A financial asset measured at amortized cost is initially recognized at fair value plus transaction costs directly attributable to the asset. After initial recognition, the carrying amount of the financial asset measured at amortized cost is determined using the effective interest method, net of impairment loss, if necessary. - 45 - ii. Financial assets measured at FVTOCI A financial asset measured at fair value through other comprehensive income is recognized initially at fair value plus transaction costs ...

Revenue Growth and Composition - Consolidated revenues increased by $2,222,000 (3%) to $69,931,000 in fiscal 2024, driven by Journal Technologies' license and maintenance fees ($4,762,000) and other public service fees ($1,577,000), partially offset by decreased consulting fees ($4,690,000)[174] - Journal Technologies accounted for approximately 76% of the company's revenues in fiscal 2024, with $6,153,000 (9%) derived from foreign countries[175] - Revenues increased by $1,649,000 (3%) to $53,105,000 from $51,456,000 in the prior fiscal year[194] - Licensing and maintenance fees increased by $4,762,000 (20%) to $28,265,000 from $23,503,000[194] - Consulting fees decreased by $4,690,000 (24%) to $15,086,000 from $19,776,000 due to fewer project go-lives[194] - Other public service fees increased by $1,577,000 (19%) to $9,754,000 from $8,177,000 primarily due to increased e-filing fee revenues[194] Operating Expenses and Salaries - Consolidated operating expenses increased by $4,804,000 (8%) to $65,861,000, primarily due to a $3,728,000 (9%) increase in salaries and employee benefits[176] Non-Operating Income and Marketable Securities - Non-operating income increased by $78,758,000 (367%) to $100,208,000, largely due to net realized and unrealized gains on marketable securities of $96,142,000[177] - The fair market value of the company's marketable securities was $358,691,000, with net unrealized gains of $219,597,000 before taxes of $57,100,000[179] Pretax Income and Tax Rate - Consolidated pretax income was $104,278,000 in fiscal 2024, compared to $28,102,000 in the prior year, with net income of $78,113,000 ($56.73 per share)[178] - The effective tax rate for fiscal 2024 was 25.1%, including taxes on realized and unrealized gains on marketable securities[180] Cybersecurity Measures - Journal Technologies hired a Director of Security Operations in August 2024 to oversee cybersecurity strategies and align practices with industry standards[185] - The company employs a multi-layered cybersecurity approach, including threat detection and response, patch management, and network segmentation[187] - The Company maintains a formalized incident response (IR) plan and tests it annually with results reported to senior management[189] - The Company provides regular cybersecurity training for employees, including annual CJIS training and certification[188] - The Company enforces multi-factor authentication (MFA) for all systems and deploys anti-phishing solutions[192] - The Company uses Security Information and Event Management (SIEM) systems for continuous monitoring and logging[192] - The Company maintains a central Risk Register as part of its cybersecurity risk management framework[188] Business Continuity and Disaster Recovery - The Traditional Business and Journal Technologies have implemented Business Continuity Plans and Disaster Recovery (BCP/DR) to minimize downtime and facilitate recovery[191]

18 Table of Contents Class A Convertible Preferred Stock As of September 30, 2024, and December 31, 2023, the Company had authorized 5,000 and 2,500 shares, respectively, of Class E Preferred Stock, of which 0 shares were issued and outstanding as of September 30, 2024, and December 31, 2023. As of September 30, 2024, and December 31, 2023, a total of 19,990,000 shares of preferred stock remains undesignated and unissued. As of September 30, 2024, and December 31, 2023, the Company's authorized common stock ...

