CEMTREX INC 10-Q

Item 1. Financial Statements Cemtrex, Inc. and Subsidiaries Condensed Consolidated Balance Sheets (Unaudited) June 30, 2025 September 30, 2024 Assets Current assets Cash and cash equivalents $ 7,032,530 $ 3,897,511 Restricted cash 1,112,829 1,522,881 Trade receivables, net 12,678,928 11,159,676 Trade receivables, net - related party 513,263 685,788 Inventory, net 5,826,243 6,988,529 Contract assets, net 598,151 985,207 Prepaid expenses and other current assets 1,555,663 1,456,687 Total current assets 29,317,607 26,696,279 Property and equipment, net 9,573,374 9,133,578 Right-of-use operating lease assets 1,969,122 1,933,378 Royalties receivable, net - related party 230,143 456,611 Goodwill 3,708,347 3,708,347 Other 2,162,230 2,187,265 Total Assets $ 46,960,823 $ 44,115,458 Liabilities & Stockholders’ Equity Current liabilities Accounts payable $ 4,815,551 $ 4,520,173 Sales tax payable 14,575 73,024 Revolving line of credit 2,039,858 3,125,011 Current maturities of long-term liabilities 9,827,991 4,732,377 Operating lease liabilities - short-term 818,486 832,823 Loan from CEO 200,000 - Deposits from customers 261,671 408,415 Accrued expenses 1,925,794 1,393,902 Accrued payable on inventory in transit 168,717 640,450 Contract liabilities 2,709,590 1,254,204 Deferred revenue 1,329,902 1,297,616 Accrued income taxes 288,848 314,827 Total current liabilities 24,400,983 18,592,822 Long-term liabilities Long-term debt 8,475,921 13,270,178 Long-term operating lease liabilities 1,200,841 1,159,204 Other long-term liabilities 285,821 274,957 Deferred Revenue - long-term 490,046 658,019 Warrant liabilities 8,255,215 5,199,436 Total long-term liabilities 18,707,844 20,561,794 Total liabilities 43,108,827 39,154,616 Commitments and contingencies - - Stockholders’ equity Preferred stock , $ 0.001 par value, 10,000,000 shares authorized, Series 1, 3,000,000 shares authorized, 2,705,327 shares issued and 2,641,227 shares outstanding as of June 30, 2025 and 2,456,827 shares issued and 2,392,727 shares outstanding as of September 30, 2024 (liquidation value of $ 10 per share) 2,705 2,457 Series C, 100,000 shares authorized, 50,000 shares issued and outstanding at June 30, 2025 and September 30, 2024 50 50 Common stock, $ 0.001 par value, 70,000,000 shares authorized, 3,509,606 shares issued and outstanding at June 30, 2025 and 14,176 shares issued and outstanding at September 30, 2024 3,510 14 Additional paid-in capital 97,402,468 73,262,536 Accumulated deficit ( 96,270,146 ) ( 71,355,386 ) Treasury stock, 64,100 shares of Series 1 Preferred Stock at June 30, 2025, ( 148,291 ) ( 148,291 ) Accumulated other comprehensive income 2,627,462 2,949,297 Total Cemtrex stockholders’ equity 3,617,758 4,710,677 Non-controlling interest 234,238 250,165 Total liabilities and stockholders’ equity $ 46,960,823 $ 44,115,458 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 3 Table of Contents Cemtrex, Inc. and Subsidiaries Condensed Consolidated Statements of Operations (Unaudited) June 30, 2025 June 30, 2024 June 30, 2025 June 30, 2024 For the three months ended For the nine months ended June 30, 2025 June 30, 2024 June 30, 2025 June 30, 2024 Revenues $ 16,965,658 $ 14,686,398 $ 57,955,826 $ 48,724,159 Cost of revenues 9,595,152 8,809,251 32,717,929 28,825,197 Gross profit 7,370,506 5,877,147 25,237,897 19,898,962 Operating expenses General and administrative 7,626,342 8,192,180 21,490,373 22,184,303 Research and development 386,565 864,483 2,054,537 2,664,688 Total operating expenses 8,012,907 9,056,663 23,544,910 24,848,991 Operating (loss)/income ( 642,401 ) ( 3,179,516 ) 1,692,987 ( 4,950,029 ) Other (expense)/income Other income/(expense), net 68,002 ( 933,539 ) ( 47,190 ) ( 710,363 ) Interest expense ( 461,504 ) ( 521,316 ) ( 1,398,415 ) ( 1,697,803 ) Gain/(loss) on exercise of warrant liabilities 74,008 ( 7,255,528 ) ( 15,722,097 ) ( 7,255,528 ) Changes in fair value of warrant liability ( 3,615,437 ) 2,807,890 ( 8,928,275 ) 2,807,890 Total other income/(expense), net ( 3,934,931 ) ( 5,902,493 ) ( 26,095,977 ) ( 6,855,804 ) Net loss before income taxes ( 4,577,332 ) ( 9,082,009 ) ( 24,402,990 ) ( 11,805,833 ) Income tax expense 14,035 67,294 245,098 238,049 Loss from continuing operations ( 4,591,367 ) ( 9,149,303 ) ( 24,648,088 ) ( 12,043,882 ) (Loss)/income from discontinued operations, net of tax ( 42,280 ) 9,984 ( 282,599 ) 30,939 Net loss ( 4,633,647 ) ( 9,139,319 ) ( 24,930,687 ) ( 12,012,943 ) Less net loss in noncontrolling interest ( 90,312 ) ( 158,293 ) ( 15,927 ) ( 351,212 ) Net loss attributable to Cemtrex, Inc. stockholders $ ( 4,543,335 ) $ ( 8,981,026 ) $ ( 24,914,760 ) $ ( 11,661,731 ) Income/(loss) per share - Basic & Diluted Continuing Operations $ ( 1.78 ) $ ( 605.49 ) $ ( 11.68 ) $ ( 2,232.92 ) Discontinued Operations $ ( 0.02 ) $ 0.67 $ ( 0.13 ) $ 5.88 Weighted Average Number of Shares-Basic & Diluted 2,542,677 14,936 2,111,669 5,260 Condensed Consolidated Statements of Comprehensive Loss (Unaudited) June 30, 2025 June 30, 2024 June 30, 2025 June 30, 2024 For the three months ended For the nine months ended June 30, 2025 June 30, 2024 June 30, 2025 June 30, 2024 Other comprehensive loss Net loss $ ( 4,633,647 ) $ ( 9,139,319 ) $ ( 24,930,687 ) $ ( 12,012,943 ) Foreign currency translation gain/(loss) 233,086 188,491 ( 321,835 ) ( 114,431 ) Comprehensive loss ( 4,400,561 ) ( 8,950,828 ) ( 25,252,522 ) ( 12,127,374 ) Less net (loss)/income in noncontrolling interest ( 90,312 ) 158,293 ( 15,927 ) ( 351,212 ) Comprehensive loss attributable to Cemtrex, Inc. stockholders $ ( 4,310,249 ) $ ( 9,109,121 ) $ ( 25,236,595 ) $ ( 11,776,162 ) The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 4 Table of Contents Cemtrex, Inc. and Subsidiaries Condensed Consolidated Statement of Stockholders’ Equity (Unaudited) Preferred Stock Series 1 Par Value $0.001 Preferred Stock Series C Par Value $0.001 Common Stock Par Value $0.001 Treasury Accumulated Number of Number of Number of Additional Paid-in Accumulated Stock, 64,100 shares of other Comprehensive Cemtrex Stockholders’ Non- controlling Shares Amount Shares Amount Shares Amount Capital Deficit Series 1 Preferred Stock Income Equity interest Balance at September 30, 2024 2,456,827 $ 2,457 50,000 $ 50 14,176 $ 14 $ 73,262,536 $ ( 71,355,386 ) $ ( 148,291 ) $ 2,949,297 $ 4,710,677 $ 250,165 Foreign currency translation loss ( 131,439 ) ( 131,439 ) Share-based compensation 4,087 4,087 Dividends paid in Series 1 preferred shares 123,167 123 ( 123 ) - Exercise of Series A warrants 1,436,749 1,437 21,514,340 21,515,777 Exercise of Series B warrants 333,650 334 1,095,397 1,095,731 Loss attributable to noncontrolling interest ( 180,152 ) Net loss - - - - - - - ( 28,754,367 ) - - ( 28,754,367 ) - Balance at December 31, 2024 2,579,994 $ 2,580 50,000 $ 50 1,784,575 $ 1,785 $ 95,876,237 $ ( 100,109,753 ) $ ( 148,291 ) $ 2,817,858 $ ( 1,559,534 ) $ 70,013 Foreign currency translation loss $ ( 423,482 ) ( 423,482 ) Share-based compensation $ 3,096 3,096 Rounding shares 6 - Income attributable to noncontrolling interest - $ 254,537 Net income - - - - $ 8,382,942 - - 8,382,942 - Balance at March 31, 2025 2,579,994 $ 2,580 50,000 $ 50 1,784,581 $ 1,785 $ 95,879,333 $ ( 91,726,811 ) $ ( 148,291 ) $ 2,394,376 $ 6,403,022 $ 324,550 Foreign currency translation gain $ 233,086 233,086 Share-based compensation $ 3,097 3,097 Loss attributable to noncontrolling interest - $ ( 90,312 ) Dividends paid in Series 1 preferred shares 129,111 $ 129 $ ( 129 ) - Cancelation of 3,778 shares of Series 1 Preferred Shares ( 3,778 ) $ ( 4 ) $ 4 - Shares issued in offering 1,250,000 $ 1,250 $ 1,057,700 1,058,950 Shares issued in over allotment exercise 187,500 $ 188 $ 172,312 172,500 Series B Warrant exercises 287,525 $ 287 $ 290,151 290,438 Net loss - - - - - - - $ ( 4,543,335 ) - - ( 4,543,335 ) - Balance at June 30, 2025 2,705,327 $ 2,705 50,000 $ 50 3,509,606 $ 3,510 $ 97,402,468 $ ( 96,270,146 ) $ ( 148,291 ) $ 2,627,462 $ 3,617,758 $ 234,238 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements . 5 Table of Contents Cemtrex, Inc. and Subsidiaries Condensed Consolidated Statement of Stockholders’ Equity (Continued) (Unaudited) Preferred Stock Series 1 Preferred Stock Series C Common Stock Par Par Value $0.001 Par Value $0.001 Value $0.001 Treasury Accumulated Number of Number of Number of Additional Paid-in Accumulated Stock, 64,100 shares of other Comprehensive Cemtrex Stockholders’ Non- controlling Shares Amount Shares Amount Shares Amount Capital Deficit Series 1 Preferred Stock Income Equity interest Balance at September 30, 2023 2,293,016 $ 2,293 50,000 $ 50 498 $ 1 $ 68,882,750 $ ( 64,125,895 ) $ ( 148,291 ) $ 3,076,706 $ 7,687,614 $ 656,179 Foreign currency translation gain 227,764 227,764 Share-based compensation 7,558 7,558 Shares issued to pay notes payable 5 40,000 40,000 Dividends paid in Series 1 preferred shares 115,037 115 ( 115 ) - Loss attributable to noncontrolling interest - ( 96,409 ) Net loss - - - - ( 1,207,494 ) - - ( 1,207,494 ) - Balance at December 31, 2023 2,408,053 $ 2,408 50,000 $ 50 503 $ 1 $ 68,930,193 $ ( 65,333,389 ) $ ( 148,291 ) $ 3,304,470 $ 6,755,442 $ 559,770 Foreign currency translation loss $ ( 530,686 ) ( 530,686 ) Share-based compensation $ 7,558 7,558 Purchase of treasury stock $ ( 69,705 ) ( 69,705 ) Loss attributable to noncontrolling interest - $ ( 96,510 ) Net loss - - - - $ ( 1,473,211 ) - - ( 1,473,211 ) - Balance at March 31, 2024 2,408,053 2,408 50,000 50 503 1 68,937,751 ( 66,806,600 ) ( 217,996 ) 2,773,784 4,689,398 463,260 Balance 2,408,053 2,408 50,000 50 503 1 68,937,751 ( 66,806,600 ) ( 217,996 ) 2,773,784 4,689,398 463,260 Foreign currency translation gain 188,491 188,491 Foreign currency translation (loss)/gain 188,491 188,491 Share-based compensation 7,559 7,559 Dividends paid in Series 1 preferred shares 120,725 121 ( 121 ) - Common shares issued to underwriter 264 - 96,360 96,360 Exercise of prefunded warrants 5,338 5 3,093,955 3,093,960 Exercise of Series A warrants 1,670 2 864,212 864,214 Cancellation of treasury stock ( 71,951 ) ( 72 ) ( 69,633 ) 69,705 - Loss attributable to noncontrolling interest - ( 158,293 ) Income/(l oss) attributable to noncontrolling interest - ( 158,293 ) Shares issued to pay for services 12 - 89,000 89,000 Net loss - - - - - - - ( 8,981,026 ) - - ( 8,981,026 ) - Net income (loss) - - - - - - - ( 8,981,026 ) - - ( 8,981,026 ) - Balance at June 30, 2024 2,456,827 2,457 50,000 50 7,787 8 73,019,083 ( 75,787,626 ) ( 148,291 ) 2,962,275 47,956 304,967 Balance 2,456,827 2,457 50,000 50 7,787 8 73,019,083 ( 75,787,626 ) ( 148,291 ) 2,962,275 47,956 304,967 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 6 Table of Contents Cemtrex, Inc. and Subsidiaries Condensed Consolidated Statements of Cash Flows (Unaudited) For the nine months ended June 30, 2025 2024 Cash Flows from Operating Activities Net loss $ ( 24,930,687 ) $ ( 12,012,943 ) Adjustments to reconcile net loss to net cash used by operating activities Depreciation and amortization 960,930 998,641 (Gain)/loss on disposal of property and equipment 19,668 ( 13,595 ) Noncash lease expense 684,360 645,695 Bad debt expense 55,222 1,429,791 Contract modification - related party 280,545 - Share-based compensation 10,280 22,675 Income tax expense - 208,669 Shares issued to pay for services - 129,000 Accrued interest on notes payable 803,030 937,899 Non-cash royalty income ( 48,668 ) ( 39,846 ) Amortization of original issue discounts on notes payable 29,167 - Loan origination costs 5,000 54,400 Loss on excess fair value of warrants - 7,255,528 Loss on exercise of warrant liabilities 15,722,096 - Changes in fair value of warrant liability 8,928,275 ( 2,807,890 ) Changes in operating assets and liabilities net of effects from acquisition of subsidiaries: Trade receivables ( 1,534,474 ) 1,420,733 Trade receivables - related party 87,116 ( 136,277 ) Inventory 1,162,286 1,350,333 Contract assets 387,056 624,141 Prepaid expenses and other current assets ( 98,976 ) 548,129 Other assets 125,035 ( 274,081 ) Accounts payable 295,378 ( 1,588,439 ) Accounts payable - related party - ( 5,009 ) Sales tax payable ( 58,449 ) 2,036 Operating lease liabilities ( 692,804 ) ( 646,595 ) Deposits from customers ( 146,744 ) 189,331 Accrued expenses 60,159 ( 496,932 ) Contract liabilities 1,455,386 921,287 Deferred revenue ( 135,687 ) ( 395,065 ) Income taxes payable ( 24,582 ) ( 196,727 ) Other liabilities 10,864 ( 201,366 ) Net cash provided by/(used in) operating activities 3,410,782 ( 2,076,477 ) Cash Flows from Investing Activities Purchase of property and equipment ( 1,435,743 ) ( 429,334 ) Proceeds from sale of property and equipment 13,511 77,110 Royalties on related party revenues 40,000 46,000 Investment in MasterpieceVR ( 100,000 ) ( 100,000 ) Net cash used by investing activities ( 1,482,232 ) ( 406,224 ) Cash Flows from Financing Activities Proceeds on revolving line of credit 23,424,024 26,682,873 Payments on revolving line of credit ( 24,509,177 ) ( 24,025,081 ) Payments on debt ( 985,212 ) ( 7,818,405 ) Payments on Paycheck Protection Program Loans ( 50,628 ) ( 30,365 ) Proceeds on Loan from CEO 200,000 - Proceeds on bank loans - 28,267 Proceeds from notes payable 500,000 - Proceeds from warrant exercises 1,307,354 - Proceeds from offerings 1,463,550 10,035,293 Expenses on offerings ( 232,100 ) ( 935,333 ) Purchases of treasury stock - ( 69,705 ) Net cash provided by financing activities 1,117,811 3,867,544 Effect of currency translation ( 321,394 ) ( 114,180 ) Net increase/(decrease) in cash, cash equivalents, and restricted cash 2,724,967 1,270,663 Cash, cash equivalents, and restricted cash at beginning of period 5,420,392 6,349,562 Cash, cash equivalents, and restricted cash at end of period $ 8,145,359 $ 7,620,225 Balance Sheet Accounts Included in Cash, Cash Equivalents, and Restricted Cash Cash and cash equivalents $ 7,032,530 $ 6,468,197 Restricted cash 1,112,829 1,152,028 Total cash, cash equivalents, and restricted cash $ 8,145,359 $ 7,620,225 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 7 Table of Contents Cemtrex, Inc. and Subsidiaries Condensed Consolidated Statements of Cash Flows (Continued) (Unaudited) For the nine months ended June 30, 2025 2024 Supplemental Disclosure of Cash Flow Information: Cash paid during the period for interest $ 1,777,081 $ 705,504 Cash paid during the period for income taxes, net of refunds $ 237,943 $ 196,727 Supplemental Schedule of Non-Cash Investing and Financing Activities Shares issued to pay for services $ - $ 129,000 Financing of fixed asset purchase $ - $ 28,331 Noncash recognition of new leases $ 720,104 $ 294,513 Series A Warrant Exercises $ 21,515,777 $ - Series B Warrant Exercises $ 1,386,169 $ - The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 8 Table of Contents Cemtrex, Inc. and Subsidiaries NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) NOTE 1 – ORGANIZATION AND PLAN OF OPERATIONS Cemtrex 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. The Company’s reporting segments consist of Security and Industrial Services. Additionally, the Company’s operational structure also reports unallocated corporate expenses. Security Cemtrex’s Security segment operates under the brand of its 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 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. AIS installs high precision equipment in a wide variety of industrial markets like automotive, printing & 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. We help 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. Common Stock Reverse Stock Split On 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. Nasdaq Notices for Listing Deficiencies On 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. On December 11, 2024, we received a notification letter from the Nasdaq notifying us that we have regained compliance with the Minimum Bid Requirement. Although we currently meet the Nasdaq Minimum Bid Requirement, out of abundance of caution, we believe that a future reverse split may be necessary in the future if we were to fall short of the Minimum Bid Price Requirement. A Reverse Stock Split would potentially increase our bid price such that we maintain the Minimum Bid Requirement required for maintaining the listing requirements for the Nasdaq Capital Market. 