Financial Analysis

NOTE 20 COMMITMENTS AND CONTINGENCIES From time to time, the Company and its subsidiaries are involved in legal proceedings that are incidental to the operation of our business. The Company continues to defend vigorously against all claims. Although the ultimate outcome of any legal matter cannot be predicted with certainty, based on present information, including assessment of the merits of the particular claim, as well as current accruals and insurance coverage, the Corporation does not expect that such legal proceedings will have a material adverse impact on its consolidated financial statements. …

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SCHEDULE OF DISAGGREGATION OF THE COMPANY REVENUE RECOGNITION For the year ended September 30, 2025 September 30, 2024 Over time 53 % 57 % Point-in-time 47 % 43 %

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NOTE 19 SHARE-BASED COMPENSATION On September 25, 2019, the Company cancelled all outstanding options granted to Saagar Govil, the Companys Chairman and CEO and granted a stock option for 1 share. This option has an exercise price of $ 1,759,228 per share, which vested upon grant, and they expire after seven years. Additionally, Mr. Govil was granted additional future options; (i) 1 share of the Corporations common stock, CETX, at an exercise price of $ 2,100,630 per share vesting on September 25, 2021; (ii) 1 share of the Corporations common stock, CETX, at an exercise price of $ 2,520,756 per share vesting on September 25, 2023; and (iii) 1 share of the Corporations common stock, CETX, at an exercise price of $ 3,024,907 per share vesting on September 25, 2025. During the years ended September 30, 2025, and 2024 the Company recognized $ 14,236 and $ 30,325 of share-based compensation expense on its outstanding options, respectively. The share-based compensation is listed under the caption General and administrative expenses on the Companys Consolidated Statements of Operations. As of September 30, 2025, there was $ 0 of total unrecognized compensation cost related to non-vested stock options. 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, 2023 7 $ 1,527,357 3.06 $ - Options granted - - - Options exercised - - - Options forfeited …

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NOTE 4 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, bankers acceptances, trading securities investments, and investment funds. The Company measures 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 ar …

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NOTE 21 INCOME TAXES As result of changes made by the Tax Cuts and Jobs Act of 2017, that became effective as of January 1, 2022, the company is now required to capitalize for tax purposes certain research and development expenses and amortize domestic expenses over a 5 year period and foreign expenses over a 15 year period, resulting in a deferred tax asset for the capitalized amounts. Cemtrex Inc. and Subsidiaries In accordance with ASC 740, Income Taxes, specifically related to uncertain tax positions, a Company is required to use a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. The Company believes its income tax filing positions and deductions will be sustained upon examination, and accordingly, no reserves or related accruals for interest and penalties have been recorded as of September 30, 2025. The Company is subject to taxation in the United States federal and state jurisdictions. The Companys federal income tax and state income tax returns are subject to examination by tax authorities. The Company is not currently under examination by any tax authority. On July 4, 2025, the One Big Beautiful Bill Act (OBBBA) was enacted in the U.S. The OBBBA includes significant provisions, such as the permanent extension of ce …

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NOTE 15 LEASES The Company is party to contracts where we lease property from others under contracts classified as operating leases. The Company primarily leases office and operating facilities, vehicles, and office equipment. The weighted average remaining term of our operating leases was approximately 2.52 years at September 30, 2025, and 3.3 years at September 30, 2024. The weighted average discount rate used to measure lease liabilities was approximately 6.23 % at September 30, 2025, and 6.54 % at September 30, 2024. 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. The Companys corporate segment leased approximately 100 square feet of office space in Brooklyn, NY on a month-to-month lease, which the Company ended in June 2025, at a rent of $ 600 per month with $ 5,400 of expense for the year ended September 30, 2025 and approximately 350 square feet of office space in Clovis, CA on a month-to-month lease at a monthly rent of $ 1,933 with $ 33,797 of expense for the year ended September 30, 2025. The expense is under the caption General and administrative on the Companys Consolidated Statements of Operations. A reconciliation of undiscounted cash flows to operating lease liabilities recognized in the Consolidated Balance Sheet at September 30, 2025, is set forth below. SCHEDULE OF RECONCILIATION OF UNDISCOUNTED CASH FLOWS TO OPERATING LEASE LIABILITIES Years ending Septem …

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NOTE 16 LINES OF CREDIT AND LONG-TERM LIABILITIES Revolving line of credit On October 5, 2023, the Company obtained a revolving line of credit in the amount of $ 5,000,000 from Pathward, N.A. The interest rate will be a rate which is equal to three percentage points ( 3 %) in excess of that rate shown in the Wall Street Journal as the prime rate (the Effective Rate) and matures twenty-four 24 months from the closing date. This loan is secured by the Companys eligible accounts receivable and eligible finished goods inventory. The Companys ability to borrow against the line of credit is limited by the value of the eligible assets. As of September 30, 2024, the Company had enough eligible assets to access the full credit line. The Company was in compliance with all loan covenants as of September 30, 2024. The funds were used to pay the NIL Funding term loan and will fund operations of the Vicon entity. As of September 30, 2025, this loan had a balance of $ 3,176,096 , with no remaining unamortized loan origination fees. There were $ 1,564,179 of available funds as of September 30, 2025. Standstill Agreement On August 31, 2023, the Company and Streeterville Capital, LLC (Streeterville) entered into a standstill agreement for the two notes held by Streeterville Capital, LLC. The terms of this agreement are the earlier of (a) the date that is ninety (90) days from the Effective Date, and (b) the date that the Company completes an equity offering on either Form S-1 or Form S-3 (the …