Financial Performance - Net sales for fiscal year 2024 were $47,198,020, with a gross profit of $25,913,591[4] - Operating income for fiscal year 2024 was $9,661,537, compared to $7,359,048 in fiscal year 2023[4] - Net income for fiscal year 2024 was $6,998,380, with a basic net income per common share of $0.40[4] - Company reported net sales of $47.2 million in fiscal year 2024, a 35.6% increase from $34.8 million in fiscal year 2023[140] - Net income increased to $7.0 million in fiscal year 2024, up 16.1% from $6.0 million in fiscal year 2023[140] - The company's net income for fiscal year 2023 was $6.0 million, compared to $5.5 million in fiscal year 2022, with fully diluted net income per share of $0.35 in 2023 versus $0.32 in 2022[108] Expenses and Costs - R&D expenses were $3.1 million in fiscal year 2023, decreasing to 9.0% of Net sales from 9.8% in fiscal year 2022[14] - Cost of sales was $13.5 million, or 38.7% of Net sales, in fiscal year 2023, with a gross margin of 61.3% compared to 60.1% in fiscal year 2022[18] - Income tax expense was $1.6 million in fiscal year 2023, with an effective tax rate of 21.1% compared to 24.8% in fiscal year 2022[15] Cash Flow and Financing - Net cash provided by financing activities was $8.5 million for fiscal year 2024, consisting of $43.8 million in payments against the line of credit offset by $52.3 million in additional borrowings[23] - Cash used in investing activities was $16.8 million for fiscal year 2024, primarily due to the $14.2 million acquisition of military display generators and flight control computers[22] Assets and Liabilities - Total assets as of September 30, 2024, were $82,382,261, compared to $62,957,451 in 2023[4] - Total assets increased to $82.38 million in 2024 from $62.96 million in 2023[74] - Accounts receivable rose to $12.61 million in 2024 compared to $9.74 million in 2023[74] - Inventories grew to $12.73 million in 2024 from $6.14 million in 2023[74] - Long-term debt increased to $28.03 million in 2024 from $17.50 million in 2023[74] - Retained earnings improved to $12.67 million in 2024 from $5.67 million in 2023[74] Revenue and Sales - The company's net sales outside the United States were $22.8 million in fiscal year 2024, $15.5 million in 2023, and $11.1 million in 2022[45] - Customer service sales were $11.1 million in 2023, down from $4.9 million in 2022[83] - Engineering and development contracts net sales were $1.1 million in 2023, down from $0.4 million in 2022[83] - Top five customers accounted for 42% of total sales in 2024, down from 54% in 2023[77] - In fiscal year 2024, the company's three largest customers, Pilatus, Textron, and Honeywell, accounted for 23%, 7%, and 7% of total revenue, respectively[125] Acquisitions and Agreements - The company acquired additional key assets and entered into an exclusive license agreement with Honeywell in July 2024 for $4.2 million in cash[144] - Company entered into a $14.2 million agreement with Honeywell for military display generators and flight control computers in September 2024[145] - Company entered into a $35.9 million agreement with Honeywell for inertial, communication, and navigation product lines in June 2023[143] - The Company entered into the September 2024 Honeywell Agreement for $14.2 million in cash, acquiring assets related to military display generators and flight control computers[337] - The exclusive licensing from Honeywell enhances the Company's offerings in air transport, military, and business aviation markets[338] Backlog and Contracts - Backlog at September 30, 2024 was $89.2 million, including $74.3 million from a recent acquisition, with 65% expected to be recognized as revenue over the next 12 months and 98% over the next 24 months[141] - Company secured a multi-million dollar production contract for 19'' Multifunction Display with Integrated Mission Computer in August 2024[142] - The company's backlog at September 30, 2023 was $13.5 million, significantly lower than the $89.2 million backlog at September 30, 2024[141] Market Risk and Interest Rates - A hypothetical 1% increase in variable interest rates would affect interest expense by approximately $0.3 million based on $28.0 million of variable rate debt as of September 30, 2024[46] - The company's exposure to market risk primarily relates to changes in interest rates, particularly from its revolving credit facility[46] - The company's cash equivalents consist of funds invested in money market funds with variable interest rates, and a 1% increase in rates would not materially impact operations[47] Inventory and Suppliers - Inventory write-downs are recorded when the net realizable value is below cost or future demand is lower than current inventory levels[44] - Four suppliers accounted for 63.1% of total inventory purchases in 2024, up from 49.0% in 2023[79] - The company's manufacturing relies on four key suppliers: Honeywell, FilConn, APCT Inc, and Brandywine Precision Inc, which accounted for most of the company's inventory-related purchases in fiscal year 2024[123] Revenue Recognition and Accounting Policies - Revenue recognition for EDC contracts is measured over time using an input measure, such as costs incurred to date relative to total estimated costs at completion[37] - The company's accounting policies require significant judgment and estimates due to inherent uncertainty or complexity[30] - The company uses the relief from royalty method to estimate the fair value of acquired license agreements, considering future expected revenues, royalty rates, and discount rates[59] Intangible Assets and Goodwill - The fair value of acquired license agreements in the September 2024 Honeywell Agreement was estimated at $2,300,000[58] - The company's identifiable intangible assets primarily consist of license agreements, customer relationships, and backlog, recognized at fair value in business combinations[100] - The company's goodwill impairment test is performed annually or in interim periods if certain changes indicate potential impairment, with factors including macroeconomic conditions and financial performance[104] Business Strategy and Operations - The company plans to continue investing in capital equipment to support engineering development efforts and operations[22] - The company operates in one business segment, focusing on flight guidance and cockpit display systems for OEMs and retrofit applications[45] - The company's multi-channel sales strategy targets various aviation sectors, including passenger and cargo aircraft operators, general aviation, MRO dealer networks, and the Department of Defense[119] - Potential cost synergies are expected from better utilization of the Company's engineering team and operational capacity[338] Facilities and Expansion - The company is expanding its Exton facility by 40,000 square feet at an expected cost of $6 million to support commercial growth and recent transactions with Honeywell[118] - Company operates a 45,000 square foot design, manufacturing, and office facility in Exton, Pennsylvania[155] Patents and Employees - Company held over 120 U.S. and international patents as of September 30, 2024[154] - 27% of full-time employees were in engineering-related roles as of September 30, 2024[154] - Company employed 133 full-time employees as of September 30, 2024, up from 98 in September 2023[137] Cybersecurity - The Company has not identified material risks from known cybersecurity threats affecting its operations or financial condition[321] Stock and Market Value - The aggregate market value of common stock held by non-affiliates was $112.2 million as of March 31, 2024[69] Product and Technology - ThrustSense® Autothrottle system selected by US Army for C-12 (B200) aircraft, with deliveries starting in September 2024[142]

