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RELATED PARTY TRANSACTIONS
 12 Months Ended
Sep. 30, 2025
Related Party Transactions [Abstract]  
RELATED PARTY TRANSACTIONS

NOTE 17 – RELATED PARTY TRANSACTIONS

 

As of September 30, 2023, there were $637,208 of receivables due from Ducon Technologies, Inc ., which is controlled by Aron Govil, the Company’s Founder and Former Director and CFO. The Company has negotiated a payment agreement regarding past receivables and other liabilities due to Cemtrex, Inc. totaling $761,585. This agreement is in the form of a secured promissory note earning interest at a rate of 5% per annum and matured on July 31, 2024. The Company did not receive payment on this note at the maturity date and placed a full allowance on the note during fiscal year 2024 and appears on the Company’s Consolidated Statements of Operations and Comprehensive Loss under general and administrative expenses.

 

 

Cemtrex Inc. and Subsidiaries

 

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.

 

On January 6, 2025, the Company and Saagar Govil signed an agreement to revise the purchase price structure and payment terms.

 

The Agreement’s Purchase Price provisions were amended to reflect that the Purchase Price will solely consist of the royalties based on the actual revenues generated in the three years following closing. The provision requiring the total sum of royalties to reach a minimum of $820,000, with any shortfall to be paid by Purchaser, was removed from the Agreement.

 

Additionally, it was agreed that the payment terms due under the royalties shall be as follows commencing on January 1, 2025:

 

●First Year (January 2025) Monthly Payment: $10,000

 

●Second Year (January 2026) Monthly Payment: $20,000

 

●Balloon Payment at the end of the Second Year (December 31, 2026): Total outstanding royalties

 

This transaction was approved by the Board of Directors with Saagar Govil abstaining from the vote.

 

Based on the new payment terms, management determined that it was appropriate to remove the previously recognized royalty receivable of $280,545 from the financial statements as of December 31, 2024.

 

As of September 30, 2025, there were royalties receivable from the sale of Cemtrex, XR, Inc. of $460,475, of which $104,229 is considered short-term and is presented on the Company’s Consolidated Balance Sheet under the caption “Trade receivables, net – related party. The Company has taken a $165,771 allowance for expected credit losses against these royalties.

 

As of September 30, 2025, there was $405,493 in trade receivables due from the Cemtrex XR successor company, CXR, Inc. Of these receivables $104,229 is the short term due on the royalties on CXR Inc.’s revenues. The remaining $301,264 is related to the services provided by Cemtrex Technologies Pvt. Ltd. in the normal course of business. During the year, the Company recorded $60,628 in current expected credit losses on receivables due from CXR Inc.

 

On May 5, 2025, Saagar Govil, CEO, made a short-term loan to the Company of $200,000 for certain operating needs. This loan was repaid on August 1, 2025.