Cemtrex, Inc. (CETX) - 10-Q Summary for Period Ended June 30, 2026
Business Context and Reporting Period
This Form 10-Q covers the quarterly period ended June 30, 2026, and the nine-month period ended on the same date. Cemtrex, Inc. operates through three primary segments: Security (Vicon Industries), Industrial Services (Advanced Industrial Services), and Aerospace and Defense (Invocon, Inc.). The company completed two significant acquisitions during the period: Invocon (January 2026) and Richland Industries (February 2026). The company is classified as a non-accelerated filer and a smaller reporting company.
Key Financial Metrics
| Metric | Three Months Ended June 30, 2026 | Nine Months Ended June 30, 2026 |
|---|---|---|
| Revenues | $18,440,210 | $52,634,888 |
| Gross Profit | $7,696,790 (42% margin) | $20,165,860 (38% margin) |
| Operating Loss | $(1,193,142) | $(6,171,339) |
| Net Loss (Attributable to Stockholders) | $(4,479,492) | $(24,175,509) |
| Loss Per Share (Basic & Diluted) | $(3.27) | $(23.37) |
| Cash and Cash Equivalents | $7,972,128 | $7,972,128 |
| Restricted Cash | $1,329,612 | $1,329,612 |
| Total Debt (Current + Long-Term) | $16,633,867 | $16,633,867 |
| Working Capital | $13,155,389 | $13,155,389 |
Material Changes vs. Prior Period
- Revenue Trends: For the nine months ended June 30, 2026, total revenue decreased by approximately 9% compared to the prior year ($52.6M vs. $58.0M). This was driven by a 42% decline in the Security segment due to the absence of a $10.4M sale recorded in the prior year and supply chain delays. Conversely, the Industrial Services segment grew 13% due to the Richland acquisition, and the new Aerospace and Defense segment contributed $3.4M in revenue.
- Profitability: Gross margin declined from 44% to 38% year-over-year for the nine-month period, impacted by tariffs, fuel surcharges, and integration costs for new acquisitions. Operating expenses increased 16% to $26.3M, primarily due to acquisition-related costs for Invocon and Richland.
- Non-Operating Items: The company recognized a bargain purchase gain of $2,068,047 from the Richland acquisition. Significant non-cash expenses included a $12.3M interest expense related to shares issued to satisfy debt and a $4.7M loss on the exercise of warrant liabilities.
- Balance Sheet: Total assets increased to $70.0M from $47.8M at the prior fiscal year-end, driven by acquisitions and new debt/equity financing. Total liabilities decreased slightly to $38.0M, while stockholders' equity increased to $32.0M due to equity offerings and warrant exercises.
Guidance, Outlook, Risks, and Contingencies
- Going Concern: Management has raised substantial doubt regarding the company's ability to continue as a going concern for the next twelve months. This is due to accumulated losses of $24.2M for the nine months ended June 30, 2026, and debt obligations of $10.4M due within the next fiscal year. The company relies on equity offerings, debt-for-equity swaps, and potential refinancing to meet obligations.
- Liquidity Strategy: The company raised $10.0M in equity offerings and $5.8M from warrant exercises during the nine-month period. It maintains a revolving line of credit with approximately $622,000 in available capacity as of June 30, 2026.
- Nasdaq Listing Risk: The company faces a new Nasdaq requirement to maintain a Market Value of Listed Securities (MVLS) of at least $5 million. As of August 12, 2026, the MVLS was approximately $5.25 million. Failure to maintain this threshold could result in immediate suspension and delisting, with no cure period.
- Subsequent Events: On July 1, 2026, the company acquired Plant Engineering Services, Inc. for $3.5M cash plus contingent earnouts. On July 2, 2026, the company issued shares to satisfy $1.3M in notes payable.
Investor Verification Checklist
- Debt Structure: Verify the terms of the $7.0M note payable to Streeterville Capital (8% interest) and the $3.9M mortgage with Fulton Bank, including maturity dates and covenants.
- Warrant Liability: Review the volatility and fair value adjustments of Series A and Series B warrants, which significantly impact net income/loss.
- Acquisition Integration: Assess the preliminary purchase price allocations for Invocon and Richland, specifically the $2.1M bargain purchase gain and the recognition of intangible assets.
- Going Concern Mitigation: Evaluate the feasibility of the company's plan to satisfy debt through equity issuance and the potential dilution impact on existing shareholders.
- Nasdaq Compliance: Monitor the Market Value of Listed Securities (MVLS) closely, as the new $5M threshold has no cure period and poses an immediate delisting risk.