Financial Performance - The company incurred substantial losses of $7.2 million and $9.2 million for fiscal years 2024 and 2023, respectively[144] - The company incurred substantial losses of $7,229,491 and $9,196,875 for fiscal years 2024 and 2023, respectively[68] - The company's gross profit was $27,478,204 and $25,685,826 for fiscal years 2024 and 2023, respectively[6] - The company's operating loss was $5,269,745 and $1,511,508 for fiscal years 2024 and 2023, respectively[6] - The company's net loss attributable to Cemtrex, Inc. stockholders was $7,229,491 and $9,196,875 for fiscal years 2024 and 2023, respectively[6] - The company's total operating expenses were $32,747,949 and $27,197,334 for fiscal years 2024 and 2023, respectively[6] - The company's revenues were $66,863,884 and $59,368,562 for fiscal years 2024 and 2023, respectively[6] - The company's cost of revenues was $39,385,680 and $33,682,736 for fiscal years 2024 and 2023, respectively[6] - The company's general and administrative expenses were $28,860,019 and $23,929,340 for fiscal years 2024 and 2023, respectively[6] - Net loss for the year ended September 30, 2024 was $7,635,505, compared to $9,233,438 in the previous year[8] - Comprehensive loss attributable to Cemtrex, Inc. stockholders was $7,356,900 for the year ended September 30, 2024, compared to $8,497,694 in the previous year[8] - Net loss for the year ended September 30, 2024, was $7,635,505, compared to $9,233,438 in 2023[16] - Net loss for 2024 was $(7,635,505), an improvement from $(9,233,438) in 2023[499] - The company's net loss improved to $(7,635,505) in 2024 from $(13,292,242) in 2022[499] - The company incurred net losses of $7.2 million in 2024, $9.2 million in 2023, and $13.0 million in 2022, with an accumulated deficit of $71.4 million as of September 30, 2024[196] Revenue Recognition - Revenue from fixed price contracts is recognized using the percentage-of-completion method[151] - Revenue from time and material price contracts is recognized based on costs incurred and projected markup[152] - The company's contracts generally contain one performance obligation, recognized as revenue over time[153] - Over time revenue recognition increased to 57% in 2024 from 48% in 2023[155] - Point-in-time revenue recognition decreased to 43% in 2024 from 52% in 2023[155] International Operations - International operations accounted for approximately 5.9% of net sales in 2024[140] - Foreign currency translation loss for the year ended September 30, 2024 was $127,409, compared to a gain of $699,181 in the previous year[8] Tax and Warranty Provisions - The company did not take any uncertain tax positions for the years ended September 30, 2024 and 2023[158] - The company may recognize tax benefits from uncertain tax positions only if more likely than not to be sustained[159] - The company provides for estimated costs of product warranties and processes[155] Credit and Inventory Reserves - The company's allowance for credit losses was $155,918 and $234,924 at September 30, 2024, and 2023, respectively[79] - The company's inventory obsolescence reserve was $1,044,530 and $618,021 at September 30, 2024, and 2023, respectively[84] - Inventory obsolescence reserve increased to $1,044,530 as of September 30, 2024, compared to $618,021 in 2023[404] Cash Flow and Financing - Net cash used by operating activities for 2024 was $3,949,360, an improvement from $4,724,305 in 2023[16] - Depreciation and amortization expenses increased to $1,328,741 in 2024 from $1,026,075 in 2023[16] - Goodwill impairment of $530,475 was recorded in 2024, compared to none in 2023[16] - Inventory increased by $1,893,759 in 2024, compared to an increase of $48,598 in 2023[16] - Net cash used by investing activities decreased to $1,257,393 in 2024 from $5,628,400 in 2023[16] - Proceeds from offerings in 2024 amounted to $10,035,292, with expenses of $995,333[16] - Total cash, cash equivalents, and restricted cash decreased to $5,420,392 in 2024 from $6,349,562 in 2023[19] - The company raised $9,039,959 in net proceeds through its May 2024 equity financing[36] - The company anticipates an additional $5 to $10 million when the Series B warrants are exercised[36] - The company raised approximately $9.0 million in net proceeds through May 2024 equity financing and anticipates an additional $5 to $10 million from Series B warrants[193] Stock and Equity - Paid-in additional capital increased to $73,262,536 as of September 30, 2024, up from $68,882,750 in the previous year[11] - Accumulated deficit increased to $71,355,386 as of September 30, 2024, up from $64,125,895 in the previous year[11] - Cemtrex stockholders' equity decreased to $4,710,677 as of September 30, 2024, down from $7,687,614 in the previous year[11] - Noncontrolling interest decreased to $250,165 as of September 30, 2024, down from $656,179 in the previous year[11] - Share-based compensation for the year ended September 30, 2024 was $30,235, compared to $106,839 in the previous year[11][13] - Treasury stock purchases for the year ended September 30, 2024 amounted to $69,705[11] - Shares issued to pay for services during the year ended September 30, 2024 amounted to $169,000[11] - The company completed a 60:1 reverse stock split on October 2, 2024, and a 35:1 reverse stock split on November 26, 2024[23] - The company completed a 60:1 reverse stock split on October 2, 2024, and a 35:1 reverse stock