CEMTREX INC 10-Q

Item 1. Financial Statements Cemtrex, Inc. and Subsidiaries Condensed Consolidated Balance Sheets (Unaudited) March 31, September 30, Assets 2026 2025 Current assets Cash and cash equivalents $ 6,567,030 $ 4,974,303 Restricted cash 1,343,088 1,372,738 Marketable securities 5,030,448 - Trade receivables, net 13,325,559 13,133,424 Trade receivables, net - related party 548,554 405,493 Inventory, net 6,740,579 6,584,944 Contract assets, net 2,208,569 980,164 Prepaid expenses and other current assets 2,167,209 1,556,432 Total current assets 37,931,036 29,007,498 Property and equipment, net 16,540,949 9,651,996 Right-of-use operating lease assets 2,833,949 2,003,967 Right-of-use finance lease assets 66,518 - Royalties receivable, net - related party - 190,475 Digital assets 1,085,163 1,158,238 Intangible assets, net of amortization 2,981,750 - Goodwill 7,686,141 3,708,347 Other 1,610,868 2,067,755 Total Assets $ 70,736,374 $ 47,788,276 Liabilities & Stockholders’ Equity Current liabilities Accounts payable $ 4,566,512 $ 4,492,859 Sales tax payable 50,887 76,008 Revolving line of credit 2,035,697 3,176,096 Current maturities of long-term liabilities 8,770,319 8,925,497 Operating lease liabilities - short-term 1,249,135 918,391 Finance lease liabilities - short-term 331,818 - Deposits from customers 548,745 158,344 Accrued expenses 2,555,108 2,223,521 Accrued payable on inventory in transit 174,076 652,179 Contract liabilities 2,348,384 1,655,055 Deferred revenue 1,019,351 1,383,036 Accrued income taxes 574,433 162,173 Total current liabilities 24,224,465 23,823,159 Long-term liabilities Long-term debt 8,756,025 4,586,779 Long-term operating lease liabilities 1,641,599 1,153,221 Other long-term liabilities 290,000 289,483 Deferred revenue - long-term 371,551 482,978 Warrant liabilities 743,499 8,735,197 Total long-term liabilities 11,802,674 15,247,658 Total liabilities 36,027,139 39,070,817 Commitments and contingencies - - Stockholders’ equity Preferred stock , $ 0.001 par value, 10,000,000 shares authorized, Series 1, 4,000,000 shares authorized, 2,840,919 shares issued and 2,776,819 shares outstanding as of March 31, 2026 and 2,705,327 shares issued and 2,641,227 shares outstanding as of September 30, 2025 (liquidation value of $ 10 per share) 2,841 2,705 Series C, 100,000 shares authorized, 50,000 shares issued and outstanding at March 31, 2026 and September 30, 2025 50 50 Preferred stock, value 50 50 Common stock, $ 0.001 par value, 70,000,000 shares authorized, 10,078,089 shares issued and outstanding at March 31, 2026 and 830,606 shares issued and outstanding at September 30, 2025 10,078 831 Additional paid-in capital 151,331,793 105,668,565 Accumulated deficit ( 119,046,840 ) ( 99,397,741 ) Treasury stock, 64,100 shares of Series 1 Preferred Stock at March 31, 2026, and September 30, 2025 ( 148,291 ) ( 148,291 ) Accumulated other comprehensive income 2,559,604 2,591,340 Total stockholders’ equity 34,709,235 8,717,459 Total liabilities and stockholders’ equity $ 70,736,374 $ 47,788,276 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 3 Cemtrex, Inc. and Subsidiaries Condensed Consolidated Statements of Operations (Unaudited) March 31, 2026 March 31, 2025 March 31, 2026 March 31, 2025 For the three months ended For the six months ended March 31, 2026 March 31, 2025 March 31, 2026 March 31, 2025 Revenues $ 18,061,367 $ 27,250,269 $ 34,194,678 $ 40,990,168 Cost of revenues 11,214,163 15,084,814 21,725,608 23,122,777 Gross profit 6,847,204 12,165,455 12,469,070 17,867,391 Operating expenses General and administrative 8,472,383 6,770,742 16,398,974 13,864,031 Research and development 546,858 777,889 1,048,293 1,667,972 Total operating expenses 9,019,241 7,548,631 17,447,267 15,532,003 Operating (loss)/income ( 2,172,037 ) 4,616,824 ( 4,978,197 ) 2,335,388 Other income/(expense) Other income/(expense), net 6,047 ( 150,165 ) 41,302 ( 115,192 ) Interest expense ( 562,383 ) ( 452,998 ) ( 12,686,078 ) ( 936,911 ) Changes in fair value of digital assets ( 628,581 ) - ( 1,098,441 ) - Bargain purchase gain 2,068,047 - 2,068,047 - Gain/(loss) on exercise of warrant liabilities 16,224 - ( 4,658,582 ) ( 15,796,105 ) Changes in fair value of warrant liability 2,568,357 4,707,374 2,285,811 ( 5,312,838 ) Total other income/(expense), net 3,467,711 4,104,211 ( 14,047,941 ) ( 22,161,046 ) Net income/(loss) before income taxes 1,295,674 8,721,035 ( 19,026,138 ) ( 19,825,658 ) Income tax expense 73,859 110,525 340,185 231,063 Income/(loss) from continuing operations 1,221,815 8,610,510 ( 19,366,323 ) ( 20,056,721 ) (Loss)/income from discontinued operations, net of tax ( 314,767 ) 26,969 ( 282,776 ) ( 240,319 ) Net income/(loss) 907,048 8,637,479 ( 19,649,099 ) ( 20,297,040 ) Less net income in noncontrolling interest - - - ( 180,152 ) Net income/(loss) attributable to Cemtrex, Inc. stockholders $ 907,048 $ 8,637,479 $ ( 19,649,099 ) $ ( 20,116,888 ) Income/(loss) per share - Basic Continuing Operations $ 0.12 $ 72.19 $ ( 3.11 ) $ ( 215.24 ) Discontinued Operations $ ( 0.03 ) $ 0.23 $ ( 0.05 ) $ ( 2.60 ) Income/(loss) per share - Diluted Continuing Operations $ 0.11 $ 19.51 $ ( 2.97 ) $ ( 48.11 ) Discontinued Operations $ ( 0.03 ) $ 0.06 $ ( 0.04 ) $ ( 0.58 ) Weighted Average Number of Shares-Basic 9,946,752 118,972 6,247,421 92,450 Weighted Average Number of Shares-Diluted 10,237,983 440,146 6,538,652 413,624 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 4 Condensed Consolidated Statements of Comprehensive Income/(Loss) (Unaudited) March 31, 2026 March 31, 2025 March 31, 2026 March 31, 2025 For the three months ended For the six months ended March 31, 2026 March 31, 2025 March 31, 2026 March 31, 2025 Other comprehensive loss Net income/(loss) $ 907,048 $ 8,637,479 $ ( 19,649,099 ) $ ( 20,297,040 ) Foreign currency translation gain/(loss) 687,749 ( 423,482 ) ( 31,736 ) ( 554,921 ) Comprehensive income/(loss) 1,594,797 8,213,997 ( 19,680,835 ) ( 20,851,961 ) Less net loss in noncontrolling interest - - - ( 180,152 ) Comprehensive income/(loss) attributable to Cemtrex, Inc. stockholders $ 1,594,797 $ 8,213,997 $ ( 19,680,835 ) $ ( 20,671,809 ) The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 5 Cemtrex, Inc. and Subsidiaries Condensed Consolidated Statement of Stockholders’ Equity (Unaudited) Number of Shares Amount Number of Shares Amount Number of Shares Amount Paid-in Capital Accumulated Deficit Preferred Stock Comprehensive Income Stockholders’ Equity Preferred Stock Series 1 Par Value $0.001 Preferred Stock Series C Par Value $0.001 Common Stock Par Value $0.001 Additional Treasury Stock, 64,100 shares of Series 1 Accumulated other Cemtrex Number of Shares Amount Number of Shares Amount Number of Shares Amount Paid-in Capital Accumulated Deficit Preferred Stock Comprehensive Income Stockholders’ Equity Balance at September 30, 2025 2,705,327 $ 2,705 50,000 $ 50 830,606 $ 831 $ 105,668,565 $ ( 99,397,741 ) $ ( 148,291 ) $ 2,591,340 $ 8,717,459 Foreign currency translation loss ( 719,485 ) ( 719,485 ) Dividends paid in Series 1 preferred shares 135,592 136 ( 136 ) - Shares issued to pay debt 3,000,296 3,001 19,639,282 19,642,283 Exercise of Series A warrants 29,943 30 211,068 211,098 Exercise of Series B warrants 2,316,480 2,317 15,802,537 15,804,854 Shares issued in offering 2,355,556 2,356 5,988,171 5,990,527 Issuance of roundup shares 67,671 66 ( 66 ) - Net loss - ( 20,556,147 ) - ( 20,556,147 ) Balance at December 31, 2025 2,840,919 $ 2,841 50,000 $ 50 8,600,552 $ 8,601 $ 147,309,421 $ ( 119,953,888 ) $ ( 148,291 ) $ 1,871,855 $ 29,090,589 Foreign currency translation gain 687,749 687,749 Exercise of Series B warrants 8,030 8 23,841 23,849 Shares issued in offering 1,469,507 1,469 3,998,531 4,000,000 Net income - - 907,048 - 907,048 Balance at March 31, 2026 2,840,919 $ 2,841 50,000 $ 50 10,078,089 $ 10,078 $ 151,331,793 $ ( 119,046,840 ) $ ( 148,291 ) $ 2,559,604 $ 34,709,235 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements . 6 Cemtrex, Inc. and Subsidiaries Condensed Consolidated Statement of Stockholders’ Equity (Continued) (Unaudited) Number of Shares Amount Number of Shares Amount Number of Shares Amount Paid-in Capital Accumulated Deficit Series 1 Preferred Stock Comprehensive Income Stockholders’ Equity controlling interest Preferred Stock Series 1 Par Value $0.001 Preferred Stock Series C Par Value $0.001 Common Stock Par Value $0.001 Additional Treasury Stock, 64,100 shares of Accumulated other Cemtrex Non- Number of Shares Amount Number of Shares Amount Number of Shares Amount Paid-in Capital Accumulated Deficit Series 1 Preferred Stock Comprehensive Income Stockholders’ Equity controlling interest Balance at September 30, 2024 2,456,827 $ 2,457 50,000 $ 50 946 $ 1 $ 73,262,549 $ ( 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 88,492 89 21,515,688 21,515,777 Exercise of Series B warrants 22,244 22 1,095,709 1,095,731 Issuance of roundup shares 7,299 7 ( 7 ) - 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 $ 50 118,981 $ 119 $ 95,877,903 $ ( 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 1 - Elimination of non-controlling interest 70,013 70,013 ( 70,013 ) Net income - - 8,637,479 - 8,637,479 Balance at March 31, 2025 2,579,994 2,580 50,000 50 118,982 119 95,880,999 ( 91,402,261 ) ( 148,291 ) 2,394,376 6,727,572 - The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 7 Cemtrex, Inc. and Subsidiaries Condensed Consolidated Statements of Cash Flows (Unaudited) Cash Flows from Operating Activities 2026 2025 For the six months ended March 31, Cash Flows from Operating Activities 2026 2025 Net loss ( 19,649,099 ) ( 20,297,040 ) Adjustments to reconcile net loss to net cash used by operating activities Depreciation and amortization 1,015,907 648,025 (Gain)/loss on disposal of property and equipment ( 1,007 ) 19,668 Noncash lease expense 580,751 461,490 Interest on finance leases 496 - Loss on marketable securities 69,552 - Credit loss (recovery)/expense ( 2,409 ) 10,572 Loss on write-off of related party receivables 215,779 - Contract modification - related party - 280,545 Share-based compensation - 7,183 Bargain purchase gain ( 2,068,047 ) - Write-off of demonstration equipment 441,624 - Interest expense paid in equity shares 11,798,283 - Accrued interest on notes payable 341,982 530,404 Non-cash royalty income ( 243,525 ) ( 71,464 ) Amortization of original issue discounts on notes payable 221,875 16,667 Loan origination costs 25,000 5,000 Receipt of SOL from staking ( 31,683 ) - Non-cash transaction fees 6,884 - Unrealized loss on digital assets 1,098,441 - Loss on exercise of warrant liabilities 4,658,582 15,796,105 Changes in fair value of warrant liability ( 2,285,811 ) 5,312,838 Changes in operating assets and liabilities net of effects from acquisition of subsidiaries: Trade receivables 1,014,607 ( 1,536,888 ) Trade receivables - related party 35,160 66,057 Inventory 142,207 851,764 Contract assets ( 566,550 ) ( 171,413 ) Prepaid expenses and other current assets ( 492,520 ) ( 569,401 ) Other assets 15,263 173,497 Accounts payable ( 696,851 ) ( 518,330 ) Sales tax payable ( 25,121 ) ( 69,054 ) Operating lease liabilities ( 582,108 ) ( 464,886 ) Deposits from customers 140,401 ( 225,560 ) Accrued expenses ( 586,966 ) 972,123 Contract liabilities 160,792 670,221 Deferred revenue ( 475,112 ) ( 266,217 ) Income taxes payable 412,260 ( 38,617 ) Other liabilities 517 7,243 Net cash (used in)/provided by operating activities ( 5,310,446 ) 1,600,532 Cash Flows from Investing Activities Purchase of property and equipment ( 336,782 ) ( 1,359,963 ) Proceeds from sale of property and equipment 19,592 13,511 Royalties on related party revenues 40,000 10,000 Purchase of marketable securities ( 5,100,000 ) - Acquisitions, net of cash acquired ( 7,594,695 ) - Investment in digital assets ( 1,000,567 ) - Investment in MasterpieceVR - ( 100,000 ) Net cash used by investing activities ( 13,972,452 ) ( 1,436,452 ) Cash Flows from Financing Activities Proceeds on revolving line of credit 10,511,864 18,925,223 Payments on revolving line of credit ( 12,048,307 ) ( 19,182,809 ) Payments on debt ( 250,767 ) ( 240,510 ) Finance lease liabilities ( 6,897 ) Payments on Paycheck Protection Program Loans - ( 20,247 ) Proceeds from notes payable 7,000,000 500,000 Proceeds from warrant exercises 5,675,332 1,050,597 Proceeds from offerings 10,000,000 - Expenses on offerings ( 9,473 ) - Net cash provided by financing activities 20,871,752 1,032,254 Effect of currency translation ( 25,777 ) ( 550,693 ) Net increase in cash, cash equivalents, and restricted cash 1,588,854 1,196,334 Cash, cash equivalents, and restricted cash at beginning of period 6,347,041 5,420,392 Cash, cash equivalents, and restricted cash at end of period $ 7,910,118 $ 6,066,033 Balance Sheet Accounts Included in Cash, Cash Equivalents, and Restricted Cash March 31, 2026 March 31, 2025 Cash and cash equivalents $ 6,567,030 $ 4,538,405 Restricted cash 1,343,088 1,527,628 Total cash, cash equivalents, and restricted cash $ 7,910,118 $ 6,066,033 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 8 Cemtrex, Inc. and Subsidiaries Condensed Consolidated Statements of Cash Flows (Continued) (Unaudited) Supplemental Disclosure of Cash Flow Information: 2026 2025 For the six months ended March 31, Supplemental Disclosure of Cash Flow Information: 2026 2025 Cash paid during the period for interest $ 323,938 $ 389,840 Cash paid during the period for income taxes, net of refunds $ 107,621 $ 269,680 Supplemental Schedule of Non-Cash Investing and Financing Activities Shares issued to pay notes payable $ 19,642,283 $ - Noncash dividends $ 136 $ 123 Financing of Building Purchase $ 3,920,000 $ - Financing of Acquisitions $ 600,000 $ - Noncash recognition of new leases $ 750,580 $ 204,726 Series A Warrant Exercises $ 211,098 $ 21,515,777 Series B Warrant Exercises $ 15,828,703 $ - The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 9 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, Industrial Services, and Aerospace and Defense. 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 plant and asset utilization and efficiency by cutting costs and increasing production from existing assets, including small projects to major capital investments, turnarounds, maintenance, specialty welding services, and high-quality scaffolding and platforms. Aerospace and Defense Cemtrex’s Aerospace and Defense segment operates under the brand Invocon, Inc., which offers designing, manufacturing, and supporting advanced instrumentation, wireless sensing, and telemetry systems deployed across satellites, launch vehicles, target missiles, and space-based platforms. Its technologies support numerous government and prime contractor programs, including multiple Space Shuttle and International Space Station systems, and the company maintains long-standing relationships across the Missile Defense Agency and leading aerospace and defense primes. Common Stock Reverse Stock Split On October 2, 2024, November 26, 2024, and September 29, 2025, the Company completed 60:1 , 35:1 , and 15:1 respectively, reverse stock split on its common stock. All share and per share data have been retroactively adjusted for the reverse splits. Acquisitions The Company accounts for business combinations are using the acquisition method. The consideration transferred is measured at fair value, which is calculated as the sum of the acquisition-date fair values of the assets transferred, liabilities incurred, and equity interests issued. Acquisition-related costs are expensed as incurred. Identifiable assets acquired and liabilities assumed are measured at their acquisition-date fair values. On January 8, 2026, the Company completed the acquisition of Invocon, Inc. (“Invocon”). As a result of the transaction, Invocon became a wholly owned subsidiary of the Company. The purchase price of $ 7,060,000 was paid in cash at closing. Invocon will be the launch of the Company’s Aerospace and Defense segment with reporting results beginning in the second quarter of fiscal year 2026. This acquisition is part of the Company’s strategy to grow through strategic acquisitions in stable market sectors. 