Cemtrex
Annual Report 2016

Plain-text annual report

Morningstar® Document Research℠ FORM 10-KCEMTREX INC - CETXFiled: December 28, 2016 (period: September 30, 2016)Annual report with a comprehensive overview of the companyThe information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The userassumes all risks for any damages or losses arising from any use of this information, except to the extent such damages or losses cannot belimited or excluded by applicable law. Past financial performance is no guarantee of future results. UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549 FORM 10-K [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES ACT OF 1934 For the fiscal year ended September 30, 2016 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES ACT OF 1934 Commission File Number 001-37464 CEMTREX, INC.(Exact name of registrant as specified in its charter) Delaware 30-0399914(State or other jurisdiction of incorporation or organization) (I.R.S. EmployerIdentification No.) 19 Engineers Lane, Farmingdale, New York 11735(Address of principal executive offices) (Zip code) Registrant telephone number, including area code: 631-756-9116 Securities registered pursuant to Section 12(b) of the Act: Title of Each Class Name of Each Exchange on Which RegisteredCommon Stock, $0.001 par value per share NASDQ CM Securities registered pursuant to Section 12(g) of the Act: None Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes [ ] No [X] Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act. Yes [ ] No [X] Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filingrequirements for the past 90 days. Yes [X] No [ ] Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required tobe submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required tosubmit and post such files). Yes [X] No [ ] Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the bestof registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form10-K. Yes [X] No [ ] Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See thedefinitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one): Large accelerated filer [ ]Accelerated filer [ ]Non-accelerated filer [ ]Smaller reporting company [X] Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [ ] No [X] As of March 31, 2016, the number of the registrant’s common stock held by non-affiliates of the registrant was 3,517,813 and the aggregate market value$17,764,956 based on the average bid and asked price of $2.05 on March 31, 2016. As of December 27, 2016, the registrant had 9,919,376 shares of common stock outstanding.Source: CEMTREX INC, 10-K, December 28, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Documents Incorporated By Reference Information required by Part III of this Annual Report on Form 10-K is incorporated by reference to portions of our definitive proxy statement for our 2016annual meeting of stockholders which we will file with the Securities and Exchange Commission. Source: CEMTREX INC, 10-K, December 28, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Table of Contents CEMTREX, INC. AND SUBSIDIARIES INDEX Page Part I Cautionary Statement Regarding Forward-Looking Statements Item 1Business3Item 1ARisk Factors7Item 1BUnresolved Staff Comments17Item 2Properties17Item 3Legal Proceedings17Item 4Mine Safety Disclosures17 Part II Item 5Market for Registrant’s Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities18Item 6Selected Financial Data19Item 7Management’s Discussion and Analysis of Financial Condition and Results of Operations19Item 7AQuantitative and Qualitative Disclosures about Market Risk23Item 8Financial Statements and Supplementary Data23Item 9Changes in and Disagreements with Accountants on Accounting and Financial Disclosure23Item 9AControls and Procedures23Item 9BOther Information24 Part III Item 10Directors, Executive Officers and Corporate Governance25Item 11Executive Compensation25Item 12Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters25Item 13Certain Relationships and Related Transactions and Director Independence25Item 14Pricipal Accountatnt Fees and Services25 Part IV Item 15Exhibits and Financial Statement Schedules26 2 Source: CEMTREX INC, 10-K, December 28, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. FORWARD-LOOKING STATEMENTS Statements in this report may be “forward-looking statements.” Forward-looking statements include, but are not limited to, statements that expressour intentions, beliefs, expectations, strategies, predictions or any other statements relating to our future activities or other future events or conditions. Thesestatements are based on current expectations, estimates and projections about our business based, in part, on assumptions made by management. Thesestatements are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. Therefore, actual outcomesand results may, and are likely to, differ materially from what is expressed or forecasted in the forward-looking statements due to numerous factors, includingthose described above and those risks discussed from time to time in this report, including the risks described under “Risk Factors” and any risks described inany other filings we make with the SEC. Any forward-looking statements speak only as of the date on which they are made, and we do not undertake anyobligation to update any forward-looking statement to reflect events or circumstances after the date of this report. Management’s discussion and analysis of financial condition and results of operations are based upon our financial statements, which have beenprepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires us to makeestimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses. On an on-going basis, we evaluate these estimates,including those related to useful lives of real estate assets, cost reimbursement income, bad debts, impairment, net lease intangibles, contingencies andlitigation. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, theresults of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Therecan be no assurance that actual results will not differ from those estimates. Part I. Item 1. BUSINESS The Company was incorporated on April 27, 1998, in the state of Delaware under the name “Diversified American Holdings, Inc.” The Companysubsequently changed its name to “Cemtrex Inc.” on December 16, 2004. Unless the context requires otherwise, all references to “we”, “our”, “us”,“Company”, “registrant”, “Cemtrex” or “management” refer to Cemtrex, Inc. and its subsidiaries. Cemtrex is a leading diversified technology company thatoperates in a wide array of business segments and provides solutions to meet today’s industrial and manufacturing challenges. The Company provideselectronic manufacturing services of advanced electric system assemblies, provides instruments & emission monitors for industrial processes, and providesindustrial air filtration & environmental control systems. On December 15, 2015, we acquired Advanced Industrial Services Inc. (AIS), an installer of high precision equipment in a wide variety of industrialmarkets such as automotive, printing and graphics, industrial automation, packaging and chemicals, for a purchase price of approximately $7.7 million. Thepurchase price was paid in the form of $5.2 million in cash, $1.5 million in a seller note and $1.0 million from the issuance of 315,458 shares of our commonstock. AIS averaged approximately $23.0 million in annual revenue during 2013 and 2014. We financed the acquisition by obtaining a $5.25 million self-amortizing, seven-year term loan and $3.5 million working capital credit line. The loans carry annual interest rates at the 30-day LIBOR rate, plus 2.25% and2.0%, respectively. The seller note matures in three years and bears interest at 6% per year (see NOTE 13 BUSINESS COMBINATION). On May 31, 2016, we acquired machinery and equipment, and the electronics manufacturing and logistics businesses of Periscope, GmbH. Theseoperations deal primarily with major German automotive manufacturers, including Tier 1 suppliers in the industry, as well as with industries includingtelecommunications, industrial goods, luxury consumer products, display technology, and other industrial OEMs. We purchased the assets of Periscope inconsideration for $4,902,670 in cash, $717,936 in the form of a seller note and $3,298,600 in proceeds from the issuance of a related party note (see NOTE 13BUSINESS COMBINATION). 3 Source: CEMTREX INC, 10-K, December 28, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Electronics Manufacturing Services (EMS) Cemtrex, through its Electronics Manufacturing Services (EMS) segment, provides end to end electronic manufacturing services, which includesproduct design and sustaining engineering services, printed circuit board assembly and production, cabling and wire harnessing, systems integration,comprehensive testing services and completely assembled electronic products. Cemtrex’s EMS segment works with industry leading OEMs in their outsourcing of non-core manufacturing services by forming a long termrelationship as an electronics manufacturing partner. We work in close relationships with our customers throughout the entire electronic life of a product,from design, manufacturing, and distribution. We seek to grow our business through the addition of new, high quality customers, the expansion of our shareof business with existing customers, and participating in the growth of existing customers. Using our manufacturing capabilities, we are able to provide our customers with advanced product assembly and system level integration combinedwith test services to meet the highest standards of quality. Through our agile manufacturing environment we can deliver low and medium volume and mixservices to our clients. Additionally we design, develop, and manufacture various interconnects and cable assemblies that often are sold in conjunction withour PCBAs to enhance our value to our customers. The Company also provides engineering services from new product introductions and prototyping, relatedtesting equipment, to product redesigns. Our ability to attract and retain new customers comes from our ongoing commitment to understanding our customers’ business performancerequirements and our expertise in meeting or exceeding these requirements and enhancing their competitive edge. We work closely with our customers froman operational and senior executive level in order to achieve a deep understanding of our customer’s goals, challenges, strategies, operations, and products toultimately build a long lasting successful relationship. Industrial Products & Services (IPS) Cemtrex, through its Industrial Products and Services segment, offers single-source services for in plant equipment erection, relocation, andmaintenance. The segment also sells a complete line of air filtration and environmental control products to a wide variety of industrial customers worldwide.The segment also manufactures, sells, and services monitoring instruments, software and systems for measurement of emissions of Greenhouse gases,hazardous gases, particulate and other regulated pollutants used in emissions trading globally as well as for industrial processes. The Company also marketsmonitoring and analysis equipment for gas and liquid measurement for various downstream oil & gas applications as well as various industrial processoptimization applications. The Company, under the Griffin Filters brand, provides a complete line of air filtration and environmental control equipment to industries such as:chemical, cement, steel, food, construction, mining, & petrochemical. This equipment is used to: (i) remove dust, corrosive fumes, mists, hydrocarbons,volatile organic compounds, submicron particles and particulate from industrial exhausts and boilers; (ii) clean noxious and acid gases such as sulfurdioxide, hydrogen chloride, hydrogen sulfide, chlorides, and organics from industrial exhaust stacks prior to discharging to the atmosphere; and (iii) controlemissions of coal, dust, sawdust, phosphates, fly ash, cement, carbon black, soda ash, silica, etc. from construction facilities, mining operations and dryerexhausts. The Company through its AIS subsidiary offers one-source expertise and services for in plant maintenance, equipment erection, relocation, anddisassembly to diversified customers in USA. AIS installs high precision equipment in a wide variety of industrial markets like automotive, printing &graphics, industrial automation, packaging, and chemicals among others. The Company, under the MIP-Cemtrex brand, manufactures and sells advanced instruments for emissions monitoring, process analysis, and controlsfor industrial applications and compliance with environmental regulations. MIP-Cemtrex emission monitoring systems are installed at the exhaust stacks ofindustrial facilities and are used to measure the outlet flue gas concentrations of a range of regulated air pollutants to determine the quality of the air webreathe. Through use of the company’s equipment and instrumentation, Cemtrex clients can monitor the exhausts to the atmosphere from their facilities andcomply with Environmental Protection Agency and state and local emission regulations on dust, particulate, fumes, acid gases and other regulated pollutantsinto the atmosphere. 4 Source: CEMTREX INC, 10-K, December 28, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. MIP’s Laser Opacity monitor is used to determine opacity or dust concentration in stack gases. Cemtrex also provides direct-extractive and dilution-extractive CEMS (continuous emissions monitoring solutions) equipment and systems for use with utilities, industrial boilers, FGD systems, SCR-NOxcontrol, furnaces, gas turbines, process heaters, incinerators in industries such as: chemicals, pulp and paper, steel, power, coal and petrochemical along withmunicipalities, state and federal governments. The Company provides a single source responsibility for design, engineering, assembly, installation andmaintenance of systems to its customers. The Company’s products are designed to operate so as to allow its users to determine their compliance with thelatest governmental emissions regulations. Cemtrex also markets a range of crude oil and natural gas analyzers. These products provide real time measurement of various properties specific tothe refining processes of oil and gas. Some of the properties include RON, salt and water content, pH, viscosity, and other critical parameters that can be usedto improve the blending and refining processes. The analyzers are sold by refineries and similar facilities to optimize the yield of blended and refinedproduct. SUPPLIERS The Company is not dependent on, nor expects to become dependent on, any one or a limited number of suppliers. The Company buys parts andcomponents to assemble and manufacture its equipment and products. The Company also utilizes sub-suppliers and third party vendors to procure from orfabricate its components based on its design, engineering and specifications. The Company also enters into subcontracts for field installation, which theCompany supervises; and the Company manages all technical, physical and commercial aspects of the performance of the Company contracts. To date, theCompany has not experienced difficulties either in obtaining fabricated components and other materials and parts or in obtaining qualified subcontractors forinstallation work. PARTS, REPAIR AND REFURBISHMENT SERVICES The Company also provides replacement and spare parts and repair and refurbishment services for all its systems following the expiration of thewarranties which generally range up to 12 months. The Company has experienced only minimal costs from its warranties. The Company’s standard terms of sale disclaim any liability for consequential or indirect losses or damages stemming from any failure of itsproducts or systems or any component thereof. The Company seeks indemnification from its subcontractors for any loss, damage or claim arising from thesubcontractors’ failure to perform. COMPETITION The Company faces substantial competition in each of its principal markets. Most of its competitors are larger and have greater financial resourcesthan the Company; several are divisions of multi-national companies. The Company competes on the basis of price, engineering and technological expertise,know-how and the quality of its products, systems and services. Additionally, the Company’s management believes that the successful delivery, installationand performance of the Company’s products and systems is a key factor in gaining business as customers typically prefer to make significant purchases from acompany with a solid performance history. The Company obtains virtually all its contracts through competitive bidding. Although price is an important factor and may in some cases be thegoverning factor, it is not always determinative, and contracts are often awarded on the basis of the efficiency or reliability of products and the engineeringand technical expertise of the bidder. Several companies market products that compete directly with Company’s products. Other companies offer productsthat potential customers may consider to be acceptable alternatives to Company’s products and services. The Company faces direct competition fromcompanies with far greater financial, technological, manufacturing and personnel resources. 5 Source: CEMTREX INC, 10-K, December 28, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. INTELLECTUAL PROPERTY Over the years, the Company has developed proprietary technologies that give it an edge in competing with its competitors. Thus, the Companyrelies on a combination of trade secrets and know-how to protect its intellectual property. MARKETING The Company sells its products globally and relies on direct sales force, manufacturing representatives, distributors, commission sales agents,magazine advertisements, internet advertising, trade shows, trade directories and catalogue listings to market its products and services. The Company usesindependent sales representatives in the United States backed by its sales management and technical professionals. The Company’s arrangements withindependent sales representatives accord each a defined territory within which to sell some or all of its products and systems, provide for the payment ofagreed-upon sales commissions and are terminable at will. The Company’s sales representatives do not have authority to execute contracts on the Company’sbehalf. The Company’s sales representatives also serve as ongoing liaison function between Company and its customers during the installation phase of theproducts and systems and address customers’ questions or concerns arising thereafter. The Company selects representatives based upon industry reputation,prior sales performance including number of prospective leads generated and sales closure rates, and the breadth of territorial coverage, among other criteria. Technical inquiries received from potential customers are referred to the engineering personnel. Thereafter, the Company’s sales and engineeringpersonnel jointly prepare a budget proposal, or a final bid. The period between initial customer contact and issuance of an order is generally between two andtwelve months. CUSTOMERS The Company’s principal customers are engaged in automotive, medical, industrial automation, refining, power, chemical, packaging, printing,electronics, mining, and metallurgical processing. Historically, most of the customers have purchased individual products or systems which, in manyinstances, operate in conjunction with products and systems supplied by others. For several years, the Company has marketed its products as integratedcustom engineered systems and solutions. No one single customer accounts for more than 10% of its annual sales. For the IPS segment, the Company is responsible to its customers for all phases of the design, assembly, supply and, if included, field installation ofits products and systems. The successful completion of a project is generally determined by a successful operational test of the supplied equipmentconducted by our field service technician in the presence of the customer. For the EMS segment, the company is responsible for the prototype design, production, supply, and delivery of products to its customers. In order tosatisfy customer orders, the Company must consistently meet production deadlines and maintain a high standard of quality. INSURANCE The Company currently maintains different types of insurance, including general liability and property coverage. The Company also maintainsproduct liability insurance with respect to its products and equipment. Management believes that the insurance coverage that it has is adequate for its currentbusiness needs. EMPLOYEES The Company employs approximately 577 full-time people as of December 13, 2016, including 57 engaged in engineering, 335 in manufacturingand 185 in administrative and marketing functions. 6 Source: CEMTREX INC, 10-K, December 28, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. GOVERNMENT REGULATION The Company’s operations are subject to certain foreign, federal, state and local regulatory requirements relating to, among others, environmental,waste management, labor and health and safety matters. Management believes that the Company’s business is operated in material compliance with all suchregulations. Management believes that the existence of governmental regulations creates demand for Company’s emission monitoring equipment andenvironmental control systems. Significant environmental laws, particularly the Federal Clean Air Act, have been enacted in response to public concernabout the environment. The Company believes that compliance with and enforcement of these laws and regulations create the demand for its environmentalcontrol related products and systems. The Federal Clean Air Act, initially adopted in 1970 and extensively amended in 1990, requires compliance withambient air quality standards and empowers the EPA to establish and enforce limits on the emission of various pollutants from specific types of industrialfacilities. States have primary responsibility for implementing these standards, and, in some cases, have adopted more stringent standards. ITEM 1A. RISK FACTORS Investing in our common stock involves a high degree of risk. You should consider carefully the risks and uncertainties described below, togetherwith all of the other information in this report, including the consolidated audited financial statements and the related notes appearing at the end of thisannual report on Form 10-K, with respect to any investment in shares of our common stock. If any of the following risks actually occurs, our business,financial condition, results of operations and future prospects would likely be materially and adversely affected. In that event, the market price of ourcommon stock could decline and you could lose all or part of your investment. These statements, like all statements in this report, speak only as of the date ofthis report (unless another date is indicated) and we undertake no obligation to update or revise the statements in light of future development. RISKS RELATED TO OUR BUSINESS There is no guarantee that cash flow from operations and/or debt and equity financings will provide sufficient capital to meet our expansion goals andworking capital needs. Our current strategic plan includes the expansion of our company both organically and through acquisitions if market conditions and competitiveconditions allow. Due to the long-term nature of investments in acquisitions and other financial needs to support organic growth, including working capital,we expect our long-term and working capital needs to periodically exceed the short-term fluctuations in cash flow from operations. We anticipate that we willlikely raise additional external capital from the sale of common stock, preferred stock and debt instruments as market conditions may allow, in addition tocash flow from operations (which may not always be sufficient), to fund our growth and working capital needs. In December 2016, we commenced asubscription rights offering to our stockholders to raise up to $15.0 million through the sale of units, each consisting of one share of our series 1 preferredstock, paying cumulative dividends at the rate of 10% of the purchase price per year, and two five-year series 1 warrants, upon the exercise of subscriptionrights at $10.00 per unit. The rights offering extends through January 2017 and may be extended thereafter. No assurance can be given that the rights offeringwill result in significant funds for us. We are subject to uncertain and ever-changing debt and equity capital market conditions over which we have nocontrol. The magnitude and the timing of the funds that we need to raise from external sources also cannot be easily predicted. In the event that we need to raise significant amounts of external capital at any time or over an extended period, we face a risk that we may need todo so under adverse capital market conditions with the result that persons who acquire our common stock may incur significant and immediate dilutionshould we raise capital from the sale of our common or preferred stock. Similarly, we may need to meet our external capital needs from the sale of secured orunsecured debt instruments at interest rates and with such other debt covenants and conditions as the market then requires. In all of these transactions weanticipate that we will likely need to raise significant amounts of additional external capital to support our growth. However, there can be no guarantee thatwe will be able to raise external capital on terms that are reasonable in light of current market conditions. In the event that we are not able to do so, those whoacquire our common stock may face significant and immediate dilution and other adverse consequences. Further, debt covenants contained in debtinstruments that we issue may limit our financial and operating flexibility with consequent adverse impact on our common stock market price. 