UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES ACT OF 1934

For the quarterly period ended June 30, 2021

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES ACT OF 1934

For the transition period from ___________to ____________

Commission File Number 001-37464

CEMTREX, INC.

(Exact name of registrant as specified in its charter)

Delaware

30-0399914

(State or other jurisdiction of
incorporation or organization)

(I.R.S. Employer

Identification No.)

276 Greenpoint Ave, Suite 208, Brooklyn, NY		11222
(Address of principal executive offices)		(Zip Code)

631-756-9116

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading symbol	Name of each exchange on which registered
Common Stock	CETX	Nasdaq Capital Market
Series 1 Preferred Stock	CETXP	Nasdaq Capital Market
Series 1 Warrants	CETXW	Nasdaq Capital Market

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

☒ Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

☒ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐	Accelerated filer ☐
Non-accelerated filer ☒	Smaller reporting company ☒
	Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

☐ Yes ☒ No

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: As of August 13, 2021, the issuer had 20,782,194 shares of common stock issued and outstanding.

Table of Contents

CEMTREX, INC. AND SUBSIDIARIES

INDEX

		Page

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

	Condensed Consolidated Balance Sheets as of June 30, 2021 (Unaudited) and September 30, 2020 (Restated)	3

	Condensed Consolidated Statements of Operations and Comprehensive Income/(Loss) for the three months ended June 30, 2021 (Unaudited) and June 30, 2020 (Restated)	4

	Consolidated Statement of Stockholders’ Equity for the nine months ended June 30, 2021 (Unaudited)/(Restated)	5

	Consolidated Statement of Stockholders’ Equity for the nine months ended June 30, 2020 (Unaudited)/(Restated)	6

	Condensed Consolidated Statements of Cash Flow for the nine months ended June 30, 2021 (Unaudited) and June 30, 2020 (Restated)	7

	Notes to Unaudited Condensed Consolidated Financial Statements	9

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		23

Item 4. Controls and Procedures		28

PART II. OTHER INFORMATION

Item 1. Legal Proceedings		29

Item 1A Risk Factors		29

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		29

Item 6. Exhibits		30

SIGNATURES		31

Part I. Financial Information

Item 1. Financial Statements

Cemtrex, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

	(UNAUDITED)			(Restated)
	June 30,			September 30,
	2021			2020
Assets
Current assets
Cash and equivalents	$	12,879,278		$	19,490,061
Restricted cash		1,690,873			1,582,798
Short-term investments		452,175			887,746
Trade receivables, net		5,234,216			6,686,797
Trade receivables - related party		1,505,789			1,432,209
Inventory –net of allowance for inventory obsolescence		8,669,397			6,793,806
Prepaid expenses and other assets		2,164,367			1,188,317
Total current assets		32,596,095			38,061,734

Property and equipment, net		7,236,755			6,961,751
Right-of-use assets		3,098,523			2,728,380
Assets held for sale		8,323,321			8,323,321
Goodwill		5,886,096			4,370,894
Other		1,094,429			744,207
Total Assets	$	58,235,219		$	61,190,287

Liabilities & Stockholders’ Equity (Deficit)
Current liabilities
Accounts payable	$	2,888,144		$	2,857,817
Short-term liabilities		6,381,047			7,034,510
Lease liabilities - short-term		840,016			721,036
Deposits from customers		39,227			29,660
Accrued expenses		2,476,812			2,392,487
Deferred revenue		1,794,187			1,651,784
Accrued income taxes		331			89,318
Total current liabilities		14,419,764			14,776,612

Long-term liabilities
Loans payable to bank		1,046,504			1,871,201
Long-term lease liabilities		2,261,148			2,027,406
Notes payable		3,079,743			6,029,999
Mortgage payable		2,282,409			2,355,542
Other long-term liabilities		1,078,752			1,063,733
Paycheck Protection Program Loans		2,871,161			2,169,437
Deferred Revenue - long-term		449,563			467,329
Total long-term liabilities		13,069,280			15,984,647

