Cover
Cover - USD ($) | 12 Months Ended | ||
Sep. 30, 2021 | Jan. 20, 2022 | Mar. 31, 2021 | |
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Document Period End Date | Sep. 30, 2021 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2021 | ||
Current Fiscal Year End Date | --09-30 | ||
Entity File Number | 001-37464 | ||
Entity Registrant Name | CEMTREX, INC. | ||
Entity Central Index Key | 0001435064 | ||
Entity Tax Identification Number | 30-0399914 | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Address, Address Line One | 276 Greenpoint Ave. Suite 208 | ||
Entity Address, City or Town | Brooklyn | ||
Entity Address, State or Province | NY | ||
Entity Address, Postal Zip Code | 11222 | ||
City Area Code | 631 | ||
Local Phone Number | 756-9116 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 18,141,241 | ||
Entity Common Stock, Shares Outstanding | 23,673,210 | ||
ICFR Auditor Attestation Flag | false | ||
Common Stock [Member] | |||
Title of 12(b) Security | Common Stock | ||
Security Exchange Name | NASDAQ | ||
Series-1 Preferred Stock [Member] | |||
Title of 12(b) Security | Preferred Stock, Series 1 | ||
Security Exchange Name | NASDAQ | ||
Series 1 Warrants [Member] | |||
Title of 12(b) Security | Series 1 | ||
Security Exchange Name | NASDAQ |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Sep. 30, 2021 | Sep. 30, 2020 |
Current assets | ||
Cash and equivalents | $ 15,426,976 | $ 19,487,023 |
Restricted cash | 1,759,347 | 1,582,798 |
Short-term investments | 14,981 | 887,746 |
Trade receivables, net | 7,810,896 | 6,686,797 |
Trade receivables - related party | 1,487,155 | 1,432,209 |
Inventory –net of allowance for inventory obsolescence | 5,657,287 | 4,946,457 |
Prepaid expenses and other assets | 2,585,652 | 1,175,775 |
Total current assets | 34,742,294 | 36,198,805 |
Property and equipment, net | 6,738,944 | 5,973,850 |
Right-of-use assets | 2,940,127 | 2,728,380 |
Assets held for sale | 8,323,321 | |
Goodwill | 7,821,283 | 7,222,892 |
Other | 697,240 | 381,900 |
Total Assets | 52,939,888 | 60,829,148 |
Current liabilities | ||
Accounts payable | 4,235,002 | 4,811,217 |
Short-term liabilities | 9,977,972 | 7,034,510 |
Lease liabilities - short-term | 830,791 | 721,036 |
Deposits from customers | 62,970 | 29,660 |
Accrued expenses | 2,094,303 | 2,107,027 |
Deferred revenue | 2,004,170 | 1,497,826 |
Accrued income taxes | 448,194 | 89,318 |
Total current liabilities | 19,653,402 | 16,290,594 |
Long-term liabilities | ||
Loans payable to bank | 767,279 | 1,871,201 |
Long-term lease liabilities | 2,017,408 | 2,027,406 |
Notes payable | 2,350,000 | 6,029,999 |
Mortgage payable | 2,257,785 | 2,355,542 |
Other long-term liabilities | 839,171 | 768,595 |
Paycheck Protection Program Loans | 1,032,200 | 2,169,437 |
Deferred Revenue - long-term | 467,967 | 467,329 |
Total long-term liabilities | 9,731,810 | 15,689,509 |
Total liabilities | 29,385,212 | 31,980,103 |
Commitments and contingencies | ||
Shareholders’ equity | ||
Common stock, $0.001 par value, 50,000,000 shares authorized,20,782,194 shares issued and outstanding at September 30, 2021 and 17,622,539 shares issued and outstanding at September 30, 2020 | 20,782 | 17,623 |
Additional paid-in capital | 61,727,834 | 60,221,766 |
Retained earnings (accumulated deficit) | (41,908,062) | (34,100,067) |
Treasury stock at cost | (148,291) | (148,291) |
Accumulated other comprehensive income (loss) | 2,896,452 | 1,812,457 |
Total Cemtrex stockholders’ equity | 22,590,650 | 27,806,745 |
Non-controlling interest | 964,026 | 1,042,300 |
Total liabilities and shareholders’ equity | 52,939,888 | 60,829,148 |
Series-1 Preferred Stock [Member] | ||
Shareholders’ equity | ||
Preferred stock, value | 1,885 | 2,157 |
Series A Preferred Stock [Member] | ||
Shareholders’ equity | ||
Preferred stock, value | 1,000 | |
Series C Preferred Stock [Member] | ||
Shareholders’ equity | ||
Preferred stock, value | $ 50 | $ 100 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) | Sep. 30, 2020$ / sharesshares |
Preferred stock, par value | $ / shares | $ 0.001 |
Preferred stock, shares authorized | 10,000,000 |
Preferred stock, shares issued | 3,256,784 |
Preferred stock, shares outstanding | 3,256,784 |
Common stock, par value | $ / shares | $ 0.001 |
Common stock, shares authorized | 50,000,000 |
Common stock, shares issued | 17,622,539 |
Common stock, shares outstanding | 17,622,539 |
Series 1 Preferred Stock [Member] | |
Preferred stock, shares authorized | 3,000,000 |
Preferred stock, shares issued | 2,156,784 |
Preferred stock, shares outstanding | 2,156,784 |
Preferred Stock, Liquidation Preference Per Share | $ / shares | $ 10 |
Series A Preferred Stock [Member] | |
Preferred stock, shares authorized | 1,000,000 |
Preferred stock, shares issued | 1,000,000 |
Preferred stock, shares outstanding | 1,000,000 |
Series C Preferred Stock [Member] | |
Preferred stock, shares authorized | 100,000 |
Preferred stock, shares issued | 100,000 |
Preferred stock, shares outstanding | 100,000 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations and Comprehensive Income/(Loss) (Unaudited) - USD ($) | 12 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Income Statement [Abstract] | ||
Revenues | $ 43,130,934 | $ 43,518,384 |
Cost of revenues | 26,162,582 | 25,897,181 |
Gross profit | 16,968,352 | 17,621,203 |
Operating expenses | ||
General and administrative | 22,538,496 | 20,363,728 |
Research and development | 3,171,676 | 1,827,286 |
Total operating expenses | 25,710,172 | 22,191,014 |
Operating income/(loss) | (8,741,820) | (4,569,811) |
Other income/(expense) | ||
Other income/(expense) | 8,758,212 | 1,821,029 |
Settlement Agreement - Related Party | 3,674,165 | |
Interest Expense | (2,921,345) | (4,607,453) |
Total other income/(expense), net | 9,511,032 | (2,786,424) |
Net loss before income taxes | 769,212 | (7,356,235) |
Income tax benefit/(expense) | (375,434) | (2,073,835) |
Income/Loss from Continuing operations | 393,778 | (9,430,070) |
Loss from discontinued operations, net of tax | (8,280,047) | (812,895) |
Net income/(loss) | (7,886,269) | (10,242,965) |
Less income/(loss) in noncontrolling interest | (78,274) | 227,116 |
Net income/(loss) attributable to Cemtrex, Inc. shareholders | (7,807,995) | (10,470,081) |
Net income/(loss) | (7,886,269) | (10,242,965) |
Other comprehensive income/(loss) | ||
Foreign currency translation gain/(loss) | 996,100 | 57,639 |
Defined benefit plan actuarial gain/(loss) | 87,895 | |
Comprehensive income/(loss) | (6,802,274) | (10,185,326) |
Less comprehensive income/(loss) attributable to noncontrolling interest | 78,274 | (227,116) |
Comprehensive income/(loss) attributable to Cemtrex, Inc. shareholders | $ (6,880,548) | $ (9,958,210) |
Income/(loss) Per Share-Basic | ||
Income/(loss) Per Share-Basic- Continuing operations | $ 0.02 | $ (1) |
Income/(loss) Per Share-Basic - Discontinued operations | (0.44) | (0.08) |
Income/(loss) Per Share-Diluted- Continuing operations | ||
Income/(loss) Per Share-Diluted | 0.02 | (1) |
Income/(loss) Per Share-Diluted - Discontinued operations | $ (0.44) | $ (0.08) |
Weighted Average Number of Shares-Basic | 18,911,746 | 9,611,516 |
Weighted Average Number of Shares-Diluted | 18,911,746 | 9,611,516 |
Condensed Consolidated Statem_2
Condensed Consolidated Statement of Stockholders' Equity (Unaudited) - USD ($) | Preferred Stock [Member]Series-1 Preferred Stock [Member] | Preferred Stock [Member]Series A Preferred Stock [Member] | Preferred Stock [Member]Series C Preferred Stock [Member] | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Treasury Stock [Member] | AOCI Attributable to Parent [Member] | Total | Noncontrolling Interest [Member] |
Balance at September 30, 2019, as reported at Aug. 31, 2019 | $ 2,111 | $ 1,000 | $ 3,963 | $ 40,344,837 | $ (20,067,685) | $ 796,004 | $ 21,080,230 | $ 885,874 | ||
Balance, shares at Aug. 31, 2019 | 2,110,718 | 1,000,000 | 3,962,790 | |||||||
Adjustment | (1,002,030) | 3,562,301 | 958,814 | (3,605,517) | (70,690) | |||||
Balance at September 30, 2020, as restated at Sep. 30, 2019 | $ 2,111 | $ 1,000 | $ 3,963 | 39,342,807 | (23,629,986) | 1,754,818 | 17,474,713 | 815,184 | ||
Balance, shares at Sep. 30, 2019 | 2,110,718 | 1,000,000 | 3,962,790 | |||||||
Foreign currency translation gain | 57,639 | 57,639 | ||||||||
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 | |||||||||
Purchase of treasury stock | (338,775) | (338,775) | ||||||||
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) | |||||||||
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 | (217) | ||||||||
Dividends paid in Series 1 preferred shares, shares | 217,099 | |||||||||
Income/(loss) attributable to noncontrolling interest | 227,116 | |||||||||
Net loss | (10,470,081) | (10,470,081) | ||||||||
Balance at September 30, 2020, as restated at Sep. 30, 2020 | $ 2,157 | $ 1,000 | $ 100 | $ 17,623 | 60,221,766 | (34,100,067) | (148,291) | 1,812,457 | 27,806,745 | 1,042,300 |
Balance, shares at Sep. 30, 2020 | 2,156,784 | 1,000,000 | 100,000 | 17,622,539 | ||||||
Balance at September 30, 2019, as reported at Aug. 31, 2020 | $ 2,157 | $ 1,000 | $ 100 | $ 17,623 | 63,313,336 | (33,172,690) | (148,291) | 853,643 | 28,996,207 | 1,077,645 |
Balance, shares at Aug. 31, 2020 | 2,156,784 | 1,000,000 | 100,000 | 17,622,539 | ||||||
Adjustment | (3,091,570) | 297,430 | 923,469 | (1,870,671) | ||||||
Balance at September 30, 2020, as restated at Sep. 30, 2020 | $ 2,157 | $ 1,000 | $ 100 | $ 17,623 | 60,221,766 | (34,100,067) | (148,291) | 1,812,457 | 27,806,745 | 1,042,300 |
Balance, shares at Sep. 30, 2020 | 2,156,784 | 1,000,000 | 100,000 | 17,622,539 | ||||||
Foreign currency translation gain | 996,100 | 996,100 | ||||||||
Defined benefit plan actuarial gain/(loss) | 87,895 | 87,895 | ||||||||
Share-based compensation | 156,419 | 156,419 | ||||||||
Shares issued to pay notes payable | $ 3,159 | 5,022,492 | 5,025,651 | |||||||
Shares issued to pay notes payable, shares | 3,159,655 | |||||||||
Dividends paid in Series 1 preferred shares | $ 198 | (198) | ||||||||
Dividends paid in Series 1 preferred shares, shares | 198,316 | |||||||||
Income/(loss) attributable to noncontrolling interest | (78,274) | |||||||||
Shares and options surrendered in settelment agreement | $ (470) | $ (1,000) | $ (50) | (3,672,645) | (3,674,165) | |||||
Stock Issued During Period Shares and Options Surrendered In Settlement Agreement | (469,949) | (1,000,000) | (50,000) | |||||||
Net loss | (7,807,995) | (7,807,995) | ||||||||
Balance at September 30, 2020, as restated at Sep. 30, 2021 | $ 1,885 | $ 50 | $ 20,782 | $ 61,727,834 | $ (41,908,062) | $ (148,291) | $ 2,896,452 | $ 22,590,650 | $ 964,026 | |
Balance, shares at Sep. 30, 2021 | 1,885,151 | 50 | 20,782,194 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 12 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Cash Flows from Operating Activities | ||
Net income/(loss) | $ (7,886,269) | $ (10,242,965) |
Net loss from discontinued operations | (8,280,047) | (812,895) |
Net loss from continuing operations | 393,778 | (9,430,070) |
Adjustments to reconcile net loss to net cash provided/(used) by operating activities: | ||
Depreciation and amortization | 1,335,189 | 1,865,726 |
Gain on disposal of property and equipment | 48,981 | 37,910 |
Amortization of right-of-use assets | 870,860 | 816,550 |
Change in allowance for doubtful accounts | (161,856) | (265,203) |
Share-based compensation | 156,418 | 191,416 |
Income tax expense/ (benefit) | 375,434 | 2,073,835 |
Interest expense paid in equity shares | 1,291,596 | 2,859,125 |
Accrued interest on notes payable | 398,321 | 374,328 |
Amortization of original issue discounts on notes payable | 675,000 | 944,778 |
Gain/loss on marketable securities | (2,612,847) | 52,695 |
Settlement Agreement - Related Party | (3,674,165) | |
Discharge of Paycheck Protection Program Loans | (5,320,485) | |
Changes in operating assets and liabilities net of effects from acquisition of subsidiaries: | ||
Accounts receivable | (962,243) | 37,390 |
Accounts receivable - related party | (59,960) | (660,690) |
Inventory | (670,838) | 156,593 |
Prepaid expenses and other current assets | (1,411,653) | 267,448 |
Other assets | 110,534 | (246,350) |
Other liabilities | 70,576 | (157,816) |
Accounts payable | (512,138) | (846,340) |
Operating lease liabilities | (962,790) | (816,549) |
Deposits from customers | 33,310 | (3,414) |
Accrued expenses | 47,389 | (673,792) |
Deferred revenue | 506,982 | 195,775 |
Income taxes payable | (16,558) | (121,191) |
Net cash used by operating activities - continuing operations | (10,051,165) | (3,347,846) |
Net cash provided/(used) by operating activities - discontinued operations | (438,356) | |
Net cash used by operating activities | (10,051,165) | (3,786,202) |
Cash Flows from Investing Activities | ||
Purchase of property and equipment | (1,069,283) | (1,566,014) |
Investment in Virtual Driver Interactive | (1,075,428) | |
Investment in MasterpieceVR | (500,000) | |
Proceeds from sale of marketable securities | 11,477,321 | 30,080,220 |
Purchase of marketable securities | (7,991,709) | (30,607,931) |
Purchases of treasury stock | (338,775) | |
Net cash provided/(used) by investing activities | 840,901 | (2,432,500) |
Cash Flows from Financing Activities | ||
Proceeds from notes payable | 5,005,000 | 8,485,000 |
Payments on notes payable | (2,220,257) | (1,225,969) |
Payments received on notes receivable | 3,300,289 | |
Proceeds on bank loans | 3,831,100 | |
Payments on bank loans | (1,261,035) | (778,090) |
Proceeds from Paycheck Protection Program Loans | 2,942,285 | |
Proceeds from securities purchase agreements | 12,462,648 | |
Payments on capital lease liabilities | (20,061) | (22,718) |
Expenses on securities purchase agreements | (840,728) | |
Revolving line of credit | (425,812) | |
Net cash provided by financing activities - continuing operations | 4,445,932 | 24,785,720 |
Net cash used by financing activities - discontinued operations | (374,538) | |
Net cash provided by financing activities | 4,445,932 | 24,411,182 |
Effect of currency translation | 880,834 | 22,294 |
Net increase in cash, cash equivalents, and restricted cash | (4,764,332) | 18,192,480 |
Cash, cash equivalents, and restricted cash at beginning of period | 21,069,821 | 2,855,047 |
Cash, cash equivalents, and restricted cash at end of period | 17,186,323 | 21,069,821 |
Balance Sheet Accounts Included in Cash, Cash Equivalents, and Restricted Cash | ||
Cash and equivalents | 15,426,976 | 19,487,023 |
Restricted cash | 1,759,347 | 1,582,798 |
Total cash, cash equivalents, and restricted cash | 17,186,323 | 21,069,821 |
Supplemental Disclosure of Cash Flow Information: | ||
Cash paid during the period for interest | 556,428 | 429,222 |
Cash paid during the period for income taxes | (358,876) | 75,724 |
Supplemental Schedule of Non-Cash Investing and Financing Activities | ||
Investment in Virtual Driver Interactive | 439,774 | |
Stock issued to pay for products and/or services | 532,788 | |
Stock issued to pay notes payable | $ 5,025,652 | 8,737,125 |
Loan from bank to acquire building and land | $ 2,476,000 |
ORGANIZATION
ORGANIZATION | 12 Months Ended |
Sep. 30, 2021 | |
