Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Sep. 30, 2020 | Dec. 30, 2020 | Mar. 31, 2020 | |
Cover [Abstract] | |||
Entity Registrant Name | CEMTREX INC | ||
Entity Central Index Key | 0001435064 | ||
Document Type | 10-K | ||
Document Period End Date | Sep. 30, 2020 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --09-30 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filer | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business Flag | true | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 5,132,162 | ||
Entity Common Stock, Shares Outstanding | 17,968,177 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2020 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Sep. 30, 2020 | Sep. 30, 2019 |
Current assets | ||
Cash and equivalents | $ 19,490,061 | $ 1,769,994 |
Restricted cash | 1,582,798 | 1,088,091 |
Short-term investments | 887,746 | 412,730 |
Accounts receivables, net | 6,686,797 | 6,458,984 |
Accounts receivables - related party | 1,432,209 | 771,519 |
Notes receivable - short-term | 1,713,371 | |
Inventory -net of allowance for inventory obsolescence | 6,793,806 | 5,207,155 |
Prepaid expenses and other assets | 1,188,317 | 1,455,765 |
Total current assets | 38,061,734 | 18,877,609 |
Property and equipment, net | 9,558,936 | 16,776,552 |
Right-of-use assets | 2,728,380 | |
Assets held for sale | 8,323,321 | |
Goodwill | 4,370,894 | 4,370,894 |
Notes receivable - long-term | 1,586,918 | |
Deferred tax asset | 2,282,867 | |
Other | 744,207 | 497,857 |
Total Assets | 63,787,472 | 44,392,697 |
Current liabilities | ||
Accounts payable | 2,857,817 | 4,236,945 |
Current portion of long -term liabilities | 7,034,510 | 6,817,534 |
Lease liabilities - short-term | 721,036 | 22,718 |
Deposits from customers | 29,660 | 33,074 |
Accrued expenses | 2,392,487 | 2,673,646 |
Deferred revenue | 1,651,784 | 1,433,803 |
Accrued income taxes | 89,318 | 419,541 |
Total current liabilities | 14,776,612 | 15,637,261 |
Long-term liabilities | ||
Loans payable to bank, net of current portion | 1,871,201 | 2,240,526 |
Long-term lease liabilities, net of current portion | 2,027,406 | 20,061 |
Notes payable, net of current portion | 6,029,999 | 2,817,661 |
Mortgage payable, net of current portion | 2,355,542 | |
Other long-term liabilities | 1,063,733 | 1,221,549 |
Series 1 preferred stock dividends payable | 1,081,690 | |
Paycheck Protection Program Loans | 2,169,437 | |
Deferred revenue - long-term | 467,329 | 489,535 |
Total long-term liabilities | 17,066,337 | 6,789,332 |
Total liabilities | 31,842,949 | 22,426,593 |
Commitments and contingencies | ||
Stockholders' equity | ||
Preferred stock value | 2,157 | 2,111 |
Common stock, $0.001 par value, 40,000,000 shares authorized, 17,622,539 shares issued and outstanding at September 30, 2020 and 3,962,790 shares issued and outstanding at September 30, 2019 | 17,623 | 3,963 |
Additional paid-in capital | 63,313,336 | 40,344,837 |
Accumulated deficit | (33,172,690) | (20,067,685) |
Treasury stock at cost | (148,291) | |
Accumulated other comprehensive income | 853,643 | 796,004 |
Cemtrex stockholders' equity | 30,866,878 | 21,080,230 |
Non-controlling interest | 1,077,645 | 885,874 |
Total liabilities and stockholders' equity | 63,787,472 | 44,392,697 |
Series A Preferred Stock [Member] | ||
Stockholders' equity | ||
Preferred stock value | 1,000 | 1,000 |
Cemtrex stockholders' equity | 1,000 | 1,000 |
Preferred Stock Series C [Member] | ||
Stockholders' equity | ||
Preferred stock value | $ 100 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2020 | Oct. 03, 2019 | Sep. 30, 2019 |
Preferred stock, par value | $ 0.001 | $ 0.001 | |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 | |
Preferred stock, shares issued | 3,256,784 | 3,110,718 | |
Preferred stock, shares outstanding | 3,256,784 | 3,110,718 | |
Common stock, par value | $ 0.001 | $ 0.001 | |
Common stock, shares authorized | 40,000,000 | 40,000,000 | |
Common stock, shares issued | 17,622,539 | 3,962,790 | |
Common stock, shares outstanding | 17,622,539 | 3,962,790 | |
Series 1 Preferred Stock [Member] | |||
Preferred stock, shares authorized | 3,000,000 | 3,000,000 | |
Preferred stock, shares issued | 2,156,784 | 2,110,718 | |
Preferred stock, shares outstanding | 2,156,784 | 2,110,718 | |
Preferred stock, liquidation value | $ 10 | $ 10 | |
Series A Preferred Stock [Member] | |||
Preferred stock, shares authorized | 1,000,000 | 1,000,000 | |
Preferred stock, shares issued | 1,000,000 | 1,000,000 | |
Preferred stock, shares outstanding | 1,000,000 | 1,000,000 | |
Preferred Stock Series C [Member] | |||
Preferred stock, par value | $ 0.001 | ||
Preferred stock, shares authorized | 100,000 | 100,000 | 100,000 |
Preferred stock, shares issued | 100,000 | 100,000 | |
Preferred stock, shares outstanding | 100,000 | 100,000 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Income - USD ($) | 12 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Income Statement [Abstract] | ||
Revenues | $ 43,518,384 | $ 39,265,041 |
Cost of revenues | 24,153,937 | 23,702,367 |
Gross profit | 19,364,447 | 15,562,674 |
Operating expenses | ||
General and administrative | 21,570,666 | 21,528,145 |
Research and development | 1,827,286 | 1,481,879 |
Total operating expenses | 23,397,952 | 23,010,024 |
Operating loss | (4,033,505) | (7,447,350) |
Other income (expense) | ||
Other Income | 1,821,029 | (62,705) |
Loss on equity interests | (342,776) | |
Interest expense | (4,607,453) | (4,785,506) |
Total other expense, net | (2,786,424) | (5,190,987) |
Net loss before income taxes | (6,819,929) | (12,638,337) |
Income tax benefit/(expense) | (2,073,835) | 1,335,584 |
Loss from continuing operations | (8,893,764) | (11,302,753) |
Loss from discontinued operations, net of tax | (812,895) | (10,559,963) |
Net loss | (9,706,659) | (21,862,716) |
Less income in noncontrolling interest | 227,116 | 502,225 |
Net loss | (9,933,775) | (22,364,941) |
Preferred dividends | (3,171,230) | (1,965,500) |
Net loss available to Cemtrex, Inc. shareholders | (13,105,005) | (24,330,441) |
Other comprehensive income | ||
Foreign currency translation gain | 57,639 | 1,624,253 |
Other comprehensive income attribitable to noncontrolling interest | (35,345) | (344,952) |
Comprehensive income | 22,294 | 1,279,301 |
Comprehensive loss | $ (13,082,711) | $ (23,051,140) |
Loss Per Share-Basic | ||
Continuing Operations | $ (1.28) | $ (6.07) |
Discontinued Operations | (0.08) | (4.66) |
Loss Per Share-Diluted | ||
Continuing Operations | (1.28) | (6.07) |
Discontinued Operations | $ (0.08) | $ (4.66) |
Weighted Average Number of Shares-Basic | 9,611,516 | 2,267,501 |
Weighted Average Number of Shares-Diluted | 9,611,516 | 2,267,501 |
Consolidated Statements of Shar
Consolidated Statements of Shareholders' Equity - USD ($) | Series 1 Preferred Stock [Member] | Preferred Stock Series C [Member] | Common Stock [Member] | Additional Paid-In Capital [Member] | Retained Earnings (Accumulated Deficit) [Member] | Treasury Stock At Cost [Member] | Accumulated Other Comprehensive Income (Loss) [Member] | Series A Preferred Stock [Member] | Total | Noncontrolling Interest [Member] |
Balance at Sep. 30, 2018 | $ 1,914 | $ 1,622 | $ 31,496,671 | $ 4,262,756 | $ (483,297) | $ 1,000 | $ 35,280,666 | |||
Balance, shares at Sep. 30, 2018 | 1,914,168 | 1,621,719 | 1,000,000 | |||||||
Foreign currency translation gain | 1,624,253 | 1,624,253 | ||||||||
Share-based compensation | 622,231 | 622,231 | ||||||||
Shares issued in Subscription Rights Offering | $ 25 | 138,669 | 138,694 | |||||||
Shares issued in Subscription Rights Offering, shares | 25,126 | |||||||||
Shares issued to pay notes payable | $ 1,847 | 5,022,607 | 5,024,454 | |||||||
Shares issued to pay notes payable, shares | 1,847,830 | |||||||||
Dividends paid in Series 1 preferred shares | $ 197 | 1,965,303 | (1,965,500) | |||||||
Dividends paid in Series 1 preferred shares, shares | 196,550 | |||||||||
Shares issued in trust for ATM Offering | $ 28 | (28) | ||||||||
Shares issued in trust for ATM Offering, shares | 27,953 | |||||||||
Shares sold in ATM Offering | $ 35 | 203,644 | 203,679 | |||||||
Shares sold in ATM Offering, shares | 34,547 | |||||||||
Series B Conversion | $ 176 | 356,270 | 356,446 | |||||||
Series B Conversion, shares | 175,562 | |||||||||
Reverse split rounding shares | $ 3 | 3 | ||||||||
Reverse split rounding shares,shares | 3,338 | |||||||||
Discount on Series B (deemed dividend) | (154,512) | (154,512) | ||||||||
Increase in noncontrolling interest through consolidation accounting | 97,149 | 97,149 | ||||||||
Shares sold in Securities Purchase Agreement | $ 227 | 596,833 | 597,060 | |||||||
Shares sold in Securities Purchase Agreement, shares | 226,715 | |||||||||
Income in noncontrolling interest | (344,952) | (344,952) | 885,874 | |||||||
Net loss | (22,364,941) | (22,364,941) | ||||||||
Balance at Sep. 30, 2019 | $ 2,111 | $ 3,963 | 40,344,837 | (20,067,685) | 796,004 | $ 1,000 | 21,080,230 | 885,874 | ||
Balance, shares at Sep. 30, 2019 | 2,110,718 | 3,962,790 | 1,000,000 | |||||||
Foreign currency translation gain | 22,294 | 22,294 | ||||||||
Share-based compensation | $ 100 | 191,316 | 191,416 | |||||||
Share-based compensation, shares | 100,000 | |||||||||
Shares issued for goods and services | $ 513 | 532,275 | 532,788 | |||||||
Shares issued for goods and services, shares | 513,358 | |||||||||
Shares sold in Securities Purchase Agreements, net of offering costs | $ 6,644 | 11,615,276 | 11,621,920 | |||||||
Shares sold in Securities Purchase Agreements, net of offering costs, shares | 6,643,872 | |||||||||
Shares issued to pay notes payable | $ 6,531 | 8,730,594 | 8,737,125 | |||||||
Shares issued to pay notes payable, shares | 6,530,473 | |||||||||
Dividends paid in Series 1 preferred shares | $ 217 | 2,089,323 | (2,089,540) | |||||||
Dividends paid in Series 1 preferred shares, shares | 217,099 | |||||||||
Income in noncontrolling interest | 35,345 | 35,345 | 191,771 | |||||||
Purchase of treasury stock | $ (338,775) | (338,775) | ||||||||
Accrued dividends | (1,081,690) | (1,081,690) | ||||||||
Cancellation of Shares not issued in 2019 ATM offering | $ (28) | 28 | ||||||||
Cancellation of Shares not issued in 2019 ATM offering, shares | (27,954) | |||||||||
Retirement of treasury stock | $ (171) | (190,313) | 190,484 | |||||||
Retirement of treasury stock, shares | (171,033) | |||||||||
Net loss | (9,933,775) | (9,933,775) | ||||||||
Balance at Sep. 30, 2020 | $ 2,157 | $ 100 | $ 17,623 | $ 63,313,336 | $ (33,172,690) | $ (148,291) | $ 853,643 | $ 1,000 | $ 30,866,878 | $ 1,077,645 |
Balance, shares at Sep. 30, 2020 | 2,156,784 | 100,000 | 17,622,539 | 1,000,000 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Cash Flows from Operating Activities | ||
Net loss | $ (9,706,659) | $ (21,862,716) |
Net loss from discontinued operations | (812,895) | (10,559,963) |
Net loss from continuing operations | (8,893,764) | (11,302,753) |
Adjustments to reconcile net loss to net cash provided/(used) by operating activities: | ||
Depreciation and amortization | 2,898,399 | 3,013,986 |
Gain/(loss) on disposal of property & equipment | 37,910 | 471,019 |
Amortization of right-of-use assets | 816,550 | |
Change in allowance for inventory obsolescence | 636,981 | |
Change in allowance for doubtful accounts | (265,203) | |
Amortization of original issue discounts on notes payable | 944,778 | 108,222 |
Share-based compensation | 191,416 | 622,232 |
Interest expense paid in equity shares | 2,859,125 | 1,590,374 |
Income tax expense/(benefit) | 2,073,835 | (1,335,584) |
Loss on equity interests | 342,776 | |
Changes in operating assets and liabilities net of effects from acquisition of subsidiaries: | ||
Accounts receivable | 37,390 | 3,082,635 |
Accounts receivable - related party | (660,690) | (61,799) |
Inventory | (2,223,632) | 1,341,569 |
Prepaid expenses and other current assets | 267,448 | (240,732) |
Other assets | (246,350) | (27,418) |
Other liabilities | (157,816) | 1,221,549 |
Accounts payable | (846,340) | (2,114,250) |
Operating lease liabilities | (816,549) | |
Deposits from customers | (3,414) | (17,545) |
Accrued expenses | (4,820) | (493,921) |
Deferred revenue | 195,775 | 228,024 |
Income taxes payable | (121,191) | |
Net cash used by operating activities - continuing operations | (3,280,162) | (3,571,616) |
Net cash provided/(used) by operating activities - discontinued operations | (812,895) | 7,507,090 |
Net cash provided/(used) by operating activities | (4,093,057) | 3,935,474 |
Cash Flows from Investing Activities | ||
Net change in self-insured benefit deposits | (494,707) | (1,659,480) |
Purchase of property and equipment | (1,566,014) | 14,000 |
Purchase of marketable securities | (475,016) | (398,291) |
Payments received on notes receivable | 3,300,289 | |
Net cash provided/(used) by investing activities - continuing operations | 764,552 | (2,043,771) |
Net cash provided by investing activities - discontinued operations | 8,883,541 | |
Net cash provided/(used) by investing activities | 764,552 | 6,839,770 |
Cash Flows from Financing Activities | ||
Proceeds from notes payable | 8,485,000 | 2,595,000 |
Payments on notes payable | (851,640) | (414,859) |
Issuance of notes receivable | (3,300,289) | |
Proceeds on bank loans | 3,831,100 | |
Payments on bank loans | (778,090) | (1,440,535) |
Proceeds from securities purchase agreements | 12,462,648 | |
Expenses on securities purchase agreements | (840,728) | |
Proceeds from at-the-market offerings | 957,784 | |
Expenses on at-the-market offerings | (41,438) | |
Proceeds from the issuance of Series B Preferred Stock | 500,000 | |
Expenses from the issuance of Series B Preferred Stock | (25,000) | |
Settlement of Series B Preferred Stock in cash | (273,092) | |
Revolving line of credit | (425,812) | (925,124) |
Purchases of treasury stock | (338,775) | |
Payments on capital lease liabilities | (22,718) | (24,286) |
Net cash provided/used by financing activities - continuing operations | 21,520,985 | (2,391,839) |
Net cash used by financing activities - discontinued operations | (9,465,508) | |
Net cash provided/(used) by financing activities | 21,520,985 | (11,857,347) |
Effect of currency translation | 22,294 | 1,624,253 |
Net increase in cash, cash equivalents, and restricted cash | 18,192,480 | (1,082,103) |
Cash, cash equivalents, and restricted cash at beginning of period | 2,858,085 | 2,315,935 |
Cash, cash equivalents, and restricted cash at end of period | 21,072,859 | 2,858,085 |
Balance Sheet Accounts Included in Cash, Cash Equivalents, and Restricted Cash | ||
Cash and equivalents | 19,490,061 | 1,769,994 |
Restricted cash | 1,582,798 | 1,088,091 |
Total cash, cash equivalents, and restricted cash | 21,072,859 | 2,858,085 |
Supplemental Disclosure of Cash Flow Information: | ||
Cash paid during the period for interest | 1,590,541 | 715,722 |
Cash paid during the period for income taxes | 32,345 | 162,871 |
Supplemental Schedule of Non-Cash Investing and Financing Activities | ||
Investment in Vicon Technologies | 500,000 | 300,000 |
Stock issued to pay for products and/or services | 532,788 | |
Stock issued to pay notes payable | 8,737,125 | 5,047,569 |
Dividends paid in equity shares | $ 2,170,990 | $ 1,965,500 |
Organization
Organization | 12 Months Ended |
Sep. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization | NOTE 1 – ORGANIZATION Cemtrex was incorporated in 1998, in the state of Delaware and has evolved through strategic acquisitions and internal growth into a leading multi-industry technology company. The Company has expanded in a wide range of sectors, including smart technologies, virtual and augmented realities, industrial solutions, and intelligent security systems. Unless the context requires otherwise, all references to “we”, “our”, “us”, “Company”, “registrant”, “Cemtrex” or “management” refer to Cemtrex, Inc. and its subsidiaries. The Company continuously assesses the composition of its portfolio businesses to ensure it is aligned with its strategic objectives and positioned to maximize growth and return in the coming years. During fiscal 2018, the Company made a strategic decision to exit its Electronics Manufacturing group by selling all companies in that business segment on August 15, 2019. Accordingly, the Company has reported the results of the Electronics Manufacturing business as discontinued operations in the Consolidated Statements of Operations and in the Consolidated Balance Sheets. These changes have been applied for all periods presented. During fiscal 2019, the Company also reached a strategic decision to exit the environmental products business, which was part of the Industrial Services Segment. Accordingly, the Company has reported the results of the environmental control products business as discontinued operations in the Consolidated Statements of Operations and in the Consolidated Balance Sheets. Now the Company has two business segments, consisting of (i) Advanced Technologies (AT) and (ii) Industrial Services (IS). Advanced Technologies (AT) Cemtrex’s Advanced Technologies segment delivers cutting-edge technologies in the Internet of Things (IoT) and Smart Devices, such as the SmartDesk. Through the Company’s advanced engineering and product design, the Company delivers Virtual Reality (VR) and Augmented Reality (AR) solutions that provide higher productivity, progressive design and impactful experiences for consumer products, and various commercial and industrial applications. The Company is in the process of developing virtual reality applications for commercialization over the next couple years. The AT business segment also includes the Company’s majority owned subsidiary, Vicon Industries, which provides end-to-end security solutions to meet the toughest corporate, industrial and governmental security challenges. 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 cutting edge, mission critical security and video surveillance solutions utilizing Artificial Intelligence (AI) based data algorithms. Industrial Services (IS) Cemtrex’s IS segment, offers single-source expertise and services for rigging, millwrighting, in plant maintenance, equipment erection, relocation, and disassembly to diversified customers. We install high precision equipment in a wide variety of industrial markets like automotive, printing & graphics, industrial automation, packaging, and chemicals among others. We are a leading provider of reliability-driven maintenance and contracting solutions for the machinery, packaging, printing, chemical, and other manufacturing markets. 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. Going Concern Considerations The Company has incurred substantial losses over the past two fiscal years and has debt obligations over the next fiscal year that raise going concern considerations. The Company has raised capital and will continue to reduce expenses through the use of (i) issuance of notes and subsequent settlement of such notes with equity, (ii) equity offering to qualified investors and at-the-market offerings, (iii) review and improve our business processes for more efficiency, (iv) sale or reallocation of fixed assets held from exited business segments to raise capital or increase revenue in continuing business segments, (v) development of additional products for the Advanced Technologies segment to increase revenues, (vi) cost reductions to improve overall profitability in all segments. The Company believes that these going concern considerations have been alleviated by management’s plans. |
Basis of Presentation and Signi