7 Source: CEMTREX INC, 10-K, December 28, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. We are substantially dependent upon the success and continued market acceptance of our technology and a favorable regulatory environment; the absenceof which may significantly reduce our sales, profits and cash flow and adversely impact our financial condition. The failure of the emissions monitoring and controls market to develop as we anticipate and any lack of acceptance of our emissions monitoring andcontrol equipment technology would adversely affect our environmental control products business. In this respect, we may find that other competingtechnologies may be offered by other existing competitors or by those that enter the market and these competing technologies may offer a better cost-benefitratio than our products and/or at lower prices with the result that our sales, profits, and cash flow may suffer significantly over an extended period with seriousadverse impact on our financial condition. We have substantial debt which could adversely affect our ability to raise additional capital to fund operations and prevent us from meeting ourobligations under outstanding indebtedness. As of September 30, 2016, our total indebtedness was approximately $24.2 million, including a revolving line of credit of $3.5 million, convertiblenotes payable of $3.7 million, non-convertible notes payable of $1.4 million, related party notes payable of $3.6 million, bank loans of $8.0 million andmortgage of $4.0 million. Approximately $7.9 million of such debt is classified as current and approximately $3.7 million of such debt is convertible intoshares of our common stock. This substantial debt could have important consequences, including the following: (i) a substantial portion of our cash flowfrom operations may be dedicated to the payment of principal and interest on indebtedness, thereby reducing the funds available for operations, futurebusiness opportunities and capital expenditures; (ii) our ability to obtain additional financing for working capital, debt service requirements and generalcorporate purposes in the future may be limited; (iii) we may face a competitive disadvantage to lesser leveraged competitors; (iv) our debt servicerequirements could make it more difficult to satisfy other financial obligations; and (v) we may be vulnerable in a downturn in general economic conditionsor in our business and we may be unable to carry out activities that are important to our growth. Our ability to make scheduled payments of the principal of, or to pay interest on, or to refinance indebtedness depends on and is subject to ourfinancial and operating performance, which in turn is affected by general and regional economic, financial, competitive, business and other factors beyondmanagement’s control. If we are unable to generate sufficient cash flow to service our debt or to fund our other liquidity needs, we will need to restructure orrefinance all or a portion of our debt, which could impair our liquidity. Any refinancing of indebtedness, if available at all, could be at higher interest ratesand may require us to comply with more onerous covenants that could further restrict our business operations. Despite our significant amount ofindebtedness, we may be able to incur significant additional amounts of debt, which could further exacerbate the risks associated with our substantial debt. We have outstanding convertible notes with fluctuating conversion rates that are set at a discount to market prices of our common stock during the periodimmediately preceding conversion, which may result in material dilution to our common stockholders. As of September 30, 2016, we had outstanding unsecured convertible notes issued to a number of unrelated third parties in the aggregate principalamount of approximately $3.7 million. Of these unsecured convertible notes, $373,000 under two notes are convertible into shares of our common stock at aprice per share equal to 75% of the average closing bid prices of our common stock for the ten days preceding the conversion date (the “75% Notes”), whileapproximately $1.3 million under three notes are convertible into shares of our common stock at a price per share equal to 80% of the average closing bidprices of our common stock for the ten days preceding the conversion date (the “80% Notes”). This could result in material dilution to existing stockholdersof our company. The number of shares of common stock into which the notes may be converted may increase without an upper bound as a consequence of thefluctuating conversion rate that is 75% or 80% of the weighted average market price at the time of conversion. By way of illustration, the following table setsforth the dilutive impact of conversion of the unsecured convertible notes, assuming that the average closing bid price of our common stock for the ten dayspreceding the conversion is equal to $5.00, $4.00, $3.00 and $2.00 per share: 8 Source: CEMTREX INC, 10-K, December 28, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Conversion Price Average Closing Bid Price Principal Amount (75%/80% of Market) Shares Issuable $ 5.00: 75% Notes $373,000 $3.75 99,467 80% Notes $1,265,000 $4.00 316,250 $ 4.00: 75% Notes $373,000 $3.00 124,333 80% Notes $1,265,000 $3.20 395,313 $ 3.00: 75% Notes $373,000 $2.25 165,778 80% Notes $1,265,000 $2.40 527,083 $ 2.00: 75% Notes $373,000 $1.50 248,667 80% Notes $1,265,000 $1.60 790,625 Additionally, we have outstanding convertible notes in the aggregate principal amount of $2,110,000 with fixed conversion prices ranging from$5.00 to $6.50 per share. Approximately 373,300 shares of our common stock are issuable pursuant to these notes at the election of the holder. Our ability to secure and maintain sufficient credit arrangements is key to our continued operations and there is no assurance we will be able to obtainsufficient additional equity or debt financing in the future. There is no assurance that we will be able to retain or renew our credit agreements and other finance agreements in the future. In the event thebusiness grows rapidly, the uncertain economic climate continues or we acquire one or more other companies, additional financing resources will likely benecessary in the current or future fiscal years. As a small company with a limited ability to attract and obtain financing, there is no assurance that we will beable to obtain sufficient additional equity or debt financing in the future on terms that are reasonable in light of current market conditions. Our sales and gross margins depend significantly on market demand for our products, as to which there can be no assurances. The uncertainty in the U.S. and international economic and political environment could result in a decline in demand for our products in anyindustry. Our gross margins are dependent upon our ability to maintain sales volumes at levels that allow us to cover our fixed costs and variable costs perunit. To the extent that one or more product lines experience a significant and protracted decline in sales volume, we may experience significant declines inour gross margins that may result in losses. Further, any adverse changes in tax rates and laws affecting our customers could result in decreases in demand ofour products and thus decrease our gross margins. Any of these factors could negatively impact our business, results of operations and financial condition. Many of our existing and future customers do not commit to firm production schedules, which may result in higher fixed costs per unit for us relative to ourcompetitors. Most of our customers do not commit to long-term production schedules, which makes it difficult to schedule production and achieve maximumefficiency at our manufacturing facilities and to manage inventory levels. As a result, our fixed costs per unit may be higher than our competitors who areable to achieve greater economies with longer production runs at lower costs per unit and, at the same time, achieve lower manufacturing costs as a result andas a result of better manufacturing scheduling. ●The volume and timing of sales to our customers may vary due to: ●customers’ attempts to manage their inventory; ●variation in demand for the company’s customers’ products design changes; or ●acquisitions of or consolidation among customers. 9 Source: CEMTREX INC, 10-K, December 28, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Many of our existing and future customers do not commit to firm production schedules. As a result, we are unable to forecast the level of customerorders with any precision. This means that it is very difficult for us to schedule production and maximize utilization of manufacturing capacity and manageinventory levels. This may adversely impact our unit manufacturing costs so that our unit manufacturing costs may be higher than our competitors’ costs. In these circumstances we anticipate that we could be required to increase or decrease staffing and more closely manage other expenses in order tomeet the anticipated demand of our existing and future customers. Orders from our customers are subject to cancellation and delivery schedules fluctuate as aresult of changes in our customers’ demand, thereby adversely affecting our results of operations, and may result in higher inventory levels. Higher inventorylevels cause us to obtain greater external financing which adversely affects our financial performance. Our products could face serious competitive challenges, including rapid technological changes, and pricing pressure from competitors, which couldadversely affect our business. In the event that one or more of our product lines become the subject of significant pressures from our existing and future competitors, marketconditions, technological change, or any combination thereof, our sales revenues and our gross margins may suffer protracted and serious declines with theresult that we will likely incur protracted losses thereby. Further, the barriers to entry in several of our lines of business are not so significant that we may befacing competition from others who see significant opportunities to enter the market and undercut our prices with products that possess superiortechnological attributes at prices that offer our customers a better value. In this instance we could incur protracted and significant losses and persons whoacquire our common stock would suffer losses thereby. Factors affecting the industries that utilize our customers’ products could negatively impact our customers and us. We have no real control over these factors and to the extent that any one or more of them change dramatically, we may be facing significantfinancial challenges that are in excess of our abilities. These factors include: ●increased competition among our customers and their competitors; ●the inability of our customers to develop and market their products; ●recessionary periods in our customers’ markets; ●the potential that our customers’ products become obsolete; ●our customers’ inability to react to rapidly changing technology; ●our customers’ inability to pay for our products, which could, in turn, affect the company’s results of operations. If we are unable to develop new products, our competitors may develop and market products with better features that may reduce demand for our potentialproducts or otherwise result in our products becoming obsolete and could materially and adversely affect our ability to sustain profitability. There are many larger competitors who compete directly with us and who have significantly greater technological and research resources. Theselarger competitors have greater technological and research abilities that put us at a severe disadvantage. This may serve to severely damage our reputationand our ability to market and sell other products at price levels that would allow us to achieve and maintain profit margins and positive cash flow. We are a small company and we face rapid technological change in many of our product markets and we may not be able to introduce any newproducts or any enhancements to our existing products on a timely basis, or at all. This could result in prolonged and significant losses. In addition, ourintroduction of any new products could adversely affect the sales of certain of our existing products if new products cannibalize sales of our existingproducts. If our competitors develop innovative technologies that are superior to our products or if we fail to accurately anticipate market trends and respondon a timely basis with our own innovations, we may not achieve sufficient growth in its revenues to attain profitability or if we do, we may not be able sustainprofitability. 10 Source: CEMTREX INC, 10-K, December 28, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. We have grown through acquisitions and are continuously looking to fund such acquisitions; our failure to raise funds will have the effect of slowing downour growth. We recently completed the acquisitions of Advanced Industrial Services Inc., an installer of high precision equipment, and Periscope, GmbH, anelectronics manufacturing company. We need to raise funds to finance acquisitions and support the working capital requirements of the acquired companies.A portion of the expected net proceeds from our pending $15.0 million subscription rights offering is intended to be used to fund our acquisition growthplan. Through this rights offering, which was commenced in December 2016 and extends through January 2017 and may be extended thereafter, and anysubsequent financing transactions. There is substantial risk that we will only be able to raise funds that would cause substantial dilution to the existingstockholders or at terms that may be very expensive. In the past, we have raised funds from related party loans and there can be no assurance that such relatedparty loans will be available to us in the future. Further, there can be no guarantee that we will be able to raise funds in sufficient amounts in the future and onterms that are reasonable in light of our current circumstances. Persons who acquire our common stock may suffer immediate and substantial dilution and, inother instances, the total loss of their investment if we are not able to raise sufficient funds on reasonable terms. In the event that we are unable to raise fundsin sufficient amounts and on reasonable terms, we may not be able to complete any further acquisitions and provide working capital for the completedacquisitions. We could be subject to economic, political, regulatory and other risks arising from international operations. Operating in international markets requires significant resources and management attention and will subject us to regulatory, economic and politicalrisks that may be different from and incremental to those in the United States. In addition to the risks that we face in the United States, our internationaloperations may involve risks that could adversely affect our business, including: ●the need to adapt our content and user interfaces for specific cultural and language differences, including licensing a certain portion of our contentlibrary before we have developed a full appreciation for its performance within a given territory; ●difficulties and costs associated with staffing and managing foreign operations; ●management distraction; ●political or social unrest and economic instability; ●compliance with United States laws, such as the Foreign Corrupt Practices Act, export controls and economic sanctions, and local laws prohibitingcorrupt payments to government officials; ●unexpected changes in regulatory requirements; ●less favorable foreign intellectual property laws; ●adverse tax consequences such as those related to repatriation of cash from foreign jurisdictions into the United States, non-income related taxessuch as value-added tax or other indirect taxes, changes in tax laws or their interpretations, or the application of judgment in determining our globalprovision for income taxes and other tax liabilities given inter-company transactions and calculations where the ultimate tax determination isuncertain; ●fluctuations in currency exchange rates, which could impact revenues and expenses of our international operations and expose us to foreigncurrency exchange rate risk; ●profit repatriation and other restrictions on the transfer of funds; ●differing payment processing systems as well as consumer use and acceptance of electronic payment methods, such as payment cards; ●new and different sources of competition; ●different and more stringent user protection, data protection, privacy and other laws; and ●availability of reliable broadband connectivity and wide area networks in targeted areas for expansion. Our failure to manage any of these risks successfully could harm our international operations and our overall business, and results of our operations. 11 Source: CEMTREX INC, 10-K, December 28, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Even though we achieved a profit for the fiscal year ended September 30, 2016, we cannot assure you that we will remain profitable and maintain apositive cash flow or, if we are profitable and have a positive cash flow, that we can sustain operations that are profitable and have a positive cash flow inthe future. We continue to incur significant expenditures related to selling and marketing and general and administrative activities as well as capitalexpenditures and anticipate that our expenses may increase in the foreseeable future as we expand our business. Further, as a public company we continue toincur significant legal, accounting and other expenses that we would not incur as a private company. To maintain profitability, we will need to generatesignificant additional revenues with significantly improved gross margins. There can be no assurance that we will be able to maintain profitability with ourexisting revenues and in the future generate such additional revenues, improve our gross margins, or both of them and maintain and sustain our profitabilityor a positive cash flow. We face constant changes in governmental standards by which our environmental control products are evaluated and we have no control over thesestandards. We have no ability to predict the extent to which governmental standards and regulations will favor or disfavor our products, our technology, or thebusiness strategies that we have or will implement in the future. There is a distinct risk that we may face governmental standards and regulations thatseriously undercut our fundamental assumptions regarding existing trends in regulation and technology and assumptions regarding the type of technology touse. To the extent that we are not able to accurately predict these trends and effectively utilize these predictions in our business strategy, we may sufferprotracted losses with the result that persons who acquire our common stock will suffer losses thereby. We believe that, due to the constant focus on the environment and clean air standards throughout the world, a requirement in the future to adhere tonew and more stringent regulations both domestically and abroad is possible as governmental agencies seek to improve standards required for certification ofproducts intended to promote clean air. In the event our products fail to meet these ever-changing standards, some or all of our emission monitoring andenvironmental control products may become obsolete. The future growth of our environmental control business depends, in part, on enforcement of existing emissions-related environmental regulations andfurther tightening of emission standards worldwide with regulations that allow our products to compete effectively against our competitors. We expect that the future environmental control products business growth will likely be driven, in part, by the enforcement of existing emissions-related environmental regulations and tightening of emissions standards worldwide. If such standards do not continue to become stricter or are loosened orare not enforced by governmental authorities or if such standards require the use of technologies that we do not possess or are not able to develop, it couldhave a material adverse effect on our business, operating results, financial condition and long-term prospects. We may incur substantial costs enforcing our proprietary information, defending against third-party patents, invalidating third-party patents or licensingthird-party intellectual property, as a result of litigation or other proceedings relating to intellectual property rights. We have undertaken only a limited evaluation of our intellectual property rights and we may discover that one or more of our intellectual propertyrights infringe upon the patents or rights of others with the result that we may incur significant losses thereby. In that event, any person who acquires ourcommon stock may suffer losses thereby. 