EXHIBIT 99.2

 

UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION

 

On March 23, 2018 the Company acquired an approximately 46% stake in Vicon Industries, Inc. (“Vicon”) based in Hauppauge New York. Vicon a global producer of video management systems and system components for use in security, surveillance, safety and communication applications by a broad group of end users worldwide. Vicon’s product line consists of various elements of a video system, including DVR’s, NVR’s, video encoders, decoders, servers and related video management software, data storage units, analog, digital and HD megapixel fixed and robotic cameras, virtual and analog matrix video switchers and controls, and system peripherals.

 

The unaudited pro forma financial information, prepared by Cemtrex, Inc., presents the historical consolidated balance sheet and statement of operations of the Company adjusted to reflect the Company’s acquisition of approximately 46% of the issued and outstanding shares of Vicon in exchange for 1,012,625 share of the Company’s common stock

 

The unaudited proforma consolidated balance sheet gives effect to the investment as if it had occurred on December 31, 2017. The unaudited pro forma statements of operations for the three months ended December 31, 2017 and for the year ended September 31, 2017 gives effect to the investment as if it had occurred as of the beginning of the initial period presented.

 

The pro forma combined financial information is unaudited, and is not necessarily indicative of the consolidated results that actually would have occurred if the investment had been consummated at the beginning of the periods presented, nor does it purport to present the future financial position and results of operations for future periods.

 

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PRO-FORMA CONSOLIDATED BALANCE SHEET

December 31, 2017

 

  Cemtrex Inc.   Equity investment in Vicon (Note 1)   Combined Proforma 
ASSETS            
Current Assets               
Cash & equivalents  $12,416,993        $12,416,993 
Restricted cash   1,582,345         1,582,345 
Accounts receivable, net   17,840,344         17,840,344 
Inventory -net  of allowance for inventory obsolescence   12,850,015         12,850,015 
Prepaid expenses & other current assets   2,503,311         2,503,311 
Total Current Assets   47,193,008    -    47,193,008 
                
Property & equipment, net   22,384,454         22,384,454 
Goodwill   3,322,818         3,322,818 
Investment in Vicon   -    2,913,930 (1a)   2,913,930 
Other   400,875         400,875 
Total Assets  $73,301,155   $2,913,930   $76,215,085 
                
LIABILITIES AND STOCKHOLDERS EQUITY               
Current Liabilities               
Accounts payable  $7,604,475        $7,604,475 
Credit card payable   132,437         132,437 
Sales tax payable   723,894         723,894 
Revolving line of credit   3,992,282         3,992,282 
Accrued expenses   3,045,079         3,045,079 
Deferred revenue   484,005         484,005 
Accrued income taxes   1,496,379         1,496,379 
Current portion of long-term liabilities   2,090,821         2,090,821 
Total Current Liabilities   19,569,372    -    19,569,372 
                
Long term- Liabilities               
Loans payable to bank   4,917,939         4,917,939 
Notes payable   2,396,223         2,396,223 
Mortgage payable   3,842,136         3,842,136 
Total long-term liabilities   11,156,298         11,156,298 
Deferred tax liabilities   1,891,000         1,891,000 
Total Liabilities   32,616,670    -    32,616,670 
                
Commitments & Contingencies               
                
Stockholders’ Equity               
Preferred stock , $0.001 par value, 10,000,000 shares authorized,               
Series A, 1,000,000 shares authorized, issued and outstanding at December 31, 2017           1,000                            1,000    
Series 1, 3,000,000 shares authorized, 1,822,660 shares issued and outstanding as of December 31, 2017        1,823                       1,823   
Common stock, $0.001 par value, 20,000,000 shares authorized,10,553,522 shares issued and outstanding at December 31, 2017        10,553           1,013  (1b)        11,566  
Additional paid-in capital   25,023,320    2,912,917(1b)   27,936,237 
Retained earnings   15,150,236         15,150,236 
Accumulated other comprehensive income   497,553         497,553 
Total Stockholders’ Equity   40,684,485    2,913,930    43,598,415 
                
Total Liabilities & Stockholders’ Equity  $73,301,155   $2,913,930   $76,215,085 

 

See Accompanying Notes to Proforma Combined Financial Statements.

