What changed in this filing

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Item 1. Business

2024-12-30 compared with 2023-12-28 · 236 added, 272 removed, 7 unchanged (99% of the section changed)

Cemtrex, Inc.

was incorporated

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

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

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

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

multi-industry company.

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

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

and its subsidiaries.

During the first quarter of fiscal

year 2023, the Company reorganized its reporting segments to be in line with its current structure consisting of (i) Security, (ii) Industrial

Services, and (iii) Cemtrex Corporate.

Cemtrex’s Security segment

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

(“Vicon”), which provides end-to-end security

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

Vicon’s products include browser-based

video monitoring systems and analytics-based recognition systems, cameras, servers, and access control systems for every aspect of security

and surveillance in industrial and commercial facilities, federal prisons, hospitals, universities, schools, and federal and state government

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

based data algorithms.

Industrial Services

Cemtrex’s Industrial Services

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

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

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

and chemicals, among others.

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

printing, chemical, and other manufacturing markets.

The focus is on customers seeking to achieve greater asset utilization and reliability

to cut costs and increase production from existing assets, including small projects, sustaining capital, turnarounds, maintenance, specialty

welding services, and high-quality scaffolding.

Cemtrex Corporate

Cemtrex’s Corporate segment

is the holding company of our other two segments.

Recent Developments

Sale of former Cemtrex Brands

On November 22, 2022, the Company

entered into two Asset Purchase Agreements and one Simple Agreement for Future Equity (“SAFE”) with the Company’s CEO,

Saagar Govil, to secure the sale of the subsidiaries Cemtrex Advanced Technologies, Inc, which include the brand SmartDesk, and Cemtrex

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

On November 22, 2022, the Company completed the above

disposition for the following consideration.

Cemtrex XR, Inc.

$895,000 comprised of:

$75,000 in cash payable at Closing;

5% royalty of all revenues on the Business to be paid 90 days after the end of each calendar year for the next three years;

and should the total sum of royalties due be less than $820,000 at the end of the three-year period, Purchaser shall be obligated to pay the difference between $820,000 and the royalties paid.

Cemtrex Advanced Technologies, Inc.

$10,000 in cash payable at Closing;

5% royalty of all revenues on the Business to be paid 90 days after the end of each calendar year for the next 5 years;

$1,600,000 in SAFE (common equity) at any subsequent fundraising or exit above $5,000,000 with a $10,000,000 cap.

The Company’s Board of Directors,

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

Acquisition of Heisey Mechanical

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

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

(“Heisey”) based in Columbia, Pennsylvania for

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

The real estate of the business was

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

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

mix tanks, reactors, and other specialized fabricated equipment.

Additionally, the contracting team assists with installation and service

of fabricated items.

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

fabricators, welders, and field mechanics.

The purchase price allocation

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

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

The final allocation of the purchase price will be determined

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

The consideration transferred

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

Consideration Transferred:

Seller’s note

Financed amount

Total consideration transferred

Purchase Price Allocation:

Contract assets

Machinery and equipment

Contract liabilities

Accrued expenses

Total consideration transferred

The pro forma summary below presents

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

Proforma adjustments for the twelve months ended September

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

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

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

The pro forma summary uses estimates and assumptions based on information

available at the time.

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

significantly from this pro forma financial information.

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

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

The unaudited pro forma summary is provided for illustrative

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

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

For the year ended

September 30, 2023

September 30, 2022

(13,038,817 )

On August 30, 2023, the Company

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

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

Common Stock Reverse Stock Split

On January 25, 2023, the Company

completed a 35:1 reverse stock split on its common stock.

All share and per share data have been retroactively adjusted for this reverse

Notice of Delisting, Extension of cure period,

and Subsequent Compliance

Series 1 Preferred Stock

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

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

(“Vicon”), which provides

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

Vicon’s products

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

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

and federal and state government offices.

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

Artificial Intelligence (AI) based data algorithms.

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

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

AIS installs high precision equipment in a wide variety of industrial markets like automotive, printing and graphics, industrial automation,

packaging, and chemicals, among others.

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

packaging, printing, chemical, and other manufacturing markets.

The focus is on customers seeking to achieve greater asset utilization

and reliability to cut costs and increase production from existing assets, including small projects, sustaining capital, turnarounds,

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

Stock Reverse Stock Split

October 2, 2024, the Company completed a 60:1 reverse stock split on its common stock, and on November 26, 2024, The Company completed

a 35:1 reverse stock split on its common stock.

All share and per share data have been retroactively adjusted for the reverse splits.

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”)

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

3 unchanged sentences

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

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

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

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

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

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

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

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

On September 8, 2023, Cemtrex Inc.

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

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

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

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

the reverse stock split.

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

to December 29, 2023.