12 Source: CEMTREX INC, 10-K, December 28, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. While we believe that our technology and procedures are likely proprietary, we cannot assure you that others have not or will not replicate our technologyand procedures and achieve greater efficiencies and success at our expense. In that event, we could suffer serious and protracted losses and negative cash flow thereby, our strategy has been to rely on our flexibility to developcustom engineered solutions for various applications and be responsive to customer needs. We cannot assure you that this strategy is or will remain effectiveto meet these challenges. We may not have sufficient financial resources to defend our intellectual property rights or otherwise successfully defend against claims that we haveinfringed on a third party’s intellectual property and, as a result, it may adversely affect our business, financial condition and results of operations. Even if such claims are not valid, they could subject us to significant costs. In addition, it may be necessary in the future to enforce our intellectualproperty rights to determine the validity and scope of the proprietary rights of others. Litigation may also be necessary to defend against claims ofinfringement or invalidity by others. We may not have sufficient financial resources to defend our intellectual property rights or otherwise to successfullydefend the company against valid or spurious claims that we have infringed upon the intellectual property rights of others. An adverse outcome in litigation or any similar proceedings could force us to take actions that could harm its business. These include: (i) ceasing tosell products that contain allegedly infringing property; (ii) obtaining licenses to the relevant intellectual property which we may not be able to obtain onterms that are acceptable, or at all; (iii) indemnifying certain customers or strategic partners if it is determined that we have infringed upon or misappropriatedanother party’s intellectual property; and (iv) redesigning products that embody allegedly infringing intellectual property. Any of these results couldadversely and significantly affect our business, financial condition and results of operations. In addition, the cost of defending or asserting any intellectualproperty claim, both in legal fees and expenses, and the diversion of management resources, regardless of whether the claim is valid, could be significant andlead to significant and protracted losses. We may not have sufficient funds to defend a class action suit from a customer as a result of our installed base of products. Our products are installed at large industrial plants where products of other manufacturers and suppliers are also installed. We could be subject to aclass action lawsuit from a customer as a result of loss sustained by a customer due to malfunction of another manufacturer’s product. We may not havesufficient financial resources to successfully defend such a lawsuit. Product defects could cause us to incur significant product liability, warranty and repair and support costs and damage our reputation which would havea material adverse effect on our business. Although we test our products, defects may be discovered in future or existing products. These defects could cause us to incur significant warranty,support and repair costs and divert the attention of research and development personnel. It could also significantly damage our reputation and relationshipwith distributors and customers which would adversely affect our business. In addition, such defects could result in personal injury or financial or otherdamages to customers who may seek damages with respect to such losses. A product liability claim against us, even if unsuccessful, would likely be timeconsuming and costly to defend. We carry some product liability insurance but we cannot assure you that the amount of coverage that we carry is sufficient toinsulate us from these claims. In the event of any claim asserting product defects, we will be directly exposed to liability for claims in excess of our coveragelimits and there is a clear risk that we and our stockholders could suffer significant and protracted losses thereby. The markets in which we operate are highly competitive, and many of our competitors have significantly greater financial and managerial resources thanwe do. There is significant competition among companies that provide emissions monitoring and environmental control systems. Several companies marketproducts that compete directly with our products. Other companies offer products that potential customers may consider to be acceptable alternatives to ourproducts and services. We face direct competition from companies with far greater financial, technological, manufacturing and personnel resources. 13 Source: CEMTREX INC, 10-K, December 28, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Our results may fluctuate due to certain regulatory, marketing and competitive factors over which we have little or no control. The factors listed below, some of which we cannot control, may cause our revenue and results of operations to fluctuate significantly: ●The existence and enforcement of government environmental regulations. If these regulations are not maintained or enforced then themarket for the company’s products could deteriorate; ●Retaining and keeping qualified employees and management personnel; ●Ability to upgrade our products to keep up with the changing market place requirements; ●Ability to keep up with our competitors who have much higher resources than us; ●Ability to find sub-suppliers and sub-contractors to assemble and install our products; ●General economic conditions of the industry and the ability of potential customers to spend money on setting up new industries thatrequire our products; ●Ability to maintain or raise adequate working capital required for the operations and future growth; and ●Ability to retain our Chief Executive Officer and other senior key personnel. The loss of the services of Aron Govil and Saagar Govil for any reason would materially and adversely affect our business operations and prospects. Our financial success is dependent to a significant degree upon the efforts of Aron Govil, our Executive Director, and Saagar Govil, our Presidentand Chief Executive Officer. Aron Govil, who previously served as our Chairman of the Board, has knowledge regarding environmental control systems andhas financial resources and business contacts that would be extremely difficult to replace. Saagar Govil possesses engineering, sales and marketingexperience concerning our company that our other officers do not have. We have not entered into employment arrangements with them. There can be noassurance that Aron Govil and Saagar Govil will continue to provide services to us. While Saagar Govil devotes all of his working time to our company, AronGovil devotes an average of 20 hours per week to our company and the balance of his working time is devoted to other business and investment activities. Avoluntary or involuntary departure by Aron Govil and/or Saagar Govil could have a materially adverse effect on our business operations if we were not ableto attract a qualified replacement for them in a timely manner. We have a small management team. The loss of any member of our senior management and any significant failure to attract and retain qualified personnelin a competitive labor market could limit our ability to execute our growth strategy, resulting in a slower rate of growth or a period of losses and/ornegative cash flow. We depend on the continued service of our senior management. Due to the nature of our business, we may have difficulty locating and hiringqualified personnel and retaining such personnel once hired. The loss of the services of any of our key personnel, or our failure to attract and retain otherqualified and experienced personnel on acceptable terms, could limit our ability to execute our growth strategy resulting in a slower rate of growth. We are an “emerging growth company” and our election to delay adoption of new or revised accounting standards applicable to public companies mayresult in our consolidated financial statements not being comparable to those of some other public companies. As a result of this and other reduceddisclosure requirements applicable to emerging growth companies, our securities may be less attractive to investors. As a company with less than $1.0 billion in revenue during our last completed fiscal year, we qualify as an “emerging growth company” under theJOBS Act. An emerging growth company may take advantage of specified reduced reporting requirements that are otherwise generally applicable to publiccompanies. In particular, as an emerging growth company we: ●are not required to obtain an attestation and report from our auditors on our management’s assessment of our internal control over financial reportingpursuant to the Sarbanes-Oxley Act of 2002; 14 Source: CEMTREX INC, 10-K, December 28, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. ●are not required to provide a detailed narrative disclosure discussing our compensation principles, objectives and elements and analyzing how thoseelements fit with our principles and objectives; ●are not required to obtain a non-binding advisory vote from our stockholders on executive compensation or golden parachute arrangements; ●are exempt from certain executive compensation disclosure provisions requiring a pay-for-performance graph and Chief Executive Officer pay ratiodisclosure; ●may present only two years of audited financial statements and only two years of related Management’s Discussion and Analysis of FinancialCondition and Results of Operations; ●are eligible to claim longer phase-in periods for the adoption of new or revised financial accounting standards under §107 of the JOBS Act; and ●will not be required to conduct an evaluation of our internal control over financial reporting for two years.We intend to take advantage of all of these reduced reporting requirements and exemptions, including the longer phase-in periods for the adoptionof new or revised financial accounting standards under §107 of the JOBS Act. Our election to use the phase-in periods may make it difficult to compare ourconsolidated financial statements to those of non-emerging growth companies and other emerging growth companies that have opted out of the phase-inperiods under §107 of the JOBS Act. Certain of these reduced reporting requirements and exemptions were already available to us due to the fact that we also qualify as a “smallerreporting company” under SEC rules. For instance, smaller reporting companies are not required to obtain an auditor attestation and report regardingmanagement’s assessment of internal control over financial reporting, are not required to provide a compensation discussion and analysis, are not required toprovide a pay-for-performance graph or CEO pay ratio disclosure, and may present only two years of audited financial statements and related Management’sDiscussion and Analysis of Financial Condition and Results of Operations disclosure. Under the JOBS Act, we may take advantage of the above-described reduced reporting requirements and exemptions for up to five years after ourinitial sale of common equity pursuant to a registration statement declared effective under the Securities Act, or such earlier time that we no longer meet thedefinition of an emerging growth company. In this regard, the JOBS Act provides that we would cease to be an “emerging growth company” if we have morethan $1.0 billion in annual revenues, have more than $700 million in market value of our common stock held by non-affiliates, or issue more than $1.0billion in principal amount of non-convertible debt over a three-year period. Under current SEC rules, however, we will continue to qualify as a “smallerreporting company” for so long as we have a public float (i.e., the market value of common equity held by non-affiliates) of less than $75 million as of thelast business day of our most recently completed second fiscal quarter. We cannot predict if investors will find our securities less attractive due to our reliance on these exemptions. If investors were to find our securitiesless attractive as a result of our election, we may have difficulty raising all of the proceeds we seek in this offering. Sales of substantial amounts of our common stock in the public market could depress the market price of our common stock. Our common stock is traded on the Nasdaq Capital Market. If our stockholders sell substantial amounts of our common stock in the public market,including the shares of common stock issuable upon the exercise of the Series 1 Warrants, shares issued in acquisitions, and shares issuable upon the exerciseof outstanding stock options, or the market perceives that such sales may occur, the market price of our common stock could fall and we may be unable to sellour common stock in the future. 15 Source: CEMTREX INC, 10-K, December 28, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Our common stock may experience extreme price and volume fluctuations, which could lead to costly litigation for us and make an investment in us lessappealing. ●The market price of our common stock may fluctuate substantially due to a variety of factors, including: ●our business strategy and plans; ●changing factors related to doing business in various jurisdictions within the United States; ●new regulatory pronouncements and changes in regulatory guidelines and timing of regulatory approvals; ●general and industry-specific economic conditions; ●additions to or departures of our key personnel; ●variations in our quarterly financial and operating results; ●changes in market valuations of other companies that operate in our business segments or in our industry; ●lack of adequate trading liquidity; ●announcements about our business partners; ●changes in accounting principles; and ●general market conditions. The market prices of the securities of early-stage companies, particularly companies like ours without consistent product revenues and earnings,have been highly volatile and are likely to remain highly volatile in the future. This volatility has often been unrelated to the operating performance ofparticular companies. In the past, companies that experience volatility in the market price of their securities have often faced securities class action litigation.Whether or not meritorious, litigation brought against us could result in substantial costs, divert our management’s attention and resources and harm ourfinancial condition and results of operations. RISKS RELATED TO INVESTMENT IN THE COMMON STOCK OF THE COMPANY The Company’s Common Stock currently trades on the NASDAQ under the symbol “CETX”. There can be no assurance that the Company’s shareswill continue to trade on NASDAQ in the future, and there can be no assurance that an active trading market will develop or be sustained. The market price ofthe shares of Common Stock is likely to be highly volatile and may be significantly affected by factors such as actual or anticipated fluctuations in theCompany’s operating results, announcements of technological innovations, new products or new contracts by the Company or its competitors, developmentswith respect to proprietary rights, adoption of new government regulations affecting the environment, general market conditions and other factors. Inaddition, the stock market has from time to time experienced significant price and volume fluctuations that have particularly affected the market price for thecommon stocks of technology companies. These types of broad market fluctuations may adversely affect the market price of the Company’s common stock. Our common stock has from time to time been “thinly-traded.” The number of persons interested in purchasing our common stock at or near ask prices at any given time may be relatively small or non-existent.Therefore, stockholders may be unable to sell at or near ask prices or at all if they need to sell shares to raise money or otherwise desire to liquidate theirshares. Our “thinly-traded” stock is attributable to a number of factors, including the fact that we are a small company that is relatively unknown to stockanalysts, stock brokers, institutional investors and others in the investment community that generate or influence sales volume, and that even if we came tothe attention of such persons, they tend to be risk-averse and would be reluctant to follow an unproven company such as ours or purchase or recommend thepurchase of our shares until such time as we become more seasoned and viable. As a consequence, there may be periods of several days or more when tradingactivity in our shares is minimal or non-existent, as compared to a seasoned issuer which has a large and steady volume of trading activity that will generallysupport continuous sales without an adverse effect on share price. We cannot give stockholders any assurance that a broader or more active public tradingmarket for our common shares will develop or be sustained, or that current trading levels will be sustained. 16 Source: CEMTREX INC, 10-K, December 28, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. We do not anticipate paying any dividends. No dividends have been paid on the common stock of the Company. The Company does not intend to pay cash dividends on its common stock inthe foreseeable future, and anticipates that profits, if any, received from operations will be devoted to the Company’s future operations. Any decision to paydividends will depend upon the Company’s profitability at the time, cash available and other relevant factors. Our principal shareholder has significant influence over our Company which could make it impossible for the public stockholders to influence theaffairs of the Company. We are a “Controlled Company” under exchange listing rules. Approximately 50.0% of our outstanding voting equity is beneficially held bycombination of Aron Govil, the Company’s former Chairman of the Board, and Saagar Govil the Company’s CEO, as a result of this common stock ownershipand the Series A preferred stock ownership by Mr. Aron Govil, the Company’s management controls and will control in the future, substantially all mattersrequiring approval by the stockholders of the Company, including the election of all directors and approval of significant corporate transactions. This makesit impossible for the public stockholders to influence the affairs of the Company. ITEM 1B. UNRESOLVED STAFF COMMENTS None. ITEM 2. PROPERTIES The Company has the following properties: Our IPS segment leases (i) approx. 5,000 sq. ft. of office and warehouse space in Liverpool, New York from a third party in a five year lease at amonthly rent of $2,200 expiring on March 31, 2018, (ii) approximately 2000 square feet of office on a month to month rental from a third party in HongKong at a monthly rental of $4,133.00, (iii) approximately 1500 square feet of office on a month to month rental from a third party in Navi Mumbai, India at amonthly rental of $600.00, (iv) approximately 25,000 sq. ft. of warehouse space in Manchester, PA from a third party in a seven year lease at a monthly rent of$7,300 expiring on December 13, 2020, (v) approximately 43,000 sq. ft. of office and warehouse space in York, PA from a third party in a ten year lease at amonthly rent of $22,625 expiring on March 23, 2026, (vi) approximately 15,500 sq. ft. of warehouse space in Emigsville, PA from a third party in a one yearlease at a monthly rent of $4,337 expiring on August 31, 2016, and (vii) the Company leases its principal office at Farmingdale, New York, 4,000 square feetof office and warehouse/shop space in a single story commercial structure on a month to month lease from Ducon Technologies Inc., a company controlled byAron Govil, Executive Director of the Company, at a monthly rental of $4,000. Our EMS segment owns a 70,000 sq. ft. manufacturing building in Neulingen, Germany which has a 17 year 3.00% interest mortgage with monthlymortgage payments of €25,000, through March 2031. The EMS segment also leases (i) a 10,000 sq. ft. manufacturing facility in Sibiu, Romania from a thirdparty in a ten year lease at a monthly rent of €8,000 expiring on May 31, 2019, (ii) approximately 100,000 sq. ft. of office, warehouse and manufacturingspace in Paderborn, Germany at monthly rental of €54,100 which expires on March 31, 2017, (iii) approximately 50,000 sq. ft. of office, warehouse space inPaderborn, Germany at a monthly rental of €27,050 which expires on March 31, 2017. ITEM 3. LEGAL PROCEEDINGS None. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 17 Source: CEMTREX INC, 10-K, December 28, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. PART II ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED SHAREHOLDER MATTERS AND ISSUER PURCHASES OF EQUITYSECURITIES The Company’s Common Stock currently trades on the NASDAQ Capital Markets under the symbol “CETX”. As of December 27, 2016, there were approximately 1,800 holders of record of the Company’s common stock as determined from the Company’stransfer agent’s list. Such list also includes beneficial owners of securities whose shares are held in the names of various dealers and clearing agencies. The Company is authorized to issue 20,000,000 shares of common stock, $0.001 par value per share. On December 27, 2016, there were 9,919,376shares of common stock issued and outstanding and 1,000,000 shares of Series A preferred stock issued or outstanding. In April 2015 the Company effected a 1-for-6 reverse stock split of its outstanding common stock. On June 25, 2015 the Company’s common stock commenced trading on the NASDAQ Capital Markets under the symbol “CETX”. Prior to June 25,2015 the Company’s Common Stock traded on the over-the-counter bulletin board trading system. The price ranges presented below represent the highestand lowest quoted bid prices during the calendar quarters for 2014, 2015 and 2016 reported by the exchange and converted based on the one-for-six reversestock split. The quotes represent prices between dealers and do not reflect mark-ups, markdowns or commissions and therefore may not necessarily representactual transactions. Year Fiscal Period Stock Price 2016 4th Quarter $5.95 $3.71 3rd Quarter $3.69 $1.90 2nd Quarter $2.85 $1.65 1st Quarter $3.44 $2.36 2015 4th Quarter $4.35 $2.23 3rd Quarter $5.40 $2.70 2nd Quarter $4.20 $2.58 1st Quarter $4.74 $3.60 4th Quarter $6.24 $4.38 3rd Quarter $6.00 $3.00 2nd Quarter $3.30 $1.68 2014 1st Quarter $2.58 $0.84 As reported by NASDAQ Capital Markets, on December 27, 2016 the closing sales price of the Company’s Common Stock was $6.42 per share. Dividend Policy The Company has not declared or paid any cash dividends on its common stock nor does it anticipate paying any in the foreseeable future.Furthermore, the Company expects to retain any future earnings to finance its operations and expansion. The payment of cash dividends in the future will beat the discretion of its Board of Directors and will depend upon its earnings levels, capital requirements, any restrictive loan covenants and other factors theBoard considers relevant. 18 Source: CEMTREX INC, 10-K, December 28, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. ITEM 6. SELECTED FINANCIAL DATA Not required for Smaller Reporting Companies ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Except for historical information contained in this report, the matters discussed are forward-looking statements that involve risks anduncertainties. When used in this report, words such as “anticipates”, “believes”, “could”, “estimates”, “expects”, “may”, “plans”, “potential” and“intends” and similar expressions, as they relate to the Company or its management, identify forward-looking statements. Such forward-looking statementsare based on the beliefs of the Company’s management, as well as assumptions made by and information currently available to the Company’s management.Among the factors that could cause actual results to differ materially are the following: the effect of business and economic conditions; the impact ofcompetitive products and their pricing; unexpected manufacturing or supplier problems; the Company’s ability to maintain sufficient credit arrangements;changes in governmental standards by which our environmental control products are evaluated and the risk factors reported from time to time in theCompany’s SEC reports, including its recent report on Form 10-K. The Company undertakes no obligation to update forward-looking statements as a resultof future events or developments. Overview The Company was incorporated on April 27, 1998, in the state of Delaware under the name “Diversified American Holdings, Inc.” The Companysubsequently changed its name to “Cemtrex Inc.” on December 16, 2004. Unless the context requires otherwise, all references to “we”, “our”, “us”,“Company”, “registrant”, “Cemtrex” or “management” refer to Cemtrex, Inc. and its subsidiaries. Cemtrex is a leading diversified technology company thatoperates in a wide array of business segments and provides solutions to meet today’s industrial and manufacturing challenges. The Company providesmanufacturing services of advanced electronic system assemblies, provides broad-based industrial services, instruments & emission monitors for industrialprocesses, and provides industrial air filtration & environmental control systems. Through our Electronics Manufacturing Services (“EMS”) segment, we provide end to end electronic manufacturing services, which include productdesign and sustaining engineering services, printed circuit board assembly and production, cabling and wire harnessing, systems integration, comprehensivetesting services and completely assembled electronic products. Our EMS segment offers fully integrated contract manufacturing services to global originalequipment manufacturers (OEMs) and technology companies that operate primarily in the medical, industrial, automation, automotive, and renewablemarkets. Through our Industrial Products and Services (“IPS”) segment, we provide a complete line of air filtration and environmental control products to awide variety of industrial and manufacturing industries worldwide. The segment also manufactures, sells, and services monitoring instruments, software andsystems for measurement of emissions of Greenhouse gases, hazardous gases, particulate and other regulated pollutants used in emissions trading globally aswell as for industrial processes. We also market monitoring and analysis equipment for gas and liquid measurement for various downstream oil & gasapplications as well as various industrial process applications. In addition we, through our newly acquired business, offer one-source expertise andcapabilities in plant and equipment erection, relocation, and disassembly in a wide variety of industrial markets like automotive, printing & graphics,industrial automation, packaging, and chemicals among others. CRITICAL ACCOUNTING POLICIES AND ESTIMATES The following discussion and analysis is based upon our consolidated financial statements which have been prepared in accordance with accountingprinciples generally accepted in the United States of America. The preparation of our financial statements requires management to make estimates andassumptions that affect the reported amounts of revenues and expenses, and assets and liabilities during the periods reported. Estimates are used whenaccounting for certain items such as revenues, allowances for returns, early payment discounts, customer discounts, doubtful accounts, employeecompensation programs, depreciation and amortization periods, taxes, inventory values, and valuations of investments, goodwill, other intangible assets andlong-lived assets. We base our estimates on historical experience, where applicable and other assumptions that we believe are reasonable under thecircumstances. Actual results may differ from our estimates under different assumptions or conditions. We believe that the following critical accountingpolicies affect our more significant judgments and estimates used in preparation of our consolidated financial statements. 