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. During fiscal 2019, the Company 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. The Company presently has two business segments, consisting of (i) Advanced Technologies (AT) and (ii) Industrial Services (IS). Advanced Technologies (AT) Cemtrex’s Advanced Technologies segment operates several brands that deliver cutting-edge software and hardware technologies: - Vicon Industries - SmartDesk – - Cemtrex XR (“CXR”) - Virtual Driver Interactive (“VDI”) - Bravo Strong - good tech (formerly Cemtrex Labs) Cemtrex Inc. and Subsidiaries Industrial Services (IS) Cemtrex’s IS segment operates through a brand, Advanced Industrial Services (“AIS”), that 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. 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 $ 1,339,774 175,428 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. Results for VDI will be reported under the AT segment. 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. Additionally, the Company paid contingent consideration of $ 175,428 in May 2021. There is no further contingent consideration specified in the purchase agreement. The Company has accounted for this acquisition as a business combination and has allocated the purchase price as follows, $ 876,820 39,992 598,391 Strategic Investment On November 13, 2020, Cemtrex made a $ 500,000 investment via a simple agreement for future equity(“SAFE”) in MasterpieceVR. The SAFE provides that the Company will automatically receive shares of the entity based on the conversion rate of future equity rounds up to a valuation cap, as defined. MasterpieceVR is a software company that is developing software for content creation using virtual reality. The investment is included in other assets in the accompanying balance sheet and the Company accounts for this investment and recorded at cost. No impairment has been recorded for the year ended September 30, 2021. 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 substantial doubt with respect to the Company’s ability to continue as a going concern. The Company has raised capital and will continue to reduce expenses through (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 improvement of 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 substantial doubt has been alleviated by management’s plans and that it has sufficient working capital to sustain operations for at least the next twelve months. |
BASIS OF PRESENTATION AND SIGNI
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 – BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES 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”). Cemtrex Inc. and Subsidiaries 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 XR Inc., Cemtrex Technologies Pvt. Ltd., and Advanced Industrial Services, Inc. and the Company’s majority owned subsidiary Vicon Industries, Inc. and its subsidiary, 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. Cemtrex Inc. and Subsidiaries The Company has $ 178,992 and $ 340,848 allowance for doubtful accounts at September 30, 2021, and 2020, respectively. The Company does no 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 $ 1,921,001 and $ 4,575,193 in inventory obsolescence reserve at September 30, 2021, and 2020, respectively. The decrease in inventory obsolescence is due to the disposal of 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 is tested for impairment annually as of September 30. If circumstances change during interim periods between annual tests that would more likely than not reduce the fair value of a reporting unit below its carrying value, the Company will test goodwill for impairment. Factors that would necessitate an interim goodwill impairment assessment include prolonged negative industry or economic trends, or significant under-performance relative to expected, historical or projected future operating results. Management uses judgment to determine whether to use a qualitative analysis or a quantitative fair value measurement for its goodwill impairment testing. The Company’s fair value measurement approach combines the income and market valuation techniques for each of the Company’s reporting units that carry goodwill. These valuation techniques use estimates and assumptions including, but not limited to, the determination of appropriate market comparables, projected future cash flows (including timing and profitability), discount rate reflecting the risk inherent in future cash flows, perpetual growth rate, and projected future economic and market conditions. As permitted, if the reporting unit fails the impairment test, the Financial Accounting Standards Board (“FASB”) issued an Accounting Standard Update (“ASU”) removing step two from the goodwill impairment test. If a reporting unit fails the quantitative impairment test, impairment expense is immediately recorded as the difference between the reporting unit’s fair value and carrying value. The Company adopted this standard effective October 1, 2020. Cemtrex Inc. and Subsidiaries For the years ended September 30, 2021, and 2020, there was no 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. Cemtrex Inc. and Subsidiaries 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. Billing terms vary by customer and product but generally do not exceed 90 days. 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. The amounts were $ 2,472,137 1,965,155 1,769,380 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. Cemtrex Inc. and Subsidiaries 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 carryforwards. 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, 2021, and 2020, 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, 2021, and 2020, the following items were excluded from the computation of diluted net loss per common share as their effect is anti-dilutive: SCHEDULE OF COMPUTATION OF DILUTED NET LOSS PER COMMON SHARE AS ANTI-DILUTIVE EFFECT For the year ended September 30, 2021 2020 Warrants to purchase shares 433,965 433,965 Options 950,000 945,833 Cemtrex Inc. and Subsidiaries 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, 2021, and September 30, 2020, comprehensive loss includes a gain of $ 996,100 and $ 57,639 , respectively, which were entirely from foreign currency translation. As of and for the year ended September 30, 2021, and 2020 the Company used the following exchange rates. SCHEDULE OF FOREIGN CURRENCY EXCHANGE RATE Approximate weighted Approximate weighted average exchange rate average exchange rate Exchange rate at For the three months ended Exchange rate at For the year ended Currency September 30, 2020 September 30, 2020 September 30, 2021 September 30, 2021 Indian Rupee 0.014 0.014 0.013 0.014 Great Britain Pound 1.287 1.248 1.346 1.358 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. Cemtrex Inc. and Subsidiaries Recently Issued Accounting Pronouncements Not Yet Effective On August 5, 2020, the Financial Accounting Standards Board (FASB) issued accounting standards update (ASU) No. 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40) The amendments in the ASU remove certain separation models for convertible debt instruments and convertible preferred stock that require the separation of a convertible debt instrument into a debt component and an equity or derivative component. The ASU also amends the derivative scope exception guidance for contracts in an entity’s own equity. The amendments remove three settlement conditions that are required for equity contracts to qualify for the derivative scope exception. In addition to the above, the ASU expands disclosure requirements for convertible instruments and simplifies areas of the guidance for diluted earnings-per-share calculations that are impacted by the amendments. The ASU is effective for public business entities that meet the definition of a Securities and Exchange Commission (SEC) filer, excluding smaller reporting companies as defined by the SEC, for fiscal years beginning after December 15, 2021. Early adoption is permitted. The FASB noted that an entity should adopt the guidance as of the beginning of its annual fiscal year. The standard is effective for the Company beginning in fiscal year October 1, 2022. Entities may elect to adopt the amendments through either a modified retrospective method of transition or a fully retrospective method of transition. If an entity has convertible instruments that include a down round feature, early adoption of the ASU is permitted for fiscal years beginning after December 15, 2020. ASU 2016-13 Measurement of Credit Losses on Financial Instrument is effective for fiscal years beginning after December 15, 2022. This is not expected to apply to the Company as financial instruments giving rise to credit risk are not utilized by the Company. In May 2021, the FASB issued ASU 2021-04, Earnings Per Share (Topic 260), Debt-Modifications and Extinguishments (Subtopic 470-50), Compensation-Stock Compensation (Topic 718), and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40). The new ASU addresses issuer’s accounting for certain modifications or exchanges of freestanding equity-classified written call options. This amendment is effective for all entities, for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. Early adoption is permitted. The Company is currently evaluating the impact this new guidance will have on its financial statements The Company does not believe that any other recently issued but not yet effective accounting pronouncements, if adopted, would have a material effect on the accompanying consolidated financial statements. |
RESTATEMENTS OF FINANCIAL STATE
RESTATEMENTS OF FINANCIAL STATEMENTS | 12 Months Ended |
Sep. 30, 2021 | |
Restatements Of Financial Statements | |
RESTATEMENTS OF FINANCIAL STATEMENTS | NOTE 3 – RESTATEMENTS OF FINANCIAL STATEMENTS Background On February 23, 2021, Cemtrex’s Board of Directors determined that certain transactions between Cemtrex Inc. and First Commercial, a company owned by former Executive Director, former Controlling Shareholder and former CFO, Aron Govil, were incorrectly handled and accounted for. The total amount of disputed transfers was approximately $ 7,100,000 5,600,000 1,500,000 Upon the Company’s investigation into this matter, the Company has determined that there were inaccuracies in the Company’s financial statements. The financials for the periods 2017 and 2018 were incorrect corresponding to the amounts that were incorrectly accounted for, and subsequent years were affected by the roll forward effects of these entries. The Company found unsupported advertising expenses in the amount of approximately $ 400,000 5,700,000 975,000 7,100,000 Cemtrex Inc. and Subsidiaries As part of the restatement investigation, it was determined that the Company did not follow GAAP in the treatment of its Series 1 Preferred dividends. The Company currently has a deficit in retained earnings and in accordance with guidance has reversed the accrual for dividends payable and placed the amount of the accrual back into retained earnings. In response to the above discussed restatements, the Company revisited its fiscal year 2020 financial statements. As a result, the following items have been restated, (i) inventory valuation, recognition of discontinued operations, accrued expenses, and accounts payable of the Company’s subsidiary Vicon Industries, Inc., (ii) fixed asset valuation and deferred revenue of the Company’s subsidiary Advanced Industrial Services, Inc., some of these valuation error dates to prior to acquisition of each entity. Position and Adjusting Entries The Company has determined that these transactions are not material in the years that they occurred and conclude that prior financial reports can be relied upon. The Company’s determination is based on the following: The adjustments do not cause any changes to the previously reported cash and debt balances as of the end of each of the periods in FY 2019 and 2020. The adjustments also do not cause any changes to revenues in any of the prior periods. In addition, the Company expects to maintain compliance with its debt covenants based on a preliminary review of the covenants for all the impacted periods. The Company has also determined that the adjustments have little effect on the trend of earnings over the last three fiscal years. In 2017 the operations of the Company were vastly different with both the environmental and circuit board manufacturing segments accounting for approximately 75% of revenues. These businesses are now either sold or discontinued. The current reported 2017 financial statements of the Company do not give an accurate representation of the Company today because only 16% of the $120M business operations are still a part of current operations. The table below represents the balances of the affected accounts on the Condensed Consolidated Balance Sheets as of September 30, 2020, the Condensed Consolidated Statements of Operations and Comprehensive Income/(Loss) for the year ended September 30, 2020, Condensed Consolidated Statement of Stockholders’ Equity, and the Condensed Consolidated Statements of Cash Flows for the year ended September 30, 2020. Condensed Consolidated Balance Sheets SCHEDULE OF CONDENSED CONSOLIDATED BALANCE SHEETS Balance as reported on September 30, 2020 Adjustment of net value of intangible assets Adjustment resulting from reaudit of Fiscal Year 2020 Financial Statements Adjustment of net value of inventory Adjustment of net value of fixed assets Cumulative effect of restatement adjustments Loss on amounts transferred to First Commercial Restatement on Dividends Cumulative effect of currency translation Adjusted balance at September 30, 2020 Cash and equivalents $ 19,490,061 $ (3,038 ) $ 19,487,023 Prepaid expenses and other assets $ 1,188,317 $ (12,542 ) $ 1,175,775 Other Assets $ 744,207 $ (362,307 ) $ 381,900 Property and equipment, net $ 9,558,936 $ (2,597,185 ) $ (987,901 ) $ 5,973,850 Inventory –net of allowance for inventory obsolescence $ 6,793,806 $ (1,847,349 ) $ 4,946,457 Goodwill $ 4,370,894 $ 2,851,998 $ 7,222,892 Accounts payable $ 2,857,817 $ 1,953,400 $ 4,811,217 Accrued expenses $ 2,392,487 $ (285,460 ) $ 2,107,027 Deferred revenue $ 1,651,784 $ (153,958 ) $ 1,497,826 Other long-term liabilities $ 1,063,733 $ (295,138 ) $ 768,595 Series 1 preferred stock dividends payable $ 1,081,690 $ (1,081,690 ) $ - Additional paid-in capital $ 63,313,336 $ (3,091,570 ) $ 60,221,766 Retained earnings (accumulated deficit) $ (33,172,690 ) $ 1,999,363 $ (7,100,000 ) $ 4,173,260 $ $(34,100,067) Accumulated other comprehensive income $ 853,643 $ 958,814 $ 1,812,457 Condensed Consolidated Statements of Operations and Comprehensive Income/(Loss) SCHEDULE OF CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME/(LOSS) For the year ended September 30, 2020 Previously reported Adjustments Adjusted Net loss available to Cemtrex, Inc. shareholders $ (13,105,005 ) $ 2,634,924 $ (10,470,081 ) Cost of revenues $ 24,153,937 $ 1,743,244 $ 25,897,181 General and administrative $ 21,570,666 $ (1,206,938 ) $ 20,363,728 Preferred dividends $ 3,171,230 $ (3,171,230 ) $ - Loss Per Share-Basic $ (1.28 ) $ 0.27 $ (1.01 ) Loss Per Share-Diluted $ (1.28 ) $ 0.27 $ (1.01 ) Cemtrex Inc. and Subsidiaries Condensed Consolidated Statement of Stockholders’ Equity SCHEDULE OF CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY For the year ended September 30, 2020 Previously reported Adjustments Adjusted Retained earnings (accumulated deficit) at September 30, 2019 $ (20,067,685 ) $ (3,562,301 ) $ (23,629,986 ) Dividends pad in series preferred shares $ (2,089,540 ) $ 2,089,540 $ - Accrued dividends $ (1,081,690 ) $ 1,081,690 $ - Net income/(loss) $ (9,706,659 ) $ (763,422 ) $ (10,470,081 ) Retained earnings (accumulated deficit) at September 30, 2020 $ (33,172,690 ) $ (927,377 ) $ (34,100,067 ) Accumulated other comprehensive income/(loss)at September 30, 2019 $ 796,004 $ 958,814 $ 1,754,818 Foreign currency translation gain $ 22,294 $ 35,345 $ 57,639 Income in noncontrolling interest $ 35,345 $ (35,345 ) $ - Accumulated other comprehensive income/(loss) at September 30, 2020 $ 853,643 $ 958,814 $ 1,812,457 Additional paid-in capital at September 30, 2019 $ 40,344,837 $ (1,002,030 ) $ 39,342,807 Additional paid-in capital at September 30, 2020 $ 63,313,336 $ (3,091,570 ) $ 60,221,766 Non-controlling interst of Vicon at September 30, 2019 $ 885,874 $ (70,690 ) $ 815,184 Income in noncontrolling interest $ 191,771 $ 35,345 $ 227,116 Non-controlling interst of Vicon at September 30, 2020 $ 1,077,645 $ (35,345 ) $ 1,042,300 Condensed Consolidated Statements of Cash Flows SCHEDULE OF CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS For the year ended September 30, 2020 Previously reported Adjustments Adjusted Net loss $ (9,706,659 ) $ (536,306 ) $ (10,242,965 ) Depreciation and amortization $ 2,460,043 $ (594,317 ) $ 1,865,726 Inventory $ (1,586,651 ) $ 1,743,244 $ 156,593 Accrued expenses $ (499,527 ) $ (174,265 ) $ (673,792 ) Net cash used by operating activities - continuing operations $ (3,786,202 ) $ 438,356 $ (3,347,846 ) On February 26, 2021, the Company entered into a Settlement Agreement and Release with Aron Govil regarding these transactions. As part of the Settlement Agreement, Mr. Govil was required to pay the Company consideration with a total value of $ 7,100,000 1,533,280 In March 2021, Mr. Govil returned to the Company 1,000,000 50,000 469,949 The Company recognized the gain with respect to the surrendered Securities during this reporting period. The gain of $ 3,674,165 As discussed above, Mr. Govil also executed a secured promissory note (the “Note”) in the amount of $ 1,533,280 Cemtrex Inc. and Subsidiaries |