9 Table of Contents On 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”). On October 23, 2024, the Company received a letter from Nasdaq that it had been granted an extension to February 17, 2025, to regain compliance with the Minimum Stockholder’s Equity Requirement. On January 2, 2025, the Company received a letter from Nasdaq notifying the Company that based on the Company’s Form 10-K filed on December 30, 2024, evidencing stockholders’ equity of $ 4,710,677 , Nasdaq has determined that the Company complies with the Minimum Stockholder’s Equity Requirement and this matter is now closed. On February 24, 2025, 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 December 31, 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”). On April 22, 2025, the Company received a letter from Nasdaq that it had been granted an extension to August 20, 2025, to regain compliance with the Minimum Stockholder’s Equity Requirement. On June 4, 2025, the Company received a letter from Nasdaq notifying the Company that based on the Company’s Form 10-Q for the period ended March 31, 2025, filed on May 15, 2025, evidencing stockholders’ equity of $ 6,403,022 , Nasdaq has determined that the Company complies with the Minimum Stockholder’s Equity Requirement and this matter is now closed. Going Concern Considerations The accompanying unaudited condensed consolidated financial statements of the Company have been prepared assuming the Company will continue as a going concern and in accordance with generally accepted accounting principles in the United States of America. The going concern basis of presentation assumes that the Company will continue in operation one year after the date these financial statements are issued and will be able to realize its assets and discharge its liabilities and commitments in the normal course of business. Pursuant to the requirements of the ASC 205, management must evaluate whether there are conditions or events, considered in the aggregate, which raise substantial doubt about the Company’s ability to continue as a going concern for one year from the date these financial statements are issued. This evaluation does not take into consideration the potential mitigating effect of management’s plans that have not been fully implemented or are not within control of the Company as of the date the financial statements are issued. When substantial doubt exists under this methodology, management evaluates whether the mitigating effect of its plans sufficiently alleviates substantial doubt about the Company’s ability to continue as a going concern. The mitigating effect of management’s plans, however, is only considered if both (1) it is probable that the plans will be effectively implemented within one year after the date that the financial statements are issued, and (2) it is probable that the plans, when implemented, will mitigate the relevant conditions or events that raise substantial doubt about the entity’s ability to continue as a going concern within one year after the date that the financial statements are issued. The Company has incurred substantial operational losses of $ 5,269,745 and $ 1,511,508 for fiscal years 2024 and 2023, respectively, and an operational gain of $ 1,692,987 for the nine months ended June 30, 2025. Additionally, the Company has debt obligations over the next fiscal year of $ 12,067,849 and working capital of $ 4,916,624 , that raise substantial doubt with respect to the Company’s ability to continue as a going concern. 10 Table of Contents While our working capital and current debt indicate a substantial doubt regarding the Company’s ability to continue as a going concern, the Company has historically, from time to time, satisfied and may continue to satisfy certain short-term liabilities through the issuance of common stock, thus reducing our cash requirement to meet our operating needs. The Company has $ 7,032,530 in cash as of June 30, 2025. Additionally, the Company has (i) secured a line of credit for its Vicon brand to fund operations, which as of June 30, 2025, has available capacity of approximately $ 936,000 , (ii) continually reevaluate our pricing model on our Vicon brand to improve margins on those products and introducing new innovative products to grow revenues, (iii) raised $ 9,039,959 in net proceeds through our May 2024 equity financing, raised an additional $ 1,307,354 through exercise of our Series B Warrants, and anticipate up to $ 4 million of Series B warrants may be exercised, (iv) raised $ 1,231,450 through a private equity offering on May 29, 2025, and (v) on October 2, 2024, and November 26, 2024 has effected a 60:1 and a 35:1 reverse stock split, respectively, on our common stock to remain trading on the Nasdaq Capital Markets, and improve our ability to potentially raise capital through equity offerings that we may use to satisfy debt. In the event additional capital is raised through equity offerings and/or debt is satisfied with equity, it may have a dilutive effect on our existing stockholders. While the Company believes these plans, if successful, would be sufficient to meet the capital demands of our current operations for at least the next twelve months, there is no guarantee that we will succeed. Overall, there is no guarantee that cash flow from our existing or future operations and any external capital that we may be able to raise will be sufficient to meet our working capital needs. The Company currently does not have adequate cash or available liquidity/available capacity on our lines of credit to meet our long-term needs and our above plans in the short term may prove to be inadequate to continue as a going concern. Thus, despite our cash on hand, our ability to draw on our credit line, or changes to our pricing models, and other safeguards, we may be unable to meet our obligations as they become due over the next twelve months beyond the issuance date. The unaudited condensed consolidated financial statements do not include any adjustments relating to this uncertainty. NOTE 2 – INTERIM STATEMENT PRESENTATION Basis of Presentation and Use of Estimates The accompanying unaudited condensed consolidated financial information should be read in conjunction with the audited consolidated financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the year ended September 30, 2024. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the Unites States (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X pursuant to the requirements of the U.S. Securities and Exchange Commission (‘SEC”). Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. The results of operations for the interim periods are not necessarily indicative of the results of operations for the entire year. The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the condensed consolidated financial statements, the disclosure of contingent assets and liabilities in the condensed consolidated financial statements and the accompanying notes, and the reported amounts of revenues, expenses and cash flows during the periods presented. Actual amounts and results could differ from those estimates. The estimates and assumptions the Company makes are based on historical factors, current circumstances and the experience and judgment of the Company’s management. The Company evaluates its estimates and assumptions on an ongoing basis. Significant Accounting Policies Note 2 of the Notes to Consolidated Financial Statements, included in the annual report on Form 10-K for the year ended September 30, 2024, includes a summary of the significant accounting policies used in the preparation of the unaudited condensed consolidated financial statements. Recently Adopted Accounting Pronouncements In November 2023, the FASB issued ASU 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures” (“ASU 2023-07”), which enhances the disclosures required for operating segments in the Company’s annual and interim consolidated financial statements. ASU 2023-07 is effective for the Company for annual reporting for fiscal 2025 and for interim period reporting beginning in fiscal 2026 on a retrospective basis. Early adoption is permitted. On October 1, 2024, the Company implemented this standard and there has been no material change to the unaudited condensed consolidated financial statements. 