19 Source: CEMTREX INC, 10-K, December 28, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. We maintain allowances for doubtful accounts for estimated losses resulting from the inability of our customers to make required payments. We baseour estimates on the aging of our accounts receivable balances and our historical write-off experience, net of recoveries. We value our inventories at the lower of cost or market. We write down inventory balances for estimated obsolescence or unmarketable inventoryequal to the difference between the cost of the inventory and the estimated market value based upon assumptions about future demand and marketconditions. Goodwill is reviewed for possible impairment at least annually or more frequently upon the occurrence of an event or when circumstances indicatethat the Company’s carrying amount is greater than the fair value. In accordance with SFAS 142, the Company examined goodwill for impairment anddetermined that the Company’s carrying amount did not exceed the fair value, thus, there was no impairment. Generally, sales are recognized when shipments are made to customers. Rebates, allowances for damaged goods and other advertising and marketingprogram rebates are accrued pursuant to contractual provisions and included in accrued expenses. Certain amount of our revenues fall under the percentage-of-completion method of accounting used for long-term contracts. Under this method, sales and gross profit are recognized as work is performed based on therelationship between actual costs incurred and total estimated costs at completion. Sales and gross profit are adjusted prospectively for revisions in estimatedtotal contract costs and contract values. Estimated losses are recorded when identified. In countries in which the Company operates, and the functional currency is other than the U.S. dollar, assets and liabilities are translated usingpublished exchange rates in effect at the consolidated balance sheet date. Revenues and expenses and cash flows are translated using an approximateweighted average exchange rate for the period. Resulting translation adjustments are recorded as a component of accumulated other comprehensive incomeon the accompanying consolidated balance sheet. Results of Operations - For the fiscal years ending September 30, 2016 and 2015 Total revenue for the years ended September 30, 2016 and 2015 was $93,704,560 and $56,887,389, respectively, an increase of $36,817,171, or65%. Net income for years ended September 30, 2016 and 2015 was $4,994,045 and $2,838,116, respectively, an increase of $2,155,929, or 76%. Revenuesand net income in this period as compared to the previous one was higher as a result of the acquisitions of AIS and Periscope. Revenues Our IPS segment’s revenues for the year ended September 30, 2016 increased by $17,621,667 or 56%, to $49,224,011 from $31,622,344 for the yearended September 30, 2015. The acquisition of AIS on December 15, 2015, provided an additional $16,751,330 in revenues while existing companies had anincrease in revenues of $870,337. Our EMS segment’s revenues for the year ended September 30, 2016 increased by $19,195,504 or 76% to $44,460,549 from $25,265,045 for theyear ended September 30, 2015. The acquisition of Periscope on May 31, 2016, provided an additional $18,688,287 in revenues while existing companieshad an increase in revenues of $507,217. Gross Profit Gross Profit for the year ended September 30, 2016 was $29,213,670 or 31% of revenues as compared to gross profit of $16,322,570 or 29% ofrevenues for the year ended September 30, 2015. The increase in gross profit percentage in the year ended September 30, 2016, as compared to the prior year,was a direct result of higher profit margin projects executed during this period as compared to the prior year. The higher dollar amount of gross profit duringfiscal 2016 was due to higher overall revenue. 20 Source: CEMTREX INC, 10-K, December 28, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Operating Expenses Operating expenses for the year ended September 30, 2016 increased $10,328,226 or 75% to $24,149,772 from $13,281,546 for the year endedSeptember 30, 2015. Operating expenses as a percentage of revenue increased in the year ended September 30, 2016 to 26% from 24% in the year endedSeptember 30, 2015. The acquisition of AIS and Periscope provided additional operating expenses of $10,449,718, while existing companies had a decreaseof $121,492. Other Income Other income for the fiscal year of 2016 was $1,693,931 as compared to $834,290 for the fiscal year of 2015. The acquisition of AIS and Periscopeprovided additional other income of $913,545, while existing companies had a decrease of $53,904. Interest Expense Interest expense for the fiscal year of 2016 was $673,612 as compared to $496,281 for the fiscal year of 2015. The acquisition of AIS and Periscopeprovided additional interest expense of $271,456, while existing companies had a decrease of $94,125. Provision for Income Taxes During the fiscal year of 2016 we recorded an income tax provision of $1,090,172 compared to $917 for the fiscal year of 2015. The provision forincome tax is based upon the projected income tax from the Company’s various domestic and international subsidiaries that are subject to income taxes. Net Income The Company had net income of $4,994,045 or 5% of revenues, for the year ended September 30, 2016 as compared to a net income of $2,383,116or 5% of revenues, for the year ended September 30, 2015. The increase in net income of $2,155,929 was mainly due to higher profit margin of projectsexecuted during this period as compared to the prior year. Effects of Inflation The Company’s business and operations have not been materially affected by inflation during the periods for which financial information ispresented. Liquidity and Capital Resources Working capital was $11,771,946 at September 30, 2016 compared to $4,693,904 at September 30, 2015. This includes cash and cash equivalents of$6,045,521 at September 30, 2016 and $1,486,737 at September 30, 2015, respectively. The acquisition of AIS and Periscope provided additional workingcapital of $5,432,734, while existing companies had an increase of $1,645,308. Accounts receivable increased by $8,797,683 or 184% to $13,568,727 at September 30, 2016 from $4,771,044 at September 30, 2015. Theacquisition of AIS and Periscope provided additional accounts receivable of $7,406,279 while existing companies had an increase of $1,391,404. Inventories increased by $7,702,111 or 121% to $14,071,627 at September 30, 2016 from $6,369,516 at September 30, 2015. The acquisition of AISand Periscope provided additional inventories of $7,736,297 while existing companies had a decrease of $34,186. Operating activities provided $7,895,211 for the year ended September 30, 2016 compared to providing $3,879,926 of cash for the year endedSeptember 30, 2015. The increase in operating cash flows in fiscal 2016 was primarily due to profitable operations. 21 Source: CEMTREX INC, 10-K, December 28, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Investment activities used $17,146,716 of cash during the year ended September 30, 2016 compared to using $956,046 during the year endedSeptember 30, 2015. The use of cash by investing activities in fiscal 2016 was the result of the acquisition, net of cash received, of AIS and Periscope for$16,482,882 and the purchase of property and equipment for $663,834. Financing activities provided $13,810,289 for the year ended September 30, 2016 as compared to using $1,583,238 in the year ended September 30,2015. Cash flows from financing activities during fiscal 2016 was the result of proceeds from notes payable of $2,217,936, affiliated loans of $3,480,252,convertible notes of $5,077,500 and bank loans of $5,176,262 all used to fund our acquisition of AIS and Periscope, and to fund operations, offset bypayments on notes payable of $486,125 and payments on bank loans of $1,655,536. We believe that our cash on hand, cash generated by operations, is sufficient to meet the capital demands of our current operations during the 2017fiscal year (ending September 30, 2017). Any major increases in sales, particularly in new products, may require substantial capital investment. Failure toobtain sufficient capital could materially adversely impact our growth potential. As of September 30, 2016 and 2015, $5,740,046 of the $5,825,521 and $1,467,938 of the $1,486,737 of cash and cash equivalents on theconsolidated balance sheet was held by foreign subsidiaries, respectively. Net income of $5,061,026 and $2,618,610 for the years ended September 30, 2016and 2015, respectively, were earned by foreign subsidiaries and are considered indefinitely reinvested. Amounts held by foreign subsidiaries are generallysubject to U.S. income taxation on repatriation to the U.S. In December 2016, we commenced a subscription rights offering to our stockholders to raise up to $15.0 million through the sale of units, eachconsisting of one share of our series 1 preferred stock, paying cumulative dividends at the rate of 10% of the purchase price per year, and two five-year series1 warrants, upon the exercise of subscription rights at $10.00 per unit. The rights offering extends through January 2017 and may be extended thereafter. Noassurance can be given that the rights offering will result in significant funds for us. In the event that we raise significant external capital from the issuance ofour common stock, preferred stock, or debt instruments, we remain subject to the uncertainties and the volatility of the capital markets over which we have nocontrol. In all of these transactions we may be forced to raise capital on adverse terms or terms that are not reasonable in light of current market conditions. Asa result, persons who acquire our common stock may incur immediate and substantial dilution and, in the case of our issuance of preferred stock or any debtinstrument, we may issue preferred stock with rights and privileges that adversely impact common stockholder rights and, in the case of the issuance of anydebt instrument, the affirmative and negative covenants that we may be required to accept, could adversely impact our financial and operating flexibilitywith consequent adverse impact on the rights of our common stockholders and our common stock market price. Overall, there is no guarantee that cash flow from our existing or future operations and any external capital that we may be able to raise will besufficient to meet our expansion goals and working capital needs. Outlook We anticipate that the outlook for our products and services remains fairly strong and we are positioned well to take advantage of it. We believe there is currently a gradually increasing public awareness of the issues surrounding air quality and that this trend will continue for thenext several years. We also believe there is an increase in public concern regarding the effects of air quality on society and future generations, as well as anincrease in interest by standards-making bodies in creating specifications and techniques for detecting, defining and solving air quality problems. As a result,we believe there will be an increase in interest in our emission monitors, and environmental control products of subsidiary Griffin Filters. 22 Source: CEMTREX INC, 10-K, December 28, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. This Outlook section, and other portions of this document, include certain “forward-looking statements” within the meaning of that term in Section27A of the Securities Act of 1933, and Section 21E of the Securities Exchange Act of 1934, including, among others, those statements preceded by, followingor including the words “believe,” “expect,” “intend,” “anticipate” or similar expressions. These forward-looking statements are based largely on the currentexpectations of management and are subject to a number of assumptions, risks and uncertainties. Our actual results could differ materially from these forward-looking statements. Important factors to consider in evaluating such forward-looking statements include those discussed in Item 1A. Risk Factors as well as: ●the shortage of reliable market data regarding the emission monitoring & air filtration market; ●changes in external competitive market factors or in our internal budgeting process which might impact trends in our results of operations; ●anticipated working capital or other cash requirements; ●changes in our business strategy or an inability to execute our strategy due to unanticipated changes in the market; ●product obsolescence due to the development of new technologies; and ●Various competitive factors that may prevent us from competing successfully in the marketplace. ●In light of these risks and uncertainties, there can be no assurance that the events contemplated by the forward-looking statementscontained in this Form 10-K will in fact occur. ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Not applicable. ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA The financial statements required to be included in this report appear as indexed in the appendix to this report beginning on page F-1. ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE There have been no changes in and/or disagreements with Bharat Parikh & Associates, our independent registered public accountants, onaccounting and financial disclosure matters. ITEM 9A. CONTROLS AND PROCEDURES Our Chief Executive Officer and Vice President of Finance (the “Certifying Officers”) are responsible for establishing and maintaining disclosurecontrols and procedures for the Company. The Certifying Officers have designed such disclosure controls and procedures to ensure that material informationis made known to them, particularly during the period in which this Report was prepared. Evaluation of Controls and Procedures We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our Securities Exchange Actreports is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information isaccumulated and communicated to our management, including our chief executive and financial officer, to allow timely decisions regarding requireddisclosure. In designing and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how welldesigned and operated, can provide only reasonable assurance of achieving the desired control objectives, as ours are designed to do, and managementnecessarily was required to apply its judgment in evaluating the cost- benefit relationship of possible controls and procedures. 23 Source: CEMTREX INC, 10-K, December 28, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Management’s Report on Internal Control Over Financial Reporting The company’s management is responsible for establishing and maintaining adequate “internal control over financial reporting” (as defined inExchange Act Rules 13a-15(f) and 15d-15(f)). Management evaluates the effectiveness of the company’s internal control over financial reporting using thecriteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (1992 framework). Management, under the supervision andwith the participation of the company’s Chief Executive Officer and Vice President of Finance, assessed the effectiveness of the company’s internal controlover financial reporting as of September 30, 2016, and concluded that it is effective. This report does not include an attestation report of the Company’s Independent Registered Public Accounting Firm regarding internal control overfinancial reporting. Management’s report was not subject to attestation by the Company’s Independent Registered Public Accounting Firm pursuant totemporary rules of the Securities and Exchange Commission that permit the Company to provide only Management’s report in this Annual Report. As of September 30, 2016, an evaluation was performed under the supervision and with the participation of our management, including our ChiefExecutive Officer and Principal Financial and Accounting Officer, of the effectiveness of the design and operation of our disclosure controls and procedures.Based upon that evaluation, our Chief Executive Officer and Principal Financial Officer concluded that our disclosure controls and procedures were effective. Changes in Internal Controls There have been no changes in the Company’s internal controls over financial reporting that occurred during the Company’s last fiscal year towhich this report relates that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting. Limitations on the Effectiveness of Controls A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the controlsystem are met. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues andinstances of fraud, if any, within a company have been detected. The Company’s disclosure controls and procedures are designed to provide reasonableassurance of achieving its objectives. The Company’s chief executive officer and principal financial and accounting officer concluded that the Company’sdisclosure controls and procedures are effective at that reasonable assurance level. ITEM 9B. OTHER INFORMATION None. 24 Source: CEMTREX INC, 10-K, December 28, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. PART III ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCEWe incorporate the information this item requires by referring to the information under the captions Proposal No. 1: Election of Directors andCorporate Governance in our proxy statement for our 2016 annual stockholders’ meeting (“2016 Proxy Statement”), which we will file with the SECpursuant to Regulation 14A. ITEM 11. EXECUTIVE COMPENSATIONWe incorporate the information this item requires by referring to the information under the caption Executive Compensation in our 2016 ProxyStatement, which we will file with the SEC pursuant to Regulation 14A. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS We incorporate the information this item requires by referring to the information under the caption Security Ownership of Certain Beneficial Ownersand Management in our 2016 Proxy Statement, which we will file with the SEC pursuant to Regulation 14A. Securities Authorized for Issuance Under Equity Compensation Plans The following table presents certain information as of September 30, 2016 regarding our equity compensation plans: Plan category Number of CommonStock Shares to beIssued upon Exerciseof OutstandingOptions Weighted AverageExercise Price ofOutstanding Options Number of SecuritiesRemaining Availablefor Future Issuanceunder Plans Approved by security holders $- Not approved by security holders 275,400 $1.73 0 See more detailed information regarding our equity compensation plans in Note 15 in the Notes to Consolidated Financial Statements in this 2016 Form10-K. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE We incorporate the information this item requires by referring to the information under the captions Proposal No. 1: Election of Directors andCorporate Governance in our 2016 Proxy Statement, which we will file with the SEC pursuant to Regulation 14A. ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES We incorporate the information this item requires by referring to the information under the caption Proposal No. 2: Ratification of Appointment ofIndependent Registered Public Accounting Firm in our 2016 Proxy Statement, which we will file with the SEC pursuant to Regulation 14A. 25 Source: CEMTREX INC, 10-K, December 28, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. PART IV ITEM 15 EXHIBITS AND FINANCIAL STATEMENTS (a) Financial Statements and Notes to the Consolidated Financial Statements See Index to Consolidated Financial Statements on page F-1 at beginning of attached financial statements. (b) Exhibits Exhibit No. Description2.1 Asset Purchase Agreement regarding the assets of ROB Holding AG, ROB Electronic GmbH, ROB Connect GmbH, and ROB Engineeringdated Spetember 10, 2013. (5)2.2 Stock Purchase Agreement regarding the stock of Advanced Industrial Services, Inc., AIS Leasing Company, AIS Graphic Services, Inc., andAIS Energy Services, LLC, Dated December 15, 2015. (6)2.3 Asset Purchase agreement between Periscope GmbH and ROB Centrex Assets UG, ROB Cemtrex Automotive GmbH, and ROB CemtrexLogistics GmbH. (7)3.1 Certificate of Incorporation of the company.(1)3.2 By Laws of the company.(1)3.3 Certificate of Amendment of Certificate of Incorporation, dated September 29, 2006.(1)3.4 Certificate of Amendment of Certificate of Incorporation, dated March 30, 2007.(1)3.5 Certificate of Amendment of Certificate of Incorporation, dated May 16, 2007.(1)3.6 Certificate of Amendment of Certificate of Incorporation, dated August 21, 2007.(1)3.7 Certificate of Amendment of Certificate of Incorporation, dated April 3, 2015.(3)3.8 Certificate of Designation of the Series A Preferred Shares, dated September 8, 2009.(2)3.9 Certificate of Designation of the Series 1 Preferred Stock.(10)4.1 Form of Subscription Rights Certificate. (10)4.2 Form of Series 1 Preferred Stock Certificate. (10)4.3 Form of Series 1 Warrant. (10)10.1 Cemtrex Lease Agreement-Ducon Technologies, Inc.(1)10.2 Lease Agreement between Daniel L. Canino and Griffin Filters, LLC.(1)10.3 Asset Purchase Agreement between Ducon Technologies, Inc. and Cemtrex, Inc.(1)10.4 Agreement and Assignment of Membership Interests between Aron Govil and Cemtrex, Inc.(1)10.5 8.0% Convertible Subordinated Debenture.(1)10.6 Letter Agreement by and between Cemtrex, Inc. and Arun Govil, dated September 8, 2009.(2)10.7 Loan Agreement between Fulton Bank, N.A. and Advanced Industrial Services, Inc., AIS Acquisition, Inc., AIS Leasing Company, datedDecember 15, 2015.(6)10.8 Promissory Note between Kris L. Mailey and AIS Acquisition, Inc. dated December 15, 2015.(6)10.9 Promissory Note between Michael R. Yergo and AIS Acquisition, Inc. dated December 15, 2015.