10 The purchase price allocation presented below is still preliminary but has been developed based on an estimate of fair values of Invocon’s identifiable tangible and intangible assets acquired and liabilities assumed as of January 8, 2026. The final allocation of the purchase price will be determined within one year from the closing date of the Invocon acquisition. The acquisition of Invocon was accounted for as a business combination under ASC 805 using the acquisition method of accounting. The assets and liabilities acquired, affected for adjustments to reflect fair values assigned to assets purchased and liabilities assumed, and results of operations, are included in the Company’s condensed consolidated financial statements from the Invocon acquisition date. The Company determined that developed technology was the primary intangible acquired. Under ASC 820-10-55-3A, fair value should reflect market participant assumptions and the asset’s ability to generate cash flows, supporting an income approach and also states the Multi-Period Excess Earnings Method (“MPEEM”) is typically applied when the subject intangible asset is the primary driver of earnings. Because the developed technology is the primary driver of earnings, the MPEEM appropriately isolates its economic contribution after deducting contributory asset charges. Significant assumptions utilized included projected cash flows, royalty rates, risk free rate commensurate with the period to determine the value of developed software and tradenames. The consideration transferred and preliminary allocation of Invocon’s tangible and intangible assets and liabilities, are as follows: SCHEDULE OF CONSIDERATION TRANSFERRED AND PRELIMINARY ALLOCATION OF TANGIBLE AND INTANGIBLE ASSETS AND LIABILITIES Preliminary Consideration Transferred: Cash $ 7,060,000 Less cash acquired ( 389,193 ) Total consideration transferred $ 6,670,807 Purchase Price Allocation: Accounts receivable 98,981 Prepaid expenses 71,661 Contract assets 127,465 Property and equipment 779 Right-of-use assets 650,650 Intangible assets 3,130,000 Accounts payable ( 158,056 ) Accrued expenses ( 338,531 ) Contract liabilities ( 239,286 ) Lease liabilities ( 650,650 ) Goodwill 3,977,794 Total consideration transferred $ 6,670,807 The pro forma summary below presents the results of operations as if the Invocon acquisition occurred on October 1, 2024. Proforma adjustments for the three and six months ended March 31, 2026, includes $ ( 2,214 ) , and $ 393,750 respectively, of interest expense from the Company’s $ 7,025,000 note payable used to fund the transaction, income tax benefit of $ 2,663 , and $ 148,251 of amortization on recognized intangible assets for the three months ended March 31, 2026, and six months ended March 31, 2026. Proforma adjustments for the three and six months ended March 31, 2025, includes $ 165,475 , and $ ( 393,750 ) , respectively, of interest expense from the Company’s $ 7,025,000 note payable used to fund the transaction, $ 25,000 of legal fees related to the acquisition, $ 148,251 of amortization on recognized intangible assets and income tax expense of $ 727 for the three months ended March 31, 2025, $ 321,502 of amortization on recognized intangible assets and $ 171,604 of income tax expense for the six months ended March 31, 2025. 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 proforma 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. SCHEDULE OF PRO FORMA STATEMENTS OF OPERATIONS Unaudited Unaudited Unaudited Unaudited For the three months ended For the three months ended For the six months ended For the six months ended March 31, 2026 March 31, 2025 March 31, 2026 March 31, 2025 Revenues $ 18,865,872 $ 28,309,447 $ 34,999,183 $ 42,943,216 Net income/(loss) $ 408,543 $ 8,226,096 $ ( 20,543,568 ) $ ( 21,150,249 ) On February 5, 2026, the Company, through its subsidiary AIS, acquired substantially all the assets of Richland Industries LLC (“Richland”), an industrial services and fabrication company located in Tennessee. In connection with the transaction, AIS established a new subsidiary, AIS Tennessee, Inc (“AIS – TN”), as part of the Company’s Industrial Services Segment. The acquisition was made to bring in vital services that AIS had previously outsourced. The purchase price of $ 600,000 was paid via a note payable issued by Fulton Bank. This note carries interest of 6.09 % and matures on February 1, 2031 . In addition, the Company purchased Richland’s primary facility for $ 4,900,000 via a $ 3,920,000 mortgage issued by Fulton Bank and the balance including taxes, closing costs, and fees in cash. This mortgage has carries interest of SOFR plus 2.75 % and matures on February 1, 2041 . 11 The acquisition of Richland was accounted for as a business combination under ASC 805 using the acquisition method of accounting. The assets and liabilities acquired, affected for adjustments to reflect fair values assigned to assets purchased and liabilities assumed, and results of operations, are included in the Company’s condensed consolidated financial statements from the Richland acquisition date. The purchase price allocation presented below is still preliminary but has been developed based on an estimate of fair values of Richland identifiable tangible and intangible assets acquired and liabilities assumed as of February 5, 2026. The final allocation of the purchase price will be determined within one year from the closing date of the Richland acquisition. The consideration transferred and preliminary allocation of AIS - TN tangible and intangible assets and liabilities, are as follows: Preliminary Consideration Transferred: Cash $ 1,176,593 Note payable to finance acquisition 4,520,000 Less cash acquired ( 252,705 ) Total consideration transferred $ 5,443,888 Purchase Price Allocation: Accounts receivable 1,105,352 Prepaid expenses 46,596 Inventory 308,247 Contract assets 534,390 Property and equipment 7,443,593 Right-of-use assets 76,021 Other assets 4,188 Accounts payable ( 606,439 ) Letter of credit ( 396,022 ) Accrued expenses ( 122,522 ) Contract liabilities ( 293,251 ) Lease liabilities ( 338,218 ) Long-term debt ( 250,000 ) Bargain purchase gain ( 2,068,047 ) Total consideration transferred $ 5,443,888 The pro forma summary below presents the results of operations as if the Richland acquisition occurred on October 1, 2024. Proforma adjustments for the three and six months ended March 31, 2026, includes $ 10,008 , and $ 13,976 , respectively, of interest expense from the Company’s 600,000 note payable used to fund the transaction, and income tax benefit of $ 22,537 for the three months ended March 31, 2026, and $ 114,432 of income tax benefit for the six months ended March 31, 2026. Proforma adjustments for the three and six months ended March 31, 2025, includes $ 9,347 , and $ 18,564 , respectively, of interest expense from the Company’s 600,000 note payable used to fund the transaction, and income tax benefit of $ 37,364 for the three months ended March 31, 2025, and $ 63,230 of income tax expense for the six months ended March 31, 2025. 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 proforma 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. Unaudited Unaudited Unaudited Unaudited For the three months ended For the three months ended For the six months ended For the six months ended March 31, 2026 March 31, 2025 March 31, 2026 March 31, 2025 Revenues $ 18,511,558 $ 30,403,614 $ 37,031,105 $ 47,451,363 Net(loss)/income $ 380,868 $ 8,316,781 $ ( 20,517,585 ) $ ( 21,716,395 ) 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. 12 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 net losses attributable to Cemtrex, Inc. stockholders of $ 28,112,368 and $ 7,229,491 for fiscal years 2025 and 2024, respectively and a net losses attributable to Cemtrex, Inc. stockholders of $ 19,649,099 for the six months ended March 31, 2026, and has debt obligations over the next fiscal year of $ 10,806,016 that raise substantial doubt with respect to the Company’s ability to continue as a going concern. While the Company’s losses 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. These transactions add additional significant non-operational expenses which are non-cash in nature. The Company has $ 7,910,118 in cash and cash equivalents and restricted cash as of March 31, 2026. Additionally, the Company has (i) secured a line of credit for its Vicon brand to fund operations, which as of March 31, 2026, has available capacity of approximately $ 1,100,000 , (ii) continually reevaluate our pricing model on the Company’s Vicon brand to improve margins on those products, (iii) raised $ 5,675,332 through the exercise of our Series B warrants during the six months ended March 31, 2026 (iv) raised $ 10,000,000 in gross proceeds in equity offering during the six months ended March 31, 2026 (v) Invested approximately $ 5,000,000 of the Company’s surplus cash in various marketable securities to generate income on those investments. 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 the Company’s current operations for at least the next twelve months, there is no guarantee that the Company 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, 2025. 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. 