What changed in CEMTREX INC's 10-K — 2024 vs 2025
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Paragraph-level year-over-year comparison of CEMTREX INC's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.
+188 added−162 removedSource: 10-K (2025-12-29) vs 10-K (2024-12-30)
Top changes in CEMTREX INC's 2025 10-K
188 paragraphs added · 162 removed · 127 edited across 6 sections
- Item 1A. Risk Factors+86 / −78 · 67 edited
- Item 1. Business+43 / −34 · 18 edited
- Item 7. Management's Discussion & Analysis+47 / −40 · 34 edited
- Item 5. Market for Registrant's Common Equity+8 / −6 · 5 edited
- Item 1C. Cybersecurity+2 / −3 · 2 edited
Item 1. Business
Business — how the company describes what it does
18 edited+25 added−16 removed30 unchanged
Item 1. Business
Business — how the company describes what it does
18 edited+25 added−16 removed30 unchanged
2024 filing
2025 filing
Biggest changeNasdaq Notices for Listing Deficiencies On July 29, 2022, the Company received a notification letter from the Listing Qualifications Department of The Nasdaq Stock Market LLC (“Nasdaq”) notifying the Company that, because the closing bid price for the Company’s Series 1 Preferred Stock listed on Nasdaq was below $1.00 for 30 consecutive trading days, the Company no longer met the minimum bid price requirement for continued listing on The Nasdaq Capital Market under Nasdaq Marketplace Rule 5550(a)(2), requiring a minimum bid price of $1.00 per share (the “Minimum Bid Price Requirement”).
Biggest changeOn August 21, 2024, the Company received a notification letter from the Listing Qualifications Department of Nasdaq notifying the Company that, because the stockholder’s equity for the Company was below $2,500,000 as reported on our Form 10-Q for the period ended June 30, 2024, the Company no longer meets the minimum shareholder’s equity requirement for continued listing on The Nasdaq Capital Market under Nasdaq Marketplace Rule 5550(b)(1), requiring a minimum stockholder’s equity of $2,500,000 (the “Minimum Stockholder’s Equity Requirement”).
Additionally, the Company’s management believes that the successful delivery, installation and performance of the Company’s products and services is a key factor in gaining business as customers typically prefer to make significant purchases from a company with a solid performance history. The Company obtains virtually all its contracts through competitive bidding.
Additionally, the Company’s management believes that the successful delivery, installation and performance of the Company’s products and services is a key factor in gaining business as customers typically prefer to make significant purchases from a company with a solid performance history. 7 The Company obtains virtually all its contracts through competitive bidding.
The aggregate gross proceeds to the Company were approximately $10,035,293, before deducting underwriting discounts and other issuance expenses of $995,333 recorded under the caption “General and administrative” on the Company’s Consolidated Statements of Operations.
The aggregate gross proceeds to the Company were $10,035,293, before deducting underwriting discounts and other issuance expenses of $995,333 recorded under the caption “General and administrative” on the Company’s Consolidated Statements of Operations.
On June 14, 2024, the Company received a notification letter from the Listing Qualifications Department of Nasdaq notifying the Company that, because the closing bid price for the Company’s common stock listed on Nasdaq was below $1.00 for 30 consecutive trading days, the Company no longer meets the minimum bid price requirement for continued listing on The Nasdaq Capital Market under Nasdaq Marketplace Rule 5550(a)(2), requiring a minimum bid price of $1.00 per share.
Nasdaq Notices for Listing Deficiencies On June 14, 2024, the Company received a notification letter from the Listing Qualifications Department of Nasdaq notifying the Company that, because the closing bid price for the Company’s common stock listed on Nasdaq was below $1.00 for 30 consecutive trading days, the Company no longer meets the minimum bid price requirement for continued listing on The Nasdaq Capital Market under Nasdaq Marketplace Rule 5550(a)(2), requiring a minimum bid price of $1.00 per share.
On August 21, 2024, the Company received a notification letter from the Listing Qualifications Department of Nasdaq notifying the Company that, because the stockholder’s equity for the Company was below $2,500,000 as reported on our Form 10-Q for the period ended June 30, 2024, the Company no longer meets the minimum shareholder’s equity requirement for continued listing on The Nasdaq Capital Market under Nasdaq Marketplace Rule 5550(b)(1), requiring a minimum stockholder’s equity of $2,500,000 (the “Minimum Stockholder’s Equity Requirement”). 4 On October 23, 2024, the Company received a letter from Nasdaq that it had been granted an extension to regain compliance with the Minimum Stockholder’s Equity Requirement.
On February 24, 2025, the Company received a notification letter from the Listing Qualifications Department of Nasdaq notifying the Company that, because the stockholder’s equity for the Company was below $2,500,000 as reported on our Form 10-Q for the period ended December 31, 2024, the Company no longer meets the minimum shareholder’s equity requirement for continued listing on The Nasdaq Capital Market under Nasdaq Marketplace Rule 5550(b)(1), requiring a minimum stockholder’s equity of $2,500,000 (the “Minimum Stockholder’s Equity Requirement”). 4 On April 22, 2025, the Company received a letter from Nasdaq that it had been granted an extension to August 20, 2025, to regain compliance with the Minimum Stockholder’s Equity Requirement.
In order to satisfy customer orders, in both segments, the Company must consistently meet production deadlines and maintain a high standard of quality. The Company’s principal customers in its Industrial Services segment include businesses engaged in manufacturing, chemical, packaging, printing, electronics, automotive, construction, and metallurgical processing.
In order to satisfy customer orders, in both segments, the Company must consistently meet production deadlines and maintain a high standard of quality. The Company’s principal customers in its Industrial Services segment include businesses engaged in manufacturing, chemical, packaging, printing, electronics, automotive, construction, and metallurgical processing. No one single customer accounts for more than 10% of its annual sales.
Management believes that the insurance coverage that it has is adequate for its current business needs. Employees The Company employs approximately 264 full-time employees and approximately 17 part-time employees as of the date of this Annual Report, including 58 engaged in engineering, 140 in manufacturing and field service and 83 in administrative, sales and marketing functions.
Management believes that the insurance coverage that it has is adequate for its current business needs. 8 Employees The Company employs approximately 240 full-time employees and approximately 4 part-time employees as of the date of this Annual Report, including 34 engaged in engineering, 128 in manufacturing and field service and 82 in administrative, sales and marketing functions.
The underwriting discounts and other issuance expenses were expensed since the Series A, Series B, and Pre-Funded Warrants were each determined to be liabilities and recorded at their fair value. 5 May 2024 Warrants The Company evaluated the Series A, Series B, and Prefunded Warrants (collectively, the “Warrants”) in accordance with the guidance at ASC 480, Distinguishing Liabilities from Equity and ASC 815-40, Derivatives and Hedging, and determined that the Warrants did not meet the definition a liability under ASC 480, and the warrants are precluded from being considered indexed to the entity’s own stock under ASC 815, resulting in the Warrants being classified as a liability.
May 2024 Warrants The Company evaluated the Series A, Series B, and Prefunded Warrants (collectively, the “Warrants”) in accordance with the guidance at ASC 480, Distinguishing Liabilities from Equity and ASC 815-40, Derivatives and Hedging, and determined that the Warrants did not meet the definition a liability under ASC 480, and the warrants are precluded from being considered indexed to the entity’s own stock under ASC 815, resulting in the Warrants being classified as a liability.
Vicon’s products include browser-based video monitoring systems and analytics-based recognition systems, cameras, servers, and access control systems for every aspect of security and surveillance in industrial and commercial facilities, federal prisons, hospitals, universities, schools, and federal and state government offices. Vicon provides innovative, mission critical security and video surveillance solutions utilizing Artificial Intelligence (AI) based data algorithms.
Vicon’s products include browser-based video monitoring systems and analytics-based recognition systems, cameras, servers, and access control systems for every aspect of security and surveillance in industrial and commercial facilities, federal prisons, hospitals, universities, schools, and federal and state government offices.
The purchase price of each Unit was $0.85, and the purchase price of each Pre-Funded Unit was $0.849. The Pre-Funded Warrants are immediately exercisable and may be exercised at any time until all of the Pre-Funded Warrants are exercised in full.
The purchase price of each Unit was $0.85, and the purchase price of each Pre-Funded Unit was $0.849. The Pre-Funded Warrants were immediately exercisable and all of the Pre-Funded Warrants were exercised in full.
No one single customer accounts for more than 10% of its annual sales. 7 Insurance The Company currently maintains different types of insurance, including general property coverage, and directors’ and officers’ insurance. The Company also maintains product liability insurance with respect to its products and equipment.
Insurance The Company currently maintains different types of insurance, including general property coverage, and directors’ and officers’ insurance. The Company also maintains product liability insurance with respect to its products and equipment.
Given that the gross proceeds received of $10,035,293 was less than the total fair value of the liability classified Warrants, the Company recorded a loss on excess fair value of $7,255,528 at issuance.
Given that the gross proceeds received of $10,035,293 was less than the total fair value of the liability classified Warrants, the Company recorded a loss on excess fair value of $7,255,528 at issuance. 5 May 2025 Equity Offering On May 28, 2025 the Company, entered into an underwriting agreement (the “Underwriting Agreement”) with Aegis Capital Corp.
The focus is on customers seeking to achieve greater asset utilization and reliability to cut costs and increase production from existing assets, including small projects, sustaining capital, turnarounds, maintenance, specialty welding services, and high-quality scaffolding. 3 Recent Developments Common Stock Reverse Stock Split On October 2, 2024, the Company completed a 60:1 reverse stock split on its common stock, and on November 26, 2024, The Company completed a 35:1 reverse stock split on its common stock.
The focus is on customers seeking to achieve greater asset utilization and reliability to cut costs and increase production from existing assets, including small projects, sustaining capital, turnarounds, maintenance, specialty welding services, and high-quality scaffolding.
The notification letter also disclosed that in the event the Company does not regain compliance with the Minimum Bid Price Requirement by December 11, 2024, the Company may be eligible for additional time.
The notification letter also disclosed that in the event the Company does not regain compliance with the Minimum Bid Price Requirement by December 11, 2024. On December 11, 2024, we received a notification letter from the Nasdaq notifying us that we have regained compliance with the Minimum Bid Requirement.
AIS is a leading provider of reliability-driven maintenance and contracting solutions for machinery, packaging, printing, chemical, and other manufacturing markets.
AIS installs high precision equipment in a wide variety of industrial markets like automotive, printing and graphics, industrial automation, packaging, and chemicals, among others. AIS is a leading provider of reliability-driven maintenance and contracting solutions for machinery, packaging, printing, chemical, and other manufacturing markets.
The Company also utilizes sub-suppliers and third-party vendors to procure from or fabricate its components based on its design, engineering, and specifications.
The Company also utilizes sub-suppliers and third-party vendors to procure from or fabricate its components based on its design, engineering, and specifications. The Company also enters into subcontracts for field installation, which the Company supervises; and the Company manages all technical, physical, and commercial aspects of the performance of the Company contracts.
The Company also enters into subcontracts for field installation, which the Company supervises; and the Company manages all technical, physical and commercial aspects of the performance of the Company contracts. 6 Competition The Company competes on the basis of price, engineering and technological expertise, know-how and the quality of its products, systems and services.
Competition The Company competes on the basis of price, engineering and technological expertise, know-how and the quality of its products, systems, and services.