Total liabilities		27,489,044			30,761,259

Commitments and contingencies		-			-

Shareholders’ equity
Preferred stock , $0.001 par value, 10,000,000 shares authorized,
Series 1, 3,000,000 shares authorized, 1,885,151 shares issued and outstanding as of June 30, 2021 and 2,156,784 shares issued and outstanding as of September 30, 2020 (liquidation value of $10 per share)		1,885			2,157
Series A, 1,000,000 shares authorized, zero shares issued and outstanding at June 30, 2021 and 1,000,000 shares issued and outstanding at September 30, 2020		-			1,000
Series C, 100,000 shares authorized, 50,000 shares issued and outstanding at June 30, 2021 and 100,000 shares issued and outstanding at September 30, 2020		50			100
Common stock, $0.001 par value, 50,000,000 shares authorized, 18,711,463 shares issued and outstanding at June 30, 2021 and 17,622,539 shares issued and outstanding at September 30, 2020		18,711			17,623
Preferred stock value		-			-
Additional paid-in capital		58,846,576			60,221,766
Retained earnings (accumulated deficit)		(30,660,550	)		(32,520,084	)
Treasury stock at cost		(148,291	)		(148,291	)
Accumulated other comprehensive income (loss)		1,624,673			1,777,112
Total Cemtrex stockholders’ equity		29,683,054			29,351,383
Non-controlling interest		1,063,121			1,077,645
Total liabilities and shareholders’ equity	$	58,235,219		$	61,190,287

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

Cemtrex, Inc. and Subsidiaries

Condensed Consolidated Statements of Operations and Comprehensive Income/(Loss)

	June 30, 2021			June 30, 2020			June 30, 2021			June 30, 2020
	For the three months ended						For the nine months ended
	June 30, 2021			June 30, 2020			June 30, 2021			June 30, 2020
Revenues		10,326,431			8,440,867			28,422,892			32,774,797
Cost of revenues		6,198,715			5,161,015			16,360,822			18,800,355
Gross profit		4,127,716			3,279,852			12,062,070			13,974,442

Operating expenses
General and administrative		5,670,019			5,347,718			16,337,200			15,380,199
Research and development		757,966			331,936			2,033,688			1,113,455
Total operating expenses		6,427,985			5,679,654			18,370,888			16,493,654
Operating income/(loss)		(2,300,269	)		(2,399,802	)		(6,308,818	)		(2,519,212	)

Other income/(expense)
Other income/(expense)		3,901,658			158,134			6,532,590			830,251
Settlement Agreement - Related Party		-			-			3,674,165			-
Interest Expense		(433,009	)		(1,982,101	)		(1,891,026	)		(3,812,921	)
Total other income/(expense), net		3,468,649			(1,823,967	)		8,315,729			(2,982,670	)

Net loss before income taxes		1,168,380			(4,223,769	)		2,006,911			(5,501,882	)
Income tax benefit/(expense)		(40,759	)		(7,658	)		(168,190	)		(197,201	)
Net income/(loss)		1,127,621			(4,231,427	)		1,838,721			(5,699,083	)

Less income in noncontrolling interest		29,608			(35,751	)		(20,813	)		151,312
Net income/(loss) attributable to Cemtrex, Inc. shareholders	$	1,098,013		$	(4,195,676	)	$	1,859,534		$	(5,850,395	)

Net income/(loss)	$	1,127,621		$	(4,231,427	)	$	1,838,721		$	(5,699,083	)
Other comprehensive income/(loss)
Foreign currency translation gain/(loss)		(193,554	)		154,443			(234,045	)		161,460
Defined benefit plan actuarial gain/(loss)		-			-			87,895			-
Comprehensive income/(loss)		934,067			(4,076,984	)		1,692,571			(5,537,623	)
Less comprehensive income/(loss) attributable to noncontrolling interest		(35,731	)		41,266			14,524			(118,623	)

