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DISCONTINUED OPERATIONS

3 Months Ended

Dec. 31, 2022

Discontinued Operations and Disposal Groups [Abstract]

DISCONTINUED OPERATIONS

NOTE 3 – DISCONTINUED OPERATIONS

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 has recognized $660,621 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:

SUMMARY OF LOSS ON SALE


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
Total Assets Sold			3,545,145
Liabilities Transferred
Accounts payable			370,774
Short-term liabilities			364,775
Long-term liabilities			318,981
Total Liabilities Transferred			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 December 31, 2022 and September 30, 2022 are as follows;

		December 31,				September 30,
		2022				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

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-month periods ended December 31, 2022 and 2021, are as follows:

		2022				2021
		Three months ended December 31,
		2022				2021

Total net sales		$	649,061			$	1,259,904
Cost of sales			228,086				612,150
Operating, selling, general and administrative expenses			1,295,572				1,402,961
Other expenses			3,195				3,034
Income (loss) from discontinued operations			(877,792	)			(758,241	)
Amortization of discounted royalties			4,427				-
Loss on sale of discontinued operations			(2,455,341	)			-
Income tax provision			-				-
Discontinued operations, net of tax			(3,328,706	)			(758,241	)

During the quarter ended December 31, 2022, Vicon completed the closure of its discontinued operating entity Vicon Systems, Ltd. located in Israel. The Company received funds 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.