Basis of Presentation and Significant Accounting Policies | 12 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Significant Accounting Policies | NOTE 2 – BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation and Use of Estimates The Management of the Company is responsible for the selection and use of appropriate accounting policies and the appropriateness of accounting policies and their application. Critical accounting policies and practices are those that are both most important to the portrayal of the Company’s financial condition and results and require management’s most difficult, subjective, or complex judgments, often as a result of the need to make estimates about the effects of matters that are inherently uncertain. The Company’s significant and critical accounting policies and practices are disclosed below as required by generally accepted accounting principles. Basis of Presentation The accompanying consolidated financial statements and related notes have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). Fiscal Year-End The Company elected September 30 as its fiscal year-end date. Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Such estimates include, but are not limited to, provisions for doubtful accounts receivable, net realizable value of inventory, warranty obligations, income tax accruals, deferred tax valuation and assessments of the recoverability of the Company’s long-lived assets. Actual results could differ from those estimates. Principles of Consolidation The consolidated financial statements include the accounts of the Company, its wholly-owned subsidiaries, Cemtrex Advanced Technologies Inc., Cemtrex Ltd., Cemtrex Technologies Pvt. Ltd., and Advanced Industrial Services, Inc. and the Company’s majority-owned subsidiary Vicon Industries, Inc. and its subsidiaries, Telesite USA, Vicon Industries Ltd., Vicon Deutschland GmbH, and Vicon Systems, Ltd. All inter-company balances and transactions have been eliminated in consolidation. Carrying Value, Recoverability and Impairment of Long-Lived Assets The Company’s long-lived assets, which include property and equipment and intangible assets, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The Company assesses the recoverability of its long-lived assets by comparing the projected undiscounted net cash flows associated with the related long-lived asset or group of long-lived assets over their remaining estimated useful lives against their respective carrying amounts. Impairment, if any, is based on the excess of the carrying amount over the fair value of those assets. Fair value is generally determined using the asset’s expected future discounted cash flows or market value, if readily determinable. When long-lived assets are determined to be recoverable, but the newly determined remaining estimated useful lives are shorter than originally estimated, the net book values of the long-lived assets are depreciated over the newly determined remaining estimated useful lives. The impairment charges, if any, is included in operating expenses in the accompanying statements of operations. Cash Equivalents The Company considers all highly liquid investments with maturities of three months or less at the time of purchase to be cash equivalents. Accounts Receivable and Allowance for Doubtful Accounts Accounts receivable are recorded at the invoiced amount, net of an allowance for doubtful accounts. The Company performs on-going credit evaluations of its customers and adjusts credit limits based upon payment history and the customer’s current credit worthiness, as determined by the review of their current credit information; and determines the allowance for doubtful accounts based on historical write-off experience, customer specific facts and general economic conditions that may affect a client’s ability to pay. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. The Company determines when receivables are past due or delinquent based on how recently payments have been received. The Company has $340,848 and $606,051 allowance for doubtful accounts at September 30, 2020 and 2019, respectively. The Company does not have any off-balance-sheet credit exposure to its customers at September 30, 2020 or 2019. Inventory and Cost of Goods Sold The Company values inventory, consisting of finished goods, at the lower of cost or market. Cost is determined on the first-in and first- out (“FIFO”) method. The Company reduces inventory for the diminution of value, resulting from product obsolescence, damage or other issues affecting marketability, equal to the difference between the cost of the inventory and its estimated market value. 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. These markdowns are estimates, which could vary significantly from actual requirements if future economic conditions, customer demand or competition differ from expectations. There was $4,575,193 and $3,938,212 in inventory obsolescence at September 30, 2020 and 2019, respectively. The increase in inventory obsolescence is due to the addition of slow moving and out of date products. Property and Equipment Property and equipment is recorded at cost. Expenditures for major additions and betterments are capitalized. Maintenance and repairs are charged to operations as incurred. Depreciation of property and equipment is computed by the straight-line method over the estimated useful lives of the respective assets, shown in the table below; Estimated Useful Life (Years) Building 30 Furniture and office equipment 5 Computer software 7 Machinery and equipment 7 Upon sale or retirement of property and equipment, the related cost and accumulated depreciation are removed from the accounts and any gain or loss is reflected in statements of operations. Goodwill Goodwill represents the excess of cost over the fair value of net assets of businesses acquired. The Company accounts for goodwill under the guidance of the ASC Topic 350, “Intangibles: Goodwill and Other”. Goodwill acquired in a purchase business combination and determined to have an indefinite useful life is not amortized, but instead tested for impairment, at least annually, in accordance with this guidance. The recoverability of goodwill is subject to an annual impairment test or whenever an event occurs or circumstances change that would more likely than not result in an impairment. The Company tests goodwill for impairment at the reporting unit level on an annual basis as of September 30 and between annual tests when an event occurs or circumstances change that could indicate that the asset might be impaired. In accordance with the FASB revised guidance on “Testing of Goodwill for Impairment,” a company first has the option to assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If the company decides, as a result of its qualitative assessment, that it is more-likely-than- not that the fair value of a reporting unit is less than its carrying amount, the quantitative impairment test is mandatory. Otherwise, no further testing is required. The quantitative impairment test consists of a two-step goodwill impairment test. The first step compares the fair value of each reporting unit to its carrying amount. If the fair value of each reporting unit exceeds its carrying amount, goodwill is not considered to be impaired and the second step will not be required. If the carrying amount of a reporting unit exceeds its fair value, the second step compares the implied fair value of goodwill to the carrying value of a reporting unit’s goodwill. The implied fair value of goodwill is determined in a manner similar to accounting for a business combination with the allocation of the assessed fair value determined in the first step to the assets and liabilities of the reporting unit. The excess of the fair value of the reporting unit over the amounts assigned to the assets and liabilities is the implied fair value of goodwill. This allocation process is only performed for purposes of evaluating goodwill impairment and does not result in an entry to adjust the value of any assets or liabilities. An impairment loss is recognized for any excess in the carrying value of goodwill over the implied fair value of goodwill. For the years ended September 30, 2020, and 2019, there was no impairment of the Company’s goodwill. Leases On October 1, 2019, the Company adopted ASU 2016-02 (Topic 842), “Leases”. ASU 2016-02 requires that a lessee recognize the assets and liabilities that arise from operating leases. A lessee should recognize in the statement of financial position a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term. For leases with a term of 12 months or less, a lessee is permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and lease liabilities. In transition, lessees and lessors may use the effective date method and elected certain practical expedients allowing the Company not to reassess: ● whether expired or existing contracts contain leases under the new definition of a lease; ● lease classification for expired or existing leases; and ● whether previously capitalized initial direct costs would qualify for capitalization under Topic 842. The Company also made the accounting policy decision not to recognize lease assets and liabilities for leases with a term of 12 months or less. Related Parties The financial statements shall include disclosures of material related party transactions, other than compensation arrangements, expense allowances, and other similar items in the ordinary course of business. However, disclosure of transactions that are eliminated in the preparation of consolidated or combined financial statements is not required in those statements. 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. Commitment and Contingencies The Company follows subtopic 450-20 of the FASB Accounting Standards Codification to report accounting for contingencies. Certain conditions may exist as of the date the consolidated financial statements are issued, which may result in a loss to the Company, but which will only be resolved when one or more future events occur or fail to occur. The Company assesses such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company or unasserted claims that may result in such proceedings, the Company evaluates the perceived merits of any legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein. If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company’s consolidated financial statements. If the assessment indicates that a potential material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, and an estimate of the range of possible losses, if determinable and material, would be disclosed. Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the guarantees would be disclosed. Management does not believe, based upon information available at this time, that these matters will have a material adverse effect on the Company’s consolidated financial position, results of operations or cash flows. However, there is no assurance that such matters will not materially and adversely affect the Company’s business, financial position, and results of operations or cash flows. 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. Management determined that there was no cumulative effect adjustment to the consolidated financial statements and the adoption of the standard did not require any adjustments to the consolidated financial statements for prior periods. 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. Most of the Company’s sales arrangements with customers 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. The Company generally permits returns of product or repaired equipment due to defects; however, returns are historically insignificant. In accordance with the authoritative guidance issued by the FASB on revenue recognition, the Company recognizes revenue from cost reimbursable contracts based on the services provided, typically represented by man-hours worked, and is measured by reference to agreed charge-out rates or to the estimated total contract revenue. Revenue from long-term fixed price contracts is recognized using the percentage-of-completion method, measured by reference to physical completion or the ratio of costs incurred to total estimated contract costs. If the outcome of a contract cannot be estimated reliably, as may be the case in the initial stages of completion of the contract, revenue is recognized only to the extent of the costs incurred that are expected to be recoverable. 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. The Company records a liability when receiving cash in advance of delivering goods or services to the customer. This liability is reversed against the receivable recognized when those goods or services are delivered Warranties The Company provides for the estimated cost of product warranties at the time revenue is recognized. While the Company engages in product quality programs and processes, including monitoring and evaluating the quality of its component suppliers, its warranty obligation is affected by product failure rates, material usage and service delivery costs incurred in correcting a product failure. Should actual product failure rates, material usage or service delivery costs differ from its estimates, revisions to the estimated warranty liability may be required. Shipping and Handling Costs The Company accounts for shipping and handling fees in accordance with paragraph 605-45 of the FASB Accounting Standards Codification. Amounts charged to customers for shipping products are included in revenues, the related costs are classified in cost of goods sold as incurred. Income Tax Provision The Company accounts for income taxes under ASC 740-10, which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred tax assets and liabilities are based on the differences between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the assets will not be realized. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the Consolidated Statements of Operations and Comprehensive Income in the period that includes the enactment date. The Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than fifty (50) percent likelihood of being realized upon ultimate settlement. The Company will accrue for interest and penalties on income taxes when there is a likelihood that they will occur and can be reasonably estimated. The estimated future tax effects of temporary differences between the tax basis of assets and liabilities are reported in the accompanying consolidated balance sheets, as well as tax credit carrybacks and carry-forwards. The Company periodically reviews the recoverability of deferred tax assets recorded on its consolidated balance sheets and provides valuation allowances as management deems necessary. Management makes judgments as to the interpretation of the tax laws that might be challenged upon an audit and cause changes to previous estimates of tax liability. In addition, the Company operates within multiple taxing jurisdictions including the United States, India, and The United Kingdom, and is subject to audit in these jurisdictions. In management’s opinion, adequate provisions for income taxes have been made for all years. If actual taxable income by tax jurisdiction varies from estimates, additional allowances or reversals of reserves may be necessary. Uncertain Tax Positions For the years ended September 30, 2020 and 2019, the Company did not take any uncertain tax positions and had no adjustments to its income tax liabilities or benefits. The Company will record any interest and/or penalties arising from uncertain tax provisions when they are likely to occur and reasonably estimable. Accounting for Share-Based Compensation The Company follows ASC 718 (“Share-Based Payment”), which requires that all share-based payments to employees, including stock options, stock appreciation rights (SARs) and common stock share awards, be recognized as compensation expense in the consolidated financial statements based on their fair values and over the requisite service period. The fair value for options granted was determined at the date of grant using a Black-Scholes valuation model and the straight-line attribution approach using the following weighted average assumptions: The risk-free interest rate used in the Black-Scholes valuation method is based on the implied yield currently available in U.S. Treasury securities at maturity with an equivalent term. Other than a one-time dividend paid in fiscal year 2017, the Company never declared or paid any cash dividends and does not currently expect to do so in the future. Expected volatility is based on the annualized daily historical volatility of the Company’s stock over a representative period. The weighted-average expected life represents the period over which stock-based awards are expected to be outstanding and was determined based on a number of factors, including historical weighted average and projected holding periods for the remaining unexercised shares, the contractual terms of the Company’s stock-based awards, vesting schedules and expectations of future employee behavior. Net Income (Loss) per Common Share Basic net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding during the period. Diluted net income per common share is computed by dividing net income by the weighted average number of shares of common stock and potentially dilutive outstanding shares of common stock during the period to reflect the potential dilution that could occur from common shares issuable through contingent share arrangements, stock options and warrants. As of September 30, 2020, and 2019, the following items were excluded from the computation of diluted net loss per common share as their effect is anti-dilutive: For the years ended September 30, 2020 2019 Warrants to purchase shares 945,833 1,050,000 Options 433,965 433,965 Foreign Currency Translation Gain and Comprehensive Income (Loss) In countries in which the Company operates, and the functional currency is other than the U.S. dollar, assets and liabilities are translated using published exchange rates in effect at the consolidated balance sheet date. Revenues and expenses and cash flows are translated using an approximate weighted average exchange rate for the period. Resulting translation adjustments are recorded as a component of accumulated other comprehensive income on the accompanying consolidated balance sheet. For the years ending September 30, 2020 and September 30, 2019, comprehensive loss includes a gain of $22,295 and a gain of $1,279,301, respectively, which were entirely from foreign currency translation. As of and for the year ended September 30, 2020 the Company used the following exchange rates. Currency Exchange rate at Approximate weighted exchange rate Exchange rate at Approximate weighted exchange rate Indian Rupee 0.001 0.014 0.014 0.014 Great Britain Pound 1.320 1.290 1.287 1.248 Cash Flows Reporting The Company adopted uses the indirect or reconciliation method (“Indirect method”) as to report net cash flow from operating activities by adjusting net income to reconcile it to net cash flow from operating activities by removing the effects of (a) all deferrals of past operating cash receipts and payments and all accruals of expected future operating cash receipts and payments and (b) all items that are included in net income that do not affect operating cash receipts and payments. The Company reports the reporting currency equivalent of foreign currency cash flows, using the current exchange rate at the time of the cash flows and the effect of exchange rate changes on cash held in foreign currencies is reported as a separate item in the reconciliation of beginning and ending balances of cash and cash equivalents and separately provides information about investing and financing activities not resulting in cash receipts or payments in the period. Subsequent Events The Company will evaluate subsequent events through the date when the financial statements were issued. It is the Company’s policy to disclose subsequent information that it feels is important to the context of the financial statements. Reclassifications Certain reclassifications have been made to prior period amounts to conform to the current period presentation. Recently Issued Accounting Pronouncements Not Yet Effective Intangibles – Goodwill and Other - Internal-Use Software In August 2018, the FASB issued No. ASU 2018-15, which addresses a customer’s accounting for implementation costs incurred in a cloud computing arrangement that is a service contract. Under the new standard, customers will apply the same criteria for capitalizing implementation costs as they would for an arrangement that has a software license. ASU 2018-15 is effective for annual reporting periods beginning after December 15, 2019, including interim periods within those annual reporting periods, with early adoption permitted. As of September 30, 2020, the Company does not have significant implementation costs incurred in a cloud computing arrangement that is a service contract and therefore upon adoption the impact of the new standard on its consolidated financial statements and related disclosures is not expected to be material. All future implementation costs in such arrangements will be capitalized and amortized over the life of the arrangement, which may have a material impact in those future periods if such costs are material. Fair Value In August 2018, the FASB issued ASU No. 2018-13, which changes the fair value measurement disclosure requirements of ASC 820. ASU 2018-13 will be effective for annual reporting periods beginning after December 15, 2019, including interim periods within those annual reporting periods, with early adoption permitted for any eliminated or modified disclosures upon issuance of this ASU. Upon adoption, the new standard will eliminate certain disclosure requirements in the Company’s consolidated financial statements. Financial Instruments – Credit Losses In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments-Credit Losses (Topic 326) All other Accounting Standards Updates issued but not yet effective are not expected to have a material effect on the Company’s future consolidated financial statements or related disclosures. |