PURCHASED ASSETS AND INVESTMENT
PURCHASED ASSETS AND INVESTMENTS | 12 Months Ended |
Sep. 30, 2021 | |
Purchased Assets And Investments | |
PURCHASED ASSETS AND INVESTMENTS | NOTE 4 PURCHASED ASSETS AND INVESTMENTS 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, 2021 | |
Discontinued Operations and Disposal Groups [Abstract] | |
DISCONTINUED OPERATIONS | NOTE 5 – DISCONTINUED OPERATIONS During fiscal 2019, the Company 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. During fiscal 2021, the Company made the final determination on it inactive entities and have written off all assets and liabilities of these entities Assets and liabilities included within discontinued operations on the Company’s Consolidated Balance Sheets at September 30, 2021 and 2020 are as follows; SCHEDULE OF DISPOSAL GROUPS, INCLUDING DISCONTINUED OPERATIONS September 30, September 30, 2021 2020 Assets Current assets Trade receivables - related party - 544,500 Total current assets - 544,500 Property and equipment, net Assetss held for sale - 8,323,321 Total Assets $ - $ 8,867,821 Liabilities Current liabilities Accounts payable $ - $ - Total liabilities $ - $ 263,832 Cemtrex Inc. and Subsidiaries Loss from discontinued operations, net of tax and the loss on sale of discontinued operations, net 2021 2020 Year ended September 30, 2021 2020 Total net sales $ - $ - Cost of sales - - Operating, selling, general and administrative expenses 8,280,047 812,895 Other expenses - - Income (loss) from discontinued operations (8,280,047 ) (812,895 ) Loss on sale of discontinued operations - - Income tax provision - - Discontinued operations, net of tax $ (8,280,047 ) $ (812,895 ) |
SEGMENT AND GEOGRAPHIC INFORMAT
SEGMENT AND GEOGRAPHIC INFORMATION | 12 Months Ended |
Sep. 30, 2021 | |
Segment Reporting [Abstract] | |
SEGMENT AND GEOGRAPHIC INFORMATION | NOTE 6 – SEGMENT AND GEOGRAPHIC INFORMATION The Company reports and evaluates financial information for two Cemtrex Inc. and Subsidiaries The following tables summarize the Company’s segment information: SCHEDULE OF SEGMENT INFORMATION For the years ended September 30, 2021 2020 Revenues from external customers Advanced Technologies $ 24,154,488 $ 25,750,684 Industrial Services 18,976,446 17,767,700 Total revenues $ 43,130,934 $ 43,518,384 Gross profit (restated) Advanced Technologies $ 10,591,956 $ 11,181,127 Industrial Services 6,376,396 6,440,076 Total gross profit $ 16,968,352 $ 17,621,203 Operating loss (restated) Advanced Technologies $ (9,793,851 ) $ (3,278,873 ) Industrial Services 1,052,031 (1,290,938 ) Total operating loss $ (8,741,820 ) $ (4,569,811) Other income/(expense) Advanced Technologies $ 4,891,984 $ (2,588,609 ) Industrial Services 4,619,048 (197,815 ) Total other expense $ 9,511,032 $ (2,786,424 ) Depreciation and Amortization (restated) Advanced Technologies $ 515,465 $ 643,427 Industrial Services 819,724 1,222,299 Total depreciation and amortization $ 1,335,189 $ 1,865,726 September 30, September 30, 2021 2020 (restated) Identifiable Assets Advanced Technologies $ 33,850,496 $ 37,311,047 Industrial Services 19,089,392 14,650,280 Discontinued operations - 8,867,821 Total Assets $ 52,939,888 $ 60,829,148 Cemtrex Inc. and 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: SCHEDULE OF REVENUE FROM PRODUCT SALES AND SERVICES FROM ITS SUBSIDIARIES September 30, September 30, Revenues 2021 2020 U.S. Operations $ 39,081,703 $ 40,211,773 Non-U.S. Operations 4,049,231 3,306,611 $ 43,130,934 $ 43,518,384 September 30, September 30, Long-lived Assets 2021 2020 (restated) U.S. Operations $ 6,584,161 $ 5,805,696 Non-U.S. Operations 154,783 168,154 $ 6,738,944 $ 5,973,850 |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 12 Months Ended |
Sep. 30, 2021 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | NOTE 7 – 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. Cemtrex Inc. and Subsidiaries The Company’s fair value assets for the years ended September 30, 2021, and 2020, are as follows; SCHEDULE OF FAIR VALUE OF ASSETS Quoted Prices in Active Significant Markets for Other Significant Balance Identical Observable Unobservable as of Assets Inputs Inputs June 30, (Level 1) (Level 2) (Level 3) 2021 Assets Investment in marketable securities (included in short-term investments) $ 14,981 $ - $ - $ 14,981 $ 14,981 $ - $ - $ 14,981 Quoted Prices in Active Significant Markets for Other Significant Balance Identical Observable Unobservable as of Assets Inputs Inputs September 30, (Level 1) (Level 2) (Level 3) 2020 Assets Investment in marketable securities (included in short-term investments) $ 887,746 $ - $ - $ 887,746 $ 887,746 $ - $ - $ 887,746 |
RESTRICTED CASH
RESTRICTED CASH | 12 Months Ended |
Sep. 30, 2021 | |
Restricted Cash | |
RESTRICTED CASH | NOTE 8 – 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 $ 1,601,932 157,415 |
ACCOUNTS RECEIVABLE, NET
ACCOUNTS RECEIVABLE, NET | 12 Months Ended |
Sep. 30, 2021 | |
Receivables [Abstract] | |
ACCOUNTS RECEIVABLE, NET | NOTE 9 – ACCOUNTS RECEIVABLE, NET Accounts receivable, net consists of the following: SCHEDULE OF ACCOUNTS RECEIVABLE, NET September 30, September 30, September 30, 2021 2020 2019 Accounts receivable $ 7,989,888 $ 7,027,645 $ 7,065,035 Allowance for doubtful accounts (178,992 ) (340,848 ) (606,051 ) Accounts receivables, net, total $ 7,810,896 $ 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, 2021 | |
Inventory Disclosure [Abstract] | |
INVENTORY, NET | NOTE 10 – INVENTORY, NET Inventory, net of reserves, consist of the following: SCHEDULE OF INVENTORY, NET September 30, September 30, 2021 2020 Restated Raw materials $ 1,957,410 $ 3,959,888 Work in progress 429,871 1,069,050 Finished goods 5,191,007 5,717,519 Inventory, gross 7,578,288 10,746,457 Less: Allowance for inventory obsolescence (1,921,001 ) (5,800,000 ) Inventory –net of allowance for inventory obsolescence $ 5,657,287 $ 4,946,457 Cemtrex Inc. and Subsidiaries |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 12 Months Ended |
Sep. 30, 2021 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | NOTE 11 – PROPERTY AND EQUIPMENT Property and equipment are summarized as follows: SUMMARY OF PROPERTY AND EQUIPMENT September 30, September 30, 2021 2020 (restated) Land $ 790,373 $ 790,373 Building and leasehold improvements 2,892,900 2,935,628 Furniture and office equipment 501,885 621,790 Computers and software 1,105,681 264,940 Trade show display - 89,330 Machinery and equipment 12,984,959 13,620,530 18,275,798 18,322,591 Less: Accumulated depreciation (11,536,854 ) (12,348,741 ) Property and equipment, net $ 6,738,944 $ 5,973,850 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, 2021. Depreciation and amortization of property and equipment totaled approximately $ 1,335,189 and $ 1,865,726 for fiscal years ended September 30, 2021, and 2020, respectively. |
LEASES
LEASES | 12 Months Ended |
Sep. 30, 2021 | |
Leases | |
LEASES | NOTE 12 – 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 2 7 Cemtrex Inc. and Subsidiaries Finance and operating lease liabilities consist of the following: SUMMARY OF FINANCE AND OPERATING LEASE LIABILITIES September 30, September 30, 2021 2020 Lease liabilities - current Finance leases $ - $ 20,061 Operating leases 830,791 700,975 830,791 721,036 Lease liabilities - net of current portion Finance leases $ - $ - Operating leases 2,017,408 2,027,406 $ 2,017,408 $ 2,027,406 A reconciliation of undiscounted cash flows to finance and operating lease liabilities recognized in the condensed consolidated balance sheet at September 30, 2021, is set forth below: SCHEDULE OF RECONCILIATION OF UNDISCOUNTED CASH FLOWS TO FINANCE AND OPERATING LEASE LIABILITIES Years ending September 30, Finance leases Operating Leases Total 2022 912,755 912,755 2023 - 725,207 725,207 2024 - 588,454 588,454 2025 - 565,431 565,431 2026 & Thereafter - 668,292 668,292 Undiscounted lease payments - 3,460,139 3,460,139 Amount representing interest - (611,940 ) (611,940 ) Discounted lease payments $ - $ 2,848,199 $ 2,848,199 Additional disclosures of lease data are set forth below: SCHEDULE OF LEASE COSTS For the year ended September 30, 2021 September 30, 2020 Lease costs: Finance lease costs: Depreciation of finance lease assets $ 17,184 $ 22,912 Interest on lease liabilities 88 832 Operating lease costs: Amortization of right-of-use assets 870,860 816,550 Interest on lease liabilities 91,930 59,122 Total lease cost $ 980,062 $ 899,416 Other information: Cash paid for amounts included in the measurement of lease liabilities: Operating leases $ 962,790 $ 816,549 Finance leases 20,061 22,718 $ 982,851 $ 839,267 Weighted-average remaining lease term - finance leases (months) 0 10 Weighted-average remaining lease term - operating leases (months) 55 51 Weighted-average discount rate - finance leases 3.63 % 3.63 % Weighted-average discount rate - operating leases 6.85 % 6.64 % Cemtrex Inc. and Subsidiaries 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, 2021 | |
Prepaid And Other Current Assets | |
PREPAID AND OTHER CURRENT ASSETS | NOTE 13 – PREPAID AND OTHER CURRENT ASSETS On September 30, 2021, the Company had prepaid and other current assets consisting of prepayments on inventory purchases of $ 298,707 , and other current assets of $ 2,286,945 . 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 $ 1,074,467 . |
OTHER ASSETS
OTHER ASSETS | 12 Months Ended |
Sep. 30, 2021 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
OTHER ASSETS | NOTE 14 - OTHER ASSETS As of September 30, 2021, the Company had other assets of $ 697,240 which was comprised of rent security deposits of $ 84,362 , Investment in Masterpiece VR valued at $ 500,000 , and other assets of $ 112,878 . As of September 30, 2020, the Company had other assets of $ 381,900 which was comprised of rent security deposits. |
LINES OF CREDIT AND LONG-TERM L
LINES OF CREDIT AND LONG-TERM LIABILITIES | 12 Months Ended |
Sep. 30, 2021 | |
Debt Disclosure [Abstract] | |
LINES OF CREDIT AND LONG-TERM LIABILITIES | NOTE 15 – 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 ( 2.075% as of September 30, 2021). At September 30, 2021, there was no outstanding balance on this line of credit. The terms of this line of credit are subject to the bank’s review annually on February1. Loans payable to bank On December15, 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 ( 2.325% as of September 30, 2021, and 4.23 December 15, 2022 . This loan carries loan covenants which the Company was in compliance with as of September 30, 2021. 1,218,680 2,164,584 On May 1, 2018, the Company acquired a loan from Fulton Bank in the amount of $ 400,000 2.00 3.98 May 1, 2023 58,897 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 ( 2.075% as of September 30, 2021, and 3.98 May 1, 2023 . This loan carries loan covenants which the Company was in compliance with as of September 30, 2021. 149,914 246,673 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 ( 2.325% as of September 30, 2021, and 4.23 and is payable on May 1, 2023 . This loan carries loan covenants which the Company was in compliance with as of September 30, 2021. 258,060 331,535 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. As of September 30, 2021, this note was fully satisfied. As of September 30, 2020, the balance on this note was $ 620,754 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. As of September 30, 2021, this note was fully satisfied. As of September 30, 2020, this note had a balance of $ 1,787,033 Cemtrex Inc. and Subsidiaries 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. As of September 30, 2021, and 2020, this note had a balance of $ 2,456,448 4,605,000 On September 30, 2021, the Company, issued a note payable to an independent private lender in the amount of $ 5,755,000 . This note carries interest of 8 % and matures on March 30, 2023 . After deduction of an original issue discount of 750,000 and legal fees of $ 5,000 , the Company received $ 5,000,000 in cash. One September 30, 2021, this note had a balance of 5,775,000 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, 2021. On September 30, 2021, and 2020, this note had a balance of $ 3,604,743 4,625,000 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, 2021, the Company was in compliance with these covenants. 2,339,114 2,355,542 Paycheck Protection Program Loans In April and May of 2020, and January and April of 2021, the Company and its subsidiaries applied for and were granted $ 6,413,385 2 6,291,985 971,500 1,032,200 971,500 Estimated maturities of our long-term debt over the next 5 years are as follows; SCHEDULE OF ESTIMATED MATURITIES OF LONG TERM DEBT 2022 2023 2024 2025 2026 Thereafter Total 713,548 505,132 - - - - $ 1,218,680 Fulton Bank - $ 5,250,000 713,548 505,132 - - - $ 1,218,680 Fulton Bank - $ 400,000 78,995 70,919 - - - $ 149,914 Fulton Bank - $ 360,000 66,831 69,484 49,502 - - $ 258,060 Fulton Bank - Mortgage payable 81,329 88,266 92,120 96,142 102,521 1,878,736 $ 2,339,114 NIL Funding 3,604,743 - - - - $ 3,604,743 PPP Loans 60,700 1,032,200 - - - $ 1,092,900 Notes Payable (1) 5,371,825 2,350,000 - - - $ 7,721,825 TOTAL $ 9,977,971 $ 4,116,001 $ 141,622 $ 96,142 $ 102,521 $ 1,878,736 $ 16,385,236 (1) Net of unamortized original issue discounts of $ 950,000 |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Sep. 30, 2021 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 16 – 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 Founder and Former CFO, is President, for total consideration of $ 550,000 1,487,155 1,432,209 At September 30, 2021, $500,000 of the balance due is for the sale of Griffin, which was due in February 2021, and the remaining balance are various receivables with various due dates within the next fiscal year. Cemtrex Inc. and Subsidiaries Please see Note 3 for further transactions relating to Aron Govil. On May 1, 2020, Company invested $ 500,000 166,667 3.00 |
SHAREHOLDERS_ EQUITY
SHAREHOLDERS’ EQUITY | 12 Months Ended |
Sep. 30, 2021 | |
Equity [Abstract] | |
SHAREHOLDERS’ EQUITY | NOTE 17 – 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 60,000,000 50,000,000 10,000,000 Preferred Stock The Company is authorized to issue 10,000,000 0.001 1,935,151 3,256,784 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, 2021, the Company retired 1,000,000 As of September 30, 2021, and September 30, 2020, there were zero 1,000,000 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 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 0.95 50,000 Cemtrex Inc. and Subsidiaries During the year ended September 30, 2021, the Company retired 50,000 shares of Series C Preferred Stock surrendered by Aron Govil as part of the settlement agreement (see Note 3). As of September 30, 2021, and September 30, 2020, there were 50,000 100,000 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 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. Cemtrex Inc. and Subsidiaries 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 4,000,000 During the year ended September 30, 2021, 198,316 During the year ended September 30, 2021, the Company retired 469,949 shares of Series 1 Preferred Stock surrendered by Aron Govil as part of the settlement agreement (see Note 3). As of September 30, 2021, and September 30, 2020, there were 1,885,151 2,156,784 During the fiscal year ended September 30, 2020, the Company purchased 235,133 1.92 338,775 171,033 190,484 Common Stock The Company is authorized to issue 50,000,000 0.001 20,782,194 17,622,539 During the fiscal year ended September 30, 2021, we issued 3,159,655 shares of common stock to satisfy $ 5,025,651 of notes payable and accumulated interest. During the fiscal years ended September 30, 2020, 6,530,473 8,737,125 During fiscal year 2020, the Company issued 6,643,872 12,462,648 840,728 11,621,920 During fiscal year 2020, the Company issued 513,358 532,788 During fiscal year 2020, the Company cancelled 27,954 Series 1 Warrants There are currently 433,965 50.48 During the years ended September 30, 2021, and 2020, none of our outstanding Series 1 Warrants have been exercised. Subscription Rights Offering On January 24, 2020, the “Company entered into a Subscription Agreement relating to the public offering of 500,000 0.001 1.50 750,000 37,500 712,500 Cemtrex Inc. and Subsidiaries On February 26, 2020, the “Company entered into a Subscription Agreement relating to the public offering of 347,000 0.001 1.30 451,100 2,500 448,600 On June 1, 2020, the “Company entered into a Subscription Agreement relating to the public offering of 3,055,556 0.001 1.80 5,500,000 395,000 5,105,000 On June 9, 2020, the “Company entered into a Subscription Agreement relating to the public offering of 2,402,923 0.001 2.24 5,382,548 386,778 4,995,769 |
