10-Q 1 form10-q.htm

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

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

 

For the quarterly period ended March 31, 2019

 

OR

 

[  ] 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.)

 

30-30 47th Avenue, Long Island City, NY   11101
(Address of principal executive offices)   (Zip Code)

 

631-756-9116
 (Registrant’s telephone number, including area code)

 

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.

 

[X] Yes [  ] No

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted 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 and post such files).

 

[X] Yes [  ] No

 

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

 

  Large accelerated filer Accelerated filer
  Non-accelerated filer Smaller reporting company [X]

 

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 [X] 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 13, 2019, the issuer had 16,737,009 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, 2019 and September 30, 2018 (Unaudited) 3
     
  Condensed Consolidated Statements of Operations and Comprehensive Income/(Loss) for the three and six months ended March 31, 2019 and March 31, 2018 (Unaudited) 4
     
  Consolidated Statement of Stockholders’ Equity for the three and six months ended March 31, 2019 and March 31, 2018 (Unaudited) 5
     
  Condensed Consolidated Statements of Cash Flow for the six months ended March 31, 2019 and March 31, 2018 (Unaudited) 6
     
  Notes to Unaudited Condensed Consolidated Financial Statements 7
     
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 16
     
Item 4. Controls and Procedures 22
     
PART II. OTHER INFORMATION  
     
Item 1. Legal Proceedings 23
     
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 23
     
Item 6. Exhibits 24
     
SIGNATURES 25

 

 2 
 

 

Part I. Financial Information

 

Item 1. Financial Statements

Cemtrex, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(Unaudited)

 

   March 31, 2019  September 30, 2018
Assets          
Current assets          
Cash and equivalents  $1,707,685   $973,772 
Short-term investments   13,692    -   
Restricted cash   1,228,653    1,342,163 
Accounts receivable, net   15,599,809    13,945,655 
Trade receivables - related party   -      165,220 
Inventory, net   17,566,352    11,354,458 
Prepaid expenses and other current assets   4,355,052    4,132,996 
Total current assets   40,471,243    31,914,264 
           
Property and equipment, net   25,329,230    27,300,654 
Goodwill   5,041,960    3,322,818 
Investment in Vicon   -      1,699,271 
Other assets   4,706,345    3,093,607 
Total Assets  $75,548,778   $67,330,614 
           
Liabilities & Stockholders’ Equity          
Current liabilities          
Accounts payable  $11,157,303   $7,068,005 
Short-term liabilities   16,069,234    10,913,703 
Deposits from customers   122,920    50,619 
Accrued expenses   4,591,690    2,333,938 
Deferred revenue   1,105,811    970,590 
Accrued income taxes   566,151    565,513 
Total current liabilities   33,613,109    21,902,368 
           
Long-term liabilities          
Loans payable to bank, net of current portion   3,485,050    4,206,468 
Long-term capital lease, net of current portion   32,835    44,081 
Notes payable, net of current portion   309,455    276,639 
Mortgage payable, net of current portion   3,285,427    3,568,545 
Other long-term liabilities   1,199,539    -   
Deferred tax liabilities   2,051,186    2,051,847 
Deferred Revenue - long-term   433,828    —   
Total long-term liabilities   10,797,320    10,147,580 
Total liabilities   44,410,429    32,049,948 
           
Commitments and contingencies   -      -   
           
Mezzanie equity          
Series B Preferred stock, $500 Stated Value 3,000 shares authorized, 1,050 issued and outstanding at March 31, 2019 and 0 at September 30, 2018, net of discount   345,489    -   
           
Shareholders’ equity          
Preferred stock , $0.001 par value, 10,000,000 shares authorized, Series 1, 3,000,000 shares authorized, 2,009,946 shares issued and outstanding as of March 31, 2019 and 1,914,168 shares issued and outstanding as of September 30, 2018 (liquidation value of $10 per share)   2,010    1,914 
Series A, 1,000,000 shares authorized, issued and outstanding at December 31, 2018 and September 30, 2018   1,000    1,000 
Common stock, $0.001 par value, 20,000,000 shares authorized, 14,487,284 shares issued and outstanding at March 31, 2019 and 12,973,730 shares issued and outstanding at September 30, 2018   14,847    12,973 
Additional paid-in capital   33,924,120    31,485,320 
Retained earnings   (855,189)   4,262,756 
Accumulated other comprehensive loss   (1,512,057)   (483,297)
Total shareholders’ equity   31,574,731    35,280,666 
Non-controlling interest of Vicon   (781,871)   —   
Total liabilities, mezzanie equity and shareholders’ equity  $75,548,778   $67,330,614 

 

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

 

 3 
 

 

Cemtrex, Inc. and Subsidiaries

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

(Unaudited)

 

   For the three months ended   For the six months ended 
   March 31,   March 31, 
   2019   2018   2019   2018 
Revenues                
Advanced Technologies Revenue  $6,927,778   $-   $7,395,613   $- 
Electronics Manufacturing Revenue   11,100,184    10,845,511    22,126,437    31,288,612 
Industrial Technology Revenue   5,579,535    9,567,785    11,369,991    21,506,584 
Total revenues   23,607,497    20,413,296    40,892,041    52,795,196 
                     
Cost of revenues                    
Cost of Sales, Advanced Technologies   3,899,773    -    4,092,138    - 
Cost of Sales, Electronics Manufacturing   6,504,519    6,499,072    13,016,848    19,687,027 
Cost of Sales, Industrial Technology   3,753,813    6,530,914    7,338,541    15,200,367 
Total cost of revenues   14,158,105    13,029,986    24,447,527    34,887,394 
Gross profit   9,449,392    7,383,310    16,444,514    17,907,802 
                     
Operating expenses                    
General and administrative   11,952,000    7,161,906    20,192,174    16,669,490 
Research and development   471,611    57,881    851,128    207,098 
Total operating expenses   12,423,611    7,219,787    21,043,302    16,876,588 
Operating income/(loss)   (2,974,219)   163,523    (4,598,788)   1,031,214 
                     
Other income (expense)                    
Other Income (expense)   69,284    506,946    116,927    798,713 
Interest Expense   (608,787)   (204,367)   (798,534)   (572,828)
Total other income (expense)   (539,503)   302,579    (681,607)   225,885 
                     
Net income (loss) before income taxes and equity interest   (3,513,722)   466,102    (5,280,395)   1,257,099 
Income tax (expense)/benefit   1,173,700    (42,631)   1,106,849    (101,637)
Earnings/(loss) in equity interests   -    -    (342,776)   - 
Net income (loss) before non-controlling interest   (2,340,022)   423,471    (4,516,322)   1,155,462 
Less net income/(loss) noncontrolling interest of Vicon   (356,155)   -    (356,155)   - 
Net income (loss)   (1,983,867)   423,471    (4,160,167)   1,155,462 
                     
Preferred dividends paid   -    -    957,780    - 
Net income/(loss) available to common shareholders   (1,983,867)   423,471    (5,117,947)   1,155,462 
Other comprehensive income/(loss)                    
Foreign currency translation gain/(loss)   (171,208)   (857,769)   (1,028,760)   (226,724)
Comprehensive income/(loss) available to common shareholders  $(2,155,075)  $(434,298)  $(6,146,707)  $928,738 
                     
Income/(loss) Per Common Share-Basic  $(0.14)  $0.04   $(0.38)  $0.11 
Income/(loss) Per Common Share-Diluted  $(0.14)  $0.04   $(0.38)  $0.11 
                     
Weighted Average Number of Common Shares-Basic   14,197,087    10,599,033    13,646,161    10,542,340 
Weighted Average Number of Common Shares-Diluted   14,197,087    10,699,529    13,646,161    10,644,859 

 

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

 

 4 
 

 

Cemtrex, Inc. and Subsidiaries

Consolidated Statement of Stockholders’ Equity

(Unaudited)

 