split on November 26, 2024[55] - The company has 1,724,162 shares of common stock outstanding as of December 23, 2024[45] - The company’s common stock had an aggregate market value of $4,249,917 based on the average bid and asked price of $8,799 on March 28, 2024[44] - The company issued 123,167 shares of Series 1 Preferred Stock to pay dividends on October 7, 2024[398] - The company's equity compensation plans had 18 outstanding options with a weighted average exercise price of $105,258.92 as of September 30, 2024[393] Nasdaq Compliance and Delisting - The company received a Nasdaq notification on August 21, 2024, for not meeting the minimum stockholder's equity requirement of $2,500,000[28] - The company may be subject to delisting if it fails to evidence compliance with the stockholders' equity requirement by March 31, 2025[31] - The Company received a Nasdaq notification on July 29, 2022, for failing to meet the minimum bid price requirement of $1.00 for Series 1 Preferred Stock[56] - The Company's Series 1 Preferred Stock was delisted from NASDAQ on January 22, 2024, and is now quoted on OTC Markets under the symbol "CETXP"[57] - The Company received a Nasdaq notification on June 14, 2024, for failing to meet the minimum bid price requirement of $1.00 for common stock[58] - The Company received a Nasdaq notification on August 21, 2024, for failing to meet the minimum stockholder's equity requirement of $2,500,000[59] Corporate Governance - The Company's disclosure controls and procedures were effective as of September 30, 2024[452] - The Board of Directors held four meetings during the fiscal year ended September 30, 2024[469] - The Company is classified as a "Controlled Company" under NASDAQ Listing Rule 5615 and is not required to have a Compensation Committee[481] - Saagar Govil owns 153,153 shares of Series 1 Preferred Stock, representing 1.3% of the voting stock[513] - All directors and executive officers as a group own 203,189 shares, representing 73.1% of the voting stock[513] Related Party Transactions - The company recognized $665,520 of revenue from CXR, Inc. during fiscal year 2024[530] - Trade receivables due from CXR, Inc. amounted to $685,788 as of September 30, 2024[530] - The company's total assets included $456,611 in long-term royalties receivable from CXR, Inc. as of September 30, 2024[530] - The company discounted royalties due to $660,621 and recognized $53,126 in royalties for 2024[529] Segment Performance - Identifiable assets for Security segment decreased to $17,253,328 from $21,829,183[191] - Identifiable assets for Industrial Services segment increased to $24,576,055 from $23,781,349[191] - Total assets decreased to $44,115,458 from $48,453,743[191] Liquidity and Capital Resources - The company has $3,897,511 in cash as of September 30, 2024[36] - The company secured a line of credit for its Vicon brand with available capacity of $1,874,989 as of September 30, 2024[36] - The company’s working capital and current debt indicate substantial doubt regarding its ability to continue as a going concern[36] - The company has approximately $3.9 million in cash as of September 30, 2024[193] - The company secured a line of credit for its Vicon brand with $1.9 million available capacity and a $3.5 million line of credit for its AIS brand as of September 30, 2024[193] - The company’s ability to meet debt obligations depends on financial and operating performance, which is subject to external economic and competitive factors[200] - The company’s ability to secure sufficient credit arrangements is critical for continued operations, with no assurance of obtaining additional equity or debt financing[201] - The company’s substantial debt could adversely affect its ability to raise additional capital and meet obligations[198] - The company’s plans to meet capital demands for the next twelve months may prove inadequate, despite current safeguards[193] Product Development and Market Acceptance - The company’s Vicon brand is introducing new innovative products to grow revenues[36] - The company’s future operating results depend on successful research, development, and marketing of new products and services in the Security segment[210] - The company’s success is heavily dependent on the market acceptance of its technology, which impacts sales, profits, and cash flow[203] Accounting Adjustments - Short-term investments reclassified to Prepaid expenses and other current assets, resulting in a revised amount of $2,112,022[169] - Gain/(loss) on marketable securities reclassified to Prepaid expenses and other current assets, resulting in a revised amount of $(458,476)[169] - Non-cash royalty income correction resulted in a revised Trade receivables - related party amount of $(1,099,070)[171] - Shares issued to pay for services correction resulted in a revised Accounts payable amount of $3,145,469[171] - Trade receivables, net under ASC 326 adoption showed no impact, remaining at $234,924[176] - Contract assets, net increased by $8,696 due to ASC 326 adoption[176] - Royalties receivable, net - related party remained unchanged at $10,000 post ASC 326 adoption[176] Executive Compensation - Total compensation for the PEO in 2024 was $1,089,451, with $702,443 actually paid[499] Share Repurchase Program - The Company repurchased 71,951 shares of Series 1 Preferred Stock for $69,705 under the Share Repurchase Program approved on August 22, 2023[57]