Industrial Services Cemtrex’s Industrial Services segment operates under the brand, Advanced Industrial Services (“AIS”), which offers single-source expertise and services for rigging, millwrighting, in plant maintenance, equipment erection, relocation, and disassembly to diversified customers. AIS installs high precision equipment in a wide variety of industrial markets like automotive, printing and graphics, industrial automation, packaging, and chemicals, among others.
Vicon provides innovative, mission critical security and video surveillance solutions utilizing Artificial Intelligence (AI) based data algorithms. 3 Industrial Services Cemtrex’s Industrial Services segment operates under the brand, Advanced Industrial Services (“AIS”), which offers single-source expertise and services for rigging, millwrighting, in plant maintenance, equipment erection, relocation, and disassembly to diversified customers.
Removed
On January 26, 2023, the Company received a notification letter from the Listing Qualifications Department of Nasdaq notifying the Company that, it had been granted an additional 180 days or until July 24, 2023, to regain compliance with the Minimum Bid Price Requirement based on the Company meeting the continued listing requirement for market value of publicly held shares and all other applicable requirements for initial listing on the Capital Market with the exception of the bid price requirement, and the Company’s written notice of its intention to cure the deficiency during the second compliance period by effecting a reverse stock split, if necessary.
Added
Recent Developments Common Stock Reverse Stock Split On October 2, 2024, the Company completed a 60:1 reverse stock split on its common stock, on November 26, 2024, The Company completed a 35:1 reverse stock split on its common stock, and on September 29, 2025, the Company completed a 15:1 reverse stock split on its common stock.
Removed
On September 8, 2023, the Company received a letter from the Nasdaq Hearings Panel (“Panel”) informing the Company that the Panel has granted the Company a temporary exception to regain compliance with The Nasdaq Stock Market LLC’s (“Nasdaq” or the “Exchange”) Listing Rule 5555(a)(1) (the “Bid Price Rule”) by no later than January 19, 2024.
Added
Although we currently meet the Nasdaq Minimum Bid Requirement, out of abundance of caution, we believe that a future reverse split may be necessary in the future if we were to fall short of the Minimum Bid Price Requirement.
Removed
The Company has announced a special meeting of Series 1 Preferred Stock shareholders was scheduled for December 26, 2023, to approve the reverse stock split.
Added
A Reverse Stock Split would potentially increase our bid price such that we maintain the Minimum Bid Requirement required for maintaining the listing requirements for the Nasdaq Capital Market.
Removed
On December 26, 2023, the meeting was adjourned to December 29, 2023, due to insufficient votes represented by proxy or virtually in person to constitute a quorum for the transaction of business at the Special Meeting.
Added
On October 23, 2024, the Company received a letter from Nasdaq that it had been granted an extension to February 17, 2025, to regain compliance with the Minimum Stockholder’s Equity Requirement.
Removed
On December 29, 2023, there were still insufficient votes represented by proxy or virtually in person to constitute a quorum thus the resolution did not pass.
Added
On January 2, 2025, the Company received a letter from Nasdaq notifying the Company that based on the Company’s Form 10-K filed on December 30, 2024, evidencing stockholders’ equity of $4,710,677, Nasdaq has determined that the Company complies with the Minimum Stockholder’s Equity Requirement and this matter is now closed.
Removed
On January 5, 2024, and January 12, 2024, the Company bought back an aggregate of 71,951 shares of Series 1 Preferred Stock for $69,705 under the Share Repurchase Program approved on August 22, 2023, that allows the Company to repurchase shares of the Series 1 Preferred Stock through various means, including through privately negotiated transactions and through an open market program.
Added
On June 4, 2025, the Company received a letter from Nasdaq notifying the Company that based on the Company’s Form 10-Q for the period ended March 31, 2025, filed on May 15, 2025, evidencing stockholders’ equity of $6,403,022, Nasdaq has determined that the Company complies with the Minimum Stockholder’s Equity Requirement and this matter is now closed.
Removed
On April 8, 2024, these shares were cancelled. The Company’s Series 1 Preferred Stock was delisted from the NASDAQ Capital Market on January 22, 2024. The Series 1 Preferred Stock is now quoted on the OTC Markets under the symbol “CETXP”.
Added
The underwriting discounts and other issuance expenses were expensed since the Series A, Series B, and Pre-Funded Warrants were each determined to be liabilities and recorded at their fair value.
Removed
Nasdaq filed a Form 25 on March 21, 2024, and the deregistration of the Company’s Series 1 Preferred Stock under Section 12(b) of the Exchange Act became effective for 90 days after filing of the Form 25.
Added
(the “Underwriter”), pursuant to which the Company agreed to sell to the Underwriter, in a firm commitment public offering (the “Offering”), 1,250,000 shares of the Company’s common stock, par value $0.001 per share (the “Firm Shares”), for a public offering price of $1.00 per share.
Removed
To qualify for additional time, the Company would be required to meet the continued listing requirement for market value of publicly held shares and all other initial listing standards for The Nasdaq Capital Market, with the exception of the bid price requirement, and would need to provide written notice of its intention to cure the deficiency during the second compliance period, by effecting a reverse stock split, if necessary.
Added
The Company also granted the Underwriter an over-allotment option to purchase up to 187,500 shares of the Company’s common stock (the “Option Shares,” together with Firm Shares, the “Shares”). The Company received $1,250,000 in gross proceeds from this Offering, before deducting underwriting discounts and other related offering expenses of $191,050. The Offering closed on May 29, 2025.
Removed
The terms of the extension are as follows: on or before February 17, 2025, the Company must complete the submitted plan and opt for one of the two following alternatives to evidence compliance with the Rule: Alternative 1 : The Company must furnish to the SEC and Nasdaq a publicly available report (e.g., a Form 8-K) including: 1.
Added
On June 2, 2025, the Underwriter fully exercised the option, and on June 3, 2025, the Company closed the offering of the Option Shares to the Underwriter, for aggregate gross proceeds of approximately $187,500 less applicable underwriter discounts and other offering fees and expenses of $15,000.
Removed
A disclosure of Staff’s deficiency letter and the specific deficiency(ies) cited; 2. A description of the completed transaction or event that enabled the Company to satisfy the stockholders’ equity requirement for continued listing; 3.
Added
Issuance of Note payable On November 7, 2025, the Company issued a Promissory Note with Streeterville Capital, LLC in the original principal amount of $7,025,000.
Removed
An affirmative statement that, as of the date of the report, the Company believes it has regained compliance with the stockholders’ equity requirement based upon the specific transaction or event referenced in Step 2; and 4.
Added
From November 7, 2025, until December 31, 2025, interest will accrue on the outstanding balance of this Note at a per annum rate of interest equal to the daily Secured Overnight Financing Rate (SOFR) as quoted by the Federal Reserve Bank of New York.
Removed
A disclosure stating that Nasdaq will continue to monitor the Company’s ongoing compliance with the stockholders’ equity requirement and, if at the time of its next periodic report the Company does not evidence compliance, that it may be subject to delisting. Alternative 2: The Company must furnish to the SEC and Nasdaq a publicly available report including: 1.
Added
From January 1, 2026, until this Note is paid in full, interest will accrue at the rate of eight percent (8%) per annum. After original issuance fees of $25,000, the Company received cash of $7,000,000 for this agreement.
Removed
Steps 1 & 2 set forth above; 2. A balance sheet no older than 60 days with pro forma adjustments for any significant transactions or event occurring on or before the report date. The pro forma balance sheet must evidence compliance with the stockholders’ equity requirement; and 3.
Added
If this Note is outstanding on January 1, 2026, a one-time additional interest fee of $1,050,000.00 will automatically be added to the outstanding balance. This Note matures eighteen (18) months from the issuance date with redemptions beginning at six (6) months from the issuance date. The Company intends to use the cash proceeds to complete potential acquisitions.
Removed
A disclosure that the Company believes it also satisfies the stockholders’ equity requirement as of the report date and that Nasdaq will continue to monitor the Company’s ongoing compliance with the stockholders’ equity requirement and, if at the time of its next periodic report the Company does not evidence compliance, that it may be subject to delisting.
Added
Share Purchase to Acquire Invocon, Inc. On November 13, 2025, the Company entered into a Share Purchase Agreement with Karl F. Kiefer and Invocon, Inc., a Texas-based systems-engineering firm specializing in mission-critical instrumentation, wireless sensing systems, and flight hardware for aerospace, defense, and civil structure monitoring applications.
Removed
Regardless of which alternative the Company chooses, if the Company fails to evidence compliance upon filing its periodic report for the March 31, 2025, with the SEC and Nasdaq, the Company may be subject to delisting.
Added
The agreement provides for the acquisition of 100% of the issued and outstanding shares of Invocon for a purchase price of $7,060,000. The transaction is expected to close on or around January 1, 2026, subject to customary closing conditions.
Added
Invocon has a 40-year history supplying turnkey solutions to major corporations, government entities, and universities, with technologies deployed in satellites, launch vehicles, space shuttles, the International Space Station, and other extreme-environment programs. Upon closing, the Company plans to establish a new reporting segment, Aerospace & Defense, with Invocon as its cornerstone.
Added
December 2025 Debt Exchange and Warrant Exercises On December 8, 2025, the Company issued 2,500,609 shares of its common stock pursuant to exchange agreements with certain lenders to satisfy $6,084,000 of outstanding debt.
Added
Additionally, during December 2025, the Company issued 29,943 shares of common stock upon the exercise of 9,981 Series A Warrants and 2,234,247 shares of common stock upon the exercise of 2,234,247 Series B Warrants.
Added
The Company received approximately $5.5 million in gross proceeds from the Series B Warrant exercises. 6 December 2025 Equity Offerings On December 11, 2025, the Company entered into a Securities Purchase Agreement with a single accredited institutional investor, pursuant to which the Company issued and sold, in a registered direct offering, 310,000 shares of common stock at $3.00 per share and pre-funded warrants to purchase 356,667 shares of common stock at $2.999 per warrant (with a $0.001 exercise price per underlying share), for aggregate gross proceeds of $2,000,000 (net proceeds approximately $1,950,000 after estimated expenses).
Added
The pre-funded warrants are immediately exercisable, have no expiration date, and include a 4.99% beneficial ownership limitation (which may be increased or decreased upon notice). The offering was made pursuant to the Company’s effective shelf registration statement on Form S-3 (File No. 333-283995) and closed on December 11, 2025.
Added
The Company intends to use the net proceeds for working capital and general corporate purposes, which may include potential future acquisitions. No underwriter or placement agent was involved.
Added
On December 23, 2025, the Company entered into a Securities Purchase Agreement with a single accredited institutional investor, pursuant to which the Company issued and sold, in a registered direct offering, 330,000 shares of common stock at $2.50 per share and pre-funded warrants to purchase 470,000 shares of common stock at $2.499 per warrant (with a $0.001 exercise price per underlying share), for aggregate gross proceeds of $2,000,000 (net proceeds approximately $1,950,000 after estimated expenses).
Added
The pre-funded warrants are immediately exercisable, have no expiration date, and include a 4.99% beneficial ownership limitation (which may be increased or decreased upon notice). The offering was made pursuant to the Company’s effective shelf registration statement on Form S-3 (File No. 333-283995) and closed on December 23, 2025.
