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 March 31, 2024

☐	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.)

135 Fell Ct. Hauppauge, NY		11788
(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

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 May 10, 2024, the issuer had 10,652,287 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 March 31, 2024 (Unaudited) and September 30, 2023	3

	Condensed Consolidated Statements of Operations for the three and six months ended March 31, 2024 and 2023 (Unaudited)	4

	Condensed Consolidated Statements of Comprehensive Loss for the three and six months ended March 31, 2024 and 2023 (Unaudited)	5

	Condensed Consolidated Statement of Stockholders’ Equity for the three and six months ended March 31, 2024 (Unaudited)	6

	Condensed Consolidated Statement of Stockholders’ Equity for the three and six months ended March 31, 2023 (Unaudited)	7

	Condensed Consolidated Statements of Cash Flow for the six months ended March 31, 2024 and 2023 (Unaudited)	8

	Notes to Unaudited Condensed Consolidated Financial Statements	10

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	27

Item 4.	Controls and Procedures	32

PART II. OTHER INFORMATION

Item 1.	Legal Proceedings	33

Item 1A	Risk Factors	33

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	33

Item 3.	Defaults Upon Senior Securities	33

Item 4.	Mine Safety Disclosures	33

Item 5.	Other Information	33

Item 6.	Exhibits	34

SIGNATURES		35

Part I. Financial Information

Item 1. Financial Statements

Cemtrex, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

	(Unaudited)
	March 31,			September 30,
	2024			2023
Assets
Current assets
Cash and cash equivalents	$	2,916,120		$	5,329,910
Restricted cash		1,172,416			1,019,652
Short-term investments		13,853			13,663
Trade receivables, net		11,535,880			9,209,695
Trade receivables, net - related party		1,479,703			1,143,342
Inventory, net		7,397,747			8,739,219
Contract assets, net		1,979,679			1,739,201
Prepaid expenses and other current assets		1,910,415			2,098,359
Total current assets		28,405,813			29,293,041

Property and equipment, net		8,902,051			9,218,701
Right-of-use operating lease assets		2,193,011			2,287,623
Royalties receivable, net - related party		440,049			674,893
Note receivable, net - related party		761,585			761,585
Goodwill		4,381,891			4,381,891
Other		2,161,862			1,836,009
Total Assets	$	47,246,262		$	48,453,743

Liabilities & Stockholders’ Equity
Current liabilities
Accounts payable	$	5,741,091		$	6,196,406
Accounts payable - related party		9,214			68,509
Sales tax payable		37,487			35,829
Revolving line of credit		4,019,234			-
Current maturities of long-term liabilities		914,170			14,507,711
Operating lease liabilities - short-term		792,141			741,487
Deposits from customers		207,708			57,434
Accrued expenses		2,676,079			2,784,390
Contract liabilities		1,899,409			980,319
Deferred revenue		1,404,608			1,583,406
Accrued income taxes		404,288			388,627
Total current liabilities		18,105,429			27,344,118
Long-term liabilities
Long-term debt		21,553,920			9,929,348
Long-term operating lease liabilities		1,462,545			1,607,202
Other long-term liabilities		317,093			501,354
Deferred Revenue - long-term		654,617			727,928
Total long-term liabilities		23,988,175			12,765,832
Total liabilities		42,093,604			40,109,950

Commitments and contingencies		-			-

Stockholders’ equity
Preferred stock , $0.001 par value, 10,000,000 shares authorized, Series 1, 3,000,000 shares authorized, 2,408,053 shares issued and 2,272,002 shares outstanding as of March 31, 2024 and 2,293,016 shares issued and 2,228,916 shares outstanding as of September 30, 2023 (liquidation value of $10 per share)		2,408			2,293
Series C, 100,000 shares authorized, 50,000 shares issued and outstanding at March 31, 2024 and September 30, 2023		50			50
Preferred stock, value
Common stock, $0.001 par value, 50,000,000 shares authorized, 1,055,636 shares issued and outstanding at March 31, 2024 and 1,045,783 shares issued and outstanding at September 30, 2023		1,056			1,046
Additional paid-in capital		68,936,696			68,881,705
Accumulated deficit		(66,806,600	)		(64,125,895	)
Treasury stock, 136,051 shares of Series 1 Preferred Stock at March 31, 2024 and 64,100 shares of Series 1 Preferred Stock at September 30, 2023		(217,996	)		(148,291	)
Accumulated other comprehensive income		2,773,784			3,076,706
Total Cemtrex stockholders’ equity		4,689,398			7,687,614
Non-controlling interest		463,260			656,179
Total liabilities and stockholders’ equity	$	47,246,262		$	48,453,743