11 Table of Contents On June 30, 2022, the FASB issued ASU 2022-03 Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions (“ASU 2022-03”), which (1) clarifies the guidance in ASC 820 on the fair value measurement of an equity security that is subject to a contractual sale restriction and (2) requires specific disclosures related to such an equity security. Under current guidance, stakeholders have observed diversity in practice related to whether contractual sale restrictions should be considered in the measurement of the fair value of equity securities that are subject to such restrictions. On the basis of interpretations of existing guidance and the current illustrative example in ASC 820-10-55-52 of a restriction on the sale of an equity instrument, some entities use a discount for contractual sale restrictions when measuring fair value, while others view the application of such a discount to be inconsistent with the principles of ASC 820. To reduce the diversity in practice and increase the comparability of reported financial information, ASU 2022-03 clarifies this guidance and amends the illustrative example. ASU No. 2022-03 is effective for fiscal years beginning after December 15, 2023, with early adoption permitted. On October 1, 2024, the Company implemented this standard and there has been no material change to the unaudited condensed consolidated financial statements. Recently Issued Accounting Pronouncements Not Yet Effective In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures,” which requires public entities to disclose consistent categories and greater disaggregation of information in the rate reconciliation and for income taxes paid. It also includes certain other amendments to improve the effectiveness of income tax disclosures. The guidance is effective for financial statements issued for annual periods beginning after December 15, 2024, with early adoption permitted. The Company is required to adopt this standard prospectively in fiscal year 2026 for the annual reporting period ending September 30, 2026. The Company is currently in the process of evaluating the impact of adoption on the unaudited condensed consolidated financial statements. In November 2024, the FASB issued ASU 2024-03, “Income Statement (Topic 220): Reporting Comprehensive Income - Expense Disaggregation Disclosures, Disaggregation of Income Statement Expenses”, that requires public companies to disclose, in interim and reporting periods, additional information about certain expenses in the financial statements. ASU 2024-03 is effective for annual periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption is permitted and is effective on either a prospective basis or retrospective basis. The Company is currently assessing the potential impacts of adoption on the unaudited condensed consolidated financial statements. In November 2024, the FASB issued ASU 2024-04, “Debt with Conversion and Other Options (Subtopic 470-20), which clarifies the requirements for determining whether certain settlements of convertible debt instruments should be accounted for as an induced conversion. ASU 2024-04 is effective for annual periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods. Early adoption is permitted for all entities that have adopted the amendments in Update 2020-06. Adoption can be on a prospective or retrospective basis. The Company is currently in the process of evaluating the impact of adoption on the unaudited condensed consolidated financial statements. The Company does not believe that any other recently issued but not yet effective accounting pronouncements, if adopted, would have a material effect on the accompanying unaudited condensed consolidated financial statements. NOTE 3 – REVENUE The following table illustrates the approximate disaggregation of the Company’s revenue based off timing of revenue recognition for the three and nine months ended June 30, 2025 and 2024: SCHEDULE OF DISAGGREGATION OF REVENUE RECOGNITION For the three months ended For the nine months ended June 30, 2025 June 30, 2024 June 30, 2025 June 30, 2024 Over time 59 % 63 % 52 % 57 % Point-in-time 41 % 37 % 48 % 43 % Revenue performance obligation percentage 41 % 37 % 48 % 43 % 12 Table of Contents NOTE 4 – INCOME/(LOSS) PER COMMON SHARE Basic net income/(loss) per common share is computed by dividing net income/(loss) by the weighted average number of shares of common stock outstanding during the period. Diluted net income/(loss) per common share is computed by dividing net income by the weighted average number of shares of common stock and potentially dilutive outstanding shares of common stock during the period to reflect the potential dilution that could occur from common shares issuable through contingent share arrangements, stock options and warrants. For the three and nine months ended June 30, 2025, and 2024, the following items were excluded from the computation of diluted net income/(loss) per common share as their effect is anti-dilutive: SCHEDULE OF COMPUTATION OF DILUTED NET LOSS PER COMMON SHARE AS ANTI-DILUTIVE EFFECT For the three months ended For the nine months ended June 30, 2025 June 30, 2024 June 30, 2025 June 30, 2024 Options 18 18 18 18 Warrants 11,413,951 - 11,413,951 - Anti-dilutive shares 11,413,951 - 11,413,951 - For the three and nine months ended June 30, 2025, and 2024, income/(loss) per share basic and diluted for continuing operations are calculated as follows: SCHEDULE OF LOSS PER SHARE BASIC AND DILUTED FOR CONTINUING OPERATIONS For the three months For the nine months ended June 30, June 30, 2025 2024 2025 2024 Loss from Continuing operations $ ( 4,591,367 ) $ ( 9,149,303 ) $ ( 24,648,088 ) $ ( 12,043,882 ) Less loss in noncontrolling interest ( 90,312 ) ( 158,293 ) ( 15,927 ) ( 351,212 ) Preferred stock dividends 21,949 52,515 21,949 52,515 Net loss applicable to common shareholders ( 4,523,004 ) ( 9,043,525 ) ( 24,654,110 ) ( 11,745,185 ) Weighted Average Number of Shares-Basic & Diluted 2,542,677 14,936 2,111,669 5,260 Earnings/(loss) per share - Basic & Diluted - Continuing Operations $ ( 1.78 ) $ ( 605.49 ) $ ( 11.68 ) $ ( 2,232.92 ) In 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. NOTE 5 – SEGMENT INFORMATION The Company reports and evaluates financial information for two reportable segments: the Security segment and the Industrial Services segment. The Chief Operating Decision Maker (“CODM”) for all segments is Saagar Govil, the CEO of the Company. The following tables summarize the Company’s reportable segment information and unallocated corporate expenses: SCHEDULE OF SEGMENT INFORMATION Three months ended June 30, 2025 Three months ended June 30, 2024 Reportable Segments Reportable Segments Security Industrial Services Corporate Consolidated Security Industrial Services Corporate Consolidated External revenues $ 7,581,814 $ 9,383,844 $ - $ 16,965,658 $ 6,193,487 $ 8,492,911 $ - $ 14,686,398 Cost of revenues 3,628,252 5,966,900 - 9,595,152 2,970,396 5,838,855 - 8,809,251 Gross profit $ 3,953,562 $ 3,416,944 $ - $ 7,370,506 $ 3,223,091 $ 2,654,056 $ - $ 5,877,147 Operating expenses Sales, general, and administrative 4,202,304 2,371,501 739,632 7,313,437 4,363,645 1,917,206 1,585,878 7,866,729 Depreciation and amortization 87,290 225,615 - 312,905 96,210 229,241 - 325,451 Research and development 386,565 - - 386,565 864,483 - - 864,483 Operating (loss)/income $ ( 722,597 ) $ 819,828 $ ( 739,632 ) $ ( 642,401 ) ( 2,101,247 ) 507,609 ( 1,585,878 ) ( 3,179,516 ) Other income/(expense), net $ ( 359,260 ) $ ( 2,363,574 ) $ ( 1,212,097 ) $ ( 3,934,931 ) $ ( 119,813 ) $ ( 50,250 ) $ ( 5,732,430 ) $ ( 5,902,493 ) 13 Table of Contents Nine months ended June 30, 2025 Nine months ended June 30, 2024 Reportable Segments Reportable Segments Security Industrial Services Corporate Consolidated Security Industrial Services Corporate Consolidated External revenues $ 30,016,665 $ 27,939,161 $ - $ 57,955,826 $ 23,446,220 $ 25,277,939 $ - $ 48,724,159 Cost of revenues 14,419,488 18,298,441 - 32,717,929 11,593,213 17,231,984 - 28,825,197 Gross profit $ 15,597,177 $ 9,640,720 $ - $ 25,237,897 $ 11,853,007 $ 8,045,955 $ - $ 19,898,962 Operating expenses General, and administrative 11,617,358 6,361,927 2,550,158 20,529,443 12,524,869 5,343,738 3,317,055 21,185,662 Depreciation and amortization 258,746 702,184 - 960,930 295,622 703,019 - 998,641 Research and development 2,054,537 - - 2,054,537 2,664,688 - - 2,664,688 Operating (loss)/income $ 