   Preferred Stock Series 1   Preferred Stock Series A   Common Stock Par       Retained   Accumulated     
   Par Value $0.001   Par Value $0.001   Value $0.01   Additional   Earnings   other   Total 
   Number of       Number of       Number of       Paid-in   (Accumulated   Comprehensive   Stockholders’ 
   Shares   Amount   Shares   Amount   Shares   Amount   Capital   Deficit)   Income(loss)   Equity 
Balance at September 30, 2018   1,914,168   $1,914    1,000,000   $1,000    12,973,370   $12,973   $31,485,320   $4,262,756   $(483,297)  $35,280,666 
Foreign currency translations   -    -    -    -    -    -    -    -    (857,552)   (857,552)
Share-based compensation   -    -    -    -    -    -    36,108    -    -    36,108 
Common stock issued in Subscription Rights Offering   -    -    -    -    201,002    201    138,493    -    -    138,694 
Common stock issued to pay notes payable   -    -    -    -    210,736    211    224,789    -    -    225,000 
Dividends paid in Series 1 preferred shares   95,778    96    -    -    -    -    957,684    (957,780)   -    - 
Net loss   -    -    -    -    -    -    -    (2,176,298)   -    (2,176,298)
Balance at December 31, 2018   2,009,946   $2,010    1,000,000   $1,000    13,385,108   $13,385   $32,842,394   $1,128,678   $(1,340,849)  $32,646,618 
Foreign currency translations   -    -    -    -    -    -    -    -    (171,208)   (171,208)
Share-based compensation   -    -    -    -    -    -    36,108    -    -    36,108 
Stock issued to pay notes payable   -    -    -    -    942,176    942    687,948    -    -    688,890 
Shares held in trust for ATM Offering   -    -    -    -    223,628    224    (224)   -    -    - 
Shares sold in ATM Offering   -    -    -    -    276,372    276    203,403    -    -    203,679 
Common stock sold in Securities Purchase Agreement   -    -    -    -    20,000    20    (20)   -    -    - 
Discount on Series B Preferred stock   -    -    -    -    -    -    154,511    -    -    154,511 
Net loss   -    -    -    -    -    -    -    (1,983,867)   -    (1,983,867)
Balance at March 31, 2019   2,009,946   $2,010    1,000,000   $1,000    14,847,284   $14,847   $33,924,120   $(855,189)  $(1,512,057)  $31,574,731 

 

   Preferred Stock Series 1   Preferred Stock Series A   Common Stock Par        Retained    Accumulated     
   Par Value $0.001   Par Value $0.001   Value $0.01    Additional    Earnings    other    Total 
   Number of       Number of       Number of       Paid-in   (Accumulated   Comprehensive   Stockholders’ 
   Shares   Amount   Shares   Amount   Shares   Amount   Capital   Deficit)   Income(loss)   Equity 
Balance at September 30, 2017   1,822,660   $1,823    1,000,000   $1,000    10,404,434   $10,404   $24,694,325   $14,418,245   $(133,492)  $38,992,305 
Foreign currency translations   -    -    -    -    -    -    -    -    631,045    631,045 
Stock issued for convertible debt   -    -    -    -    98,821    99    219,901    -    -    220,000 
Stock issued for interest on convertible debt   -    -    -    -    50,267    50    109,094    -    -    109,144 
Net Income   -    -    -    -    -    -    -    731,991    -    731,991 
Balance at Decemder 31, 2017   1,822,660   $1,823    1,000,000   $1,000    10,553,522   $10,553   $25,023,320   $15,150,236   $497,553   $40,684,485 
Foreign currency translations   -    -    -    -    -    -    -    -    (857,769)   (857,769)
Stock issued for investment in Vicon   -    -    -    -    1,012,625    1,013    2,912,917    -    -    2,913,930 
Net Income   -    -    -    -    -    -    -    423,471    -    423,471 
Balance at March 31, 2018   1,822,660   $1,823    1,000,000   $1,000    11,566,147   $11,566   $27,936,237   $15,573,707   $(360,216)  $43,164,117 

 

 5 
 

 

Cemtrex, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(Unaudited)

 

   For the six months ended 
   March 31, 
  2019   2018 
         
Cash Flows from Operating Activities        
Consolidated net income/(loss)  $(4,516,322)  $1,155,462 
Adjustments to reconcile net income/(loss) to net cash provided by operating activities:          
Depreciation and amortization   2,634,904    1,721,830 
Deferred revenue   (287,021)   780,455 
Change in allowance for inventory obsolescence   (38,276)   650,446 
Share-based compensation   72,216    - 
Interest expense paid in equity shares   163,890    - 
Interest expense on convertible debt   -    109,144 
Consolidation of equity interest   342,776    - 
Changes in operating assets and liabilities net of effects from acquisition of subsidiaries:  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Accounts receivable   2,802,739    2,228,175 
Trade receivables - related party   165,220    - 
Inventory   (1,181,200)   4,877,271 
Prepaid expenses and other assets   171,100    (1,363,888)
Other assets   (1,186,589)   (262,449)
Other liabilities   9,343    - 
Accounts payable   976,287    (883,004)
Deposits from customers   72,301    - 
Accrued expenses   395,634    (1,676,710)
Income taxes payable   (31,951)   (587,204)
Net cash provided by operating activities   565,051    6,749,528 
           
Cash Flows from Investing Activities          
Purchase of property and equipment   (865,538)   (8,180,925)
Net cash used by investing activities   (865,538)   (8,180,925)
           
Cash Flows from Financing Activities          
Proceeds from notes payable   -    2,300,000 
Payments on notes payable   (214,560)   (244,321)
Payments on secured loan   (1,417,926)   - 
Payments on bank loans   (996,589)   (793,877)
Proceeds from at-the-market offerings   360,695    - 
Expenses on at-the-market offerings   (18,323)   - 
Proceeds from the issuance of Series B Preferred Stock   500,000    - 
Expenses from the issuance of Series B Preferred Stock   (25,000)   - 
Revolving line of credit   1,387,344    (1,176,886)
Payments on caplital lease obligations   (11,246)   - 
Net cash provided/(used) by financing activities   (435,605)   84,916 
Effect of exchange rate differences on cash and cash equivalents   1,356,495    230,803 
           
Net increase (decrease) in cash   620,403    (1,115,678)
Cash beginning of period   2,315,935    11,974,752 
Cash end of period  $2,936,338   $10,859,074 
           
Supplemental Disclosure of Cash Flow Information:          
Cash paid during the period for interest  $611,444   $259,317 
           
Cash paid during the period for income taxes  $31,951   $587,204 
           
Supplemental Schedule of Non-Cash Investing and Financing Activities          
Payment of convertible notes in common stock  $-   $220,000 
Payment of interest on convertible notes in common stock  $-   $109,144 
Payment of short-term notes payable in common stock  $775,000   $- 
Dividends paid in equity shares  $957,780   $- 

 

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

 

 6 
 

 

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 from a small environmental monitoring instruments company into a world leading multi-industry technology company. The Company drives innovation in a wide range of sectors, including smart technology, virtual and augmented realities, advanced electronic systems, industrial solutions, and intelligent security systems. Unless the context requires otherwise, all references to “we”, “our”, “us”, “Company”, “registrant”, “Cemtrex” or “management” refer to Cemtrex, Inc. and its subsidiaries.

 

Advanced Technologies (AT)

 

Cemtrex’s Advanced Technologies segment delivers cutting-edge technologies in the IoT, Wearables and Smart Devices, such as the SmartDesk. Through the Company’s advanced engineering and product design, we deliver progressive design and development solutions to create impactful experiences for mobile, web, virtual and augmented reality, wearables and television as well as providing cutting edge, mission critical security and video surveillance through its variable interest entity, Vicon Industries, Inc. Through its Cemtrex VR division, the Company is developing a wide variety of applications for virtual and augmented reality markets.

 

Cemtrex has developed a cutting edge IoT product, the SmartDesk, over the last eighteen months to revolutionize the desktop PC and personal workspace market. The SmartDesk is custom engineered and manufactured by Cemtrex with over eighteen patents pending around the product. SmartDesk combines and reimagines the needs of the modern office workstation in a sleek, clutter-free design. The product includes 72 inches of touch display monitors, proprietary patent-pending touch and gesture control, digital phone and webcam, integrated document scanner, wireless smartphone charging, and a built-in keyboard / trackpad with an electric-powered, adjustable-height desk.

 

The Company is marketing this product to both consumers and enterprises alike. The Company currently markets this product directly to consumers but is also bringing on value added resellers (VARs) to reach enterprise customers. Cemtrex has received pre-orders from large Fortune 500 organizations like Black & Decker and United airlines. The Company will start fulfilling most SmartDesk orders in its fiscal second quarter. The Company also offers white glove installation, extended warranties, and accessories to go along with the SmartDesk.

 

Electronics Manufacturing (EM)

 

Cemtrex’s Electronics Manufacturing (EM) segment provides end to end electronic manufacturing services, which includes product design and sustaining engineering services, printed circuit board assembly and production, cabling and wire harnessing, systems integration, comprehensive testing services and completely assembled electronic products.

 

Cemtrex works with industry leading OEMs in their outsourcing of advanced manufacturing services by forming a long-term relationship as an electronics manufacturing partner. We work in close relationships with our customers throughout the entire electronic lifecycle of a product, from design, manufacturing, and distribution. The Company seeks to grow the business through the addition of new, high quality customers, the expansion of its share of business with existing customers and participating in the growth of existing customers.

 

Using its manufacturing capabilities, the Company provides customers with advanced product assembly and system level integration combined with test services to meet the highest standards of quality. Through its agile manufacturing environment, we can deliver low and medium volume and mix services to our clients. Additionally, we design, develop, and manufacture various interconnects and cable assemblies that often are sold in conjunction with its PCBAs to enhance value for their customers. The Company also provides engineering services from new product introductions and prototyping, related testing equipment, to product redesigns.