13 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, 2025, includes a summary of the significant accounting policies used in the preparation of the unaudited condensed consolidated financial statements. Recently Adopted Accounting Pronouncements 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 adopted this standard on October 1, 2025. The Company does not believe that this will have a material effect on the unaudited condensed consolidated financial statements. Recently Issued Accounting Pronouncements Not Yet Effective In October 2023, the FASB issued ASU 2023-06, Disclosure Improvements: Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative, to amend certain disclosure and presentation requirements for a variety of topics within the Accounting Standards Codification (“ASC”). These amendments align the requirements in the ASC to the removal of certain disclosure requirements set out in Regulation S-X and Regulation S-K, announced by the SEC. The effective date for each amended topic in the ASC is the date on which the SEC’s removal of the related disclosure requirement from Regulation S-X or Regulation S-K becomes effective. Early adoption is prohibited. The Company does not anticipate that the ASU will have a material effect on the Company’s unaudited financial statements and related disclosures. 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. In July 2025, the FASB issued ASU 2025-05, Financial Instruments—Credit Losses (Topic 326). This guidance contains amendments that provide decision-useful information to investors and other financial statement users while reducing the time and effort necessary to analyze and estimate credit losses for current accounts receivable and current contract assets. The amendments will be effective for annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods. Early adoption is permitted in both interim and annual reporting periods in which financial statements have not yet been issued or made available for issuance. The Company is currently evaluating the impact of ASU 2025-05 on its unaudited condensed consolidated financial statements and related disclosures. 14 In December 2025, the FASB issued ASU 2025-11 - Interim Reporting (“ASU 2025-11”) which is intended to improve the navigability of the guidance in ASC 270, Interim Reporting, and clarify when it applies. Under the amendments, an entity is subject to ASC 270 if it provides interim financial statements and notes in accordance with GAAP. ASU 2025-11 also addresses the form and content of such financial statements, interim disclosures requirements, and establishes a principle under which an entity must disclose events since the end of the last annual reporting period that have a material impact on the entity. ASU 2025-11 is effective for interim reporting periods within annual reporting periods beginning after December 15, 2027, and early adoption is permitted. The Company is currently evaluating the impact the adoption of ASU 2025-11 may have on the Company’s unaudited consolidated financial statements. In April 2026, the FASB issued Accounting Standards Update No. 2026-01, Equity (Topic 505): Initial Measurement of Paid-in-Kind Dividends on Equity-Classified Preferred Stock . The amendments in this Update clarify that PIK dividends on equity-classified preferred stock should be initially measured at the amount specified in the agreement, generally calculated by multiplying the PIK dividend rate by the liquidation value of the preferred stock outstanding. The standard is effective for the Company for fiscal years beginning after December 15, 2026. The Company is currently evaluating the impact the adoption of ASU 2026-01 may have on the Company’s unaudited 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. Correction of an Immaterial Error in Previously Issued Financial Statements Subsequent to the issuance of our financial statements for the quarter ended March 31, 2026, an immaterial error was identified and has been corrected in our historical information related to the net income/(loss) in noncontrolling interest. On February 24, 2025, the Company filed a Certificate of Amendment to the Certificate of Incorporation for Vicon Industries Inc. This amendment effected a reverse stock split which exchanged 98,521 for 6 shares of common stock and reduces the number of authorized common shares from 75,000,000 to 15,000 . The effects of the correction to the individual effected line items in our Consolidated Statement of Operations are as follows: SCHEDULE OF EFFECTS OF CORRECTION TO CONSOLIDATED STATEMENT OF OPERATIONS As previously reported Corrections As corrected For the three months ended March 31, 2025 As previously reported Corrections As corrected Less net income/(loss) in noncontrolling interest 254,537 ( 254,537 ) - Net income/(loss) attributable to Cemtrex, Inc. stockholders $ 8,382,942 $ 254,537 $ 8,637,479 As previously reported Corrections As corrected For the six months ended March 31, 2025 As previously reported Corrections As corrected Less net income/(loss) in noncontrolling interest 74,385 ( 254,537 ) ( 180,152 ) Net income/(loss) attributable to Cemtrex, Inc. stockholders $ ( 20,371,425 ) $ 254,537 $ ( 20,116,888 ) 15 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 six months ended March 31, 2026, and 2025: SCHEDULE OF DISAGGREGATION OF REVENUE RECOGNITION March 31, 2026 March 31, 2025 March 31, 2026 March 31, 2025 For the three months ended For the six months ended March 31, 2026 March 31, 2025 March 31, 2026 March 31, 2025 Over time 71 % 40 % 71 % 49 % Point-in-time 29 % 60 % 29 % 51 % Revenue performance obligation percentage 29 % 60 % 29 % 51 % NOTE 4 – INCOME/(LOSS) PER COMMON SHARE Basic net loss per common share is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period. Diluted net 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 six months ended March 31, 2026, and 2025, the following items were excluded from the computation of diluted net loss per common share as their effect is anti-dilutive: SCHEDULE OF COMPUTATION OF DILUTED NET LOSS PER COMMON SHARE AS ANTI-DILUTIVE EFFECT March 31, 2026 March 31, 2025 March 31, 2026 March 31, 2025 For the three months ended For the six months ended March 31, 2026 March 31, 2025 March 31, 2026 March 31, 2025 Options 7 7 7 7 Warrants 1,068,339 3,318,556 1,068,339 3,318,556 Anti-dilutive shares 1,068,339 3,318,556 1,068,339 3,318,556 For the three and six months ended March 31, 2026, and 2025, loss per share basic and diluted for continuing operations are calculated as follows: SCHEDULE OF LOSS PER SHARE BASIC AND DILUTED FOR CONTINUING OPERATIONS 2026 2025 2026 2025 For the three months ended For the six months ended March 31, March 31, 2026 2025 2026 2025 Net income/(loss) $ 907,048 $ 8,637,479 $ ( 19,649,099 ) $ ( 20,297,040 ) Less(loss)/income from discontinued operations, net of tax ( 314,767 ) 26,969 ( 282,776 ) ( 240,319 ) Less net loss in noncontrolling interest - - - ( 180,152 ) Preferred stock dividends 46,918 21,949 46,918 21,949 Net income/(loss) applicable to common shareholders 1,174,983 8,588,561 ( 19,413,241 ) ( 19,898,158 ) Weighted Average Number of Shares-Basic 9,946,752 118,972 6,247,421 92,450 Weighted Average Number of Shares-Diluted 10,237,983 440,146 6,538,652 413,624 Loss per share - Basic - Continuing Operations $ 0.12 $ 72.19 $ ( 3.11 ) $ ( 215.24 ) Loss per share - Diluted - Continuing Operations $ 0.11 $ 19.51 $ ( 2.97 ) $ ( 48.11 ) Loss per share - Basic - Discontinued Operations $ ( 0.03 ) $ 0.23 $ ( 0.05 ) $ ( 2.60 ) Loss per share - Diluted - Discontinued Operations $ ( 0.03 ) $ 0.06 $ ( 0.04 ) $ ( 0.58 ) 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 three reportable segments: the Security segment, Industrial Services segment, and the Aerospace and Defense segment. The Chief Operating Decision Maker (“CODM”) for all segments is Saagar Govil, the CEO of the Company. 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. 16 The following tables summarize the Company’s reportable segment information and unallocated corporate expenses: SCHEDULE OF SEGMENT INFORMATION Security Industrial Services Aerospace and Defense Corporate Consolidated Three months ended March 31, 2026 Reportable Segments Security Industrial Services Aerospace and Defense Corporate Consolidated External revenues $ 5,776,557 $ 11,038,046 $ 1,232,592 $ 14,172 $ 18,061,367 Cost of revenues 3,245,863 7,256,523 711,777 - 11,214,163 Gross profit $ 2,530,694 $ 3,781,523 $ 520,815 $ 14,172 $ 6,847,204 Operating expenses General and administrative 3,305,771 2,773,590 762,072 1,115,105 7,956,538 Depreciation and amortization 65,525 302,070 148,250 - 515,845 Research and development 521,579 - 25,279 - 546,858 Operating (loss)/income $ ( 1,362,181 ) $ 705,863 $ ( 414,786 ) $ ( 1,100,933 ) $ ( 2,172,037 ) Other income/(expense), net $ ( 51,468 ) 1,967,994 $ - $ 1,551,185 $ 3,467,711 Security Industrial Services Aerospace and Defense Corporate Consolidated Three months ended March 31, 2025 Reportable Segments Security Industrial Services Aerospace and Defense Corporate Consolidated External revenues $ 16,981,152 $ 10,269,117 $ - $ - $ 27,250,269 Cost of revenues 8,177,296 6,907,518 - - 15,084,814 Gross profit $ 8,803,856 $ 3,361,599 $ - $ - $ 12,165,455 Operating expenses