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

Cemtrex, Inc. and Subsidiaries

Condensed Consolidated Statements of Operations

(Unaudited)

	March 31, 2024			March 31, 2023			March 31, 2024			March 31, 2023
	For the three months ended						For the six months ended
	March 31, 2024			March 31, 2023			March 31, 2024			March 31, 2023

Revenues	$	17,159,595		$	16,073,397		$	34,037,761		$	28,043,639
Cost of revenues		10,220,179			8,734,916			20,015,946			15,662,543
Gross profit		6,939,416			7,338,481			14,021,815			12,381,096
Operating expenses
General and administrative		7,020,157			5,318,267			13,992,123			10,482,605
Research and development		951,400			1,615,341			1,800,205			3,445,054
Total operating expenses		7,971,557			6,933,608			15,792,328			13,927,659
Operating (loss)/income		(1,032,141	)		404,873			(1,770,513	)		(1,546,563	)
Other (expense)/income
Other income/(expense), net		144,765			376,504			223,176			359,421
Interest expense		(592,804	)		(1,335,138	)		(1,176,487	)		(2,463,372	)
Total other (expense)/income, net		(448,039	)		(958,634	)		(953,311	)		(2,103,951	)
Net loss before income taxes		(1,480,180	)		(553,761	)		(2,723,824	)		(3,650,514	)
Income tax expense		(100,004	)		-			(170,755	)		-
Loss from Continuing operations		(1,580,184	)		(553,761	)		(2,894,579	)		(3,650,514	)
Income/(loss) from discontinued operations, net of tax		10,463			14,232			20,955			(3,225,389	)
Net loss		(1,569,721	)		(539,529	)		(2,873,624	)		(6,875,903	)
Less (loss)/income in noncontrolling interest		(96,510	)		55,265			(192,919	)		(3,898	)
Net loss attributable to Cemtrex, Inc. stockholders	$	(1,473,211	)	$	(594,794	)	$	(2,680,705	)	$	(6,872,005	)
(Loss)/income per share - Basic & Diluted
Continuing Operations	$	(1.46	)	$	(0.82	)	$	(2.62	)	$	(4.70	)
Discontinued Operations	$	0.01		$	0.02		$	0.02		$	(4.09	)
Weighted Average Number of Shares-Basic & Diluted		1,055,636			815,498			1,051,630			788,265

Condensed Consolidated Statements of Comprehensive Loss

(Unaudited)

	March 31, 2024			March 31, 2023			March 31, 2024			March 31, 2023
	For the three months ended						For the six months ended
	March 31, 2024			March 31, 2023			March 31, 2024			March 31, 2023
Other comprehensive loss
Net loss	$	(1,569,721	)	$	(539,529	)	$	(2,873,624	)	$	(6,875,903	)
Foreign currency translation loss		(530,686	)		(317,218	)		(302,922	)		(93,649	)
Comprehensive loss		(2,100,407	)		(856,747	)		(3,176,546	)		(6,969,552	)
Less comprehensive income/(loss) attributable to noncontrolling interest		96,510			(55,265	)		192,919			3,898
Comprehensive loss attributable to Cemtrex, Inc. stockholders	$	(2,196,917	)	$	(801,482	)	$	(3,369,465	)	$	(6,973,450	)

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)

	Shares		Amount		Shares		Amount		Shares		Amount		Capital			Deficit			Series 1 Preferred Stock			Income			Equity			interest