Purchased Assets and Investment
Purchased Assets and Investments | 12 Months Ended |
Sep. 30, 2020 | |
Purchased Assets And Investments | |
Purchased Assets and Investments | NOTE 3 PURCHASED ASSETS AND INVESTMENTS On March 23, 2018, in a private resale transaction, Cemtrex purchased 3,643 (7,284,824 prior to a 2,000-1 reverse stock split) shares of common stock and a warrant to purchase an additional 750 (1,500,000 prior to a 2,000-1 reverse stock split) shares of common stock of Vicon Industries, Inc. (OTCMKTS: VCON), (“Vicon”), from a former Vicon shareholder NIL Funding Corporation, pursuant to the terms of a Securities Purchase Agreement. Cemtrex’s purchase of the Vicon Industries common stock and warrant resulted in its beneficial ownership of approximately 46% of the outstanding shares of common stock of Vicon. Cemtrex purchased the shares of common stock and warrant of Vicon Industries in exchange for 126,579 shares of Cemtrex common stock. Following the closing of the transaction, Saagar Govil, Cemtrex’s Chairman and Chief Executive Officer, and Aron Govil, Cemtrex’s Executive Director, joined the Vicon Industries Board of Directors and Saagar Govil assumed the position of Chief Executive Officer of Vicon Industries. Following the resignation of all other Board members by January 2019, the Company gained the ability to exercise significant management control over the operations of Vicon. Because of this increased management ability, and pursuant to GAAP, the Company has consolidated the accounts of Vicon into its financial statements beginning as of January 14, 2019. Prior to January 14, 2019, the Company reported its 48% ownership of Vicon as an asset with a balance of $1,356,495 and was using the equity method of accounting for this asset. At January 14, 2019, the fair market value of the Company’s investment in Vicon was determined to be $527,089 and the Company reported as other expense a loss of $829,406, to adjust the carrying value to fair value under ASC 805. Upon recording the fair value of the assets and liabilities of Vicon, $1,893,075 was recorded as Goodwill. On May 13, 2019, the Company acquired 7,500 (15,000,000 prior to a 2,000-1 reverse stock split) shares of Vicon common stock in exchange for $300,000 owed by Vicon to the Company for services provided. On February 21, 2020, the Company purchased 71,429 shares for $500,000. The Company now owns approximately 95% of Vicon’s outstanding shares of common stock. |
Discontinued Operations
Discontinued Operations | 12 Months Ended |
Sep. 30, 2020 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Discontinued Operations | NOTE 4 – DISCONTINUED OPERATIONS EXIT FROM ENVIRONMENTAL BUSINESS During fiscal 2019, the Company also reached a strategic decision to exit the environmental products business, which was part of Industrial Services group. Accordingly, the Company has reported the results of the environmental control products business as discontinued operations in the Consolidated Statements of Operations and in the Consolidated Balance Sheets. Assets and liabilities included within discontinued operations on the Company’s Consolidated Balance Sheets at September 30, 2020 and 2019 are as follows; September 30, September 30, Assets 2020 2019 Current assets Trade receivables - related party 544,500 555,600 Total current assets 544,500 555,600 Property and equipment, net 8,761,677 Assetss held for sale 8,323,321 - Total Assets $ 8,867,821 $ 9,317,277 Liabilities Current liabilities Accounts payable $ - $ 263,832 Total liabilities $ - $ 263,832 Loss from discontinued operations, net of tax and the loss on sale of discontinued operations, net of tax, of the ROB Cemtrex Companies and Griffin Filters business, sold during fiscal year 2019, which are presented in total as discontinued operations, net of tax in the Company’s Consolidated Statements of Operations for the years ended September 30, are as follows: Year ended September 30, 2020 2019 Total net sales $ - $ 42,614,107 Cost of sales - 25,788,268 Operating, selling, general and administrative expenses 812,895 20,374,141 Other expenses - 264,505 Income (loss) from discontinued operations (812,895 ) (3,812,807 ) Loss on sale of discontinued operations - (6,374,563 ) Income tax provision - 372,593 Discontinued operations, net of tax $ (812,895 ) $ (10,559,963 ) |
Segment and Geographic Informat
Segment and Geographic Information | 12 Months Ended |
Sep. 30, 2020 | |
Segment Reporting [Abstract] | |
Segment and Geographic Information | NOTE 5 – SEGMENT AND GEOGRAPHIC INFORMATION The Company reports and evaluates financial information for two segments: Advanced Technologies (AT) segment, and the Industrial Services (IS) segment. The AT segment develops smart devices and provides progressive design and development solutions to create impactful experiences for mobile, web, virtual and augmented reality, wearables and television as well as providing cutting edge, mission critical security and video surveillance. The IS segment offers single-source expertise and services for rigging, millwrighting, in plant maintenance, equipment erection, relocation, and disassembly to diversified customers in USA in industries such as: chemical, steel, printing, construction, & petrochemical. The following tables summarize the Company’s segment information: For the years ended September 30, 2020 2019 Revenues from external customers Advanced Technologies $ 25,750,684 $ 19,268,687 Industrial Services 17,767,700 19,996,354 Total revenues $ 43,518,384 $ 39,265,041 Gross profit Advanced Technologies $ 12,924,371 $ 8,296,186 Industrial Services 6,440,076 7,266,488 Total gross profit $ 19,364,447 $ 15,562,674 Operating loss Advanced Technologies $ (2,700,997 ) $ (5,633,572 ) Industrial Services (1,332,508 ) (1,813,778 ) Total operating loss $ (4,033,505 ) $ (7,447,350 ) Other expense Advanced Technologies $ (2,588,609 ) $ (4,441,385 ) Industrial Services (197,815 ) (406,826 ) Total other expense $ (2,786,424 ) $ (4,848,211 ) Depreciation and Amortization Advanced Technologies $ 1,519,022 $ 1,350,079 Industrial Services 1,379,377 1,663,907 Total depreciation and amortization $ 2,898,399 $ 3,013,986 September 30, September 30, 2020 2019 Identifiable Assets Advanced Technologies $ 39,953,522 $ 19,365,582 Industrial Services 15,510,629 16,209,838 Discontinued operations 8,867,821 $ 9,317,277 Total Assets $ 64,331,972 $ 44,892,697 The Company generates revenue from product sales and services from its subsidiaries located in the United States, The United Kingdom, and India. Revenue and long-lived asset information for the Company is as follows: September 30, September 30, Revenues 2020 2019 U.S. Operations $ 40,211,773 $ 35,320,625 Non-U.S. Operations 3,306,611 3,944,416 $ 43,518,384 $ 39,265,041 September 30, September 30, Long-lived Assets 2020 2019 U.S. Operations $ 6,793,597 $ 5,395,353 Non-U.S. Operations 2,765,339 11,381,199 $ 9,558,936 $ 16,776,552 |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Sep. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | NOTE 6 – FAIR VALUE MEASUREMENTS Fair value is defined as the price that would be received upon sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A three-level hierarchy is applied to prioritize the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy under the guidance for fair value measurements are described below: Level 1 — Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. Our Level 1 assets include cash equivalents, banker’s acceptances, trading securities investments and investment funds. We measure trading securities investments and investment funds at quoted market prices as they are traded in an active market with sufficient volume and frequency of transactions. Level 2 — Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. If the asset or liability has a specified contractual term, a Level 2 input must be observable for substantially the full term of the asset or liability. Level 3 — Level 3 inputs are unobservable inputs for the asset or liability in which there is little, if any, market activity for the asset or liability at the measurement date. Level 3 assets and liabilities include cost method investments, goodwill, intangible assets, and property, plant and equipment, which are measured at fair value using a discounted cash flow approach when they are impaired. Quantitative information for Level 3 assets and liabilities reviewed at each reporting period includes indicators of significant deterioration in the earnings performance, credit rating, asset quality, business prospects of the investee, and financial indicators of the investee’s ability to continue as a going concern. The Company’s fair value assets for the years ended September 30, 2020 and 2019 are as follows; Quoted Prices Significant Significant Balance Assets Investment in marketable securities (included in short-term investments) $ 887,746 $ - $ - $ 887,746 $ 887,746 $ - $ - $ 887,746 Quoted Prices Significant Significant Balance Assets Investment in marketable securities (included in short-term investments) $ 412,730 $ - $ - $ 412,730 $ 412,730 $ - $ - $ 412,730 The Company’s investments are actively traded in the stock and bond markets. Therefore, there is either a realized gain or loss that is recorded when a sale happens. For the fiscal year ended September 30, 2020 the Company had sales of equity securities which yielded gross realized gains of $1,663,311 and gross realized losses of $28,229. |
Restricted Cash
Restricted Cash | 12 Months Ended |
Sep. 30, 2020 | |
Cash and Cash Equivalents [Abstract] | |
Restricted Cash | NOTE 7 – RESTRICTED CASH A subsidiary of the Company participates in a consortium in order to self-insure group care coverage for its employees. The plan is administrated by Benecon Group and the Company makes monthly deposits in a trust account to cover medical claims and any administrative costs associated with the plan. These funds, as required by the plan are restricted in nature and amounted to $1,582,798 and $1,088,091 as of September 30, 2020 and 2019, respectively. The Company also records a liability for claims that have been incurred but not recorded at the end of each year. The amount of the liability is determined by Benecon Group. The liability recorded in accrued expenses amounted to $98,056 and $118,889 as of September 30, 2020 and 2019, respectively. |
Accounts Receivable, Net
Accounts Receivable, Net | 12 Months Ended |
Sep. 30, 2020 | |
Receivables [Abstract] | |
Accounts Receivable, Net | NOTE 8 – ACCOUNTS RECEIVABLE, NET Accounts receivable, net consists of the following: September 30, September 30, 2020 2019 Accounts receivable $ 7,027,645 $ 7,065,035 Allowance for doubtful accounts (340,848 ) (606,051 ) $ 6,686,797 $ 6,458,984 Accounts receivable include amounts due for shipped products and services rendered. Allowance for doubtful accounts include estimated losses resulting from the inability of our customers to make required payments. |
Inventory, Net
Inventory, Net | 12 Months Ended |
Sep. 30, 2020 | |
Inventory Disclosure [Abstract] | |
Inventory, Net | NOTE 9 – INVENTORY, NET Inventory, net of reserves, consist of the following: September 30, September 30, 2020 2019 Raw materials $ 3,959,888 $ 4,917,700 Work in progress 995,184 543,857 Finished goods 6,413,927 3,683,810 11,368,999 9,145,367 Less: Allowance for inventory obsolescence (4,575,193 ) (3,938,212 ) Inventory –net of allowance for inventory obsolescence $ 6,793,806 $ 5,207,155 |
Property and Equipment
Property and Equipment | 12 Months Ended |
Sep. 30, 2020 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | NOTE 10 – PROPERTY AND EQUIPMENT Property and equipment are summarized as follows: September 30, September 30, 2020 2019 Land $ 790,373 $ - Building and leasehold improvements 3,875,796 1,233,733 Furniture and office equipment 621,790 614,569 Computers and software 4,985,749 5,166,922 Trade show display 89,330 89,330 Machinery and equipment 13,668,263 23,463,953 24,031,301 30,568,507 Less: Accumulated depreciation (14,472,365 ) (13,791,955 ) Property and equipment, net $ 9,558,936 $ 16,776,552 The Company completed the annual impairment test of property and equipment and determined that there was no impairment as the fair value of property and equipment, substantially exceeded their carrying values at September 30, 2019. Depreciation and amortization of property and equipment totaled approximately $2,898,399 and $3,013,986 for fiscal years ended September 30, 2020 and 2019, respectively. At September 30, 2020, the Company has $8,323,321 net value of property and equipment reported on the Consolidated Balance Sheet as Assets held for sale. |
Leases
Leases | 12 Months Ended |
Sep. 30, 2020 | |
Leases [Abstract] | |
Leases | NOTE 11 – LEASES ASC 842, “Leases”, requires that a lessee recognize the assets and liabilities that arise from operating leases. A lessee should recognize in the statement of financial position a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term. For leases with a term of 12 months or less, a lessee is permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and lease liabilities. In transition, lessees and lessors are required to recognize and measure leases at either the effective date (the “effective date method”) or the beginning of the earliest period presented (the “comparative method”) using a modified retrospective approach. Under the effective date method, the Company’s comparative period reporting is unchanged. In contrast, under the comparative method, the Company’s date of initial application is the beginning of the earliest comparative period presented, and the Topic 842 transition guidance is then applied to all comparative periods presented. Further, under either transition method, the standard includes certain practical expedients intended to ease the burden of adoption. The Company adopted ASC 842 October 1, 2019 using the effective date method and elected certain practical expedients allowing the Company not to reassess: ● whether expired or existing contracts contain leases under the new definition of a lease; ● lease classification for expired or existing leases; and ● whether previously capitalized initial direct costs would qualify for capitalization under Topic 842. The Company also made the accounting policy decision not to recognize lease assets and liabilities for leases with a term of 12 months or less. The Company entered into a financing lease for a single vehicle in the Industrial services segment with a term of 3 years. The Company enters into operating leases for its facilities in New York, United Kingdom, and India, as well as for vehicles for use in our Industrial Services segment. The operating lease terms range from 2 to 7 years. The Company excluded the renewal option on its applicable facility leases from the calculation of its right-of-use assets and lease liabilities. Finance and operating lease liabilities consist of the following: September 30, September 30, 2020 2019 Lease liabilities - current Finance leases $ 20,061 $ 22,452 Operating leases 700,975 - 721,036 22,452 Lease liabilities - net of current portion Finance leases $ - $ 20,061 Operating leases 2,027,406 - $ 2,027,406 $ 20,061 A reconciliation of undiscounted cash flows to finance and operating lease liabilities recognized in the condensed consolidated balance sheet at September 30, 2020 is set forth below: Years ending September 30, Finance leases Operating Leases Total 2021 20,862 838,028 858,890 2022 - 659,505 659,505 2023 - 505,550 505,550 2024 - 387,998 387,998 2025 - 364,974 364,974 2026 - 375,923 375,923 Undiscounted lease payments 20,862 3,131,978 3,152,840 Amount representing interest (801 ) (403,597 ) (404,398 ) Discounted lease payments $ 20,061 $ 2,728,381 $ 2,748,442 Additional disclosures of lease data are set forth below: For the year ended September 30, 2020 Lease costs: Finance lease costs: Depreciation of finance lease assets $ 22,912 Interest on lease liabilities 832 Operating lease costs: Amortization of right-of-use assets 816,550 Interest on lease liabilities 59,122 Total lease cost $ 899,416 Other information: Cash paid for amounts included in the measurement of lease liabilities: Operating leases $ 816,549 Finance leases 22,718 $ 839,267 Weighted-average remaining lease term - finance leases (months) 10 Weighted-average remaining lease term - operating leases (months) 51 Weighted-average discount rate - finance leases 3.63 % Weighted-average discount rate - operating leases 6.64 % The Company used the rate implicit in the lease, where known, or its incremental borrowing rate as the rate used to discount the future lease payments. |
Prepaid and Other Current Asset
Prepaid and Other Current Assets | 12 Months Ended |
Sep. 30, 2020 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Prepaid and Other Current Assets | NOTE 12 – PREPAID AND OTHER CURRENT ASSETS On September 30, 2020, the Company had prepaid and other current assets consisting of prepayments on inventory purchases of $101,308, and other current assets of $1,087,009. On September 30, 2019, the Company had prepaid and other current assets consisting of prepayments on inventory purchases of $530,447, and other current assets of $925,318. |
Other Assets
Other Assets | 12 Months Ended |
Sep. 30, 2020 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Other Assets | NOTE 13 - OTHER ASSETS As of September 30, 2020, the Company had other assets of $744,207 which was comprised of rent security deposits of $294,553, other assets of $449,654. As of September 30, 2019, the Company had other assets of $497,857 which was comprised of rent security deposits of $127,246, other assets of $370,611. |
Lines of Credit and Long-Term L
Lines of Credit and Long-Term Liabilities | 12 Months Ended |
Sep. 30, 2020 | |
Debt Disclosure [Abstract] | |