1,666,536 $ 2,576,609 $ ( 2,550,158 ) $ 1,692,987 $ ( 3,632,172 ) $ 1,999,198 $ ( 3,317,055 ) $ ( 4,950,029 ) Other income/(expense), net $ ( 1,245,908 ) $ ( 2,551,945 ) $ ( 22,298,124 ) $ ( 26,095,977 ) $ ( 392,707 ) $ ( 236,683 ) $ ( 6,226,414 ) $ ( 6,855,804 ) June 30, September 30, 2025 2024 Identifiable Assets Security $ 17,521,601 $ 17,253,328 Industrial Services 26,943,580 24,576,055 Corporate 2,495,642 2,286,075 Total Assets $ 46,960,823 $ 44,115,458 Unallocated corporate expenses mainly relate to payroll and benefits for corporate officers, investor relation expenses, accounting expenses related to audit and taxes, legal expenses related to corporate matters, interest expense on notes payable, and Series A and B Warrants transaction losses. NOTE 6 – RESTRICTED CASH A subsidiary of the Company participates in a consortium in order to self-insure group care coverage for its employees. The plan is administrated by Benecon Group and the Company makes monthly deposits in a trust account to cover medical claims and any administrative costs associated with the plan. These funds, as required by the plan, are restricted in nature and amounted to $ 899,008 at June 30, 2025, and $ 1,030,606 at September 30, 2024. Additionally, there was $ 100,000 of restricted cash in escrow per the purchase agreement with Heisey Mechanical, Ltd, as of June 30, 2025 and September 30, 2024, an additional $ 45,256 and $ 325,340 in escrow related to bond requirements on certain public projects as of June 30, 2025, and September 30, 2024, respectively, and $ 68,565 and $ 66,935 in deposit guarantees as of June 30, 2025, and September 30, 2024, respectively. NOTE 7 – FAIR VALUE MEASUREMENTS Fair value is defined as the price that would be received upon sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A three-level hierarchy is applied to prioritize the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy under the guidance for fair value measurements are described below: Level 1 — Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. Our Level 1 assets include cash equivalents, banker’s acceptances, trading securities investments and investment funds. The Company measures trading securities investments and investment funds at quoted market prices as they are traded in an active market with sufficient volume and frequency of transactions. Level 2 — Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. If the asset or liability has a specified contractual term, a Level 2 input must be observable for substantially the full term of the asset or liability. 14 Table of Contents Level 3 — Level 3 inputs are unobservable inputs for the asset or liability in which there is little, if any, market activity for the asset or liability at the measurement date. Level 3 assets and liabilities include cost method investments. Quantitative information for Level 3 assets and liabilities reviewed at each reporting period includes indicators of significant deterioration in the earnings performance, credit rating, asset quality, business prospects of the investee, and financial indicators of the investee’s ability to continue as a going concern. The Company’s fair value liabilities at June 30, 2025, and September 30, 2024, are as follows. SCHEDULE OF FAIR VALUE OF LIABILITIES Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs Balance as of June 30, (Level 1) (Level 2) (Level 3) 2025 Liabilities Warrant liabilities $ 962,537 $ 7,292,678 $ — $ 8,255,215 $ 962,537 $ 7,292,678 $ — $ 8,255,215 Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs Balance as of September 30, (Level 1) (Level 2) (Level 3) 2024 Liabilities Warrant liabilities $ 4,160,658 $ 1,038,778 $ - $ 5,199,436 $ 4,160,658 $ 1,038,778 $ - $ 5,199,436 A summary of the warrant liabilities activity, per the valuation inputs disclosed in NOTE 20 - STOCKHOLDERS’ EQUITY, for the nine months ended June 30, 2025, is as follows: SCHEDULE OF WARRANT LIABILITIES ACTIVITY Series A Warrants Series B Warrants Total Warrant Liabilities at September 30, 2024 $ 4,160,658 $ 1,038,778 $ 5,199,436 Warrants Issued - - - Warrants Exercised ( 5,669,908 ) ( 202,588 ) ( 5,872,496 ) Fair market revaluation 2,471,787 6,456,488 8,928,275 Warrant Liabilities at June 30, 2025 $ 962,537 $ 7,292,678 $ 8,255,215 NOTE 8 – TRADE RECEIVABLES, NET Trade receivables, net consisted of the following: SCHEDULE OF TRADE RECEIVABLES, NET June 30, September 30, 2025 2024 Trade receivables $ 12,850,068 $ 11,315,594 Allowance for credit losses ( 171,140 ) ( 155,918 ) Accounts receivables, net, total $ 12,678,928 $ 11,159,676 Trade receivables include amounts due for shipped products and services rendered. Allowance for credit losses include estimated losses resulting from the inability of our customers to make the required payments. 15 Table of Contents NOTE 9 – PREPAID EXPENSES AND OTHER CURRENT ASSETS Prepaid expenses and other current assets consisted of the following: SCHEDULE OF PREPAID EXPENSES AND OTHER CURRENT ASSETS June 30, 2025 September 30, 2024 Prepaid expenses $ 747,169 $ 547,914 Prepaid inventory 143,220 301,605 Deferred costs 24,922 71,359 Short-term investments 14,715 13,871 Prepaid income taxes 625,637 462,997 VAT and GST tax receivable - 58,941 Prepaid expenses and other current assets total $ 1,555,663 $ 1,456,687 NOTE 10 – INVENTORY, NET Inventory, net consisted of the following: SCHEDULE OF INVENTORY, NET June 30, September 30, 2025 2024 Raw materials $ 609,725 $ 421,557 Work in progress 391,302 272,910 Finished goods 4,825,216 6,294,062 Inventory, net 5,826,243 6,988,529 The Company maintained an allowance for obsolete inventories of $ 954,997 and $ 1,044,530 at June 30, 2025, and September 30, 2024, respectively. NOTE 11 – PROPERTY AND EQUIPMENT Property and equipment are summarized as follows: SCHEDULE OF PROPERTY AND EQUIPMENT June 30, September 30, 2025 2024 Land $ 945,279 $ 945,279 Building and leasehold improvements 4,413,642 4,388,556 Furniture and office equipment 619,209 600,186 Computers and software 1,333,135 1,333,135 Machinery and equipment 14,931,107 13,578,702 Property and equipment, gross 22,242,372 20,845,858 Less: Accumulated depreciation ( 12,668,998 ) ( 11,712,280 ) Property and equipment, net $ 9,573,374 $ 9,133,578 Depreciation expense for the three and nine months ended June 30, 2025 and 2024, was $ 312,905 and $ 960,930 , and $ 325,451 and $ 998,641 , respectively, and is recorded in cost of revenues and general and administrative expenses on the Company’s unaudited condensed consolidated statements of operations. NOTE 12 – GOODWILL Changes in the carrying amount of goodwill, by segment, were as follows: SCHEDULE OF GOODWILL BY SEGMENT Security Industrial Services Consolidated Balance at September 30, 2024 $ - $ 3,708,347 $ 3,708,347 Impairment /adjustments - - - Balance at June 30, 2025 $ - $ 3,708,347 $ 3,708,347 16 Table of Contents As of June 30, 2025, and September 30, 2024, accumulated impairment losses of $ 3,846,475 have been recorded related to the Security segment. NOTE 13 – OTHER ASSETS On November 13, 2020, and January 19, 2022, Cemtrex made $ 500,000 in investments, on July 18, 2023, and October 5, 2023, made additional $ 100,000 in investments, and on October 17, 2024, and November 18, 2024, made additional $ 50,000 in investments on each respective date, via a simple agreement for future equity (“SAFE”) in MasterpieceVR. The SAFE provides that the Company will automatically receive shares of the entity based on the conversion rate of future equity rounds up to a valuation cap, as defined. MasterpieceVR is a software company that is developing software for content creation using virtual reality. The investment is included in other assets in the accompanying consolidated balance sheet and the Company accounts for this investment and records it at cost. No impairment has been recorded for the three and nine months ended June 30, 2025, and 2024. Other assets consisted of the following: SCHEDULE OF OTHER ASSETS June 30, 2025 September 30, 2024 Rental deposits $ 267,731 $ 194,796 Investment in Masterpiece VR 1,300,000 1,200,000 Other deposits 152,875 350,845 Demonstration equipment supplied to resellers 441,624 441,624 Other assets total $ 2,162,230 $ 2,187,265 NOTE 14 – ACCRUED EXPENSES Accrued expenses consisted of the