SHARE-BASED COMPENSATION
SHARE-BASED COMPENSATION | 12 Months Ended |
Sep. 30, 2021 | |
Share-based Payment Arrangement [Abstract] | |
SHARE-BASED COMPENSATION | NOTE 18 – 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 1.90 seven years (i) 100,000 1.92 September 25, 2021 (ii) 100,000 2.30 September 25, 2023 (iii) 100,000 2.76 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 1.90 seven years (i) 25,000 1.92 September 25, 2021 (ii) 12,500 2.30 September 25, 2023 (iii) 8,333 2.76 September 25, 2025 As part of the settlement agreement with Mr. Govil, all his options were cancelled. On January 6, 2021, the Company granted to Christopher C. Moore, the Company’s CFO, a stock option for 150,000 1.58 five years The following weighted-average assumptions were used to estimate the fair value of the common stock option liability for the options granted to Christopher C. Moore; SCHEDULE OF FAIR VALUE STOCK OPTION WEIGHTED AVERAGE ASSUMPTIONS January 6, 2021 Expected term 5 Risk-free interest rate 0.41 % Expected volatility 111.47 % Expected dividend yield 0 % Cemtrex Inc. and Subsidiaries During the years ended September 30, 2021, and 2020 the Company recognized $ 156,419 191,416 As of September 30, 2021, there was $ 359,415 4 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, 2019 1,050,000 $ - Options granted - Options exercised - Options forfeited - Options cancelled (104,167 ) Outstanding at September 30, 2020 945,833 Options granted 250,000 Options exercised Options forfeited Options cancelled (245,833 ) Outstanding at September 30, 2021 950,000 Exercisable at September 30, 2021 583,333 $ 1.78 0.40 $ - |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Sep. 30, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 19 – 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’s IS segment owns approximately 25,000 43,000 15,500 4,555 August 31, 2022 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 (INR 456,972 ) expiring on February 28, 2024 , (ii) approximately 30,000 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 , (iii) approximately 4,570 November 30, 2022 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 2026 . |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Sep. 30, 2021 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE 20 – 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% 21% At September 30, 2021, the Company had approximately $ 37,099,262 13,726,364 The net operating loss carryforwards, if not utilized, will begin to expire in 2036 for federal purposes and in 2036 for state purposes. The following is a geographical breakdown of loss before the provision for income taxes: SCHEDULE OF (LOSS) INCOME BEFORE PROVISION FOR TAX Year ended September 30, 2021 2020 Restated Domestic $ 30,957 $ (6,422,704 ) Foreign 738,255 (933,531 ) Loss before provision for income taxes $ 769,212 $ (7,356,235 ) Cemtrex Inc. and Subsidiaries The provision for income taxes consisted of the following: SCHEDULE OF PROVISION FOR INCOME TAXES September 30, 2021 September 30, 2020 Restated Current (benefit)/provision Federal $ - $ - State 375,434 (209,032 ) Foreign - - Total current (benefit)/provision 375,434 (209,032 ) Deferred provision Federal - 2,282,867 State - - Foreign - - Total deferred provision $ - $ 2,282,867 Total (benefit)/provision for income taxes $ 375,434 $ 2,073,835 Effective Income tax rate 48.81 % -28.19 % The following is a reconciliation of the effective income tax rate to the federal and state statutory rates: SCHEDULE OF EFFECTIVE INCOME TAX RATE RECONCILIATION For the Fiscal Year For the Fiscal Year Ended Ended September 30, 2021 September 30, 2020 Restated 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 0.00 % - 30.78 % Effect of change in rates 0.00 % 0.00 % Permanent differences 21.31 % - 24.91 % Effective rate 48.81 % -28.19 % Cemtrex Inc. and Subsidiaries The components of our deferred tax assets and liabilities are summarized as follows: SCHEDULE OF DEFERRED TAX ASSETS AND LIABILITIES September 30, 2021 September 30, 2020 Restated Deferred Tax Assets: Net operating loss carryforwards $ 8,702,738 $ 20,482,973 Inventory 1,405,057 - Prepaid expenses - - Allowance for bad debt 35,345 3,491 Fixed Assets - 19,271 Goodwill amortization - - Non-qualified stock options - - Warrants (interest expense) 1,155,642 - Accruals 280,447 2,699,246 Warranty Reserve 28,002 - Foreign Tax Credits - 354,000 Other 4,358 - Total gross deferred taxes 11,611,589 23,558,981 Valuation allowance (9,491,650 ) (22,720,711 ) Net deferred tax assets 2,119,939 838,270 Deferred Tax Liabilities: Inventory and other Reserves (638,230 ) - Inventory - (2,277 ) Prepaid expenses (87,934 ) (45,563 ) Goodwill amortization (557,074 ) (428,395 ) Research and development expenses - - Depreciation (836,701 ) (319,090 ) Gain/loss on fixed asset disposal - - Other - (42,945 ) Total deferred tax liabilities (2,119,939 ) (838,270 ) Total deferred tax assets (liabilities) $ - $ - |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Sep. 30, 2021 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 21– 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. Forgiveness of Payroll Protection Plan Loan In November 2021, $ 971,500 Preferred shares issued for dividend On October 18, 2021, the Company issued 94,602 . Common shares issued subsequent to financial statements date. During October 2021, 2,891,016 2,466,478 |
BASIS OF PRESENTATION AND SIG_2
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
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”). Cemtrex Inc. and Subsidiaries |
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 XR Inc., Cemtrex Technologies Pvt. Ltd., and Advanced Industrial Services, Inc. and the Company’s majority owned subsidiary Vicon Industries, Inc. and its subsidiary, 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. Cemtrex Inc. and Subsidiaries The Company has $ 178,992 and $ 340,848 allowance for doubtful accounts at September 30, 2021, and 2020, respectively. The Company does no |
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 $ 1,921,001 and $ 4,575,193 in inventory obsolescence reserve at September 30, 2021, and 2020, respectively. The decrease in inventory obsolescence is due to the disposal of 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 is tested for impairment annually as of September 30. If circumstances change during interim periods between annual tests that would more likely than not reduce the fair value of a reporting unit below its carrying value, the Company will test goodwill for impairment. Factors that would necessitate an interim goodwill impairment assessment include prolonged negative industry or economic trends, or significant under-performance relative to expected, historical or projected future operating results. Management uses judgment to determine whether to use a qualitative analysis or a quantitative fair value measurement for its goodwill impairment testing. The Company’s fair value measurement approach combines the income and market valuation techniques for each of the Company’s reporting units that carry goodwill. These valuation techniques use estimates and assumptions including, but not limited to, the determination of appropriate market comparables, projected future cash flows (including timing and profitability), discount rate reflecting the risk inherent in future cash flows, perpetual growth rate, and projected future economic and market conditions. As permitted, if the reporting unit fails the impairment test, the Financial Accounting Standards Board (“FASB”) issued an Accounting Standard Update (“ASU”) removing step two from the goodwill impairment test. If a reporting unit fails the quantitative impairment test, impairment expense is immediately recorded as the difference between the reporting unit’s fair value and carrying value. The Company adopted this standard effective October 1, 2020. Cemtrex Inc. and Subsidiaries For the years ended September 30, 2021, and 2020, there was no |
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. Cemtrex Inc. and Subsidiaries 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. Billing terms vary by customer and product but generally do not exceed 90 days. 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. The amounts were $ 2,472,137 1,965,155 1,769,380 |
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. Cemtrex Inc. and Subsidiaries |
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 carryforwards. 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, 2021, and 2020, 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, 2021, and 2020, the following items were excluded from the computation of diluted net loss per common share as their effect is anti-dilutive: SCHEDULE OF COMPUTATION OF DILUTED NET LOSS PER COMMON SHARE AS ANTI-DILUTIVE EFFECT For the year ended September 30, 2021 2020 Warrants to purchase shares 433,965 433,965 Options 950,000 945,833 Cemtrex Inc. and Subsidiaries |
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, 2021, and September 30, 2020, comprehensive loss includes a gain of $ 996,100 and $ 57,639 , respectively, which were entirely from foreign currency translation. As of and for the year ended September 30, 2021, and 2020 the Company used the following exchange rates. SCHEDULE OF FOREIGN CURRENCY EXCHANGE RATE Approximate weighted Approximate weighted average exchange rate average exchange rate Exchange rate at For the three months ended Exchange rate at For the year ended Currency September 30, 2020 September 30, 2020 September 30, 2021 September 30, 2021 Indian Rupee 0.014 0.014 0.013 0.014 Great Britain Pound 1.287 1.248 1.346 1.358 |
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. Cemtrex Inc. and Subsidiaries |
Recently Issued Accounting Pronouncements Not Yet Effective | Recently Issued Accounting Pronouncements Not Yet Effective On August 5, 2020, the Financial Accounting Standards Board (FASB) issued accounting standards update (ASU) No. 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40) The amendments in the ASU remove certain separation models for convertible debt instruments and convertible preferred stock that require the separation of a convertible debt instrument into a debt component and an equity or derivative component. The ASU also amends the derivative scope exception guidance for contracts in an entity’s own equity. The amendments remove three settlement conditions that are required for equity contracts to qualify for the derivative scope exception. In addition to the above, the ASU expands disclosure requirements for convertible instruments and simplifies areas of the guidance for diluted earnings-per-share calculations that are impacted by the amendments. The ASU is effective for public business entities that meet the definition of a Securities and Exchange Commission (SEC) filer, excluding smaller reporting companies as defined by the SEC, for fiscal years beginning after December 15, 2021. Early adoption is permitted. The FASB noted that an entity should adopt the guidance as of the beginning of its annual fiscal year. The standard is effective for the Company beginning in fiscal year October 1, 2022. Entities may elect to adopt the amendments through either a modified retrospective method of transition or a fully retrospective method of transition. If an entity has convertible instruments that include a down round feature, early adoption of the ASU is permitted for fiscal years beginning after December 15, 2020. ASU 2016-13 Measurement of Credit Losses on Financial Instrument is effective for fiscal years beginning after December 15, 2022. This is not expected to apply to the Company as financial instruments giving rise to credit risk are not utilized by the Company. In May 2021, the FASB issued ASU 2021-04, Earnings Per Share (Topic 260), Debt-Modifications and Extinguishments (Subtopic 470-50), Compensation-Stock Compensation (Topic 718), and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40). The new ASU addresses issuer’s accounting for certain modifications or exchanges of freestanding equity-classified written call options. This amendment is effective for all entities, for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. Early adoption is permitted. The Company is currently evaluating the impact this new guidance will have on its financial statements The Company does not believe that any other recently issued but not yet effective accounting pronouncements, if adopted, would have a material effect on the accompanying consolidated financial statements. |
BASIS OF PRESENTATION AND SIG_3
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
SCHEDULE OF COMPUTATION OF DILUTED NET LOSS PER COMMON SHARE AS ANTI-DILUTIVE EFFECT | SCHEDULE OF COMPUTATION OF DILUTED NET LOSS PER COMMON SHARE AS ANTI-DILUTIVE EFFECT For the year ended September 30, 2021 2020 Warrants to purchase shares 433,965 433,965 Options 950,000 945,833 |
SCHEDULE OF FOREIGN CURRENCY EXCHANGE RATE | As of and for the year ended September 30, 2021, and 2020 the Company used the following exchange rates. SCHEDULE OF FOREIGN CURRENCY EXCHANGE RATE Approximate weighted Approximate weighted average exchange rate average exchange rate Exchange rate at For the three months ended Exchange rate at For the year ended Currency September 30, 2020 September 30, 2020 September 30, 2021 September 30, 2021 Indian Rupee 0.014 0.014 0.013 0.014 Great Britain Pound 1.287 1.248 1.346 1.358 |
RESTATEMENTS OF FINANCIAL STA_2
RESTATEMENTS OF FINANCIAL STATEMENTS (Tables) | 12 Months Ended |
Sep. 30, 2021 | |
Restatements Of Financial Statements | |
SCHEDULE OF CONDENSED CONSOLIDATED BALANCE SHEETS | Condensed Consolidated Balance Sheets SCHEDULE OF CONDENSED CONSOLIDATED BALANCE SHEETS Balance as reported on September 30, 2020 Adjustment of net value of intangible assets Adjustment resulting from reaudit of Fiscal Year 2020 Financial Statements Adjustment of net value of inventory Adjustment of net value of fixed assets Cumulative effect of restatement adjustments Loss on amounts transferred to First Commercial Restatement on Dividends Cumulative effect of currency translation Adjusted balance at September 30, 2020 Cash and equivalents $ 19,490,061 $ (3,038 ) $ 19,487,023 Prepaid expenses and other assets $ 1,188,317 $ (12,542 ) $ 1,175,775 Other Assets $ 744,207 $ (362,307 ) $ 381,900 Property and equipment, net $ 9,558,936 $ (2,597,185 ) $ (987,901 ) $ 5,973,850 Inventory –net of allowance for inventory obsolescence $ 6,793,806 $ (1,847,349 ) $ 4,946,457 Goodwill $ 4,370,894 $ 2,851,998 $ 7,222,892 Accounts payable $ 2,857,817 $ 1,953,400 $ 4,811,217 Accrued expenses $ 2,392,487 $ (285,460 ) $ 2,107,027 Deferred revenue $ 1,651,784 $ (153,958 ) $ 1,497,826 Other long-term liabilities $ 1,063,733 $ (295,138 ) $ 768,595 Series 1 preferred stock dividends payable $ 1,081,690 $ (1,081,690 ) $ - Additional paid-in capital $ 63,313,336 $ (3,091,570 ) $ 60,221,766 Retained earnings (accumulated deficit) $ (33,172,690 ) $ 1,999,363 $ (7,100,000 ) $ 4,173,260 $ $(34,100,067) Accumulated other comprehensive income $ 853,643 $ 958,814 $ 1,812,457 |
SCHEDULE OF CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME/(LOSS) | Condensed Consolidated Statements of Operations and Comprehensive Income/(Loss) SCHEDULE OF CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME/(LOSS) For the year ended September 30, 2020 Previously reported Adjustments Adjusted Net loss available to Cemtrex, Inc. shareholders $ (13,105,005 ) $ 2,634,924 $ (10,470,081 ) Cost of revenues $ 24,153,937 $ 1,743,244 $ 25,897,181 General and administrative $ 21,570,666 $ (1,206,938 ) $ 20,363,728 Preferred dividends $ 3,171,230 $ (3,171,230 ) $ - Loss Per Share-Basic $ (1.28 ) $ 0.27 $ (1.01 ) Loss Per Share-Diluted $ (1.28 ) $ 0.27 $ (1.01 ) |