Short-Term Liabilities | NOTE 14 – LINES OF CREDIT AND LONG-TERM LIABILITIES Lines of credit The Company currently has a line of credit with Fulton Bank for $3,500,000. The line carries an interest of LIBOR plus 2.00% per annum (3.98% as of September 30, 2020). At September 30, 2020 there was no outstanding balance on this line of credit. Loans payable to bank On December 15, 2015, the Company acquired a loan from Fulton Bank in the amount of $5,250,000 in order to fund the purchase of Advanced Industrial Services, Inc. $5,000,000 of the proceeds went to direct purchase of AIS. This loan carries interest of LIBOR plus 2.25% per annum (4.23% as of September 30, 2020) and is payable on December 15, 2022. This loan carries loan covenants which the Company was in compliance with as of September 30, 2020. On December 15, 2015, the Company acquired a loan from Fulton Bank in the amount of $620,000 in order to fund the operations of Advanced Industrial Services, Inc. This loan carries interest of LIBOR plus 2.00% per annum (3.98% as of September 30, 2020) and is payable on December 15, 2020. This loan carries loan covenants which the Company was in compliance with as of September 30, 2020. On May 1, 2018, the Company acquired a loan from Fulton Bank in the amount of $400,000 in order to fund new equipment for Advanced Industrial Services, Inc. This loan carries interest of LIBOR plus 2.00% per annum (3.98% as of September 30, 2020) and is payable on May 1, 2023. This loan carries loan covenants which the Company was in compliance with as of September 30, 2020. On January 28, 2020, the Company acquired a loan from Fulton Bank in the amount of $360,000 in order to fund new equipment for Advanced Industrial Services, Inc. This loan carries interest of LIBOR plus 2.25% per annum (4.23% as of September 30, 2019) and is payable on May 1, 2023. This loan carries loan covenants which the Company was in compliance with as of September 30, 2020. Notes payable On December 23, 2019, the Company, issued a note payable to an independent private lender in the amount of $1,725,000. This note carries interest of 8% and matures on June 23, 2021. After deduction of an original issue discount of $225,000 and legal fees of $5,000, the Company received $1,495,000 in cash. On April 24, 2020, the Company, issued a note payable to an independent private lender in the amount of $1,725,000. This note carries interest of 8% and matures on October 24, 2021. After deduction of an original issue discount of $225,000 and legal fees of $5,000, the Company received $1,495,000 in cash. On September 30, 2020, the Company, issued a note payable to an independent private lender in the amount of $4,605,000. This note carries interest of 8% and matures on March 30, 2022. After deduction of an original issue discount of 600,000 and legal fees of $5,000, the Company received $4,000,000 in cash. On March 3, 2020, Vicon, a subsidiary of the Company amended the $5,600,000 Term Loan Agreement with NIL Funding Corporation (“NIL”). Upon closing, $500,000 of outstanding borrowings were repaid to NIL, additionally, another $500,000 is to be paid in one year. The Agreement requires monthly payments of accrued interest that began on October 1, 2018. This note carries interest of 8.85% and matures on March 30, 2022. This note carries loan covenants which the Company is in compliance with as of September 30, 2020. Mortgage Payable On January 28, 2020, the Company’s subsidiary, Advanced Industrial Services, Inc., completed the purchase of two buildings for a total purchase price of $3,381,433. The Company paid $905,433 in cash and acquired a mortgage from Fulton Bank in the amount of $2,476,000. This mortgage carries interest of LIBOR plus 2.50% per annum and is payable on January 28, 2040. This loan carries loan covenants similar to covenants on The Company’s other loans from Fulton Bank. As of September 30, 2020, the Company was in compliance with these covenants. Paycheck Protection Program Loans In April and May of 2020, the Company and its subsidiaries applied for and were granted $3,471,100 in Paycheck Protection Program loans under the CARES Act. These loans bear interest of 2% and mature in two years. The Company will apply for and fully expects these loans to be forgiven under the provisions of the CARES Act and any subsequent legislation that may be applicable. These loans are recorded under Paycheck Protection Program Loans on our Condensed Consolidated Balance Sheet as of September 30, 2020, net of the short-term portion of $1,301,663. Estimated maturities of our long-term debt over the next 5 years are as follows; 2021 2022 2023 2024 2025 Thereafter Total Fulton Bank - $5,250,000 $ 713,548 782,269 668,767 - - - $ 2,164,584 Fulton Bank - $620,000 $ 58,897 - - - - - $ 58,897 Fulton Bank - $400,000 $ 78,995 85,792 81,886 - - - $ 246,673 Fulton Bank - $360,000 $ 67,291 69,024 72,243 75,111 47,866 - $ 331,535 Fulton Bank - Mortgage payable $ 81,329 84,574 88,266 92,120 96,142 1,913,111 $ 2,355,542 NIL Funding $ 800,000 3,825,000 - - - - $ 4,625,000 PPP Loans $ 1,301,663 2,169,437 - - - - $ 3,471,100 Notes Payable (1) $ 3,932,787 2,205,000 - - - - $ 6,137,787 TOTAL $ 7,034,510 $ 9,221,096 $ 911,162 $ 167,231 $ 144,008 $ 1,913,111 $ 19,391,118 (1) Net of unamortized original issue discounts of $875,000 |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Sep. 30, 2020 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | NOTE 15 – RELATED PARTY TRANSACTIONS On August 31, 2019, the Company entered into an Asset Purchase Agreement for the sale of Griffin Filters, LLC to Ducon Technologies, Inc., which Aron Govil, the Company’s CFO, is President, for total consideration of $550,000. As of September 30, 2020, and 2019, there was $1,432,209 and $771,519 in receivables due from Ducon Technologies, Inc., respectively. At September 30, 2020, $500,000 of the balance due is for the sale of Griffin, due in February 2021, and the remaining balance are various receivables with various due dates within the next fiscal year. On May 1, 2020, Company invested $500,000 in a registered S-1 stock offering of Telidyne Inc., an OTC listed company, by purchasing 166,667 shares of common stock at $3.00 per share. Telidyne Inc. is controlled by the Company’s former CFO and Executive Director, Aron Govil. On September 30, 2020, the Company decided to withdraw its investment, the transaction was cancelled and all proceeds were returned. |
Shareholders' Equity
Shareholders' Equity | 12 Months Ended |
Sep. 30, 2020 | |
Equity [Abstract] | |
Shareholders' Equity | NOTE 16 – SHAREHOLDERS’ EQUITY On July 27, 2020, the Company amended the Company’s Certificate of Incorporation (the “Amended Certificate of Incorporation”) which was duly approved by the Company’s Board of Directors and duly adopted by the Company’s shareholders increasing the number of authorized shares of all classes of stock from 30,000,000 shares to 50,000,000 shares with 40,000,000 designated as Common Stock and 10,000,000 designated as Preferred Stock. Preferred Stock The Company is authorized to issue 10,000,000 shares of Preferred Stock, $0.001 par value. As of September 30, 2020, and September 30, 2019, there were 3,256,784 and 3,110,718 shares issued and outstanding, respectively. Series A Preferred stock Each issued and outstanding Series A Preferred Share shall be entitled to the number of votes per share equal to the result of: (i) the number of shares of common stock of the Company issued and outstanding at the time of such vote multiplied by 1.01; divided by (ii) the total number of Series A Preferred Shares issued and outstanding at the time of such vote, at each meeting of shareholders of the Company with respect to any and all matters presented to the shareholders of the Company for their action or consideration, including the election of directors. Holders of Series A Preferred Shares shall vote together with the holders of Common Shares as a single class. The Series A Preferred Stock has no liquidation value or preference. During the twelve-month periods ended September 30, 2020 and 2019, the Company did not issue any Series A Preferred Stock. As of September 30, 2020, and September 30, 2019, there were 1,000,000 shares of Series A Preferred Stock issued and outstanding, respectively. Series C Preferred Stock On October 3, 2019, pursuant to Article IV of our Articles of Incorporation, our Board of Directors voted to designate a class of preferred stock entitled Series C Preferred Stock, consisting of up to one hundred thousand (100,000) shares, par value $0.001. Under the Certificate of Designation, holders of Series C Preferred Stock are entitled to the number of votes per share equal to the result of (i) the total number of shares of Common Stock outstanding at the time of such vote multiplied by 10.01, and divided by (ii) the total number of shares of Series C Preferred Stock outstanding at the time of such vote, at each meeting of our shareholders with respect to any and all matters presented to our shareholders for their action or consideration, including the election of directors. For the year ended September 30, 2020, 100,000 shares of Series C Preferred Stock were issued to Aron Govil, Executive former Director and CFO of the Company as part of his employment agreement. In order to determine the fair market value of these shares the Company used the closing price of its Series 1 preferred stock of $0.95 on October 3, 2019. On July 10, 2020, Aron Govil transferred 50,000 shares of the Series C Preferred Stock to Saagar Govil. As of September 30, 2020, there were 100,000 shares of Series C Preferred Stock issued and outstanding. Series 1 Preferred Stock Dividends Holders of the Series 1 Preferred will be entitled to receive cumulative cash dividends at the rate of 10% of the purchase price per year, payable semiannually on the last day of March and September in each year. Dividends may also be paid, at our option, in additional shares of Series 1 Preferred, valued at their liquidation preference. The Series 1 Preferred will rank senior to the common stock with respect to dividends. Dividends will be entitled to be paid prior to any dividend to the holders of our common stock. Liquidation Preference The Series 1 Preferred will have a liquidation preference of $10 per share, equal to its purchase price. In the event of any liquidation, dissolution or winding up of our company, any amounts remaining available for distribution to stockholders after payment of all liabilities of our company will be distributed first to the holders of Series 1 Preferred, and then pari passu Voting Rights Except as otherwise provided in the certificate of designation, preferences and rights or as required by law, the Series 1 Preferred will vote together with the shares of our common stock (and not as a separate class) at any annual or special meeting of stockholders. Except as required by law, each holder of shares of Series 1 Preferred will be entitled to two votes for each share of Series 1 Preferred held on the record date as though each share of Series 1 Preferred were 2 shares of our common stock. Holders of the Series 1 Preferred will vote as a class on any amendment altering or changing the powers, preferences or special rights of the Series 1 Preferred so as to affect them adversely. No Conversion The Series 1 Preferred will not be convertible into or exchangeable for shares of our common stock or any other security. Rank The Series 1 Preferred will rank with respect to distribution rights upon our liquidation, winding-up or dissolution and dividend rights, as applicable: ● senior to our Series A preferred stock, common stock and any other class of capital stock we issue in the future unless the terms of that stock provide that it ranks senior to any or all of the Series 1 Preferred; ● on a parity with any class of capital stock we issue in the future the terms of which provide that it will rank on a parity with any or all of the Series 1 Preferred; ● junior to each class of capital stock issued in the future the terms of which expressly provide that such capital stock will rank senior to the Series 1 Preferred and the common stock; and ● junior to all of our existing and future indebtedness. On March 30, 2020, the Company amended the Certificate of Designation (the “Amended Certificate of Designation”) for our Series 1 Preferred Stock (the “Series 1 Stock”). The Amended Certificate of Designation increased the number of authorized preferred shares under the designation for our Series 1 Preferred Stock from 3,000,000 shares to 4,000,000 shares. As of September 30, 2020, and 2019 there were 2,156,784 and 2,110,718 shares of Series 1 Preferred Stock issued and outstanding, respectively. For the fiscal years ended September 30, 2020 and 2019, 217,099 and 196,550 shares of Series 1 Preferred Stock were issued to pay $2,089,540 and $1,965,500 worth of dividends to holders of Series 1 Preferred Stock, respectively. For the fiscal years ended September 30, 2020, the Company purchased 235,133 shares of its Series 1 Preferred Stock on the open market at an average price per share of $1.92, for an aggregate cost of approximately $338,775, as part of its ongoing share repurchase program announced earlier. The Company retired 171,033 shares worth $190,484 during fiscal 2020. Common Stock The Company is authorized to issue 40,000,000 shares of common stock, $0.001 par value. As of September 30, 2020, there were 17,622,539 shares issued and outstanding and at September 30, 2019, there were 3,962,790 shares issued and outstanding. During the fiscal years ended September 30, 2020 and 2019, 6,530,473 and 1,847,832 shares of the Company’s common stock have been issued to satisfy $8,737,125 and $5,047,569 of notes payable and accumulated interest, respectively. During fiscal year 2020, the Company issued 6,643,872 shares of the Company’s common stock for $12,462,648 in gross proceeds in various subscription rights offerings. After deducting offering expenses of $840,728 the Company received $11,621,920 in net proceeds (see below). During fiscal year 2020, the Company issued 513,358 shares in exchange for $532,788 worth of goods and services. During fiscal year 2020, the Company cancelled 27,954 shares that were issued in trust for an ATM offering in the prior fiscal year that were not sold. Series 1 Warrants There are currently 433,965 shares of our common stock issuable upon the exercise of our publicly traded Series 1 warrants that have an exercise price of $50.48 per share. During the years ended September 30, 2020 and 2019, none of our outstanding Series 1 Warrants have been exercised. Subscription Rights Offering On December 4, 2019, the “Company entered into a Subscription Agreement relating to the public offering of 338,393 shares (the “Shares”) of the Company’s common stock, par value $0.001 per share, all of which were sold by the Company (the “Offering”) to an accredited investor. The Offering price of the Shares was $1.12 per share for gross proceeds of $379,000. After deducting offering expenses of $18,950 the Company received $360,050 in net proceeds. On January 24, 2020, the “Company entered into a Subscription Agreement relating to the public offering of 500,000 shares (the “Shares”) of the Company’s common stock, par value $0.001 per share, all of which were sold by the Company (the “Offering”) to an accredited investor. The Offering price of the Shares was $1.50 per share for gross proceeds of $750,000. After deducting offering expenses of $37,500 the Company received $712,500 in net proceeds. On February 26, 2020, the “Company entered into a Subscription Agreement relating to the public offering of 347,000 shares (the “Shares”) of the Company’s common stock, par value $0.001 per share, all of which were sold by the Company (the “Offering”) to an accredited investor. The Offering price of the Shares was $1.30 per share for gross proceeds of $451,100. After deducting offering expenses of $2,500 the Company received $448,600 in net proceeds. On June 1, 2020, the “Company entered into a Subscription Agreement relating to the public offering of 3,055,556 shares (the “Shares”) of the Company’s common stock, par value $0.001 per share, all of which were sold by the Company (the “Offering”) to accredited investors. The Offering price of the Shares was $1.80 per share for gross proceeds of $5,500,000. After deducting offering expenses of $395,000 the Company received $5,105,000 in net proceeds. On June 9, 2020, the “Company entered into a Subscription Agreement relating to the public offering of 2,402,923 shares (the “Shares”) of the Company’s common stock, par value $0.001 per share, all of which were sold by the Company (the “Offering”) to accredited investors. The Offering price of the Shares was $2.24 per share for gross proceeds of $5,382,548. After deducting offering expenses of $386,778 the Company received $4,995,769 in net proceeds. |
Share-Based Compensation
Share-Based Compensation | 12 Months Ended |
Sep. 30, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Share-Based Compensation | NOTE 19 – SHARE-BASED COMPENSATION On September 25, 2019, the Company cancelled all outstanding options granted to Saagar Govil, the Company’s Chairman and CEO and granted a stock option for 400,000 shares. These options have an exercise price of $1.90 per share, which vested upon grant and they expire after seven years. Additionally, Mr. Govil was granted additional future options; (i) 100,000 shares of the Corporation’s common stock, CETX at an exercise price of $1.92 per share on September 25, 2021; (ii) 100,000 shares of the Corporation’s common stock, CETX at an exercise price of $2.30 per share on September 25, 2023; and (iii) 100,000 shares of the Corporation’s common stock, CETX at an exercise price of $2.76 per share on September 25, 2025. On September 25, 2019, the Company granted to Aron Govil, the Company’s former Executive Director and CFO, a stock option for 200,000 shares. These options have an exercise price of $1.90 per share, which vested upon grant and they expire after seven years. Upon Mr. Govil’s retirement his outstanding options that were vested remain available to him until they expire. Mr. Govil’s remaining options are; (i) 25,000 shares of the Corporation’s common stock, CETX at an exercise price of $1.92 per share on September 25, 2021; (ii) 12,500 shares of the Corporation’s common stock, CETX at an exercise price of $2.30 per share on September 25, 2023; and (iii) 8,333 shares of the Corporation’s common stock, CETX at an exercise price of $2.76 per share on September 25, 2025. The following weighted-average assumptions were used to estimate the fair value of the common stock option liability at September 30, 2019; September 30, 2019 Expected term 5 Years Risk-free interest rate 1.56 % Expected volatility 94.74 % Expected dividend yield 0 % During the years ended September 30, 2020 and 2019 the Company recognized $191,416 and $622,232 of share-based compensation expense on its outstanding options, respectively. As of September 30, 2020, there was $64,278 of total unrecognized compensation cost related to non-vested stock options, which is expected to be recognized over a weighted-average period of 4 years. Number of Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term (in years) Aggregate Intrinsic Value Outstanding at September 30, 2018 79,111 $ 22.40 4.09 $ - Options granted 1,050,000 Options exercised - Options forfeited (4,111 ) Options cancelled (75,000 ) Outstanding at September 30, 2019 1,050,000 $ - Options granted - Options exercised - Options forfeited - Options cancelled (104,167 ) Outstanding at September 30, 2020 945,833 Exercisable at September 30, 2020 737,500 $ 1.71 3.00 $ - |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Sep. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | NOTE 20 – COMMITMENTS AND CONTINGENCIES The Company has moved its corporate activities to New York City with a month to month lease of 2,500 square feet of office space at a rate of $13,000 per month. The Company has recognized $143,000 of lease expense for this lease, for the year ended September 30, 2020. The Company’s IS segment owns approximately 25,000 square feet of warehouse space in Manchester, PA and approximately 43,000 square feet of office and warehouse space in York, PA. The IS 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 $4,555 expiring on August 31, 2022. The Company has recognized $54,660 of lease expense for this lease, for the year ended September 30, 2020. The Company’s AT segment leases (i) approximately 6,700 square feet of office and warehouse space in Pune, India from a third party in an five year lease at a monthly rent of $6,453 (INR456,972) expiring on February 28, 2024, the Company has recognized $77,436 of lease expense for this lease, for the year ended September 30, 2020, (ii) approximately 27,000 square feet of office and warehouse space in Hauppauge, New York from a third party in a seven-year lease at a monthly rent of $28,719 expiring on March 31, 2027, the Company recognized $152,880 of lease expense for prior lease on this property, in the six months ended March 31, 2020, and has recognized $139,721 of lease expense for the current lease during the six months ended September 30, 2020 and (iii) approximately 9,400 square feet of office and warehouse space in Hampshire, England in a fifteen-year lease with at a monthly rent of $7,329 (£5,771) which expires on March 24, 2031 and contains provisions to terminate in 2021 and 2026, the Company has recognized $87,948 of lease expense for this lease for the year ended September 30, 2020. |