On January 24, 2022, the Company

received a notification letter from the Listing Qualifications Department of Nasdaq notifying the Company that, because the closing bid

price for the Company’s common stock listed on Nasdaq was below $1.00 for 30 consecutive trading days, the Company no longer met

the minimum bid price requirement for continued listing on The Nasdaq Capital Market under Nasdaq Marketplace Rule 5550(a)(2), requiring

a minimum bid price of $1.00 per share (the “Minimum Bid Price Requirement”).

On July 26, 2022, the Company

received a notification letter from the Listing Qualifications Department of The Nasdaq Stock Market LLC Nasdaq notifying the Company

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

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

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

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

On January 26, 2023, the Company

received a notification letter from the Listing Qualifications Department of Nasdaq notifying the Company that it has not regained compliance

with Listing Rule 5550(a)(2) and accordingly would be delisted from the Capital Market.

The Company then requested and had been granted

a hearing to occur on March 16, 2023, appealing this determination to a Hearings Panel (the “Panel”), pursuant to the procedures

set forth in the Nasdaq Listing Rule 5800 Series.

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

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

The Company’s common

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

Settlement with the Securities and Exchange Commission

On September 30, 2022, acting

pursuant to an offer of settlement submitted by the Company, the U.S.

Securities and Exchange Commission (“SEC”) issued an

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

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

“SEC Order”).

The SEC Order also directed Mr.

Saagar Govil to cease and desist from committing or causing any violations and any future violations of Section 17(a)(3) of the Securities

The SEC found that, as a result

of its conduct, which was neither admitted nor denied, the Company violated Section 17(a) of the Securities Act and Section 10(b) of the

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

purchase or sale of securities.

The SEC also found that, as a

result of his conduct, which was neither admitted nor denied, Mr.

Govil violated Section 17(a)(3) of the Securities Act, which makes it

illegal to engage in any transaction, practice, or course of business which operates or would operate as a fraud or deceit upon the purchaser.

In addition to the above cease

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

a customer of the Company without providing prior written notice, including a copy of the announcement text, to the businessperson at

the other company responsible for that company’s relationship with the Company.

Also, the Company received a civil

monetary penalty of two million two hundred thousand dollars ($2,200,000) in the aggregate that must be paid to the SEC.

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

The Company and Mr.

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

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

Business Strategy

Our focus is to utilize our resources

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

shareholders, and employees over the long term.

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

attractive return on shareholder equity.

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

or other industry shifts taking place.

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

opportunities for customer retention, and are asset light.

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

years or longer time horizons.

We believe our ability to attract

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

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

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

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

We continue to seek and execute

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

We believe that the

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

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

We constantly look for opportunities

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

that are operationally and financially beneficial for the Company.

The Company is not solely dependent

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

The Company also utilizes sub-suppliers and

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

The Company also

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

and the Company manages all technical, physical and commercial

aspects of the performance of the Company contracts.

The Company competes on the basis

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

Additionally, the Company’s

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

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

The Company obtains virtually

all its contracts through competitive bidding.

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

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

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

Several companies market products that compete directly with Company’s

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

and services.

Intellectual Property

Over the years, the Company has

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

Thus, the Company relies on a combination of

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

The Company currently has multiple patents and patent claims that it

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

property as allowed by its financial resources.

Sales and Marketing

The Company sells its products

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

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

to market its products and services.

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

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

and are terminable at will.

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

The Company’s sales representatives

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

and address customers’ questions or concerns arising thereafter.

The Company selects representatives based upon industry reputation,

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

among other criteria.

Technical inquiries received from

potential customers are referred to the engineering personnel.

Thereafter, the Company’s sales and engineering personnel jointly

prepare a budget proposal, or a final bid.

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

and twelve months.

The Company’s principal

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

end customers including, government agencies or commercial businesses.

Historically, most of the customers have purchased individual products

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

The Company’s principal

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

automotive, construction, and metallurgical processing.

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

For the Security segment, the

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

In order to satisfy customer orders,

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

The Company currently maintains

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

The Company also maintains

product liability insurance with respect to its products and equipment.

Management believes that the insurance coverage that it has is

adequate for its current business needs.

The Company employs approximately

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

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

Government Regulation

The Company’s operations

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

labor and health and safety matters.

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

such regulations.

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.

January 5, 2024, and January 12, 2024, the Company bought back an aggregate of 71,951 shares of Series 1 Preferred Stock 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.

On April 8, 2024,

these shares were cancelled.

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

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

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.

August 21, 2024, the Company received a notification letter from the Listing Qualifications Department of Nasdaq notifying the Company

that, because the stockholder’s equity for the Company was below $2,500,000 as reported on our Form 10-Q for the period ended June

30, 2024, the Company no longer meets the minimum shareholder’s equity requirement for continued listing on The Nasdaq Capital

Market under Nasdaq Marketplace Rule 5550(b)(1), requiring a minimum stockholder’s equity of $2,500,000 (the “Minimum Stockholder’s

Equity Requirement”).