 

 7 
 

 

Industrial Technology (IT)

 

Cemtrex’s Industrial Technology (IT) segment, offers single-source expertise and services for rigging, millwrighting, in plant maintenance, equipment erection, relocation, and disassembly to diversified customers. The segment also sells a complete line of air filtration and environmental control products to a wide variety of customers in industries such as: chemical, cement, steel, food, construction, mining, & petrochemical worldwide.

 

The Company believes its ability to attract and retain new customers comes from their ongoing commitment to understanding its customers’ business performance requirements and our expertise in meeting or exceeding these requirements and enhancing their competitive edge. We work closely with our customers from an operational and senior executive level to achieve a deep understanding of our customer’s goals, challenges, strategies, operations, and products to ultimately build a long-lasting successful relationship.

 

Vicon Industries, Inc.

 

On March 23, 2018, in a private resale transaction, Cemtrex purchased 7,284,824 shares of common stock and a warrant to purchase an additional 1,500,000 shares of common stock of Vicon Industries, Inc. (OTCMKTS: VCON), (“Vicon”), from former Vicon shareholder NIL Funding Corporation, pursuant to the terms of a Securities Purchase Agreement. Cemtrex’s purchase of the Vicon Industries common stock and warrant resulted in its beneficial ownership of approximately 46% of the outstanding shares of common stock of Vicon. Cemtrex purchased the shares of common stock and warrant of Vicon Industries in exchange for 1,012,625 shares of Cemtrex common stock. Following the closing of the transaction, Saagar Govil, Cemtrex’s Chairman and Chief Executive Officer, and Aron Govil, Cemtrex’s Executive Director, joined the Vicon Industries Board of Directors and Saagar Govil assumed the position of Chief Executive Officer of Vicon Industries. Following the resignation of all other Board members by January 2019, the Company had elected to account for Vicon using the consolidation method. The Company is currently evaluating any fair market value adjustments that may be required.

 

On August 8, 2018, the Company entered into a Research and Development Services Agreement (the “Agreement”) with Vicon to provide Vicon with outsourced software development services. Vicon is transitioning its principal Israeli based software development activities to the Company’s India based services group, which has now assumed principal software coding and test responsibilities for Vicon. The outsourcing of these activities is expected to materially reduce the Vicon’s software development costs and provide development efficiencies, which should help expedite its software roadmap. The terms of the Agreement, among other things, set forth the scope of services, consideration, developed technology ownership, non-disclosure and safeguard of Vicon’s software code.

 

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 Annual Report on Form 10-K for the year ended September 30, 2018 (“2018 Annual Report”) of Cemtrex Inc. (“Cemtrex” or the “Company”). A summary of the Company’s significant accounting policies is identified in Note 2 of the notes to the consolidated financial statements included in the Company’s 2018 Annual Report.

 

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the Unites States (“US 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.

 

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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.

 

The condensed consolidated financial statements include the accounts of the Company, its wholly-owned subsidiaries (Griffin Filters LLC, MIP Cemtrex Inc., Cemtrex Advanced Technologies Inc., Cemtrex Ltd., Cemtrex Technologies Pvt. Ltd., ROB Cemtrex GmbH, ROB Systems Srl, ROB Cemtrex Assets UG, ROB Cemtrex Logistics GmbH, and Advanced Industrial Services, Inc. and the variable interest entity Vicon Industries, Inc. All inter-company balances and transactions have been eliminated in consolidation.

 

Significant Accounting Policies and Recent Accounting Pronouncements

 

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, 2018, includes a summary of the significant accounting policies used in the preparation of the consolidated financial statements.

 

Recently Adopted Accounting Pronouncements

 

Adoption of ASC 606

 

Effective October 1, 2018, the Company adopted ASC 606 using the modified retrospective approach for all of its contracts. Following the adoption of ASC 606, the Company continues to recognize revenue at a point-in-time when control of goods transfers to the customer. This is consistent with the Company’s previous revenue recognition accounting policy under which the Company recognized revenue when title and risk of loss pass to the customer and collectability was reasonably assured. ASC 606 did not impact the Company’s presentation of revenue on a gross or net basis. The Company recognizes contract revenue from the sales of services for rigging, millwrighting, in plant maintenance, equipment erection, relocation, and disassembly. In addition, there was no impact of adoption on the statement of operations or balance sheet as of March 31, 2019 or for the three and six months then ended. The Company expects the impact of adopting the new revenue standard to be immaterial to net income on an ongoing basis.

 

Revenue Recognition

 

The Company recognizes revenue from sales of services for rigging, millwrighting, in plant maintenance, equipment erection, relocation, and disassembly at the point in time when the performance obligations in the contract are met, which is when the customer obtains control of such products and typically occurs upon delivery depending on the terms of the underlying contracts. Revenue is measured as the amount of consideration expected to be received in exchange for transferring goods or providing services. In some instances, the Company enters into contracts with customers that contain multiple performance obligations to deliver volumes of co-products over a contractual period of less than 12 months. The Company allocates the transaction price to each performance obligation identified in the contract based on relative standalone selling prices and recognizes the related revenue as control of each individual product is transferred to the customer in satisfaction of the corresponding performance obligation.

 

Recently Issued Accounting Standards

 

In February 2016, The FASB issued ASU 2016-02 (Topic 842), “Leases”. ASU 2016-02 requires that a lessee recognize the assets and liabilities that arise from operating leases. A lessee should recognize in the statement of financial position a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term. For leases with a term of 12 months or less, a lessee is permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and lease liabilities. In transition, lessees and lessors are required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. The Company will adopt this standard starting October 1, 2019. The Company does not believe adoption will have a material effect on its financial position.

 

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Reclassifications

 

Certain reclassifications have been made to prior period amounts to conform to the current period presentation.

 

NOTE 3 – LOSS PER COMMON SHARE

 

Basic income/(loss) per common share is computed as income/(loss) applicable to common stockholders divided by the weighted-average number of common shares outstanding for the period. Diluted income/(loss) per common share reflects the potential dilution that could occur if securities or other contracts to issue common shares were exercised or converted to common stock.

 

The following table represents common stock equivalents that were excluded from the computation of diluted loss per share for the three and six months ended March 31, 2019 and 2018, because the effect of their inclusion would be anti-dilutive.

 

   For the three and six months ended 
   March 31, 
   (unaudited) 
   2019   2018 
Options   632,889    637,497 
Warrants   3,671,717    3,471,717 
    4,304,606    4,109,214 

 

NOTE 4 – VICON INDUSTRIES, INC. (VARIABLE INTEREST ENTITY)

 

On March 23, 2018, in a private resale transaction, the Company purchased 7,284,824 shares of common stock and a warrant to purchase an additional 1,500,000 shares of common stock of Vicon Industries, Inc. (OTCMKTS: VCON), (“Vicon”), from former Vicon shareholder NIL Funding Corporation, pursuant to the terms of a Securities Purchase Agreement. The Company’s purchase of the Vicon Industries common stock and warrant resulted in its beneficial ownership of approximately 46% of the outstanding shares of common stock of Vicon. The Company purchased the shares of common stock and warrant of Vicon Industries in exchange for 1,012,625 shares of The Company common stock. Following the closing of the transaction, Saagar Govil, The Company’s Chairman and Chief Executive Officer, and Aron Govil, The Company’s Executive Director, joined the Vicon Industries Board of Directors and Saagar Govil assumed the position of Chief Executive Officer of Vicon Industries.

 

Vicon is a variable interest entity of which the Company beneficially owned a minority 46.0% interest at March 31, 2019, and, for accounting purposes under FASB guidelines, is considered the primary beneficiary among the equity participants based on qualitative and quantitative criteria. Vicon was incorporated in 1967 and develops video management software and also designs, assembles and markets a wide range of video system components, comprised principally of cameras, network video servers/recorders, encoders and mass storage units, used in security, surveillance, safety, and control applications by a broad group of end users. A video system is typically a private (or hybrid public/private) network that can transmit and receive video, audio and data signals in accordance with the operational needs of the user. Vicon’s primary business focus is the design of network video systems that it produces and sells worldwide, primarily to authorized dealers, system integrators, government entities and security products distributors.

 

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NOTE 5 – SEGMENT INFORMATION

 

The Company reports and evaluates financial information for three segments: Advanced Technologies (AT) segment, the Electronics Manufacturing (EM) segment and the Industrial Technology (IT) segment. The AT segment develops smart devices and provides progressive design and development solutions to create impactful experiences for mobile, web, virtual and augmented reality, wearables and television as well as providing cutting edge, mission critical security and video surveillance. The EM segment provides end to end electronic manufacturing services, which includes product design and sustaining engineering services, printed circuit board assembly and production, cabling and wire harnessing, systems integration, comprehensive testing services and completely assembled electronic products. This segment also sells software development services for mobile, web, virtual reality, and PC applications. The IT segment offers single-source expertise and services for rigging, millwrighting, in plant maintenance, equipment erection, relocation, and disassembly to diversified customers in USA. The segment also sells a complete line of air filtration and environmental control instruments & products to a wide variety of customers in industries such as: chemical, cement, steel, food, construction, mining, & petrochemical worldwide.