General and administrative 3,655,756 2,229,023 - 575,661 6,460,440 Depreciation and amortization 85,433 224,869 - - 310,302 Research and development 777,889 - - - 777,889 Operating income/(loss) $ 4,284,778 $ 907,707 $ - $ ( 575,661 ) $ 4,616,824 Other (expense)/income, net $ ( 493,731 ) ( 110,145 ) $ - $ 4,708,087 $ 4,104,211 17 Security Industrial Services Aerospace and Defense Corporate Consolidated Six months ended March 31, 2026 Reportable Segments Security Industrial Services Aerospace and Defense Corporate Consolidated External revenues $ 11,288,085 $ 21,649,202 $ 1,232,592 $ 24,799 $ 34,194,678 Cost of revenues 6,596,623 14,417,208 711,777 - 21,725,608 Gross profit $ 4,691,462 $ 7,231,994 $ 520,815 $ 24,799 $ 12,469,070 Operating expenses General and administrative 7,909,694 4,563,329 762,072 2,324,733 15,559,828 Depreciation and amortization 145,561 545,335 148,250 - 839,146 Research and development 1,023,014 - 25,279 - 1,048,293 Operating (loss)/income $ ( 4,386,807 ) $ 2,123,330 $ ( 414,786 ) $ ( 2,299,934 ) $ ( 4,978,197 ) Other (expense)/income, net $ ( 115,642 ) $ 1,918,577 $ - $ ( 15,850,876 ) $ ( 14,047,941 ) Security Industrial Services Aerospace and Defense Corporate Consolidated Six months ended March 31, 2025 Reportable Segments Security Industrial Services Aerospace and Defense Corporate Consolidated External revenues $ 22,434,851 $ 18,555,317 $ - $ - $ 40,990,168 Cost of revenues 10,791,236 12,331,541 - - 23,122,777 Gross profit $ 11,643,615 $ 6,223,776 $ - $ - $ 17,867,391 Operating expenses General and administrative 7,415,054 3,990,426 - 1,810,526 13,216,006 Depreciation and amortization 171,456 476,569 - - 648,025 Research and development 1,667,972 - - - 1,667,972 Operating income/(loss) $ 2,389,133 $ 1,756,781 $ - $ ( 1,810,526 ) $ 2,335,388 Other (expense)/income, net $ ( 886,648 ) $ ( 188,371 ) $ - $ ( 21,086,027 ) $ ( 22,161,046 ) The following table summarizes the Company’s identifiable assets by segment as of March 31, 2026, and September 30, 2025. SCHEDULE OF IDENTIFIABLE ASSETS BY SEGMENT March 31, 2026 September 30, 2025 Identifiable Assets Security $ 14,568,187 $ 17,334,365 Industrial Services 34,001,213 25,865,577 Aerospace and Defense 8,466,640 - Corporate 13,700,334 4,588,334 Total Assets $ 70,736,374 $ 47,788,276 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. Additionally, there was restricted cash in escrow per the purchase agreement with Heisey Mechanical Ltd. Additionally, there are funds in escrow related to bond requirements on certain public projects and deposit guarantees. 18 The Company’s restricted cash as of March 31, 2026, and September 30, 2025, are summarized below. SCHEDULE OF RESTRICTED CASH March 31, 2026 September 30, 2025 Benecon group $ 972,865 $ 839,215 Heisey escrow - 100,000 Bond escrow 304,145 366,319 Deposit guarantees 66,078 67,204 Escrow deposit 66,078 67,204 Restricted cash $ 1,343,088 $ 1,372,738 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. 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. 19 The Company’s fair value liabilities at March 31, 2026, and September 30, 2025, are as follows. SCHEDULE OF FAIR VALUE OF LIABILITIES Quoted Prices Significant in Active Other Significant Balance Markets for Observable Unobservable as of Identical Assets Inputs Inputs March 31, (Level 1) (Level 2) (Level 3) 2026 Assets Digital assets - SOL $ 1,085,163 $ - $ - $ 1,085,163 Marketable Securities $ 5,030,448 $ - $ - $ 5,030,448 Liabilities Warrant liabilities $ 196,823 $ 546,676 $ - $ 743,499 Quoted Prices Significant in Active Other Significant Balance Markets for Observable Unobservable as of Identical Assets Inputs Inputs September 30, (Level 1) (Level 2) (Level 3) 2025 Assets Digital assets - SOL $ 1,158,238 $ - $ - $ 1,158,238 Liabilities Warrant liabilities $ 833,854 $ 7,901,343 $ - $ 8,735,197 Digital Assets – SOL On July 29, 2025, and January 7, 2026, the Company invested $ 998,642 , and 1,000,567 , respectively, in Solana (SOL) and staked our holdings. SOL is a fungible crypto asset that meets the criteria for an intangible asset, resides on a distributed ledger, is secured by cryptography, and does not grant enforceable rights to underlying goods or services to its holder. The digital assets were measured at fair value after acquisition, with changes reported in net income. Staking earnings are recorded as revenue. Digital Asset staking allows holders of specific cryptocurrencies to earn rewards for helping to validate blocks of transaction data as it is submitted to the blockchain network. The staking process serves two key purposes: ● Ensures the accuracy of new information as it is added to the blockchain. ● Helps to secure the underlying blockchain network against the majority of the network taking over control, known as a 51% attack. The staking process uses incentives and penalties governed by computer-based rules to encourage honest participation in the network. Stakers who act within the rules of the protocol receive rewards for their contributions, while those who act dishonestly can face penalties, such as losing their staked cryptocurrency through a process called slashing. Staking rewards are distributed as newly minted cryptocurrency units, oftentimes at a proportionate rate to the amount a person stakes. With some proof-of-stake blockchains, depositing more assets in a staking smart contract increases the chance of being selected to validate blocks. This mechanism is based on the assumption that those with more “skin in the game” are more likely to act within the best interests of the network because they have more to lose financially if their assets are slashed (confiscated by the network). However, to avoid favoring wealthier participants, some protocols incorporate randomness to ensure everyone, including those with smaller stakes, has a chance to earn rewards. 20 Staking incentives, in the form of additional SOL, are recognized on the date received at the fair market value on that date. There are no lockups or restrictions on the Company’s digital asset holdings due to staking. The Company’s digital assets as of March 31, 2026, and September 30, 2025, are as follows. SCHEDULE OF DIGITAL ASSETS HOLDINGS March 31, 2026 September 30, 2025 Units - SOL 13,058 5,549 Cost Per Unit $ 155.74 $ 181.70 Cost Basis $ 2,033,595 $ 1,008,229 Fair Value $ 1,085,163 $ 1,158,238 The following table is a summary of our digital assets as of March 31, 2026. SUMMARY OF DIGITAL ASSETS Fair Value, September 30, 2025 $ 1,158,238 Cash purchase 1,000,567 Receipt of SOL from staking 31,683 Non-cash transaction fees ( 6,884 ) Unrealized loss ( 1,098,441 ) Fair Value, March 31, 2026 $ 1,085,163 Marketable Securities Marketable securities utilizing Level 1 inputs include active exchange-traded equity securities and equity index funds, as these securities all have quoted prices in active markets. These marketable securities are trading securities and are recorded at fair value. Unrealized gains and losses are reported under the caption other income/(expense), net on the Company’s Condensed Consolidated Statements of Operations. Warrant Liabilities The value of the Series A Warrants is based on the market value of our common stock on the balance sheet date. The fair value of the Series B Warrants is estimated on the balance sheet date using the Black-Scholes model, which requires inputs based on certain subjective assumptions, including the fair value of the Company’s common shares, expected share price volatility, the expected term of the award, the risk-free interest rate for a period that approximates the expected term of the option, and the Company’s expected dividend yield. At March 31, 2026, and September 30, 2025, the following inputs were used in the Black-Scholes model. SCHEDULE OF FAIR VALUE INPUTS USED IN BLACK-SCHOLES MODEL March 31, 2026 September 30, 2025 Expected term 3.09 Years 3.59 Years Risk-free interest rate 3.81 % 3.61 % Expected volatility 185.85 % 178.98 % Expected dividend yield 0.00 % 0.00 % Exercise Price $ 2.25 $ 5.30 21 The following table summarizes information on warrant liabilities as of March 31, 2026. SCHEDULE OF WARRANT LIABILITIES ACTIVITY Series A Warrants Series B Warrants Total Warrant Liabilities at September 30, 2025 $ 833,854 $ 7,901,343 $ 8,735,197 Warrant Liabilities, Beginning balance $ 833,854 $ 7,901,343 $ 8,735,197 Warrants Issued - - - Warrants Exercised ( 97,614 ) ( 5,608,273 ) ( 5,705,887 ) Fair market revaluation ( 539,417 ) ( 1,746,394 ) ( 2,285,811 ) Warrant Liabilities at March 31, 2026 $ 196,823 $ 546,676 $ 743,499 Warrant Liabilities, Ending balance $ 196,823 $ 546,676 $ 743,499 NOTE 8 – TRADE RECEIVABLES, NET Trade receivables, net consisted