 

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PRO-FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

FOR THE THREE MONTHS ENDED DECEMBER 31, 2017

 

   Cemtrex Inc.   Equity investment in Vicon (Note 2)   Proforma consolidated 
Revenues            
Total revenues  $32,381,900        $32,381,900 
                
Cost of revenues               
Total cost of revenues   21,857,408         21,857,408 
Gross profit   10,524,492         10,524,492 
                
Operating expenses               
Selling, general and administrative   9,507,584         9,507,584 
Research and development   149,217         149,217 
Equity loss form Vicon   -    (604,363)(2a)   (604,363)
Total operating expenses   9,656,801    (604,363)   10,261,164 
Operating income/(loss)   867,691    (604,363)   263,328 
                
Other income (expenses)               
Other Income (expense)   291,767         291,767 
Interest Expense   (368,461)        (368,461)
Total other income/(expense),   (76,694)        (76,694)
                
Income/(loss) before income taxes   790,997    (604,363)   186,634 
Income tax expense/(benefit), net   59,006         59,006 
Net income available to common shareholders  $731,991   $(604,363)  $127,628 
                
Income/(loss) per common share               
- basic  $0.07        $0.01 
-diluted  $0.07        $0.01 
                
Weighted average common shares outstanding               
- basic   10,486,770    1,012,625(2b)   11,499,395 
-diluted   10,644,723    1,012,625(2b)   11,657,348 

 

See Accompanying Notes to Proforma Combined Financial Statements.

 

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PRO-FORMA COMBINED STATEMENT OF OPERATIONS

FOR THE TWELVE MONTHS ENDED SEPTEMBER 30, 2017

 

   Cemtrex Inc.   Equity investment in Vicon (Note 3)   Proforma consolidated 
Revenues            
Total revenues  $120,628,200        $120,628,200 
                
Cost of revenues               
Total cost of revenues   80,714,648         80,714,648 
Gross profit   39,913,552         39,913,552 
                
Operating expenses               
Selling, general and administrative   34,797,874         34,797,874 
Research and development   -         - 
Equity loss form Vicon   -    (3,225,327) (3a)   (3,225,327)
Total operating expenses   34,797,874    (3,225,327)   38,023,201 
Operating income/(loss)   5,115,678    (3,225,327)   1,890,351 
                
Other income (expenses)               
Other Income (expense)   313,837         313,837 
Interest Expense   (923,952)        (923,952)
Total other income/(expense),   (610,115)        (610,115)
                
Income/(loss) before income taxes   4,505,563    (3,225,327)   1,280,236 
Income tax expense/(benefit), net   917         917 
Net income/(loss)  $4,504,646   $(3,225,327)  $1,279,319 
                
Preferred dividends paid  $1,200,871        $1,200,871 
Net income available to common shareholders  $3,303,775   $(3,225,327)  $78,448 
                
Income/(loss) per common share               
- basic  $0.33        $0.01 
-diluted  $0.32        $0.01 
                
Weighted average common shares outstanding               
- basic   10,013,378    1,012,625(3b)   11,026,003 
-diluted   10,175,736    1,012,625(3b)   11,188,361 

 

See Accompanying Notes to Proforma Combined Financial Statements.

 

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NOTES TO PRO-FORMA COMBINED FINANCIAL STATEMENTS (unaudited)

 

Note 1. Equity Investment in Vicon Industries, Inc. – Balance Sheet Adjustments

 

The investment in Vicon will be accounted for using the equity method of accounting. The Company acquired its 46% investment in Vicon through the issuance of 1,012,625 shares of its common stock with a value of $2,913,930 based on the five-day weighted average price of the Company’s common stock of the five business days immediately preceding the closing date.

 

  (a) Reflects the Company’s equity method investment in Vicon which was determined based on the preliminary allocation of the purchase price of $2,913,930 to the equity method investment.
  (b) Reflects the increase in common stock and additional paid-in capital resulting in the issuance of 1,012,625 new shares.

 

Note 2. Equity Investment in Vicon Industries, Inc. – Statement of Operations for the Three Months ended December 31, 2017, Adjustments

 

  (a) Reflects 46% of Vicon’s net loss of $1,313,833 for the three months ended December 31, 2017.
  (b) Reflects the issuance of 1,012,625 new shares of common stock.

 

Note 3. Equity Investment in Vicon Industries, Inc. – Statement of Operations for the year ended September 30, 2017, Adjustments

 

  (a) Reflects 46% of Vicon’s net loss of $7,011,580 for the year ended September 30, 2017.
  (b) Reflects the issuance of 1,012,625 new shares of common stock.

 

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