 

The following tables summarize the Company’s segment information:

 

   For the three months ended   For the six months ended 
   March 31,   March 31, 
   2019   2018   2019   2018 
Revenues from external customers                    
Advanced Technologies   6,927,778    -   $7,395,613   $- 
Electronics Manufacturing   11,100,184    10,845,511    22,126,437    31,288,612 
Industrial Technology   5,579,535    9,567,785    11,369,991    21,506,584 
Total revenues   23,607,497    20,413,296   $40,892,041   $52,795,196 
                     
Gross profit                    
Advanced Technologies   3,028,005    -   $3,303,475   $- 
Electronics Manufacturing   4,595,665    4,807,400    9,109,589    11,601,585 
Industrial Technology   1,825,722    3,036,871    4,031,450    6,306,217 
Total gross profit   9,449,392    7,844,271   $16,444,514   $17,907,802 
                     
Operating (loss) income                    
Advanced Technologies   (2,437,421)   -   $(3,667,729)  $- 
Electronics Manufacturing   26,296    (82,348)   (160,878)   464,012 
Industrial Technology   (563,094)   245,871    (770,181)   567,202 
Total operating (loss) income   (2,974,219)   163,523   $(4,598,788)  $1,031,214 
                     
Other income (expense)                    
Advanced Technologies   (194,225)   -   $(194,385)  $- 
Electronics Manufacturing   (29,694)   263,361    (45,972)   122,159 
Industrial Technology   (315,584)   39,218    (441,250)   103,726 
Total other income (expense)   (539,503)   302,579   $(681,607)  $225,885 
                     
Depreciation and Amortization                    
Advanced Technologies   346,450    -   $866,992   $- 
Electronics Manufacturing   542,737    476,042    823,698    912,042 
Industrial Technology   668,455    403,933    944,214    809,788 
Total depreciation and amortization   1,557,642    879,975   $2,634,904   $1,721,830 

 

NOTE 6 – FAIR VALUE MEASUREMENTS

 

The Company complies with the provisions of ASC 820 “Fair Value Measurements and Disclosures” (“ASC 820”). Under ASC 820, fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (i.e., the “exit price”) in an orderly transaction between market participants at the measurement date.

 

The Company had no assets reportable under ASC 820 at December 31, 2018 and 2017.

 

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NOTE 7 – RESTRICTED CASH

 

A subsidiary of the Company participates in a consortium in order to self-insure group care coverage for its employees. The plan is administrated by Benecon Group and the Company makes monthly deposits in a trust account to cover medical claims and any administrative costs associated with the plan. These funds, as required by the plan are restricted in nature and amounted to $1,228,653 as of March 31, 2019. The Company also records a liability for claims that have been incurred but not recorded at the end of each year. The amount of the liability is determined by Benecon Group. The liability recorded in accrued expenses amounted to $106,230 as of March 31, 2019 and $104,987 at September 30, 2018.

 

NOTE 8 – ACCOUNTS RECEIVABLE, NET

 

Trade receivables, net consist of the following:

 

   March 31, 2019   September 30, 2018 
Accounts receivable  $15,898,517   $14,244,363 
Allowance for doubtful accounts   (298,708)   (298,708)
   $15,599,809   $13,945,655 

 

Accounts receivable include amounts due for shipped products and services rendered.

 

Allowance for doubtful accounts include estimated losses resulting from the inability of our customers to make required payments.

 

NOTE 9 – INVENTORY, NET

 

Inventory, net, consist of the following:

 

   March 31, 2019   September 30, 2018 
Raw materials  $9,721,220   $8,654,497 
Work in progress   1,966,159    1,412,828 
Finished goods   6,851,645    2,298,081 
    18,539,024    12,365,406 
           
Less: Allowance for inventory obsolescence   (972,672)   (1,010,948)
Inventory –net of allowance for inventory obsolescence  $17,566,352   $11,354,458 

 

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NOTE 10 – PROPERTY AND EQUIPMENT

 

Property and equipment are summarized as follows:

 

   March 31, 2019   September 30, 2018 
Land  $1,063,715   $1,063,715 
Building   5,311,269    5,321,926 
Furniture and office equipment   2,579,195    2,685,315 
Computers and software   7,070,003    6,762,046 
Trade show display   89,330    - 
Machinery and equipment   27,936,709    22,102,390 
    44,050,221    37,935,392 
           
Less: Accumulated depreciation   (18,720,991)   (10,634,738)
Property and equipment, net  $25,329,230   $27,300,654 

 

Depreciation expense for the six months ended March 31, 2019 and 2018 were $2,634,904 and $1,721,830, respectively.

 

NOTE 11 – PREPAID AND OTHER CURRENT ASSETS

 

On March 31, 2019, the Company had prepaid and other current assets consisting of prepayments on inventory purchases of $617,850, other current assets of $1,745,848 and other receivables of $1,991,354. On September 30, 2018, the Company had prepaid and other current assets consisting of prepayments on inventory purchases of $1,026,441, other current assets of $1,115,201 and other receivables of $1,991,354.

 

NOTE 12 - OTHER ASSETS

 

As of March 31, 2019, the Company had other assets of $4,706,345 which was comprised of rent security of $144,125, deferred tax assets of $4,140,988, and other assets of $421,232. As of September 30, 2018, the Company had other assets of $3,093,607 which was comprised of rent security of $126,078, and deferred tax assets of $2,967,529.

 

NOTE 13 – SHORT-TERM LIABILITES

 

The Company’s subsidiaries have revolving lines of credit with various banks in order to fund operations. As of March 31, 2019, and September 30, 2018, the balances of these accounts were $2,028,974 and $2,639,542, respectively.

 

On February 12, 2018 the Company’s subsidiary ROB Cemtrex GmbH obtained a $3,680,079 (€3,000,000 based on the exchange rate at the time) secured loan with Deutsche Bank. This loan carries interest of EURIBOR (Euro Interbank Offer Rate) plus 1.25% per annum (1.133% as of December 31, 2018) and is payable on January 1, 2020. ROB Cemtrex GmbH has pledged its receivables to secure this loan. As of March 31, 2019, the loan had a balance of $3,443,353, based on the exchange rate at the time.

 

On November 15, 2017, the Company issued a note payable to an unrelated third party, for $2,300,000. This note carries interest of 8% and is due after 18 months. At September 30, 2018 1,475,000 of this note was outstanding with $225,000 classified as long-term. During the six months ended March 31, 2019, 1,152,912 shares of the Company’s common stock have been issued to satisfy $775,000 of this note. As of March 31, 2019, $700,000 of this note remains outstanding with $275,000 classified as long-term. Additionally, during the six months ended March 31, 2019, the Company recognized $163,890 of additional interest expense due to the value of stock given exceeded the note payable settled.

 

On May 11, 2018, the Company issued a note payable to an unrelated third party, for $1,725,000. This note carries interest of 8% and is due after 18 months.

 

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On September 21, 2018, the Company’s variable interest entity, Vicon, entered into a $5,600,000 Term Loan Agreement with NIL Funding Corporation. This note carries interest of 8.95% and has a maturity date of March 30, 2020. As of March 31, 2019, $5,350,000 of this note remains outstanding.

 

As of March 31, 2019, and September 30, 2018 there were $3,096,907 and $1,807,910 in current portion of long-term liabilities, respectively.

 

NOTE 14 – RELATED PARTY TRANSACTIONS

 

As of December 31, 2018, the Company has completed its move to Long Island City. Prior to December 31, 2018, the Company leased its principal office at Farmingdale, New York, 8,000 square feet of office and warehouse/assembly space on a month to month lease in a building owned by Aron Govil, Executive Director of the Company, at a monthly rental of $10,000. For the six months ended March 31, 2019 and 2018 rent expense under this lease was $30,000 and $60,000, respectively.