Income Taxes
Income Taxes | 12 Months Ended |
Sep. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | NOTE 21 – INCOME TAXES The Tax Cuts and Jobs Act (the “Tax Act”) was enacted on December 22, 2017. The Tax Act reduces the maximum U.S. federal corporate tax rate from 35% to 21%, allows net operating losses incurred in 2018 and beyond to be carried forward indefinitely, allows alternative minimum tax carryforwards to be partially refunded, beginning in 2018, and fully refunded by 2021, and creates new taxes on certain foreign sourced earnings. The following is a geographical breakdown of loss before the provision for income taxes: Year ended September 30, 2020 2019 Domestic $ (5,886,398 ) $ (10,774,136 ) Foreign (933,531 ) (1,864,201 ) Loss before provision for income taxes $ (6,819,929 ) $ (12,638,337 ) The provision for income taxes consisted of the following: September 30, 2020 September 30, 2019 Current (benefit)/provision Federal $ - $ - State (209,032 ) 7,978 Foreign - - Total current (benefit)/provision (209,032 ) 7,978 Deferred provision Federal 2,282,867 (1,343,562 ) State - - Foreign - - Total deferred provision $ 2,282,867 $ (1,343,562 ) Total (benefit)/provision for income taxes $ 2,073,835 $ (1,335,584 ) Effective Income tax rate -30.41 % 10.57 % The following is a reconciliation of the effective income tax rate to the federal and state statutory rates: For the Fiscal Year For the Fiscal Year Ended Ended September 30, 2020 September 30, 2019 U.S. statutory rate 21.00 % 21.00 % State statutory rate 6.50 % 6.50 % Foreign tax rate differential 0.00 % 0.00 % Change in valuation allowance -33.00 % -12.83 % Effect of change in rates 0.00 % -6.23 % Nondeducttible expenses -24.91 % 2.13 % Effective rate -30.41 % 10.57 % The components of our deferred tax assets and liabilities are summarized as follows: September 30, 2020 September 30, 2019 Deferred Tax Assets: Net operating loss carryforwards $ 15,136,466 $ 15,473,774 Inventory 1,475,593 1,121,788 Prepaid expenses 74,149 - Allowance for bad debt 52,168 121,485 Depreciation 331,924 341,093 Non-qualified stock options 393,191 393,518 Warrants (interest expense) 78,557 78,622 Accrued compensation 623,996 327,487 Warranty Reserve 100,926 101,010 Unearned revenue 109,013 113,111 Other 61 638,022 Total gross deferred taxes 18,376,044 18,709,910 Valuation allowance (17,168,322 ) (15,292,817 ) Net deferred tax assets 1,207,722 3,417,093 Deferred Tax Liabilities: Accrued vacation - (1,804 ) Inventory (41,526 ) - Prepaid expenses (45,563 ) (25,305 ) Goodwill amortization (163,839 ) (112,800 ) Research and development expenses (42,274 ) (42,216 ) Depreciation (807,096 ) (821,440 ) Gain/loss on fixed asset disposal (106,753 ) (130,661 ) Other (671 ) - Total deferred tax liabilities (1,207,722 ) (1,134,226 ) Total deferred tax assets (liabilities) $ - $ 2,282,867 |
Subsequent Events
Subsequent Events | 12 Months Ended |
Sep. 30, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | NOTE 22– SUBSEQUENT EVENTS Cemtrex has evaluated subsequent events up to the date the consolidated financial statements were issued. Centrex concluded that the following subsequent events have occurred and require recognition or disclosure in the consolidated financial statements. Acquisition of Virtual Driver Interactive On October 26, 2020, the company acquired Virtual Driver Interactive (“VDI”), a California based provider of innovative driver training simulation solutions for a purchase price of $1,339,774. For over 10 years, VDI has been known for its effective and engaging driver training systems, designed for users of all ages and skill levels. The Company offers comprehensive training for new teen and novice drivers, along with advanced training for corporate fleets and truck drivers. VDI’s wide range of training courses and system options provide customers with highly portable, affordable and effective solutions, all while focusing on the dangers of distracted driving. The Company paid $900,000 in cash and issued a Note payable in the amount of $439,774. This note carries interest of 5% and is payable in two installments of $239,774 plus accumulated interest on October 26, 2021, and $200,000 plus accumulated interest on October 26, 2022. Preferred shares issued for dividend On October 6, 2020, the Company issued 108,169 shares of its Series 1 Preferred Stock to for the dividends that were accrued for the September 30, 2020 dividend payment. The dividend was paid to shareholders of record as of September 30, 2020 . Common shares issued subsequent to financial statements date. On November 3, 2020, the Company issued 345,648 shares of common stock to satisfy $323,517 worth of notes payable and accumulated interest. Strategic Investment in MasterpieceVR On November 13, 2020, Cemtrex made an equity investment of $500,000 in MasterpieceVR and the investment represents roughly an 8% stake in MasterpieceVR. MasterpieceVR is a software company that is developing powerful software for content creation using virtual reality. Currently, creative professionals worldwide are challenged in creating 3D visual content because existing software is too complex and slow to use, creating a significant unmet market. Thanks to advances in machine learning and virtual reality, MasterpieceVR’s software platform is the first end to end solution to enable any creative professional to make 3D content fast and easy. Masterpiece Studio has partnered with leading technology companies and its software is used by a host of the world’s major studios. |
Basis of Presentation and Sig_2
Basis of Presentation and Significant Accounting Policies (Policies) | 12 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Use of Estimates | Basis of Presentation and Use of Estimates The Management of the Company is responsible for the selection and use of appropriate accounting policies and the appropriateness of accounting policies and their application. Critical accounting policies and practices are those that are both most important to the portrayal of the Company’s financial condition and results and require management’s most difficult, subjective, or complex judgments, often as a result of the need to make estimates about the effects of matters that are inherently uncertain. The Company’s significant and critical accounting policies and practices are disclosed below as required by generally accepted accounting principles. |
Basis of Presentation | Basis of Presentation The accompanying consolidated financial statements and related notes have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). |
Fiscal Year-End | Fiscal Year-End The Company elected September 30 as its fiscal year-end date. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Such estimates include, but are not limited to, provisions for doubtful accounts receivable, net realizable value of inventory, warranty obligations, income tax accruals, deferred tax valuation and assessments of the recoverability of the Company’s long-lived assets. Actual results could differ from those estimates. |
Principles of Consolidation | Principles of Consolidation The consolidated financial statements include the accounts of the Company, its wholly-owned subsidiaries, Cemtrex Advanced Technologies Inc., Cemtrex Ltd., Cemtrex Technologies Pvt. Ltd., and Advanced Industrial Services, Inc. and the Company’s majority-owned subsidiary Vicon Industries, Inc. and its subsidiaries, Telesite USA, Vicon Industries Ltd., Vicon Deutschland GmbH, and Vicon Systems, Ltd. All inter-company balances and transactions have been eliminated in consolidation. |
Carrying Value, Recoverability and Impairment of Long-Lived Assets | Carrying Value, Recoverability and Impairment of Long-Lived Assets The Company’s long-lived assets, which include property and equipment and intangible assets, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The Company assesses the recoverability of its long-lived assets by comparing the projected undiscounted net cash flows associated with the related long-lived asset or group of long-lived assets over their remaining estimated useful lives against their respective carrying amounts. Impairment, if any, is based on the excess of the carrying amount over the fair value of those assets. Fair value is generally determined using the asset’s expected future discounted cash flows or market value, if readily determinable. When long-lived assets are determined to be recoverable, but the newly determined remaining estimated useful lives are shorter than originally estimated, the net book values of the long-lived assets are depreciated over the newly determined remaining estimated useful lives. The impairment charges, if any, is included in operating expenses in the accompanying statements of operations. |
Cash Equivalents | Cash Equivalents The Company considers all highly liquid investments with maturities of three months or less at the time of purchase to be cash equivalents. |
Accounts Receivable and Allowance for Doubtful Accounts | Accounts Receivable and Allowance for Doubtful Accounts Accounts receivable are recorded at the invoiced amount, net of an allowance for doubtful accounts. The Company performs on-going credit evaluations of its customers and adjusts credit limits based upon payment history and the customer’s current credit worthiness, as determined by the review of their current credit information; and determines the allowance for doubtful accounts based on historical write-off experience, customer specific facts and general economic conditions that may affect a client’s ability to pay. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. The Company determines when receivables are past due or delinquent based on how recently payments have been received. The Company has $340,848 and $606,051 allowance for doubtful accounts at September 30, 2020 and 2019, respectively. The Company does not have any off-balance-sheet credit exposure to its customers at September 30, 2020 or 2019. |
Inventory and Cost of Goods Sold | Inventory and Cost of Goods Sold The Company values inventory, consisting of finished goods, at the lower of cost or market. Cost is determined on the first-in and first- out (“FIFO”) method. The Company reduces inventory for the diminution of value, resulting from product obsolescence, damage or other issues affecting marketability, equal to the difference between the cost of the inventory and its estimated market value. 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. These markdowns are estimates, which could vary significantly from actual requirements if future economic conditions, customer demand or competition differ from expectations. There was $4,575,193 and $3,938,212 in inventory obsolescence at September 30, 2020 and 2019, respectively. The increase in inventory obsolescence is due to the addition of slow moving and out of date products. |
Property and Equipment | Property and Equipment Property and equipment is recorded at cost. Expenditures for major additions and betterments are capitalized. Maintenance and repairs are charged to operations as incurred. Depreciation of property and equipment is computed by the straight-line method over the estimated useful lives of the respective assets, shown in the table below; Estimated Useful Life (Years) Building 30 Furniture and office equipment 5 Computer software 7 Machinery and equipment 7 Upon sale or retirement of property and equipment, the related cost and accumulated depreciation are removed from the accounts and any gain or loss is reflected in statements of operations. |
Goodwill | Goodwill Goodwill represents the excess of cost over the fair value of net assets of businesses acquired. The Company accounts for goodwill under the guidance of the ASC Topic 350, “Intangibles: Goodwill and Other”. Goodwill acquired in a purchase business combination and determined to have an indefinite useful life is not amortized, but instead tested for impairment, at least annually, in accordance with this guidance. The recoverability of goodwill is subject to an annual impairment test or whenever an event occurs or circumstances change that would more likely than not result in an impairment. The Company tests goodwill for impairment at the reporting unit level on an annual basis as of September 30 and between annual tests when an event occurs or circumstances change that could indicate that the asset might be impaired. In accordance with the FASB revised guidance on “Testing of Goodwill for Impairment,” a company first has the option to assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If the company decides, as a result of its qualitative assessment, that it is more-likely-than- not that the fair value of a reporting unit is less than its carrying amount, the quantitative impairment test is mandatory. Otherwise, no further testing is required. The quantitative impairment test consists of a two-step goodwill impairment test. The first step compares the fair value of each reporting unit to its carrying amount. If the fair value of each reporting unit exceeds its carrying amount, goodwill is not considered to be impaired and the second step will not be required. If the carrying amount of a reporting unit exceeds its fair value, the second step compares the implied fair value of goodwill to the carrying value of a reporting unit’s goodwill. The implied fair value of goodwill is determined in a manner similar to accounting for a business combination with the allocation of the assessed fair value determined in the first step to the assets and liabilities of the reporting unit. The excess of the fair value of the reporting unit over the amounts assigned to the assets and liabilities is the implied fair value of goodwill. This allocation process is only performed for purposes of evaluating goodwill impairment and does not result in an entry to adjust the value of any assets or liabilities. An impairment loss is recognized for any excess in the carrying value of goodwill over the implied fair value of goodwill. For the years ended September 30, 2020, and 2019, there was no impairment of the Company’s goodwill. |
Leases | Leases On October 1, 2019, the Company adopted ASU 2016-02 (Topic 842), “Leases”. ASU 2016-02 requires that a lessee recognize the assets and liabilities that arise from operating leases. A lessee should recognize in the statement of financial position a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term. For leases with a term of 12 months or less, a lessee is permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and lease liabilities. In transition, lessees and lessors may use the effective date method and elected certain practical expedients allowing the Company not to reassess: ● whether expired or existing contracts contain leases under the new definition of a lease; ● lease classification for expired or existing leases; and ● whether previously capitalized initial direct costs would qualify for capitalization under Topic 842. The Company also made the accounting policy decision not to recognize lease assets and liabilities for leases with a term of 12 months or less. |
Related Parties | Related Parties The financial statements shall include disclosures of material related party transactions, other than compensation arrangements, expense allowances, and other similar items in the ordinary course of business. However, disclosure of transactions that are eliminated in the preparation of consolidated or combined financial statements is not required in those statements. 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. |
Commitment and Contingencies | Commitment and Contingencies The Company follows subtopic 450-20 of the FASB Accounting Standards Codification to report accounting for contingencies. Certain conditions may exist as of the date the consolidated financial statements are issued, which may result in a loss to the Company, but which will only be resolved when one or more future events occur or fail to occur. The Company assesses such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company or unasserted claims that may result in such proceedings, the Company evaluates the perceived merits of any legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein. If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company’s consolidated financial statements. If the assessment indicates that a potential material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, and an estimate of the range of possible losses, if determinable and material, would be disclosed. Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the guarantees would be disclosed. Management does not believe, based upon information available at this time, that these matters will have a material adverse effect on the Company’s consolidated financial position, results of operations or cash flows. However, there is no assurance that such matters will not materially and adversely affect the Company’s business, financial position, and results of operations or cash flows. |
Revenue Recognition | 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. Management determined that there was no cumulative effect adjustment to the consolidated financial statements and the adoption of the standard did not require any adjustments to the consolidated financial statements for prior periods. 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. Most of the Company’s sales arrangements with customers 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. The Company generally permits returns of product or repaired equipment due to defects; however, returns are historically insignificant. In accordance with the authoritative guidance issued by the FASB on revenue recognition, the Company recognizes revenue from cost reimbursable contracts based on the services provided, typically represented by man-hours worked, and is measured by reference to agreed charge-out rates or to the estimated total contract revenue. Revenue from long-term fixed price contracts is recognized using the percentage-of-completion method, measured by reference to physical completion or the ratio of costs incurred to total estimated contract costs. If the outcome of a contract cannot be estimated reliably, as may be the case in the initial stages of completion of the contract, revenue is recognized only to the extent of the costs incurred that are expected to be recoverable. 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. The Company records a liability when receiving cash in advance of delivering goods or services to the customer. This liability is reversed against the receivable recognized when those goods or services are delivered |
Warranties | Warranties The Company provides for the estimated cost of product warranties at the time revenue is recognized. While the Company engages in product quality programs and processes, including monitoring and evaluating the quality of its component suppliers, its warranty obligation is affected by product failure rates, material usage and service delivery costs incurred in correcting a product failure. Should actual product failure rates, material usage or service delivery costs differ from its estimates, revisions to the estimated warranty liability may be required. |
Shipping and Handling Costs | Shipping and Handling Costs The Company accounts for shipping and handling fees in accordance with paragraph 605-45 of the FASB Accounting Standards Codification. Amounts charged to customers for shipping products are included in revenues, the related costs are classified in cost of goods sold as incurred. |