(6)10.1 Term Loan Agreement between Cemtrex GmbH and Sparkasse Bank for Financing of funds within the scope of the Asset-Deals of the ROBGroup, dated October 4, 2013.(8)10.11 Working Capital Credit Line Agreement between Cemtrex GmbH and Sparkasse Bank, dated October 4, 2013 (updated May 8, 2014).(8)10.12 Loan Agreement between ROB Cemtrex GmbH and Sparkasse Bank to finance the purchase of the property at Am Wolfsbaum 1, 75245Neulingen, Germany, dated October 7, 2013, purchase completed March 1, 2014.(9)10.13* Stock Option Agreement entered into as of February 12, 2016 between Cemtrex, Inc. and Saagar Govil14.1 Corporate Code of Business Ethics.(4)21.1* Subsidiaries of the Registrant31.1* Certification of Chief Executive Officer as required by Rule 13a-14 or 15d-14 of the Exchange Act, as adopted Pursuant to Section 302 of theSarbanes-Oxley Act of 2002.31.2* Certification of Vice President of Finance and Principal Financial Officer as required by Rule 13a-14 or 15d-14 of the Exchange Act, asadopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.32.1* Certification of Chief Executive Officer Pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act 0f of 2002.32.2* Certification of Vice President of Finance and Principal Financial Officer Pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 ofthe Sarbanes-Oxley Act 0f of 2002.101.INS* XBRL Instance Document101.SCH* XBRL Taxonomy Extension Schema101.CAL* XBRL Taxonomy Extension Calculation Linkbase101.DEF* XBRL Taxonomy Extension Definition Linkbase101.LAB* XBRL Taxonomy Extension Label Linkbase101.PRE* XBRL Taxonomy Extension Presentation Linkbase *Filed herewith (1)Incorporated by reference from Form 10-12G filed on May 22, 2008.(2)Incorporated by reference from Form 8-K filed on September 10, 2009.(3)Incorporated by reference from Form 8-K filed on August 22, 2016.(4)Incorporated by reference from Form 8-K filed on July 1, 2016.(5)Incorporated by reference from Form 10-K filed on August 25, 2016.(6)Incorporated by reference from Form 8-K/A filed on September 26, 2016.(7)Incorporated by reference from Form 8-K/A filed on November 4, 2016.(8)Incorporated by reference from Form 8-K/A filed on November 9, 2016.(9)ncorporated by reference from Form 10-Q/A filed on November 10, 2016.(10)Incorporated by reference from Form S-1 filed on August 29, 2016 and as amended on November 4, 2016, November 23, 2016, and December 7, 2016 26 Source: CEMTREX INC, 10-K, December 28, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed onits behalf by the undersigned, thereunto duly authorized. CEMTREX, INC. December 28, 2016By:/s/ Saagar Govil . Saagar Govil, Chairman of the Board, CEO, President & Secretary (Principal Executive Officer) Pursuant to the requirements of the Securities and Exchange Act of 1934, this report has been signed below by the following persons on behalf of theregistrant and in the capacities and on the dates indicated. December 28, 2016By:./s/ Saagar Govil Saagar Govil, Chairman of the Board, CEO, President & Secretary (Principal Executive Officer) December 28, 2016By:/s/ Renato Dela Rama . Renato Dela Rama, Vice President of Finance (Principal Financial and Accounting Officer) December 28, 2016By:/s/ Raju Panjwani Raju Panjwani, Director December 28, 2016By:/s/ Sunny Patel Sunny Patel, Director December 28, 2016By:/s/ Shamik Shah Shamik Shah, Director December 28, 2016By:/s/ Aron Govil Aron Govil, Executive Director 27 Source: CEMTREX INC, 10-K, December 28, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Index to the Consolidated Financial Statements Contents Page(s) Reports of Independent Registered Public Accounting Firm F-2 Consolidated Balance Sheets at September 30, 2016 and 2015 F-3 Consolidated Statements of Operations and Comprehensive Income for the Fiscal Years Ended September 30, 2016 and 2015 F-4 Consolidated Statements of Shareholders’ Equity for the Fiscal Years Ended September 30, 2016 and 2015 F-5 Consolidated Statement of Cash Flows for Fiscal Years Ended September 30, 2016 and 2015 F-6 Notes to the Consolidated Financial Statements F-7 F-1 Source: CEMTREX INC, 10-K, December 28, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors and Shareholders of Cemtrex, Inc. We have audited the consolidated balance sheet of Cemtrex, Inc. (the “Company”) and subsidiaries as of September 30, 2016 and 2015 and the relatedconsolidated statements of income, retained earnings and cash flows for the years then ended. These financial statements are the responsibility of theCompany’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We did not audit thefinancial statements of Advanced Industrial Services Inc, a wholly owned subsidiary, which statements reflect total assets of $11,833,564 as of September 30,2016 and total revenues of $16,751,330 for the year then ended. Those statements were audited by other auditors whose report has been furnished to us, andour opinion, in so far as it relates to the amounts included for Advanced Industrial Services Inc., is based solely on the report of the other auditors. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require thatwe plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is notrequired to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal controlover financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinionon the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on atest basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used andsignificant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provide a reasonablebasis for our opinion. In our opinion, based on our audits and the report of other auditors, the consolidated financial statements referred to above present fairly, in all materialrespects, the financial position of the Company and subsidiaries as of September 30, 2016 and 2015 and the results of their operations and their cash flows forthe years then ended in conformity with accounting principles generally accepted in the United States of America. /s/Bharat Parikh & Associates Bharat Parikh & Associates 4940, McDermott Road, Plano, TX 75024, USA December 28, 2016 F-2 Source: CEMTREX INC, 10-K, December 28, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. CONSOLIDATED BALANCE SHEETS September 30, 2016 September 30, 2015 Assets Current assets Cash and equivalents $6,045,521 $1,486,737 Restricted Cash 698,459 - Accounts receivable, net 13,568,727 4,771,044 Inventory, net 14,071,627 6,369,516 Prepaid expenses and other current assets 2,475,404 893,792 Deferred tax asset 67,000 - Total current assets 36,926,738 13,521,089 Property and equipment, net 17,647,888 8,142,523 Goodwill 918,819 845,000 Other assets 540,064 35,630 Total Assets $56,033,509 $22,544,242 Liabilities & Stockholders’ Equity (Deficit) Current liabilities Accounts payable $7,733,459 $4,208,783 Credit card payable 294,169 - Sales tax payable 263,107 177,795 Revolving line of credit 3,454,913 2,129,711 Accrued expenses 5,174,529 309,130 Deferred revenue 1,387,139 - Accrued income taxes 1,042,589 73,746 Convertible notes payable 3,748,000 1,274,000 Current portion of long-term liabilities 2,056,887 654,020 Total current liabilities 25,154,792 8,827,185 Long-term liabilities Loans payable to bank 6,402,228 2,383,815 Notes payable 1,222,158 - Mortgage payable 3,869,066 4,088,618 Notes payable to related party 3,599,307 119,055 Total long-term liabilities 15,092,759 6,591,488 Deferred tax liabilities 94,000 - Total liabilities 40,341,551 15,418,673 Commitments and contingencies - - Shareholders’ equity Preferred stock series A, $0.001 par value, 10,000,000 shares authorized,1,000,000 sharesissued and outstanding, respectively 1,000 1,000 Common stock, $0.001 par value, 20,000,000 shares authorized, 9,460,283 shares issuedand outstanding at September 30, 2016 and 7,158,087 shares issued and outstanding atSeptember 30, 2015 9,460 7,158 Additional paid-in capital 5,230,745 1,020,444 Retained earnings 11,424,900 6,430,855 Accumulated other comprehensive loss (974,147) (333,888)Total shareholders’ equity 15,691,958 7,125,569 Total liabilities and shareholders’ equity $56,033,509 $22,544,242 The accompanying notes are an integral part of these consolidated financial statements. F-3 Source: CEMTREX INC, 10-K, December 28, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME For the year ended September 30, 2016 2015 Revenues Industrial Products & Services Revenue $49,244,011 $31,622,344 Electronics Manufacturing Services Revenue 44,460,549 25,265,045 Total revenues 93,704,560 56,887,389 Cost of revenues Cost of Sales, Industrial Products & Services 35,496,098 24,843,753 Cost of Sales, Electronics Manufacturing Services 28,994,792 15,721,066 Total cost of revenues 64,490,890 40,564,819 Gross profit 29,213,670 16,322,570 Operating expenses General and administrative 24,149,772 13,821,546 Total operating expenses 24,149,772 13,821,546 Operating income (loss) 5,063,898 2,501,024 Other income (expense) Other Income (expense) 1,693,931 834,290 Interest Expense (673,612) (496,281)Total other income (expense) 1,020,319 338,009 Net income (loss) before income taxes 6,084,217 2,839,033 Provision for income taxes 1,090,172 917 Net income (loss) 4,994,045 2,838,116 Other comprehensive income/(loss) Foreign currency translation gain/(loss) (640,259) (177,329)Comprehensive income/(loss) $4,353,786 $2,660,787 Income (Loss) Per Share-Basic $0.59 $0.41 Income (Loss) Per Share-Diluted $0.58 $0.40 Weighted Average Number of Shares-Basic 8,441,620 6,843,666 Weighted Average Number of Shares-Diluted 8,581,607 6,911,235 The accompanying notes are an integral part of these consolidated financial statements. F-4 Source: CEMTREX INC, 10-K, December 28, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY Preferred StockSeries A Par Common Stock Par Value $0.001 Value $0.01 Retained Accumulated Additional Earnings other Total Number of Number of Paid-in (Accumulated Comperhensive Stockholders’ Shares Amount Shares Amount Capital Deficit) Income(loss) Equity Balance at September 30, 2014 1,000,000 $1,000 6,766,587 $6,767 $199,562 $3,592,739 $(156,559) $3,643,509 Foreign currency translations $(177,329) $(177,329)Stock issued for employeeoptions 16,264 $16 $44,251 $44,267 Stock issued for convertibledebt 371,069 $371 $763,645 $764,016 Stock issued for services 4,167 $4 $12,986 $12,990 Net income $2,838,116 $2,838,116 Balance at September 30, 2015 1,000,000 $1,000 7,158,087 $7,158 $1,020,444 $6,430,855 $(333,888) $7,125,569 Foreign currency translations $(640,259) $(640,259)Stock issued for employeeoptions 7,583 $8 $51,888 $51,896 Stock issued for convertibledebt 1,919,492 $1,919 $2,989,488 $2,991,407 Stock issued for services 57,661 $58 $169,242 $169,300 Stock issued for acquisition 317,460 $317 $999,683 $1,000,000 Net income $4,994,045 $4,994,045 Balance at September 30, 2016 1,000,000 $1,000 9,460,283 $9,460 $5,230,745 $11,424,900 $(974,147) $15,691,958 The accompanying notes are an integral part of these consolidated financial statements. F-5 Source: CEMTREX INC, 10-K, December 28, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. CONSOLIDATED STATEMENTS OF CASH FLOWS For the year ended September 30, 2016 2015 Cash Flows from Operating Activities Net income $4,994,045 $2,838,116 Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 2,296,010 772,434 Deferred revenue 1,126,809 - Share-based compensation 51,896 57,257 Shares issued for acquisition 1,000,000 - Discounts on convertible debt 249,000 64,000 Interest expense on convertible debt 138,907 6,016 Deferred taxes 102,000 - Goodwill 4,633 - Changes in operating assets and liabilities net of effects from acquisition of subsidiaries: Restricted cash (90,032) - Accounts receivable (5,585,686) (732,704)Inventory 764,640 (99,189)Prepaid expenses and other assets 2,342,744 (362,530)Others (170,926) 16,798 Accounts payable 1,376,793 1,588,110 Credit card payable 66,891 25,841 Sales tax payable 85,312 50,922 Revolving line of credit (6,116,739) (225,553)Accrued expenses 4,297,221 (131,306)Income taxes payable 961,693 11,714 Net cash provided by (used by) operating activities 7,895,211 3,879,926 Cash Flows from Investing Activities Purchase of property and equipment (663,834) (1,515,861)Redemption of short-term investments - 559,815 Investment in subsidiary, net of cash received (16,482,882) - Net cash provided by (used by) investing activities (17,146,716) (956,046) Cash Flows from Financing Activities Proceeds from notes payable 2,217,936 - Payments on notes payable (486,125) - Proceeds/(payments) on affiliated loan 3,480,252 (1,750,736)Proceeds from bank loans 5,176,262 - Payments on bank loans (1,655,536) (1,800,502)Proceeds from convertible notes 5,077,500 1,968,000 Net cash provided by (used by) financing activities 13,810,289 (1,583,238) Net increase (decrease) in cash 4,558,784 1,340,642 Cash beginning of period 1,486,737 146,095 Cash end of period $6,045,521 $1,486,737 Supplemental Disclosure of Cash Flow Information: Cash paid during the period for interest $605,826 $312,286 Cash paid during the period for income taxes $9,943 $5,032 The accompanying notes are an integral part of these consolidated financial statements. F-6 Source: CEMTREX INC, 10-K, December 28, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 1 – ORGANIZATION AND PLAN OF OPERATIONS The Company was incorporated on April 27, 1998, in the state of Delaware under the name “Diversified American Holdings, Inc.” The Companysubsequently changed its name to “Cemtrex Inc.” on December 16, 2004. Unless the context requires otherwise, all references to “we”, “our”, “us”,“Company”, “registrant”, “Cemtrex” or “management” refer to Cemtrex, Inc. and its subsidiaries. Cemtrex is a leading diversified technology company thatoperates in a wide array of business segments and provides solutions to meet today’s industrial and manufacturing challenges. The Company providesmanufacturing services of advanced electronic system assemblies, provides broad-based industrial services, instruments & emission monitors for industrialprocesses, and provides industrial air filtration & environmental control systems. Through our Electronics Manufacturing Services (“EMS”) segment, we provide end to end electronic manufacturing services, which include productdesign and sustaining engineering services, printed circuit board assembly and production, cabling and wire harnessing, systems integration, comprehensivetesting services and completely assembled electronic products. Our EMS segment offers fully integrated contract manufacturing services to global originalequipment manufacturers (OEMs) and technology companies that operate primarily in the medical, industrial, automation, automotive, and renewablemarkets. Through our Industrial Products and Services (“IPS”) segment, we provide a complete line of air filtration and environmental control products to awide variety of industrial and manufacturing industries worldwide. The segment also manufactures, sells, and services monitoring instruments, software andsystems for measurement of emissions of Greenhouse gases, hazardous gases, particulate and other regulated pollutants used in emissions trading globally aswell as for industrial processes. We also market monitoring and analysis equipment for gas and liquid measurement for various downstream oil & gasapplications as well as various industrial process applications. In addition we, through our newly acquired business, offer one-source expertise andcapabilities in plant and equipment erection, relocation, and disassembly in a wide variety of industrial markets like automotive, printing & graphics,industrial automation, packaging, and chemicals among others. On December 15, 2015 we acquired Advanced Industrial Services Inc. (“AIS”) and its affiliate subsidiary company based in York, Pennsylvania for apurchase price of approximately $7.7 million and acquisition related expenses of $476,340. The purchase price was paid with $5.2 million in cash,$1,500,000 in a seller’s note, and $1,000,000 in the form of 315,458 shares of Cemtrex restricted Common Stock. AIS averaged approximately $23 million inannual revenue and $2.4 million in annual normalized EBITDA over the two calendar years 2013 and 2014. We worked with a local bank to finance the$5.25 million self-amortizing, seven (7) year term loan and $3.5 million working capital credit line for the transaction. The loans carry annual interest rates of30 day LIBOR plus 2.25 and 2.0 respectively. The seller’s note is for 3 years at 6% (see NOTE 13 BUSINESS COMBINATION). On May 31, 2016 we acquired machinery & equipment, electronics manufacturing business and logistics business from a German company,Periscope, GmbH (“Periscope”) and placed them in three newly formed entities: ROB Cemtrex Assets UG, ROB Cemtrex Automotive GmbH and ROBCemtrex Logistics GmbH respectively. Periscope’s electronic manufacturing business deals primarily with the major German automotive manufacturers,including Tier 1 suppliers in the industry, as well as for industries like telecommunications, industrial goods, luxury consumer products, display technology,and other industrial OEMs. Periscope had more than 35 years of industrial operating experience. The Periscope acquisition was completed through use of$4,902,670 of Company cash, $717,936 in Seller note and $3,298,600 in proceeds from issuance of a note to Ducon Technologies Inc., a related party (seeNOTE 13 BUSINESS COMBINATION). F-7 Source: CEMTREX INC, 10-K, December 28, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. NOTE 2 – BASIS OF PRESENTATION AND CRITICAL ACCOUNTING POLICIES Basis of Presentation and Use of Estimates The Management of the Company is responsible for the selection and use of appropriate accounting policies and the appropriateness of accountingpolicies and their application. Critical accounting policies and practices are those that are both most important to the portrayal of the Company’s financialcondition and results and require management’s most difficult, subjective, or complex judgments, often as a result of the need to make estimates about theeffects of matters that are inherently uncertain. The Company’s significant and critical accounting policies and practices are disclosed below as required bygenerally accepted accounting principles. Basis of Presentation The accompanying consolidated financial statements and related notes have been prepared in accordance with accounting principles generallyaccepted in the United States of America (“U.S. GAAP”). Fiscal Year-End The Company elected September 30 as its fiscal year-end date. Use of Estimates and Assumptions and Critical Accounting Estimates and Assumptions The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requiresmanagement to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities atthe date(s) of the financial statements and the reported amounts of revenues and expenses during the reporting period(s). Critical accounting estimates are estimates for which (a) the nature of the estimate is material due to the levels of subjectivity and judgmentnecessary to account for highly uncertain matters or the susceptibility of such matters to change and (b) the impact of the estimate on financial condition oroperating performance is material. The Company’s critical accounting estimates and assumptions affecting the financial statements were: i.Allowance for doubtful accounts: Management’s estimate of the allowance for doubtful accounts is based on historical sales, historical loss levels,and an analysis of the collectability of individual accounts; and general economic conditions that may affect a client’s ability to pay. The Companyevaluated the key factors and assumptions used to develop the allowance in determining that it is reasonable in relation to the financial statementstaken as a whole; ii.Inventory Obsolescence and Markdowns: The Company’s estimate of potentially excess and slow-moving inventories is based on evaluation ofinventory levels and aging, review of inventory turns and historical sales experiences. The Company’s estimate of reserve for inventory shrinkage isbased on the historical results of physical inventory cycle counts; iii.Fair value of long-lived assets: Fair value is generally determined using the asset’s expected future discounted cash flows or market value, if readilydeterminable. If long-lived assets are determined to be recoverable, but the newly determined remaining estimated useful lives are shorter thanoriginally estimated, the net book values of the long-lived assets are depreciated over the newly determined remaining estimated useful lives. TheCompany considers the following to be some examples of important indicators that may trigger an impairment review: i.significant under-performance or losses of assets relative to expected historical or projected future operating results; ii.significant changes in the manner or use of assets or in the Company’s overall strategy with respect to the manner or use of the acquiredassets or changes in the Company’s overall business strategy; iii.significant negative industry or economic trends; iv.increased competitive pressures; v.a significant decline in the Company’s stock price for a sustained period of time; and vi.regulatory changes. The Company evaluates acquired assets for potential impairment indicators at least annually and more frequently uponthe occurrence of such events. iv.Valuation allowance for deferred tax assets: Management assumes that the realization of the Company’s net deferred tax assets resulting from its netoperating loss (“NOL”) carry–forwards for Federal income tax purposes that may be offset against future taxable income was not considered morelikely than not and accordingly, the potential tax benefits of the net loss carry- forwards are offset by a full valuation allowance. Management madethis assumption based on (a) the Company has incurred recurring losses, (b) general economic conditions, and (c) its ability to raise additional fundsto support its daily operations by way of a public or private offering, among other factors. F-8 Source: CEMTREX INC, 10-K, December 28, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. These significant accounting estimates or assumptions bear the risk of change due to the fact that there are uncertainties attached to these estimatesor assumptions, and certain estimates or assumptions are difficult to measure or value. Management bases its estimates on historical experience and on various assumptions that are believed to be reasonable in relation to the financialstatements taken as a whole under the circumstances, the results of which form the basis for making judgments about the carrying values of assets andliabilities that are not readily apparent from other sources. Management regularly evaluates the key factors and assumptions used to develop the estimates utilizing currently available information, changes infacts and circumstances, historical experience and reasonable assumptions. After such evaluations, if deemed appropriate, those estimates are adjustedaccordingly. Actual results could differ from those estimates. Principles of Consolidation The Company applies the guidance of Topic 810 “Consolidation” of the FASB Accounting Standards Codification to determine whether and how toconsolidate another entity. Pursuant to ASC Paragraph 810-10-15-10 all majority-owned subsidiaries—all entities in which a parent has a controllingfinancial interest—shall be consolidated except (1) when control does not rest with the parent, the majority owner; (2) if the parent is a broker-dealer withinthe scope of Topic 940 and control is likely to be temporary; (3) consolidation by an investment company within the scope of Topic 946 of a non-investment-company investee. Pursuant to ASC Paragraph 810-10-15-8 the usual condition for a controlling financial interest is ownership of a majorityvoting interest, and, therefore, as a general rule ownership by one reporting entity, directly or indirectly, of more than 50 percent of the outstanding votingshares of another entity is a condition pointing toward consolidation. The power to control may also exist with a lesser percentage of ownership, for example,by contract, lease, agreement with other stockholders, or by court decree. The Company consolidates all less-than-majority-owned subsidiaries, if any, inwhich the parent’s power to control exists. The Company’s consolidated subsidiaries and/or entities are as follows: Name of consolidated State or other jurisdiction of Date of incorporation or Attributablesubsidiary or entity incorporation or organization formation (date of acquisition) Interest Griffin Filters, LLC New York September 6, 2005 (April 30, 2007) 100%Cemtrex, Ltd. Hong Kong September 4, 2013 100%ROB Cemtrex GmbH Germany August 15, 2013 (October 31, 2013) 100%ROB Systems, Srl Romania November 1, 2013 100%Advanced Industrial Services, Inc. Pennsylvania July 20, 1984 (December 15, 2015) 100%ROB Cemtrex Assets UG Germany May 12, 2016 100%ROB Cemtrex Automotive GmbH Germany May 12, 2016 100%ROB Cemtrex Logistics GmbH Germany May 12, 2016 100% The consolidated financial statements include all accounts of the Company and its wholly-owned subsidiary as of the reporting period end dates andfor the reporting periods then ended. All inter-company balances and transactions have been eliminated. F-9 Source: CEMTREX INC, 10-K, December 28, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Fair Value of Financial Instruments The Company follows paragraph 825-10-50-10 of the FASB Accounting Standards Codification for disclosures about fair value of its financialinstruments and paragraph 820-10-35-37 of the FASB Accounting Standards Codification (“Paragraph 820-10-35-37”) to measure the fair value of itsfinancial instruments. Paragraph 820-10-35-37 establishes a framework for measuring fair value in generally accepted accounting principles (GAAP), andexpands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, Paragraph820-10-35-37 establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three (3) broad levels. Thefair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority tounobservable inputs. The three (3) levels of fair value hierarchy defined by Paragraph 820-10-35-37 are described below: Level 1 -Quoted market prices available in active markets for identical assets or liabilities as of the reporting date. Level 2 -Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of thereporting date. Level 3 -Pricing inputs that are generally observable inputs and not corroborated by market data. Financial assets are considered Level 3 when their fair values are determined using pricing models, discounted cash flow methodologies or similartechniques and at least one significant model assumption or input is unobservable. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowestpriority to unobservable inputs. If the inputs used to measure the financial assets and liabilities fall within more than one level described above, thecategorization is based on the lowest level input that is significant to the fair value measurement of the instrument. The carrying amounts of the Company’s financial assets and liabilities, such as cash, prepaid expenses and accounts payable, approximate their fairvalues because of the short maturity of these instruments. Transactions involving related parties cannot be presumed to be carried out on an arm’s-length basis, as the requisite conditions of competitive, free-market dealings may not exist. Representations about transactions with related parties, if made, shall not imply that the related party transactions wereconsummated on terms equivalent to those that prevail in arm’s-length transactions unless such representations can be substantiated. Fair Value of Non-Financial Assets or Liabilities Measured on a Recurring Basis The Company’s non-financial assets include inventories. The Company identifies potentially excess and slow-moving inventories by evaluatingturn rates, inventory levels and other factors. Excess quantities are identified through evaluation of inventory aging, review of inventory turns and historicalsales experiences. The Company provides lower of cost or market reserves for such identified excess and slow- moving inventories. The Company establishesa reserve for inventory shrinkage, if any, based on the historical results of physical inventory cycle counts. Carrying Value, Recoverability and Impairment of Long-Lived Assets The Company has adopted paragraph 360-10-35-17 of the FASB Accounting Standards Codification for its 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 indicatethat the carrying amount of an asset may not be recoverable. F-10 Source: CEMTREX INC, 10-K, December 28, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. The Company assesses the recoverability of its long-lived assets by comparing the projected undiscounted net cash flows associated with the relatedlong-lived asset or group of long-lived assets over their remaining estimated useful lives against their respective carrying amounts. Impairment, if any, isbased 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 discountedcash flows or market value, if readily determinable. When long-lived assets are determined to be recoverable, but the newly determined remaining estimateduseful lives are shorter than originally estimated, the net book values of the long-lived assets are depreciated over the newly determined remaining estimateduseful lives. The Company considers the following to be some examples of important indicators that may trigger an impairment review: (i) significant under-performance or losses of assets relative to expected historical or projected future operating results; (ii) significant changes in the manner or use of assets or inthe Company’s overall strategy with respect to the manner or use of the acquired assets or changes in the Company’s overall business strategy; (iii)significant negative industry or economic trends; (iv) increased competitive pressures; (v) a significant decline in the Company’s stock price for a sustainedperiod of time; and (vi) regulatory changes. The Company evaluates acquired assets for potential impairment indicators at least annually and more frequentlyupon the occurrence of such events. The key assumptions used in management’s estimates of projected cash flow deal largely with forecasts of sales levels, gross margins, and operatingcosts of the manufacturing facilities. These forecasts are typically based on historical trends and take into account recent developments as well asmanagement’s plans and intentions. Any difficulty in manufacturing or sourcing raw materials on a cost effective basis would significantly impact theprojected future cash flows of the Company’s manufacturing facilities and potentially lead to an impairment charge for long-lived assets. Other factors, suchas increased competition or a decrease in the desirability of the Company’s products, could lead to lower projected sales levels, which would adverselyimpact cash flows. A significant change in cash flows in the future could result in an impairment of long lived assets. 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. Short-term Investments The Company’s short-term investments consist of certificates of deposit with original maturities of greater than three months. They are bought andheld principally for the purpose of selling them in the near-term and are classified as trading securities. Trading securities are recorded at fair value on theconsolidated balance sheets in current assets, with the change in fair value during the year recorded in earnings. Accounts Receivable and Allowance for Doubtful Accounts Accounts receivable are recorded at the invoiced amount, net of an allowance for doubtful accounts. The Company follows paragraph 310-10-50-9of the FASB Accounting Standards Codification to estimate the allowance for doubtful accounts. The Company performs on-going credit evaluations of itscustomers and adjusts credit limits based upon payment history and the customer’s current credit worthiness, as determined by the review of their currentcredit information; and determines the allowance for doubtful accounts based on historical write-off experience, customer specific facts and general economicconditions that may affect a client’s ability to pay. Pursuant to paragraph 310-10-50-2 of the FASB Accounting Standards Codification account balances are charged off against the allowance after allmeans of collection have been exhausted and the potential for recovery is considered remote. The Company has adopted paragraph 310-10-50-6 of the FASBAccounting Standards Codification and determine when receivables are past due or delinquent based on how recently payments have been received. Outstanding account balances are reviewed individually for collectability. The allowance for doubtful accounts is the Company’s best estimate ofthe amount of probable credit losses in the Company’s existing accounts receivable. Bad debt expense is included in general and administrative expenses, ifany. F-11 Source: CEMTREX INC, 10-K, December 28, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. The Company has $121,650 and $65,002 allowance for doubtful accounts at September 30, 2016 and 2015, respectively. The Company does not have any off-balance-sheet credit exposure to its customers at September 30, 2016 or 2015. Inventory and Cost of Goods Sold Inventory Valuation 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 valueinclude (i) current sales data and historical return rates, (ii) estimates of future demand, and (iii) competitive pricing pressures. Inventory Obsolescence and Markdowns The Company evaluates its current level of inventory considering historical sales and other factors and, based on this evaluation, classify inventorymarkdowns in the income statement as a component of cost of goods sold pursuant to Paragraph 420-10-S99 of the FASB Accounting Standards Codificationto adjust inventory to net realizable value. These markdowns are estimates, which could vary significantly from actual requirements if future economicconditions, customer demand or competition differ from expectations. There was $970,763 and $148,967 in inventory obsolescence at September 30, 2016 and 2015, respectively. Property and Equipment Property and equipment is recorded at cost. Expenditures for major additions and betterments are capitalized. Maintenance and repairs are chargedto operations as incurred. Depreciation of property and equipment is computed by the straight-line method (after taking into account their respectiveestimated residual values shown in the table below) over the estimated useful lives of the respective assets. 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 orloss is reflected in statements of operations. Goodwill Goodwill represents the excess of cost over the fair value of net assets of businesses acquired. The Company accounts for goodwill under theguidance of the ASC Topic 350, “Intangibles: Goodwill and Other”. Goodwill acquired in a purchase business combination and determined to have anindefinite useful life is not amortized, but instead tested for impairment, at least annually, in accordance with this guidance. The recoverability of goodwill issubject to an annual impairment test or whenever an event occurs or circumstances change that would more likely than not result in an impairment. TheCompany tests goodwill for impairment at the reporting unit level on an annual basis as of September 30 and between annual tests when an event occurs orcircumstances change that could indicate that the asset might be impaired. In accordance with the FASB revised guidance on “Testing of Goodwill forImpairment,” a company first has the option to assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unitis less than its carrying amount. If the company decides, as a result of its qualitative assessment, that it is more-likely-than- not that the fair value of areporting unit is less than its carrying amount, the quantitative impairment test is mandatory. Otherwise, no further testing is required. The quantitativeimpairment test consists of a two-step goodwill impairment test. The first step compares the fair value of each reporting unit to its carrying amount. If the fairvalue of each reporting unit exceeds its carrying amount, goodwill is not considered to be impaired and the second step will not be required. If the carryingamount of a reporting unit exceeds its fair value, the second step compares the implied fair value of goodwill to the carrying value of a reporting unit’sgoodwill. The implied fair value of goodwill is determined in a manner similar to accounting for a business combination with the allocation of the assessedfair value determined in the first step to the assets and liabilities of the reporting unit. The excess of the fair value of the reporting unit over the amountsassigned to the assets and liabilities is the implied fair value of goodwill. This allocation process is only performed for purposes of evaluating goodwillimpairment and does not result in an entry to adjust the value of any assets or liabilities. An impairment loss is recognized for any excess in the carryingvalue of goodwill over the implied fair value of goodwill. F-12 Source: CEMTREX INC, 10-K, December 28, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Leases Lease agreements are evaluated to determine whether they are capital leases or operating leases in accordance with paragraph 840-10-25-1 of theFASB Accounting Standards Codification (“Paragraph 840-10-25-1”). Pursuant to Paragraph 840-10-25-1 A lessee and a lessor shall consider whether a leasemeets any of the following four criteria as part of classifying the lease at its inception under the guidance in the Lessees Subsection of this Section (for thelessee) and the Lessors Subsection of this Section (for the lessor): a. Transfer of ownership. The lease transfers ownership of the property to the lessee by theend of the lease term. This criterion is met in situations in which the lease agreement provides for the transfer of title at or shortly after the end of the leaseterm in exchange for the payment of a nominal fee, for example, the minimum required by statutory regulation to transfer title. b. Bargain purchase option.The lease contains a bargain purchase option. c. Lease term. The lease term is equal to 75 percent or more of the estimated economic life of the leasedproperty. d. Minimum lease payments. The present value at the beginning of the lease term of the minimum lease payments, excluding that portion of thepayments representing executory costs such as insurance, maintenance, and taxes to be paid by the lessor, including any profit thereon, equals or exceeds 90percent of the excess of the fair value of the leased property to the lessor at lease inception over any related investment tax credit retained by the lessor andexpected to be realized by the lessor. In accordance with paragraphs 840-10- 25-29 and 840-10-25-30, if at its inception a lease meets any of the four leaseclassification criteria in Paragraph 840-10-25-1, the lease shall be classified by the lessee as a capital lease; and if none of the four criteria in Paragraph 840-10-25-1 are met, the lease shall be classified by the lessee as an operating lease. Pursuant to Paragraph 840-10- 25-31 a lessee shall compute the present valueof the minimum lease payments using the lessee’s incremental borrowing rate unless both of the following conditions are met, in which circumstance thelessee shall use the implicit rate: a.) It is practicable for the lessee to learn the implicit rate computed by the lessor. b.) The implicit rate computed by thelessor is less than the lessee’s incremental borrowing rate. Capital lease assets are depreciated on a straight line method, over the capital lease assets estimateduseful lives consistent with the Company’s normal depreciation policy for tangible fixed assets. Interest charges are expensed over the period of the lease inrelation to the carrying value of the capital lease obligation. Operating leases primarily relate to the Company’s leases of office spaces. When the terms of an operating lease include tenant improvementallowances, periods of free rent, rent concessions, and/or rent escalation amounts, the Company establishes a deferred rent liability for the difference betweenthe scheduled rent payment and the straight-line rent expense recognized, which is amortized over the underlying lease term on a straight-line basis as areduction of rent expense. The Company has adopted Subtopic 350-30 of the FASB Accounting Standards Codification for intangible assets other than goodwill. Under therequirements, the Company amortizes the acquisition costs of intangible assets other than goodwill on a straight-line basis over their estimated useful lives,the terms of the exclusive licenses and/or agreements, or the terms of legal lives of the intangible assets, whichever is shorter. Upon becoming fullyamortized, the related cost and accumulated amortization are removed from the accounts. F-13 Source: CEMTREX INC, 10-K, December 28, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Related Parties The Company follows subtopic 850-10 of the FASB Accounting Standards Codification for the identification of related parties and disclosure ofrelated party transactions. Pursuant to Section 850-10-20 the related parties include a. affiliates of the Company; b. entities for which investments in their equity securitieswould be required, absent the election of the fair value option under the Fair Value Option Subsection of Section 825–10–15, to be accounted for by theequity method by the investing entity; c. trusts for the benefit of employees, such as pension and profit-sharing trusts that are managed by or under thetrusteeship of management; d. principal owners of the Company; e. management of the Company; f. other parties with which the Company may deal if oneparty controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might beprevented from fully pursuing its own separate interests; and g. other parties that can significantly influence the management or operating policies of thetransacting parties or that have an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or moreof the transacting parties might be prevented from fully pursuing its own separate interests. 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 orcombined financial statements is not required in those statements. The disclosures shall include: a. the nature of the relationship(s) involved b. description ofthe transactions, including transactions to which no amounts or nominal amounts were ascribed, for each of the periods for which income statements arepresented, and such other information deemed necessary to an understanding of the effects of the transactions on the financial statements; c. the dollaramounts of transactions for each of the periods for which income statements are presented and the effects of any change in the method of establishing theterms 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 otherwiseapparent, 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 conditionsmay 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 oneor more future events occur or fail to occur. The Company assesses such contingent liabilities, and such assessment inherently involves an exercise ofjudgment. In assessing loss contingencies related to legal proceedings that are pending against the Company or unasserted claims that may result in suchproceedings, the Company evaluates the perceived merits of any legal proceedings or unasserted claims as well as the perceived merits of the amount of reliefsought 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 losscontingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, and an estimate ofthe range of possible losses, if determinable and material, would be disclosed. Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the guarantees would be disclosed.Management does not believe, based upon information available at this time, that these matters will have a material adverse effect on the Company’sconsolidated financial position, results of operations or cash flows. However, there is no assurance that such matters will not materially and adversely affectthe Company’s business, financial position, and results of operations or cash flows. F-14 Source: CEMTREX INC, 10-K, December 28, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Revenue Recognition The Company follows paragraph 605-10-S99-1 of the FASB Accounting Standards Codification for revenue recognition. The Company recognizesrevenue when it is realized or realizable and earned. The Company considers revenue realized or realizable and earned when all of the following criteria aremet: (i) persuasive evidence of an arrangement exists, (ii) the product has been shipped or the services have been rendered to the customer, (iii) the sales priceis fixed or determinable, and (iv) collectability is reasonably assured. The Company derives a certain amount of its revenues from sales of its products, with revenues being generated upon the shipment of merchandise.Persuasive evidence of an arrangement is demonstrated via sales invoice or contract; the sales price to the customer is fixed upon acceptance of the signedpurchase order or contract and there is no separate sales rebate, discount, or volume incentive. A certain amount of our revenues fall under the percentage-of-completion method of accounting used for long-term contracts. Under this method,sales and gross profit are recognized as work is performed based on the relationship between actual costs incurred and total estimated costs at completion.Sales and gross profit are adjusted prospectively for revisions in estimated total contract costs and contract values. Estimated losses are recorded whenidentified. Shipping and Handling Costs The Company accounts for shipping and handling fees in accordance with paragraph 605-45-45-19 of the FASB Accounting StandardsCodification. While amounts charged to customers for shipping products are included in revenues, the related costs are classified in cost of goods sold asincurred. Income Tax Provision The Company accounts for income taxes under Section 740-10-30 of the FASB Accounting Standards Codification, which requires recognition ofdeferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Underthis method, deferred tax assets and liabilities are based on the differences between the financial statement and tax bases of assets and liabilities usingenacted 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 extentmanagement concludes it is more likely than not that the assets will not be realized. Deferred tax assets and liabilities are measured using enacted tax ratesexpected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred taxassets and liabilities of a change in tax rates is recognized in the Consolidated Statements of Income and Comprehensive Income in the period that includesthe enactment date. The Company adopted section 740-10-25 of the FASB Accounting Standards Codification (“Section 740-10-25”). Section 740-10-25 addresses thedetermination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under Section 740-10-25, 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 onexamination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such aposition should be measured based on the largest benefit that has a greater than fifty (50) percent likelihood of being realized upon ultimate settlement.Section 740-10-25 also provides guidance on de-recognition, classification, interest and penalties on income taxes, accounting in interim periods andrequires increased disclosures. The estimated future tax effects of temporary differences between the tax basis of assets and liabilities are reported in the accompanyingconsolidated balance sheets, as well as tax credit carry-backs and carry-forwards. The Company periodically reviews the recoverability of deferred tax assetsrecorded 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 previousestimates of tax liability. In addition, the Company operates within multiple taxing jurisdictions and is subject to audit in these jurisdictions. Inmanagement’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. F-15 Source: CEMTREX INC, 10-K, December 28, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Uncertain Tax Positions The Company did not take any uncertain tax positions and had no adjustments to its income tax liabilities or benefits pursuant to the provisions ofSection 740-10-25 for the fiscal year ended September 30, 2016 or 2015. Net Income (Loss) per Common Share Net income (loss) per common share is computed pursuant to section 260-10-45 of the FASB Accounting Standards Codification. 