of the following: SCHEDULE OF TRADE RECEIVABLES, NET March 31, 2026 September 30, 2025 Trade receivables $ 13,475,565 $ 13,285,839 Allowance for credit losses ( 150,006 ) ( 152,415 ) Trade receivables, net $ 13,325,559 $ 13,133,424 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. NOTE 9 – PREPAID EXPENSES AND OTHER CURRENT ASSETS Prepaid expenses and other current assets consisted of the following: SUMMARY OF PREPAID EXPENSES AND OTHER CURRENT ASSETS March 31, 2026 September 30, 2025 Prepaid expenses $ 1,307,009 $ 1,327,463 Prepaid inventory 334,286 81,820 Deferred costs 379,797 132,434 Short-term investments - 14,715 Prepaid income taxes 146,117 - Prepaid expenses and other current assets total $ 2,167,209 $ 1,556,432 NOTE 10 – INVENTORY, NET Inventory, net consisted of the following: SCHEDULE OF INVENTORY, NET March 31, 2026 September 30, 2025 Raw materials $ 680,252 $ 609,304 Work in progress 464,337 364,907 Finished goods 5,595,990 5,610,733 Inventory, net 6,740,579 6,584,944 22 The Company maintained an allowance for obsolete inventories of $ 1,019,828 and $ 1,034,798 at March 31, 2026, and September 30, 2025, respectively. NOTE 11 – PROPERTY AND EQUIPMENT Property and equipment are summarized as follows: SUMMARY OF PROPERTY AND EQUIPMENT March 31, 2026 September 30, 2025 Land $ 1,854,511 $ 945,279 Building and leasehold improvements 8,744,992 4,482,978 Furniture and office equipment 650,194 625,995 Computers and software 2,654,119 2,685,331 Machinery and equipment 16,443,751 13,927,502 Property and equipment, gross 30,347,567 22,667,085 Less: Accumulated depreciation ( 13,806,618 ) ( 13,015,089 ) Property and equipment, net $ 16,540,949 $ 9,651,996 Depreciation expense for the three months ended March 31, 2026, and 2025, was $ 458,939 and $ 319,507 , respectively, depreciation expense for the six months ended March 31, 2026, and 2025, was $ 877,126 and $ 666,252 , 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 AND INTANGIBLE ASSETS Changes in the carrying amount of goodwill, by segment, were as follows: SCHEDULE OF GOODWILL BY SEGMENT Security Industrial Services Aerospace and Defense Consolidated Balance at September 30, 2025 $ - $ 3,708,347 $ - $ 3,708,347 Impairment /adjustments - - - - Acquisitions - - 3,977,794 3,977,794 Balance at March 31, 2026 $ - $ 3,708,347 $ 3,977,794 $ 7,686,141 As of March 31, 2026, and September 30, 2025, accumulated impairment losses of $ 3,846,475 have been recorded related to the Security segment. On January 8, 2026, the Company acquired Invocon, as part of the fair market evaluation for the purchase price accounting, the company recognized intangible assets in the form of the company trade name and internal developed technologies. Changes in the carrying amount of intangible assets, by segment, were as follows: SCHEDULE OF INTANGIBLE ASSETS BY SEGMENT Security Industrial Services Aerospace and Defense Consolidated Balance at September 30, 2025 $ - $ - $ - $ - Acquisitions - - 3,130,000 3,130,000 Amortization - - ( 148,250 ) ( 148,250 ) Balance at March 31, 2026 $ - $ - $ 2,981,750 $ 2,981,750 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 unaudited condensed consolidated balance sheet and the Company accounts for this investment and records it at cost. No impairment has been recorded for the six months ended March 31, 2026, and 2025. 23 Other assets consisted of the following: SCHEDULE OF OTHER ASSETS March 31, 2026 September 30, 2025 Rental deposits $ 259,619 $ 262,201 Investment in Masterpiece VR 1,300,000 1,300,000 Other deposits 51,249 63,930 Demonstration equipment supplied to resellers - 441,624 Other assets total $ 1,610,868 $ 2,067,755 NOTE 14 – ACCRUED EXPENSES Accrued expenses consisted of the following: SCHEDULE OF ACCRUED EXPENSES March 31, 2026 September 30, 2025 Accrued expenses $ 1,305,722 $ 442,344 Accrued payroll and payroll taxes 1,026,684 1,558,475 Accrued warranty 222,702 222,702 Accrued expenses total $ 2,555,108 $ 2,223,521 NOTE 15 – DEFERRED REVENUE The Company’s deferred revenue for the three and six months ended March 31, 2026, and 2025, were as follows: SCHEDULE OF DEFERRED REVENUE For the three months ended For the six months ended March 31, 2026 March 31, 2025 March 31, 2026 March 31, 2025 Deferred revenue at beginning of period $ 1,683,471 $ 1,766,705 $ 1,866,014 $ 1,955,635 Net additions: Deferred software revenues 233,696 445,382 607,796 809,527 Recognized as revenue: Deferred software revenues ( 526,265 ) ( 522,669 ) ( 1,082,908 ) ( 1,075,744 ) Deferred revenue at end of period 1,390,902 1,689,418 1,390,902 1,689,418 Less: current portion 1,019,351 1,179,536 1,019,351 1,179,536 Long-term deferred revenue at end of period $ 371,551 $ 509,882 $ 371,551 $ 509,882 For the three months ended March 31, 2026, and 2025, the Company recognized revenue of $ 495,402 and $ 501,666 , respectively. For the six months ended March 31, 2026, and 2025, the Company recognized revenue of $ 914,003 , and $ 885,962 , respectively, that was previously included in the beginning balance of deferred revenues. 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. 24 The following is a summary of the Company’s uncompleted contracts: SCHEDULE OF CONTRACT ASSETS AND LIABILITIES March 31, 2025 September 30, 2025 Costs incurred on uncompleted contracts $ 21,695,817 $ 10,344,923 Estimated gross profit 6,457,872 4,025,531 28,153,689 14,370,454 Applicable billings to date ( 28,293,504 ) ( 15,045,345 ) Net earnings in excess of billings/(billing in excess of costs) $ ( 139,815 ) $ ( 674,891 ) For the three and six months ended March 31, 2026, and 2025, the Company recognized revenue of $ 130,471 and $ 342,725 , and $ 1,402,348 and $ 1,103,156 , 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 six months ended March 31, 2026, and 2025. SUMMARY OF CONTRACT ASSETS AND CONTACT LIABILITIES March 31, 2026 March 31, 2025 March 31, 2026 March 31, 2025 For the three months ended For the six months ended March 31, 2026 March 31, 2025 March 31, 2026 March 31, 2025 Costs and Estimated Earnings in Excess of Billings on Uncompleted Contracts Contract asset, beginning balance $ 1,697,691 $ 1,541,241 $ 980,164 $ 985,207 Changes in revenue billed, contract price or cost estimates ( 151,007 ) ( 384,621 ) 566,520 171,413 Contract assets acquired in acquisition 661,885 - 661,885 - Contract asset, net, ending balance $ 2,208,569 $ 1,156,620 $ 2,208,569 $ 1,156,620 Billings in Excess of Costs and Estimated Earnings on Uncompleted Contracts Contract liability, beginning balance ( 1,542,262 ) $ ( 1,279,187 ) ( 1,655,055 ) $ ( 1,254,204 ) Changes in revenue billed, contract price or cost estimates ( 273,585 ) ( 645,238 ) ( 160,792 ) ( 670,221 ) Contract liabilities acquired in acquisition ( 532,537 ) - ( 532,537 ) - Contract liability, ending balance $ ( 2,348,384 ) $ ( 1,924,425 ) $ ( 2,348,384 ) $ ( 1,924,425 ) Net Billings in Excess of Costs and Estimated Earnings on Uncompleted Contracts Net billings in excess of costs, beginning balance $ 155,429 $ 262,054 $ ( 674,891 ) $ ( 268,997 ) Changes in revenue billed, contract price or cost estimates ( 424,592 ) ( 1,029,859 ) 405,728 ( 498,808 ) Net billings in excess of costs acquired in acquisition 129,348 - 129,348 - Net (earnings in excess of billings)/costs in excess of billings, ending balance $ ( 139,815 ) $ ( 767,805 ) $ ( 139,815 ) $ ( 767,805 ) 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. 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. 25 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 March 31, 2026, there were royalties receivable from the sale of Cemtrex, XR, Inc. of $ 664,000 , all of which 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 $ 381,550 allowance for expected credit losses against these royalties. As of March 31, 2026, there was $ 548,554 in trade receivables due from the Cemtrex XR successor company, CXR, Inc. Of these receivables $ 282,450 is the net due on the royalties on CXR Inc.’s revenues. The remaining $ 266,104 is related to the services provided by Vicon Security Technologies Pvt Ltd. (formerly Cemtrex Technologies Pvt. Ltd.) in the normal course of business. During the year ended September 30, 2025, the Company recorded $ 60,628 in current expected credit losses on receivables due from CXR Inc. NOTE 18 – EXPECTED CREDIT LOSSES The following table summarized the Company’s activity for expected credit losses for the six months ended March 31, 2026. SCHEDULE OF CURRENT EXPECTED CREDIT LOSSES Trade receivables, net Contract assets, net Royalties receivable, net - related party As of September 30, 2025 $ 152,415 $ 9,704 $ 165,771 Expected credit losses, beginning balance $ 152,415 $ 9,704 $ 165,771 Provision - 10,395 215,779 Recovery ( 2,409 ) - - Write-off - - - As of March 31, 2026 $ 150,006 $ 20,099 $ 381,550 Expected credit losses, ending balance $ 150,006 $ 20,099 $ 381,550 NOTE 19 – 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 3.23 years at March 31, 2026, and 3.30 years at March 31, 2025. The weighted average discount rate used to measure lease liabilities was approximately 6.16 % at March 31, 2026, and 6.22 % at March 31, 2025. 