Income Tax Provision | Income Tax Provision The Company accounts for income taxes under ASC 740-10, which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred tax assets and liabilities are based on the differences between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the assets will not be realized. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the Consolidated Statements of Operations and Comprehensive Income in the period that includes the enactment date. The Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than fifty (50) percent likelihood of being realized upon ultimate settlement. The Company will accrue for interest and penalties on income taxes when there is a likelihood that they will occur and can be reasonably estimated. The estimated future tax effects of temporary differences between the tax basis of assets and liabilities are reported in the accompanying consolidated balance sheets, as well as tax credit carrybacks and carry-forwards. The Company periodically reviews the recoverability of deferred tax assets recorded on its consolidated balance sheets and provides valuation allowances as management deems necessary. Management makes judgments as to the interpretation of the tax laws that might be challenged upon an audit and cause changes to previous estimates of tax liability. In addition, the Company operates within multiple taxing jurisdictions including the United States, India, and The United Kingdom, and is subject to audit in these jurisdictions. In management’s opinion, adequate provisions for income taxes have been made for all years. If actual taxable income by tax jurisdiction varies from estimates, additional allowances or reversals of reserves may be necessary. |
Uncertain Tax Positions | Uncertain Tax Positions For the years ended September 30, 2020 and 2019, the Company did not take any uncertain tax positions and had no adjustments to its income tax liabilities or benefits. The Company will record any interest and/or penalties arising from uncertain tax provisions when they are likely to occur and reasonably estimable. |
Accounting for Share-Based Compensation | Accounting for Share-Based Compensation The Company follows ASC 718 (“Share-Based Payment”), which requires that all share-based payments to employees, including stock options, stock appreciation rights (SARs) and common stock share awards, be recognized as compensation expense in the consolidated financial statements based on their fair values and over the requisite service period. The fair value for options granted was determined at the date of grant using a Black-Scholes valuation model and the straight-line attribution approach using the following weighted average assumptions: The risk-free interest rate used in the Black-Scholes valuation method is based on the implied yield currently available in U.S. Treasury securities at maturity with an equivalent term. Other than a one-time dividend paid in fiscal year 2017, the Company never declared or paid any cash dividends and does not currently expect to do so in the future. Expected volatility is based on the annualized daily historical volatility of the Company’s stock over a representative period. The weighted-average expected life represents the period over which stock-based awards are expected to be outstanding and was determined based on a number of factors, including historical weighted average and projected holding periods for the remaining unexercised shares, the contractual terms of the Company’s stock-based awards, vesting schedules and expectations of future employee behavior. |
Net Income (Loss) per Common Share | Net Income (Loss) per Common Share Basic net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding during the period. Diluted net income per common share is computed by dividing net income by the weighted average number of shares of common stock and potentially dilutive outstanding shares of common stock during the period to reflect the potential dilution that could occur from common shares issuable through contingent share arrangements, stock options and warrants. As of September 30, 2020, and 2019, the following items were excluded from the computation of diluted net loss per common share as their effect is anti-dilutive: For the years ended September 30, 2020 2019 Warrants to purchase shares 945,833 1,050,000 Options 433,965 433,965 |
Foreign Currency Translation Gain and Comprehensive Income (Loss) | Foreign Currency Translation Gain and Comprehensive Income (Loss) In countries in which the Company operates, and the functional currency is other than the U.S. dollar, assets and liabilities are translated using published exchange rates in effect at the consolidated balance sheet date. Revenues and expenses and cash flows are translated using an approximate weighted average exchange rate for the period. Resulting translation adjustments are recorded as a component of accumulated other comprehensive income on the accompanying consolidated balance sheet. For the years ending September 30, 2020 and September 30, 2019, comprehensive loss includes a gain of $22,295 and a gain of $1,279,301, respectively, which were entirely from foreign currency translation. As of and for the year ended September 30, 2020 the Company used the following exchange rates. Currency Exchange rate at Approximate weighted exchange rate Exchange rate at Approximate weighted exchange rate Indian Rupee 0.001 0.014 0.014 0.014 Great Britain Pound 1.320 1.290 1.287 1.248 |
Cash Flows Reporting | Cash Flows Reporting The Company adopted uses the indirect or reconciliation method (“Indirect method”) as to report net cash flow from operating activities by adjusting net income to reconcile it to net cash flow from operating activities by removing the effects of (a) all deferrals of past operating cash receipts and payments and all accruals of expected future operating cash receipts and payments and (b) all items that are included in net income that do not affect operating cash receipts and payments. The Company reports the reporting currency equivalent of foreign currency cash flows, using the current exchange rate at the time of the cash flows and the effect of exchange rate changes on cash held in foreign currencies is reported as a separate item in the reconciliation of beginning and ending balances of cash and cash equivalents and separately provides information about investing and financing activities not resulting in cash receipts or payments in the period. |
Subsequent Events | Subsequent Events The Company will evaluate subsequent events through the date when the financial statements were issued. It is the Company’s policy to disclose subsequent information that it feels is important to the context of the financial statements. |
Reclassifications | Reclassifications Certain reclassifications have been made to prior period amounts to conform to the current period presentation. |
Recently Issued Accounting Pronouncements Not Yet Effective | Recently Issued Accounting Pronouncements Not Yet Effective Intangibles – Goodwill and Other - Internal-Use Software In August 2018, the FASB issued No. ASU 2018-15, which addresses a customer’s accounting for implementation costs incurred in a cloud computing arrangement that is a service contract. Under the new standard, customers will apply the same criteria for capitalizing implementation costs as they would for an arrangement that has a software license. ASU 2018-15 is effective for annual reporting periods beginning after December 15, 2019, including interim periods within those annual reporting periods, with early adoption permitted. As of September 30, 2020, the Company does not have significant implementation costs incurred in a cloud computing arrangement that is a service contract and therefore upon adoption the impact of the new standard on its consolidated financial statements and related disclosures is not expected to be material. All future implementation costs in such arrangements will be capitalized and amortized over the life of the arrangement, which may have a material impact in those future periods if such costs are material. Fair Value In August 2018, the FASB issued ASU No. 2018-13, which changes the fair value measurement disclosure requirements of ASC 820. ASU 2018-13 will be effective for annual reporting periods beginning after December 15, 2019, including interim periods within those annual reporting periods, with early adoption permitted for any eliminated or modified disclosures upon issuance of this ASU. Upon adoption, the new standard will eliminate certain disclosure requirements in the Company’s consolidated financial statements. Financial Instruments – Credit Losses In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments-Credit Losses (Topic 326) All other Accounting Standards Updates issued but not yet effective are not expected to have a material effect on the Company’s future consolidated financial statements or related disclosures. |
Basis of Presentation and Sig_3
Basis of Presentation and Significant Accounting Policies (Tables) | 12 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Schedule of Estimated Useful Lives of Assets | Depreciation of property and equipment is computed by the straight-line method over the estimated useful lives of the respective assets, shown in the table below; Estimated Useful Life (Years) Building 30 Furniture and office equipment 5 Computer software 7 Machinery and equipment 7 |
Schedule of Computation of Diluted Net Loss Per Common Share as Anti-dilutive Effect | As of September 30, 2020, and 2019, the following items were excluded from the computation of diluted net loss per common share as their effect is anti-dilutive: For the years ended September 30, 2020 2019 Warrants to purchase shares 945,833 1,050,000 Options 433,965 433,965 |
Schedule of Foreign Currency Exchange Rate | As of and for the year ended September 30, 2020 the Company used the following exchange rates. Currency Exchange rate at Approximate weighted exchange rate Exchange rate at Approximate weighted exchange rate Indian Rupee 0.001 0.014 0.014 0.014 Great Britain Pound 1.320 1.290 1.287 1.248 |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 12 Months Ended |
Sep. 30, 2020 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Schedule of Disposal Groups, Including Discontinued Operations | Assets and liabilities included within discontinued operations on the Company’s Consolidated Balance Sheets at September 30, 2020 and 2019 are as follows; September 30, September 30, Assets 2020 2019 Current assets Trade receivables - related party 544,500 555,600 Total current assets 544,500 555,600 Property and equipment, net 8,761,677 Assetss held for sale 8,323,321 - Total Assets $ 8,867,821 $ 9,317,277 Liabilities Current liabilities Accounts payable $ - $ 263,832 Total liabilities $ - $ 263,832 Loss from discontinued operations, net of tax and the loss on sale of discontinued operations, net of tax, of the ROB Cemtrex Companies and Griffin Filters business, sold during fiscal year 2019, which are presented in total as discontinued operations, net of tax in the Company’s Consolidated Statements of Operations for the years ended September 30, are as follows: Year ended September 30, 2020 2019 Total net sales $ - $ 42,614,107 Cost of sales - 25,788,268 Operating, selling, general and administrative expenses 812,895 20,374,141 Other expenses - 264,505 Income (loss) from discontinued operations (812,895 ) (3,812,807 ) Loss on sale of discontinued operations - (6,374,563 ) Income tax provision - 372,593 Discontinued operations, net of tax $ (812,895 ) $ (10,559,963 ) |
Segment and Geographic Inform_2
Segment and Geographic Information (Tables) | 12 Months Ended |
Sep. 30, 2020 | |
Segment Reporting [Abstract] | |
Schedule of Segment Information | The following tables summarize the Company’s segment information: For the years ended September 30, 2020 2019 Revenues from external customers Advanced Technologies $ 25,750,684 $ 19,268,687 Industrial Services 17,767,700 19,996,354 Total revenues $ 43,518,384 $ 39,265,041 Gross profit Advanced Technologies $ 12,924,371 $ 8,296,186 Industrial Services 6,440,076 7,266,488 Total gross profit $ 19,364,447 $ 15,562,674 Operating loss Advanced Technologies $ (2,700,997 ) $ (5,633,572 ) Industrial Services (1,332,508 ) (1,813,778 ) Total operating loss $ (4,033,505 ) $ (7,447,350 ) Other expense Advanced Technologies $ (2,588,609 ) $ (4,441,385 ) Industrial Services (197,815 ) (406,826 ) Total other expense $ (2,786,424 ) $ (4,848,211 ) Depreciation and Amortization Advanced Technologies $ 1,519,022 $ 1,350,079 Industrial Services 1,379,377 1,663,907 Total depreciation and amortization $ 2,898,399 $ 3,013,986 September 30, September 30, 2020 2019 Identifiable Assets Advanced Technologies $ 39,953,522 $ 19,365,582 Industrial Services 15,510,629 16,209,838 Discontinued operations 8,867,821 $ 9,317,277 Total Assets $ 64,331,972 $ 44,892,697 |
Schedule of Revenue from Product Sales and Services from its Subsidiaries | The Company generates revenue from product sales and services from its subsidiaries located in the United States, The United Kingdom, and India. Revenue and long-lived asset information for the Company is as follows: September 30, September 30, Revenues 2020 2019 U.S. Operations $ 40,211,773 $ 35,320,625 Non-U.S. Operations 3,306,611 3,944,416 $ 43,518,384 $ 39,265,041 September 30, September 30, Long-lived Assets 2020 2019 U.S. Operations $ 6,793,597 $ 5,395,353 Non-U.S. Operations 2,765,339 11,381,199 $ 9,558,936 $ 16,776,552 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Sep. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value of Assets | The Company’s fair value assets for the years ended September 30, 2020 and 2019 are as follows; Quoted Prices Significant Significant Balance Assets Investment in marketable securities (included in short-term investments) $ 887,746 $ - $ - $ 887,746 $ 887,746 $ - $ - $ 887,746 Quoted Prices Significant Significant Balance Assets Investment in marketable securities (included in short-term investments) $ 412,730 $ - $ - $ 412,730 $ 412,730 $ - $ - $ 412,730 |
Accounts Receivable, Net (Table
Accounts Receivable, Net (Tables) | 12 Months Ended |
Sep. 30, 2020 | |
Receivables [Abstract] | |
Schedule of Accounts Receivable, Net | Accounts receivable, net consists of the following: September 30, September 30, 2020 2019 Accounts receivable $ 7,027,645 $ 7,065,035 Allowance for doubtful accounts (340,848 ) (606,051 ) $ 6,686,797 $ 6,458,984 |
Inventory, Net (Tables)
Inventory, Net (Tables) | 12 Months Ended |
Sep. 30, 2020 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory, Net | Inventory, net of reserves, consist of the following: September 30, September 30, 2020 2019 Raw materials $ 3,959,888 $ 4,917,700 Work in progress 995,184 543,857 Finished goods 6,413,927 3,683,810 11,368,999 9,145,367 Less: Allowance for inventory obsolescence (4,575,193 ) (3,938,212 ) Inventory –net of allowance for inventory obsolescence $ 6,793,806 $ 5,207,155 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Sep. 30, 2020 | |
Property, Plant and Equipment [Abstract] | |
Summary of Property and Equipment | Property and equipment are summarized as follows: September 30, September 30, 2020 2019 Land $ 790,373 $ - Building and leasehold improvements 3,875,796 1,233,733 Furniture and office equipment 621,790 614,569 Computers and software 4,985,749 5,166,922 Trade show display 89,330 89,330 Machinery and equipment 13,668,263 23,463,953 24,031,301 30,568,507 Less: Accumulated depreciation (14,472,365 ) (13,791,955 ) Property and equipment, net $ 9,558,936 $ 16,776,552 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Sep. 30, 2020 | |
Leases [Abstract] | |
Summary of Finance and Operating Lease Liabilities | Finance and operating lease liabilities consist of the following: September 30, September 30, 2020 2019 Lease liabilities - current Finance leases $ 20,061 $ 22,452 Operating leases 700,975 - 721,036 22,452 Lease liabilities - net of current portion Finance leases $ - $ 20,061 Operating leases 2,027,406 - $ 2,027,406 $ 20,061 |
Schedule of Reconciliation of Undiscounted Cash Flows to Finance and Operating Lease Liabilities | A reconciliation of undiscounted cash flows to finance and operating lease liabilities recognized in the condensed consolidated balance sheet at September 30, 2020 is set forth below: Years ending September 30, Finance leases Operating Leases Total 2021 20,862 838,028 858,890 2022 - 659,505 659,505 2023 - 505,550 505,550 2024 - 387,998 387,998 2025 - 364,974 364,974 2026 - 375,923 375,923 Undiscounted lease payments 20,862 3,131,978 3,152,840 Amount representing interest (801 ) (403,597 ) (404,398 ) Discounted lease payments $ 20,061 $ 2,728,381 $ 2,748,442 |
Schedule of Lease Costs | Additional disclosures of lease data are set forth below: For the year ended September 30, 2020 Lease costs: Finance lease costs: Depreciation of finance lease assets $ 22,912 Interest on lease liabilities 832 Operating lease costs: Amortization of right-of-use assets 816,550 Interest on lease liabilities 59,122 Total lease cost $ 899,416 Other information: Cash paid for amounts included in the measurement of lease liabilities: Operating leases $ 816,549 Finance leases 22,718 $ 839,267 Weighted-average remaining lease term - finance leases (months) 10 Weighted-average remaining lease term - operating leases (months) 51 Weighted-average discount rate - finance leases 3.63 % Weighted-average discount rate - operating leases 6.64 % |
Lines of Credit and Long-Term_2
Lines of Credit and Long-Term Liabilities (Tables) | 12 Months Ended |
Sep. 30, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of Estimated Maturities of Long Term Debt | Estimated maturities of our long-term debt over the next 5 years are as follows; 2021 2022 2023 2024 2025 Thereafter Total Fulton Bank - $5,250,000 $ 713,548 782,269 668,767 - - - $ 2,164,584 Fulton Bank - $620,000 $ 58,897 - - - - - $ 58,897 Fulton Bank - $400,000 $ 78,995 85,792 81,886 - - - $ 246,673 Fulton Bank - $360,000 $ 67,291 69,024 72,243 75,111 47,866 - $ 331,535 Fulton Bank - Mortgage payable $ 81,329 84,574 88,266 92,120 96,142 1,913,111 $ 2,355,542 NIL Funding $ 800,000 3,825,000 - - - - $ 4,625,000 PPP Loans $ 1,301,663 2,169,437 - - - - $ 3,471,100 Notes Payable (1) $ 3,932,787 2,205,000 - - - - $ 6,137,787 TOTAL $ 7,034,510 $ 9,221,096 $ 911,162 $ 167,231 $ 144,008 $ 1,913,111 $ 19,391,118 (1) Net of unamortized original issue discounts of $875,000 |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 12 Months Ended |
Sep. 30, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of Fair Value Stock Option Weighted Average Assumptions | The following weighted-average assumptions were used to estimate the fair value of the common stock option liability at September 30, 2019; September 30, 2019 Expected term 5 Years Risk-free interest rate 1.56 % Expected volatility 94.74 % Expected dividend yield 0 % |
Schedule of Stock Options Activity | Number of Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term (in years) Aggregate Intrinsic Value Outstanding at September 30, 2018 79,111 $ 22.40 4.09 $ - Options granted 1,050,000 Options exercised - Options forfeited (4,111 ) Options cancelled (75,000 ) Outstanding at September 30, 2019 1,050,000 $ - Options granted - Options exercised - Options forfeited - Options cancelled (104,167 ) Outstanding at September 30, 2020 945,833 Exercisable at September 30, 2020 737,500 $ 1.71 3.00 $ - |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Sep. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
Schedule of (Loss) Income Before Provision for Tax | The following is a geographical breakdown of loss before the provision for income taxes: Year ended September 30, 2020 2019 Domestic $ (5,886,398 ) $ (10,774,136 ) Foreign (933,531 ) (1,864,201 ) Loss before provision for income taxes $ (6,819,929 ) $ (12,638,337 ) |