 

NOTE 15 – MEZZANIE EQUITY

 

On March 22, 2019, the Company entered into a Securities Purchase Agreement (the “Purchase Agreement”) with an unaffiliated institutional investor (the “Investor”), pursuant to which the Company agreed to issue to the Investor 20,000 shares of common stock, a warrant to purchase 200,000 shares of common stock and 2,100 shares of Series B Preferred Stock, stated value $500 per share. The Series B Preferred Stock has a maturity date of one year from the issuance date and the Company has agreed to pay dividends on the outstanding shares of Series B Preferred at the rate equal to 7.5% per annum (increasing by 10% upon the occurrence of each trigger (or default) event). Dividends are payable on the date the shares of Series B Preferred are converted or on maturity. The dividends must be paid in cash or, in certain circumstances, may be paid in shares of Common Stock. As of March 31, 2019, 1,050 shares of Series B Preferred Stock, 20,000 shares of Common Stock, and a Series B warrant to purchase 200,000 shares of common stock were issued for gross proceeds of $500,000. The Company has assigned the relative fair value of $10,359 to the Common Stock issued, $20,231 to the Series B warrant issued, $98,921 to the benefit conversion feature, and $25,000 to the upfront 5% discount for total of $154,511 of discounts to the Series B Preferred Stock as of March 31, 2019 After deducting offering expenses of $25,000 the Company received $475,000 in net proceeds. The proceeds were used to fund operations.

 

NOTE 16 – STOCKHOLDERS’ EQUITY

 

Preferred Stock

 

The Company is authorized to issue 10,000,000 shares of Preferred Stock, $0.001 par value. As of March 31, 2019, and September 30, 2018, there were 3,010,996 and 2,914,168 shares issued and outstanding, respectively.

 

Series 1 Preferred Stock

 

For the six months ended March 31, 2019, 95,778 shares of Series 1 Preferred Stock were issued to pay $957,780 worth of dividends to holders of Series 1 Preferred Stock.

 

As of March 31, 2019, and September 30, 2018, there were 2,009,946 and 1,914,168 shares of Series 1 Preferred Stock issued and outstanding, respectively.

 

Series A Preferred stock

 

During the six-month periods ended March 31, 2019 and 2018, the Company did not issue any Series A Preferred Stock.

 

As of March 31, 2019, and September 30, 2018, there were 1,000,000 shares of Series A Preferred Stock issued and outstanding.

 

Common Stock

 

The Company is authorized to issue 20,000,000 shares of common stock, $0.001 par value. As of March 31, 2019, there were 14,487,284 shares issued and outstanding and at September 30, 2018, there were 12,973,730 shares issued and outstanding.

 

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During the six months ended March 31, 2019, 1,152,912 shares of the Company’s common stock have been issued to satisfy $775,000 of a short-term note payable, 201,002 shares were issued in a Subscription Rights Offering(See below), 500,000 shares were issued and held in trust in an At-the-Market Offering Agreement(See below), and 20,000 were issued in a Securities Purchase Agreement(See below).

 

Subscription Rights Offering

 

On November 26, 2018, Cemtrex, Inc. (the “Company”) commenced a rights offering to its stockholders (“Rights Offering”). Pursuant to the Rights Offering, the Company has distributed, at no charge to holders of record of the Company’s common stock and series 1 warrants as of November 19, 2018 (the “Record Date”), non-transferable subscription rights to purchase up to an aggregate of $2,700,000 worth of shares of common stock, at a purchase price equal to the lesser of (i) $1.06 per share (in which case 2,547,170 shares may be sold), or (ii) 95% of the volume weighted average price of the Company’s common stock for the five trading day period through and including December 19, 2018, which is the initial expiration date of the Rights Offering, all as set forth in the Prospectus Supplement filed on November 21, 2018 with the Securities and Exchange Commission (the “Prospectus Supplement”). On December 19, 2018 the price was set at $0.75 per share and the expiration date was extended to December 21, 2018. Each stockholder of record on the Record Date received one right for each one share of common stock held by the stockholder, and each series 1 warrant holder of record on the Record Date received one right for every ten shares for which their warrant is exercisable. Each right entitles the holder to purchase one share of the Company’s common stock, subject to proration. In connection with the Rights Offering, the Company entered into a Dealer-Manager Agreement (the “Agreement”) with Advisory Group Equity Services, Ltd. Doing business as RHK Capital (“RHK”). As of March 31, 2019, 201,002 shares of common stock were issued for gross proceeds of $150,721. After deducting offering expenses of $12,027 the Company received $138,694 in net proceeds.

 

At-the-Market Offering Agreement

 

On January 28, 2019,the “Company entered into an At-the-Market Offering Agreement (the “Agreement”) with Advisory Group Equity Services, Ltd. Doing business as RHK Capital (the “Manager”), pursuant to which the Manager will act as the Company’s sales agent with respect to the issuance and sale of up to $2,000,000 of the Company’s shares of common stock, par value $0.001 per share (the “Shares”), from time to time in an at-the-market public offering (the “Offering”). The proceeds were used to fund operations.

 

Sales of the Shares, through the Manager, will be made directly on The NASDAQ Capital Market, on any other existing trading market for our common stock or to or through a market maker. The Manager may also sell the Shares in privately negotiated transactions, provided that the Manager receives our prior written approval for any sales in privately negotiated transactions. The Company will pay the Manager a commission equal to 3.0% of the gross proceeds from the sale of the Shares pursuant to the Sales Agreement. As of March 31, 2019, 500,000 shares of common stock were issued and held in trust. Of the shares held in trust, 276,372 were issued for gross proceeds of $209,974. After deducting offering expenses of $6,296 the Company received $203,679 in net proceeds. The proceeds were used to fund operations.

 

NOTE 17 – SHARE-BASED COMPENSATION

 

For the six months ended March 31, 2019 and 2018, the Company recognized $72,216 and zero of share-based compensation expense on its outstanding options, respectively. As of March 31, 2019, $112,483 of unrecognized share-based compensation expense is expected to be recognized over a period of three years. Future compensation amounts will be adjusted for any change in estimated forfeitures.

 

NOTE 18 – COMMITMENTS AND CONTINGENCIES

 

The Company has moved its corporate activities to Long Island City with a lease of 12,000 square feet at a rate of $30,000 per month that expires May 31, 2020.

 

The Company’s IT segment leases (i) approx. 5,000 square feet of office and warehouse space in Liverpool, New York from a third party on a month to month lease at a monthly rent of $2,200, (ii) approximately 25,000 square feet of warehouse space in Manchester, PA from a third party in a seven year lease at a monthly rent of $7,300 expiring on December 13, 2022, (iii) approximately 43,000 square feet of office and warehouse space in York, PA from a third party in a seven year lease at a monthly rent of $21,825 expiring on December 13, 2022, (iv) approximately 15,500 square feet of warehouse space in Emigsville, PA from a third party in a one year lease at a monthly rent of $4,555 expiring on August 31, 2019.

 

The Company’s EM segment owns a 70,000 square-foot manufacturing building in Neulingen. The EM segment also leases a 10,000 square foot manufacturing facility in Sibiu, Romania from a third party in a ten-year lease at a monthly rent of $9,363 (€8,000) expiring on May 31, 2019.

 

The Company’s AT segment leases approximately 6,700 square feet of office and warehouse space in Pune, India from a third party in an eighteen-month lease at a monthly rent of $6,265 (INR454,365) expiring on September 6, 2019.

 

NOTE 19 - SUBSEQUENT EVENTS

 

Cemtrex has evaluated subsequent events up to the date the condensed consolidated financial statements were issued. Cemtrex concluded that the following subsequent events have occurred and require recognition or disclosure in the condensed consolidated financial statements.

 

In April of 2019, the Company issued 811,166 shares of common stock to satisfy $275,000 worth of notes payable.

 

In April and May of 2019, the Company issued 1,384,485 shares of common stock to convert 700 shares of Series B Preferred Stock.

 

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

 

Except for historical information contained in this report, the matters discussed are forward-looking statements that involve risks and uncertainties. When used in this report, words such as “anticipates”, “believes”, “could”, “estimates”, “expects”, “may”, “plans”, “potential” and “intends” and similar expressions, as they relate to the Company or its management, identify forward-looking statements. Such forward-looking statements are based on the beliefs of the Company’s management, as well as assumptions made by and information currently available to the Company’s management. Among the factors that could cause actual results to differ materially are the following: the effect of business and economic conditions; the impact of competitive products and their pricing; unexpected manufacturing or supplier problems; the Company’s ability to maintain sufficient credit arrangements; changes in governmental standards by which our environmental control products are evaluated and the risk factors reported from time to time in the Company’s SEC reports, including its recent report on Form 10-K. The Company undertakes no obligation to update forward-looking statements as a result of future events or developments.

 

General Overview

 

Cemtrex was incorporated in 1998, in the state of Delaware and has evolved through strategic acquisitions and internal growth from a small environmental monitoring instruments company into a world leading multi-industry technology company that provides a wide array of solutions to meet today’s consumer, commercial, and industrial challenges. Cemtrex manufactures advanced custom engineered electronics, including SmartDesk, extensive industrial services, integrated hardware and software solutions, proprietary IoT and wearable devices, and systems for controlling particulates and other regulated pollutants. Unless the context requires otherwise, all references to “we”, “our”, “us”, “Company”, “registrant”, “Cemtrex” or “management” refer to Cemtrex, Inc. and its subsidiaries.