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 a single lease that is classified as a finance lease for equipment acquired as part of the Richland acquisition. The remaining term of this lease is 0.58 years with a discount rate of 1.76 % as of March 31, 2026. The Company has elected not to recognize lease assets and liabilities for leases with a term of 12 months or less. 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 $ 2,075 per month. Short-term rent expense was $ 12,840 for the six months ended March 31, 2026, and $ 25,671 for the six months ended March 31, 2025. 26 A reconciliation of undiscounted cash flows to finance and operating lease liabilities recognized in the unaudited condensed consolidated balance sheet at March 31, 2026, is set forth below: SCHEDULE OF RECONCILIATION OF UNDISCOUNTED CASH FLOWS TO OPERATING LEASE LIABILITIES Years ending September 30, Finance Leases Operating Leases Remainder of 2026 $ 335,027 $ 728,754 2027 - 1,170,804 2028 - 560,383 2029 - 372,750 2030 and thereafter - 380,672 Undiscounted lease payments 335,027 3,213,363 Amount representing interest ( 3,209 ) ( 322,629 ) Discounted lease payments 331,818 2,890,734 Less short-term lease liabilities 331,818 1,249,135 Long-term lease liabilities $ - $ 1,641,599 Lease costs for the three and six months ended March 31, 2026, and 2025 are set forth below: SCHEDULE OF LEASE COSTS 2026 2025 2026 2025 For the three months ended For the six months ended March 31, March 31, 2026 2025 2026 2025 Operating lease costs: Amortization of right-of-use assets 313,479 206,795 571,248 461,490 Interest on lease obligations 5,624 1,820 10,860 3,396 Operating lease costs total 319,103 208,615 582,108 464,886 Finance lease costs Amortization of right-of-use assets 9,503 - 9,503 - Interest on lease obligations 496 - 496 - Finance lease costs total 9,999 - 9,999 - Short-term lease costs 6,420 11,265 12,840 25,671 Total lease cost $ 335,522 $ 219,880 $ 604,947 $ 490,557 Other information: Cash paid for amounts included in the measurement of lease liabilities: Operating leases $ 319,103 $ 208,615 $ 582,108 $ 464,886 Finance lease $ 6,897 $ - $ 6,897 $ - NOTE 20 – 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”) matures twenty-four months 24 from the closing date, and if not specifically terminated, renews for one-year periods. 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 March 31, 2026, the Company had enough eligible assets to access approximately $ 3,100,000 of the credit line. The Company was in compliance with all loan covenants as of March 31, 2026. As of March 31, 2026, and September 30, 2025, this loan had a balance of $ 2,035,697 , and $ 3,176,096 , respectively. Notes payable On November 7, 2025, the Company issued a note payable to Streeterville Capital, LLC in the amount of $ 7,025,000 . This note carries interest between November 7, 2025, and December 31, 2025, of SOFR ( 3.87 % as of December 31, 2025), after December 31, 2025, 8 %, This Note matures eighteen (18) months from the issuance date with redemptions of up to $ 700,000 a month beginning at six (6) months from the issuance date. After deduction of legal fees of $ 25,000 , the Company received $ 7,000,000 in cash. Additionally, this note contains an additional interest provision that if this note is outstanding on January 1, 2026, a one-time additional interest fee of $ 1,050,00 which is being amortized over the remaining life of the loan, as of March 31, 2026, there is $ 853,125 of unamortized interest. As of March 31, 2026, this note had a balance of $ 8,281,006 . 27 On February 5, 2026, the company issued a promissory note to Fulton Bank in the amount of $ 600,000 for the purchase of Richland Industries, LLC. This note carries interest of 6.09 % requires 60 monthly payments of interest and principal and matures on February 1, 2031 . As of March 31, 2026, the note had a balance of $ 590,787 . On February 5, 2026, the Company acquired a mortgage in the amount of $ 3,920,000 from Fulton Bank to finance the purchase of the property formerly owned by Richland Industries, LLC. The mortgage carries interest at the Secured Overnight Financing Rate (SOFR) plus 2.75 % and matures on February 1, 2046 . As of March 31, 2026, this loan had a balance of $ 3,912,200 . The following table outlines the Company’s secured liabilities: SCHEDULE OF LINES OF CREDIT AND AND LONG TERM LIABILITIES March 31, September 30, Interest Rate Maturity 2026 2025 Fulton Bank - $312,000 fund equipment for AIS. This loan is secured by certain assets of the Company. SOFR plus 2.37% (6.05% as of March 31, 2026 and 6.61% as of September 30, 2025). 9/30/2029 228,921 257,704 Fulton Bank - $ 312,000 fund equipment for AIS. This loan is secured by certain assets of the Company. SOFR plus 2.37 % ( 6.05 % as of March 31, 2026 and 6.61 % as of September 30, 2025). 9/30/2029 228,921 257,704 Fulton Bank mortgage $ 2,476,000 . This loan is secured by the underlying asset. SOFR plus 2.62 % ( 6.30 % on March 31, 2026 and 6.86 % on September 30, 2025). 1/28/2040 1,989,603 2,034,048 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 ( 6.48 % as of March 31, 2026 and 7.04 % as of September 30, 2025). 9/30/2043 1,129,836 1,146,630 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 Cemtrex; matures in 2030. SOFR plus 2.80 % per annum ( 6.48 % as of March 31, 2026 and 7.04 % as of September 30, 2025). 7/1/2030 1,469,944 1,613,677 Fulton Bank (AIS - TN) - $ 3,920,000 mortgage loan; requires monthly principal and interest payments through January 1, 2046 with a final payment of remaining principal on February 1, 2046 ; The loan is collateralized by 1905 Mines Rd. and guaranteed by AIS and Cemtrex. SOFR plus 2.75 % per annum ( 6.43 % as of March 31, 2026). 2/1/2046 3,912,200 - Fulton Bank (AIS - TN) - $ 600,000 . promissory note related to purchase of AIS - TN; requires 60 monthly principal and interest payments ; The note is collateralized by the AIS - TN assets and guaranteed by AIS and Cemtrex; matures in 2031. 6.09 % 2/1/2031 590,787 - 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 September 30, 2025 and September 30, 2024. 8 % 2/22/2027 138,072 7,871,777 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 $ 33,333 as of September 30, 2025. 8 % 5/21/2026 647,433 621,773 Note payable - $ 7,025,000 . Less legal fees $ 25,000 ,net cash received $ 7,000,000 . A $ 1,050,000 additional interest provision was recorded on January 1, 2026 Between November 7, 2025 and December 31, 2025, SOFR ( 3.87 % as of December 31, 2025), after December 31, 2025, 8 % 5/6/2027 8,281,006 - Less: Unamortized original issue discount ( 861,458 ) ( 33,333 ) Total debt $ 17,526,344 $ 13,512,276 Less: Current maturities ( 8,770,319 ) ( 8,925,497 ) Long-term debt $ 8,756,025 $ 4,586,779 28 NOTE 21 – STOCKHOLDERS’ EQUITY Series 1 Preferred Stock The Company’s Series 1 Preferred Stock is quoted on the OTC Markets OTCID tier under the symbol “CETXP.” During the six months ended March 31, 2026, 135,592 shares of Series 1 Preferred Stock were issued to pay dividends to holders of Series 1 Preferred Stock. As of March 31, 2026, and September 30, 2025, there were 2,840,919 and 2,705,327 shares of Series 1 Preferred Stock issued and 2,776,819 and 2,641,227 shares of Series 1 Preferred Stock outstanding, respectively. Common Stock On October 2, 2024, November 26, 2024, and September 29, 2025, the Company completed a 60:1 , 35:1 , and 15:1 respectively, reverse stock split on its common stock. All share and per share data have been retroactively adjusted for the reverse splits. During the six months ended March 31, 2026, 29,943 shares of common stock were issued for the exercise 9,981 Series A Warrants, under the Alternative Cashless Exercise option as adjusted for exercise price adjustments. During the three months ended March 31, 2026, no Series A Warrants were exercised. During the six months ended March 31, 2026, there 67,671 shares of common stock issued for rounding on the September 29, 2025, reverse stock split. During the three months ended March 31, 2026, no rounding shares were issued. During the three and six months ended March 31, 2026, 8,030 , and 2,324,510 shares of common stock were issued for the exercise of 8,030 , and 2,324,510 Series B