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 theperiod. Diluted net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of shares of common stockand potentially dilutive outstanding shares of common stock during the period to reflect the potential dilution that could occur from common shares issuablethrough contingent share arrangements, stock options and warrants. There were 139,987 and 67,569 potentially dilutive common shares outstanding for the fiscal years ended September 30, 2016 or 2015, respectively. 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 usingpublished exchange rates in effect at the consolidated balance sheet date. Revenues and expenses and cash flows are translated using an approximateweighted average exchange rate for the period. Resulting translation adjustments are recorded as a component of accumulated other comprehensive incomeon the accompanying consolidated balance sheet. For the years ending September 30, 2016 and September 30, 2015, comprehensive income includes lossesof $640,259 and $177,329, respectively, which were entirely from foreign currency translation. Cash Flows Reporting The Company adopted paragraph 230-10-45-24 of the FASB Accounting Standards Codification for cash flows reporting, classifies cash receiptsand payments according to whether they stem from operating, investing, or financing activities and provides definitions of each category, and uses theindirect or reconciliation method (“Indirect method”) as defined by paragraph 230-10-45-25 of the FASB Accounting Standards Codification to report netcash 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 deferralsof past operating cash receipts and payments and all accruals of expected future operating cash receipts and payments and (b) all items that are included innet 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 aseparate item in the reconciliation of beginning and ending balances of cash and cash equivalents and separately provides information about investing andfinancing activities not resulting in cash receipts or payments in the period pursuant to paragraph 830-230-45-1 of the FASB Accounting StandardsCodification. Subsequent Events The Company follows the guidance in Section 855-10-50 of the FASB Accounting Standards Codification for the disclosure of subsequent events.The Company will evaluate subsequent events through the date when the financial statements were issued. Pursuant to ASU 2010-09 of the FASBAccounting Standards Codification, the Company as an SEC filer considers its financial statements issued when they are widely distributed to users, such asthrough filing them on EDGAR. Reclassifications Certain reclassifications have been made to prior period amounts to conform to the current period presentation. F-16 Source: CEMTREX INC, 10-K, December 28, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Recently Issued Accounting Pronouncements In June 2016, the FASB issued guidance surrounding credit losses for financial instruments that replaces the incurred loss impairment methodologyin current U.S. generally accepted accounting principles (“GAAP”). The new impairment model requires immediate recognition of estimated credit lossesexpected to occur for most financial assets and certain other instruments. For available-for-sale debt securities with unrealized losses, the losses will berecognized as allowances rather than reductions in the amortized cost of the securities. The standard is effective for annual reporting periods beginning afterDecember 15, 2019 and interim periods within those annual periods. Early adoption for fiscal year beginning after December 15, 2018 is permitted. Entitieswill apply the standard’s provisions as a cumulative-effect adjustment to retained earnings as of the beginning of the first effective reporting period. TheCompany expects to adopt this standard in its fiscal year ending September 30, 2021 and does not expect the adoption of this standard to have a materialeffect upon its consolidated financial statements. In March 2016, the FASB issued guidance to simplify key components of employee share-based payment accounting. The guidance is effective forfiscal years beginning after December 15, 2016, including interim periods within that reporting period. Several aspects of the accounting for share-basedpayment award transactions are simplified, including: (a) income tax consequences; (b) classification of awards as either equity or liabilities; and (c)classification on the statement of cash flows. The Company expects to adopt this standard in its fiscal year ending September 30, 2018 and does not expectthe adoption of this guidance to have a material effect upon its consolidated financial statements. In February 2016, the FASB issued guidance requiring a lessee to recognize assets and liabilities for leases with lease terms of more than 12 months.Consistent with current GAAP, the recognition, measurement and presentation of expense and cash flows arising from a lease by a lessee primarily willdepend on its classification as a finance or operating lease. However, unlike current GAAP, which requires only capital leases to be recognized on the balancesheet, this new guidance will require both types of leases to be recognized on the balance sheet. The guidance also requires disclosures to help investors andother financial statement users to better understand the amount, timing and uncertainty of cash flows arising from leases. These disclosures includequalitative and quantitative requirements, providing additional information about the amounts recorded in the financial statements. The guidance is effectivefor fiscal years, and interim reporting periods therein, beginning after December 15, 2018 and is to be applied using the modified retrospective approach. TheCompany expects to adopt this standard in its fiscal year ending September 30, 2020 and does not expect the adoption of this guidance to have a materialeffect upon its consolidated financial statements. Management does not believe that any other recently issued, but not yet effective accounting pronouncements, if adopted, would have a materialeffect on the accompanying financial statements. NOTE 3 – LIQUIDITY Our current strategic plan includes the expansion of the Company both organically and through acquisitions if market conditions and competitiveconditions allow. Due to the long-term nature of investments in acquisitions and other financial needs to support organic growth, including working capital,we expect our long-term and working capital needs to periodically exceed the short-term fluctuations in cash flow from operations. Accordingly, weanticipate that we will likely raise additional external capital from the sale of common stock, preferred stock, and debt instruments as market conditions mayallow in addition to cash flow from operations to fund our growth and working capital needs. To the extent that our internally-generated cash flow is insufficient to meet our needs, we are subject to uncertain and ever-changing debt and equitycapital market conditions over which we have no control. The magnitude and the timing of the funds that we need to raise from external sources also cannotbe easily predicted. In December 2016, we commenced a subscription rights offering to our stockholders to raise up to $15.0 million through the sale of units, eachconsisting of one share of our series 1 preferred stock, paying cumulative dividends at the rate of 10% of the purchase price per year, and two five-year series1 warrants, upon the exercise of subscription rights at $10.00 per unit. The rights offering extends through January 2017 and may be extended thereafter. Noassurance can be given that the rights offering will result in significant funds for us. In the event that we raise significant external capital from the issuance ofour common stock, preferred stock, or debt instruments, we remain subject to the uncertainties and the volatility of the capital markets over which we have nocontrol. In all of these transactions we may be forced to raise capital on adverse terms or terms that are not reasonable in light of current market conditions. Asa result, persons who acquire our common stock may incur immediate and substantial dilution and, in the case of our issuance of preferred stock or any debtinstrument, we may issue preferred stock with rights and privileges that adversely impact common stockholder rights and, in the case of the issuance of anydebt instrument, the affirmative and negative covenants that we may be required to accept, could adversely impact our financial and operating flexibilitywith consequent adverse impact on the rights of our common stockholders and our common stock market price. F-17 Source: CEMTREX INC, 10-K, December 28, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. There is no guarantee that cash flow from operations and/or debt and equity vehicles will provide sufficient capital to meet our expansion goals andworking capital needs. NOTE 4 – SEGMENT AND GEOGRAPHIC INFORMATION The Company reports and evaluates financial information for two segments: Electronics Manufacturing Services (EMS) segment and the IndustrialProducts and Services (IPS) segment. The EMS segment provides end to end electronic manufacturing services, which includes product design and sustainingengineering services, printed circuit board assembly and production, cabling and wire harnessing, systems integration, comprehensive testing services andcompletely assembled electronic products. The IPS segment sells a complete line of air filtration and environmental control products to a wide variety ofindustrial and manufacturing industries worldwide. The Company also manufactures sells, and services monitoring instruments, software and systems formeasurement of emissions of Greenhouse gases, hazardous gases, particulate and other regulated pollutants used in emissions trading globally as well as forindustrial processes. The Company also markets monitoring and analysis equipment for gas and liquid measurement for various downstream oil & gasapplications as well as various industrial process applications. The following tables summarize the Company’s segment information: As of or for the year ended September 30, 2016 IndustrialProducts &Services Segment ElectronicsManufacturingServices Segment Consolidated Revenue form external customers $49,244,011 $44,460,549 $93,704,560 Total assets $23,890,455 $32,143,054 $56,033,509 Accounts receivable, net $8,193,982 $5,374,745 $13,568,727 Other assets $477,456 $62,608 $540,064 As of or for the year ended September 30, 2015 IndustrialProducts &Services Segment ElectronicsManufacturingServices Segment Consolidated Revenue form external customers $31,622,344 $25,265,045 $56,887,389 Total assets $7,225,828 $15,318,414 $22,544,242 Accounts receivable, net $2,947,242 $1,823,802 $4,771,044 Other assets $4,225 $31,405 $35,630 F-18 Source: CEMTREX INC, 10-K, December 28, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. The Company generates revenue from product sales and services from its subsidiaries located in the United States, Germany, Romania and Hong Kong.Revenue information for the Company is as follows: Year ended September 30, 2016 2015 United States $21,692,736 $4,567,591 Non-U.S. Locations 72,011,824 52,319,798 $93,704,560 $56,887,389 NOTE 5 – FAIR VALUE MEASUREMENTS The Company complies with the provisions of ASC 820 “Fair Value Measurements and Disclosures” (“ASC 820”). Under ASC 820, fair value isdefined as the price that would be received to sell an asset or paid to transfer a liability (i.e., the “exit price”) in an orderly transaction between marketparticipants at the measurement date. The following tables present information about the Company’s assets measured at fair value as of September 30, 2016 and September 30, 2015: Quoted Prices Significant in Active Other Significant Balance Markets for Observable Unobservable as of Identical Assets Inputs Inputs September 30, (Level 1) (Level 2) (Level 3) 2016 Assets Investment in certificates of deposit (included in short-term investments) $- $- $- $- $- $- $- $- Quoted Prices Significant in Active Other Significant Balance Markets for Observable Observable as of Identical Assets Inputs Inputs September 30, (Level 1) (Level 2) (Level 3) 2015 Assets Investment in certificates of deposit (included in short-term investments) $- $- $- $- $- $- $- $- NOTE 6 – 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 byBenecon 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 $698,849 as of September 30, 2016. The Company also records a liability forclaims that have been incurred but not recorded at the end of each year. The amount of the liability is determined by Benecon Group. The liability recordedin accrued expenses amounted to $71,789 as of September 30, 2016. F-19 Source: CEMTREX INC, 10-K, December 28, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. NOTE 7 – ACCOUNTS RECEIVABLE, NET Accounts receivable, net consists of the following: September 30, 2016 September 30, 2015 Accounts receivable $13,690,377 $4,836,046 Allowance for doubtful accounts (121,650) (65,002) $13,568,727 $4,771,044 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. NOTE 8 – INVENTORY, NET Inventory, net of reserves, consist of the following: September 30, 2016 September 30, 2015 Raw materials $9,636,142 $3,345,432 Work in progress 2,554,025 1,306,906 Finished goods 2,852,223 1,866,145 15,042,390 6,518,483 Less: Allowance for inventory obsolescence (970,763) $(148,967)Inventory –net of allowance for inventory obsolescence $14,071,627 $6,369,516 NOTE 9 – PROPERTY AND EQUIPMENT Property and equipment are summarized as follows: September 30, 2016 September 30, 2015 Land $1,193,230 $1,194,979 Building 5,019,484 3,938,544 Furniture and office equipment 1,180,963 576,741 Computer software 1,377,260 286,638 Machinery and equipment 12,718,694 3,663,526 21,489,631 9,660,428 Less: Accumulated depreciation (3,841,743) (1,517,905)Property and equipment, net $17,647,888 $8,142,523 The Company completed the annual impairment test of property and equipment and determined that there was no impairment as the fair value ofproperty and equipment, substantially exceeded their carrying values at September 30, 2016. Depreciation and amortization of property and equipmenttotaled approximately $2,296,010 and $772,434 for fiscal years ended September 30, 2016 and 2015, respectively. NOTE 10 – PREPAID AND OTHER CURRENT ASSETS On September 30, 2016 the Company had prepaid and other current assets consisting of prepayments on inventory purchases of $2,201,335 andother current assets of $274,049 and on September 30, 2015 the Company had prepaid and other current assets consisting of prepayments on inventorypurchases of $120,296 and other current assets of $773,496. F-20 Source: CEMTREX INC, 10-K, December 28, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. NOTE 11 – CONVERTIBLE NOTES PAYABLE As of September 30, 2016 the Company has the following unsecured convertible notes, issued on the dates listed, to various unrelated third partiesoutstanding. Date Amount Maturity period Interest rate Conversion price Conversion period February 29, 2016 $115,000 12 Months 8% 75% of Market 6 Months March 16, 2016 258,000 12 Months 10% 75% of market 6 Months April 22, 2016 525,000 12 Months 10% 80% of market 6 Months May 20, 2016 525,000 12 Months 10% 80% of market 6 Months June 13, 2016 215,000 12 Months 8% 80% of market 6 Months July 13, 2016 1,055,000 12 Months 10% $5.00 6 Months August 16, 2016 1,055,000 12 Months 10% $6.50 6 Months Total $3,748,000 The use of the proceeds from the notes issued is for growth capital and planned acquisitions. As per the terms of these convertible notes theCompany has reserved 4,000,000 shares (post reverse split basis) representing approximately three times the actual shares that would be issued uponconversion of all the notes. As of September 30, 2016, 2,290,368 shares of the Company’s common stock have been issued to satisfy $3,610,500 of convertible notes payable. NOTE 12 – LONG-TERM LIABILITIES Loans payable to bank On October 31, 2013, the company acquired a loan from Sparkasse Bank of Germany in the amount of €3,000,000 ($4,006,500, based uponexchange rate on October 31, 2013) in order to fund the purchase of ROB Cemtrex GmbH. $2,799,411 of the proceeds went to direct purchase of ROBCemtrex GmbH and $1,207,089 funded beginning operations. This loan carries interest of 4.95% per annum and is payable on October 30, 2021. On May 28, 2014 the Company financed an upgrade of the information technology infrastructure for ROB Cemtrex GmbH. The purchase was fullyfinanced through Sparkasse Bank of Germany for €200,000 ($272,840 based upon the exchange rate on May 28, 2014). This loan carries interest of 4.50%and is payable over 4 years. 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 AdvancedIndustrial 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 and is payableon December 15, 2022. On December15, 2015, the company acquired a loan from Fulton Bank in the amount of $800,000 in order to fund the operations of AdvancedIndustrial Services, Inc. $620,000 of the proceeds was drawn upon closing. This loan carries interest of LIBOR plus 2.00% per annum and is payable onDecember 15, 2020. Mortgage payable On March 1, 2014 the Company completed the purchase of the building that ROB Cemtrex GmbH occupies in Neulingen, Germany. The purchasewas fully financed through Sparkasse Bank of Germany for €4,000,000 ($5,500,400 based upon the exchange rate on March 1, 2014). This mortgage carriesinterest of 3.00% and is payable over 17 years. Notes payable On December 15, 2015 the Company issued notes payable to the sellers of Advanced Industrial Services, Inc. for $1,500,000 to fund the purchase ofAIS. These notes carry interest of 6% and are payable over 3 years. F-21 Source: CEMTREX INC, 10-K, December 28, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Notes payable – related party Please see Note 14 – Related Party Transactions for details on notes payable to Ducon Technologies, Inc. NOTE 13 – BUSINESS COMBINATION Advanced Industrial Services, Inc. On December 15, 2015 the Company acquired Advanced Industrial Services, Inc. (“AIS”) and its affiliate subsidiary company based in YorkPennsylvania. Advanced Industrial Services Inc. is a well-known broad based industrial services provider that offers one-source expertise and capabilities inplant and equipment erection, relocation, and disassembly. Over the years it has been one of the market leaders in installing high precision equipment in awide variety of industrial markets like automotive, printing & graphics, industrial automation, packaging, and chemicals among others. In addition, AIS hasexperience in installing industrial air filtration equipment, similar to the equipment sold by Cemtrex through its existing business operations. The acquisition date fair value of the total consideration transferred was approximately $7.7 million, which consisted of the following: Cemtrex, Inc. common stock 1,000,000 Loan from bank 5,176,262 Note payable 1,500,000 Total Purchase Price $7,676,262 In accordance with Accounting Standards Codification (“ASC”) 805, Business Combinations (“ASC 805”), the total purchase consideration isallocated to the net tangible and identifiable intangible assets acquired and liabilities assumed based on their estimated fair values as of December 15, 2015(the acquisition date). The purchase price was allocated based on the information currently available, and may be adjusted after obtaining more informationregarding, among other things, asset valuations, liabilities assumed, and revisions of preliminary estimates. The following table summarizes the current allocation of the assets acquired and liabilities assumed based on their preliminary estimated fair valuesand current measurement period adjustments as follows: As initiallyreported Measurementperiod adjustments As adjusted Cash $112,586 $- $112,586 Restricted Cash 608,427 - 608,427 Accounts receivable, net 3,211,997 - 3,211,997 Prepaid expenses 551,292 - 551,292 Inventory, net 465,877 - 465,877 Deferred costs 43,208 - 43,208 Deferred Tax Asset - current - 75,000 75,000 Property, plant, and equipment, net 6,525,902 126,192 6,652,094 Goodwill - 78,452 78,452 Other 121,000 - 121,000 Total Liabilities (4,140,289) (103,382) (4,243,671)Net assets acquired $7,500,000 $176,262 $7,676,262 F-22 Source: CEMTREX INC, 10-K, December 28, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. The following supplemental pro forma information presents the financial results as if the acquisition of AIS had occurred October 1, 2014: For the year ended September 30, 2016 2015 Revenues $98,456,214 $79,097,686 Net income $4,468,692 $3,491,020 Income (Loss) Per Share-Basic $0.53 $0.49 Income (Loss) Per Share-Diluted $0.52 $0.47 Periscope, GmbH On May 31, 2016 we acquired machinery & equipment, electronics manufacturing business and logistics business from a German company,Periscope, GmbH (“Periscope”) and placed them in three newly formed entities: ROB Cemtrex Assets UG, ROB Cemtrex Automotive GmbH and ROBCemtrex Logistics GmbH respectively. Periscope’s electronic manufacturing business deals primarily with the major German automotive manufacturers,including Tier 1 suppliers in the industry, as well as for industries like telecommunications, industrial goods, luxury consumer products, display technology,and other industrial OEMs. Periscope had more than 35 years of industrial operating experience. The acquisition date fair value of the total consideration transferred was approximately $8.9 million, which consisted of the following: Cash 4,902,670 Loan from related party 3,298,600 Note payable 717,936 Total Purchase Price $8,919,206 In accordance with Accounting Standards Codification (“ASC”) 805, Business Combinations (“ASC 805”), the total purchase consideration isallocated to the net tangible and identifiable intangible assets acquired and liabilities assumed based on their estimated fair values as of May 31, 2016 (theacquisition date). The purchase price was allocated based on the information currently available, and may be adjusted after obtaining more informationregarding, among other things, asset valuations, liabilities assumed, and revisions of preliminary estimates. The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the acquisition date: Prepaid expenses $3,373,063 Inventory, net 8,000,874 Property, plant, and equipment, net 4,485,448 Total Liabilities (6,940,179)Net assets acquired $8,919,206 F-23 Source: CEMTREX INC, 10-K, December 28, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. The following supplemental pro forma information presents the financial results as if the acquisition of Periscope had occurred October 1, 2014: For the year ended September 30, 2016 2015 Revenues $121,850,369 $143,871,692 Net income $5,132,306 $(7,884,095) Income (Loss) Per Share-Basic $0.61 $(1.15) Income (Loss) Per Share-Diluted $0.60 $(1.12) NOTE 14 – RELATED PARTY TRANSACTIONS The Company has Notes payable to Ducon Technologies Inc., totaling $3,413,840 and $119,055 at September 30, 2016 and September 30, 2015,respectively. These notes are unsecured and carry 5% interest per annum. NOTE 15 – SHAREHOLDERS’ EQUITY Series A Preferred Stock The Company is authorized to issue 10,000,000 shares of Series A Preferred Stock, $0.001 par value. As of September 30, 2016 and September 30,2015, there were 1,000,000 shares issued and outstanding, respectively. Each issued and outstanding Series A Preferred Share shall be entitled to the number of votes equal to the result of: (i) the number of shares ofcommon 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 PreferredShares 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 theshareholders of the Company for their action or consideration, including the election of directors. Holders of Series A Preferred Shares shall vote togetherwith the holders of Common Shares as a single class. During the year ending September 30, 2016 and 2015, the Company did not issue any Series A Preferred Stock. Common Stock On April 3, 2015, our Board of Directors approved a reverse split of our common stock, par value $0.001, at a ratio of one-for-six. This reverse stocksplit became effective on April 15, 2015 and, unless otherwise indicated, all share amounts. Per share data, share prices, exercise prices and conversion ratesset forth in this Report and the accompanying consolidated financial statements have, where applicable, been adjusted retroactively to reflect this reversestock split. On June 25, 2015 the Company’s common stock commenced trading on the NASDAQ Capital Markets under the symbol “CETX”. The Company is authorized to issue 20,000,000 shares of common stock, $0.001 par value. As of September 30, 2016 and September 30, 2015, therewere 9,460,283 and 7,158,087 shares issued and outstanding, respectively. During the year ending September 30, 2016 the company issued 2,302,196 shares of Common Stock. During the year ended September 30, 2015 thecompany issued 391,500 shares of Common Stock. During the year ending September 30, 2014 the company issued stock options for 100,000 shares to three key executives of ROB Cemtrex GmbH.These options have a call price of $1.80 per share, vest over four years, and expire after six years. During the years ended September 30, 2016 and 2015 zeroand 16,264 shares of common stock were issued in relation to these options, respectively. F-24 Source: CEMTREX INC, 10-K, December 28, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. On February 12, 2016, the Company granted a stock option for 200,000 shares to Saagar Govil, Company’s Chairman and CEO. These options havea call price of $1.70 per share, and expire after six years. As of September 30, 2016 no shares under this option have been exercised. During the year ending September 30, 2016 the company issued 1,919,492 shares of common stock to satisfy $2,952,500 of convertible notespayable. During the year ending September 30, 2015 the company issued 371,069 shares of common stock to satisfy $658,000 of convertible notes payable(see NOTE 11 CONVERTIBLE NOTES PAYABLE). NOTE 16 – COMMITMENTS AND CONTINGENCIES Our IPS segment leases (i) approx. 