Added
The Company intends to use the net proceeds for working capital and general corporate purposes, which may include potential future acquisitions. No underwriter or placement agent was involved.
Item 1A. Risk Factors
Risk Factors — what could go wrong, per management
67 edited+19 added−11 removed237 unchanged
Item 1A. Risk Factors
Risk Factors — what could go wrong, per management
67 edited+19 added−11 removed237 unchanged
2024 filing
2025 filing
Biggest changeThe uncertainty in the United States and in the international economic and political environment could result in a decline in demand for our products in any industry. Our gross margins are dependent upon our ability to maintain sales volumes at levels that allow us to cover our fixed costs and variable costs per unit.
Biggest changeOur gross margins are dependent upon our ability to maintain sales volumes at levels that allow us to cover our fixed costs and variable costs per unit. To the extent that one or more product lines experience a significant and protracted decline in sales volume, we may experience significant declines in our gross margins that may result in losses.
Our business is affected by varying degrees of technological change and corresponding shifts in customer demand, which result in unpredictable product transitions, shortened life cycles and increased importance of being first to market with new products and services.
Our business is affected by varying degrees of technological change and corresponding shifts in customer demand, which result in unpredictable product transitions, shortened life cycles and increased importance of being first to market with new products and services.
This substantial debt could have important consequences, including the following: (i) a substantial portion of our cash flow from operations may be dedicated to the payment of principal and interest on indebtedness, thereby reducing the funds available for operations, future business opportunities and capital expenditures; (ii) our ability to obtain additional financing for working capital, debt service requirements and general corporate purposes in the future may be limited; (iii) we may face a competitive disadvantage to lesser leveraged competitors; (iv) our debt service requirements could make it more difficult to satisfy other financial obligations; and (v) we may be vulnerable in a downturn in general economic conditions or in our business and we may be unable to carry out activities that are important to our growth . 11 Our ability to make scheduled payments of the principal of, or to pay interest on, or to refinance our indebtedness depends on and is subject to our financial and operating performance, which in turn is affected by general and regional economic, financial, competitive, business and other factors beyond management’s control.
This substantial debt could have important consequences, including the following: (i) a substantial portion of our cash flow from operations may be dedicated to the payment of principal and interest on indebtedness, thereby reducing the funds available for operations, future business opportunities and capital expenditures; (ii) our ability to obtain additional financing for working capital, debt service requirements and general corporate purposes in the future may be limited; (iii) we may face a competitive disadvantage to lesser leveraged competitors; (iv) our debt service requirements could make it more difficult to satisfy other financial obligations; and (v) we may be vulnerable in a downturn in general economic conditions or in our business and we may be unable to carry out activities that are important to our growth. 12 Our ability to make scheduled payments of the principal of, or to pay interest on, or to refinance our indebtedness depends on and is subject to our financial and operating performance, which in turn is affected by general and regional economic, financial, competitive, business and other factors beyond management’s control.
The terms of the extension are as follows: on or before February 17, 2025, the Company must complete the submitted plan and opt for one of the two following alternatives to evidence compliance with the Rule: 26 Alternative 1: The Company must furnish to the SEC and Nasdaq a publicly available report (e.g., a Form 8-K) including: 1.
The terms of the extension are as follows: on or before February 17, 2025, the Company must complete the submitted plan and opt for one of the two following alternatives to evidence compliance with the Rule: Alternative 1: The Company must furnish to the SEC and Nasdaq a publicly available report (e.g., a Form 8-K) including: 1.
A disclosure stating that Nasdaq will continue to monitor the Company’s ongoing compliance with the stockholders’ equity requirement and, if at the time of its next periodic report the Company does not evidence compliance, that it may be subject to delisting. Alternative 2: The Company must furnish to the SEC and Nasdaq a publicly available report including: 1.
A disclosure stating that Nasdaq will continue to monitor the Company’s ongoing compliance with the stockholders’ equity requirement and, if at the time of its next periodic report the Company does not evidence compliance, that it may be subject to delisting. 28 Alternative 2: The Company must furnish to the SEC and Nasdaq a publicly available report including: 1.
Any restrictions on the export of our products or product lines could have a material adverse effect on our competitive position, results of operations, cash flows or financial condition. Our international operations subject us to many different and complex laws and rules, and we may face difficulty in compliance.
Any restrictions on the export of our products or product lines could have a material adverse effect on our competitive position, results of operations, cash flows, or financial condition. 10 Our international operations subject us to many different and complex laws and rules, and we may face difficulty in compliance.
Any of these factors could negatively impact our business, results of operations and financial condition. In these circumstances, we anticipate that we could be required to increase or decrease staffing and more closely manage other expenses in order to meet the anticipated demand of our existing and future customers.
Any of these factors could negatively impact our business, results of operations and financial condition. 15 In these circumstances, we anticipate that we could be required to increase or decrease staffing and more closely manage other expenses in order to meet the anticipated demand of our existing and future customers.
Litigation relating to our intellectual property may not prove successful and might result in substantial costs and diversion of resources and management attention. 18 From our customers’ standpoint, the strength of the intellectual property under which we control can be a critical determinant of the value of our products and services.
Litigation relating to our intellectual property may not prove successful and might result in substantial costs and diversion of resources and management attention. From our customers’ standpoint, the strength of the intellectual property under which we control can be a critical determinant of the value of our products and services.
Without an active trading market, there can be no assurance of any liquidity or resale value of the common stock, and stockholders may be required to hold their shares of common stock for an indefinite period of time. 24 We may not pay cash dividends on our common stock.
Without an active trading market, there can be no assurance of any liquidity or resale value of the common stock, and stockholders may be required to hold their shares of common stock for an indefinite period of time. We may not pay cash dividends on our common stock.
Furthermore, the disclosure of non-public sensitive information through external media channels could lead to the loss of intellectual property or damage our reputation and brand image. 15 We are also in the process of converting certain information technology networks and systems and consolidating certain global systems.
Furthermore, the disclosure of non-public sensitive information through external media channels could lead to the loss of intellectual property or damage our reputation and brand image. We are also in the process of converting certain information technology networks and systems and consolidating certain global systems.
These and other impacts can materially adversely affect our business, results of operations, financial condition and stock price. 8 Our business can be impacted by political events, trade and other international disputes, war, terrorism, natural disasters, public health issues, industrial accidents and other business interruptions.
These and other impacts can materially adversely affect our business, results of operations, financial condition, and stock price. Our business can be impacted by political events, trade and other international disputes, war, terrorism, natural disasters, public health issues, industrial accidents, and other business interruptions.
Moreover, the OTC Pink Market is not a stock exchange, and trading of securities on the OTC Pink Market is often more sporadic than the trading of securities listed on Nasdaq. These factors may result in shareholders having difficulty reselling any Series 1 Preferred Stock. 27
Moreover, the OTC Pink Market is not a stock exchange, and trading of securities on the OTC Pink Market is often more sporadic than the trading of securities listed on Nasdaq. These factors may result in shareholders having difficulty reselling any Series 1 Preferred Stock.
Resales of our common stock may cause the market price of our securities to drop significantly, regardless of the performance of our business. 23 Provisions of the Series A Warrants and Series B Warrants could discourage an acquisition of us by a third-party.
Resales of our common stock may cause the market price of our securities to drop significantly, regardless of the performance of our business. Provisions of the Series A Warrants and Series B Warrants could discourage an acquisition of us by a third-party.
Thus, despite our cash on hand, our ability to draw on our credit line, or changes to our pricing models, and other safeguards, we may be unable to meet our obligations as they become due over the next twelve months beyond the issuance date . 10 There is no guarantee that cash flow from operations and/or debt and equity financings will provide sufficient capital to meet our expansion goals working capital needs or fund our operations.
Thus, despite our cash on hand, our ability to draw on our credit line, or changes to our pricing models, and other safeguards, we may be unable to meet our obligations as they become due over the next twelve months beyond the issuance date. 11 There is no guarantee that cash flow from operations and/or debt and equity financings will provide sufficient capital to meet our expansion goals working capital needs or fund our operations.
There can be no assurance that our business will grow through acquisitions, as anticipated. 20 We may fail to successfully integrate our acquisitions or otherwise be unable to benefit from pursuing acquisitions.
There can be no assurance that our business will grow through acquisitions, as anticipated. We may fail to successfully integrate our acquisitions or otherwise be unable to benefit from pursuing acquisitions.
As a result, fewer broker-dealers may be willing to make a market in our common stock or our preferred stock, reducing a stockholder’s ability to resell shares of our common stock or our preferred stock. 25 Future sales and issuances of our Common Stock or rights to purchase Common Stock, including pursuant to our equity incentive plans and outstanding options could result in additional dilution of the percentage ownership of our stockholders and could cause our stock price to fall.
As a result, fewer broker-dealers may be willing to make a market in our common stock or our preferred stock, reducing a stockholder’s ability to resell shares of our common stock or our preferred stock. 27 Future sales and issuances of our Common Stock or rights to purchase Common Stock, including pursuant to our equity incentive plans and outstanding options could result in additional dilution of the percentage ownership of our stockholders and could cause our stock price to fall.
Based on its evaluation, our management concluded that as of September 30, 2024, that our internal control over financial reporting were effective. We are required to disclose changes made in our internal control and procedures on a quarterly basis.
Based on its evaluation, our management concluded that as of September 30, 2025, that our internal control over financial reporting were effective. We are required to disclose changes made in our internal control and procedures on a quarterly basis.
As of September 30, 2024, our total indebtedness was approximately $21.05 million, including notes payable of $12.4 million, revolving line of credit of $3.1 million, mortgage payable of $3.3 million, bank loans of $2.2 million, and $0.05 million of PPP loans.
By comparison, as of September 30, 2024, our total indebtedness was approximately $21.05 million, including notes payable of $12.4 million, revolving line of credit of $3.1 million, mortgage payable of $3.3 million, bank loans of $2.2 million, and $0.05 million of PPP loans.
The aggregate number of shares of our Common Stock that may be issued pursuant to stock awards under our 2020 Equity Compensation Plan as of September 30, 2024, is 28 shares. Increases in the number of shares available for future grant or purchase may result in additional dilution, which could cause our stock price to decline.
The aggregate number of shares of our Common Stock that may be issued pursuant to stock awards under our 2020 Equity Compensation Plan as of September 30, 2025, is 2 shares. Increases in the number of shares available for future grant or purchase may result in additional dilution, which could cause our stock price to decline.
We have incurred net losses, including net losses attributable to Cemtrex, Inc. shareholders of $7.2 million in 2024, $9.2 million in 2023, and $13.0 million in 2022. We have an accumulated deficit of $71.4 million as of September 30, 2024. We expect to continue to incur significant product development, sales and marketing and administrative expenses.
We have incurred net losses, including net losses attributable to Cemtrex, Inc. shareholders of $28.1 million in 2025, $7.2 million in 2024, $9.2 million in 2023, and $13.0 million in 2022. We have an accumulated deficit of $99.4 million as of September 30, 2025. We expect to continue to incur significant product development, sales and marketing and administrative expenses.
