rule 14c-2 under the Exchange Act, this corporate action will not be

effected until at least twenty (20) calendar days after the mailing of the Information Statement to our stockholders.

following table, which is for illustrative purposes only, illustrates the effects of Reverse Split at certain exchange ratios within

the foregoing range, without giving effect to any adjustments for fractional shares of common stock, on our outstanding shares of common

stock and authorized shares of capital stock as of the Balance Sheet date.

SHARES OF COMMON STOCK AND AUTHORIZED SHARES OF CAPITAL STOCK

Reverse Split

Reverse Stock Split

Common Stock Authorized (1)

Preferred Stock Authorized

Common Stock Issued and Outstanding

Common Stock Underlying Options and Warrants

Common Stock Available for Grant under 2020

Equity Compensation Plan

(1) Considers

the increase in authorized shares which became effective on August 2, 2024.

July 11, 22, and 23, 2024, the Company issued an aggregate of 900,000 shares of common stock to satisfy the exercise of 300,000 Series

A Warrants under the alternative cashless exercise.

August 8, 2024, the Company issued 185,186 shares of common stock in exchange for services rendered.

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