Cemtrex(US:CETX)2025-08-14 20:01PART I. FINANCIAL INFORMATION This section provides Cemtrex, Inc.'s unaudited condensed consolidated financial statements and management's analysis Financial Statements Cemtrex's unaudited financial statements show asset and liability increases, revenue growth, and a substantial net loss due to warrant liabilities, raising going concern doubts Condensed Consolidated Balance Sheets Total assets increased to $47.0 million and total liabilities to $43.1 million as of June 30, 2025, while stockholders' equity decreased Condensed Consolidated Balance Sheet Highlights (in USD) | Metric | June 30, 2025 | September 30, 2024 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $7,032,530 | $3,897,511 | | Total current assets | $29,317,607 | $26,696,279 | | Total Assets | $46,960,823 | $44,115,458 | | Liabilities & Equity | | | | Total current liabilities | $24,400,983 | $18,592,822 | | Warrant liabilities | $8,255,215 | $5,199,436 | | Total liabilities | $43,108,827 | $39,154,616 | | Total Cemtrex stockholders' equity | $3,617,758 | $4,710,677 | Condensed Consolidated Statements of Operations Revenues increased for both three and nine-month periods, with a shift to operating income, but net loss widened significantly due to warrant-related charges Statement of Operations Summary (in USD) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Nine Months Ended June 30, 2025 | Nine Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Revenues | $16,965,658 | $14,686,398 | $57,955,826 | $48,724,159 | | Gross Profit | $7,370,506 | $5,877,147 | $25,237,897 | $19,898,962 | | Operating (Loss)/Income | ($642,401) | ($3,179,516) | $1,692,987 | ($4,950,029) | | Net Loss Attributable to Cemtrex | ($4,543,335) | ($8,981,026) | ($24,914,760) | ($11,661,731) | | Loss per Share (Basic & Diluted) | ($1.78) | ($605.49) | ($11.68) | ($2,232.92) | - The significant increase in net loss for the nine-month period was primarily driven by non-cash expenses, including a $15.7 million loss on the exercise of warrant liabilities and an $8.9 million loss from changes in the fair value of warrant liability13 Condensed Consolidated Statements of Cash Flows Operating activities provided $3.4 million cash, reversing prior year usage, while investing and financing activities saw changes, leading to an overall cash increase Cash Flow Summary (Nine Months Ended June 30) | Cash Flow Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net cash provided by/(used in) operating activities | $3,410,782 | ($2,076,477) | | Net cash used by investing activities | ($1,482,232) | ($406,224) | | Net cash provided by financing activities | $1,117,811 | $3,867,544 | | Net increase/(decrease) in cash | $2,724,967 | $1,270,663 | Notes to Unaudited Condensed Consolidated Financial Statements Notes detail segment operations, reverse stock splits, and a significant 'Going Concern' disclosure due to operational losses and debt, with plans for mitigation - The company operates through two reporting segments: Security (Vicon brand) and Industrial Services (AIS brand)303132 - The company executed two reverse stock splits in late 2024 (60:1 and 35:1) to address Nasdaq's minimum bid price requirement. It also received and subsequently regained compliance with Nasdaq's minimum stockholder's equity requirement multiple times333441 - Management has identified conditions that raise substantial doubt about the company's ability to continue as a going concern, citing historical operational losses and upcoming debt obligations of $12.1 million against working capital of $4.9 million. Mitigating plans include raising capital through equity offerings and utilizing a line of credit424446 Segment Performance (Nine Months Ended June 30, 2025) | Segment | External Revenues | Gross Profit | Operating (Loss)/Income | | :--- | :--- | :--- | :--- | | Security | $30,016,665 | $15,597,177 | $1,666,536 | | Industrial Services | $27,939,161 | $9,640,720 | $2,576,609 | | Corporate | - | - | ($2,550,158) | | Consolidated | $57,955,826 | $25,237,897 | $1,692,987 | - The company entered into Standstill Agreements with Streeterville Capital, LLC, agreeing to pay a portion of equity financing proceeds in exchange for Streeterville not redeeming its outstanding notes. Payments of $636,250 were made under the May 2025 agreement100101 - Subsequent to the quarter-end, the company issued 2,018,577 shares for Series B warrant exercises generating $1.8 million in proceeds, acquired approximately 5,500 units of Solana (SOL) cryptocurrency, and settled $166,050 of debt by issuing 150,000 shares134135136 Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses 18.7% revenue growth, improved gross profit, and a shift to operating income, while reiterating going concern risks due to warrant liabilities and liquidity challenges Revenue by Segment (Three Months Ended June 30) | Segment | 2025 Revenue | 2024 Revenue | % Change | | :--- | :--- | :--- | :--- | | Security | $7,581,814 | $6,193,487 | +22% | | Industrial Services | $9,383,844 | $8,492,911 | +10% | Revenue by Segment (Nine Months Ended June 30) | Segment | 2025 Revenue | 2024 Revenue | % Change | | :--- | :--- | :--- | :--- | | Security | $30,016,665 | $23,446,220 | +28% | | Industrial Services | $27,939,161 | $25,277,939 | +11% | - The 28% revenue increase in the Security segment for the nine-month period was significantly influenced by a single large sale of security technology products valued at $10,375,000153 - Working capital decreased from $8.1 million at September 30, 2024, to $4.9 million at June 30, 2025, primarily due to an increase in the current portion of long-term debt164 - The company's liquidity position is strained, with management stating that working capital may not be sufficient to cover operating costs, raising substantial doubt about its ability to continue as a going concern. Management's plans to address this include raising capital via equity offerings and managing debt through agreements like the Standstill Agreement with Streeterville170171 Controls and Procedures CEO and CFO concluded disclosure controls were effective as of June 30, 2025, with no material changes to internal control over financial reporting - Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of the end of the reporting period, June 30, 2025176 - There were no changes in internal control over financial reporting during the nine months ended June 30, 2025, that have materially affected, or are reasonably likely to materially affect, internal controls177 PART II. OTHER INFORMATION This section covers legal proceedings, risk factors, unregistered sales of equity securities, and a list of exhibits Legal Proceedings No material legal proceedings are pending or threatened against the company that would adversely affect its financial condition - To the company's knowledge, there are no material legal proceedings pending or threatened against the company or its subsidiaries180 Risk Factors No material changes to previously disclosed risk factors were identified; investors should refer to prior annual and quarterly reports - The company refers investors to the risk factors detailed in its previously filed Annual Report for the year ended September 30, 2024, and the Quarterly Report for the quarter ended March 31, 2025, indicating no material changes181 Unregistered Sales of Equity Securities and Use of Proceeds The company issued Series 1 Preferred Stock for dividends and common stock for warrant exercises, generating $1.3 million in proceeds - Issued 252,278 shares of Series 1 Preferred Stock to pay dividends182 - Issued 1,436,749 common shares upon the cashless exercise of Series A Warrants184 - Issued 621,175 common shares upon the exercise of Series B Warrants, which generated $1,307,355 in cash proceeds185 Exhibits This section lists all exhibits filed, including corporate governance documents, material agreements, and CEO/CFO certifications