SCHEDULE OF CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY | Condensed Consolidated Statement of Stockholders’ Equity SCHEDULE OF CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY For the year ended September 30, 2020 Previously reported Adjustments Adjusted Retained earnings (accumulated deficit) at September 30, 2019 $ (20,067,685 ) $ (3,562,301 ) $ (23,629,986 ) Dividends pad in series preferred shares $ (2,089,540 ) $ 2,089,540 $ - Accrued dividends $ (1,081,690 ) $ 1,081,690 $ - Net income/(loss) $ (9,706,659 ) $ (763,422 ) $ (10,470,081 ) Retained earnings (accumulated deficit) at September 30, 2020 $ (33,172,690 ) $ (927,377 ) $ (34,100,067 ) Accumulated other comprehensive income/(loss)at September 30, 2019 $ 796,004 $ 958,814 $ 1,754,818 Foreign currency translation gain $ 22,294 $ 35,345 $ 57,639 Income in noncontrolling interest $ 35,345 $ (35,345 ) $ - Accumulated other comprehensive income/(loss) at September 30, 2020 $ 853,643 $ 958,814 $ 1,812,457 Additional paid-in capital at September 30, 2019 $ 40,344,837 $ (1,002,030 ) $ 39,342,807 Additional paid-in capital at September 30, 2020 $ 63,313,336 $ (3,091,570 ) $ 60,221,766 Non-controlling interst of Vicon at September 30, 2019 $ 885,874 $ (70,690 ) $ 815,184 Income in noncontrolling interest $ 191,771 $ 35,345 $ 227,116 Non-controlling interst of Vicon at September 30, 2020 $ 1,077,645 $ (35,345 ) $ 1,042,300 |
SCHEDULE OF CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | Condensed Consolidated Statements of Cash Flows SCHEDULE OF CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS For the year ended September 30, 2020 Previously reported Adjustments Adjusted Net loss $ (9,706,659 ) $ (536,306 ) $ (10,242,965 ) Depreciation and amortization $ 2,460,043 $ (594,317 ) $ 1,865,726 Inventory $ (1,586,651 ) $ 1,743,244 $ 156,593 Accrued expenses $ (499,527 ) $ (174,265 ) $ (673,792 ) Net cash used by operating activities - continuing operations $ (3,786,202 ) $ 438,356 $ (3,347,846 ) |
DISCONTINUED OPERATIONS (Tables
DISCONTINUED OPERATIONS (Tables) | 12 Months Ended |
Sep. 30, 2021 | |
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, 2021 and 2020 are as follows; SCHEDULE OF DISPOSAL GROUPS, INCLUDING DISCONTINUED OPERATIONS September 30, September 30, 2021 2020 Assets Current assets Trade receivables - related party - 544,500 Total current assets - 544,500 Property and equipment, net Assetss held for sale - 8,323,321 Total Assets $ - $ 8,867,821 Liabilities Current liabilities Accounts payable $ - $ - Total liabilities $ - $ 263,832 Cemtrex Inc. and Subsidiaries Loss from discontinued operations, net of tax and the loss on sale of discontinued operations, net 2021 2020 Year ended September 30, 2021 2020 Total net sales $ - $ - Cost of sales - - Operating, selling, general and administrative expenses 8,280,047 812,895 Other expenses - - Income (loss) from discontinued operations (8,280,047 ) (812,895 ) Loss on sale of discontinued operations - - Income tax provision - - Discontinued operations, net of tax $ (8,280,047 ) $ (812,895 ) |
SEGMENT AND GEOGRAPHIC INFORM_2
SEGMENT AND GEOGRAPHIC INFORMATION (Tables) | 12 Months Ended |
Sep. 30, 2021 | |
Segment Reporting [Abstract] | |
SCHEDULE OF SEGMENT INFORMATION | The following tables summarize the Company’s segment information: SCHEDULE OF SEGMENT INFORMATION For the years ended September 30, 2021 2020 Revenues from external customers Advanced Technologies $ 24,154,488 $ 25,750,684 Industrial Services 18,976,446 17,767,700 Total revenues $ 43,130,934 $ 43,518,384 Gross profit (restated) Advanced Technologies $ 10,591,956 $ 11,181,127 Industrial Services 6,376,396 6,440,076 Total gross profit $ 16,968,352 $ 17,621,203 Operating loss (restated) Advanced Technologies $ (9,793,851 ) $ (3,278,873 ) Industrial Services 1,052,031 (1,290,938 ) Total operating loss $ (8,741,820 ) $ (4,569,811) Other income/(expense) Advanced Technologies $ 4,891,984 $ (2,588,609 ) Industrial Services 4,619,048 (197,815 ) Total other expense $ 9,511,032 $ (2,786,424 ) Depreciation and Amortization (restated) Advanced Technologies $ 515,465 $ 643,427 Industrial Services 819,724 1,222,299 Total depreciation and amortization $ 1,335,189 $ 1,865,726 September 30, September 30, 2021 2020 (restated) Identifiable Assets Advanced Technologies $ 33,850,496 $ 37,311,047 Industrial Services 19,089,392 14,650,280 Discontinued operations - 8,867,821 Total Assets $ 52,939,888 $ 60,829,148 |
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: SCHEDULE OF REVENUE FROM PRODUCT SALES AND SERVICES FROM ITS SUBSIDIARIES September 30, September 30, Revenues 2021 2020 U.S. Operations $ 39,081,703 $ 40,211,773 Non-U.S. Operations 4,049,231 3,306,611 $ 43,130,934 $ 43,518,384 September 30, September 30, Long-lived Assets 2021 2020 (restated) U.S. Operations $ 6,584,161 $ 5,805,696 Non-U.S. Operations 154,783 168,154 $ 6,738,944 $ 5,973,850 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 12 Months Ended |
Sep. 30, 2021 | |
Fair Value Disclosures [Abstract] | |
SCHEDULE OF FAIR VALUE OF ASSETS | The Company’s fair value assets for the years ended September 30, 2021, and 2020, are as follows; SCHEDULE OF FAIR VALUE OF ASSETS Quoted Prices in Active Significant Markets for Other Significant Balance Identical Observable Unobservable as of Assets Inputs Inputs June 30, (Level 1) (Level 2) (Level 3) 2021 Assets Investment in marketable securities (included in short-term investments) $ 14,981 $ - $ - $ 14,981 $ 14,981 $ - $ - $ 14,981 Quoted Prices in Active Significant Markets for Other Significant Balance Identical Observable Unobservable as of Assets Inputs Inputs September 30, (Level 1) (Level 2) (Level 3) 2020 Assets Investment in marketable securities (included in short-term investments) $ 887,746 $ - $ - $ 887,746 $ 887,746 $ - $ - $ 887,746 |
ACCOUNTS RECEIVABLE, NET (Table
ACCOUNTS RECEIVABLE, NET (Tables) | 12 Months Ended |
Sep. 30, 2021 | |
Receivables [Abstract] | |
SCHEDULE OF ACCOUNTS RECEIVABLE, NET | Accounts receivable, net consists of the following: SCHEDULE OF ACCOUNTS RECEIVABLE, NET September 30, September 30, September 30, 2021 2020 2019 Accounts receivable $ 7,989,888 $ 7,027,645 $ 7,065,035 Allowance for doubtful accounts (178,992 ) (340,848 ) (606,051 ) Accounts receivables, net, total $ 7,810,896 $ 6,686,797 $ 6,458,984 |
INVENTORY, NET (Tables)
INVENTORY, NET (Tables) | 12 Months Ended |
Sep. 30, 2021 | |
Inventory Disclosure [Abstract] | |
SCHEDULE OF INVENTORY, NET | Inventory, net of reserves, consist of the following: SCHEDULE OF INVENTORY, NET September 30, September 30, 2021 2020 Restated Raw materials $ 1,957,410 $ 3,959,888 Work in progress 429,871 1,069,050 Finished goods 5,191,007 5,717,519 Inventory, gross 7,578,288 10,746,457 Less: Allowance for inventory obsolescence (1,921,001 ) (5,800,000 ) Inventory –net of allowance for inventory obsolescence $ 5,657,287 $ 4,946,457 |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 12 Months Ended |
Sep. 30, 2021 | |
Property, Plant and Equipment [Abstract] | |
SUMMARY OF PROPERTY AND EQUIPMENT | Property and equipment are summarized as follows: SUMMARY OF PROPERTY AND EQUIPMENT September 30, September 30, 2021 2020 (restated) Land $ 790,373 $ 790,373 Building and leasehold improvements 2,892,900 2,935,628 Furniture and office equipment 501,885 621,790 Computers and software 1,105,681 264,940 Trade show display - 89,330 Machinery and equipment 12,984,959 13,620,530 18,275,798 18,322,591 Less: Accumulated depreciation (11,536,854 ) (12,348,741 ) Property and equipment, net $ 6,738,944 $ 5,973,850 |
LEASES (Tables)
LEASES (Tables) | 12 Months Ended |
Sep. 30, 2021 | |
Leases | |
SUMMARY OF FINANCE AND OPERATING LEASE LIABILITIES | Finance and operating lease liabilities consist of the following: SUMMARY OF FINANCE AND OPERATING LEASE LIABILITIES September 30, September 30, 2021 2020 Lease liabilities - current Finance leases $ - $ 20,061 Operating leases 830,791 700,975 830,791 721,036 Lease liabilities - net of current portion Finance leases $ - $ - Operating leases 2,017,408 2,027,406 $ 2,017,408 $ 2,027,406 |
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, 2021, is set forth below: SCHEDULE OF RECONCILIATION OF UNDISCOUNTED CASH FLOWS TO FINANCE AND OPERATING LEASE LIABILITIES Years ending September 30, Finance leases Operating Leases Total 2022 912,755 912,755 2023 - 725,207 725,207 2024 - 588,454 588,454 2025 - 565,431 565,431 2026 & Thereafter - 668,292 668,292 Undiscounted lease payments - 3,460,139 3,460,139 Amount representing interest - (611,940 ) (611,940 ) Discounted lease payments $ - $ 2,848,199 $ 2,848,199 |
SCHEDULE OF LEASE COSTS | Additional disclosures of lease data are set forth below: SCHEDULE OF LEASE COSTS For the year ended September 30, 2021 September 30, 2020 Lease costs: Finance lease costs: Depreciation of finance lease assets $ 17,184 $ 22,912 Interest on lease liabilities 88 832 Operating lease costs: Amortization of right-of-use assets 870,860 816,550 Interest on lease liabilities 91,930 59,122 Total lease cost $ 980,062 $ 899,416 Other information: Cash paid for amounts included in the measurement of lease liabilities: Operating leases $ 962,790 $ 816,549 Finance leases 20,061 22,718 $ 982,851 $ 839,267 Weighted-average remaining lease term - finance leases (months) 0 10 Weighted-average remaining lease term - operating leases (months) 55 51 Weighted-average discount rate - finance leases 3.63 % 3.63 % Weighted-average discount rate - operating leases 6.85 % 6.64 % |
LINES OF CREDIT AND LONG-TERM_2
LINES OF CREDIT AND LONG-TERM LIABILITIES (Tables) | 12 Months Ended |
Sep. 30, 2021 | |
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; SCHEDULE OF ESTIMATED MATURITIES OF LONG TERM DEBT 2022 2023 2024 2025 2026 Thereafter Total 713,548 505,132 - - - - $ 1,218,680 Fulton Bank - $ 5,250,000 713,548 505,132 - - - $ 1,218,680 Fulton Bank - $ 400,000 78,995 70,919 - - - $ 149,914 Fulton Bank - $ 360,000 66,831 69,484 49,502 - - $ 258,060 Fulton Bank - Mortgage payable 81,329 88,266 92,120 96,142 102,521 1,878,736 $ 2,339,114 NIL Funding 3,604,743 - - - - $ 3,604,743 PPP Loans 60,700 1,032,200 - - - $ 1,092,900 Notes Payable (1) 5,371,825 2,350,000 - - - $ 7,721,825 TOTAL $ 9,977,971 $ 4,116,001 $ 141,622 $ 96,142 $ 102,521 $ 1,878,736 $ 16,385,236 (1) Net of unamortized original issue discounts of $ 950,000 |
SHARE-BASED COMPENSATION (Table
SHARE-BASED COMPENSATION (Tables) | 12 Months Ended |
Sep. 30, 2021 | |
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 for the options granted to Christopher C. Moore; SCHEDULE OF FAIR VALUE STOCK OPTION WEIGHTED AVERAGE ASSUMPTIONS January 6, 2021 Expected term 5 Risk-free interest rate 0.41 % Expected volatility 111.47 % Expected dividend yield 0 % |
SCHEDULE OF STOCK OPTIONS ACTIVITY | 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, 2019 1,050,000 $ - Options granted - Options exercised - Options forfeited - Options cancelled (104,167 ) Outstanding at September 30, 2020 945,833 Options granted 250,000 Options exercised Options forfeited Options cancelled (245,833 ) Outstanding at September 30, 2021 950,000 Exercisable at September 30, 2021 583,333 $ 1.78 0.40 $ - |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Sep. 30, 2021 | |
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: SCHEDULE OF (LOSS) INCOME BEFORE PROVISION FOR TAX Year ended September 30, 2021 2020 Restated Domestic $ 30,957 $ (6,422,704 ) Foreign 738,255 (933,531 ) Loss before provision for income taxes $ 769,212 $ (7,356,235 ) |
SCHEDULE OF PROVISION FOR INCOME TAXES | The provision for income taxes consisted of the following: SCHEDULE OF PROVISION FOR INCOME TAXES September 30, 2021 September 30, 2020 Restated Current (benefit)/provision Federal $ - $ - State 375,434 (209,032 ) Foreign - - Total current (benefit)/provision 375,434 (209,032 ) Deferred provision Federal - 2,282,867 State - - Foreign - - Total deferred provision $ - $ 2,282,867 Total (benefit)/provision for income taxes $ 375,434 $ 2,073,835 Effective Income tax rate 48.81 % -28.19 % |
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: SCHEDULE OF EFFECTIVE INCOME TAX RATE RECONCILIATION For the Fiscal Year For the Fiscal Year Ended Ended September 30, 2021 September 30, 2020 Restated 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 0.00 % - 30.78 % Effect of change in rates 0.00 % 0.00 % Permanent differences 21.31 % - 24.91 % Effective rate 48.81 % -28.19 % |
SCHEDULE OF DEFERRED TAX ASSETS AND LIABILITIES | The components of our deferred tax assets and liabilities are summarized as follows: SCHEDULE OF DEFERRED TAX ASSETS AND LIABILITIES September 30, 2021 September 30, 2020 Restated Deferred Tax Assets: Net operating loss carryforwards $ 8,702,738 $ 20,482,973 Inventory 1,405,057 - Prepaid expenses - - Allowance for bad debt 35,345 3,491 Fixed Assets - 19,271 Goodwill amortization - - Non-qualified stock options - - Warrants (interest expense) 1,155,642 - Accruals 280,447 2,699,246 Warranty Reserve 28,002 - Foreign Tax Credits - 354,000 Other 4,358 - Total gross deferred taxes 11,611,589 23,558,981 Valuation allowance (9,491,650 ) (22,720,711 ) Net deferred tax assets 2,119,939 838,270 Deferred Tax Liabilities: Inventory and other Reserves (638,230 ) - Inventory - (2,277 ) Prepaid expenses (87,934 ) (45,563 ) Goodwill amortization (557,074 ) (428,395 ) Research and development expenses - - Depreciation (836,701 ) (319,090 ) Gain/loss on fixed asset disposal - - Other - (42,945 ) Total deferred tax liabilities (2,119,939 ) (838,270 ) Total deferred tax assets (liabilities) $ - $ - |
ORGANIZATION (Details Narrative
ORGANIZATION (Details Narrative) | Oct. 26, 2022USD ($) | Oct. 26, 2021USD ($) | Oct. 26, 2020USD ($) | Sep. 30, 2021Segments | May 31, 2021USD ($) | Nov. 13, 2020USD ($) |
Number of Reportable Segments | Segments | 2 | |||||
Contingent consideration | $ 175,428 | |||||
MasterpieceVR [Member] | ||||||
Equity Method Investment, Underlying Equity in Net Assets | $ 500,000 | |||||
Forecast [Member] | Installment One [Member] | ||||||
Debt Instrument, Periodic Payment | $ 239,774 | |||||
Forecast [Member] | Installment Two [Member] | ||||||
Debt Instrument, Periodic Payment | $ 200,000 | |||||
Virtual Driver Interactive [Member] | ||||||
Business combination, purchase price | $ 1,339,774 | |||||
Contingent consideration | 175,428 | |||||
Payments to Acquire Businesses, Gross | 900,000 | |||||
Notes Payable | $ 439,774 | |||||
Debt Instrument, Interest Rate, Stated Percentage | 5.00% | |||||
Virtual Driver Interactive [Member] | Proprietary Software [Member] | ||||||
Business combination, purchase price | $ 876,820 | |||||
Virtual Driver Interactive [Member] | Inventory [Member] | ||||||
Business combination, purchase price | 39,992 | |||||
Virtual Driver Interactive [Member] | Goodwill [Member] | ||||||
Business combination, purchase price | $ 598,391 |
SCHEDULE OF COMPUTATION OF DILU
SCHEDULE OF COMPUTATION OF DILUTED NET LOSS PER COMMON SHARE AS ANTI-DILUTIVE EFFECT (Details) - shares | 12 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Warrant [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Net loss per common share anti-dilutive effect | 433,965 | 433,965 |
Share-based Payment Arrangement, Option [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Net loss per common share anti-dilutive effect | 950,000 | 945,833 |
SCHEDULE OF FOREIGN CURRENCY EX
SCHEDULE OF FOREIGN CURRENCY EXCHANGE RATE (Details) | Dec. 31, 2021 | Sep. 30, 2020 |
INR [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Exchange rate | 0.013 | 0.014 |
Approximate weighted average exchange rate | 0.014 | 0.014 |
Great Britain Pound [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Exchange rate | 1.346 | 1.287 |
Approximate weighted average exchange rate | 1.358 | 1.248 |
BASIS OF PRESENTATION AND SIG_4
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | 12 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2019 | |
Property, Plant and Equipment [Line Items] | |||
Accounts Receivable, Allowance for Credit Loss | $ 178,992 | $ 340,848 | |
Inventory Write-down | 1,921,001 | 4,575,193 | |
Impairment of goodwill | 0 | 0 | |
Revenue recognized | 2,472,137 | 1,965,155 | $ 1,769,380 |
OCI, Foreign Currency Transaction and Translation Gain (Loss), Arising During Period, Tax | $ 996,100 | 57,639 | |
Building [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, useful life | 30 years | ||