 

Advanced Technologies (AT)

 

Cemtrex’s Advanced Technologies segment delivers cutting-edge technologies in the IoT, Wearables and Smart Devices, such as SmartDesk. Through our advanced engineering and product design, we deliver progressive design and development solutions to create impactful experiences for mobile, web, virtual and augmented reality, wearables and television as well as providing cutting edge, mission critical security and video surveillance. Through its Cemtrex VR division, the Company is developing a wide variety of applications for virtual and augmented reality markets.

 

Electronics Manufacturing (EM)

 

Cemtrex’s Electronics Manufacturing (EM) segment, provides end to end electronic manufacturing services, which includes product design and sustaining engineering services, printed circuit board assembly and production, cabling and wire harnessing, systems integration, comprehensive testing services and completely assembled electronic products.

 

Industrial Technology (IT)

 

Cemtrex’s Industrial Technology (IT) segment, offers single-source expertise and services for rigging, millwrighting, in plant maintenance, equipment erection, relocation, and disassembly to diversified customers in USA. The segment also sells a complete line of air filtration and environmental instruments and control products to a wide variety of customers in industries such as: chemical, cement, steel, food, construction, mining, & petrochemical worldwide.

 

Significant Accounting Policies and Estimates

 

Our discussion and analysis of our financial condition and results of operations are based upon the accompanying unaudited condensed consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”). The preparation of financial statements in conformity with U.S. GAAP requires management to make judgments, estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, expenses, and the related disclosures at the date of the financial statements and during the reporting period. Although these estimates are based on our knowledge of current events, our actual amounts and results could differ from those estimates. The estimates made are based on historical factors, current circumstances, and the experience and judgment of our management, who continually evaluate the judgments, estimates and assumptions and may employ outside experts to assist in the evaluations.

 

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Certain of our accounting policies are deemed “significant”, as they are both most important to the financial statement presentation and require management’s most difficult, subjective or complex judgments as a result of the need to make estimates about the effect of matters that are inherently uncertain. For a discussion of our significant accounting policies, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended September 30, 2018.

 

Results of Operations - For the three months ending March 31, 2019 and 2018

 

Total revenue for the three months ended March 31, 2019 and 2018 was $23,607,497 and $20,413,296, respectively, an increase of $3,194,201, or 16%. Net income available to common shareholders for the three months ended March 31, 2019 and 2018 was a loss of $1,983,867 and income of $423,471, respectively, a decrease of $2,407,338, or 568%. Total revenue in the second quarter increased, as compared to total revenue in the same period last year, due to new revenues in the Advanced Technologies Segment, which had no revenues during the same period last year, a small increase in revenues in the Electronics Manufacturing segment, and lower sales in the Industrial Technology segment due to the softening demand for environmental products. Net income available to common shareholders decreased due to increased expenses in sales and marketing for the SmartDesk and VR applications in the Advanced Technologies segment as well as the consolidation of the variable interest entity, Vicon Industries, Inc., lower other income in the Electronics Manufacturing Segment due to a one-time income on debt forgiveness as a result of the consolidation of the manufacturing facilities in Germany in the same period last year, and lower revenues in the Industrial Technology segment in response the decline in demand for environmental products.

 

Revenues

 

Our Advanced Technologies segment revenues for the three months ended March 31, 2019 was $6,927,778. This is a new segment for the company and we anticipate revenues to grow with development and investment in this division. Revenues in this segment are attributable to the sale of software development services, sales of SmartDesks, and the consolidation of the variable interest entity, Vicon Industries, Inc. Revenues from the SmartDesk sales were $638,000.

 

Our Electronics Manufacturing segment revenues for the three months ended March 31, 2019 increased by $254,673 or 2% to $11,100,184 from $10,845,511 for the three months ended March 31, 2018. The primary reason for increased sales was due to new contracts in the segment.

 

Our Industrial Technology segment revenues for the three months ended March 31, 2019 decreased by $3,988,250 or 42%, to $5,579,535 from $9,567,785 for the three months ended March 31, 2018. The decrease was primarily due to decreased demand for environmental products globally and as result of relaxation of environmental regulations by the current administration.

 

Gross Profit

 

Gross Profit for the three months ended March 31, 2019 was $9,449,392 or 40% of revenues as compared to gross profit of $7,383,310 or 36% of revenues for the three months ended March 31, 2018. Gross profit as a percentage of revenues in the three months ended March 31, 2019 increased as compared to the three months ended March 31, 2018 as the Company works to achieve economies of scale, lower expenses, and shift to products and services with higher margins. The Company’s gross profit margins vary from product to product and from customer to customer.

 

General and Administrative Expenses

 

General and administrative expenses for the three months ended March 31, 2019 increased $4,790,094 or 67% to $11,952,000 from $7,161,906 for the three months ended March 31, 2018. General and administrative expenses as a percentage of revenue was 51% and 35% of revenues for the three-month periods ended March 31, 2019 and 2018. The dollar for dollar and percentage increases in operating expenses was due to increased expenses in sales and marketing for the SmartDesk and VR applications in the Advanced Technologies segment as well as the consolidation of the variable interest entity, Vicon Industries, Inc.

 

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Research and Development Expenses

 

Research and Development expenses for the three months ended March 31, 2019 was $471,611 compared to $57,881 for the three months ended March 31, 2018. Research and Development expenses are primarily related to the Advanced Technologies Segment’s development of proprietary software and further developments of the SmartDesk as well as on-going development for video surveillance technology under Vicon.

 

Other Income/(Expense)

 

Interest and other income/(expense) for the second quarter of fiscal 2019 was $(539,503) as compared to $302,579 for the second quarter of fiscal 2018. Other income/(Expense) for the three months ended March 31, 2019 was primarily due to interest expense related to the Company’s interest-bearing payables.

 

Provision for Income Taxes

 

During the second quarter of fiscal 2019 we recorded an income tax benefit of $1,173,700 compared to a provision of $42,631 for the second quarter of fiscal 2018. The provision for income tax is based upon the projected income tax from the Company’s various U.S. and international subsidiaries that are subject to their respective income tax jurisdictions.

 

Comprehensive income/loss available to common shareholders

 

The Company had a comprehensive loss available to common shareholders of $2,155,075 or 9% of revenues, for the three-month period ended March 31, 2019 as compared to a comprehensive loss available to common shareholders of $434,298 or 2% of revenues, for the three months ended March 31, 2018. Comprehensive loss available to common shareholders in the second quarter increased, as compared to comprehensive loss available to common shareholders in the same period last year, due the higher expenses related to the sales and marketing in the Advanced Technologies segment along with lower revenues in the Industrial Technologies segment.

 

Results of Operations - For the six months ending March 31, 2019 and 2018

 

Total revenue for the six months ended March 31, 2019 and 2018 was $40,894,041 and $52,795,196, respectively, a decrease of $11,903,155, or 23%. Net income available to common shareholders for the three months ended March 31, 2019 and 2018 was a loss of $5,117,947 and income of $1,155,462, respectively, a decrease of $6,629,564, or 564%. Total revenue in the first two quarters decreased, as compared to total revenue in the same period last year, due to decreased revenues in the Electronics Manufacturing segment, and lower sales in the Industrial Technology segment due to the softening demand for environmental products offset by revenues in the Advanced Technologies Segment, which had no revenues during the same period last year, a. Net income available to common shareholders decreased due to increased expenses in sales and marketing for the SmartDesk and VR applications in the Advanced Technologies segment as well as the consolidation of the variable interest entity, Vicon Industries, Inc., Lower other income in the Electronics Manufacturing Segment due to a one-time income on debt forgiveness as a result of the consolidation of the manufacturing facilities in Germany in the same period last year, and lower revenues in the Industrial Technology segment in response the decline in demand for environmental products.

 

Revenues

 

Our Advanced Technologies segment revenues for the six months ended March 31, 2019 was $7,395,613. This is a new segment for the company and we anticipate revenues to grow with development and investment in this division. Revenues in this segment are attributable to the sale of software development services, sales of SmartDesks, and the consolidation of the variable interest entity, Vicon Industries, Inc.

 

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Our Electronics Manufacturing segment revenues for the six months ended March 31, 2019 decreased by $9,162,175 or 29% to $22,126,437 from $31,288,612 for the six months ended March 31, 2018. The primary reason for decreased sales was due to the loss of two customers in the EM subsequent to the first quarter of fiscal 2018, one as result of consolidation and other due to obsolescence of their product.

 

Our Industrial Technology segment revenues for the six months ended March 31, 2019 decreased by $10,136,593 or 47%, to $11,369,991 from $21,506,584 for the six months ended March 31, 2018. The decrease was primarily due to decreased demand for environmental products globally and as result of relaxation of environmental regulations by the current administration.