following: SCHEDULE OF ACCRUED EXPENSES June 30, 2025 September 30, 2024 Accrued expenses $ 758,573 $ 352,938 Accrued payroll 944,519 818,262 Accrued warranty 222,702 222,702 Accrued expenses total $ 1,925,794 $ 1,393,902 NOTE 15 – DEFERRED REVENUE The Company’s deferred revenue for the three and nine months ended June 30, 2025, and 2024, were as follows: SCHEDULE OF DEFERRED REVENUE For the three months ended For the nine months ended June 30, 2025 June 30, 2024 June 30, 2025 June 30, 2024 Deferred revenue at beginning of period $ 1,689,418 $ 2,059,225 $ 1,955,635 $ 2,311,334 Net additions: Deferred software revenues 661,917 502,136 1,471,444 1,649,519 Recognized as revenue: Deferred software revenues ( 531,387 ) ( 645,092 ) ( 1,607,131 ) ( 2,044,584 ) Deferred revenue at end of period 1,819,948 1,916,269 1,819,948 1,916,269 Less: current portion 1,329,902 1,284,688 1,329,902 1,284,688 Long-term deferred revenue at end of period $ 490,046 $ 631,581 $ 490,046 $ 631,581 For the three months ended June 30, 2025, and 2024, the Company recognized revenue of $ 453,205 , and $ 571,660 , respectively. For the nine months ended June 30, 2025, and 2024, the Company recognized revenue of $ 1,167,080 and $ 1,364,475 , respectively, that was previously included in the beginning balance of deferred revenues. 17 Table of Contents NOTE 16 – CONTRACT ASSETS AND LIABILITIES Project contracts typically provide for a schedule of billings on percentage of completion of specific tasks inherent in the fulfillment of the Company’s performance obligation(s). The schedules for such billings usually do not precisely match the schedule on which costs are incurred. As a result, contract revenue recognized in the statements of operations can and usually does differ from amounts that can be billed to the customer at any point during the contract. Amounts by which cumulative contract revenue recognized on a contract as of a given date exceeds cumulative billings and unbilled receivables to the customer under the contract are reflected as a current asset in the unaudited condensed consolidated balance sheets under the caption “Contract assets.” Amounts by which cumulative billings to the customer under a contract as of a given date exceed cumulative contract revenue recognized are reflected as a current liability in the unaudited condensed consolidated balance sheets under the caption “Contract liabilities.” Conditional retainage represents the portion of the contract price withheld until the work is substantially complete for assurance of the Company’s obligations to complete the job. The following is a summary of the Company’s uncompleted contracts: SCHEDULE OF CONTRACT ASSETS AND LIABILITIES June 30, 2025 September 30, 2024 Costs incurred on uncompleted contracts $ 19,409,856 $ 12,724,334 Estimated gross profit 8,409,145 3,006,692 27,819,001 15,731,026 Applicable billings to date ( 29,930,440 ) ( 16,000,023 ) Net earnings in excess of billings / (billing in excess of costs) $ ( 2,111,439 ) $ ( 268,997 ) For the three and nine months ended June 30, 2025 and 2024, the Company recognized revenue of $ 0 and $ 18,625 , and $ 1,103,156 and $ 905,319 , respectively, that was previously included in the beginning balance of contract liabilities. The following table summarizes the net activity of the contract assets and contract liabilities for the three and nine months ended June 30, 2025, and 2024. SCHEDULE OF CONTRACT ASSETS AND CONTACT LIABILITIES For the three months ended For nine months ended June 30, 2025 June 30, 2024 June 30, 2025 June 30, 2024 Costs and Estimated Earnings in Excess of Billings on Uncompleted Contracts Contract asset, beginning balance $ 1,156,620 $ 1,979,679 $ 985,207 $ 1,739,201 Changes in revenue billed, contract price or cost estimates ( 558,469 ) ( 864,619 ) ( 387,056 ) ( 624,141 ) Contract asset, net, ending balance $ 598,151 $ 1,115,060 $ 598,151 $ 1,115,060 Billings in Excess of Costs and Estimated Earnings on Uncompleted Contracts Contract liability, beginning balance ( 1,924,425 ) $ ( 1,899,409 ) ( 1,254,204 ) $ ( 980,319 ) Changes in revenue billed, contract price or cost estimates ( 785,165 ) ( 2,197 ) ( 1,455,386 ) ( 921,287 ) Contract liability, ending balance $ ( 2,709,590 ) $ ( 1,901,606 ) $ ( 2,709,590 ) $ ( 1,901,606 ) Net Billings in Excess of Costs and Estimated Earnings on Uncompleted Contracts Net billings in excess of costs, beginning balance $ ( 767,805 ) $ 80,270 $ ( 268,997 ) $ 758,882 Changes in revenue billed, contract price or cost estimates ( 1,343,634 ) ( 866,816 ) $ ( 1,842,442 ) ( 1,545,428 ) Net billings in excess of costs, ending balance $ ( 2,111,439 ) $ ( 786,546 ) $ ( 2,111,439 ) $ ( 786,546 ) NOTE 17 – RELATED PARTY TRANSACTIONS 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. Govil. On January 6, 2025, the Company and Saagar Govil signed an agreement to revise the purchase price structure and payment terms. The Agreement’s Purchase Price provisions were amended to reflect that the Purchase Price will solely consist of the royalties based on the actual revenues generated in the three years following closing. The provision requiring the total sum of royalties to reach a minimum of $ 820,000 , with any shortfall to be paid by Purchaser, was removed from the Agreement. 18 Table of Contents Additionally, it was agreed that the payment terms due under the royalties shall be as follows commencing on January 1, 2025: ● First Year (January 2025) Monthly Payment: $ 10,000 ● Second Year (January 2026) Monthly Payment: $ 20,000 ● Balloon Payment at the end of the Second Year (December 31, 2026): Total outstanding royalties This transaction was approved by the Board of Directors with Saagar Govil abstaining from the vote. Based on the new payment terms, management determined that it was appropriate to remove the previously recognized royalty receivable of $ 280,545 from the financial statements as of December 31, 2024. As of June 30, 2025, there were royalties receivable from the sale of Cemtrex, XR, Inc. of $ 410,143 , of which $ 130,000 is considered short-term and is presented on the Company’s unaudited Condensed Consolidated Balance Sheet under the caption “Trade receivables, net – related party. The Company has taken a $ 50,000 allowance for expected credit losses against these royalties. As of June 30, 2025, there was $ 513,263 in trade receivables due from the Cemtrex XR successor company, CXR, Inc. Of these receivables $ 60,628 are related to costs paid by Cemtrex and $ 130,000 is the short term due on the royalties on CXR, Inc.’s revenues. The remaining $ 322,635 is related to the services provided by Cemtrex Technologies Pvt. Ltd. in the normal course of business. On May 5, 2025, Saagar Govil, CEO, made a short-term loan to the Company of $ 200,000 for certain operating needs. This loan was repaid on August 1, 2025. NOTE 18 – LEASES The Company is party to contracts where we lease property from others under contracts classified as operating leases. The Company primarily leases office and operating facilities, vehicles, and office equipment. The weighted average remaining term of our operating leases was approximately 2.91 years at June 30, 2025, and 3.30 years at September 30, 2024. The weighted average discount rate used to measure lease liabilities was approximately 6.56 % at June 30, 2025, and 6.54 % at September 30, 2024. The Company used the rate implicit in the lease, where known, or its incremental borrowing rate as the rate used to discount the future lease payments. The Company has elected not to recognize lease assets and liabilities for leases with a term of 12 months or less. The Company’s corporate segment leased approximately 100 square feet of office space in Brooklyn, NY on a month-to-month lease at a rent of $ 600 per month. Short-term rent expense was $ 5,400 for the nine months ended June 30, 2025, and 2024. The Company terminated this lease on June 30, 2025. The Company’s security segment leases approximately 350 square feet of office space in Clovis, CA on a month-to-month lease at a rent of $ 1,933 per month. Short-term rent expense was $ 27,870 for the nine months ended June 30, 2025, and $ 43,941 for the nine months ended June 30, 2024. 