Furniture And Office Equipment [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, useful life | 5 years | ||
Software and Software Development Costs [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, useful life | 7 years | ||
Machinery and Equipment [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, useful life | 7 years | ||
Customers [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Off balance sheet credit exposure | $ 0 | $ 0 |
SCHEDULE OF CONDENSED CONSOLIDA
SCHEDULE OF CONDENSED CONSOLIDATED BALANCE SHEETS (Details) - USD ($) | Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2019 |
Reclassification [Line Items] | |||
Cash and equivalents | $ 15,426,976 | $ 19,487,023 | |
Prepaid expenses and other assets | 2,585,652 | 1,175,775 | |
Other Assets | 697,240 | 381,900 | |
Property and equipment, net | 6,738,944 | 5,973,850 | |
Inventory –net of allowance for inventory obsolescence | 5,657,287 | 4,946,457 | |
Goodwill | 7,821,283 | 7,222,892 | |
Accounts payable | 4,235,002 | 4,811,217 | |
Accrued expenses | 2,094,303 | 2,107,027 | |
Deferred revenue | 2,004,170 | 1,497,826 | |
Other long-term liabilities | 839,171 | 768,595 | |
Series 1 preferred stock dividends payable | |||
Additional paid-in capital | 61,727,834 | 60,221,766 | |
Retained earnings (accumulated deficit) | (41,908,062) | (34,100,067) | $ (23,629,986) |
Accumulated other comprehensive income | $ 2,896,452 | 1,812,457 | 1,754,818 |
Adjustment of Net Value of Intangible Assets [Member] | |||
Reclassification [Line Items] | |||
Property and equipment, net | (2,597,185) | ||
Adjustment Of Resulting From Reaudit [Member] | |||
Reclassification [Line Items] | |||
Cash and equivalents | (3,038) | ||
Prepaid expenses and other assets | (12,542) | ||
Other Assets | (362,307) | ||
Goodwill | 2,851,998 | ||
Accounts payable | 1,953,400 | ||
Accrued expenses | (285,460) | ||
Deferred revenue | (153,958) | ||
Other long-term liabilities | (295,138) | ||
Adjustment Of Net Valueof Inventory [Member] | |||
Reclassification [Line Items] | |||
Inventory –net of allowance for inventory obsolescence | (1,847,349) | ||
Adjustment of Net Value of Fixed Assets [Member] | |||
Reclassification [Line Items] | |||
Property and equipment, net | (987,901) | ||
Cumulative Effect of Restatement Adjustments [Member] | |||
Reclassification [Line Items] | |||
Retained earnings (accumulated deficit) | 1,999,363 | ||
Loss on Amounts Transferred to First Commercial [Member] | |||
Reclassification [Line Items] | |||
Retained earnings (accumulated deficit) | (7,100,000) | ||
Restatement on Dividends [Member] | |||
Reclassification [Line Items] | |||
Series 1 preferred stock dividends payable | (1,081,690) | ||
Additional paid-in capital | (3,091,570) | ||
Retained earnings (accumulated deficit) | 4,173,260 | ||
Cumulative Effect of Currency Translation [Member] | |||
Reclassification [Line Items] | |||
Accumulated other comprehensive income | 958,814 | ||
Previously Reported [Member] | |||
Reclassification [Line Items] | |||
Cash and equivalents | 19,490,061 | ||
Prepaid expenses and other assets | 1,188,317 | ||
Other Assets | 744,207 | ||
Property and equipment, net | 9,558,936 | ||
Inventory –net of allowance for inventory obsolescence | 6,793,806 | ||
Goodwill | 4,370,894 | ||
Accounts payable | 2,857,817 | ||
Accrued expenses | 2,392,487 | ||
Deferred revenue | 1,651,784 | ||
Other long-term liabilities | 1,063,733 | ||
Series 1 preferred stock dividends payable | 1,081,690 | ||
Additional paid-in capital | 63,313,336 | ||
Retained earnings (accumulated deficit) | (33,172,690) | (20,067,685) | |
Accumulated other comprehensive income | $ 853,643 | $ 796,004 |
SCHEDULE OF CONDENSED CONSOLI_2
SCHEDULE OF CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME/(LOSS) (Details) - USD ($) | 12 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Reclassification [Line Items] | ||
Net loss available to Cemtrex, Inc. shareholders | $ (7,807,995) | $ (10,470,081) |
Cost of revenues | 26,162,582 | 25,897,181 |
General and administrative | $ 22,538,496 | 20,363,728 |
Preferred dividends | ||
Loss Per Share-Basic | $ (1.01) | |
Loss Per Share-Diluted | $ (1.01) | |
Previously Reported [Member] | ||
Reclassification [Line Items] | ||
Net loss available to Cemtrex, Inc. shareholders | $ (13,105,005) | |
Cost of revenues | 24,153,937 | |
General and administrative | 21,570,666 | |
Preferred dividends | $ 3,171,230 | |
Loss Per Share-Basic | $ (1.28) | |
Loss Per Share-Diluted | $ (1.28) | |
Revision of Prior Period, Adjustment [Member] | ||
Reclassification [Line Items] | ||
Net loss available to Cemtrex, Inc. shareholders | $ 2,634,924 | |
Cost of revenues | 1,743,244 | |
General and administrative | (1,206,938) | |
Preferred dividends | $ (3,171,230) | |
Loss Per Share-Basic | $ 0.27 | |
Loss Per Share-Diluted | $ 0.27 |
SCHEDULE OF CONDENSED CONSOLI_3
SCHEDULE OF CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (Details) - USD ($) | 12 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2019 | |
Reclassification [Line Items] | |||
Retained earnings (accumulated deficit), beginning balance | $ (34,100,067) | $ (23,629,986) | |
Dividends pad in series preferred shares | |||
Accrued dividends | |||
Net income/(loss) | (10,470,081) | ||
Retained earnings (accumulated deficit), ending balance | (41,908,062) | (34,100,067) | $ (23,629,986) |
Accumulated other comprehensive income/(loss), beginning balance | 1,812,457 | 1,754,818 | |
Foreign currency translation gain | 996,100 | 57,639 | |
Income in noncontrolling interest | |||
Accumulated other comprehensive income/(loss), ending balance | 2,896,452 | 1,812,457 | 1,754,818 |
Adjustments to Additional Paid in Capital, Other | 60,221,766 | 39,342,807 | |
Non-controlling interst of Vicon, beginning balance | 1,042,300 | 815,184 | |
Income in noncontrolling interest | 227,116 | ||
Non-controlling interst of Vicon, ending balance | 1,042,300 | 815,184 | |
Previously Reported [Member] | |||
Reclassification [Line Items] | |||
Retained earnings (accumulated deficit), beginning balance | (33,172,690) | (20,067,685) | |
Dividends pad in series preferred shares | (2,089,540) | ||
Accrued dividends | (1,081,690) | ||
Net income/(loss) | (9,706,659) | ||
Retained earnings (accumulated deficit), ending balance | (33,172,690) | (20,067,685) | |
Accumulated other comprehensive income/(loss), beginning balance | 853,643 | 796,004 | |
Foreign currency translation gain | 22,294 | ||
Income in noncontrolling interest | 35,345 | ||
Accumulated other comprehensive income/(loss), ending balance | 853,643 | 796,004 | |
Adjustments to Additional Paid in Capital, Other | 63,313,336 | 40,344,837 | |
Non-controlling interst of Vicon, beginning balance | 1,077,645 | 885,874 | |
Income in noncontrolling interest | 191,771 | ||
Non-controlling interst of Vicon, ending balance | 1,077,645 | 885,874 | |
Revision of Prior Period, Adjustment [Member] | |||
Reclassification [Line Items] | |||
Retained earnings (accumulated deficit), beginning balance | (927,377) | (3,562,301) | |
Dividends pad in series preferred shares | 2,089,540 | ||
Accrued dividends | 1,081,690 | ||
Net income/(loss) | (763,422) | ||
Retained earnings (accumulated deficit), ending balance | (927,377) | (3,562,301) | |
Accumulated other comprehensive income/(loss), beginning balance | 958,814 | 958,814 | |
Foreign currency translation gain | 35,345 | ||
Income in noncontrolling interest | (35,345) | ||
Accumulated other comprehensive income/(loss), ending balance | 958,814 | 958,814 | |
Adjustments to Additional Paid in Capital, Other | (3,091,570) | (1,002,030) | |
Non-controlling interst of Vicon, beginning balance | $ (35,345) | (70,690) | |
Income in noncontrolling interest | 35,345 | ||
Non-controlling interst of Vicon, ending balance | $ (35,345) | $ (70,690) |
SCHEDULE OF CONDENSED CONSOLI_4
SCHEDULE OF CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Details) - USD ($) | 12 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Reclassification [Line Items] | ||
Net loss | $ (10,242,965) | |
Depreciation and amortization | 1,865,726 | |
Inventory | $ (670,838) | 156,593 |
Accrued expenses | 47,389 | (673,792) |
Net cash used by operating activities - continuing operations | $ (10,051,165) | (3,347,846) |
Previously Reported [Member] | ||
Reclassification [Line Items] | ||
Net loss | (9,706,659) | |
Depreciation and amortization | 2,460,043 | |
Inventory | (1,586,651) | |
Accrued expenses | (499,527) | |
Net cash used by operating activities - continuing operations | (3,786,202) | |
Revision of Prior Period, Adjustment [Member] | ||
Reclassification [Line Items] | ||
Net loss | (536,306) | |
Depreciation and amortization | (594,317) | |
Inventory | 1,743,244 | |
Accrued expenses | (174,265) | |
Net cash used by operating activities - continuing operations | $ 438,356 |
RESTATEMENTS OF FINANCIAL STA_3
RESTATEMENTS OF FINANCIAL STATEMENTS (Details Narrative) - USD ($) | Feb. 26, 2021 | Feb. 23, 2021 | Mar. 31, 2021 | Mar. 31, 2021 | Jun. 30, 2021 | Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2018 | Sep. 30, 2017 |
Research and development expenses | $ 3,171,676 | $ 1,827,286 | |||||||
Series 1 Preferred Stock [Member] | |||||||||
Shares repurchased during period, value | $ 338,775 | ||||||||
Shares repurchased during period | 235,133 | ||||||||
Settlement Agreement [Member] | |||||||||
One-time gain | $ 3,674,165 | ||||||||
Incorrectly Handled and Accounted [Member] | |||||||||
Advertising expenses | $ 400,000 | ||||||||
Intangible asset | 5,700,000 | ||||||||
Research and development expenses | 975,000 | ||||||||
Error corrections and prior period adjustments, description | In 2017 the operations of the Company were vastly different with both the environmental and circuit board manufacturing segments accounting for approximately 75% of revenues. These businesses are now either sold or discontinued. The current reported 2017 financial statements of the Company do not give an accurate representation of the Company today because only 16% of the $120M business operations are still a part of current operations. | ||||||||
Incorrectly Handled and Accounted [Member] | Settlement Agreement [Member] | |||||||||
Error corrections and prior period adjustments, description | As part of the Settlement Agreement, Mr. Govil was required to pay the Company consideration with a total value of $7,100,000 (the “Settlement Amount”) by entering into the Agreement. The Settlement Amount was satisfied in a combination of Mr. Govil forfeiting certain Preferred Stock and outstanding options and executing a secured note in the amount of $1,533,280. The Independent Board of Directors in coordination with Management concluded the settlement represented fair value. | ||||||||
Incorrectly Handled and Accounted [Member] | Aron Govil [Member] | Settlement Agreement [Member] | |||||||||
Receivable from related party | $ 7,100,000 | ||||||||
Error corrections and prior period adjustments, description | As discussed above, Mr. Govil also executed a secured promissory note (the “Note”) in the amount of $1,533,280. The Note matures and is due in full in two years and bears interest at 9% per annum and is secured by all of Mr. Govil’s assets. Mr. Govil also agreed to sign an affidavit confessing judgment in the event of a default on the Note. | ||||||||
Shares repurchased during period, value | $ 1,533,280 | ||||||||
Incorrectly Handled and Accounted [Member] | Aron Govil [Member] | Settlement Agreement [Member] | Series A Preferred Stock [Member] | |||||||||
Shares repurchased during period | 1,000,000 | ||||||||
Incorrectly Handled and Accounted [Member] | Aron Govil [Member] | Settlement Agreement [Member] | Series C Preferred Stock [Member] | |||||||||
Shares repurchased during period | 50,000 | ||||||||
Incorrectly Handled and Accounted [Member] | Aron Govil [Member] | Settlement Agreement [Member] | Series 1 Preferred Stock [Member] | |||||||||
Shares repurchased during period | 469,949 | ||||||||
Disputes [Member] | Incorrectly Handled and Accounted [Member] | |||||||||
Dispute amount | $ 7,100,000 | $ 1,500,000 | $ 5,600,000 |
PURCHASED ASSETS AND INVESTME_2
PURCHASED ASSETS AND INVESTMENTS (Details Narrative) - USD ($) | Feb. 21, 2020 | Sep. 30, 2021 |
Stock Issued During Period, Shares, New Issues | 3,159,655 | |
Vicon Industries, Inc. [Member] | ||
Stock Issued During Period, Shares, New Issues | 71,429 | |
Stock Issued During Period, Value, New Issues | $ 500,000 | |
[custom:EquityMethodInvestmentOwnershipPercentageDescription] | The Company now owns approximately 95% of Vicon’s outstanding shares of common stock |
SCHEDULE OF DISPOSAL GROUPS, IN
SCHEDULE OF DISPOSAL GROUPS, INCLUDING DISCONTINUED OPERATIONS (Details) - USD ($) | 12 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Discontinued Operations and Disposal Groups [Abstract] | ||
Trade receivables - related party | $ 544,500 | |
Total current assets | 544,500 | |
Assetss held for sale | 8,323,321 | |
Total Assets | 8,867,821 | |
Accounts payable | ||
Total liabilities | 263,832 | |
Total net sales | ||
Cost of sales | ||
Operating, selling, general and administrative expenses | 8,280,047 | 812,895 |
Other expenses | ||
Income (loss) from discontinued operations | (8,280,047) | (812,895) |
Loss on sale of discontinued operations | ||
Income tax provision | ||
Discontinued operations, net of tax | $ (8,280,047) | $ (812,895) |
SCHEDULE OF SEGMENT INFORMATION
SCHEDULE OF SEGMENT INFORMATION (Details) - USD ($) | 12 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Segment Reporting Information [Line Items] | ||
Total revenues | $ 43,130,934 | $ 43,518,384 |
Total gross profit | 16,968,352 | 17,621,203 |
Total operating loss | (8,741,820) | (4,569,811) |
Total other expense | 9,511,032 | (2,786,424) |
Total depreciation and amortization | 1,335,189 | 1,865,726 |
Total Assets | 52,939,888 | 60,829,148 |
Discontinued Operations [Member] | ||
Segment Reporting Information [Line Items] | ||
Total Assets | ||
Revision of Prior Period, Error Correction, Adjustment [Member] | ||
Segment Reporting Information [Line Items] | ||
Total gross profit | 17,621,203 | |
Total operating loss | (4,569,811) | |
Total depreciation and amortization | 1,865,726 | |
Total Assets | 60,829,148 | |
Revision of Prior Period, Error Correction, Adjustment [Member] | Discontinued Operations [Member] | ||
Segment Reporting Information [Line Items] | ||
Total Assets | 8,867,821 | |
Advanced Technologies [Member] | ||
Segment Reporting Information [Line Items] | ||
Total revenues | 24,154,488 | 25,750,684 |
Total gross profit | 10,591,956 | |
Total operating loss | (9,793,851) | |
Total other expense | 4,891,984 | (2,588,609) |
Total depreciation and amortization | 515,465 | |
Total Assets | 33,850,496 | |
Advanced Technologies [Member] | Revision of Prior Period, Error Correction, Adjustment [Member] | ||
Segment Reporting Information [Line Items] | ||
Total gross profit | 11,181,127 | |
Total operating loss | (3,278,873) | |
Total depreciation and amortization | 643,427 | |
Total Assets | 37,311,047 | |
Industrial Services [Member] | ||
Segment Reporting Information [Line Items] | ||
Total revenues | 18,976,446 | 17,767,700 |
Total gross profit | 6,376,396 | |
Total operating loss | 1,052,031 | |
Total other expense | 4,619,048 | (197,815) |
Total depreciation and amortization | 819,724 | |
Total Assets | $ 19,089,392 | |
Industrial Services [Member] | Revision of Prior Period, Error Correction, Adjustment [Member] | ||
Segment Reporting Information [Line Items] | ||
Total gross profit | 6,440,076 | |
Total operating loss | (1,290,938) | |
Total depreciation and amortization | 1,222,299 | |
Total Assets | $ 14,650,280 |
SCHEDULE OF REVENUE FROM PRODUC
SCHEDULE OF REVENUE FROM PRODUCT SALES AND SERVICES FROM ITS SUBSIDIARIES (Details) - USD ($) | 12 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Segment Reporting Information [Line Items] | ||
Revenues | $ 43,130,934 | $ 43,518,384 |
Long-lived Assets | 6,738,944 | 5,973,850 |
United States [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenues | 39,081,703 | 40,211,773 |
Long-lived Assets | 6,584,161 | 5,805,696 |
Non-U.S. Locations [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenues | 4,049,231 | 3,306,611 |
Long-lived Assets | $ 154,783 | $ 168,154 |
SEGMENT AND GEOGRAPHIC INFORM_3
SEGMENT AND GEOGRAPHIC INFORMATION (Details Narrative) | 12 Months Ended |
