Cemtrex(CETX) - 2024 Q2 - Quarterly Report

Revenue Performance - Security segment revenues decreased by $1,828,966 or 18$8,084,932 for the three months ended March 31, 2024, compared to $9,913,898 for the same period in 2023 due to project delays [98]. - Industrial Services segment revenues increased by$2,915,164 or 47% to $9,074,663 for the three months ended March 31, 2024, driven by increased demand and the Heisey acquisition [98]. - Revenues from the Security segment increased by$334,091 or 2% to $17,252,733 for the six months ended March 31, 2024, compared to$16,918,642 for the same period in 2023 [141]. - Revenues from the Industrial Services segment surged by $5,660,031 or 51$16,785,028 for the six months ended March 31, 2024, up from $11,124,997 in the prior year [141]. Profitability and Expenses - Gross profit for the three months ended March 31, 2024, was$6,939,416 or 40% of revenues, down from $7,338,481 or 46$1,701,890 or 32% to $7,020,157 for the three months ended March 31, 2024, primarily due to higher sales and marketing activities [100]. - Research and Development expenses decreased by$663,941 or 41% to $951,400 for the three months ended March 31, 2024, compared to$1,615,341 for the same period in 2023 [101]. - The Company reported a decrease in other expenses for the six months ended March 31, 2024, totaling $953,311, down from$2,103,951 for the same period in 2023 [129]. - The Company had an income tax expense from continuing operations of $170,755 for the six months ended March 31, 2024, compared to$0 in the same period of 2023 [129]. Cash Flow and Working Capital - Working capital increased to $10,300,384 at March 31, 2024, from$1,948,923 at September 30, 2023, primarily due to a standstill agreement on two notes [103]. - Cash used by operating activities for continuing operations was $2,752,236 for the six months ended March 31, 2024, compared to$5,383,060 for the same period in 2023 [103]. - The Company has $2,916,120 in cash and cash equivalents as of March 31, 2024, and secured a line of credit with available capacity of$980,766 [131]. Shareholder Activities - The Company repurchased 71,951 shares for $69,705 under the Share Repurchase Program during the six months ended March 31, 2024 [116]. - The Underwriter received a 7.0$10,035,000 in gross proceeds from an underwritten public offering, selling a total of 11,764,705 Units and 11,210,000 Pre-Funded Units [120]. Compliance and Reporting - The Chief Executive Officer and Interim Chief Financial Officer have certified compliance with the Sarbanes-Oxley Act of 2002 [152]. - The company filed its Annual Report on Form 10-K with the SEC on December 28, 2023, which includes risk factors [148]. - There have been no changes in internal control over financial reporting that materially affected the company during the six months ended March 31, 2024 [145]. - The management does not expect that disclosure controls and procedures will prevent all errors and fraud, indicating inherent limitations in control systems [146]. Agreements and Future Outlook - The Company anticipates that its long-term objectives will require sufficient cash to fund marketing, sales, and strategic acquisitions, which may not be fully met by current resources [131]. - The Company has various amendments and agreements filed, including a Term Loan Agreement amendment dated March 3, 2023 [150]. - The company has entered into multiple Securities Purchase Agreements, with the latest dated April 30, 2024 [150]. - The Company has granted the Underwriter a right of first refusal for certain financing transactions for a period of 15 months following the closing of the Offering [121]. - The company has engaged in asset purchase agreements, including one dated June 7, 2023 [150]. - The company has filed Inline XBRL documents as part of its reporting requirements [150]. - The company has a Lock-Up Agreement and Underwriting Agreement filed on April 30, 2024 [150].