	Preferred Stock Series 1				Preferred Stock Series C				Common Stock Par
	Par Value $0.001				Par Value $0.001				Value $0.001										Treasury			Accumulated
	Number				Number				Number				Additional						Stock,			other			Cemtrex			Non-
	of				of				of				Paid-in			Accumulated			136,051 shares of			Comprehensive			Stockholders’			controlling
	Shares		Amount		Shares		Amount		Shares		Amount		Capital			Deficit			Series 1 Preferred Stock			Income			Equity			interest
Balance at September 30, 2023		2,293,016	$	2,293		50,000	$	50		1,045,783	$	1,046	$	68,881,705		$	(64,125,895	)	$	(148,291	)	$	3,076,706		$	7,687,614		$	656,179
Foreign currency translation gain		-				-				-				-			-						227,764			227,764			-
Share-based compensation														7,558						-						7,558
Dividends paid in Series 1 preferred shares		115,037		115		-				-				(115	)		-						-			-			-
Loss attributable to noncontrolling interest		-				-														-						-			(96,409	)
Shares issued to pay for services						-				9,853		10		39,990												40,000
Net loss		-				-		-									(1,207,494	)								(1,207,494	)
Balance at December 31, 2023		2,408,053	$	2,408		50,000	$	50		1,055,636	$	1,056	$	68,929,138		$	(65,333,389	)	$	(148,291	)	$	3,304,470		$	6,755,442		$	559,770
Foreign currency translation loss				-				-				-					-			-		$	(530,686	)		(530,686	)		-
Share-based compensation													$	7,558												7,558
Purchase of treasury stock		-				-				-									$	(69,705	)					(69,705	)
Loss attributable to noncontrolling interest				-				-									-			-			-			-		$	(96,510	)
Shares issued to pay for services		-				-								-									-			-			-
Net loss								-								$	(1,473,211	)								(1,473,211	)
Balance at March 31, 2024		2,408,053	$	2,408		50,000	$	50		1,055,636	$	1,056	$	68,936,696		$	(66,806,600	)	$	(217,996	)	$	2,773,784		$	4,689,398		$	463,260

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)

	Preferred Stock Series 1				Preferred Stock Series C				Common Stock Par
	Par Value $0.001				Par Value $0.001				Value $0.001										Treasury			Accumulated
	Number				Number				Number				Additional						Stock,			other			Cemtrex			Non-
	of				of				of				Paid-in			Accumulated			64,100 shares of			Comprehensive			Stockholders’			controlling
	Shares		Amount		Shares		Amount		Shares		Amount		Capital			Deficit			Series 1 Preferred Stock			Income			Equity			interest
Balance at September 30, 2022		2,079,122	$	2,079		50,000	$	50		754,711	$	755	$	66,641,698		$	(54,929,020	)	$	(148,291	)	$	2,377,525		$	13,944,796		$	692,742
Foreign currency translation gain		-		-		-		-						-									223,569			223,569
Share-based compensation		-								-				39,842			-									39,842			-
Shares issued to pay notes payable		-		-		--		-		39,016		39		232,106						-			-			232,145
Dividends paid in Series 1 preferred shares		104,341		104		-								(104	)		-						-			-			-
Loss attributable to noncontrolling interest		-		-		-		-		-				-						-						-			(59,163	)
Net loss																	(6,277,211	)								(6,277,211	)
Balance at December 31, 2022		2,183,463	$	2,183		50,000	$	50		793,727	$	794	$	66,913,542		$	(61,206,231	)	$	(148,291	)	$	2,601,094		$	8,163,141		$	633,579
Balance, value		2,183,463	$	2,183		50,000	$	50		793,727	$	794	$	66,913,542		$	(61,206,231	)	$	(148,291	)	$	2,601,094		$	8,163,141		$	633,579
Foreign currency translation loss		--				-				-		-		-			-					$	(317,218	)		(317,218	)		-
Share-based compensation														26,735												26,735
Additional rounding shares issued for reverse stock split		-		-		-		-		19,314		19		(19	)		-			-			-			-			-
Income attributable to noncontrolling interest		-				-								-												-		$	55,265
Shares issued to pay for services										15,529		15		102,485						-			-			102,500
Net loss																$	(594,794	)							$	(594,794	)
Balance at March 31, 2023		2,183,463	$	2,183		50,000	$	50		828,570	$	828	$	67,042,743		$	(61,801,025	)	$	(148,291	)	$	2,283,876		$	7,380,364		$	688,844
Balance, value		2,183,463	$	2,183		50,000	$	50		828,570	$	828	$	67,042,743		$	(61,801,025	)	$	(148,291	)	$	2,283,876		$	7,380,364		$	688,844

