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Discontinued Operations

12 Months Ended

Sep. 30, 2019

Discontinued Operations and Disposal Groups [Abstract]

Discontinued Operations

NOTE 4 – DISCONTINUED OPERATIONS

ROB Cemtrex GmbH and Subsidiaries

On August 15, 2019 the Company sold its Electronics Manufacturing business consisting of its subsidiaries ROB Cemtrex GmbH, ROB Systems Srl, ROB Cemtrex Assets UG, ROB Cemtrex Logistics GmbH (the “Disposition”) to a third party for total consideration of €6,367,199, ($7,061,224 based on the exchange rate on the date of Disposition). The Company received cash, net of expenses of €2,294,903, ($2,537,895 based on the exchange rate on the dates of cash exchanges), A note payable in the amount of €1,500,000, ($1,663,500 based on the exchange rate on the date of Disposition), this note bears interest of 3% and is due one year form the date of disposition, A note payable in the amount of €1,350,000, ($1,497,150 based on the exchange rate on the date of Disposition), this note bears interest of 3% and is due two years form the date of disposition, and the payment of certain liabilities held by the disposed subsidiaries of €1,222,296 ($1,362,679 based on the exchange rate on the date of Disposition). The calculation of the pretax loss on the disposition is as follows;

Purchase Price			7,061,224
Less Liabilities assumed			(1,362,679	)
Net purchase price			5,698,545

Assets Sold
Accounts receivable, net			5,434,894
Inventory, net			9,676,746
Prepaid expenses and other current assets			48,674
Property and equipment, net			6,594,945
			21,755,259
Liabilities Transferred
Accounts payable			4,113,274
Short-term liabilities			991,518
Accrued expenses			1,421,833
Bank loans and and mortgage			3,942,348
			10,468,973
Net assets sold			11,286,286

Pretax loss on sale of ROB Cemtrex Companies			(5,587,741	)

Griffin Filters, LLC

On August 31, 2019, the Company entered into an Asset Purchase Agreement for sale of Griffin Filters with Ducon Technologies, Inc., a related party, for total consideration of $550,000. The calculation of the pretax loss on the sale is as follows;

Purchase Price			550,000

Assets Sold
Accounts receivable, net			166,393
Inventory, net			213,289
Prepaid expenses and other assets			1,197,235
			1,576,917
Liabilities Transferred
Accounts payable			240,095
			240,095
Net assets sold			1,336,822

Pretax loss on sale of ROB Cemtrex Companies			(786,822	)

EXIT FROM ENVIRONMENTAL BUSINESS

During fiscal 2019, the Company also reached a strategic decision to exit the environmental products business, which was part of Industrial Services group. Accordingly, the Company has reported the results of the environmental control products business as discontinued operations in the Consolidated Statements of Operations and in the Consolidated Balance Sheets.

Assets and liabilities included within discontinued operations on the Company’s Consolidated Balance Sheets at September 30, 2019 and 2018 are as follows;

			September 30,				September 30,
Assets			2019				2018
Current assets
Trade receivables, net			-				6,365,459
Trade receivables - related party			55,600				-
Inventory –net of allowance for inventory obsolescence			-				10,808,356
Prepaid expenses and other assets			-				1,317,987
Total current assets			55,600				18,491,802

Property and equipment, net			8,761,677				10,605,387
Other			-				74,125
Total Assets		$	8,817,277			$	29,171,314

Liabilities
Current liabilities
Accounts payable		$	263,832			$	4,950,650
Short-term liabilities			-				5,539,191
Accrued expenses			-				906,103
Accrued income taxes			-				243,646
Total current liabilities			263,832				11,639,590

Long-term liabilities
Loans payable to bank, net of current portion			-				1,054,961
Mortgage payable, net of current portion			-				3,568,545
Total long-term liabilities			-				4,623,506
Total liabilities		$	263,832			$	16,263,096

Income (loss) from discontinued operations, net of tax and the loss on sale of discontinued operations, net of tax, of the ROB Cemtrex Companies and Griffin Filters business which are presented in total as discontinued operations, net of tax in the Company’s Consolidated Statements of Operations for the years ended September 30, are as follows:

		Years Ended September 30,
		2019				2018

Total net sales		$	42,614,107			$	67,295,102
Cost of sales			25,788,268				44,125,799
Operating, selling, general and administrative expenses			20,374,141				21,519,660
Other expenses			264,505				(398,898	)
Income (loss) from discontinued operations			(3,812,807	)			2,048,541
Loss on sale of discontinued operations			(6,374,563	)			-
Income tax provision			372,593				261,804
Discontinued operations, net of tax			(10,559,963	)			1,786,737