Additionally, the Company has (i) secured a line of credit for its Vicon brand to fund operations, which as of September 30, 2024, has available capacity of $1.9 million, and a line of credit for its AIS brand with a $3.5 million capacity that has not been drawn upon, (ii) continually reevaluate our pricing model on our Vicon brand to improve margins on those products and introducing new innovative products to grow revenues, (iii) raised approximately $9.0 million in net proceeds through our May 2024 equity financing and anticipate an additional $5 to $10 million when the Series B warrants are exercised, and (iv) subsequent to the balance sheet date has effected a 60:1 and a 35:1 reverse stock split on our common stock to remain trading on the Nasdaq Capital Markets, and improve our ability to potentially raise capital through equity offerings that we may use to satisfy debt.
Additionally, the Company has (i) secured a line of credit for its Vicon brand to fund operations, which as of September 30, 2025, has available capacity of $1.6 million, and a line of credit for its AIS brand with a $3.5 million capacity that has not been drawn upon, (ii) continually reevaluate our pricing model on our Vicon brand to improve margins on those products and introducing new innovative products to grow revenues, (iii) raised approximately $12.5 million in net proceeds through our May 2024 equity financing, raised an additional $5.7 million subsequent to the balance sheet date and anticipate an additional $2.4 million when the remaining Series B warrants are exercised, (iv) raised approximately $1.2 million in net proceeds from our May 2025 equity offering and an additional $4.0 million in December 2025, and (v) has effected a 60:1, 35:1, and a 15:1 reverse stock splits on our common stock to remain trading on the Nasdaq Capital Markets, and improve our ability to potentially raise capital through equity offerings that we may use to satisfy debt.
The Series B Warrants provide, subject to certain exemptions, that if we sell or issue, any common stock or convertible securities, at an effective price per share less than the exercise price of the Series B Warrant then in effect, or a Dilutive Issuance, the exercise price of the Series B Warrant will be reduced to an amount equal to the lowest daily volume weighted average price (“VWAP”) during the period commencing five consecutive trading days following the Dilutive Issuance and the number of shares issuable upon exercise of the Series B Warrant shall be proportionally adjusted so that the aggregate exercise price of the Series B Warrant shall remain unchanged.
Series A Warrants may be exercised on an alternative cash basis where each warrant exercised will result in the Company issuing three shares of common stock. 24 The Series B Warrants provide, subject to certain exemptions, that if we sell or issue, any common stock or convertible securities, at an effective price per share less than the exercise price of the Series B Warrant then in effect, or a Dilutive Issuance, the exercise price of the Series B Warrant will be reduced to an amount equal to the lowest daily volume weighted average price (“VWAP”) during the period commencing five consecutive trading days following the Dilutive Issuance and the number of shares issuable upon exercise of the Series B Warrant shall be proportionally adjusted so that the aggregate exercise price of the Series B Warrant shall remain unchanged.
As of September 30, 2024, we had total consolidated liabilities of approximately $39.2 million and 2,456,827 shares issued and 2,392,727 shares of Series 1 preferred stock outstanding. Any liquidation, winding up or dissolution of our company or of any of our wholly or partially owned subsidiaries would have a material adverse effect on holders of our common stock .
As of September 30, 2025, we had total consolidated liabilities of approximately $39.1 million and 2,705,327 shares issued and 2,641,227 shares of Series 1 preferred stock outstanding. Any liquidation, winding up or dissolution of our company or of any of our wholly or partially owned subsidiaries would have a material adverse effect on holders of our common stock.
The market price of our securities may fluctuate substantially due to a variety of factors, including: ● our business strategy and plans; ● changing factors related to doing business in various jurisdictions within the United States; ● new regulatory pronouncements and changes in regulatory guidelines and timing of regulatory approvals; ● general and industry-specific economic conditions; ● additions to or departures of our key personnel; ● variations in our quarterly financial and operating results; ● changes in market valuations of other companies that operate in our business segments or in our industry; ● lack of trading liquidity; ● announcements about our business partners; ● intellectual property disputes; ● operating results below or exceeding expectations or period-to-period fluctuations in our financial results; ● whether we achieve profits or not; ● changes in accounting principles; and ● general market conditions, economic and other external factors. 22 The market prices of the securities of early-stage companies, particularly companies like ours without consistent product revenues and earnings, have been highly volatile and are likely to remain highly volatile in the future.
The market price of our securities may fluctuate substantially due to a variety of factors, including: ● our business strategy and plans; ● changing factors related to doing business in various jurisdictions within the United States; ● new regulatory pronouncements and changes in regulatory guidelines and timing of regulatory approvals; ● general and industry-specific economic conditions; ● additions to or departures of our key personnel; ● variations in our quarterly financial and operating results; ● changes in market valuations of other companies that operate in our business segments or in our industry; ● lack of trading liquidity; ● announcements about our business partners; ● intellectual property disputes; ● operating results below or exceeding expectations or period-to-period fluctuations in our financial results; ● whether we achieve profits or not; ● changes in accounting principles; and ● general market conditions, economic and other external factors.
Volatility in currency exchange rates may adversely affect our financial condition, results of operations and cash flows. Our international operations accounted for approximately 5.9% of our net sales in 2024.
Volatility in currency exchange rates may adversely affect our financial condition, results of operations and cash flows. Our international operations accounted for approximately 6.8% of our net sales in 2025.
The Company has incurred substantial losses of $7.2 million and $9.2 million for fiscal years 2024 and 2023, respectively, and working capital of $8.1 million as at the end of fiscal 2024, that raise substantial doubt with respect to the Company’s ability to continue as a going concern.
The Company has incurred substantial losses of $28.3 million and $7.6 million for fiscal years 2025 and 2024, respectively, and working capital of $5.2 million as at the end of fiscal 2025, that raise substantial doubt with respect to the Company’s ability to continue as a going concern.
We may not be able to maintain insurance coverage at a reasonable cost or in an amount adequate to satisfy any liability that may arise. 19 If we experience material weaknesses in the future or otherwise fail to maintain an effective system of internal control over financial reporting in the future, we may not be able to accurately or timely report our financial condition or results of operations, which may adversely affect investor confidence in us and, as a result, the value of our common stock.
If we experience material weaknesses in the future or otherwise fail to maintain an effective system of internal control over financial reporting in the future, we may not be able to accurately or timely report our financial condition or results of operations, which may adversely affect investor confidence in us and, as a result, the value of our common stock.
A copy of the SEC Order can be found at www.sec.gov . 17 Provisions in the Delaware law and our Bylaws could make it very difficult for an investor to bring any legal actions against our directors or officers for violations of their fiduciary duties or could require us to pay any amounts incurred by our directors or officers in any such actions.
Provisions in the Delaware law and our Bylaws could make it very difficult for an investor to bring any legal actions against our directors or officers for violations of their fiduciary duties or could require us to pay any amounts incurred by our directors or officers in any such actions.
Should any of the following problems, or others, occur as a result of our acquisition strategy, the impact could be material: ■ difficulties integrating personnel from acquired entities and other corporate cultures into our business; ■ difficulties integrating information systems; ■ the potential loss of key employees of acquired companies; ■ the assumption of liabilities and exposure to undisclosed or unknown liabilities of acquired companies; or ■ the diversion of management attention from existing operations.
Should any of the following problems, or others, occur as a result of our acquisition strategy, the impact could be material: ■ difficulties integrating personnel from acquired entities and other corporate cultures into our business; ■ difficulties integrating information systems; ■ the potential loss of key employees of acquired companies; ■ the assumption of liabilities and exposure to undisclosed or unknown liabilities of acquired companies; or ■ the diversion of management attention from existing operations. 22 Risks Related to Our Management and Control Persons The loss of the services of Saagar Govil for any reason would materially and adversely affect our business operations and prospects.
Delaware law provides that directors of a corporation will not be personally liable for monetary damages for breach of their fiduciary duties as directors, except for liability for any: ● breach of their duty of loyalty to us or our stockholders; ● act or omission not in good faith or that involves intentional misconduct or a knowing violation of law; ● unlawful payments of dividends or unlawful stock repurchases, or redemptions as provided in Section 174 of the Delaware General Corporation Law; or ● transaction from which the directors derived an improper personal benefit. 21 These limitations of liability do not apply to liabilities arising under the federal or state securities laws and do not affect the availability of equitable remedies such as injunctive relief or rescission.
Delaware law provides that directors of a corporation will not be personally liable for monetary damages for breach of their fiduciary duties as directors, except for liability for any: ● breach of their duty of loyalty to us or our stockholders; ● act or omission not in good faith or that involves intentional misconduct or a knowing violation of law; ● unlawful payments of dividends or unlawful stock repurchases, or redemptions as provided in Section 174 of the Delaware General Corporation Law; or ● transaction from which the directors derived an improper personal benefit.
In the event securities or industry analysts initiate coverage, if one or more of the analysts who covers us downgrades our stock or publishes inaccurate or unfavorable research about our business, our stock price may decline.
If no securities or industry analysts commence coverage of our Company, the trading price for our stock would likely be negatively impacted. In the event securities or industry analysts initiate coverage, if one or more of the analysts who covers us downgrades our stock or publishes inaccurate or unfavorable research about our business, our stock price may decline.
Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers or persons controlling us, we have been informed that, in the opinion of the SEC, such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.
Our results of operations and financial condition may be harmed to the extent we pay the costs of settlement and damage awards against directors and officers pursuant to these indemnification provisions. 23 Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers or persons controlling us, we have been informed that, in the opinion of the SEC, such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.
If securities or industry analysts do not publish research or publish inaccurate or unfavorable research about our business, our stock price and trading volume could decline. The trading market for our Common Stock will depend in part on the research and reports that securities or industry analysts publish about us or our business.
The trading market for our Common Stock will depend in part on the research and reports that securities or industry analysts publish about us or our business. Securities and industry analysts do not currently, and may never, publish research on our Company.
Our operating results are sensitive to raw material and resale product availability, quality, and cost We seek to have many sources of supply for each of our major requirements in order to avoid significant dependence on any one or a few suppliers.
Any of these events could harm our reputation or subject us to significant liability, and materially and adversely affect our business and financial results. 18 Our operating results are sensitive to raw material and resale product availability, quality, and cost We seek to have many sources of supply for each of our major requirements in order to avoid significant dependence on any single or a few suppliers.
We may experience difficulties or delays in the research and development, production and/or marketing of new products and services due to lack of capital, which may negatively impact our operating results and prevent us from recouping or realizing a return on the investments required to continue to bring new products and services to market.
We may experience difficulties or delays in the research and development, production and/or marketing of new products and services due to lack of capital, which may negatively impact our operating results and prevent us from recouping or realizing a return on the investments required to continue to bring new products and services to market. 14 Our future operating results depends in part on the continued successful operation of our Industrial Services segment, and there can be no assurance that we will be successful in this business.
Further issues could reduce investor and shareholder confidence in our company and could result in a failure to execute on our business plan, which would negatively impact our business.
Further issues could reduce investor and shareholder confidence in our company and could result in a failure to execute on our business plan, which would negatively impact our business. A copy of the SEC Order can be found at www.sec.gov .
Political events, trade and other international disputes, war, terrorism, natural disasters, public health issues (such as COVID-19), industrial accidents and other business interruptions can harm or disrupt international commerce and the global economy and could have a material adverse effect on us and our customers, suppliers, contract manufacturers, logistics providers, distributors, and other channel partners.
Political events, trade and other international disputes, war, terrorism, natural disasters, public health issues (such as COVID-19), industrial accidents and other business interruptions can harm or disrupt international commerce and the global economy and could have a material adverse effect on us and our customers, suppliers, contract manufacturers, logistics providers, distributors, and other channel partners. 9 Restrictions on international trade, such as tariffs and other controls on imports or exports of goods, technology or data, can materially adversely affect our operations and supply chain and limit our ability to offer and distribute products and services to customers.