Schedule of Provision for Income Taxes | The provision for income taxes consisted of the following: September 30, 2020 September 30, 2019 Current (benefit)/provision Federal $ - $ - State (209,032 ) 7,978 Foreign - - Total current (benefit)/provision (209,032 ) 7,978 Deferred provision Federal 2,282,867 (1,343,562 ) State - - Foreign - - Total deferred provision $ 2,282,867 $ (1,343,562 ) Total (benefit)/provision for income taxes $ 2,073,835 $ (1,335,584 ) Effective Income tax rate -30.41 % 10.57 % |
Schedule of Effective Income Tax Rate Reconciliation | The following is a reconciliation of the effective income tax rate to the federal and state statutory rates: For the Fiscal Year For the Fiscal Year Ended Ended September 30, 2020 September 30, 2019 U.S. statutory rate 21.00 % 21.00 % State statutory rate 6.50 % 6.50 % Foreign tax rate differential 0.00 % 0.00 % Change in valuation allowance -33.00 % -12.83 % Effect of change in rates 0.00 % -6.23 % Nondeducttible expenses -24.91 % 2.13 % Effective rate -30.41 % 10.57 % |
Schedule of Deferred Tax Assets and Liabilities | The components of our deferred tax assets and liabilities are summarized as follows: September 30, 2020 September 30, 2019 Deferred Tax Assets: Net operating loss carryforwards $ 15,136,466 $ 15,473,774 Inventory 1,475,593 1,121,788 Prepaid expenses 74,149 - Allowance for bad debt 52,168 121,485 Depreciation 331,924 341,093 Non-qualified stock options 393,191 393,518 Warrants (interest expense) 78,557 78,622 Accrued compensation 623,996 327,487 Warranty Reserve 100,926 101,010 Unearned revenue 109,013 113,111 Other 61 638,022 Total gross deferred taxes 18,376,044 18,709,910 Valuation allowance (17,168,322 ) (15,292,817 ) Net deferred tax assets 1,207,722 3,417,093 Deferred Tax Liabilities: Accrued vacation - (1,804 ) Inventory (41,526 ) - Prepaid expenses (45,563 ) (25,305 ) Goodwill amortization (163,839 ) (112,800 ) Research and development expenses (42,274 ) (42,216 ) Depreciation (807,096 ) (821,440 ) Gain/loss on fixed asset disposal (106,753 ) (130,661 ) Other (671 ) - Total deferred tax liabilities (1,207,722 ) (1,134,226 ) Total deferred tax assets (liabilities) $ - $ 2,282,867 |
Basis of Presentation and Sig_4
Basis of Presentation and Significant Accounting Policies (Details Narrative) - USD ($) | 12 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Allowance for doubtful accounts | $ 340,848 | $ 606,051 |
Inventory obsolescence | 4,575,193 | 3,938,212 |
Impairment of goodwill | ||
Foreign currency translation gain | 22,294 | 1,279,301 |
Customers [Member] | ||
Off balance sheet credit exposure |
Basis of Presentation and Sig_5
Basis of Presentation and Significant Accounting Policies - Schedule of Estimated Useful Lives of Assets (Details) | 12 Months Ended |
Sep. 30, 2020 | |
Building [Member] | |
Property and equipment, estimated lives | 30 years |
Furniture and Office Equipment [Member] | |
Property and equipment, estimated lives | 5 years |
Computer Software [Member] | |
Property and equipment, estimated lives | 7 years |
Machinery and Equipment [Member] | |
Property and equipment, estimated lives | 7 years |
Basis of Presentation and Sig_6
Basis of Presentation and Significant Accounting Policies - Schedule of Computation of Diluted Net Loss Per Common Share as Anti-dilutive Effect (Details) - shares | 12 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Warrants to Purchase Shares [Member] | ||
Net loss per common share anti-dilutive effect | 945,833 | 1,050,000 |
Options [Member] | ||
Net loss per common share anti-dilutive effect | 433,965 | 433,965 |
Basis of Presentation and Sig_7
Basis of Presentation and Significant Accounting Policies - Schedule of Foreign Currency Exchange Rate (Details) | Sep. 30, 2020 | Dec. 31, 2019 |
INR [Member] | ||
Exchange rate | .014 | 0.001 |
Approximate weighted average exchange rate | 0.014 | 0.014 |
Great Britain Pound [Member] | ||
Exchange rate | 1.287 | 1.320 |
Approximate weighted average exchange rate | 1.248 | 1.290 |
Purchased Assets and Investme_2
Purchased Assets and Investments (Details Narrative) - USD ($) | Feb. 21, 2020 | May 28, 2019 | May 13, 2019 | Mar. 23, 2018 | Sep. 30, 2020 | Sep. 30, 2019 | Jan. 14, 2019 |
Purchase of common stock | 3,643 | ||||||
Reverse stock split | 1-for-8 reverse split | ||||||
Other expense loss on investment | $ (342,776) | ||||||
Number of shares issued for services provided | 7,500 | ||||||
Vicon Industries, Inc. [Member] | |||||||
Purchase of common stock | 71,429 | 7,284,824 | |||||
Reverse stock split | 2,000-1 reverse stock split | 2,000-1 reverse stock split | |||||
Warrants to purchase shares of common stock | 750 | ||||||
Ownership percentage | 46.00% | ||||||
Number of share exchanged during period | 126,579 | ||||||
Fair market value of the investment | $ 527,089 | ||||||
Other expense loss on investment | 829,406 | ||||||
Goodwill on equity method investment | $ 1,893,075 | ||||||
Fair value of assets and liabilities duration | 1 year | ||||||
Number of shares issued for services provided | 15,000,000 | ||||||
Number of shares issued for services provided, value | $ 300,000 | ||||||
Number of new stock issued, value | $ 500,000 | ||||||
Ownership percentage, description | The Company now owns approximately 95% of Vicon's outstanding shares of common stock. | ||||||
Vicon Industries, Inc. [Member] | Prior to January 14, 2019 [Member] | |||||||
Ownership percentage | 48.00% | ||||||
Asset used in equity method investment | $ 1,356,495 | ||||||
Warrant [Member] | Vicon Industries, Inc. [Member] | |||||||
Reverse stock split | 2,000-1 reverse stock split | ||||||
Warrants to purchase shares of common stock | 1,500,000 |
Discontinued Operations - Sched
Discontinued Operations - Schedule of Disposal Groups, Including Discontinued Operations (Details) - USD ($) | 12 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Discontinued Operations and Disposal Groups [Abstract] | ||
Trade receivables - related party | $ 544,500 | $ 555,600 |
Total current assets | 544,500 | 555,600 |
Property and equipment, net | 8,761,677 | |
Assets held for sale | 8,323,321 | |
Total Assets | 8,867,821 | 9,317,277 |
Accounts payable | 263,832 | |
Total liabilities | 263,832 | |
Total net sales | 42,614,107 | |
Cost of sales | 25,788,268 | |
Operating, selling, general and administrative expenses | 812,895 | 20,374,141 |
Other expenses | 264,505 | |
Income (loss) from discontinued operations | (812,895) | (3,812,807) |
Loss on sale of discontinued operations | (6,374,563) | |
Income tax provision | 372,593 | |
Discontinued operations, net of tax | $ (812,895) | $ (10,559,963) |
Segment and Geographic Inform_3
Segment and Geographic Information (Details Narrative) | 12 Months Ended |
Sep. 30, 2020Segments | |
Segment Reporting [Abstract] | |
Number of reportable segments | 2 |
Segment and Geographic Inform_4
Segment and Geographic Information - Schedule of Segment Information (Details) - USD ($) | 12 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Total revenues | $ 43,518,384 | $ 39,265,041 |
Total gross profit | 19,364,447 | 15,562,674 |
Total operating loss | (4,033,505) | (7,447,350) |
Total other expense | (2,786,424) | (5,190,987) |
Total depreciation and amortization | 2,898,399 | 3,013,986 |
Total Assets | 63,787,472 | 44,392,697 |
Discontinued Operations [Member] | ||
Total Assets | 8,867,821 | 9,317,277 |
Advanced Technologies [Member] | ||
Total revenues | 25,750,684 | 19,268,687 |
Total gross profit | 12,924,371 | 8,296,186 |
Total operating loss | (2,700,997) | (5,633,572) |
Total other expense | (2,588,609) | (4,441,385) |
Total depreciation and amortization | 1,519,022 | 1,350,079 |
Total Assets | 39,953,522 | 19,365,582 |
Industrial Services [Member] | ||
Total revenues | 17,767,700 | 19,996,354 |
Total gross profit | 6,440,076 | 7,266,488 |
Total operating loss | (1,332,508) | (1,813,778) |
Total other expense | (197,815) | (406,826) |
Total depreciation and amortization | 1,379,377 | 1,663,907 |
Total Assets | $ 15,510,629 | $ 16,209,838 |
Segment and Geographic Inform_5
Segment and Geographic Information - Schedule of Revenue from Product Sales and Services from its Subsidiaries (Details) - USD ($) | 12 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Revenues | $ 43,518,384 | $ 39,265,041 |
Long-lived Assets | 9,558,936 | 16,776,552 |
U.S. Operations [Member] | ||
Revenues | 40,211,773 | 35,320,625 |
Long-lived Assets | 6,793,597 | 5,395,353 |
Non-U.S. Operations [Member] | ||
Revenues | 3,306,611 | 3,944,416 |
Long-lived Assets | $ 2,765,339 | $ 11,381,199 |
Fair Value Measurements (Detail
Fair Value Measurements (Details Narrative) | 12 Months Ended |
Sep. 30, 2020USD ($) | |
Fair Value Disclosures [Abstract] | |
Gain on Sale of Equity Investments | $ 1,663,311 |
Loss on Sale of Equity Investment | $ 28,229 |
Fair Value Measurements - Sched
Fair Value Measurements - Schedule of Fair Value of Assets (Details) - USD ($) | Sep. 30, 2020 | Sep. 30, 2019 |
Investment in marketable securities (included in short-term investments) | $ 887,746 | $ 412,730 |
Short-term Investments [Member] | ||
Investment in marketable securities (included in short-term investments) | 887,746 | 412,730 |
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | ||
Investment in marketable securities (included in short-term investments) | 887,746 | 412,730 |
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Short-term Investments [Member] | ||
Investment in marketable securities (included in short-term investments) | 887,746 | 412,730 |
Significant Other Observable Inputs (Level 2) [Member] | ||
Investment in marketable securities (included in short-term investments) | ||
Significant Other Observable Inputs (Level 2) [Member] | Short-term Investments [Member] | ||
Investment in marketable securities (included in short-term investments) | ||
Significant Unobservable Inputs (Level 3) [Member] | ||
Investment in marketable securities (included in short-term investments) | ||
Significant Unobservable Inputs (Level 3) [Member] | Short-term Investments [Member] | ||
Investment in marketable securities (included in short-term investments) |
Restricted Cash (Details Narrat
Restricted Cash (Details Narrative) - USD ($) | Sep. 30, 2020 | Sep. 30, 2019 |
Cash and Cash Equivalents [Abstract] | ||
Restricted cash | $ 1,582,798 | $ 1,088,091 |
Accrued expenses | $ 98,056 | $ 118,889 |
Accounts Receivable, Net - Sche
Accounts Receivable, Net - Schedule of Accounts Receivable, Net (Details) - USD ($) | Sep. 30, 2020 | Sep. 30, 2019 |
Receivables [Abstract] | ||
Accounts receivable | $ 7,027,645 | $ 7,065,035 |
Allowance for doubtful accounts | (340,848) | (606,051) |
Accounts receivables, net, total | $ 6,686,797 | $ 6,458,984 |
Inventory, Net - Schedule of In
Inventory, Net - Schedule of Inventory, Net (Details) - USD ($) | Sep. 30, 2020 | Sep. 30, 2019 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 3,959,888 | $ 4,917,700 |
Work in progress | 995,184 | 543,857 |
Finished goods | 6,413,927 | 3,683,810 |
Inventory, gross | 11,368,999 | 9,145,367 |
Less: Allowance for inventory obsolescence | (4,575,193) | (3,938,212) |
Inventory - net of allowance for inventory obsolescence | $ 6,793,806 | $ 5,207,155 |
Property and Equipment (Details
Property and Equipment (Details Narrative) - USD ($) | 12 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation and amortization | $ 2,898,399 | $ 3,013,986 |
Assets held for sale | $ 8,323,321 |
Property and Equipment - Summar
Property and Equipment - Summary of Property and Equipment (Details) - USD ($) | Sep. 30, 2020 | Sep. 30, 2019 |
Property and equipment, gross | $ 24,031,301 | $ 30,568,507 |
Less: Accumulated depreciation | (14,472,365) | (13,791,955) |
Property and equipment, net | 9,558,936 | 16,776,552 |
Land [Member] | ||
Property and equipment, gross | 790,373 | |
Building and Leasehold Improvements [Member] | ||
Property and equipment, gross | 3,875,796 | 1,233,733 |
Furniture and Office Equipment [Member] | ||
Property and equipment, gross | 621,790 | 614,569 |
Computers and Software [Member] | ||
Property and equipment, gross | 4,985,749 | 5,166,922 |
Trade Show Display [Member] | ||
Property and equipment, gross | 89,330 | 89,330 |
Machinery and Equipment [Member] | ||
Property and equipment, gross | $ 13,668,263 | $ 23,463,953 |
Leases (Details Narrative)
Leases (Details Narrative) | 12 Months Ended |
Sep. 30, 2020 | |
Lease description | The Company also made the accounting policy decision not to recognize lease assets and liabilities for leases with a term of 12 months or less. |
Minimum [Member] | |
Operating lease term | 2 years |
Maximum [Member] | |
Operating lease term | 7 years |
Industrial Services [Member] | |
Finance lease term | 3 years |
Leases - Summary of Finance and
Leases - Summary of Finance and Operating Lease Liabilities (Details) - USD ($) | Sep. 30, 2020 | Sep. 30, 2019 |
Lease liabilities - current | $ 721,036 | $ 22,718 |
Lease liabilities - net of current portion | 2,027,406 | 20,061 |
Other Liabilities [Member] | ||
Lease liabilities - current, Finance leases | 20,061 | 22,452 |
Lease liabilities - current, Operating leases | 700,975 | |
Lease liabilities - current | 721,036 | 22,452 |
Lease liabilities - net of current portion, Finance leases | 20,061 | |
Lease liabilities - net of current portion, Operating leases | 2,027,406 | |
Lease liabilities - net of current portion | $ 2,027,406 | $ 20,061 |
Leases - Schedule of Reconcilia
Leases - Schedule of Reconciliation of Undiscounted Cash Flows to Finance and Operating Lease Liabilities (Details) | Sep. 30, 2020USD ($) |
Leases [Abstract] | |
Finance leases, 2021 | $ 20,862 |
Finance leases, 2022 | |
Finance leases, 2023 | |
Finance leases, 2024 | |
Finance leases, 2025 | |
Finance leases, 2026 | |
Finance leases, Undiscounted lease payments | 20,862 |
Finance leases, Amount representing interest | (801) |
Finance leases, Discounted lease payments | 20,061 |
Operating Leases, 2021 | 838,028 |
Operating Leases, 2022 | 659,505 |
Operating Leases, 2023 | 505,550 |
Operating Leases, 2024 | 387,998 |
Operating Leases, 2025 | 364,974 |
Operating Leases, 2026 | 375,923 |
Operating Leases, Undiscounted lease payments | 3,131,978 |
Operating Leases, Amount representing interest | (403,597) |
Operating Leases, Discounted lease payments | 2,728,381 |
Total, 2021 | 858,890 |
Total, 2022 | 659,505 |
Total, 2023 | 505,550 |
Total, 2024 | 387,998 |
Total, 2025 | 364,974 |
Total, 2026 | 375,923 |
Total, Undiscounted lease payments | 3,152,840 |
Total, Amount representing interest | (404,398) |
Total, Discounted lease payments | $ 2,748,442 |
Leases - Schedule of Lease Cost
Leases - Schedule of Lease Costs (Details) | 6 Months Ended | 12 Months Ended |
Sep. 30, 2020USD ($) | Sep. 30, 2020USD ($) | |
Leases [Abstract] | ||
Finance lease costs: Depreciation of finance lease assets | $ 22,912 | |
Finance lease costs: Interest on lease liabilities | 832 | |
Operating lease costs: Amortization of right-of-use assets | 816,550 | |
Operating lease costs: Interest on lease liabilities | $ 139,721 | 59,122 |
Total lease cost | 899,416 | |
Cash paid for amounts included in the measurement of lease liabilities: Operating leases | 816,549 | |
Cash paid for amounts included in the measurement of lease liabilities: Finance leases | 22,718 | |
Cash paid for amounts included in the measurement of lease liabilities: Total | $ 839,267 | |
Weighted-average remaining lease term - finance leases (months) | 10 months | 10 months |
Weighted-average remaining lease term - operating leases (months) | 51 months | 51 months |
Weighted-average discount rate - finance leases | 3.63% | 3.63% |
Weighted-average discount rate - operating leases | 6.64% | 6.64% |
Prepaid and Other Current Ass_2
Prepaid and Other Current Assets (Details Narrative) - USD ($) | Sep. 30, 2020 | Sep. 30, 2019 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Prepayments on inventory purchases | $ 101,308 | $ 530,447 |
Other assets, current | $ 1,087,009 | $ 925,318 |
Other Assets (Details Narrative
Other Assets (Details Narrative) - USD ($) | Sep. 30, 2020 | Sep. 30, 2019 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Other assets | $ 744,207 | $ 497,857 |
Rent security deposits | 294,553 | 127,246 |
Other assets excluding rent security | $ 449,654 | $ 370,611 |
Lines of Credit and Long-Term_3
Lines of Credit and Long-Term Liabilities (Details Narrative) - USD ($) | Sep. 30, 2020 | Apr. 24, 2020 | Mar. 03, 2020 | Jan. 28, 2020 | Dec. 23, 2019 | May 01, 2019 | Dec. 15, 2015 | May 31, 2020 | Apr. 30, 2020 | Sep. 30, 2020 | Sep. 30, 2019 |
Proceeds from notes payable | $ 8,485,000 | $ 2,595,000 | |||||||||
Repayment of notes payable | 851,640 | 414,859 | |||||||||
Long term liabilities | $ 17,066,337 | $ 17,066,337 | $ 6,789,332 | ||||||||
Independent Third-party [Member] | |||||||||||
Debt instrument, interest rate | 8.00% | 8.00% | 8.00% | 8.00% | |||||||
Debt instrument, maturity date | Mar. 30, 2022 | Oct. 24, 2021 | Jun. 23, 2021 | ||||||||
Note payable | $ 4,605,000 | $ 1,725,000 | $ 1,725,000 | $ 4,605,000 | |||||||
Original issue discount | 600,000 | 225,000 | 225,000 | $ 600,000 | |||||||
Legal fees | 5,000 | 5,000 | 5,000 | ||||||||
Proceeds from notes payable | $ 4,000,000 | $ 1,495,000 | $ 1,495,000 | ||||||||
Advanced Industrial Services, Inc [Member] | |||||||||||
Purchase price | $ 3,381,433 | ||||||||||
Long term liabilities | 905,433 | ||||||||||
Advanced Industrial Services, Inc [Member] | Fulton Bank [Member] | |||||||||||
Long term liabilities | 2,476,000 | ||||||||||
Notes Payable Due on May 1, 2023 [Member] | Fulton Bank [Member] | |||||||||||
Loans payable to bank | $ 360,000 | $ 400,000 | |||||||||
Debt instrument, interest rate | 3.98% | 3.98% | 4.23% | ||||||||
Advanced Industrial Services, Inc [Member] | |||||||||||
Payments to acquire businesses and interest in affiliates | $ 5,000,000 | ||||||||||
Advanced Industrial Services, Inc [Member] | Notes Payable Due on May 1, 2023 [Member] | |||||||||||
Debt instrument, maturity date | May 1, 2023 | May 1, 2023 | |||||||||
London Interbank Offered Rate [Member] | Advanced Industrial Services, Inc [Member] | |||||||||||
Debt instrument, interest rate | 2.50% | ||||||||||
Debt instrument, maturity date | Jan. 28, 2040 | ||||||||||
London Interbank Offered Rate [Member] | Notes Payable Due on May 1, 2023 [Member] | Fulton Bank [Member] | |||||||||||
Debt instrument, variable interest rate | 2.25% | 2.00% | |||||||||
London Interbank Offered Rate [Member] | Advanced Industrial Services, Inc [Member] | |||||||||||
Debt instrument, variable interest rate | 2.25% | ||||||||||
Fulton Bank [Member] | |||||||||||
Line of credit | $ 3,500,000 | ||||||||||
Line of credit facility, interest rate | 3.98% | ||||||||||
Loans payable to bank | $ 5,250,000 | ||||||||||
Debt instrument, interest rate | 4.23% | 4.23% | |||||||||
Debt instrument, maturity date | Dec. 15, 2022 | ||||||||||
Fulton Bank [Member] | Notes Payable Due on December 15, 2020 [Member] | |||||||||||
Loans payable to bank | $ 620,000 | ||||||||||
Debt instrument, interest rate | 3.98% | 3.98% | |||||||||
Debt instrument, maturity date | Dec. 15, 2020 | ||||||||||
Fulton Bank [Member] | London Interbank Offered Rate [Member] | Notes Payable Due on December 15, 2020 [Member] | |||||||||||
Debt instrument, variable interest rate | 2.00% | ||||||||||
Fulton Bank One [Member] | |||||||||||
Loans payable to bank | $ 5,250,000 | $ 5,250,000 | |||||||||
Fulton Bank One [Member] | London Interbank Offered Rate [Member] | |||||||||||
Line of credit facility, interest rate | 2.00% | 2.00% | |||||||||
Paycheck Protection Program [Member] | |||||||||||
Debt instrument, interest rate | 2.00% | 2.00% | |||||||||
Loan granted on paycheck protection | $ 3,471,100 | $ 3,471,100 | |||||||||
Debt term | 2 years | 2 years | |||||||||
Other long-term liabilities | $ 1,301,663 | $ 1,301,663 | |||||||||
Loan Agreement [Member] | |||||||||||
Debt instrument, interest rate | 8.85% | ||||||||||
Debt instrument, maturity date | Mar. 30, 2022 | ||||||||||
Note payable | $ 5,600,000 | ||||||||||
Repayment of notes payable | 500,000 | ||||||||||
Loan Agreement [Member] | One Year [Member] | |||||||||||
Repayment of notes payable | $ 500,000 |
Lines of Credit and Long-Term_4
Lines of Credit and Long-Term Liabilities - Schedule of Estimated Maturities of Long Term Debt (Details) | Sep. 30, 2020USD ($) | |
