CEMTREX INC
For the period ended Dec 31, 2024. Filed Feb 14, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Dec 31, 2024 · Filed Feb 14, 2025
CETX$0.63-18.8%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-06-30; filed 2024-08-14.
0001493152-24-032245
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-12-31; filed 2025-02-14.
0001493152-25-006882
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 56 previous paragraphs and 40 current paragraphs.
24 unchanged; 15 reworded; 1 added; 15 removed; 2 previous and 0 current paragraphs rearranged.
Tables are not compared: 0 previous and 0 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (1)
Current report
Working capital was $4,130,393 at December 31, 2024, compared to working capital of $8,103,457 at September 30, 2024. This includes cash and equivalents and restricted cash of $5,464,254 at December 31, 2024, and $5,420,392 at September 30, 2024. The decrease in working capital was primarily due to the increase in current maturities of long-term debt, and accrued expenses. The increases in accrued expenses are mainly related to a large order in the Security segment, the revenues of this order are to be recognized in the next quarter.
Removed paragraphs (15)
Previous report
Results of Operations – For the nine months ended June 30, 2024, and 2023
Previous report
Revenues
Previous report
Our Security segment revenues for the nine months ended June 30, 2024, decreased by $2,487,701 or 10% to $23,446,220 from $25,933,921 for the nine months ended June 30, 2023. This decrease is due to the delay of multiple projects for the Security segment’s products and services and weakening economic conditions in the industry.
Previous report
Our Industrial Services segment revenues for the nine months ended June 30, 2024, increased by $8,438,081 or 50%, to $25,277,939 from $16,839,858 for the nine months ended June 30, 2023. This increase is mainly due to increased demand for the segment’s services and the additional business from the Heisey acquisition completed during the fourth quarter of fiscal year 2023.
Previous report
Gross Profit
Previous report
Gross Profit for the nine months ended June 30, 2024, was $19,898,962 or 41% of revenues as compared to gross profit of $18,859,530 or 44% of revenues for the nine months ended June 30, 2023.
Previous report
Gross profit in our Security segment was $11,853,007 or 51% of the segment’s revenues for the nine months ended June 30, 2024, as compared to gross profit of $12,928,607 or 50% of the segment’s revenues for the nine-month period ended June 30, 2023. Gross profit was percentage down due to the mix of products sold in the nine months ended June 30, 2024, compared to the nine months ended June 30, 2023.
Previous report
Gross profit in our Industrial Services segment was $8,045,955 or 32% of the segment’s revenues for the nine months ended June 30, 2024, as compared to gross profit of $5,930,923 or 35% of the segment’s revenues for the nine-month period ended June 30, 2023. Gross profit as a percentage of revenues decreased due to lower margins related to Heisey acquisition related projects in the nine months ended June 30, 2024, compared to the nine months ended June 30, 2023.
Previous report
General and Administrative Expenses
Previous report
General and administrative expenses for the nine months ended June 30, 2024, increased $5,727,701 or 35% to $22,184,303 from $16,456,602 for the nine months ended June 30, 2023. The increase in general and administrative expenses is mainly related to increased payroll, fringe benefits, insurance, professional fees and travel. Increases in payroll include approximately $680,000 in severance and bonus payments. Legal expenses for the nine months ended June 30, 2024, include non-recurring expenses of $360,000. Expenses related to the $1,491,415 write-off of related party notes receivable are included here.
Previous report
Research and Development Expenses
Previous report
Other Income/Expense
Previous report
Other expense for the nine months ended June 30, 2024, was $6,855,804, as compared to $3,323,484 for the nine months ended June 30, 2023. Other expense for the nine months ended June 30, 2024, and 2023, was mainly driven by interest on the Company’s debt. Other expense for the nine months ended June 30, 2024, was mainly driven by the May 2024 Equity Financing expenses of $995,333, the loss on the excess fair value of the warrants issued in the May 2024 Equity Financing of $7,255,528, offset by the change in the fair value of the warrants of $2,807,890.