19 Table of Contents A reconciliation of undiscounted cash flows to operating lease liabilities recognized in the unaudited condensed consolidated balance sheet at June 30, 2025, is set forth below: SCHEDULE OF RECONCILIATION OF UNDISCOUNTED CASH FLOWS TO OPERATING LEASE LIABILITIES Years ending September 30, Operating Leases 2025 261,060 2026 909,454 2027 549,351 2028 290,110 2029 153,584 2030 295,285 Undiscounted lease payments 2,458,844 Amount representing interest ( 439,517 ) Discounted lease payments 2,019,327 Less short-term operating lease liabilities 818,486 Long-term operating lease liabilities $ 1,200,841 Lease costs for the three and nine months ended June 30, 2025, and 2024 are set forth below: SCHEDULE OF LEASE COSTS For the three months ended June 30, For the nine months ended June 30, 2025 2024 2025 2024 Operating lease costs 227,918 256,570 692,804 645,695 Short-term lease costs 7,337 15,379 33,008 49,341 Total lease cost $ 235,255 $ 271,949 $ 725,812 $ 695,036 NOTE 19 – LINES OF CREDIT AND LONG-TERM LIABILITIES Revolving line of credit On October 5, 2023, the Company obtained a revolving line of credit in the amount of $ 5,000,000 from Pathward, N.A. The interest rate will be a rate which is equal to three percentage points ( 3 %) in excess of that rate shown in the Wall Street Journal as the prime rate (the “Effective Rate”) and matures twenty-four 24 months from the closing date. This loan is secured by the Company’s eligible accounts receivable and eligible finished goods inventory. The Company’s ability to borrow against the line of credit is limited by the value of the eligible assets. As of June 30, 2025, the Company had enough eligible assets to access approximately $ 3,000,000 of the credit line. The Company was in compliance with all loan covenants as of June 30, 2025. As of June 30, 2025, and September 30, 2024, this loan had a balance of $ 2,039,858 , and $ 3,125,011 , respectively. Standstill Agreement On 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 which expired on April 30, 2025 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. During fiscal year 2024, the Company paid Streeterville $ 4,588,897 under this agreement. On May 29, 2025, the Company entered into a Standstill Agreement with Streeterville in which Streeterville agreed not to seek to redeem any portion of its two outstanding notes with the Company for a period of 60 days which expired on July 29, 2025 and in exchange, the Company agreed to pay to Streeterville the greater of $ 550,000 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. During the standstill period, the Company paid Streeterville $ 636,250 under this agreement. 20 Table of Contents Notes payable On November 21, 2024, the Company issued a note payable to Streeterville Capital, LLC in the amount of $ 580,000 . This note carries interest of 8 % and matures on May 21, 2026 . After deduction of an original issue discount of $ 75,000 and legal fees of $ 5,000 , the Company received $ 500,000 in cash. As of June 30, 2025, this note had unamortized original issue discount balance of $ 45,833 . The following table outlines the Company’s secured liabilities: SCHEDULE OF LINES OF CREDIT AND AND LONG TERM LIABILITIES June 30, September 30, Interest Rate Maturity 2025 2024 Fulton Bank - $ 360,000 fund equipment for AIS. The Company was in compliance with loan covenants as of June 30, 2025. This loan is secured by certain assets of the Company. SOFR plus 2.37 % ( 6.82 % as of June 30, 2025 and 7.33 % as of September 30, 2024). 1/31/2025 - 28,302 Fulton Bank - $ 312,000 fund equipment for AIS. The Company was in compliance with loan covenants as of June 30, 2025. This loan is secured by certain assets of the Company. SOFR plus 2.37 % ( 6.82 % as of June 30, 2025 and 7.33 % as of September 30, 2024). 9/30/2029 271,570 312,000 Fulton Bank mortgage $ 2,476,000 . The Company was in compliance with loan covenants as of June 30, 2025. This loan is secured by the underlying asset. SOFR plus 2.62 % ( 7.07 % on June 30, 2025 and 7.58 % on September 30, 2024). 1/28/2040 2,054,108 2,113,337 Fulton Bank (HEISEY) - $ 1,200,000 mortgage loan; requires monthly principal and interest payments through August 1, 2043 with a final payment of remaining principal on September 1, 2043 ; The loan is collateralized by 615 Florence Street and 740 Barber Street and guaranteed by AIS and Cemtrex. SOFR plus 2.80 % per annum ( 7.25 % as of June 30, 2025 and 7.76 % as of September 30, 2024). 9/30/2043 1,154,163 1,176,112 Fulton Bank (HEISEY) - $ 2,160,000 . promissory 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; matures in 2030. SOFR plus 2.80 % per annum ( 7.25 % as of June 30, 2025 and 7.76 % as of September 30, 2024). 7/1/2030 1,682,569 1,881,621 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, 2025 and September 30, 2024. 8 % 6/30/2025 - 244,766 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 June 30, 2025 and September 30, 2024. 8 % 2/22/2026 12,578,143 12,195,789 Note payable - $ 580,000 . Less original issue discount $ 75,000 and legal fees $ 5,000 ,net cash received $ 500,000 . Unamortized original issue discount balance of $ 45,833 as of June 30, 2025. 8 % 5/21/2027 609,192 - 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. 1 % 5/5/2025 - 50,628 Total debt $ 18,349,745 $ 18,002,555 Less: Current maturities ( 9,827,991 ) ( 4,732,377 ) Less: Unamortized original issue discount ( 45,833 ) - Long-term debt $ 8,475,921 $ 13,270,178 NOTE 20 – STOCKHOLDERS’ EQUITY Series 1 Preferred Stock The Company’s Series 1 Preferred Stock was suspended from the Nasdaq Capital Market on January 22, 2024. The Series 1 Preferred Stock is now quoted on the OTC Markets OTCID tier under the symbol “CETXP.” 21 Table of Contents Nasdaq 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 Form 25. During the nine months ended June 30, 2025, 252,278 shares of Series 1 Preferred Stock were issued to pay dividends to holders of Series 1 Preferred Stock. During the nine months ended June 30, 2025, 3,778 shares of Series 1 Preferred Stock were cancelled. As of June 30, 2025, and September 30, 2024, there were 2,705,327 and 2,456,827 shares of Series 1 Preferred Stock issued and 2,641,227 and 2,392,727 shares of Series 1 Preferred Stock outstanding, respectively. Common Stock On October 2, 2024, and November 26, 2024, the Company completed a 60:1 and 35:1 , respectively, reverse stock split on its common stock. All share and per share data have been retroactively adjusted for the reverse splits. During the nine months ended June 30, 2025, 1,436,749 shares of common stock were issued for the exercise of 3,946,790 Series A Warrants under the Alternative Cashless Exercise option as adjusted for reverse stock splits and exercise price adjustments. During the nine months ended June 30, 2025, there were 6 shares issued for rounding on November 26, 2024, reverse stock split. During the nine months ended June 30, 2025, 621,175 shares of common stock were issued for the exercise of 621,175 Series B Warrants which generated $ 1,307,355 in proceeds. May 2024 Equity Financing On 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. In 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, 2024. 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. 22 Table of Contents May 2024 Warrants The 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. 