CEMTREX INC

Previous 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.

Current wording

Our Security segment revenues for the three months ended March 31, 2025, increased by $8,896,220 or 110% to $16,981,152 from $8,084,932 for the three months ended March 31, 2024. This increase is due to a large sale valued at $10,375,000 for security technology products under our Vicon brand. This sale represents 61% of the revenue for this segment for the quarter ended March 31, 2025.

Previous 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.

Current wording

Our Industrial Services segment revenues for the three months ended March 31, 2025, increased by $1,194,454 or 13%, to $10,269,117 from $9,074,663, for the three months ended March 31, 2024. This increase is mainly due to increased demand for the segment’s services.

Previous 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.

Current wording

Gross Profit for the three months ended March 31, 2025, was $12,165,455 or 45% of revenues as compared to gross profit of $6,969,416 or 40% of revenues for the three months ended March 31, 2024.

Previous 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.

Current wording

Gross profit in our Security segment was $8,803,856 or 52% of the segment’s revenues for the three months ended March 31, 2025, as compared to gross profit of $4,112,969 or 51% of the segment’s revenues for the period ended March 31, 2024. Gross profit percentage was up due to the mix of products sold in the three months ended March 31, 2025, compared to the three months ended March 31, 2024.

Previous 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.

Current wording

Gross profit in our Industrial Services segment was $3,361,599 or 33% of the segment’s revenues for the three months ended March 31, 2025, as compared to gross profit of $2,826,447 or 31% of the segment’s revenues for the period ended March 31, 2024. Gross profit as a percentage of revenues increased due to improved margins on projects in the three months ended March 31, 2025, compared to the three months ended March 31, 2024.

Previous 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.

Current wording

General and administrative expenses for the three months ended March 31, 2025, decreased $249,415 or 4% to $6,770,742 from $7,020,157 for the three months ended March 31, 2024. The decrease in general and administrative expenses is mainly related to decreased general and administrative expenses, legal expenses, short-term rent, and travel.

Previous 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.

Current wording

Research and Development expenses for the three months ended March 31, 2025, were $777,889 compared to $951,400 for the three months ended March 31, 2024, a decrease of $173,511 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.

Previous 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.

Current wording

During the three months ended March 31, 2025, and 2024, the Company had income tax expense from continuing operations of $110,525 and $100,004, 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 March 31, 2025, and 2024, was 1.26% and (6.76%) respectively.

Previous 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.

Current wording

Other expense for the six months ended March 31, 2025, was $22,161,046, as compared to $953,311 for the six months ended March 31, 2024. Other income for the six months ended March 31, 2025, 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 $5,312,838, which represents the change in the fair value of the of the warrants unexercised at the measurement period.

Previous wording

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.

Current wording

Working capital was $5,037,130 at March 31, 2025, compared to working capital of $8,103,457 at September 30, 2024. This includes cash and equivalents and restricted cash of $6,066,033 at March 31, 2025, and $5,420,392 at September 30, 2024. The decrease in working capital was primarily due to the increase the current maturities of the Company’s long-term liabilities.

Previous 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.

Current wording

Cash provided by operating activities for the six months ended March 31, 2025, was $1,600,532 and used $2,752,236 of cash for the six-month period ended March 31, 2024. Our operating cash flow was mainly the result of our net loss, less the non-cash adjustments, combined with operating changes in inventory, accrued expenses, and contract liabilities.

Previous 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.

Current wording

Trade receivables increased by $1,556,316 or 14% to $12,715,992 at March 31, 2025, from $11,159,676 at September 30, 2024. The increase in trade receivables is attributable to the remaining balance on the large sale in the Security segment, expected to be collected in the next quarter.

Previous 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.

Current wording

Cash used by investing activities for the six months ended March 31, 2025, was $1,436,452 compared to $455,308 used for the six months ended March 31, 2024. Investing activities for the six months ended March 31, 2025, and 2024, 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 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.

Current wording

Cash provided by financing activities for the six months ended March 31, 2025, was $1,032,254 compared to $1,250,540 for the six months ended March 31, 2024. Financing activities for the six months ended March 31, 2025, 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 six months ended March 31, 2024, 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 $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.

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 $6,066,033 in cash and cash equivalents and restricted cash as of March 31, 2025. Additionally, the Company has (i) secured a line of credit for its Vicon brand to fund operations, which as of March 31, 2025, has available capacity of approximately 133,000, (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.