Warrants, respectively which generated $ 5,675,332 in proceeds. During the six months ended March 31, 2026, 3,000,296 shares of the Company’s common stock have been issued to satisfy $ 7,759,168 of notes payable, $ 84,832 in accrued interest, and $ 11,798,283 of excess value of shares issued recorded as interest expense. Such shares were issued pursuant to the exemption contained under Section 4(a)(2) of the Securities Act of 1933, as amended. During the three months ended March 31, 2026, no shares were issued to satisfy debt. 29 Series A and Series B Warrants The following table summarizes information about shares issuable under warrants outstanding as of March 31, 2026. SCHEDULE SHARES ISSUABLE UNDER WARRANTS OUTSTANDING Warrant Shares Outstanding Weighted Average Exercise Price Weighted Average Remaining Contractual Term (in years) Outstanding at September 30, 2025 1,667,106 $ 4.84 3.37 Warrants granted - Warrants exercised ( 2,354,453 ) $ 2.41 Warrants forfeited - Warrants cancelled - Exercise price adjustments 2,062,572 Outstanding at March 31, 2026 1,375,225 $ 1.73 2.52 On October 13, 2025, the Company issued shares of common stock to relieve debt. At the time, the Company had 147,324 Series A Warrants and 1,519,782 Series B Warrants outstanding at an exercise price of $ 5.304 . According to the terms of the Series A and Series B warrants, in the event of a issuance below the current exercise price, 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 October 17, 2025, it was determined that the exercise price has reset to $ 4.56 . The following table illustrates the adjustment. SCHEDULE OF WARRANTS ADJUSTMENT Warrants outstanding Aggregate Value Adjusted number of warrants outstanding Series A Warrants 147,324 $ 260,467 57,120 Series B Warrants 1,519,782 $ 8,061,006 1,767,778 On December 11, 2025, the Company closed on a Securities Purchase agreement of common stock. At the time, the Company had 57,120 Series A Warrants and 1,757,778 Series B Warrants outstanding at an exercise price of $ 4.56 . 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 December 17, 2025, it was determined that the exercise price has reset to $ 2.433 . The following table illustrates the adjustment. Warrants outstanding Aggregate Value Adjusted number of warrants outstanding Series A Warrants 57,120 $ 260,467 107,058 Series B Warrants 1,757,778 $ 8,015,406 3,294,469 On December 30, 2025, the Company closed on a Securities Purchase agreement of common stock. At the time, the Company had 78,489 Series A Warrants and 987,987 Series B Warrants outstanding at an exercise price of $ 2.433 . 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 January 6, 2026, it was determined that the exercise price has reset to $ 2.25 . 30 The following table illustrates the adjustment. Warrants outstanding Aggregate Value Adjusted number of warrants outstanding Series A Warrants 78,489 $ 236,183 104,792 Series B Warrants 987,987 $ 2,403,749 1,068,339 For the six months ended March 31, 2026, and 2025 the company recognized a loss on the fair value of the common shares issued for the exercised warrants of $ 4,658,582 and a loss of $ 15,796,105 , respectively, which represents the difference between the fair value of the shares issued and the value of the warrants exercised. For the six months ended March 31, 2026, and 2025 the company recognized a loss on changes in fair value of warrant liability of $ 688,671 , and $ 10,020,212 , respectively, which represents the change in the fair value of the of the warrants unexercised at the measurement period. Equity Offerings On December 11, 2025, the Company entered into a Securities Purchase Agreement with a single accredited institutional investor pursuant to which the Company agreed to issue and sell to the Purchaser, in a registered direct offering securities consisting of shares of the Company’s common stock, par value $ 0.001 per share, and/or pre-funded warrants to purchase shares of Common Stock at $ 3.00 per share/warrant for aggregate gross proceeds of $ 2,000,000 . The Offering closed on December 11, 2025. The Company issued 310,000 shares of common stock and prefunded warrants to purchase 356,667 shares of common stock. The Prefunded warrants were immediately exercised, and the Company issued 666,667 shares of common stock in the aggregate. On December 23, 2025, the Company entered into a Securities Purchase Agreement with a single accredited institutional investor pursuant to which the Company agreed to issue and sell to the Purchaser, in a registered direct offering securities consisting of shares of the Company’s common stock, par value $ 0.001 per share, and/or pre-funded warrants to purchase shares of Common Stock at $ 2.50 per share/warrant for aggregate gross proceeds of $ 2,000,000 . The Offering closed on December 23, 2025. The Company issued 330,000 shares of common stock and prefunded warrants to purchase 470,000 shares of common stock. The Prefunded warrants were immediately exercised, and the Company issued 800,000 shares of common stock in the aggregate. On December 30, 2025, the Company entered into a Securities Purchase Agreement with a single accredited institutional investor pursuant to which the Company agreed to issue and sell to the Purchaser, in a registered direct offering securities consisting of shares of the Company’s common stock, par value $ 0.001 per share, and/or pre-funded warrants to purchase shares of Common Stock at $ 2.25 per share/warrant for aggregate gross proceeds of $ 2,000,000 . The Offering closed on December 30, 2025. The Company issued 330,000 shares of common stock and prefunded warrants to purchase 548,889 shares of common stock. The Prefunded warrants were immediately exercised, and the Company issued 888,889 shares of common stock in the aggregate. On January 9, 2026, Cemtrex, Inc. (the “Company”) entered into a Securities Purchase Agreement (the “Purchase Agreement”) with a single accredited institutional investor (the “Purchaser”), pursuant to which the Company agreed to issue and sell to the Purchaser, in a registered direct offering (the “Offering”), securities consisting of shares of the Company’s common stock, par value $ 0.001 per share (the “Common Stock”), and/or pre-funded warrants to purchase shares of Common Stock (the “Pre-Funded Warrants”), for aggregate gross proceeds of $ 4,000,000 . The Offering closed on January 9, 2026. The Company issued 400,000 shares of common stock and prefunded warrants to purchase 1,069,507 shares of common stock, all the prefunded warrants were immediately exercised. 31 NOTE 22 – SHARE-BASED COMPENSATION For the six months ended March 31, 2026, and 2025, the Company recognized $ 0 and $ 7,183 of share-based compensation expense on its outstanding options, respectively. As of March 31, 2026, there was no unrecognized share-based compensation expense. During the six months ended March 31, 2026, no options were granted, cancelled, or forfeited. NOTE 23 – 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 24 – INCOME TAXES For the three and six months ended March 31, 2026, and 2025, the Company recorded an income tax expense of approximately $ 73,859 and $ 110,525 , 340,185 , and 231,063 , respectively. These taxes are related to our international operations and state taxes of certain subsidiaries. As of year-end 2025, the Company had federal, state, and foreign net operating losses (“NOL”) of approximately $ 68.9 million, $ 84.0 million, and $ 9.8 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 2026. 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 2022 through 2025 are subject to review by tax authorities. The Company’s effective tax rates for the three and six months ended March 31, 2026, and 2025, were ( 5.7 %) and 1.27 %, ( 1.79 %) and ( 1.17 %) respectively. NOTE 25 – SUBSEQUENT EVENTS On April 7, 2026, the Company issued 864,588 shares of the Company’s common stock to satisfy $ 580,000 of notes payable, $ 68,441 in accrued interest, and $ 466,878 of excess value of shares issued recorded as interest expense. Such shares were issued pursuant to the exemption contained under Section 4(a)(2) of the Securities Act of 1933, as amended. On April 17, 2026, the Company issued 150,000 shares of the Company’s common stock were issued for the exercise of 150,000 Series B Warrants which generated $ 112,500 in proceeds. On May 8, 2026, the Company issued 29,157 shares of the Company’s common stock to satisfy $ 25,000 of accrued interest on notes payable, and $ 950 of excess value of shares issued recorded as interest expense. Such shares were issued pursuant to the exemption contained under Section 4(a)(2) of the Securities Act of 1933, as amended. 32