 

Gross Profit

 

Gross Profit for the six months ended March 31, 2019 was $16,444,514 or 40% of revenues as compared to gross profit of $17,907,802 or 34% of revenues for the six months ended March 31, 2018. Gross profit as a percentage of revenues in the six months ended March 31, 2019 increased as compared to the six months ended March 31, 2018 as the Company works to achieve economies of scale, lower expenses, and shift to products and services with higher margins. The Company’s gross profit margins vary from product to product and from customer to customer.

 

General and Administrative Expenses

 

General and administrative expenses for the six months ended March 31, 2019 increased $3,522,684 or 21% to $20,192,174 from $16,669,490 for the six months ended March 31, 2018. General and administrative expenses as a percentage of revenue was 49% and 32% of revenues for the six-month periods ended March 31, 2019 and 2018. The dollar for dollar and percentage increases in operating expenses was due to increased expenses in sales and marketing for the SmartDesk and VR applications in the Advanced Technologies segment as well as the consolidation of the variable interest entity, Vicon Industries.

 

Research and Development Expenses

 

Research and Development expenses for the six months ended March 31, 2019 was $851,128 compared to $207,098 for the six months ended March 31, 2018. Research and Development expenses are primarily related to the Advanced Technologies Segment’s development of proprietary software and further developments of the SmartDesk as well as on-going development for video surveillance technology under Vicon.

 

Other Income/(Expense)

 

Interest and other income/(expense) for the first and second quarters of fiscal 2019 was $(681,607) as compared to $225,885 for the first and second quarters of fiscal 2018. Other income/(Expense) for the six months ended March 31, 2019 was primarily due to interest expense related to the Company’s interest-bearing payables.

 

Provision for Income Taxes

 

During the first and second quarters of fiscal 2019 we recorded an income tax benefit of $1,106,849 compared to a provision of $101,637 for the first and second quarters of fiscal 2018. The provision for income tax is based upon the projected income tax from the Company’s various U.S. and international subsidiaries that are subject to their respective income tax jurisdictions.

 

Comprehensive income/loss available to common shareholders

 

The Company had a comprehensive loss available to common shareholders of $6,146,707 or 16% of revenues, for the six-month period ended March 31, 2019 as compared to a comprehensive income available to common shareholders of $929,078 or 2% of revenues, for the six months ended March 31, 2018. Comprehensive income available to common shareholders in the first and second quarters decreased, as compared to comprehensive loss available to common shareholders in the same period last year, due the higher expenses related to the sales and marketing in the Advanced Technologies segment along with lower revenues in the Industrial Technologies segment.

 

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Effects of Inflation

 

The Company’s business and operations have not been materially affected by inflation during the periods for which financial information is presented.

 

Liquidity and Capital Resources

 

Working capital was $6,858,134 at March 31, 2019 compared to $10,011,896 at September 30, 2018. This includes cash and equivalents and restricted cash of $2,996,338 at March 31, 2019 and $2,315,935 at September 30, 2018, respectively. The decrease in working capital was primarily due to increased marketing and research & development expenses and net increases in our current assets of $8,556,979 offset by net increases in our current liabilities of $11,710,741.

 

Accounts receivable increased $1,654,154 or 12% to $15,599,809 at March 31, 2019 from $13,945,655 at September 30, 2018. The increase in accounts receivable is largely attributable to the consolidation of the variable interest entity Vicon Industries.

 

Inventories increased $6,211,894 or 55% to $17,566,352 at March 31, 2019 from $11,354,458 at September 30, 2018. The increase in inventories is attributable to the consolidation of the variable interest entity Vicon Industries.

 

Operating activities provided $565,051 of cash for the six months ended March 31, 2019 compared to providing $6,749,528 of cash for the six months ended March 31, 2018. The decrease in operating cash flows was primarily due to the acquisition of inventory and other assets, as compared to the same period a year ago.

 

Investment activities used $865,538 of cash for the six months ended March 31, 2019 compared to using cash of $8,180,925 during the six-month period ended December 31, 2018. Investing activities for the first quarter of 2019 were driven by the Company’s investment in fixed assets.

 

Financing activities used $435,605 of cash in the six-month period ended March 31, 2019 as compared to providing cash of $84,916 in the six-month period ended March 31, 2018. Financing activities were primarily driven by payments on bank loans, notes payable, proceeds and expenses of equity offerings, and use of the Company’s revolving credit lines.

 

We believe that our cash on hand and cash generated by operations is sufficient to meet the capital demands of our current operations during the 2019 fiscal year (ending September 30, 2019). Any major increases in sales, particularly in new products, may require substantial capital investment. Failure to obtain sufficient capital could materially adversely impact our growth potential.

 

Subscription Rights Offering

 

On November 26, 2018, Cemtrex, Inc. (the “Company”) commenced a rights offering to its stockholders (“Rights Offering”). Pursuant to the Rights Offering, the Company has distributed, at no charge to holders of record of the Company’s common stock and series 1 warrants as of November 19, 2018 (the “Record Date”), non-transferable subscription rights to purchase up to an aggregate of $2,700,000 worth of shares of common stock, at a purchase price equal to the lesser of (i) $1.06 per share (in which case 2,547,170 shares may be sold), or (ii) 95% of the volume weighted average price of the Company’s common stock for the five trading day period through and including December 19, 2018, which is the initial expiration date of the Rights Offering, all as set forth in the Prospectus Supplement filed on November 21, 2018 with the Securities and Exchange Commission (the “Prospectus Supplement”). On December 19, 2018 the price was set at $0.75 per share and the expiration date was extended to December 21, 2018. Each stockholder of record on the Record Date received one right for each one share of common stock held by the stockholder, and each series 1 warrant holder of record on the Record Date received one right for every ten shares for which their warrant is exercisable. Each right entitles the holder to purchase one share of the Company’s common stock, subject to proration. In connection with the Rights Offering, the Company entered into a Dealer-Manager Agreement (the “Agreement”) with Advisory Group Equity Services, Ltd. Doing business as RHK Capital (“RHK”). As of March 31, 2019, 201,002 shares of common stock were issued for gross proceeds of $150,721. After deducting offering expenses of $12,027 the Company received $138,694 in net proceeds.

 

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At-the-Market Offering Agreement

 

On January 28, 2019,the “Company entered into an At-the-Market Offering Agreement (the “Agreement”) with Advisory Group Equity Services, Ltd. Doing business as RHK Capital (the “Manager”), pursuant to which the Manager will act as the Company’s sales agent with respect to the issuance and sale of up to $2,000,000 of the Company’s shares of common stock, par value $0.001 per share (the “Shares”), from time to time in an at-the-market public offering (the “Offering”).

 

Sales of the Shares, through the Manager, will be made directly on The NASDAQ Capital Market, on any other existing trading market for our common stock or to or through a market maker. The Manager may also sell the Shares in privately negotiated transactions, provided that the Manager receives our prior written approval for any sales in privately negotiated transactions. The Company will pay the Manager a commission equal to 3.0% of the gross proceeds from the sale of the Shares pursuant to the Sales Agreement. As of March 31, 2019, 500,000 shares of common stock were issued and held in trust. Of the shares held in trust, 276,372 were issued for gross proceeds of $209,974. After deducting offering expenses of $6,296 the Company received $203,678 in net proceeds.

 

Securities Purchase Agreement

 

On March 22, 2019, the Company entered into a Securities Purchase Agreement (the “Purchase Agreement”) with an unaffiliated institutional investor (the “Investor”), pursuant to which the Company agreed to issue to the Investor 20,000 shares of common stock, a warrant to purchase 200,000 shares of common stock and 2,100 shares of Series B Preferred Stock, stated value $500 per share. The Series B Preferred Stock has a maturity date of one year from the issuance date and the Company has agreed to pay dividends on the outstanding shares of Series B Preferred at the rate equal to 7.5% per annum (increasing by 10% upon the occurrence of each trigger (or default) event). Dividends are payable on the date the shares of Series B Preferred are converted or on maturity. The dividends must be paid in cash or, in certain circumstances, may be paid in shares of Common Stock. As of March 31, 2019, 1,050 shares of Series B Preferred Stock, 20,000 shares of Common Stock, and a Series B warrant to purchase 200,000 shares of common stock were issued for gross proceeds of $500,000. After deducting offering expenses of $25,000 the Company received $475,000 in net proceeds. The proceeds were used to fund operations.

 

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 expansion goals and working capital needs.