Previous report
Provision for Income Taxes
Previous report
Working capital was $12,400,461 at June 30, 2024, compared to working capital of $1,948,923 at September 30, 2023. This includes cash and equivalents and restricted cash of $7,620,225 at June 30, 2024, and $6,349,562 at September 30, 2023. The increase in working capital was primarily due to the Company’s May 2024 Equity Financing and entry into a standstill agreement on two notes extending the maturity date and holding redemptions for a period of one year.
Reworded paragraphs (15)
Previous wording
Our Security segment revenues for the three months ended June 30, 2024, decreased by $2,821,792 or 31% to $6,193,487 from $9,015,279 for the three months ended June 30, 2023. This decrease is due to the delay of multiple projects for the Security segment’s products and services and overall worsening economic conditions in the industry.
Current wording
Our Security segment revenues for the three months ended December 31, 2024, decreased by $3,714,102 or 41% to $5,453,699 from $9,167,801 for the three months ended December 31, 2023. This decrease is due to unexpected delays in orders for security technology products under our Vicon brand.
Previous wording
Our Industrial Services segment revenues for the three months ended June 30, 2024, increased by $2,778,050 or 49%, to $8,492,911 from $5,714,861, for the three months ended June 30, 2023. This increase is mainly due to increased demand for the segment’s services and the additional business from the Heisey acquisition completed during the fourth quarter of fiscal year 2023.
Current wording
Our Industrial Services segment revenues for the three months ended December 31, 2024, increased by $575,835 or 7%, to $8,286,200 from $7,710,365, for the three months ended December 31, 2023. This increase is mainly due to increased demand for the segment’s services.
Previous wording
Gross Profit for the three months ended June 30, 2024, was $5,877,147 or 40% of revenues as compared to gross profit of $6,480,643 or 44% of revenues for the three months ended June 30, 2023.
Current wording
Gross Profit for the three months ended December 31, 2024, was $5,701,936 or 41% of revenues as compared to gross profit of $7,082,399 or 42% of revenues for the three months ended December 31, 2023.
Previous wording
Gross profit in our Security segment was $3,223,091 or 52% of the segment’s revenues for the three months ended June 30, 2024, as compared to gross profit of $4,404,836 or 49% of the segment’s revenues for the period ended June 30, 2023. Gross profit percentage was down due to the mix of product sold in the three months ended June 30, 2024, compared to the three months ended June 30, 2023.
Current wording
Gross profit in our Security segment was $2,839,759 or 52% of the segment’s revenues for the three months ended December 31, 2024, as compared to gross profit of $4,516,947or 49% of the segment’s revenues for the period ended December 31, 2023. Gross profit percentage was up due to the mix of product sold in the three months ended December 31, 2024, compared to the three months ended December 31, 2023.
Previous wording
Gross profit in our Industrial Services segment was $2,654,056 or 31% of the segment’s revenues for the three months ended June 30, 2024, as compared to gross profit of $2,075,807 or 36% of the segment’s revenues for the period ended June 30, 2023. Gross profit as a percentage of revenues decreased due to lower margins related to Heisey acquisition related projects in the three months ended June 30, 2024, compared to the three months ended June 30, 2023.
Current wording
Gross profit in our Industrial Services segment was $2,862,177 or 35% of the segment’s revenues for the three months ended December 31, 2024, as compared to gross profit of $2,565,452 or 33% of the segment’s revenues for the period ended December 31, 2023. Gross profit as a percentage of revenues increased due to improved margins on projects in the three months ended December 31, 2024, compared to the three months ended December 31 2023.
Previous wording
General and administrative expenses for the three months ended June 30, 2024, increased $2,815,220 or 52% to $8,192,180 from $5,376,960 for the three months ended June 30, 2023. The increase in general and administrative expenses is mainly related to increased sales and marketing activities including payroll, fringe benefits, legal expenses, insurance, travel as well as an increase in insurance, and repairs and maintenance expenses. Expenses related to the $1,397,388 write-off of related party note receivable are included here.
Current wording
General and administrative expenses for the three months ended December 31, 2024, increased $121,323 or 2% to $7,093,289 from $6,971,966 for the three months ended December 31, 2023. The increase in general and administrative expenses is mainly related to increased fringe benefits, legal expenses, rent, and travel.