5,000 sq. ft. of office and warehouse space in Liverpool, New York from a third party in a five year lease at amonthly rent of $2,200 expiring on March 31, 2018, (ii) approximately 2000 square feet of office on a month to month rental from a third party in HongKong at a monthly rental of $4,133.00, (iii) approximately 25,000 sq. ft. of warehouse space in Manchester, PA from a third party in a seven year lease at amonthly rent of $7,300 expiring on December 13, 2020, (iv) approximately 43,000 sq. ft. of office and warehouse space in York, PA from a third party in a tenyear lease at a monthly rent of $22,625 expiring on March 23, 2026, (v) approximately 15,500 sq. ft. of warehouse space in Emigsville, PA from a third partyin a one year lease at a monthly rent of $4,337 expiring on August 31, 2016, and (vi) the Company leases its principal office at Farmingdale, New York, 4,000square feet of office and warehouse/shop space in a single story commercial structure on a month to month lease from Ducon Technologies Inc., a companycontrolled by Aron Govil, Executive Director of the Company, at a monthly rental of $4,000.. Our EMS segment owns a 70,000 sq. ft. manufacturing building in Neulingen, Germany which has a 17 year 3.00% interest mortgage with monthlymortgage payments of €25,000, through March 2031. The EMS segment also leases (i) a 10,000 sq. ft. manufacturing facility in Sibiu, Romania from a thirdparty in a ten year lease at a monthly rent of €8,000 expiring on May 31, 2019, (ii) approximately 100,000 sq. ft. of office, warehouse and manufacturingspace in Paderborn, Germany at monthly rental of €54,100 which expires on March 31, 2017, (iii) approximately 50,000 sq. ft. of office, warehouse space inPaderborn, Germany at a monthly rental of €27,050 which expires on March 31, 2017. NOTE 17 – INCOME TAX PROVISION The Company accounts for income taxes under the provisions of FASB ASC 740, “Income Taxes”, formerly referenced as SFAS No.109,“Accounting for Income Taxes”. Under the provisions of FASB ASC 740, deferred tax assets and liabilities are recognized for the future tax consequencesattributable to differences between their financial statement carrying values and their respective tax bases. Deferred tax assets and liabilities are measuredusing enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Theeffect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Significant judgment is required in determining any valuation allowance recorded against deferred tax assets. In assessing the need for a valuationallowance, the Company considers all available evidence including past operating results, estimates of future taxable income, and the feasibility of taxplanning strategies. In the event that the Company changes its determination as to the amount of deferred tax assets that can be realized, the Company willadjust its valuation allowance with a corresponding impact to the provision for income taxes in the period in which such determination is made. F-25 Source: CEMTREX INC, 10-K, December 28, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. The provision for income taxes is as follows: September 30, 2016 September 30, 2015 Current taxes payable Federal $112,088 $5,594 State 46,363 5,506 Foreign 904,721 (10,183)Deferred taxes 27,000 - Deferred tax valuation allowance - - Total $1,090,172 $917 The foreign provision for income taxes is based on foreign pre-tax earnings of $5,965,747, and $2,806,427 in 2016 and 2015, respectively. TheCompany’s consolidated financial statements provide for any related tax liability on undistributed earnings that the Company does not intend to beindefinitely reinvested outside the U.S. Substantially all of the Company’s undistributed international earnings intended to be indefinitely reinvested inoperations outside the U.S. Reconciliation of the federal statutory income tax rate to the effective income tax rate is as follows: For the Fiscal Year For the Fiscal Year Ended Ended September 30, 2016 September 30, 2015 U.S. statutory rate 34.00% 34.00%State income taxes (net of federal benefit) 9% 9%Permanent differences 1.77% -0.10%Foreign -27.29% -42.86%Benefit of net operating loss carry-forward 0.00 0.00 Effective rate 17.47% 0.03% At September 30, 2015 and 2014, the Company has no net operating loss carryovers. NOTE 18– SUBSEQUENT EVENTS On October 31, 2016 Cemtrex announced that it had entered into a Letter of Intent to acquire an electronics manufacturing solutions company(“Target”) based in the Silicon Valley area. The Target Company is focused on electronic manufacturing services primarily for global leading semiconductorcustomers as well as OEMs in the medical, industrial, telecommunications industries. The Target Company has averaged $7 million in annual revenues overthe last two years. The company also has an office in India to support the engineering & prototype development and operational activities. In December 2016, we commenced a subscription rights offering to our stockholders to raise up to $15.0 million through the sale of units, eachconsisting of one share of our series 1 preferred stock, paying cumulative dividends at the rate of 10% of the purchase price per year, and two five-year series1 warrants, upon the exercise of subscription rights at $10.00 per unit. The rights offering extends through January 2017 and may be extended thereafter. F-26 Source: CEMTREX INC, 10-K, December 28, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Source: CEMTREX INC, 10-K, December 28, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. EXHIBIT 10.13 NONSTATUTORY STOCK OPTION AGREEMENT CEMTREX Inc. Cemtrex Inc.(the “Corporation”) and, Saagar Govil (the “Optionee”) an employee of the Corporation, in consideration of the covenants and agreementsherein contained and intending to be legally bound hereby, agree as follows: SECTION 1: Grant 1.1 Grant of Option. Subject to the terms and conditions set forth in this Nonstatutory Stock Option Agreement (this “Agreement”) the Corporationhereby grants to the Optionee a stock option (the “Option”) to purchase 200,000 (Two Hundred Thousand) shares of the Corporation’s common stock, parvalue $.001, (the “Common Stock”) from the Corporation at a price of $ 1 .70 (One Dollar and seventy cents) per share (the “Option Price”), which is the FairMarket Value of the shares of Common Stock covered by the Option on February 12, 2016 (the “Grant Date”). 1.2 Acceptance. The Optionee accepts the grant of the Option confirmed hereby, and agrees to be bound by the terms and provisions of this Agreement,as the Agreement may be amended from time to time; provided, however, that no alteration, amendment, revocation or termination of the Agreement shall,without the written consent of the Optionee, adversely affect the rights of the Optionee with respect to the Option. SECTION 2: Vesting, Exercise and Expiration 2.1 Vesting. Subject to Sections 3 and 4.8 of this Agreement, the Option will vest and become exercisable in annual installments over a two-yearvesting period according to the following vesting schedule: 1/2 of the Option will vest upon the 1st anniversary of the Grant Date;and balance 1/2 of the Option will vest upon the 2nd anniversary of the GrantDate;provided that the Optionee is employed by the Corporation on such anniversary, with all fractional shares, if any, rounded up and vesting as wholeshares upon the earlier vesting date(s). “Corporation,” when used herein with reference to employment of the Optionee, shall include any Affiliate orsubsidiary of the Corporation. To the extent vested, the Option may be exercised in whole or in part from the date of vesting through and including theOption Expiration Date, as defined in Section 2.3 hereof, subject to any limits provided in Section 3. 2.2 Exercise. This Option shall be exercised by the Optionee by delivering to the Corporation’s office at 19 Engineers Lane, Farmingdale, NY 11735, USA, Attention: Company Secretary (i) this Agreement signed by the Optionee, (ii) a written (including electronic) notification specifying the numberof shares which the Optionee then desires to purchase, (iii) a check payable to the order of the Corporation, which may include cash forwarded through thebroker or other agent-sponsored exercise or financing program approved by the Corporation, equal in value to the aggregate Option Price of such shares. Assoon as practicable after each exercise of this Option and compliance by the Optionee with all applicable conditions, the Corporation will issue the numberof shares of Common Stock, which the Optionee is entitled to receive upon such exercise under the provisions of this Agreement. 2.3 Expiration. The Option shall expire and cease to be exercisable on the earlier of (a) either (i) the last trading day immediately preceding the sixyear anniversary of the Grant Date or, if earlier, (ii) the date of cancellation provided for in Section 4.6 (the earlier of (i) and (ii) referred to as the “OptionExpiration Date”) or (b) the expiration date provided for in Section 3. Source: CEMTREX INC, 10-K, December 28, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. SECTION 3: Termination of Employment and Disability 3.1 Termination of Employment. (a) General. If the Optionee’s employment with the Corporation is terminated for whatever reasons then the vested portion of the Option will not beimpacted by such event and shall remain valid until the term outlined in section 2.3. In the event the Optionee is disabled or dies then his authorizedrepresentative or rightful successor shall have full right over the vested portion of the option until the term outlined in section 2.3 3.2 Specified Terminations of Employment. (a) If the Optionee’s employment is terminated by the Corporation or if the Optionee terminates his employment with the Corporation, the unvestedportion of the Option will expire on the Termination Date. SECTION 4: Miscellaneous 4.1 No Right to Employment. Neither the grant of the Option nor anything else contained in this Agreement shall be deemed to limit or restrict theright of the Corporation to terminate the Optionee’s employment at any time, for any reason, with or without cause. 4.2 Nontransferable. This Option may not be transferred except by the Optionee upon his or her death or disability. No other assignment or transferof this Option, or of the rights represented thereby, whether voluntary or involuntary, by operation of law or otherwise shall be permitted, but immediatelyupon any such assignment or transfer this Option shall terminate and become of no further effect. During the Optionee’s life this Option shall be exercisableonly by the Optionee, and after the Optionee’s death the Option shall remain subject to any restrictions on exercise and otherwise as if held by the Optionee.Whenever the word “Optionee” is used in any provision of this Option under circumstances where the provision should logically be construed to apply to theexecutors, the administrators or other persons to whom this Option may be transferred, the word “Optionee” shall be deemed to include such person orpersons. 4.3 Compliance with Laws. Notwithstanding any other provision hereof, the Optionee hereby agrees that he or she will not exercise the Option, andthat the Corporation will not be obligated to issue any shares to the Optionee hereunder, if the exercise thereof or the issuance of such shares shall constitutea violation by the Optionee or the Corporation of any provision of law or regulation of any governmental authority. Any determination in this connection bythe Corporation shall be final, binding and conclusive. The Corporation shall in no event be obliged to register any securities pursuant to the Securities Actof 1 933 (as the same shall be in effect from time to time) or to take any other affirmative action in order to cause the exercise of the Option or the issuance ofshares pursuant thereto to comply with any law or regulation of any governmental authority. 4.4 Nonstatutory Stock Option. The parties hereto agree that the Option granted hereby is not, and should not be construed to be, an incentive stockoption under Section 422 of the Code. 4.5 Tax Consequences. In each case where the Optionee exercises this Option in whole or in part, the Optionee shall be responsible for the amountof income tax, if any, required under federal and, where applicable, state and local law, and the Optionee shall, pay such taxes and shall provide a copy ofsuch remittance to the Corporation. The Corporation shall have no liability whatsoever for the Optionee’s tax obligations. 4.6 Forfeiture and Repayment. If: (a) during the course of the Optionee’s employment with the Corporation or, if longer, the period during which this Option is outstanding, theOptionee engages in conduct or it is discovered that the Optionee engaged in conduct that is materially adverse to the interests of the Corporation, includingfailures to comply with the Corporation ‘s rules or regulations, fraud, or conduct contributing to any financial restatements or irregularities; Source: CEMTREX INC, 10-K, December 28, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. [(c)/(d)] following termination of the Optionee’s employment with the Corporation for any reason, with or without cause, the Optionee violates anypost-termination obligations or duties owed to the Corporation or its Affiliates or any agreement with the Corporation or its Affiliates, including withoutlimitation, any employment agreement, confidentiality agreement or other agreement restricting post-employment conduct; the Corporation may cancel all or any portion of this Option with respect to the shares not yet exercised and/or require repayment of any shares (or the valuethereof) or amounts which were acquired from exercise of the Option. The Corporation shall have sole discretion to determine what constitutes such conduct. 4.7 Governing Law. This Agreement shall be construed and enforced in accordance with the laws of the State of Delaware, in USA other than anychoice of Jaw rules calling for the application of Jaws of another jurisdiction. IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the Grant Date. CEMTREX Inc. By: Name & Title Renato Dela Rama – CFO /s/ Renato Dela Rama OPTIONEE Name: Saagar Govil /s/ Saagar Govil Dated: February 12, 2016 Source: CEMTREX INC, 10-K, December 28, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. sSource: CEMTREX INC, 10-K, December 28, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. EXHIBIT 21.1 SUBSIDIARIES OF THE REGISTRANT Name of consolidated State or other jurisdiction of Date of incorporation or Attributable subsidiary or entity incorporation or organization formation (date of acquisition) Interest Griffin Filters, LLC New York September 6, 2005 (April 30, 2007) 100%Cemtrex, Ltd. Hong Kong September 4, 2013 100%ROB Cemtrex GmbH Germany August 15, 2013 (October 31, 2013) 100%ROB Systems, Srl Romania November 1, 2013 100%Advanced Industrial Services, Inc. Pennsylvania July 20, 1984 (December 15, 2015) 100%ROB Cemtrex Assets UG Germany May 12, 2016 100%ROB Cemtrex Automotive GmbH Germany May 12, 2016 100%ROB Cemtrex Logistics GmbH Germany May 12, 2016 100% Source: CEMTREX INC, 10-K, December 28, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Source: CEMTREX INC, 10-K, December 28, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. EXHIBIT 31.1 CERTIFICATION PERSUANT TO RULE 13a/15d OF THE SECURITIES AND EXCHANGE ACT OF 1934, AS ADOPTED PERSUANT TOSECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 I, Saagar Govil, certify that: 1.I have reviewed this report on Form 10-K of Cemtrex, Inc., for the fiscal year ended September 30, 2016; 2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make thestatements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by thisreport; 3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects thefinancial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined inExchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: (a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision toensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within thoseentities, particularly during the period in which this report is being prepared; (b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under oursupervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements forexternal purposes in accordance with generally accepted accounting principles; (c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about theeffectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and (d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recentfiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely tomaterially affect, the registrant’s internal control over financial reporting; and 5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to theregistrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): (a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonablelikely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and (b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controlsover financial reporting. Date: December 28, 2016/s/ Saagar Govil Saagar Govil, Chairman of the Board, CEO, President & Secretary (Principal Executive Officer) Source: CEMTREX INC, 10-K, December 28, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Source: CEMTREX INC, 10-K, December 28, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. EXHIBIT 31.2 CERTIFICATION PERSUANT TO RULE 13a/15d OF THE SECURITIES AND EXCHANGE ACT OF 1934, AS ADOPTED PERSUANT TOSECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 I, Renato Dela Rama certify that: 1.I have reviewed this report on Form 10-K of Cemtrex, Inc., for the fiscal year ended September 30, 2016; 2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make thestatements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by thisreport; 3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects thefinancial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined inExchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: (a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision toensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within thoseentities, particularly during the period in which this report is being prepared; (b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under oursupervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements forexternal purposes in accordance with generally accepted accounting principles; (c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about theeffectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and (d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recentfiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely tomaterially affect, the registrant’s internal control over financial reporting; and 5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to theregistrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): (a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonablelikely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and (b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controlsover financial reporting. Date: December 28, 2016/s/ Renato Dela Rama Renato Dela Rama Vice President of Finance (Principal Financial and Accounting Officer) Source: CEMTREX INC, 10-K, December 28, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Source: CEMTREX INC, 10-K, December 28, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. EXHIBIT 32.1 CERTIFICATION PURSUANT TO18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TOSECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the annual report of Cemtrex, Inc. (the “Company”) on Form 10-K for the fiscal year ended September 30, 2016, as filed with theSecurities and Exchange Commission on the date hereof (the “Report”), I, Saagar Govil, Chief Executive Officer of the Company, certify, pursuant to 18U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge and belief: (1)the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2)the information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company. Dated: December 28, 2016/s/ Saagar Govil Saagar Govil, Chairman of the Board, CEO, President & Secretary (Principal Executive Officer) A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting thesignature that appears in typed form within the electronic version of this written statement has been provided to the Company and will be retained by theCompany and furnished to the Securities and Exchange Commission or its staff upon request. Source: CEMTREX INC, 10-K, December 28, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Source: CEMTREX INC, 10-K, December 28, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. EXHIBIT 32.2 CERTIFICATION PURSUANT TO18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TOSECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the annual report of Cemtrex, Inc. (the “Company”) on Form 10-K for the fiscal year ended September 30, 2016, as filed with theSecurities and Exchange Commission on the date hereof (the “Report”), I, Renato Dela Rama, Vice President of Finance of the Company, certify, pursuant to18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge and belief: (1)the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2)the information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.Dated: December 28, 2016/s/ Renato Dela Rama Renato Dela Rama, Vice President of Finance (Principal Financial and Accounting Officer) A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting thesignature that appears in typed form within the electronic version of this written statement has been provided to the Company and will be retained by theCompany and furnished to the Securities and Exchange Commission or its staff upon request Source: CEMTREX INC, 10-K, December 28, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Source: CEMTREX INC, 10-K, December 28, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Source: CEMTREX INC, 10-K, December 28, 2016Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.

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