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

Cemtrex, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(Unaudited)

	2024			2023
	For the six months ended
	March 31,
	2024			2023
Cash Flows from Operating Activities

Net loss	$	(2,873,624	)	$	(6,875,903	)

Adjustments to reconcile net loss to net cash used by operating activities
Depreciation and amortization		673,190			448,388
Gain on disposal of property and equipment		-			64,908
Noncash lease expense		389,125			420,411
Bad debt expense		35,213			(1,543	)
Share-based compensation		15,116			66,577
Income tax expense		(96,750	)		-
Interest expense paid in equity shares		-			32,145
Accounts payable paid in equity shares		40,000			102,500
Accrued interest on notes payable		657,355			1,290,615
Non-cash royalty income		(26,564	)		-
Gain/(loss) on marketable securities		(190	)		58
Amortization of original issue discounts on notes payable		-			883,467
Amortization of loan origination costs		36,267			-

Changes in operating assets and liabilities net of effects from acquisition of subsidiaries:
Trade receivables		(2,317,074	)		(1,870,729	)
Trade receivables - related party		(178,980	)		(408,464	)
Inventory		1,341,472			(73,209	)
Contract assets		(240,478	)		(12,597	)
Prepaid expenses and other current assets		483,043			(141,562	)
Other assets		(225,853	)		(185,165	)
Accounts payable		(455,315	)		256,584
Accounts payable - related party		408			(15,765	)
Sales tax payable		1,658			90,204
Operating lease liabilities		(388,516	)		(356,176	)
Deposits from customers		150,274			1,618
Accrued expenses		(108,311	)		701,414
Contract liabilities		919,090			554,966
Deferred revenue		(252,109	)		(86,106	)
Income taxes payable		(146,422	)		(37,698	)
Other liabilities		(184,261	)		(231,998	)
Net cash used by operating activities - continuing operations		(2,752,236	)		(5,383,060	)
Net cash provided by operating activities - discontinued operations		-			2,488,144
Net cash used by operating activities		(2,752,236	)		(2,894,916	)

Cash Flows from Investing Activities
Purchase of property and equipment		(355,308	)		(263,732	)
Proceeds from sale of property and equipment		-			11,026
Investment in MasterpieceVR		(100,000	)		-
Net cash used by investing activities		(455,308	)		(252,706	)

Cash Flows from Financing Activities
Proceeds on revolving line of credit		19,360,672			-
Payments on revolving line of credit		(15,413,971	)		-
Payments on debt		(2,429,743	)		(544,370	)
Payments on Paycheck Protection Program Loans		(20,242	)		(10,033	)
Proceeds on bank loans		28,331			-
Payments on bank loans		(204,802	)		(365,724	)
Purchases of treasury stock		(69,705	)
Net cash provided by/(used by) financing activities		1,250,540			(920,127	)

Effect of currency translation		(304,022	)		(126,593	)
Net decrease in cash, cash equivalents, and restricted cash		(1,957,004	)		(4,067,749	)
Cash, cash equivalents, and restricted cash at beginning of period		6,349,562			11,473,676
Cash, cash equivalents, and restricted cash at end of period	$	4,088,536		$	7,279,334

Balance Sheet Accounts Included in Cash, Cash Equivalents, and Restricted Cash
Cash and cash equivalents	$	2,916,120		$	6,634,037
Restricted cash		1,172,416			645,297