Comprehensive income/(loss) attributable to Cemtrex, Inc. shareholders	$	969,798		$	(4,118,250	)	$	1,678,047		$	(5,419,000	)

Income/(loss) Per Share-Basic	$	0.06		$	(0.38	)	$	0.10		$	(0.82	)
Income/(loss) Per Share-Diluted	$	0.06		$	(0.38	)	$	0.10		$	(0.82	)

Weighted Average Number of Shares-Basic		18,711,463			10,933,926			18,368,274			7,161,785
Weighted Average Number of Shares-Diluted		18,711,463			10,933,926			18,368,274			7,161,785

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

Cemtrex, Inc. and Subsidiaries

Condensed Consolidated Statement of Stockholders’ Equity

(Unaudited/Restated)

	Shares			Amount			Shares			Amount			Shares			Amount			Shares		Amount		Capital			Deficit)			At cost			Income(loss)			Equity			interest
	Preferred Stock Series 1						Preferred Stock Series A						Preferred Stock Series C						Common Stock							Retained						Accumulated
	Par Value $0.001						Par Value $0.001						Par Value $0.001						Par Value $0.01				Additional			Earnings			Treasury			other			Cemtrex			Non-
	Number of						Number of						Number of						Number of				Paid-in			(Accumulated			Stock,			Comprehensive			Stockholders’			controlling
	Shares			Amount			Shares			Amount			Shares			Amount			Shares		Amount		Capital			Deficit)			At cost			Income(loss)			Equity			interest
Balance at September 30, 2020, as reported		2,156,784		$	2,157			1,000,000		$	1,000			100,000		$	100			17,622,539	$	17,623	$	63,313,336		$	(33,172,690	)	$	(148,291	)	$	853,643		$	30,866,878		$	1,077,645
Adjustment																								(3,091,570	)		652,606						923,469			(1,515,495	)
Balance at September 30, 2020, as restated		2,156,784		$	2,157			1,000,000		$	1,000			100,000		$	100			17,622,539	$	17,623	$	60,221,766		$	(32,520,084	)	$	(148,291	)	$	1,777,112		$	29,351,383		$	1,077,645
Foreign currency translation gain/(loss)																																	37,864			37,864

Defined benefit plan actuarial gain/(loss)
Share-based compensation								-			-			-			-							16,071						-						16,071




Shares granted to pay notes payable
Shares granted to pay notes payable, shares
Shares issued to pay notes payable																				345,638		345		407,507												407,852
Shares issued for services
Shares issued for services, shares
Purchase of treasury stock
Income in noncontrolling interest
Shares and options surrendered in settelment agreement
Shares and options surrendered in settelment agreement, shares
Dividends paid in Series 1 preferred shares		108,169			108																			(108	)											-
Net income/(loss) attributable to noncontrolling interest																																				-			(40,247	)
Comprehensive income/(loss) attributable to noncontrolling interest																																				-			9,617
Noncontrolling interest
Net loss																											(1,692,611	)								(1,692,611	)
Balance at December 31, 2020		2,264,953		$	2,265			1,000,000		$	1,000			100,000		$	100			17,968,177	$	17,968	$	60,645,236		$	(34,212,695	)	$	(148,291	)	$	1,814,976		$	28,120,559		$	1,047,015
Foreign currency translation gain/(loss)																																	(78,521	)		(78,521	)
Defined benefit plan actuarial gain/(loss)																																	87,895			87,895
Share-based compensation																								49,246												49,246
Shares issued to pay notes payable																				743,286		743		1,298,733						-						1,299,476
Income in noncontrolling interest																																							(19,625	)
Shares and options surrendered in settelment agreement		(469,949	)		(470	)		(1,000,000.00	)		(1,000	)		(50,000	)		(50	)						(3,672,645	)											(3,674,165	)
Net income																											2,454,132									2,454,132
Balance at March 31, 2021		1,795,004		$	1,795			-		$	-			50,000		$	50			18,711,463	$	18,711	$	58,320,570		$	(31,758,563	)	$	(148,291	)	$	1,824,350		$	28,258,622		$	1,027,390
Foreign currency translation gain/(loss)																																	(199,677	)		(199,677	)
Dividends paid in Series 1 preferred shares		90,147			90			-			-			-			-			-		-		(90	)					-						-
Share-based compensation																								45,587												45,587
Shares granted to pay notes payable																								480,509												480,509
Income in noncontrolling interest																																				-			35,731
																																				-
Net income																											1,098,013									1,098,013
Balance at June 30, 2021		1,885,151		$	1,885			-		$	-			50,000		$	50			18,711,463	$	18,711	$	58,846,576		$	(30,660,550	)	$	(148,291	)	$	1,624,673		$	29,683,054		$	1,063,121