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Recently Adopted Accounting Pronouncements On December 2023, the FASB issued Accounting Standards Update (ASU) 2023-08, IntangiblesGoodwill and OtherCrypto Assets (Subtopic 350-60): Accounting for and Disclosure of Crypto Assets (ASU 2023-08). ASU 2023-08 is intended to improve the accounting for certain crypto assets by requiring an entity to measure those crypto assets at fair value each reporting period with changes in fair value recognized in net income. The amendments also improve the information provided to investors about an entitys crypto asset holdings by requiring disclosure about significant holdings, contractual sale restrictions, and changes during the reporting period. ASU 2023-08 is effective for annual and interim reporting periods beginning after December 15, 2024. Early adoption is permitted for both interim and annual financial statements that have not yet been issued. The Company adopted this new guidance in July 2025, when the Company invested in its digital assets. For the year ended 2025, the company recognized an initial cash purchase of $ 998,462 , recognized $ 12,522 of staking revenue, less $ 2,755 of non-cash transaction fees, and $ 150,009 of unrealized gain on the fair value of the digital assets. …

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NOTE 17 RELATED PARTY TRANSACTIONS As of September 30, 2023, there were $ 637,208 of receivables due from Ducon Technologies, Inc ., which is controlled by Aron Govil, the Companys Founder and Former Director and CFO. The Company has negotiated a payment agreement regarding past receivables and other liabilities due to Cemtrex, Inc. totaling $ 761,585 . This agreement is in the form of a secured promissory note earning interest at a rate of 5 % per annum and matured on July 31, 2024 . The Company did not receive payment on this note at the maturity date and placed a full allowance on the note during fiscal year 2024 and appears on the Companys Consolidated Statements of Operations and Comprehensive Loss under general and administrative expenses. Cemtrex Inc. and Subsidiaries On November 22, 2022, the Company entered into two Asset Purchase Agreements and one Simple Agreement for Future Equity (SAFE) with the Companys CEO, Saagar Govil, to secure the sale of the subsidiaries Cemtrex Advanced Technologies, Inc, which include the brand SmartDesk, and Cemtrex XR, Inc., which include the brands Cemtrex XR, Virtual Driver Interactive, Bravo Strong, and good tech (formerly Cemtrex Labs), to Mr. Govil. On January 6, 2025, the Company and Saagar Govil signed an agreement to revise the purchase price structure and payment terms. The Agreements Purchase Price provisions were amended to reflect that the Purchase Price will solely consist of the royalties based on the actual revenues gene …

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NOTE 3 SEGMENT AND GEOGRAPHIC INFORMATION The Companys reporting segments consist of Security and Industrial Services. Additionally, the Companys operational structure also reports unallocated corporate expenses. All intersegment transactions have been eliminated and values are presented net of eliminations. Operating segments The Company determines its reporting units in accordance with the Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 280, Segment Reporting. The Company evaluates a reporting unit by first identifying its operating segments under ASC 280. The Company operates as two operating segments and unallocated corporate revenue and expenses which is reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The chief operating decision-maker is responsible for the allocation of resources and assessing the performance of the operating segment and has been identified as Saagar Govil, the CEO of the Company. Unallocated corporate revenue relates to the realized income on digital assets, corporate expenses mainly relate to payroll and benefits for corporate officers, investor relation expenses, accounting expenses related audit and taxes, legal expenses related to corporate matters, consulting expenses related to accounting and corporate matters, and interest expense on notes payable. Security Cemtrexs Security segment operates under the Vicon brand that delivers innovative software and …

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NOTE 18 STOCKHOLDERS EQUITY Preferred Stock The Company is authorized to issue 10,000,000 shares of Preferred Stock, $ 0.001 par value. As of September 30, 2025, and September 30, 2024, there were 2,755,327 and 2,506,827 shares issued and 2,691,227 and 2,442,727 shares outstanding, respectively. Cemtrex Inc. and Subsidiaries 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. The Series A Preferred Stock has no redemption rights. As of September 30, 2025, and September 30, 2024, there were no shares of Series A Preferred Stock issued and outstanding. 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 on …

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NOTE 23 SUBSEQUENT EVENTS Cemtrex has evaluated subsequent events up to the date the consolidated financial statements were issued. The Company concluded that the following subsequent events have occurred and require recognition or disclosure in the consolidated financial statements. Preferred shares issued for dividend On October 7, 2025, the Company issued 135,291 shares of its Series 1 Preferred Stock to for dividends. The dividend was paid to shareholders of record as of September 30, 2025 . Common shares issued subsequent to financial statements date On various dates subsequent to September 30, 2025, 29,943 shares of common stock were issued to satisfy Series A Warrants with an aggregate strike price value of $ 24,284 and a fair market value of $ 211,697 . On various dates subsequent to September 30, 2025, 2,316,480 shares of common stock were issued to satisfy Series B Warrants with an aggregate strike price value of $ 5,657,264 and a fair market value of $ 15,804,854 . On October 9, 2025, 67,671 shares of common stock were issued to make up for fractional shares from September 29, 2025, reverse stock split. On various dates subsequent to September 30, 2025, 3,000,296 shares of common stock were issued to relieve $ 7,844,000 of notes payable. Cemtrex Inc. and Subsidiaries Issuance of Note payable On November 7, 2025, the Company issued a Promissory Note with Streeterville Capital, LLC in the original principal amount of $ 7,025,000 . From November 7, 2025, until Decembe …

SubsequentEventsTextBlock · excerpt; the full note is in the filing