DISCONTINUED OPERATIONS

9 Months Ended

Jun. 30, 2023

Discontinued Operations and Disposal Groups [Abstract]

DISCONTINUED OPERATIONS

NOTE 3 – DISCONTINUED OPERATIONS

On November 22, 2022, the Company entered into two Asset Purchase Agreements and one Simple Agreement for Future Equity (“SAFE”) with the Company’s CEO, Saagar Govil, to secure the sale of the subsidiaries Cemtrex Advanced Technologies, Inc, which include the brand SmartDesk, and Cemtrex XR, Inc., which include the brands Cemtrex XR, Virtual Driver Interactive, Bravo Strong, and good tech (formerly Cemtrex Labs), to Mr. Govil

Due to the on-going losses and risk associated with the SmartDesk business the Company has valued the royalty and SAFE agreement associated with the SmartDesk sale at $0 and considers such consideration to be a gain contingency.

Based on sales projections for Cemtrex XR, Inc., the Company does not believe that it will exceed the sales levels required to exceed the $820,000 royalties due and has not accounted for any additional royalties at this time. In accordance with ASC 310 – Receivables, the Company has discounted the royalties due and during the nine-month ended June 30, 2023, has recognized $691,611 of royalties due and will amortize the remaining amount over the period the royalties are due.

The following table summarizes the loss on the sale recorded during the three months ended December 31, 2022, included in Income/(loss) from discontinued operations, net of tax in the accompanying condensed consolidated statement of Operations:

Purchase Price	$	745,621
Less cash and cash equivalents transferred		(699,423	)
Less liabilities assumed		(10,924	)
Net purchase price	$	35,274
Assets Sold
Accounts receivable, net	$	625,638
Inventory, net		980,730
Prepaid expenses and other assets		502,577
Property and equipment, net		837,808
Goodwill		598,392
		3,545,145
Liabilities Transferred
Accounts payable		370,774
Short-term liabilities		364,775
Long-term liabilities		318,981
		1,054,530
Net assets sold	$	2,490,615
Pretax loss on sale of Cemtrex Advanced Technologies, Inc, and Cemtrex XR, Inc.Companies	$	(2,455,341	)

Assets and liabilities included within discontinued operations on the Company’s Condensed Consolidated Balance Sheets at June 30, 2023, and September 30, 2022, are as follows;

	June 30,		September 30,
	2023		2022
Assets
Current assets
Cash and equivalents	$	-	$	714,420
Trade receivables, net		-		561,470
Inventory –net of allowance for inventory obsolescence		-		1,043,865
Prepaid expenses and other assets		-		153,461
Total current assets		-		2,473,216
Property and equipment, net		-		825,850
Other		-		672,627
Total Assets	$	-	$	3,971,693
Liabilities
Current liabilities
Accounts payable	$	-	$	205,622
Short-term liabilities		-		464,429
Deposits from customers		-		125,032
Accrued expenses		-		10,136
Total current liabilities		-		805,219
Long-term liabilities
Deferred revenue				6,273
Total long-term liabilities		-		6,273
Total liabilities	$	-	$	811,492

During the first quarter of fiscal 2023, Vicon completed the closure of its discontinued operating entity Vicon Systems, Ltd. located in Israel. The Company received funds related to benefit obligations of $96,095, which at the time of operational closure were not guaranteed to be retrievable. The company paid $7,010 in consulting fees for assistance in retrieving these funds. The net amount of $89,085 is recognized on the Company’s Condensed Consolidated Income Statement as part of the Loss on Discontinued Operations.

Gain/(loss) from discontinued operations, net of tax and the loss on sale of discontinued operations, net of tax, of Cemtrex Advanced Technologies, Inc. and Cemtrex XR, Inc., sold during the first quarter of fiscal year 2023, which are presented in total as discontinued operations, net of tax in the Company’s Condensed Consolidated Statements of Operations for the three and nine month periods ended June 30, 2023 and 2022, are as follows:

	Three months ended June 30,						Nine months ended June 30,
	2023			2022			2023			2022
Total net sales	$	-		$	1,521,942		$	649,061		$	3,763,234
Cost of sales		-			685,693			228,086			1,997,211
Operating, selling, general and administrative expenses		1,443			1,425,801			1,297,507			4,036,614
Other (income)/expenses		-			248,749			3,195			11,808
Income (loss) from discontinued operations		(1,443	)		(838,301	)		(879,727	)		(2,282,399	)
Amortization of discounted royalties		14,724			-			33,875			-
Loss on sale of discontinued operations		-			-			(2,455,341	)		-
Adjustment of benefit obligation		-			-			89,085			-
Income tax provision		-			-			-			-
Discontinued operations, net of tax	$	13,281		$	(838,301	)	$	(3,212,108	)	$	(2,282,399	)