In addition, currency fluctuations may affect the prices we pay suppliers for materials used in our products, along with other local costs incurred in foreign countries for foreign entities with U.S. dollar functional currency.
In addition, currency fluctuations may affect the prices we pay suppliers for materials used in our products, along with other local costs incurred in foreign countries for foreign entities with U.S. dollar functional currency. As a result, fluctuating exchange rates may adversely impact our results of operations and cash flows.
As we continuously review our portfolio of businesses we may exit or enter into new business activities which may ultimately prove to be unsuccessful. 12 Our future operating results depend in part on continued successful research, development and marketing of new and improved products and services through our Security segment, and there can be no assurance that we will successfully introduce new products and services into the market.
Our future operating results depend in part on continued successful research, development and marketing of new and improved products and services through our Security segment, and there can be no assurance that we will successfully introduce new products and services into the market.
The Company has approximately $3.9 million in cash as of September 30, 2024.
The Company has approximately $5.0 million in cash as of September 30, 2025.
A voluntary or involuntary departure by Saagar Govil could have a materially adverse effect on our business operations if we were not able to attract a qualified replacement for him in a timely manner.
Govil, and we have not obtained key man insurance over him. There can be no assurance that Saagar Govil will continue to provide services to us. A voluntary or involuntary departure by Saagar Govil could have a materially adverse effect on our business operations if we were not able to attract a qualified replacement for him in a timely manner.
These factors include: ● increased competition among our customers and their competitors; ● the inability of our customers to develop and market their products; ● recessionary periods in our customers’ markets; ● the potential that our customers’ products become obsolete; ● our customers’ inability to react to rapidly changing technology; and ● our customers’ inability to pay for our products, which could, in turn, affect the company’s results of operations. 14 If we are unable to develop new products, our competitors may develop and market products with better features that may reduce demand for our existing and potential products or otherwise result in our products becoming obsolete and could materially and adversely affect our ability to sustain profitability.
These factors include: ● increased competition among our customers and their competitors; ● the inability of our customers to develop and market their products; ● recessionary periods in our customers’ markets; ● the potential that our customers’ products become obsolete; ● our customers’ inability to react to rapidly changing technology; and ● our customers’ inability to pay for our products, which could, in turn, affect the company’s results of operations.
Similarly, if a high-profile security breach occurs with respect to a retailer or eCommerce platform, customers may lose trust in eCommerce more generally, which could adversely impact our customers’ businesses. Any of these events could harm our reputation or subject us to significant liability, and materially and adversely affect our business and financial results.
Similarly, if a high-profile security breach occurs with respect to a retailer or eCommerce platform, customers may lose trust in eCommerce more generally, which could adversely impact our customers’ businesses.
If our competitors develop innovative technologies that are superior to our products or if we fail to accurately anticipate market trends and respond on a timely basis with our own innovations, we may not achieve sufficient growth in its revenues to attain profitability or if we do, we may not be able sustain profitability.
If our competitors develop innovative technologies that are superior to our products or if we fail to accurately anticipate market trends and respond on a timely basis with our own innovations, we may not achieve sufficient growth in its revenues to attain profitability or if we do, we may not be able sustain profitability. 16 The success of new product introductions is dependent on a number of factors, including, but not limited to, timely and successful development of new products, including software development, market acceptance of these products and our ability to manage the risks associated with these introductions.
Such decisions are based on the facts and circumstances then existing including, without limitation, our results of operations, financial condition, contractual restrictions, restrictions imposed by applicable law and other factors our board of directors deems relevant. As a result, we cannot predict when, or whether, another dividend on our common stock will be declared in the future.
Such decisions are based on the facts and circumstances then existing including, without limitation, our results of operations, financial condition, contractual restrictions, restrictions imposed by applicable law and other factors our board of directors deems relevant.
If these third parties fail to adhere to adequate data security practices, or in the event of a breach of their networks, our own and our customers’ data may be improperly accessed, used or disclosed. 16 Some jurisdictions have enacted laws requiring companies to notify individuals and authorities of data security breaches involving certain types of personal or other data and our agreements with certain customers and partners require us to notify them in the event of a security incident.
Some jurisdictions have enacted laws requiring companies to notify individuals and authorities of data security breaches involving certain types of personal or other data and our agreements with certain customers and partners require us to notify them in the event of a security incident.
We currently maintain product liability insurance coverage, which may not be adequate to cover all liabilities that we may incur. Insurance coverage is increasingly expensive.
We currently maintain product liability insurance coverage, which may not be adequate to cover all liabilities that we may incur. Insurance coverage is increasingly expensive. We may not be able to maintain insurance coverage at a reasonable cost or in an amount adequate to satisfy any liability that may arise.
As a result, fluctuating exchange rates may adversely impact our results of operations and cash flows. 9 Our business and results of operations may be materially adversely affected by compliance with import and export laws.
Our business and results of operations may be materially adversely affected by compliance with import and export laws.
Whether or not meritorious, litigation brought against us could result in substantial costs, divert our management’s attention and resources and harm our financial condition and results of operations.
In the past, companies that experience volatility in the market price of their securities have often faced securities class action litigation. Whether or not meritorious, litigation brought against us could result in substantial costs, divert our management’s attention and resources, and harm our financial condition and results of operations.
Changes in demand mix, needed technologies, and end-use markets may adversely affect our ability to match our products, inventory, and capacity to meet customer demand and could adversely affect our operating results and financial condition.
Changes in demand mix, needed technologies, and end-use markets may adversely affect our ability to match our products, inventory, and capacity to meet customer demand and could adversely affect our operating results and financial condition. We are also vulnerable to general economic events or trends beyond our control, and our sales and profits may suffer in periods of weak demand.
We may be sued if any of our products allegedly causes injury. Any such product liability claims may include allegations of defects in manufacturing, defects in design, a failure to warn of dangers inherent in the product, negligence, strict liability, and a breach of warranties.
Any such product liability claims may include allegations of defects in manufacturing, defects in design, a failure to warn of dangers inherent in the product, negligence, strict liability, and a breach of warranties. We may also be subject to liability for a misunderstanding of, or inappropriate reliance upon, the information we provide.
The limitation of liability and indemnification provisions in our certificate of incorporation and bylaws may discourage stockholders from bringing a lawsuit against directors for breach of their fiduciary duties. They may also reduce the likelihood of derivative litigation against directors and officers, even though an action, if successful, might provide a benefit to us and our stockholders.
They may also reduce the likelihood of derivative litigation against directors and officers, even though an action, if successful, might provide a benefit to us and our stockholders.
Our management, including our principal executive officer and principal accounting officer, conducted an evaluation of the effectiveness of our internal control over financial reporting using the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in Internal Control—Integrated Framework (2013).
Accordingly, there could continue to be a reasonable possibility that a material misstatement of our financial statements would not be prevented or detected on a timely basis. 21 Our management, including our principal executive officer and principal accounting officer, conducted an evaluation of the effectiveness of our internal control over financial reporting using the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in Internal Control—Integrated Framework (2013).
Accordingly, our indemnification obligations could divert needed financial resources and may adversely affect our business, financial condition, results of operations and cash flows, and adversely affect prevailing market prices for our common stock.
Accordingly, our indemnification obligations could divert needed financial resources and may adversely affect our business, financial condition, results of operations and cash flows, and adversely affect prevailing market prices for our common stock. 19 If we fail to establish, maintain, and enforce intellectual property rights with respect to our technology, our financial condition, results of operations and business could be negatively impacted.
These and other provisions of the Series A Warrants and Series B Warrants could prevent or deter a third-party from acquiring us even where the acquisition could be beneficial to you.
These and other provisions of the Series A Warrants and Series B Warrants could prevent or deter a third-party from acquiring us even where the acquisition could be beneficial to you. 25 The Series A Warrants and Series B Warrants may have an adverse effect on the market price of our common stock and make it more difficult to effect a business combination.
We may also be subject to liability for a misunderstanding of, or inappropriate reliance upon, the information we provide. If we cannot successfully defend ourselves against claims that our product or planned products caused injuries, we may incur substantial liabilities.
If we cannot successfully defend ourselves against claims that our product or planned products caused injuries, we may incur substantial liabilities.
As of December 2024, approximately 82,722 and 3,318,556 Series A Warrants and Series B Warrants, respectively, remain outstanding and the Series A Warrants have a current exercise price of $3.1488 and the Series B Warrants have a current exercise price of $3.1488.
As of December 2025, approximately 291,231 and 987,987 Series A Warrants and Series B Warrants, respectively, remain outstanding and the Series A Warrants have a current exercise price of $2.433, and the Series B Warrants have a current exercise price of $2.433.
If we are unable to establish our technologies in the market, and overcome the challenges of doing so, we could go out of business.
If we are unable to establish our technologies in the market, and overcome the challenges of doing so, we could go out of business. As we continuously review our portfolio of businesses we may exit or enter into new business activities which may ultimately prove to be unsuccessful.
Any of these results could adversely and significantly affect our business, financial condition and results of operations. In addition, the cost of defending or asserting any intellectual property claim, both in legal fees and expenses, and the diversion of management resources, regardless of whether the claim is valid, could be significant and lead to significant and protracted losses.
In addition, the cost of defending or asserting any intellectual property claim, both in legal fees and expenses, and the diversion of management resources, regardless of whether the claim is valid, could be significant and lead to significant and protracted losses. 20 Product liability lawsuits against us could cause us to incur substantial liabilities and to limit commercialization of our product or any future products that we may develop.
While we do not yet have specific insurance coverage and while we plan to obtain coverage in the near future, any coverage we acquire may be insufficient to compensate us for all liabilities that we may incur.
While we do not yet have specific insurance coverage and while we plan to obtain coverage in the near future, any coverage we acquire may be insufficient to compensate us for all liabilities that we may incur. 17 Our customers’ storage and use of data to operate their businesses and deliver services to their consumers is essential to their use of our platform, which stores, transmits and processes our customers’ proprietary information and personal information relating to them, their employees, and their consumers.
Our bylaws provide that we will indemnify for our directors and officers to the fullest extent permitted by law and may indemnify employees and other agents. Our bylaws also provide that we are obligated to advance expenses incurred by a director or officer in advance of the final disposition of any action or proceeding.
Our bylaws also provide that we are obligated to advance expenses incurred by a director or officer in advance of the final disposition of any action or proceeding. The limitation of liability and indemnification provisions in our certificate of incorporation and bylaws may discourage stockholders from bringing a lawsuit against directors for breach of their fiduciary duties.
To the extent that one or more product lines experience a significant and protracted decline in sales volume, we may experience significant declines in our gross margins that may result in losses. Further, any adverse changes in tax rates and laws affecting our customers could result in decreases in demand of our products and thus decrease our gross margins.
Further, any adverse changes in tax rates and laws affecting our customers could result in decreases in demand of our products and thus decrease our gross margins.
Product liability lawsuits against us could cause us to incur substantial liabilities and to limit commercialization of our product or any future products that we may develop. We face an inherent risk of product liability exposure related to the sale of our products and the future sale of planned products.
We face an inherent risk of product liability exposure related to the sale of our products and the future sale of planned products. We may be sued if any of our products allegedly causes injury.