Previous wording
Research and Development expenses for the three months ended June 30, 2024, were $864,483 compared to $1,049,909 for the three months ended June 30, 2023, a decrease of $185,426 or 18%. Research and Development expenses are related to the Security Segment’s development of next generation solutions associated with security and surveillance systems software.
Current wording
Research and Development expenses for the three months ended December 31, 2024, were $890,083 compared to $848,805 for the three months ended December 31, 2023, an increase of $41,278 or 5%. Research and Development expenses are related to the Security Segment’s development of next generation solutions associated with security and surveillance systems software.
Previous wording
Other expense for the three months ended June 30, 2024, was $5,902,493, as compared to $1,219,533 for the three months ended June 30, 2023. Other expense for the three months ended June 30, 2024, was mainly driven by the May 2024 Equity Financing expenses of $995,333, the loss on the excess fair value of the warrants issued in the May 2024 Equity Financing of $7,255,528, offset by the change in the fair value of the warrants of $2,807,890.
Current wording
Other expense for the three months ended December 31, 2024, was $26,265,257, as compared to $505,272 for the three months ended December 31, 2023. Other expense for the three months ended December 31, 2024, was mainly driven by losses on excess fair value of the warrants of $15,796,105 which represents the difference between the fair value of the shares issued and the value of the warrants exercised and losses on changes in fair value of warrant liability of $10,020,212 which represents the change in the fair value of the of the warrants unexercised at the measurement period.
Previous wording
During the three months ended June 30, 2024 and 2023, the Company had income tax expense from continuing operations of $67,294 and $19,461, respectively. The provision for income tax is based upon the current income tax from the Company’s various U.S. and international subsidiaries that are subject to their respective income tax jurisdictions and the Company’s current ability to utilize net loss carryforwards.
Current wording
During the three months ended December 31, 2024 and 2023, the Company had income tax expense from continuing operations of $120,538 and $70,751, respectively. The provision for income tax is estimated based upon the current income projections of the Company, the effective rate of the prior year, and the Company’s current ability to utilize net loss carryforwards. The Company’s effective tax rate for the three months ended December 31, 2024, and 2023, was (.42%) and (5.69%) respectively.
Previous wording
Cash used by operating activities for continuing operations for the nine months ended June 30, 2024, and 2023 was $2,076,477 and $5,394,048, respectively. Cash provided by operating activities for discontinued operations for the nine months ended June 30, 2023, was $2,474,863. Our negative operating cash flow was mainly the result of our net loss combined with operating changes in trade payables.
Current wording
Cash used by operating activities for the three months ended December 31, 2024, and 2023 was $1,201,817 and $3,139,073, respectively. Our negative operating cash flow was mainly the result of our net loss less the losses on the warrant liabilities, which were non-cash in nature, combined with operating changes in trade payables, and inventory.
Previous wording
Trade receivables decreased by $1,408,812 or 15% to $7,800,883 at June 30, 2024, from $9,209,695 at September 30, 2023. The decrease in trade receivables is attributable to decreased sales in the Security segment.
Current wording
Trade receivables decreased by $1,956,874 or 18% to $9,202,802 at December 31, 2024, from $11,159,676 at September 30, 2024. The decrease in trade receivables is attributable to decreased sales in the Security segment.
Previous wording
Cash used by investing activities for continuing operations for the nine months ended June 30, 2024, was $406,224 compared to $735,265 used for the nine months ended June 30, 2023. Investing activities for the nine months ended June 30, 2024, were driven by the Company’s purchase of property and equipment and investment in Masterpiece VR. Investing activities for the nine months ended June 30, 2023, were driven by the Company’s purchase of property and equipment.
Current wording
Cash used by investing activities for the three months ended December 31, 2024, was $1,008,899 compared to $390,310 used for the three months ended December 31, 2023. Investing activities for the three months ended December 31, 2024, were driven by the Company’s purchase of property and equipment and investment in Masterpiece VR. Investing activities for the three months ended December 31, 2023, were driven by the Company’s purchase of property and equipment and investment in Masterpiece VR.