FORM 10-Q For the quarterly period ended September 30, 2024 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 ITEM 4. MINE SAFETY DISCLOSURES 38 | --- | --- | |---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- ...

● Our entertainment operating segment generates product revenues from the sale of tickets directly to consumers for a particular event that the entertainment operating segment has previously purchased and held in inventory for ultimate resale to the end consumer. Service sales through TicketSmarter, are driven largely in part to the usage of the TicketSmarter.com marketplace by buyers and sellers, in which the Company collects service fees for each transaction completed through this platform. We may discoun ...

KWESST MICRO SYSTEMS INC. KWESST Micro Systems Announces Fiscal 2024 Financial Results OTTAWA, December 30, 2024 - KWESST Micro Systems Inc. (TSXV: KWE and KWE.WT.U; NASDAQ: KWE and KWESW) ("KWESST" or the "Company") is pleased to announce the highlights of its fiscal 2024 year-end results. This announcement is a summary only and should be read in conjunction with KWESST's audited consolidated financial statements, related management discussion and analysis, and Form 20-F Annual Report for the year ended Se ...

☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 OR Commission file number: 001-42044 10 Times Square, 30Floor New York, New York 10018 (Address of principal executive offices) Title of Each Class: Trading Symbol(s): Name of Each Exchange on Which Registered: Common Stock, par value $0.0001 per share NNE The Nasdaq Stock Market LLC Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒ Indi ...

ITEM 17. FINANCIAL STATEMENTS See Item 18 - Financial Statements. ITEM 18. FINANCIAL STATEMENTS 100 Consolidated Financial Statements of Years ended September 30, 2024, 2023, and 2022 (Expressed in Canadian Dollars) KWESST MICRO SYSTEMS INC. Table of contents for the years ended September 30, 2024, 2023, and 2022 | --- | --- | |------------------------------------------------------------------------------------|---------| | | Page | | Independent Auditor's Report | F-1 | | FINANCIAL STATEMENTS | | | Consoli ...