Saagar Govil possesses management, financial expertise, engineering, sales and marketing experience concerning our company that our other officers do not have. We have not entered into an employment arrangement with Mr. Govil, and we have not obtained key man insurance over him. There can be no assurance that Saagar Govil will continue to provide services to us.
Our financial success is dependent to a significant degree upon the efforts of Saagar Govil, our Chairman, President, and Chief Executive Officer. Saagar Govil possesses management, financial expertise, engineering, sales, and marketing experience concerning our company that our other officers do not have. We have not entered into an employment arrangement with Mr.
By comparison, as September 30, 2023, our total indebtedness was approximately $24.4 million, including notes payable of $18.1 million, mortgage payable of $3.4 million, vendor financed purchase of $0.7 million, bank loans of $1.3 million, and $0.9 million of PPP loans. For 2024 and 2023 approximately $7.9 million and $14.5 million, respectively, of such debt is classified as current.
As of September 30, 2025, our total indebtedness was approximately $16.8 million, including notes payable of $8.5 million, revolving line of credit of $3.2 million, mortgage payable of $3.2 million, and bank loans of $1.9 million.
We are also vulnerable to general economic events or trends beyond our control, and our sales and profits may suffer in periods of weak demand. 13 Our sales and gross margins depend significantly on market demand for our products, as to which there can be no assurance.
Our sales and gross margins depend significantly on market demand for our products, as to which there can be no assurance. The uncertainty in the United States and in the international economic and political environment could result in a decline in demand for our products in any industry.
This volatility has often been unrelated to the operating performance of particular companies. In the past, companies that experience volatility in the market price of their securities have often faced securities class action litigation.
The market prices of the securities of early-stage companies, particularly companies like ours without consistent product revenues and earnings, have been highly volatile and are likely to remain highly volatile in the future. This volatility has often been unrelated to the operating performance of particular companies.
Removed
Restrictions on international trade, such as tariffs and other controls on imports or exports of goods, technology or data, can materially adversely affect our operations and supply chain and limit our ability to offer and distribute products and services to customers.
Added
For 2025 and 2024 approximately $12.1 million and $7.9 million, respectively, of such debt is classified as current.
Removed
Our future operating results depends in part on the continued successful operation of our Industrial Services segment, and there can be no assurance that we will be successful in this business.
Added
Risks Related to Our Investment in Digital Assets The value of our digital asset holdings is highly volatile and may decline significantly. We have invested in digital assets, primarily Solana (SOL), which we hold and stake for potential yield. These holdings are subject to significant risks, including extreme price volatility, regulatory uncertainty, technological vulnerabilities, and liquidity constraints.
Removed
The success of new product introductions is dependent on a number of factors, including, but not limited to, timely and successful development of new products, including software development, market acceptance of these products and our ability to manage the risks associated with these introductions.
Added
Any material decline in value or impairment could adversely affect our financial condition, results of operations, and stock price. Digital assets, including SOL, have experienced extreme price volatility. The market price of SOL is influenced by factors beyond our control, such as market sentiment, speculative trading, adoption rates, and global economic conditions.
Removed
Our customers’ storage and use of data to operate their businesses and deliver services to their consumers is essential to their use of our platform, which stores, transmits and processes our customers’ proprietary information and personal information relating to them, their employees and their consumers.
Added
A significant decline in SOL’s price could result in substantial losses or impairment charges, negatively impacting our balance sheet, liquidity, and financial results. Historical volatility in cryptocurrency markets has led to rapid and severe price drops, and there is no assurance that our holdings will appreciate or maintain value.
Removed
If we fail to establish, maintain, and enforce intellectual property rights with respect to our technology, our financial condition, results of operations and business could be negatively impacted.
Added
Our digital assets are subject to risks associated with staking and the Solana network. We stake our SOL holdings to earn rewards, exposing us to additional risks, including slashing penalties for validator misconduct, network downtime, or illiquidity during unstaking periods.
Removed
Accordingly, there could continue to be a reasonable possibility that a material misstatement of our financial statements would not be prevented or detected on a timely basis.
Added
The Solana network has historically experienced outages and congestion, which could disrupt staking operations, reduce rewards, or temporarily prevent access to our assets. Concentration among validators on Solana may also heighten centralization risks, making the network vulnerable to attacks or failures. Regulatory developments could adversely affect our digital asset holdings.
Removed
Risks Related to Our Management and Control Persons The loss of the services of Saagar Govil for any reason would materially and adversely affect our business operations and prospects. Our financial success is dependent to a significant degree upon the efforts of Saagar Govil, our Chairman, President and Chief Executive Officer.
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Item 1C. Cybersecurity
Cybersecurity — threats and controls disclosure
2 edited+0 added−1 removed4 unchanged
Item 1C. Cybersecurity
Cybersecurity — threats and controls disclosure
2 edited+0 added−1 removed4 unchanged
2024 filing
2025 filing
Biggest changeWe assess material risks from cybersecurity threats, including any potential unauthorized occurrence on or conducted through our information systems that may result in adverse effects on the confidentiality, integrity, or availability of our information systems or any information residing therein.
Biggest changeWe assess material risks from cybersecurity threats, including any potential unauthorized occurrence on or conducted through our information systems that may result in adverse effects on the confidentiality, integrity, or availability of our information systems or any information residing therein. 29 We conduct periodic risk assessments to identify cybersecurity threats, as well as assessments in the event of a material change in our business practices that may affect information systems that are vulnerable to such cybersecurity threats.
Cybersecurity Threats As of September 30, 2024, we have not identified any indication of a cybersecurity incident that would have a material impact on our business and consolidated financial statements. For further discussion of cybersecurity risks, please refer to Item 1A. Risk Factors.
Cybersecurity Threats As of September 30, 2025, we have not identified any indication of a cybersecurity incident that would have a material impact on our business and consolidated financial statements. For further discussion of cybersecurity risks, please refer to Item 1A. Risk Factors.
Removed
We conduct periodic risk assessments to identify cybersecurity threats, as well as assessments in the event of a material change in our business practices that may affect information systems that are vulnerable to such cybersecurity threats.
Item 2. Properties
Properties — owned and leased real estate
1 edited+1 added−0 removed3 unchanged
Item 2. Properties
Properties — owned and leased real estate
1 edited+1 added−0 removed3 unchanged
2024 filing
2025 filing
Biggest changeThe Industrial Services segment also leases approximately 15,500 square feet of warehouse space in Emigsville, PA from a third party in a three-year lease at a monthly rent of $5,099 expiring on August 31, 2025.
Biggest changeThe Industrial Services segment also leases approximately 15,500 square feet of warehouse space in Emigsville, PA from a third party in a three-year lease at a monthly rent of $5,784 expiring on August 31, 2026.
Added
The Company’s corporate segment leases approximately 4,900 square feet of office space in Springfield, New Jersey from a third party in a sixty-two (62) month lease at a monthly rent of $9,192.88 which expires on July 31, 2030.
Item 5. Market for Registrant's Common Equity
Market for Common Equity — stock, dividends, buybacks
5 edited+3 added−1 removed5 unchanged
Item 5. Market for Registrant's Common Equity
Market for Common Equity — stock, dividends, buybacks
5 edited+3 added−1 removed5 unchanged
2024 filing
2025 filing
Biggest changeSecurities Authorized for Issuance under Equity Compensation Plans The following table presents certain information as of September 30, 2024, regarding our equity compensation plans: Plan category Number of Common Stock Shares to be Issued upon Exercise of Outstanding Options Weighted Average Exercise Price of Outstanding Options Number of Securities Remaining Available for Future Issuance under Plans (1) (a) (b) (c) Approved by security holders 2020 Equity Compensation Plan 6 $ 28,577.25 22 Not approved by security holders Options 12 $ 143,599.76 Total 18 $ 105,258.92 22 (1) See more detailed information regarding our equity compensation plans in the Notes to Consolidated Financial Statements in this Annual Report on Form 10-K for the year ended September 30,2024. 29 Recent Sales of Unregistered Securities The information set forth below relates to our issuances of securities without registration under the Securities Act of 1933 during the reporting period which were not previously included in an Annual Report on Form 10-K, Quarterly Report on Form 10-Q or Current Report on Form 8-K.
Biggest changeNot approved by security holders Options 4 $ 307,000.00 Total 7 $ 192,571.43 0 (1) See more detailed information regarding our equity compensation plans in the Notes to Consolidated Financial Statements in this Annual Report on Form 10-K for the year ended September 30, 2025. 31 Recent Sales of Unregistered Securities The information set forth below relates to our issuances of securities without registration under the Securities Act of 1933 during the reporting period which were not previously included in an Annual Report on Form 10-K, Quarterly Report on Form 10-Q or Current Report on Form 8-K.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED SHAREHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES The Company’s Common Stock currently trades on the NASDAQ Capital Markets under the symbol “CETX.” As of December 23, 2024, the Company had 71 shareholders of record.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED SHAREHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES The Company’s Common Stock currently trades on the NASDAQ Capital Markets under the symbol “CETX.” As of December 22, 2025, the Company had 81 shareholders of record.
On December 23, 2024, there were 1,724,162 shares of common stock issued and outstanding, 2,579,994 shares of Series 1 preferred stock issued and 2,515,894 shares outstanding, and 50,000 shares of Series C preferred stock issued and outstanding. As reported by NASDAQ Capital Markets, on December 23, 2024, the closing sales price of the Company’s Common Stock was $2.98 per share.
On December 22, 2025, there were 6,911,663 shares of common stock issued and outstanding, shares of Series 1 preferred stock issued and 2,840,919 shares outstanding, and 50,000 shares of Series C preferred stock issued and outstanding. As reported by NASDAQ Capital Markets, on December 22, 2025, the closing sales price of the Company’s Common Stock was $3.03 per share.
On October 7, 2024, 123,167 shares of Series 1 Preferred Stock were issued to pay dividends to holders of Series 1 Preferred Stock. These securities were issued pursuant to Section 4(2) of the Securities Act and/or Rule 506 promulgated thereunder. The holders represented their intention to acquire the securities for investment only and not with a view towards distribution.
These securities were issued pursuant to Section 4(2) of the Securities Act and/or Rule 506 promulgated thereunder. The holders represented their intention to acquire the securities for investment only and not with a view towards distribution. The investors were given adequate information about us to make an informed investment decision. We did not engage in any general solicitation or advertising.
For the fiscal year ended September 30, 2024, 235,762 shares of Series 1 Preferred Stock were issued to pay dividends to holders of Series 1 Preferred Stock. For the fiscal year ended September 30, 2024, we issued 105 shares of common stock in exchange for $169,000 of services to the Company.
For the fiscal year ended September 30, 2025, 252,278 shares of Series 1 Preferred Stock were issued to pay dividends to holders of Series 1 Preferred Stock. On October 7, 2025, 135,291 shares of Series 1 Preferred Stock were issued to pay dividends to holders of Series 1 Preferred Stock.
Removed
The investors were given adequate information about us to make an informed investment decision. We did not engage in any general solicitation or advertising. We directed our transfer agent to issue the stock certificates with the appropriate restrictive legend affixed to the restricted stock.