Sep. 30, 2021Segments | |
Segment Reporting [Abstract] | |
Number of reportable segments | 2 |
SCHEDULE OF FAIR VALUE OF ASSET
SCHEDULE OF FAIR VALUE OF ASSETS (Details) - USD ($) | Sep. 30, 2021 | Sep. 30, 2020 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value assets | $ 14,981 | $ 887,746 |
Marketable Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value assets | 14,981 | 887,746 |
Fair Value, Inputs, Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value assets | 14,981 | 887,746 |
Fair Value, Inputs, Level 1 [Member] | Marketable Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value assets | 14,981 | 887,746 |
Fair Value, Inputs, Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value assets | ||
Fair Value, Inputs, Level 2 [Member] | Marketable Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value assets | ||
Fair Value, Inputs, Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value assets | ||
Fair Value, Inputs, Level 3 [Member] | Marketable Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value assets |
RESTRICTED CASH (Details Narrat
RESTRICTED CASH (Details Narrative) | Sep. 30, 2021USD ($) |
Restricted Cash | |
Restricted cash | $ 1,601,932 |
Accrued expenses | $ 157,415 |
SCHEDULE OF ACCOUNTS RECEIVABLE
SCHEDULE OF ACCOUNTS RECEIVABLE, NET (Details) - USD ($) | Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2019 |
Receivables [Abstract] | |||
Accounts receivable | $ 7,989,888 | $ 7,027,645 | $ 7,065,035 |
Allowance for doubtful accounts | (178,992) | (340,848) | (606,051) |
Accounts receivables, net, total | $ 7,810,896 | $ 6,686,797 | $ 6,458,984 |
SCHEDULE OF INVENTORY, NET (Det
SCHEDULE OF INVENTORY, NET (Details) - USD ($) | Sep. 30, 2021 | Sep. 30, 2020 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 1,957,410 | $ 3,959,888 |
Work in progress | 429,871 | 1,069,050 |
Finished goods | 5,191,007 | 5,717,519 |
Inventory, gross | 7,578,288 | 10,746,457 |
Less: Allowance for inventory obsolescence | (1,921,001) | (5,800,000) |
Inventory –net of allowance for inventory obsolescence | $ 5,657,287 | $ 4,946,457 |
SUMMARY OF PROPERTY AND EQUIPME
SUMMARY OF PROPERTY AND EQUIPMENT (Details) - USD ($) | Sep. 30, 2021 | Sep. 30, 2020 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 18,275,798 | $ 18,322,591 |
Less: Accumulated depreciation | (11,536,854) | (12,348,741) |
Property and equipment, net | 6,738,944 | 5,973,850 |
Land [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 790,373 | 790,373 |
Building and Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 2,892,900 | 2,935,628 |
Furniture and Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 501,885 | 621,790 |
Software Development [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 1,105,681 | 264,940 |
Trade Show Display [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 89,330 | |
Machinery and Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 12,984,959 | $ 13,620,530 |
PROPERTY AND EQUIPMENT (Details
PROPERTY AND EQUIPMENT (Details Narrative) - USD ($) | 12 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Impairment Effects on Earnings Per Share [Line Items] | ||
Depreciation, Depletion and Amortization, Nonproduction | $ 1,335,189 | $ 1,865,726 |
Property, Plant and Equipment [Member] | ||
Impairment Effects on Earnings Per Share [Line Items] | ||
Depreciation, Depletion and Amortization, Nonproduction | $ 1,335,189 | $ 1,865,726 |
SUMMARY OF FINANCE AND OPERATIN
SUMMARY OF FINANCE AND OPERATING LEASE LIABILITIES (Details) - USD ($) | Sep. 30, 2021 | Sep. 30, 2020 |
Lease liabilities - current, Finance leases | $ 20,061 | |
Lease liabilities - current, Operating leases | 830,791 | 700,975 |
Lease liabilities - current | 830,791 | 721,036 |
Lease liabilities - net of current portion, Finance leases | ||
Lease liabilities - net of current portion, Operating leases | 2,017,408 | 2,027,406 |
Lease liabilities - net of current portion | $ 2,017,408 | 2,027,406 |
Lease Liabilities [Member] | ||
Lease liabilities - net of current portion, Finance leases |
SCHEDULE OF RECONCILIATION OF U
SCHEDULE OF RECONCILIATION OF UNDISCOUNTED CASH FLOWS TO FINANCE AND OPERATING LEASE LIABILITIES (Details) | Sep. 30, 2021USD ($) |
Leases | |
Finance leases, 2022 | |
Operating Leases, 2022 | 912,755 |
Total, 2022 | 912,755 |
Finance leases, 2023 | |
Operating Leases, 2023 | 725,207 |
Total, 2023 | 725,207 |
Finance leases, 2024 | |
Operating Leases, 2024 | 588,454 |
Total, 2024 | 588,454 |
Finance leases, 2025 | |
Operating Leases, 2025 | 565,431 |
Total, 2025 | 565,431 |
Finance leases, 2026 & Thereafter | |
Operating Leases, 2026 & Thereafter | 668,292 |
Total, 2026 & Thereafter | 668,292 |
Finance leases, Undiscounted lease payments | |
Operating Leases, Undiscounted lease payments | 3,460,139 |
Total, Undiscounted lease payments | 3,460,139 |
Finance leases, Amount representing interest | |
Operating Leases, Amount representing interest | (611,940) |
Total, Amount representing interest | (611,940) |
Finance leases, Discounted lease payments | |
Operating Leases, Discounted lease payments | 2,848,199 |
Total, Discounted lease payments | $ 2,848,199 |
SCHEDULE OF LEASE COSTS (Detail
SCHEDULE OF LEASE COSTS (Details) - USD ($) | 12 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Leases | ||
Finance lease costs: Depreciation of finance lease assets | $ 17,184 | $ 22,912 |
Finance lease costs: Interest on lease liabilities | 88 | 832 |
Operating lease costs: Amortization of right-of-use assets | 870,860 | 816,550 |
Operating lease costs: Interest on lease liabilities | 91,930 | 59,122 |
Total lease cost | 980,062 | 899,416 |
Cash paid for amounts included in the measurement of lease liabilities: Operating leases | 962,790 | 816,549 |
Cash paid for amounts included in the measurement of lease liabilities: Finance leases | 20,061 | 22,718 |
Cash paid for amounts included in the measurement of lease liabilities: Total | $ 982,851 | $ 839,267 |
Weighted-average remaining lease term - finance leases (months) | 0 months | 10 months |
Weighted-average remaining lease term - operating leases (months) | 55 months | 51 months |
Weighted-average discount rate - finance leases | 3.63% | 3.63% |
Weighted-average discount rate - operating leases | 6.85% | 6.64% |
LEASES (Details Narrative)
LEASES (Details Narrative) | 12 Months Ended |
Sep. 30, 2021 | |
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 |
PREPAID AND OTHER CURRENT ASS_2
PREPAID AND OTHER CURRENT ASSETS (Details Narrative) - USD ($) | Sep. 30, 2021 | Sep. 30, 2020 |
Prepaid And Other Current Assets | ||
Prepaid Supplies | $ 298,707 | $ 101,308 |
Other Assets, Current | $ 2,286,945 | $ 1,074,467 |
OTHER ASSETS (Details Narrative
OTHER ASSETS (Details Narrative) - USD ($) | Sep. 30, 2021 | Sep. 30, 2020 |
Net Investment Income [Line Items] | ||
Other Assets | $ 697,240 | $ 381,900 |
Rent security deposits | 84,362 | |
Other assets excluding rent security | 112,878 | |
Other Assets, Noncurrent | 697,240 | $ 381,900 |
MasterpieceVR [Member] | ||
Net Investment Income [Line Items] | ||
Other Investments | $ 500,000 |
SCHEDULE OF ESTIMATED MATURITIE
SCHEDULE OF ESTIMATED MATURITIES OF LONG TERM DEBT (Details) | Sep. 30, 2021USD ($) | |
Line of Credit Facility [Line Items] | ||
2022 | $ 9,977,971 | |
2023 | 4,116,001 | |
2024 | 141,622 | |
2025 | 96,142 | |
2026 | 102,521 | |
Thereafter | 1,878,736 | |
Total | 16,385,236 | |
NIL Funding [Member] | ||
Line of Credit Facility [Line Items] | ||
2022 | 3,604,743 | |
2023 | ||
2024 | ||
2025 | ||
Thereafter | ||
Total | 3,604,743 | |
PPP Loans [Member] | ||
Line of Credit Facility [Line Items] | ||
2022 | 60,700 | |
2023 | 1,032,200 | |
2024 | ||
2025 | ||
Thereafter | ||
Total | 1,092,900 | |
Notes Payable [Member] | ||
Line of Credit Facility [Line Items] | ||
2022 | 5,371,825 | [1] |
2023 | 2,350,000 | [1] |
2024 | [1] | |
2025 | [1] | |
Thereafter | [1] | |
Total | 7,721,825 | [1] |
Fulton Bank One [Member] | ||
Line of Credit Facility [Line Items] | ||
2022 | 713,548 | |
2023 | 505,132 | |
2024 | ||
2025 | ||
2026 | ||
Thereafter | ||
Total | 1,218,680 | |
Fulton Bank Two [Member] | ||
Line of Credit Facility [Line Items] | ||
2022 | 78,995 | |
2023 | 70,919 | |
2024 | ||
2025 | ||
Thereafter | ||
Total | 149,914 | |
Fulton Bank Three [Member] | ||
Line of Credit Facility [Line Items] | ||
2022 | 66,831 | |
2023 | 69,484 | |
2024 | 49,502 | |
2025 | ||
Thereafter | ||
Total | 258,060 | |
Fulton Bank - Mortgage Payable [Member] | ||
Line of Credit Facility [Line Items] | ||
2022 | 81,329 | |
2023 | 88,266 | |
2024 | 92,120 | |
2025 | 96,142 | |
2026 | 102,521 | |
Thereafter | 1,878,736 | |
Total | $ 2,339,114 | |
[1] | Net of unamortized original issue discounts of $ 950,000 |
SCHEDULE OF ESTIMATED MATURIT_2
SCHEDULE OF ESTIMATED MATURITIES OF LONG TERM DEBT (Details) (Parenthetical) | Sep. 30, 2021USD ($) |
Line of Credit Facility [Line Items] | |
Unamortized original issue discounts | $ 950,000 |
Fulton Bank One [Member] | |
Line of Credit Facility [Line Items] | |
Loans payable to bank | 5,250,000 |
Fulton Bank Two [Member] | |
Line of Credit Facility [Line Items] | |
Loans payable to bank | 400,000 |
Fulton Bank Three [Member] | |
Line of Credit Facility [Line Items] | |
Loans payable to bank | $ 360,000 |
LINES OF CREDIT AND LONG-TERM_3
LINES OF CREDIT AND LONG-TERM LIABILITIES (Details Narrative) - USD ($) | Nov. 30, 2021 | Apr. 24, 2020 | Mar. 03, 2020 | Jan. 28, 2020 | Dec. 23, 2019 | May 02, 2018 | May 01, 2018 | Dec. 15, 2015 | Sep. 30, 2021 | Sep. 30, 2020 | Apr. 30, 2021 | May 31, 2020 |
Line of Credit Facility [Line Items] | ||||||||||||
Debt Instrument, Unamortized Discount | $ 950,000 | |||||||||||
Proceeds from Notes Payable | 5,005,000 | $ 8,485,000 | ||||||||||
Repayments of Notes Payable | 2,220,257 | 1,225,969 | ||||||||||
Liabilities, Noncurrent | 9,731,810 | 15,689,509 | ||||||||||
Short-term Debt | 9,977,972 | 7,034,510 | ||||||||||
Subsequent Event [Member] | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Repayments of lines of credit | $ 6,291,985 | |||||||||||
Term Loan Agreement [Member] | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Debt instrument, interest rate | 8.85% | |||||||||||
Debt Instrument, Maturity Date | Mar. 30, 2022 | |||||||||||
Notes Payable | $ 5,600,000 | $ 3,604,743 | 4,625,000 | |||||||||
Repayments of Notes Payable | 500,000 | |||||||||||
Term Loan Agreement [Member] | One Year [Member] | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Repayments of Notes Payable | $ 500,000 | |||||||||||
Paycheck Protection Program [Member] | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Debt instrument, interest rate | 2.00% | 2.00% | ||||||||||
Loan granted on paycheck protection | $ 6,413,385 | $ 6,413,385 | ||||||||||
Debt forgiveness | 971,500 | 971,500 | ||||||||||
Short-term Debt | 1,032,200 | |||||||||||
Paycheck Protection Program [Member] | Subsequent Event [Member] | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Debt forgiveness | $ 971,500 | |||||||||||
Independent Third-party [Member] | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Debt instrument, interest rate | 8.00% | 8.00% | ||||||||||
Debt Instrument, Maturity Date | Jun. 23, 2021 | Mar. 30, 2023 | ||||||||||
Notes Payable | $ 1,725,000 | $ 5,755,000 | 620,754 | |||||||||
Debt Instrument, Unamortized Discount | 225,000 | 750,000 | ||||||||||
Legal Fees | 5,000 | 5,000 | ||||||||||
Proceeds from Notes Payable | $ 1,495,000 | 5,000,000 | ||||||||||
Outstanding balance | 5,775,000 | |||||||||||
Independent Third Party Two [Member] | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Debt instrument, interest rate | 8.00% | |||||||||||
Debt Instrument, Maturity Date | Oct. 24, 2021 | |||||||||||
Notes Payable | $ 1,725,000 | $ 1,787,033 | ||||||||||
Debt Instrument, Unamortized Discount | 225,000 | |||||||||||
Legal Fees | 5,000 | |||||||||||
Proceeds from Notes Payable | $ 1,495,000 | |||||||||||
Independent Third Party Three [Member] | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Debt instrument, interest rate | 8.00% | |||||||||||
Debt Instrument, Maturity Date | Mar. 30, 2022 | |||||||||||
Notes Payable | 2,456,448 | $ 4,605,000 | ||||||||||
Debt Instrument, Unamortized Discount | 600,000 | |||||||||||
Legal Fees | 5,000 | |||||||||||
Proceeds from Notes Payable | 4,000,000 | |||||||||||
Advanced Industrial Services, Inc [Member] | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Outstanding loan amount | $ 2,339,114 | $ 2,355,542 | ||||||||||
Purchase price | $ 3,381,433 | |||||||||||
Liabilities, Noncurrent | $ 905,433 | |||||||||||
Notes Payable Due on May 1, 2023 [Member] | Advanced Industrial Services, Inc [Member] | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Debt Instrument, Maturity Date | May 1, 2023 | |||||||||||
Notes Payable Due on May 1, 2023 [Member] | Fulton Bank [Member] | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Loans Payable to Bank, Current | $ 400,000 | |||||||||||
Debt instrument, interest rate | 2.075% | 3.98% | ||||||||||
Outstanding loan amount | $ 149,914 | $ 246,673 | ||||||||||
Notes Payable Due On May One Two Thousand Twenty Three One [Member] | Advanced Industrial Services, Inc [Member] | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Debt Instrument, Maturity Date | May 1, 2023 | |||||||||||
Notes Payable Due On May One Two Thousand Twenty Three One [Member] | Fulton Bank [Member] | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Loans Payable to Bank, Current | $ 360,000 | |||||||||||
Debt instrument, interest rate | 2.325% | 4.23% | ||||||||||
Outstanding loan amount | $ 258,060 | $ 331,535 | ||||||||||
Advanced Industrial Services, Inc [Member] | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Line of Credit Facility, Periodic Payment, Principal | $ 5,000,000 | |||||||||||
Outstanding loan amount | $ 1,218,680 | 2,164,584 | ||||||||||
New Advanced Industrial Services Inc [Member] | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Line of Credit Facility, Periodic Payment, Principal | $ 400,000 | |||||||||||
Outstanding loan amount | $ 58,897 | |||||||||||
Fulton Bank [Member] | Advanced Industrial Services, Inc [Member] | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Liabilities, Noncurrent | $ 2,476,000 | |||||||||||
London Interbank Offered Rate (LIBOR) [Member] | Advanced Industrial Services, Inc [Member] | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Debt instrument, interest rate | 2.50% | |||||||||||
Debt Instrument, Maturity Date | Jan. 28, 2040 | |||||||||||
London Interbank Offered Rate (LIBOR) [Member] | Notes Payable Due on May 1, 2023 [Member] | Fulton Bank [Member] | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Debt Instrument, Basis Spread on Variable Rate | 2.00% | |||||||||||
London Interbank Offered Rate (LIBOR) [Member] | Notes Payable Due On May One Two Thousand Twenty Three One [Member] | Fulton Bank [Member] | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Debt Instrument, Basis Spread on Variable Rate | 2.25% | |||||||||||
London Interbank Offered Rate (LIBOR) [Member] | Advanced Industrial Services, Inc [Member] | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Debt Instrument, Basis Spread on Variable Rate | 2.25% | |||||||||||
Debt instrument, interest rate | 2.325% | 4.23% | ||||||||||
London Interbank Offered Rate (LIBOR) [Member] | New Advanced Industrial Services Inc [Member] | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Debt Instrument, Basis Spread on Variable Rate | 2.00% | |||||||||||
Debt instrument, interest rate | 3.98% | |||||||||||
Fulton Bank [Member] | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Line of Credit Facility, Fair Value of Amount Outstanding | $ 3,500,000 | |||||||||||
Loans Payable to Bank, Current | $ 5,250,000 | |||||||||||
Debt Instrument, Maturity Date | May 1, 2023 | Dec. 15, 2022 | ||||||||||
Fulton Bank [Member] | London Interbank Offered Rate (LIBOR) [Member] | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Line of Credit Facility, Interest Rate at Period End | 2.00% | 2.075% |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($) | May 01, 2021 | Aug. 31, 2019 | Sep. 30, 2021 | Sep. 30, 2020 |
Related Party Transaction [Line Items] | ||||
Trade receivables related parties | $ 1,487,155 | $ 1,432,209 | ||
Purchase of common stock | 3,159,655 | |||
Telidyne Inc.[Member] | ||||
Related Party Transaction [Line Items] | ||||