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

Cemtrex, Inc. and Subsidiaries

Condensed Consolidated Statement of Stockholders’ Equity (Continued)

(Unaudited/Restated)

	Preferred Stock Series 1				Preferred Stock Series A				Preferred Stock Series C				Common Stock Par
	Par Value $0.001				Par Value $0.001				Par Value $0.001				Value $0.01							Retained						Accumulated
	Number of				Number of				Number of				Number of				Additional Paid-in			Earnings (Accumulated			Treasury Stock,			other Comprehensive			Cemtrex Stockholders’			Non- controlling
	Shares		Amount		Shares		Amount		Shares		Amount		Shares		Amount		Capital			Deficit)			At cost			Income(loss)			Equity			interest
Balance at September 30, 2019		2,110,718	$	2,111		1,000,000	$	1,000		-	$	-		3,962,790	$	3,963	$	39,337,117		$	(23,676,887	)	$	-		$	1,791,153		$	17,458,457		$	885,874
Foreign currency translation gain																											582,156			582,156
Share-based compensation										100,000		100						119,004												119,104
Shares issued to pay accounts payable														18,358		18		27,520												27,538
Shares sold in Securities Purchase Agreements, net of offering costs														338,393		338		359,712												360,050
Stock issued to pay notes payable														105,042		105		130,147												130,252
Dividends paid in Series 1 preferred shares		105,965		106		-		-										(106	)					-						-
Net income/(loss) attributable to noncontrolling interest																														-			194,911
Comprehensive income/(loss) attributable to noncontrolling interest																														-			(18,429	)
Net loss																					(55,618	)								(55,618	)
Balance at December 31, 2019		2,216,683	$	2,217		1,000,000	$	1,000		100,000	$	100		4,424,583	$	4,424	$	39,973,394		$	(23,732,505	)	$	-		$	2,373,309		$	18,621,939		$	1,062,356

Foreign currency translation gain																											(748,929	)		(748,929	)
Share-based compensation																		24,104												24,104
Shares sold in Securities Purchase Agreements, net of offering costs		-		-		-		-		-		-		847,000		847		1,160,253												1,161,100
Stock issued to pay notes payable														2,518,045		2,519		3,499,747												3,502,266
Shares issued for services														150,000		150		170,850												171,000
Purchase of treasury stock																								(190,483	)					(190,483	)
Noncontrolling interest																														-			(16,593	)
Net loss																					(1,599,101	)								(1,599,101	)
Balance at March 31, 2020		2,216,683	$	2,217		1,000,000	$	1,000		100,000	$	100		7,939,628	$	7,940	$	44,828,348		$	(25,331,606	)	$	(190,483	)	$	1,624,380		$	20,941,896		$	1,045,763
Foreign currency translation gain																											154,443			154,443
Foreign currency translation gain (loss)																											154,443			154,443
Share-based compensation																		24,104												24,104
Shares sold in Securities Purchase Agreements, net of offering costs														5,458,479		5,459		10,095,311												10,100,770
Stock issued to pay notes payable		-		-		-		-		-		-		2,595,608		2,595		3,298,811						-						3,301,406
Shares issued for services														270,000		270		229,730												230,000
Noncontrolling interest																														-			(41,266	)
Net loss