Added
Securities Authorized for Issuance under Equity Compensation Plans The following table presents certain information as of September 30, 2025, regarding our equity compensation plans: Plan category Number of Common Stock Shares to be Issued upon Exercise of Outstanding Options Weighted Average Exercise Price of Outstanding Options Number of Securities Remaining Available for Future Issuance under Plans (1) (a) (b) (c) Approved by security holders 2020 Equity Compensation Plan 3 $ 40,000.00 0 .
Added
We directed our transfer agent to issue the stock certificates with the appropriate restrictive legend affixed to the restricted stock. On December 8, 2025, the Company issued 2,500,609 shares of its common stock pursuant to exchange agreements with certain lenders to satisfy $6,084,000 of outstanding debt.
Added
This issuance was exempt from registration pursuant to Section 3(a)(9) of the Securities Act of 1933, as amended.
Item 7. Management's Discussion & Analysis
Management's Discussion & Analysis (MD&A) — revenue / margin commentary
34 edited+13 added−6 removed40 unchanged
Item 7. Management's Discussion & Analysis
Management's Discussion & Analysis (MD&A) — revenue / margin commentary
34 edited+13 added−6 removed40 unchanged
2024 filing
2025 filing
Biggest changeCash provided by operating activities for discontinued operations for the year ended September 30, 2023, was $2,491,581. Trade receivables increased by $1,949,981 or 21% to $11,159,676 at September 30, 2024, from $9,209,695 at September 30, 2023. The increase in trade receivables is mainly due to increased revenues and receivables related to the business generated by the acquisition of Heisey.
Biggest changeTrade receivables increased by $1,973,748 or 18% to $13,133,424 at September 30, 2025, from $11,159,676 at September 30, 2024. The increase in trade receivables is mainly due to increased revenues. Investing activities for continuing operations used $2,960,739 of cash during the year ended September 30, 2025, compared to $1,257,393 used in the year ended September 30, 2024.
The Company considers the start of a project to be when the above criteria have been met and it has written authorization from the customer to proceed. Fixed price contracts The Company’s revenue from fixed price contracts is recognized on the percentage-of-completion method, measured by the percentage of costs incurred to estimated total costs for each contract.
The Company considers the start of a project to be when the above criteria have been met and it has written authorization from the customer to proceed. 33 Fixed price contracts The Company’s revenue from fixed price contracts is recognized on the percentage-of-completion method, measured by the percentage of costs incurred to estimated total costs for each contract.
Factors utilized in the determination of estimated market value include (i) current sales data and historical return rates, (ii) estimates of future demand, and (iii) competitive pricing pressures. The Company classifies inventory markdowns in the income statement as a component of cost of goods sold.
Factors utilized in the determination of estimated market value include (i) current sales data and historical return rates, (ii) estimates of future demand, and (iii) competitive pricing pressures. 32 The Company classifies inventory markdowns in the income statement as a component of cost of goods sold.
Critical Accounting Policies and Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires the Company’s management to make assumptions, estimates, and judgments that affect the amounts reported, including the notes thereto, and related disclosures of commitments and contingencies, if any.
Critical Accounting Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires the Company’s management to make assumptions, estimates, and judgments that affect the amounts reported, including the notes thereto, and related disclosures of commitments and contingencies, if any.
The excess of the purchase price over the estimated fair value is recorded as goodwill. All acquisition costs are expensed as incurred. Upon acquisition, the accounts and results of operations are consolidated as of and subsequent to the acquisition date. 31 At September 30, 2024, the Company had $3,708,347 of goodwill.
The excess of the purchase price over the estimated fair value is recorded as goodwill. All acquisition costs are expensed as incurred. Upon acquisition, the accounts and results of operations are consolidated as of and subsequent to the acquisition date. At September 30, 2025, the Company had $3,708,347 of goodwill.
In fiscal 2024 our financing activities were mainly comprised of proceeds from the Company’s equity public offering, payments on debt, and activity on the revolving line of credit.
In fiscal 2024 our financing activities were mainly comprised of proceeds from the Company’s equity public offerings, payments on debt, and activity on the revolving line of credit.
If a contract is expected to be loss-making, the expected amount of the loss is recognized immediately in the income statement. Revenue from short-term contracts is recognized when delivery has occurred, and collection of the resulting receivable is deemed probable.
If a contract is expected to be loss-making, the expected amount of the loss is recognized immediately in the income statement. Revenue from short-term contracts is recognized when delivery has occurred, and collection of the resulting receivable is deemed probable. Timing of revenue recognition may differ from the timing of invoicing to customers.
For the year ended September 30, 2024, the Company recorded $530,475 of impairment for Goodwill in the Security Segment. For the year September 30, 2023, no impairment of the Company’s goodwill was recorded.
For the year ended September 30, 2024, the Company recorded $530,475 of impairment for Goodwill in the Security Segment.
Contracts The Company’s industrial services segment’s revenue is derived from contracts with customers. These contracts fall into two categories, “Fixed Price” and “Time and Material Price” contracts. The Company determines the appropriate accounting treatment for each contract at its inception. Generally, contracts have a period from six months to two years.
These contracts fall into two categories, “Fixed Price” and “Time and Material Price” contracts. The Company determines the appropriate accounting treatment for each contract at its inception. Generally, contracts have a period from six months to two years.
In particular, the fair value estimate is sensitive to significant assumptions, such as future operating results, cash flows and the weighted average cost of capital. These significant assumptions are forward looking and could be materially affected by future market or economic conditions.
In particular, the fair value estimate is sensitive to significant assumptions, such as future operating results, cash flows, and the weighted average cost of capital. These significant assumptions are forward looking and could be materially affected by future market or economic conditions. For the year September 30, 2025, no impairment of the Company’s goodwill was recorded.
The disclosures shall include: a. the nature of the relationship(s) involved b. description of the transactions, including transactions to which no amounts or nominal amounts were ascribed, for each of the periods for which income statements are presented, and such other information deemed necessary to an understanding of the effects of the transactions on the financial statements; c. the dollar amounts of transactions for each of the periods for which income statements are presented and the effects of any change in the method of establishing the terms from that used in the preceding period; and d. amounts due from or to related parties as of the date of each balance sheet presented and, if not otherwise apparent, the terms and manner of settlement.
The disclosures shall include: a. the nature of the relationship(s) involved b. description of the transactions, including transactions to which no amounts or nominal amounts were ascribed, for each of the periods for which income statements are presented, and such other information deemed necessary to an understanding of the effects of the transactions on the financial statements; c. the dollar amounts of transactions for each of the periods for which income statements are presented and the effects of any change in the method of establishing the terms from that used in the preceding period; and d. amounts due from or to related parties as of the date of each balance sheet presented and, if not otherwise apparent, the terms and manner of settlement. 35 Income Taxes The Company recognizes deferred tax assets and liabilities for temporary differences between the financial reporting basis and the tax basis of the Company’s assets and liabilities and the expected benefits of net operating loss carryforwards.
Gross profit in our Security segment was $16,167,339 or 50% of the segment’s revenues for the year ended September 30, 2024, as compared to gross profit of $17,106,300 or 50% of the segment’s revenues for the year ended September 30, 2023.
Gross profit in our Security segment was $19,085,754 or 50% of the segment’s revenues for the year ended September 30, 2025, as compared to gross profit of $16,167,339 or 50% of the segment’s revenues for the year ended September 30, 2024.
Most of the Company’s sales arrangements with customers in the Security segment are short-term in nature involving single performance obligations related to the delivery of goods or repair of equipment and generally provide for transfer of control at the time of shipment to the customer.
Most of the Company’s sales arrangements with customers in the Security segment are short-term in nature involving single performance obligations related to the delivery of goods and generally provide for transfer of control at the time of shipment to the customer. Additionally, the Company issues additional licenses for its proprietary software.
Investing activities for fiscal year 2023 were mainly driven by the purchase of property and equipment and the acquisition of Heisey Mechanical. Financing activities provided $4,398,599 of cash for the year ended September 30, 2024, as compared to $2,036,655 provided in the year ended September 30, 2023.
Investing activities for fiscal year 2024 were mainly driven by the purchase of property and equipment. 37 Financing activities provided $4,075,261 of cash for the year ended September 30, 2025, as compared to $4,398,599 provided in the year ended September 30, 2024.
Valuation of Goodwill The Company accounts for business combinations under Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 805 “Business Combinations” using the acquisition method of accounting, and accordingly, the assets and liabilities of the acquired business are recorded at their fair values at the date of acquisition.
Changes in the estimated fair value of the warrants are recognized as a non-cash gain or loss in the Company’s Consolidated Statements of Operations. 34 Valuation of Goodwill The Company accounts for business combinations under Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 805 “Business Combinations” using the acquisition method of accounting, and accordingly, the assets and liabilities of the acquired business are recorded at their fair values at the date of acquisition.
Gross profit as a percentage of revenues remained consistent in the years ended September 30, 2024, compared to the year ended September 30, 2023. 32 Gross profit in our Industrial Services segment was $11,310,865 or 32% of the segment’s revenues for the year ended September 30, 2024, as compared to gross profit of $8,579,526 or 34% of the segment’s revenues for the year ended September 30, 2023.
Gross profit in our Industrial Services segment was $13,193,005 or 35% of the segment’s revenues for the year ended September 30, 2025, as compared to gross profit of $11,310,865 or 32% of the segment’s revenues for the year ended September 30, 2024.
The increase in Research and Development expenses are primarily related to the Security Segment’s development of proprietary technology and next generation solutions associated with security and surveillance systems software. Goodwill Impairment For the year ended September 30, 2024, the Company recognized a goodwill impairment charge of $530,475 related to its Security Segment.
The decrease in Research and Development expenses are primarily related to the Security Segment’s development of proprietary technology and next generation solutions associated with security and surveillance systems software which have now come to market. Goodwill Impairment For the year ended September 30, 2025, the Company recorded no goodwill impairment .
Goodwill is tested annually for impairment or if an event occurs or circumstances change that would more likely than not reduce the fair value of the reporting unit below its carrying amount. Other Expense, net Other expense for the year ended September 30, 2024, was $2,206,604 as compared to $4,489,605 for the year ended 2023.
For the year ended September 30, 2024, the Company recognized a goodwill impairment charge of $530,475 related to its Security Segment. Goodwill is tested annually for impairment or if an event occurs or circumstances change that would more likely than not reduce the fair value of the reporting unit below its carrying amount.
The revenue is recognized, and the deposit is applied to the invoice for those goods when those goods are delivered. The company recorded Deposits from customers of $408,415, $57,434, and $73,144 as of September 30, 2024, 2023, and 2022 respectively. These amounts are short-term and are expected to be recognized over the next 12 months.
The company recorded Deposits from customers of $158,344, $408,415, and $57,434, as of September 30, 2025, 2024, and 2023, respectively. These amounts are short-term and are expected to be recognized over the next 12 months. Contracts The Company’s industrial services segment’s revenue is derived from contracts with customers.
These markdowns are estimates, which could vary significantly from actual requirements if future economic conditions, customer demand or competition differ from expectations. There was $1,044,530 and $618,021 in inventory obsolescence reserve at September 30, 2024, and 2023, respectively.
These markdowns are estimates, which could vary significantly from actual requirements if future economic conditions, customer demand, or competition differ from expectations. There was $1,034,798 and $1,044,530 in inventory obsolescence reserves at September 30, 2025, and 2024, respectively. Revenue Recognition The Company accounts for revenue in accordance with ASC 606, Revenue from Contracts with Customers (Topic “ASC 606”) .