Previous wording
Cash provided by financing activities for the nine months ended June 30, 2024, was $3,867,544 compared to using cash of $1,280,991 for the nine months ended June 30, 2023. Financing activities for the nine months ended June 30, 2024, were primarily driven by the proceeds and expenses on the May 2024 Equity Financing, proceeds and payments on the Company’s revolving line of credit and payments on its secured debt. Financing activities for the nine months ended June 30, 2023, were primarily driven by payments on the Company’s debt.
Current wording
Cash provided by financing activities for the three months ended December 31, 2024, was $2,387,449 compared to providing cash of $998,099 for the three months ended December 31, 2023. Financing activities for the three months ended December 31, 2024, were primarily driven by the proceeds from the Company’s revolving line of credit, note payable, and the exercise of 333,650 Series B Warrants. Financing activities for the three months ended December 31, 2023, were primarily driven by the proceeds from the Company’s revolving line of credit and payments on the Company’s debt.
Previous wording
The Company’s working capital may not be sufficient to cover operating costs which indicates substantial doubt regarding the Company’s ability to continue as a going concern, the Company has historically, from time to time, satisfied and may continue to satisfy certain short-term liabilities through the issuance of common stock, thus reducing our cash requirement to meet our operating needs. The Company has $7,620,225 in cash and cash equivalents and restricted cash as of June 30, 2024. Additionally, the Company has (i) secured a line of credit for its Vicon brand to fund operations, which as of June 30, 2024, has available capacity of $2,269,675, (ii) continually reevaluated its pricing model on our Vicon brand to improve margins on those products, (iii) entered into a Standstill Agreement with Streeterville Capital, LLC (“Streeterville”) in which Streeterville agreed not to seek to redeem any portion of its two outstanding notes with the Company for a period of one year expiring on April 30, 2025 in exchange, the Company agreed to pay to Streeterville the greater of $4,000,000 or fifty percent (50%) of the net proceeds the Company receives from the sale of any of its common stock or preferred stock during the Standstill Period. To date, the company has paid Streeterville $4,588,897 under this agreement.
Current wording
The Company’s working capital may not be sufficient to cover operating costs which indicates substantial doubt regarding the Company’s ability to continue as a going concern, the Company has historically, from time to time, satisfied and may continue to satisfy certain short-term liabilities through the issuance of common stock, thus reducing our cash requirement to meet our operating needs. The Company has $5,464,254 in cash and cash equivalents and restricted cash as of December 31, 2024. Additionally, the Company has (i) secured a line of credit for its Vicon brand to fund operations, which as of December 31, 2024, has available capacity of $903,102, (ii) continually reevaluated its pricing model on our Vicon brand to improve margins on those products, (iii) entered into a Standstill Agreement with Streeterville Capital, LLC (“Streeterville”) in which Streeterville agreed not to seek to redeem any portion of its two outstanding notes with the Company expiring on April 30, 2025 in exchange, the Company agreed to pay to Streeterville the greater of $4,000,000 or fifty percent (50%) of the net proceeds the Company receives from the sale of any of its common stock or preferred stock during the Standstill Period. To date, the company has paid Streeterville $4,588,897 under this agreement.
Previous wording
The condensed consolidated financial statements do not include any adjustments relating to this uncertainty.
Current wording
The unaudited condensed consolidated financial statements do not include any adjustments relating to this uncertainty.
Rearranged previous paragraphs (2)
Previous report — wording carried elsewhere
Research and Development expenses for the nine months ended June 30, 2024, were $2,664,688 compared to $3,895,717 for the nine months ended June 30, 2023, a decrease of $1,231,029 or 32%. Research and Development expenses are related to the Security Segment’s development of next generation solutions associated with security and surveillance systems software.
Previous report — wording carried elsewhere
During the nine months ended June 30, 2024 and 2023, the Company had income tax expense from continuing operations of $238,049 and $19,641. The provision for income tax is based upon the current income tax from the Company’s various U.S. and international subsidiaries that are subject to their respective income tax jurisdictions and the Company’s current ability to utilize net loss carryforwards.