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 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 $ 7,255,528 at issuance. The following table summarizes information about shares issuable under warrants outstanding as of June 30, 2025. SCHEDULE SHARES ISSUABLE UNDER WARRANTS OUTSTANDING Warrant Shares Outstanding Weighted Average Exercise Price Weighted Average Remaining Contractual Term(in years) Outstanding at September 30, 2023 - - Warrants granted 65,327,640 $ 0.85 Warrants exercised ( 15,618,593 ) $ 0.61 Warrants forfeited - Warrants cancelled - Outstanding at September 30, 2024 49,709,047 $ 0.23 2.77 Warrants granted - Warrants exercised ( 26,683,246 ) $ 0.64 Warrants forfeited - Warrants cancelled - Exercise price adjustments ( 10,736,816 ) Outstanding at June 30, 2025 12,288,985 $ 0.83 3.67 On October 2, 2024, the Company completed a 60 for 1 reverse stock split. At the time, the Company had 12,059,879 Series A Warrants and 13,529,410 Series B Warrants outstanding at an exercise price of $ 0.85 . According to the terms of the Series A and Series B warrants, in the event of a reverse stock split, the exercise price resets to the lowest VWAP during the period commencing five (5) consecutive trading days immediately preceding and the five (5) consecutive trading days commencing on the reverse stock split effective date and the number of warrants are adjusted as to keep the aggregate value of the warrants then outstanding remains unchanged. On October 7, 2024, it was determined that the exercise price has reset to $ 0.7488 . The following table illustrates the adjustment. SCHEDULE OF WARRANTS ADJUSTMENT Warrants outstanding Aggregate Value Adjusted number of warrants outstanding Series A Warrants 12,059,879 $ 10,250,897 13,766,999 Series B Warrants 13,529,410 $ 11,499,999 15,444,550 On November 26, 2024, the Company completed a 35 for 1 reverse stock split. At the time, the Company had 1,201,932 Series A Warrants and 15,444,550 Series B Warrants outstanding at an exercise price of $ 0.7488 . According to the terms of the Series A and Series B warrants, in the event of a reverse stock split, the exercise price resets to the lowest VWAP during the period commencing five (5) consecutive trading days immediately preceding and the five (5) consecutive trading days commencing on the reverse stock split effective date and the number of warrants are adjusted as to keep the aggregate value of the warrants then outstanding remains unchanged. On December 2, 2024, it was determined that the exercise price has reset to $ 3.1488 . 23 Table of Contents The following table illustrates the adjustment. Warrants outstanding Aggregate Value Adjusted number of warrants outstanding Series A Warrants 1,201,932 $ 894,954 284,225 Series B Warrants 15,444,550 $ 11,499,999 3,652,206 On May 29, 2025, the Company completed an underwritten public offering of common stock. At the time, the Company had 248,166 Series A Warrants and 3,318,556 Series B Warrants outstanding at an exercise price of $ 3.1488 . According to the terms of the Series A and Series B warrants, in the event of a public offering, the exercise price resets to the lower of (i) the public offering price, or (ii) the lowest VWAP during the period commencing five (5) consecutive trading days commencing on the republic offering effective date and the number of warrants are adjusted as to keep the aggregate value of the warrants then outstanding remains unchanged. On June 2, 2025, it was determined that the exercise price has reset to $ 0.893 . The following table illustrates the adjustment. Warrants outstanding Aggregate Value Adjusted number of warrants outstanding Series A Warrants 248,166 $ 260,467 875,034 Series B Warrants 3,318,556 $ 10,449,401 11,701,477 For the three and nine months ended June 30, 2025, the company recognized a gain on the fair value of the common shares issued for the exercised warrants of $ 74,008 and a loss of $ 15,722,097 , respectively, which represents the difference between the fair value of the shares issued and the value of the warrants exercised. For the three and nine months ended June 30, 2025, the company recognized a loss on changes in fair value of warrant liability of $ 3,615,437 , and 8,928,275 , respectively. For the three and nine months ended June 30, 2024, the company recognized a gain on changes in fair value of warrant liability of $ 2,807,890 , which represents the change in the fair value of the of the warrants unexercised at the measurement period. May 2025 Equity Offering On May 28, 2025 the Company, entered into an underwriting agreement (the “Underwriting Agreement”) with Aegis Capital Corp. (the “Underwriter”), pursuant to which the Company agreed to sell to the Underwriter, in a firm commitment public offering (the “Offering”), 1,250,000 shares of the Company’s common stock, par value $ 0.001 per share (the “Firm Shares”), for a public offering price of $ 1.00 per share. The Company also granted the Underwriter an over-allotment option to purchase up to 187,500 shares of the Company’s common stock (the “Option Shares,” together with Firm Shares, the “Shares”). The Company received $ 1,250,000 in gross proceeds from this Offering, before deducting underwriting discounts and other related offering expenses of $ 191,050 . The Offering closed on May 29, 2025. On June 2, 2025, the Underwriter fully exercised the option, and on June 3, 2025, the Company closed the offering of the Option Shares to the Underwriter, for aggregate gross proceeds of approximately $ 187,500 less applicable underwriter discounts and other offering fees and expenses of $ 15,000 . NOTE 21 – SHARE-BASED COMPENSATION For the three and nine months ended June 30, 2025, and 2024, the Company recognized $ 3,097 and $ 10,280 , and $ 7,559 , and $ 22,675 of share-based compensation expense on its outstanding options, respectively. As of June 30, 2025, $ 3,955 of unrecognized share-based compensation expense is expected to be recognized over the next 3 months. Future compensation amounts will be adjusted for any change in estimated forfeitures. 24 Table of Contents During the three and nine months ended June 30, 2025, no options were granted, cancelled, or forfeited. NOTE 22 – COMMITMENTS AND CONTINGENCIES From time to time, the Company and its subsidiaries are involved in legal proceedings that are incidental to the operation of our business. The Company continues to defend vigorously against all claims. Although the ultimate outcome of any legal matter cannot be predicted with certainty, based on present information, including assessment of the merits of the particular claim, as well as current accruals and insurance coverage, the Corporation does not expect that such legal proceedings will have a material adverse impact on its unaudited condensed consolidated financial statements. NOTE 23 – INCOME TAXES For the three and nine months ended June 30, 2025, and 2024, the Company recorded an income tax expense of approximately $ 14,035 and $ 245,098 and $ 67,294 and $ 238,049 from continuing operations, respectively. These taxes are related to our international operations and state taxes of certain subsidiaries. As of year-end 2024, the Company had federal, state, and UK net operating losses (“NOL”) of approximately $ 71.7 million, $ 5.2 million, and $ 1.7 million respectively. The Company has pre 2018 TCJA NOLs and post 2017 TCJA NOLs. Pre 2018 NOLs will expire in 20 years with the first amount expiring in 2030 and the post 2017 NOLs can be carried forward indefinitely. Generally, state NOLs have different NOL carryforward rules, with some pre-2018 NOLs being able to be carried forward indefinitely. The first amount of state NOLs begin to expire in 2038. In accordance with Section 382 of the U.S. Internal Revenue Code, the usage of the Company’s NOL carryforwards is subject to annual limitations following greater than 50% ownership changes. Tax returns for the years ended 2021 through 2024 are subject to review by tax authorities. The Company’s effective tax rates for the three months ended June 30, 2025, and 2024, were ( 0.17 %) and ( 0.74 %) respectively. For the nine months ended June 30, 2025, and 2024, the effective tax rates were ( 1.17 %) and ( 2.02 %) respectively. NOTE 24 – SUBSEQUENT EVENTS On Various dates in July and August 2025, 2,018,577 shares of common stock were issued in exchange for 2,018,577 Series B warrants. These exercises generated $ 1,802,590 in gross proceeds and generated a $ 532,844 gain on the fair value of the common shares issued for the exercised warrants, which represents the difference between the fair value of the shares issued and the value of the warrants exercised. In July 2025, the Company acquired approximately 5,500 units of Solana (SOL) as part of its broader cryptocurrency strategy. This investment is intended to diversify the Company’s treasury holdings and provide potential exposure to blockchain-based technologies relevant to its long-term strategic initiatives. On August 1, 2025, the Company issued 150,000 shares to settle $ 166,050 of debt due to Streeterville Capital, LLC. $ 2,814 was applied to accrued interest and $ 163,236 was applied to the principal on the note that matures on February 22, 2026 . 25 Table of Contents