In fiscal 2023 our financing activities were mainly comprised of financing of the acquisition of Heisey and the building purchase The Company has incurred substantial losses of $7,229,491 and $9,196,875 for fiscal years 2024 and 2023, respectively, and has debt obligations over the next fiscal year of $7,857,388 and working capital of $8,103,457, that raise substantial doubt with respect to the Company’s ability to continue as a going concern, as discussed in Item 1A of this Form 10-K.
The Company has incurred substantial losses of $28,112,368 and $7,229,491 for fiscal years 2025 and 2024, respectively, and has debt obligations over the next fiscal year of $12,101,593 and working capital of $5,184,339, that raise substantial doubt with respect to the Company’s ability to continue as a going concern, as discussed in Item 1A of this Form 10-K.
Company recognizes revenue at the time a good or service is transferred to a customer and the customer obtains control of that good or receives the service performed.
Under the guidance of the standard, revenue represents the amount received or receivable for goods and services supplied by the Company to its customers. Company recognizes revenue at the time a good or service is transferred to a customer and the customer obtains control of that good or receives the service performed.
The amounts were $1,955,635, $2,311,334, and $1,788,507 as of September 30, 2024, 2023, and 2022 respectively, recorded as Deferred revenue. Short-term deferred revenue of $1,297,616 is expected to be recognized over the next 12 months The Company records a liability when receiving cash in advance of delivering goods to the customer.
The Company records deferred revenue when receiving cash in advance of delivering services to the customer. The deferred revenue is reversed, and revenue is recognized when those services are delivered. The amounts were $1,866,014, $1,955,635, and $2,311,334, as of September 30, 2025, 2024, and 2023 respectively, recorded as Deferred revenue.
General and Administrative Expenses General and Administrative Expenses for the year ended September 30, 2024, increased by $4,930,679 or 21% to $28,860,019 from $23,929,340 for the year ended September 30, 2023.
General and Administrative Expenses General and Administrative Expenses for the year ended September 30, 2025, increased by $565,541 or 2% to $29,425,560 from $28,860,019 for the year ended September 30, 2024.
Gross profit as a percentage of revenues decreased in the year ended September 30, 2024, compared to the year ended September 30, 2023, and was primarily due to lower margins related to Heisey projects that were in operation at the time of the Heisey acquisition.
Gross profit as a percentage of revenues increased in the year ended September 30, 2025, compared to the year ended September 30, 2024, and was primarily due to due to improved margins on projects during the year. Gross profit on the Corporate revenue for the year ended September 30, 2025, was 9,767, or 100% of those revenues.
Gross Profit Gross profit for the year ended September 30, 2024, was $27,478,204 or 41% of revenues as compared to gross profit of $25,685,826 or 43% of revenues for the year ended September 30, 2023.
This revenue is related to the Company’s investment in digital assets during the fourth quarter of the year. Gross Profit Gross profit for the year ended September 30, 2025, was $32,288,526 or 42% of revenues as compared to gross profit of $27,478,204 or 41% of revenues for the year ended September 30, 2024.
Liquidity and Capital Resources Working capital was $8,103,457 at September 30, 2024, compared to $1,948,923 at September 30, 2023. This includes cash and cash equivalents and restricted cash of $5,420,392 at September 30, 2024, and $6,349,562 at September 30, 2023, respectively.
This includes cash and cash equivalents and restricted cash of $6,347,041 at September 30, 2025, and $5,420,392 at September 30, 2024, respectively.
The increase in the expense for income tax is mainly due to an increase in the net income of the Industrial Services segment compared to the prior year. 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.
Income Tax Expense During the fiscal year of 2025 we recorded an income tax expense of $734,880 compared to $202,280 for fiscal year 2024. The increase in the expense for income tax is mainly due to an increase in the net income of the Industrial Services segment compared to the prior year.
Results of Operations - For the fiscal years ending September 30, 2024, and 2023 Revenues Our Security segment revenues for the year ended September 30, 2024, decreased by $2,337,571 or 7%, to $32,021,899 from $34,359,470 for the year ended September 30, 2023. This decrease is due to decreased demand for security technology products under our Vicon brand.
Results of Operations - For the fiscal years ending September 30, 2025, and 202 4 Revenues Our Security segment revenues for the year ended September 30, 2025, increased by $6,376,893 or 20%, to $38,398,792 from $31,021,899 for the year ended September 30, 2024.
Investing activities for continuing operations used $1,257,393 of cash during the year ended September 30, 2024, compared to $5,628,400 used in the year ended September 30, 2023. Investing activities for fiscal year 2024 were mainly driven by the purchase of property and equipment.
Investing activities for fiscal year 2025 were mainly driven by the purchase of property and equipment and investment in digital assets.
Timing of revenue recognition may differ from the timing of invoicing to customers. 30 The Company records deferred revenue when receiving cash in advance of delivering services to the customer. The deferred revenue is reversed, and revenue is recognized when those services are delivered.
Short-term deferred revenue of $1,383,036 is expected to be recognized over the next 12 months. The Company records a liability when receiving cash in advance of delivering goods to the customer. The revenue is recognized, and the deposit is applied to the invoice for those goods when those goods are delivered.
Our Industrial Services segment revenues for the year ended September 30, 2024, increased by $9,832,893 or 39%, to $34,841,985 from $25,009,092 for the year ended September 30, 2023.
Our Industrial Services segment revenues for the year ended September 30, 2025, increased by $3,237,544 or 9%, to $38,079,529 from $34,841,985 for the year ended September 30, 2024. This increase is mainly due to an increased demand for the segment’s products and services. There was unallocated revenue under the Corporate segment of $9,767 for the year ended September 30, 2025.
The increase in general and administrative expenses is mainly due to increases in salaries and wages, travel, and utilities as a result of the acquisition of Heisey completed in the fourth quarter of fiscal year 2023. Research and Development Expenses Research and Development expenses for the years ended September 30, 2024, and 2023 were $3,357,455 and $3,267,994, respectively.
The increase in general and administrative expenses is mainly due to increases in depreciation, insurance, rent and utilities, with insurance, rent and utilities being the result of the new office established in Springfield NJ, and fringe benefits due to increased premiums for employee benefit programs. 36 Research and Development Expenses Research and Development expenses decreased by $1,004,315 or 30% to $2,353,140 from $3,357,455, for the years ended September 30, 2024, and 2024, respectively.
Other expense for the year ended September 30, 2023, was mainly driven by interest expense on the Company’s debt and included an employee retention credit of $416,502. Income Tax Benefit/(Expense) During the fiscal year of 2024 we recorded an income tax expense of $202,280 compared to $394,272 for fiscal year 2023.
Other expense for the year ended September 30, 2025, was mainly driven by interest expense on the Company’s debt, loss on the excess fair value of the Company’s Series A and Series B Warrants exercised during the year, and by the changes in the fair value of the Series A and Series B warrants outstanding at September 30, 2025.
Removed
Revenue Recognition On October 1, 2018, the Company adopted ASU 2014-09, Revenue from Contracts with Customers (Topic 606), using the modified retrospective transition method. Under the guidance of the standard, revenue represents the amount received or receivable for goods and services supplied by the Company to its customers.
Added
These licenses have terms of 1, 3, and 5 years. The Company records deferred revenue and recognizes the revenue over the period of the license. The transaction price is a negotiated price with each customer and is allocated to its performance obligations based on stand-alone selling price.
Removed
Changes in the estimated fair value of the warrants are recognized as a non-cash gain or loss in the Company’s Consolidated Statements of Operations.
Added
The impact of changes in tax rates and laws on deferred taxes, if any, applied during the period in which temporary differences are expected to be settled, is reflected in the Company’s financial statements in the period of enactment.
Removed
Business Combinations The Company accounts for business combinations under Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 805 “Business Combinations” using the acquisition method of accounting, and accordingly, the assets and liabilities of the acquired business are recorded at their fair values at the date of acquisition.
Added
The measurement of deferred tax assets is reduced, if necessary, if, based on weight of the evidence, it is more likely than not that some, or all, of the deferred tax assets will not be realized. The Company had no material amounts recorded for uncertain tax positions, interest, or penalties in the accompanying financial statements.
Removed
The excess of the purchase price over the estimated fair value is recorded as goodwill. All acquisition costs are expensed as incurred. Upon acquisition, the accounts and results of operations are consolidated as of and subsequent to the acquisition date.
Added
This increase is due to a large sale valued at $10,375,000 for security technology products under our Vicon brand. This sale represents 27% of the revenue for this segment for the year ended September 30, 2025.
Removed
This increase is mainly due to an increased demand for the segment’s products and services and additional revenue related to the acquisition of Heisey Mechanical completed in the fourth quarter of fiscal year 2023.
Added
Gross profit as a percentage of revenue remained consistent in the year ended September 30, 2025, compared to the year ended September 30, 2024.
Removed
The increase in working capital was primarily due to the decrease in the Company’s current maturities of long-term liabilities of $9,775,334, a result of the standstill agreement with the holder of $12,440,555 of notes payable and a decrease in the Company’s cash and cash equivalents of $1,432,399 and a decrease inventory of $1,750,690. 33 Operating activities for continuing operations used $3,949,360 of cash for the year ended September 30, 2024, compared to using $4,724,305 of cash for the year ended September 30, 2023.
Added
Other Expense, net Other expense for the year ended September 30, 2025, was $27,823,914 as compared to $2,206,604 for the year ended 2024.
Added
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 $5,184,339 at September 30, 2025, compared to $8,103,457 at September 30, 2024.
Added
The decrease in working capital was primarily due to the increase in the Company’s current maturities of long-term liabilities of $4,193,120, a result of the timing of the Company notes payable coming due and a decrease in the Company’s trade receivables from related parties of $280,295 and a decrease in inventory of $403,585.
Added
Operating activities for continuing operations provided $159,315 of cash for the year ended September 30, 2025, compared to using $3,949,360 cash for the year ended September 30, 2024. Non-cash adjustments to net loss for the year ended September 30, 2025, were $29,970,888 as compared to $4,822,544 for the year ended September 30, 2025.
Added
For fiscal year 2025, the main drivers to this adjustment were depreciation and amortization, loss on the excess value of warrants, and the fair value change in warrant liabilities. For fiscal year 2024, the main drivers for this adjustment were depreciation and amortization, loss on the excess value of warrants, and related party write-offs.
Added
In fiscal 2025 our financing activities were mainly comprised of proceeds from the Company’s equity public offering and notes payable, proceeds from warrant exercises, payments on debt, and activity on the revolving line of credit.
Added
Subsequent to September 30, 2025, the Company completed several financing and capital transactions that have significantly improved liquidity and reduced debt: ■ In December 2025, the Company received $5,657,264 million in gross proceeds from Series B Warrant exercises and issued 2,316,480 shares of common stock upon exercise. ■ On December 8, 2025, the Company issued 2,500,609 shares of common stock to satisfy $6,084,000 of outstanding debt. ■ On December 11, 2025, the Company raised $2,000,000 gross ($1,950,000 net) in a registered direct offering. ■ On December 23, 2025, the Company raised $2,000,000 gross ($1,950,000 net) in a registered direct offering.
Added
These transactions provided approximately $9.6 million in gross cash proceeds and reduced debt by $6.084 million, significantly improving short-term liquidity and supporting ongoing operations and potential acquisitions.