Cemtrex(CETX) - 2025 Q2 - Quarterly Report

Revenue Growth - Security segment revenues increased by $8,896,220 or 110$16,981,152 for the three months ended March 31, 2025, driven by a large sale of $10,375,000, representing 61$1,194,454 or 13% to $10,269,117 for the three months ended March 31, 2025, due to increased demand for services [136] - Security segment revenues for the six months ended March 31, 2025, increased by$5,182,118 or 30% to $22,434,851, with a large sale of$10,375,000 representing 46% of the segment's revenue [144] Profitability - Gross profit for the three months ended March 31, 2025, was $12,165,455 or 45$6,969,416 or 40% for the same period in 2024 [137] - Gross profit for the six months ended March 31, 2025, was $17,867,391 or 44$14,021,815 or 41% for the same period in 2024 [146] - Other income for the three months ended March 31, 2025, was $4,104,211, primarily driven by gains on changes in fair value of warrant liability of$4,707,374 [142] Expenses Management - Research and Development expenses decreased by $173,511 or 18$777,889 for the three months ended March 31, 2025, related to the development of next-generation security solutions [141] - General and administrative expenses decreased by $128,092 or 1$13,864,031 for the six months ended March 31, 2025, due to reduced salaries and operating expenses [149] Cash Flow and Liquidity - Cash provided by operating activities for the six months ended March 31, 2025, was $1,600,532, contrasting with a cash usage of$2,752,236 for the same period in 2024 [155] - Trade receivables increased by $1,556,316 or 14$12,715,992 at March 31, 2025, attributed to the remaining balance on the large sale in the Security segment [156] - The company currently lacks adequate cash or available liquidity to meet short or long-term needs [160] - There is uncertainty regarding the sufficiency of cash flow from existing or future operations to meet working capital needs [160] - The unaudited condensed consolidated financial statements do not include adjustments related to the company's financial uncertainty [162] Strategic Objectives - The company aims to increase marketing and sales across all segments and expand presence through collaborations and strategic acquisitions [161] - Long-term growth objectives will require sufficient cash, which may be funded through cash on hand, debt issuance, and proceeds from securities sales [161] - The company may face a dilutive effect on existing stockholders if additional capital is raised through equity offerings or debt satisfied with equity [160]