October 23, 2024, the Company received a letter from Nasdaq that it had been granted an extension to regain compliance with the Minimum

Stockholder’s Equity Requirement.

terms of the extension are as follows:

on or before February 17, 2025, the Company must complete the submitted plan and opt for one of

the two following alternatives to evidence compliance with the Rule:

The Company must furnish to the SEC and Nasdaq a publicly available report (e.g., a Form 8-K) including:

disclosure of Staff’s deficiency letter and the specific deficiency(ies) cited;

description of the completed transaction or event that enabled the Company to satisfy the stockholders’ equity requirement

for continued listing;

affirmative statement that, as of the date of the report, the Company believes it has regained compliance with the stockholders’

equity requirement based upon the specific transaction or event referenced in Step 2;

disclosure stating that Nasdaq will continue to monitor the Company’s ongoing compliance with the stockholders’ equity

requirement and, if at the time of its next periodic report the Company does not evidence compliance, that it may be subject to delisting.

The Company must furnish to the SEC and Nasdaq a publicly available report including:

1 & 2 set forth above;

balance sheet no older than 60 days with pro forma adjustments for any significant transactions or event occurring on or before the

The pro forma balance sheet must evidence compliance with the stockholders’ equity requirement;

disclosure that the Company believes it also satisfies the stockholders’ equity requirement as of the report date and that

Nasdaq will continue to monitor the Company’s ongoing compliance with the stockholders’ equity requirement and, if at

the time of its next periodic report the Company does not evidence compliance, that it may be subject to delisting.

of which alternative the Company chooses, if the Company fails to evidence compliance upon filing its periodic report for the March 31,

2025, with the SEC and Nasdaq, the Company may be subject to delisting.

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 May 3,

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

$10,035,293, before deducting underwriting discounts and other issuance expenses of $995,333 recorded under the caption “General

and administrative” on the Company’s 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

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 did not meet the definition a liability under ASC 480, and the warrants are precluded from being considered indexed to the

entity’s own stock under ASC 815, resulting in the Warrants being classified as a liability.

The 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 cash 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

In addition, beginning on the date of the Warrant Stockholder Approval, the Warrants will contain a reset of the exercise

price to a price equal to the lesser of (i) the then-current exercise price and (ii) lowest volume weighted average price for the

five trading days immediately preceding and immediately following the date we effect a reverse stock split in the future with a

proportionate adjustment to the number of shares underlying the Warrants.

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.

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 $3,105,170.

The total fair value of the Warrants

upon issuance was $17,290,821.

Given that the gross proceeds received of $10,035,293 was less than the total fair value of the

liability classified Warrants, the Company recorded a loss on excess fair value of $7,255,528 at issuance.

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

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

We aim to grow in markets where we see significant

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

Generally, these markets are high growth markets that are

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

In these markets we seek to build or acquire businesses

that have attractive gross margins, strong opportunities for customer retention, and are not capital intensive.

We take a long-term approach

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

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

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

cutting edge technology.

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

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

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

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

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

We constantly

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

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

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

also utilizes sub-suppliers and third-party vendors to procure from or fabricate its components based on its design, engineering, and

specifications.

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

and the Company manages

all technical, physical and commercial aspects of the performance of the Company contracts.

Company competes on the basis of price, engineering and technological expertise, know-how and the quality of its products, systems and

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

products and services is a key factor in gaining business as customers typically prefer to make significant purchases from a company

with a solid performance history.

Company obtains virtually all its contracts through competitive bidding.

Although price is an important factor and may in some cases

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

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

Several companies market

products that compete directly with Company’s products.

Other companies offer products that potential customers may consider to

be acceptable alternatives to Company’s products and services.

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

Thus, the Company

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

The Company currently has multiple patents

and patent claims that it owns.

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

technology and intellectual property as allowed by its financial resources.

and Marketing

Company sales strategies vary across its businesses and depending on the brand, relies on direct sales force, manufacturing representatives,

distributors, integrators and installers, word of mouth or referrals, commission sales agents, magazine advertisements, internet advertising,

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

Our sales are global in nature,

but predominantly focused on the US market presently.

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

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

or wholesale pricing and are terminable at will.

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

on the Company’s behalf.

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

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

The Company selects representatives

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

the breadth of territorial coverage, among other criteria.

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

Thereafter, the Company’s sales and engineering

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

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

generally between two and twelve months.

Company’s principal customers in its Security segment are generally system integrators or channel partners who then sell our products

and solutions to our end customers, including government agencies or commercial businesses.

Historically, most of the customers have

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

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

In order to satisfy customer

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

Company’s principal customers in its Industrial Services segment include businesses engaged in manufacturing, chemical, packaging,

printing, electronics, automotive, construction, and metallurgical processing.

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

annual sales.

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

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

Management believes that

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

Company employs approximately 264 full-time employees and approximately 17 part-time employees as of the date of this Annual Report,

including 58 engaged in engineering, 140 in manufacturing and field service and 83 in administrative, sales and marketing functions.

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

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

Management believes that the Company’s business is operated

in material compliance with all such regulations.

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

What changed 10-K

Item 1. Business