 

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Item 4. Controls and Procedures

 

Evaluation of Disclosure Controls and Procedures

 

Disclosure controls and procedures reporting as promulgated under the Exchange Act is defined as controls and procedures that are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act are recorded, processed, summarized and reported within the time periods specified in the SEC rules and forms. Disclosure controls and procedures include without limitation, controls and procedures designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer (“CEO”) and Interim Chief Financial Officer (“ICFO”), or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

 

Our CEO and our ICFO have evaluated the effectiveness of the design and operation of our disclosure controls and procedures as of March 31, 2019, based on its evaluation, our management concluded that as of March 31, 2019 there is a material weakness in our internal control over financial reporting. The material weakness relates to the Company lacking sufficient, qualified, accounting personnel. The shortage of qualified accounting personal resulted in the Company lacking entity level controls around the review of period-end reporting processes, accounting policies and public disclosures. This deficiency is common in small companies, similar to us, with limited personnel.

 

In order to mitigate the material weakness, the Board of Directors has assigned a priority to the short-term and long-term improvement of our internal control over financial reporting. Our Board of Directors will work with management to continuously review controls and procedures to identified deficiencies and implement remediation within our internal controls over financial reporting and our disclosure controls and procedures.

 

Changes in Internal Control Over Financial Reporting

 

While there was no change in the Company’s internal control over financial reporting during the Company’s last fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting, the Company is taking steps to improve its internal controls by obtaining additional qualified accounting personnel.

 

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Part II Other Information

 

Item 1. Legal Proceedings.

 

Three securities class action complaints were filed against our company and certain of our executive officers in the U.S. District Court for the Eastern District of New York on February 24, 2017. Under the requirements of the Private Securities Litigation Reform Act of 1995, these three alleged class actions, as well as any further related actions, were consolidated into a single lawsuit on March 9, 2018. A follow-on, related derivative complaint also was filed against us and our executive officers and directors in New York State court on April 10, 2017. That derivative action has been stayed by agreement of the parties until after the motion to dismiss process in the consolidated alleged class actions has run its course. Pursuant to a stipulated District Court schedule, plaintiffs filed an Amended Consolidated Class Action Complaint on May 7, 2018. We filed a motion to dismiss this class action with the Court on July 6, 2018. On October 4, 2018, the Company reached a settlement on the securities class action litigation through a mediator for an amount of $625,000 and also reached a settlement on Derivative action for an amount of $100,000. This settlement is subject to a final court approval which will take several months. The settlement amounts shall be paid by the Company’s insurance carrier.

 

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

 

During the six months ended March 31, 2019, the Company issued an aggregate of 1,152,912 shares of common stock in exchange for aggregate consideration of $775,000, which was used for working capital. Such shares were issued pursuant to the exemption contained under Section 4(a)(2) of the Securities Act of 1933, as amended.

 

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Item 6. Exhibits

 

Exhibit No.   Description
2.2   Stock Purchase Agreement regarding the stock of Advanced Industrial Services, Inc., AIS Leasing Company, AIS Graphic Services, Inc., and AIS Energy Services, LLC, Dated December 15, 2015. (6)
2.3   Asset Purchase agreement between Periscope GmbH and ROB Centrex Assets UG, ROB Cemtrex Automotive GmbH, and ROB Cemtrex Logistics GmbH. (7)
3.1   Certificate of Incorporation of the company.(1)
3.2   By Laws of the company.(1)
3.3   Certificate of Amendment of Certificate of Incorporation, dated September 29, 2006.(1)
3.4   Certificate of Amendment of Certificate of Incorporation, dated March 30, 2007.(1)
3.5   Certificate of Amendment of Certificate of Incorporation, dated May 16, 2007.(1)
3.6   Certificate of Amendment of Certificate of Incorporation, dated August 21, 2007.(1)
3.7   Certificate of Amendment of Certificate of Incorporation, dated April 3, 2015.(3)
3.8   Certificate of Designation of the Series A Preferred Shares, dated September 8, 2009.(2)
3.9   Certificate of Designation of the Series 1 Preferred Stock.(12)
3.10   Certificate of Amendment of Certificate of Incorporation, dated September 7, 2017 (15)
3.11   Certificate of Designations of Series B Redeemable Convertible Preferred Stock.(21)
4.1   Form of Subscription Rights Certificate. (10)
4.2   Form of Series 1 Preferred Stock Certificate. (10)
4.3   Form of Series 1 Warrant. (10)
4.4   Form of Common Stock Purchase Warrant, dated March 22, 2019. (21)
10.7   Loan Agreement between Fulton Bank, N.A. and Advanced Industrial Services, Inc., AIS Acquisition, Inc., AIS Leasing Company, dated December 15, 2015.(6)
10.8   Promissory Note between Kris L. Mailey and AIS Acquisition, Inc. dated December 15, 2015.(6)
10.9   Promissory Note between Michael R. Yergo and AIS Acquisition, Inc. dated December 15, 2015.(6)
10.1   Term Loan Agreement between Cemtrex GmbH and Sparkasse Bank for Financing of funds within the scope of the Asset-Deals of the ROB Group, dated October 4, 2013.(8)
10.11   Working Capital Credit Line Agreement between Cemtrex GmbH and Sparkasse Bank, dated October 4, 2013 (updated May 8, 2014).(8)
10.12   Loan Agreement between ROB Cemtrex GmbH and Sparkasse Bank to finance the purchase of the property at Am Wolfsbaum 1, 75245 Neulingen, Germany, dated October 7, 2013, purchase completed March 1, 2014.(9)
10.13   Nonstatutory Stock Option Agreement entered into as of February 12, 2016 between Cemtrex, Inc. and Saagar Govil (11)
10.14   Nonstatutory Stock Option Agreement entered into as of December 5, 2016 between Cemtrex, Inc. and Saagar Govil (13)
10.15   Exchange Agreement dated as of February 1,2017 and effective February 9,2017 by and between Cemtrex Inc. and Ducon Technologies, Inc.(12)
10.16   Nonstatutory Stock Option Agreement entered into as of December 18, 2017 between Cemtrex, Inc. and Saagar Govil (16)
10.17   Securities Purchase Agreement, dated March 23, 2018, by and between Cemtrex, Inc. and NIL Funding Corporation. (17)
10.18   Research and Development Services Agreement by and between Vicon Industries, Inc. and Cemtrex, Inc., (20)
14.1   Corporate Code of Business Ethics.(4)
21.1*   Subsidiaries of the Registrant
31.1*   Certification of Chief Executive Officer as required by Rule 13a-14 or 15d-14 of the Exchange Act, as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*   Certification of Vice President of Finance and Principal Financial Officer as required by Rule 13a-14 or 15d-14 of the Exchange Act, as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1*   Certification of Chief Executive Officer Pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act 0f of 2002.
32.2*   Certification of Vice President of Finance and Principal Financial Officer Pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act 0f of 2002.
101.INS*   XBRL Instance Document
101.SCH*   XBRL Taxonomy Extension Schema
101.CAL*   XBRL Taxonomy Extension Calculation Linkbase
101.DEF*   XBRL Taxonomy Extension Definition Linkbase
101.LAB*   XBRL Taxonomy Extension Label Linkbase
101.PRE*   XBRL Taxonomy Extension Presentation Linkbase

 

* Filed herewith

(1) Incorporated by reference from Form 10-12G filed on May 22, 2008.

(2) Incorporated by reference from Form 8-K filed on September 10, 2009.

(3) Incorporated by reference from Form 8-K filed on August 22, 2016.

(4) Incorporated by reference from Form 8-K filed on July 1, 2016.

(5) Intentionally omitted

(6) Incorporated by reference from Form 8-K/A filed on September 26, 2016.

(7) Incorporated by reference from Form 8-K/A filed on November 24, 2017.

(8) Incorporated by reference from Form 8-K/A filed on November 9, 2016.

(9) Incorporated by reference from Form 10-Q/A filed on November 10, 2016.

(10) Incorporated by reference from Form S-1 filed on August 29, 2016 and as amended on November 4, 2016, November 23, 2016, and December 7, 2016.

(11) Incorporated by reference from Form 10-K filed on December 28, 2016.

(12) Incorporated by reference from Form 8-K filed on January 24, 2017.

(13) Incorporated by reference from Form 8-K filed on February 10, 2017.

(14) Incorporated by reference from Form 10-Q filed on February 14, 2017.

(15) Incorporated by reference from Form 8-K filed on September 8, 2017.

(16) Incorporated by reference from Form 10-Q filed on February 14, 2018.

(17) Incorporated by reference from Form 8-K filed on March 27, 2018.

(18) Incorporated by reference from Form 8-K filed on February 27, 2018.

(19) Incorporated by reference from Form 8-K filed on September 28, 2018.

(20) Incorporated by reference from Form 10-K filed on January 11, 2019.

(21) Incorporated by reference from Form 8-K filed on March 22, 2019.

 

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Signatures

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

  Cemtrex, Inc.
     
Dated: May 20, 2019 By: /s/Saagar Govil
    Saagar Govil
    Chief Executive Officer
     
Dated: May 20, 2019   /s/Aron Govil
    Aron Govil
    Interim Chief Financial Officer
    and Principal Financial Officer

 

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