2021 | $ 7,034,510 | |
2022 | 9,221,096 | |
2023 | 911,162 | |
2024 | 167,231 | |
2025 | 144,008 | |
Thereafter | 1,913,111 | |
Total | 19,391,118 | |
NIL Funding [Member] | ||
2021 | 800,000 | |
2022 | 3,825,000 | |
2023 | ||
2024 | ||
2025 | ||
Thereafter | ||
Total | 4,625,000 | |
PPP Loans [Member] | ||
2021 | 1,301,663 | |
2022 | 2,169,437 | |
2023 | ||
2024 | ||
2025 | ||
Thereafter | ||
Total | 3,471,100 | |
Notes Payable [Member] | ||
2021 | 3,932,787 | [1] |
2022 | 2,205,000 | [1] |
2023 | [1] | |
2024 | [1] | |
2025 | [1] | |
Thereafter | [1] | |
Total | 6,137,787 | [1] |
Fulton Bank One [Member] | ||
2021 | 713,548 | |
2022 | 782,269 | |
2023 | 668,767 | |
2024 | ||
2025 | ||
Thereafter | ||
Total | 2,164,584 | |
Fulton Bank Two [Member] | ||
2021 | 58,897 | |
2022 | ||
2023 | ||
2024 | ||
2025 | ||
Thereafter | ||
Total | 58,897 | |
Fulton Bank Three [Member] | ||
2021 | 78,995 | |
2022 | 85,792 | |
2023 | 81,886 | |
2024 | ||
2025 | ||
Thereafter | ||
Total | 246,673 | |
Fulton Bank Four [Member] | ||
2021 | 67,291 | |
2022 | 69,024 | |
2023 | 72,243 | |
2024 | 75,111 | |
2025 | 47,866 | |
Thereafter | ||
Total | 331,535 | |
Fulton Bank - Mortgage Payable [Member] | ||
2021 | 81,329 | |
2022 | 84,574 | |
2023 | 88,266 | |
2024 | 92,120 | |
2025 | 96,142 | |
Thereafter | 1,913,111 | |
Total | $ 2,355,542 | |
[1] | Net of unamortized original issue discounts of $875,000 |
Lines of Credit and Long-Term_5
Lines of Credit and Long-Term Liabilities - Schedule of Estimated Maturities of Long Term Debt (Details) (Parenthetical) | Sep. 30, 2020USD ($) |
Unamortized debt issuance cost | $ 875,000 |
Fulton Bank One [Member] | |
Loans payable to bank | 5,250,000 |
Fulton Bank Two [Member] | |
Loans payable to bank | 620,000 |
Fulton Bank Three [Member] | |
Loans payable to bank | 400,000 |
Fulton Bank Four [Member] | |
Loans payable to bank | $ 360,000 |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - USD ($) | May 01, 2020 | Aug. 31, 2019 | Mar. 23, 2018 | Sep. 30, 2020 | Sep. 30, 2019 |
Trade receivables related parties | $ 1,432,209 | $ 771,519 | |||
Purchase of common stock | 3,643 | ||||
Telidyne Inc.[Member] | |||||
Value of stock offering | $ 500,000 | ||||
Purchase of common stock | 166,667 | ||||
Common stock share price | $ 3 | ||||
Ducon Technologies, Inc [Member] | |||||
Trade receivables related parties | 1,432,209 | $ 771,519 | |||
Griffin Filters, LLC [Member] | |||||
Trade receivables related parties | $ 500,000 | ||||
Description of remaining balance due | At September 30, 2020, $500,000 of the balance due is for the sale of Griffin, due in February 2021, and the remaining balance are various receivables with various due dates within the next fiscal year. | ||||
Asset Purchase Agreement [Member] | Griffin Filters, LLC [Member] | Ducon Technologies, Inc [Member] | Aron Govil [Member] | |||||
Consideration amount | $ 550,000 |
Shareholders' Equity (Details N
Shareholders' Equity (Details Narrative) - USD ($) | Jul. 10, 2020 | Jun. 09, 2020 | Jun. 01, 2020 | Feb. 26, 2020 | Jan. 24, 2020 | Dec. 04, 2019 | Oct. 03, 2019 | May 28, 2019 | May 13, 2019 | Mar. 23, 2018 | Sep. 30, 2020 | Sep. 30, 2019 | Jul. 27, 2020 | Mar. 30, 2020 |
Common stock, shares authorized | 40,000,000 | 40,000,000 | ||||||||||||
Preferred stock, shares authorized | 10,000,000 | 10,000,000 | ||||||||||||
Preferred stock, par value | $ 0.001 | $ 0.001 | ||||||||||||
Preferred stock, shares issued | 3,256,784 | 3,110,718 | ||||||||||||
Preferred stock, shares outstanding | 3,256,784 | 3,110,718 | ||||||||||||
Number of common stock shares issued | 3,643 | |||||||||||||
Common stock, par or stated value per share | $ 0.001 | $ 0.001 | ||||||||||||
Common stock, shares, issued | 17,622,539 | 3,962,790 | ||||||||||||
Common stock, shares, outstanding | 17,622,539 | 3,962,790 | ||||||||||||
Number of shares issued for services | 7,500 | |||||||||||||
Number of shares cancelled | 4,111 | |||||||||||||
Reverse stock split | 1-for-8 reverse split | |||||||||||||
Proceeds from public offering | $ 957,784 | |||||||||||||
ATM Offering [Member] | ||||||||||||||
Number of shares cancelled | 27,954 | |||||||||||||
Common Stock [Member] | ||||||||||||||
Number of shares issued for services | 513,358 | |||||||||||||
Number of shares issued for services, value | $ 532,788 | |||||||||||||
Notes Payable [Member] | ||||||||||||||
Number of common stock shares issued | 6,530,473 | 1,847,832 | ||||||||||||
Number of new stock issued, value | $ 8,737,125 | |||||||||||||
Accrued interest | $ 5,047,569 | |||||||||||||
Securities Subscription Agreement [Member] | ||||||||||||||
Number of common stock shares issued | 6,643,872 | |||||||||||||
Number of new stock issued, value | $ 12,462,648 | |||||||||||||
Offering expenses | 840,728 | |||||||||||||
Proceeds from public offering | $ 11,621,920 | |||||||||||||
Board of Directors [Member] | ||||||||||||||
Common stock, shares authorized | 50,000,000 | 30,000,000 | ||||||||||||
Accredited Investor [Member] | Subscription Agreement [Member] | Public Offering [Member] | ||||||||||||||
Number of common stock shares issued | 2,402,923 | 3,055,556 | 347,000 | 500,000 | 338,393 | |||||||||
Stock price per share | $ 2.24 | $ 1.80 | $ 1.30 | $ 1.50 | $ 1.12 | |||||||||
Common stock, par or stated value per share | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | |||||||||
Gross proceeds from public offering | $ 5,382,548 | $ 5,500,000 | $ 451,100 | $ 750,000 | $ 379,000 | |||||||||
Offering expenses | 386,778 | 395,000 | 2,500 | 37,500 | 18,950 | |||||||||
Proceeds from public offering | $ 4,995,769 | $ 5,105,000 | $ 448,600 | $ 712,500 | $ 360,050 | |||||||||
Series A Preferred Stock [Member] | ||||||||||||||
Preferred stock, shares authorized | 1,000,000 | 1,000,000 | ||||||||||||
Preferred stock, shares issued | 1,000,000 | 1,000,000 | ||||||||||||
Preferred stock, shares outstanding | 1,000,000 | 1,000,000 | ||||||||||||
Preferred Stock Series C [Member] | ||||||||||||||
Preferred stock, shares authorized | 100,000 | 100,000 | 100,000 | |||||||||||
Preferred stock, par value | $ 0.001 | |||||||||||||
Preferred stock, shares issued | 100,000 | 100,000 | ||||||||||||
Preferred stock, shares outstanding | 100,000 | 100,000 | ||||||||||||
Preferred stock, voting rights | Under the Certificate of Designation, holders of Series C Preferred Stock are entitled to the number of votes equal to the result of (i) the total number of shares of Common Stock outstanding at the time of such vote multiplied by 10.01, and divided by (ii) the total number of shares of Series C Preferred Stock outstanding at the time of such vote, at each meeting of our shareholders with respect to any and all matters presented to our shareholders for their action or consideration, including the election of directors. | |||||||||||||
Transferring of Shares | 50,000 | |||||||||||||
Preferred Stock Series C [Member] | Executive Director and CFO [Member] | Employment Agreement [Member] | ||||||||||||||
Number of common stock shares issued | 100,000 | |||||||||||||
Series 1 Preferred Stock [Member] | ||||||||||||||
Preferred stock, shares authorized | 3,000,000 | 3,000,000 | ||||||||||||
Preferred stock, shares issued | 2,156,784 | 2,110,718 | ||||||||||||
Preferred stock, shares outstanding | 2,156,784 | 2,110,718 | ||||||||||||
Number of common stock shares issued | 2 | |||||||||||||
Stock price per share | $ 0.95 | |||||||||||||
Dividend rate | 10.00% | |||||||||||||
Preferred stock, liquidation value | $ 10 | $ 10 | ||||||||||||
Shares of preferred stock for dividends | 217,099 | 196,550 | ||||||||||||
Dividends paid to preferred shareholders | $ 2,089,540 | $ 1,965,500 | ||||||||||||
Number of shares purchased | 235,133 | |||||||||||||
Share price | $ 1.92 | |||||||||||||
Number of shares purchased, value | $ 338,775 | |||||||||||||
Number of shares retired | 171,033 | |||||||||||||
Number of shares retired, value | $ 190,484 | |||||||||||||
Series 1 Preferred Stock [Member] | Minimum [Member] | ||||||||||||||
Preferred stock, shares authorized | 3,000,000 | |||||||||||||
Series 1 Preferred Stock [Member] | Maximum [Member] | ||||||||||||||
Preferred stock, shares authorized | 4,000,000 | |||||||||||||
Series 1 Warrants [Member] | ||||||||||||||
Warrant outstanding | $ 0 | $ 0 | ||||||||||||
Warrants issued | 433,965 | |||||||||||||
Warrant price, per share | $ 50.48 |
Share-Based Compensation (Detai
Share-Based Compensation (Details Narrative) - USD ($) | Sep. 25, 2020 | Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2018 |
Stock option granted | 1,050,000 | |||
Stock option exercise price per share granted | ||||
Shares of common stock | 945,833 | 1,050,000 | 79,111 | |
Share based compensation exercise price per share | $ 22.40 | $ 22.40 | ||
Share-based compensation expense | $ 191,416 | $ 622,232 | ||
Unrecognized compensation cost | $ 64,278 | |||
Unrecognized compensation expense, expected to be recognized period | 4 years | |||
Saagar Govil [Member] | ||||
Stock option granted | 400,000 | |||
Stock option exercise price per share granted | $ 1.90 | |||
Vested period | 7 years | |||
Saagar Govil [Member] | Tranche 1 [Member] | ||||
Shares of common stock | 100,000 | |||
Share based compensation exercise price per share | $ 1.92 | |||
Maturity date | Sep. 25, 2021 | |||
Saagar Govil [Member] | Tranche 2 [Member] | ||||
Shares of common stock | 100,000 | |||
Share based compensation exercise price per share | $ 2.30 | |||
Maturity date | Sep. 25, 2023 | |||
Saagar Govil [Member] | Tranche 3 [Member] | ||||
Shares of common stock | 100,000 | |||
Share based compensation exercise price per share | $ 2.76 | |||
Maturity date | Sep. 25, 2025 | |||
Aron Govil [Member] | ||||
Stock option granted | 200,000 | |||
Stock option exercise price per share granted | $ 1.90 | |||
Vested period | 7 years | |||
Aron Govil [Member] | Tranche 1 [Member] | ||||
Shares of common stock | 25,000 | |||
Share based compensation exercise price per share | $ 1.92 | |||
Maturity date | Sep. 25, 2021 | |||
Aron Govil [Member] | Tranche 2 [Member] | ||||
Shares of common stock | 12,500 | |||
Share based compensation exercise price per share | $ 2.30 | |||
Maturity date | Sep. 25, 2023 | |||
Aron Govil [Member] | Tranche 3 [Member] | ||||
Shares of common stock | 8,333 | |||
Share based compensation exercise price per share | $ 2.76 | |||
Maturity date | Sep. 25, 2025 |
Share-Based Compensation - Sche
Share-Based Compensation - Schedule of Fair Value Stock Option Weighted Average Assumptions (Details) | 12 Months Ended |
Sep. 30, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Expected term | 5 years |
Risk-free interest rate | 1.56% |
Expected volatility | 94.74% |
Expected dividend yield | 0.00% |
Share-Based Compensation - Sc_2
Share-Based Compensation - Schedule of Stock Options Activity (Details) - USD ($) | 12 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Share-based Payment Arrangement [Abstract] | ||
Number of Options, Outstanding, Beginning balance | 1,050,000 | 79,111 |
Number of Options, Options granted | 1,050,000 | |
Number of Options, Options exercised | ||
Number of Options, Options forfeited | (4,111) | |
Number of Options, Options cancelled | (104,167) | (75,000) |
Number of Options, Outstanding, Ending balance | 945,833 | 1,050,000 |
Number of Options, Exercisable | 737,500 | |
Weighted Average Exercise Price, Outstanding, Beginning balance | $ 22.40 | $ 22.40 |
Weighted Average Exercise Price, Options granted | ||
Weighted Average Exercise Price, Options exercised | ||
Weighted Average Exercise Price, Options forfeited | ||
Weighted Average Exercise Price, Options cancelled | ||
Weighted Average Exercise Price, Outstanding, Ending balance | $ 22.40 | |
Weighted Average Exercise Price, Exercisable | $ 1.71 | |
Weighted Average Remaining Contractual Term (in years), Outstanding | 4 years 1 month 2 days | |
Weighted Average Remaining Contractual Term (in years), Exercisable | 3 years | |
Aggregate Intrinsic Value, Outstanding, Beginning balance | ||
Aggregate Intrinsic Value, Outstanding, Ending balance | ||
Aggregate Intrinsic Value, Exercisable |
Commitments and Contingencies (
Commitments and Contingencies (Details Narrative) | 6 Months Ended | 12 Months Ended | ||
Sep. 30, 2020USD ($)ft² | Sep. 30, 2020USD ($)ft² | Sep. 30, 2020INR (₨)ft² | Sep. 30, 2020GBP (£)ft² | |
Commitments and Contingencies Disclosure [Line Items] | ||||
Area of land | ft² | 2,500 | 2,500 | 2,500 | 2,500 |
Monthly lease rent payment | $ 13,000 | |||
Lease expense | $ 139,721 | $ 59,122 | ||
Operating lease termination description | The Company also made the accounting policy decision not to recognize lease assets and liabilities for leases with a term of 12 months or less. | The Company also made the accounting policy decision not to recognize lease assets and liabilities for leases with a term of 12 months or less. | The Company also made the accounting policy decision not to recognize lease assets and liabilities for leases with a term of 12 months or less. | |
IS Segment [Member] | Manchester PA [Member] | ||||
Commitments and Contingencies Disclosure [Line Items] | ||||
Area of land | ft² | 25,000 | 25,000 | 25,000 | 25,000 |
IS Segment [Member] | York, PA [Member] | ||||
Commitments and Contingencies Disclosure [Line Items] | ||||
Area of land | ft² | 43,000 | 43,000 | 43,000 | 43,000 |
IS Segment [Member] | Emigsville, PA [Member] | ||||
Commitments and Contingencies Disclosure [Line Items] | ||||
Area of land | ft² | 15,500 | 15,500 | 15,500 | 15,500 |
Monthly lease rent payment | $ 4,555 | |||
Lease expense | $ 54,660 | |||
Lease expiration date | Aug. 31, 2022 | Aug. 31, 2022 | Aug. 31, 2022 | |
Lease term | 3 years | 3 years | 3 years | 3 years |
Advanced Technologies [Member] | Pune, India [Member] | ||||
Commitments and Contingencies Disclosure [Line Items] | ||||
Area of land | ft² | 6,700 | 6,700 | 6,700 | 6,700 |
Monthly lease rent payment | $ 6,453 | |||
Lease expense | $ 77,436 | |||
Lease expiration date | Feb. 28, 2024 | Feb. 28, 2024 | Feb. 28, 2024 | |
Lease term | 5 years | 5 years | 5 years | 5 years |
Advanced Technologies [Member] | Pune, India [Member] | INR [Member] | ||||
Commitments and Contingencies Disclosure [Line Items] | ||||
Monthly lease rent payment | ₨ | ₨ 456,972 | |||
Advanced Technologies [Member] | Hauppauge, New York [Member] | ||||
Commitments and Contingencies Disclosure [Line Items] | ||||
Area of land | ft² | 27,000 | 27,000 | 27,000 | 27,000 |
Monthly lease rent payment | $ 28,719 | |||
Lease expense | $ 152,880 | |||
Lease expiration date | Mar. 31, 2027 | Mar. 31, 2027 | Mar. 31, 2027 | |
Lease term | 7 years | 7 years | 7 years | 7 years |
Advanced Technologies [Member] | Hampshire, England [Member] | ||||
Commitments and Contingencies Disclosure [Line Items] | ||||
Area of land | ft² | 9,400 | 9,400 | 9,400 | 9,400 |
Monthly lease rent payment | $ 7,329 | |||
Lease expense | $ 87,948 | |||
Lease expiration date | Mar. 24, 2031 | Mar. 24, 2031 | Mar. 24, 2031 | |
Lease term | 15 years | 15 years | 15 years | 15 years |
Operating lease termination description | Terminate in 2021 and 2026. | Terminate in 2021 and 2026. | Terminate in 2021 and 2026. | |
Advanced Technologies [Member] | Hampshire, England [Member] | GBP [Member] | ||||
Commitments and Contingencies Disclosure [Line Items] | ||||
Monthly lease rent payment | £ | £ 5,771 |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) | 12 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Income Tax Disclosure [Abstract] | ||
Income tax description | The Tax Cuts and Jobs Act (the "Tax Act") was enacted on December 22, 2017. The Tax Act reduces the maximum U.S. federal corporate tax rate from 35% to 21% | |
US federal corporate tax | 21.00% | 21.00% |
Income Taxes - Schedule of (Los
Income Taxes - Schedule of (Loss) Income Before Provision for Tax (Details) - USD ($) | 12 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Income Tax Disclosure [Abstract] | ||
Domestic | $ (5,886,398) | $ (10,774,136) |
Foreign | (933,531) | (1,864,201) |
Loss before provision for income taxes | $ (6,819,929) | $ (12,638,337) |
Income Taxes - Schedule of Prov
Income Taxes - Schedule of Provision for Income Taxes (Details) - USD ($) | 12 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Income Tax Disclosure [Abstract] | ||
Current (benefit)/provision, Federal | ||
Current (benefit)/provision, State | (209,032) | 7,978 |
Current (benefit)/provision, Foreign | ||
Total current (benefit)/provision | (209,032) | 7,978 |
Deferred provision, Federal | 2,282,867 | (1,343,562) |
Deferred provision, State | ||
Deferred provision, Foreign | ||
Total deferred provision | 2,282,867 | (1,343,562) |
Total (benefit)/provision for income taxes | $ 2,073,835 | $ (1,335,584) |
Effective Income tax rate | (30.41%) | 10.57% |
Income Taxes - Schedule of Effe
Income Taxes - Schedule of Effective Income Tax Rate Reconciliation (Details) | 12 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Income Tax Disclosure [Abstract] | ||
U.S. statutory rate | 21.00% | 21.00% |
State statutory rate | 6.50% | 6.50% |
Foreign tax rate differential | 0.00% | 0.00% |
Change in valuation allowance | (33.00%) | (12.83%) |
Effect of change in rates | 0.00% | (6.23%) |
Nondeducttible expenses | (24.91%) | 2.13% |
Effective rate | (30.41%) | 10.57% |
Income Taxes - Schedule of Defe
Income Taxes - Schedule of Deferred Tax Assets and Liabilities (Details) - USD ($) | Sep. 30, 2020 | Sep. 30, 2019 |
Income Tax Disclosure [Abstract] | ||
Deferred Tax Assets: Net operating loss carryforwards | $ 15,136,466 | $ 15,473,774 |
Deferred Tax Assets: Inventory | 1,475,593 | 1,121,788 |
Deferred Tax Assets: Prepaid expenses | 74,149 | |
Deferred Tax Assets: Allowance for bad debt | 52,168 | 121,485 |
Deferred Tax Assets: Depreciation | 331,924 | 341,093 |
Deferred Tax Assets: Non-qualified stock options | 393,191 | 393,518 |
Deferred Tax Assets: Warrants (interest expense) | 78,557 | 78,622 |
Deferred Tax Assets: Accrued compensation | 623,996 | 327,487 |
Deferred Tax Assets: Warranty Reserve | 100,926 | 101,010 |
Deferred Tax Assets: Unearned revenue | 109,013 | 113,111 |
Deferred Tax Assets: Other | 61 | 638,022 |
Deferred Tax Assets: Total gross deferred taxes | 18,376,044 | 18,709,910 |
Deferred Tax Assets: Valuation allowance | (17,168,322) | (15,292,817) |
Net deferred tax assets | 1,207,722 | 3,417,093 |
Deferred Tax Liabilities: Accrued vacation | (1,804) | |
Deferred Tax Liabilities: Inventory | (41,526) | |
Deferred Tax Liabilities: Prepaid expenses | (45,563) | (25,305) |
Deferred Tax Liabilities: Goodwill amortization | (163,839) | (112,800) |
Deferred Tax Liabilities: Research and development expenses | (42,274) | (42,216) |
Deferred Tax Liabilities: Depreciation | (807,096) | (821,440) |
Deferred Tax Liabilities: Gain/loss on fixed asset disposal | (106,753) | (130,661) |
Deferred Tax Liabilities: Other | (671) | |
Total deferred tax liabilities | (1,207,722) | (1,134,226) |
Total deferred tax assets (liabilities) | $ 2,282,867 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - USD ($) | Oct. 26, 2022 | Oct. 26, 2021 | Nov. 13, 2020 | Nov. 03, 2020 | Oct. 26, 2020 | Oct. 06, 2020 | Mar. 23, 2018 | Sep. 30, 2020 |
Number of shares of common stock | 3,643 | |||||||
Series 1 Preferred Stock [Member] | ||||||||
Number of shares of common stock | 2 | |||||||
Forecast [Member] | Installment One [Member] | ||||||||
Debt monthly payments | $ 239,774 | |||||||
Forecast [Member] | Installment Two [Member] | ||||||||
Debt monthly payments | $ 200,000 | |||||||
Subsequent Event [Member] | ||||||||
Cash | $ 900,000 | |||||||
Notes payable | $ 439,774 | |||||||
Interest rate | 5.00% | |||||||
Number of shares of common stock | 345,648 | |||||||
Number of shares of common stock, value | $ 323,517 | |||||||
Subsequent Event [Member] | MasterpieceVR [Member] | ||||||||
Equity investment | $ 500,000 | |||||||
Investment stake percentage | 8.00% | |||||||
Subsequent Event [Member] | Series 1 Preferred Stock [Member] | ||||||||
Number of shares of common stock | 108,169 | |||||||
Subsequent Event [Member] | Virtual Driver Interactive [Member] | ||||||||
Purchase price of acquisition | $ 1,339,774 |