Value of stock offering | $ 500,000 | |||
Purchase of common stock | 166,667 | |||
Common stock share price | $ 3 | |||
Ducon Technologies Inc., [Member] | ||||
Related Party Transaction [Line Items] | ||||
Trade receivables related parties | $ 1,487,155 | $ 1,432,209 | ||
Griffin Filters, LLC [Member] | ||||
Related Party Transaction [Line Items] | ||||
Description of remaining balance due | At September 30, 2021, $500,000 of the balance due is for the sale of Griffin, which was 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] | ||||
Related Party Transaction [Line Items] | ||||
Consideration amount | $ 550,000 |
SHAREHOLDERS_ EQUITY (Details N
SHAREHOLDERS’ EQUITY (Details Narrative) - USD ($) | Jun. 09, 2021 | Jun. 01, 2021 | Feb. 26, 2021 | Jan. 24, 2021 | Oct. 03, 2019 | Sep. 30, 2021 | Sep. 30, 2020 | Jul. 27, 2021 | Jul. 10, 2021 | Mar. 30, 2020 | Jan. 24, 2020 |
Class of Stock [Line Items] | |||||||||||
Common stock, shares authorized | 50,000,000 | 50,000,000 | |||||||||
Preferred stock, shares authorized | 10,000,000 | 10,000,000 | |||||||||
Preferred stock, par value | $ 0.001 | $ 0.001 | |||||||||
Preferred stock, shares issued | 1,935,151 | 3,256,784 | |||||||||
Preferred stock, shares outstanding | 1,935,151 | 3,256,784 | |||||||||
Number of common stock shares issued | 3,159,655 | ||||||||||
Common stock, par or stated value per share | $ 0.001 | $ 0.001 | |||||||||
Common stock, shares, issued | 20,782,194 | 17,622,539 | |||||||||
Common stock, shares, outstanding | 20,782,194 | 17,622,539 | |||||||||
Note payable accumulated interest | $ 5,025,651 | $ 8,737,125 | |||||||||
Number of shares cancelled | |||||||||||
ATM Offering [Member] | |||||||||||
Class of Stock [Line Items] | |||||||||||
Number of shares cancelled | 27,954 | ||||||||||
Settlement Agreement [Member] | |||||||||||
Class of Stock [Line Items] | |||||||||||
Number of common stock shares issued | 469,949 | ||||||||||
Securities Subscription Agreement [Member] | |||||||||||
Class of Stock [Line Items] | |||||||||||
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 | ||||||||||
Common Stock [Member] | |||||||||||
Class of Stock [Line Items] | |||||||||||
Number of shares issued for services | 513,358 | ||||||||||
Number of shares issued for services, value | $ 532,788 | ||||||||||
Notes Payable [Member] | |||||||||||
Class of Stock [Line Items] | |||||||||||
Number of common stock shares issued | 6,530,473 | ||||||||||
Notes Payable [Member] | Common Stock [Member] | |||||||||||
Class of Stock [Line Items] | |||||||||||
Number of shares retired | 50,000 | ||||||||||
Series A Preferred Stock [Member] | |||||||||||
Class of Stock [Line Items] | |||||||||||
Preferred stock, shares authorized | 1,000,000 | 1,000,000 | |||||||||
Preferred stock, shares issued | 0 | 1,000,000 | |||||||||
Preferred stock, shares outstanding | 0 | 1,000,000 | |||||||||
Number of shares retired | 1,000,000 | ||||||||||
Series C Preferred Stock [Member] | |||||||||||
Class of Stock [Line Items] | |||||||||||
Preferred stock, shares authorized | 100,000 | 100,000 | 100,000 | ||||||||
Preferred stock, par value | $ 0.001 | ||||||||||
Preferred stock, shares issued | 50,000 | 100,000 | |||||||||
Preferred stock, shares outstanding | 50,000 | 100,000 | |||||||||
Preferred stock, voting rights | Under the Certificate of Designation, holders of Series C Preferred Stock are entitled to the number of votes 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. | ||||||||||
Series 1 Preferred Stock [Member] | |||||||||||
Class of Stock [Line Items] | |||||||||||
Preferred stock, shares authorized | 3,000,000 | 3,000,000 | |||||||||
Preferred stock, shares issued | 1,885,151 | 2,156,784 | |||||||||
Preferred stock, shares outstanding | 1,885,151 | 2,156,784 | |||||||||
Number of shares retired | 171,033 | ||||||||||
Stock price per share | $ 0.95 | ||||||||||
Liquidation preference per share | $ 10 | ||||||||||
Shares of preferred stock for dividends | 198,316 | ||||||||||
Number of shares purchased | 235,133 | ||||||||||
Share price | $ 1.92 | ||||||||||
Number of shares purchased, value | $ 338,775 | ||||||||||
Number of shares retired, value | $ 190,484 | ||||||||||
Series 1 Preferred Stock [Member] | Minimum [Member] | |||||||||||
Class of Stock [Line Items] | |||||||||||
Preferred stock, shares authorized | 3,000,000 | ||||||||||
Series 1 Preferred Stock [Member] | Maximum [Member] | |||||||||||
Class of Stock [Line Items] | |||||||||||
Preferred stock, shares authorized | 4,000,000 | ||||||||||
Series 1 Warrants [Member] | |||||||||||
Class of Stock [Line Items] | |||||||||||
Warrants issued | 433,965 | ||||||||||
Warrant price, per share | $ 50.48 | ||||||||||
Board of Directors [Member] | |||||||||||
Class of Stock [Line Items] | |||||||||||
Common stock, shares authorized | 60,000,000 | 30,000,000 | |||||||||
Aron Govil [Member] | Series C Preferred Stock [Member] | |||||||||||
Class of Stock [Line Items] | |||||||||||
Preferred stock, shares issued | 50,000 | ||||||||||
Accredited Investor [Member] | Subscription Agreement [Member] | Public Offering [Member] | |||||||||||
Class of Stock [Line Items] | |||||||||||
Stock price per share | $ 2.24 | $ 1.80 | $ 1.30 | $ 1.50 | |||||||
Number of common stock shares issued | 2,402,923 | 3,055,556 | 347,000 | 500,000 | |||||||
Common stock, par or stated value per share | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | |||||||
Offering expenses | $ 386,778 | $ 395,000 | $ 2,500 | $ 37,500 | |||||||
Proceeds from public offering | 4,995,769 | 5,105,000 | 448,600 | 712,500 | |||||||
Gross proceeds from public offering | $ 5,382,548 | $ 5,500,000 | $ 451,100 | $ 750,000 |
SCHEDULE OF FAIR VALUE STOCK OP
SCHEDULE OF FAIR VALUE STOCK OPTION WEIGHTED AVERAGE ASSUMPTIONS (Details) | Jan. 06, 2021 |
Share-based Payment Arrangement [Abstract] | |
Expected term | 5 years |
Risk-free interest rate | 0.41% |
Expected volatility | 111.47% |
Expected dividend yield | 0.00% |
SCHEDULE OF STOCK OPTIONS ACTIV
SCHEDULE OF STOCK OPTIONS ACTIVITY (Details) - USD ($) | 12 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Share-based Payment Arrangement [Abstract] | ||
Number of Options, Outstanding, Beginning balance | 945,833 | 1,050,000 |
Aggregate Intrinsic Value, Outstanding, Beginning balance | ||
Number of Options, Options granted | 250,000 | |
Number of Options, Options exercised | ||
Number of Options, Options forfeited | ||
Number of Options, Options cancelled | (245,833) | (104,167) |
Number of Options, Outstanding, Ending balance | 950,000 | 945,833 |
Number of Options, Exercisable | 583,333 | |
Weighted Average Exercise Price, Exercisable | $ 1.78 | |
Weighted Average Remaining Contractual Term (in years), Exercisable | 4 months 24 days | |
Aggregate Intrinsic Value, Exercisable |
SHARE-BASED COMPENSATION (Detai
SHARE-BASED COMPENSATION (Details Narrative) - USD ($) | Jan. 06, 2021 | Sep. 25, 2019 | Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2019 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock option granted | 250,000 | ||||
Shares of common stock | 950,000 | 945,833 | 1,050,000 | ||
Share-based compensation expense | $ 156,419 | $ 191,416 | |||
Unrecognized compensation cost | $ 359,415 | ||||
Unrecognized compensation expense, expected to be recognized period | 4 years | ||||
Saagar Govil [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock option granted | 400,000 | ||||
Stock option exercise price per share granted | $ 1.90 | ||||
Vested period | 7 years | ||||
Saagar Govil [Member] | Share-based Payment Arrangement, Tranche One [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Shares of common stock | 100,000 | ||||
Share based compensation exercise price per share | $ 1.92 | ||||
Maturity date | Sep. 25, 2021 | ||||
Saagar Govil [Member] | Share-based Payment Arrangement, Tranche Two [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Shares of common stock | 100,000 | ||||
Share based compensation exercise price per share | $ 2.30 | ||||
Maturity date | Sep. 25, 2023 | ||||
Saagar Govil [Member] | Share-based Payment Arrangement, Tranche Three [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Shares of common stock | 100,000 | ||||
Share based compensation exercise price per share | $ 2.76 | ||||
Maturity date | Sep. 25, 2025 | ||||
Aron Govil [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock option granted | 200,000 | ||||
Stock option exercise price per share granted | $ 1.90 | ||||
Vested period | 7 years | ||||
Aron Govil [Member] | Share-based Payment Arrangement, Tranche One [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Shares of common stock | 25,000 | ||||
Share based compensation exercise price per share | $ 1.92 | ||||
Maturity date | Sep. 25, 2021 | ||||
Aron Govil [Member] | Share-based Payment Arrangement, Tranche Two [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Shares of common stock | 12,500 | ||||
Share based compensation exercise price per share | $ 2.30 | ||||
Maturity date | Sep. 25, 2023 | ||||
Aron Govil [Member] | Share-based Payment Arrangement, Tranche Three [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Shares of common stock | 8,333 | ||||
Share based compensation exercise price per share | $ 2.76 | ||||
Maturity date | Sep. 25, 2025 | ||||
Christopher C. Moore [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vested period | 5 years | ||||
Share based compensation exercise price per share | $ 1.58 | ||||
Shares issued, shares, share-based stock option | 150,000 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details Narrative) - 12 months ended Sep. 30, 2021 | USD ($)ft² | INR (₨)ft² | GBP (£)ft² |
Product Liability Contingency [Line Items] | |||
Area of land | 2,500 | 2,500 | 2,500 |
Monthly lease rent payment | $ | $ 13,000 | ||
Lessee, Operating 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 | 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] | |||
Product Liability Contingency [Line Items] | |||
Area of land | 25,000 | 25,000 | 25,000 |
IS Segment [Member] | York, PA [Member] | |||
Product Liability Contingency [Line Items] | |||
Area of land | 43,000 | 43,000 | 43,000 |
IS Segment [Member] | Emigsville, PA [Member] | |||
Product Liability Contingency [Line Items] | |||
Area of land | 15,500 | 15,500 | 15,500 |
Monthly lease rent payment | $ | $ 4,555 | ||
Lease expiration date | Aug. 31, 2022 | Aug. 31, 2022 | Aug. 31, 2022 |
Advanced Technologies [Member] | Pune [Member] | |||
Product Liability Contingency [Line Items] | |||
Area of land | 6,700 | 6,700 | 6,700 |
Monthly lease rent payment | $ 6,453 | ₨ 456,972 | |
Lease expiration date | Feb. 28, 2024 | Feb. 28, 2024 | Feb. 28, 2024 |
Advanced Technologies [Member] | Hauppauge [Member] | |||
Product Liability Contingency [Line Items] | |||
Area of land | 30,000 | 30,000 | 30,000 |
Monthly lease rent payment | $ | $ 28,719 | ||
Lease expiration date | Mar. 31, 2027 | Mar. 31, 2027 | Mar. 31, 2027 |
Lessee, Operating Lease, Term of Contract | 7 years | 7 years | 7 years |
Advanced Technologies [Member] | El Dorado Hills [Member] | |||
Product Liability Contingency [Line Items] | |||
Area of land | 4,570 | 4,570 | 4,570 |
Lease expiration date | Nov. 30, 2022 | Nov. 30, 2022 | Nov. 30, 2022 |
Advanced Technologies [Member] | Hampshire [Member] | |||
Product Liability Contingency [Line Items] | |||
Area of land | 9,400 | 9,400 | 9,400 |
Monthly lease rent payment | $ | $ 7,329 | ||
Lease expiration date | Mar. 24, 2031 | Mar. 24, 2031 | Mar. 24, 2031 |
Lessee, Operating Lease, Description | terminate in 2026 | terminate in 2026 | terminate in 2026 |
Advanced Technologies [Member] | Hampshire [Member] | G B P [Member] | |||
Product Liability Contingency [Line Items] | |||
Monthly lease rent payment | £ | £ 5,771 |
SCHEDULE OF (LOSS) INCOME BEFOR
SCHEDULE OF (LOSS) INCOME BEFORE PROVISION FOR TAX (Details) - USD ($) | 12 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Income Tax Disclosure [Abstract] | ||
Domestic | $ 30,957 | $ (6,422,704) |
Foreign | 738,255 | (933,531) |
Loss before provision for income taxes | $ 769,212 | $ (7,356,235) |
SCHEDULE OF PROVISION FOR INCOM
SCHEDULE OF PROVISION FOR INCOME TAXES (Details) - USD ($) | 12 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Income Tax Disclosure [Abstract] | ||
Current (benefit)/provision, Federal | ||
Current (benefit)/provision, State | 375,434 | (209,032) |
Current (benefit)/provision, Foreign | ||
Total current (benefit)/provision | 375,434 | (209,032) |
Deferred Federal Income Tax Expense (Benefit) | 2,282,867 | |
Deferred State and Local Income Tax Expense (Benefit) | ||
Deferred Foreign Income Tax Expense (Benefit) | ||
Total deferred provision | 2,282,867 | |
Total (benefit)/provision for income taxes | $ 375,434 | $ 2,073,835 |
Effective Income tax rate | 48.81% | (28.19%) |
SCHEDULE OF EFFECTIVE INCOME TA
SCHEDULE OF EFFECTIVE INCOME TAX RATE RECONCILIATION (Details) | 12 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
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 | 0.00% | 30.78% |
Effect of change in rates | 0.00% | 0.00% |
Nondeducttible expenses | 21.31% | 24.91% |
Effective rate | 48.81% | (28.19%) |
SCHEDULE OF DEFERRED TAX ASSETS
SCHEDULE OF DEFERRED TAX ASSETS AND LIABILITIES (Details) - USD ($) | Sep. 30, 2021 | Sep. 30, 2020 |
Deferred Tax Assets: | ||
Net operating loss carryforwards | $ 8,702,738 | $ 20,482,973 |
Inventory | 1,405,057 | |
Prepaid expenses | ||
Allowance for bad debt | 35,345 | 3,491 |
Fixed Assets | 19,271 | |
Goodwill amortization | ||
Non-qualified stock options | ||
Warrants (interest expense) | 1,155,642 | |
Accruals | 280,447 | 2,699,246 |
Warranty Reserve | 28,002 | |
Foreign Tax Credits | 354,000 | |
Other | 4,358 | |
Total gross deferred taxes | 11,611,589 | 23,558,981 |
Valuation allowance | (9,491,650) | (22,720,711) |
Net deferred tax assets | 2,119,939 | 838,270 |
Deferred Tax Liabilities: | ||
Inventory and other Reserves | (638,230) | |
Inventory | (2,277) | |
Prepaid expenses | (87,934) | (45,563) |
Goodwill amortization | (557,074) | (428,395) |
Research and development expenses | ||
Depreciation | (836,701) | (319,090) |
Gain/loss on fixed asset disposal | ||
Other | (42,945) | |
Total deferred tax liabilities | (2,119,939) | (838,270) |
Total deferred tax assets (liabilities) |
INCOME TAXES (Details Narrative
INCOME TAXES (Details Narrative) - USD ($) | 12 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Significant Change in Unrecognized Tax Benefits is Reasonably Possible [Line Items] | ||
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% |
Limitations on use | The net operating loss carryforwards, if not utilized, will begin to expire in 2036 for federal purposes and in 2036 for state purposes. | |
Federal [Member] | ||
Significant Change in Unrecognized Tax Benefits is Reasonably Possible [Line Items] | ||
Operating Loss Carryforwards | $ 37,099,262 | |
State and Local Jurisdiction [Member] | ||
Significant Change in Unrecognized Tax Benefits is Reasonably Possible [Line Items] | ||
Operating Loss Carryforwards | $ 13,726,364 | |
Minimum [Member] | ||
Significant Change in Unrecognized Tax Benefits is Reasonably Possible [Line Items] | ||
US federal corporate tax | 35.00% | |
Maximum [Member] | ||
Significant Change in Unrecognized Tax Benefits is Reasonably Possible [Line Items] | ||
US federal corporate tax | 21.00% |
SUBSEQUENT EVENTS (Details Narr
SUBSEQUENT EVENTS (Details Narrative) - USD ($) | Nov. 30, 2021 | Oct. 31, 2021 | Oct. 18, 2021 | Sep. 30, 2021 | Sep. 30, 2020 |
Subsequent Event [Line Items] | |||||
Stock Issued During Period, Shares, New Issues | 3,159,655 | ||||
Notes payable | $ 5,025,651 | $ 8,737,125 | |||
Subsequent Event [Member] | |||||
Subsequent Event [Line Items] | |||||
Notes payable | $ 2,466,478 | ||||
Subsequent Event [Member] | Common Stock [Member] | |||||
Subsequent Event [Line Items] | |||||
Stock Issued During Period, Shares, New Issues | 2,891,016 | ||||
Subsequent Event [Member] | Series 1 Preferred Stock [Member] | |||||
Subsequent Event [Line Items] | |||||
Stock Issued During Period, Value, New Issues | $ 94,602 | ||||
Paycheck Protection Program [Member] | |||||
Subsequent Event [Line Items] | |||||
Debt forgiveness | $ 971,500 | $ 971,500 | |||
Paycheck Protection Program [Member] | Subsequent Event [Member] | |||||
Subsequent Event [Line Items] | |||||
Debt forgiveness | $ 971,500 |