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LINES OF CREDIT AND LONG-TERM LIABILITIES
 6 Months Ended
Mar. 31, 2025
Debt Disclosure [Abstract]  
LINES OF CREDIT AND LONG-TERM LIABILITIES

NOTE 19 – LINES OF CREDIT AND LONG-TERM LIABILITIES

 

Revolving line of credit

 

On October 5, 2023, the Company obtained a revolving line of credit in the amount of $5,000,000 from Pathward, N.A. The interest rate will be a rate which is equal to three percentage points (3%) in excess of that rate shown in the Wall Street Journal as the prime rate (the “Effective Rate”) and matures twenty-four months from the closing date. This loan is secured by the Company’s eligible accounts receivable and eligible finished goods inventory. The Company’s ability to borrow against the line of credit is limited by the value of the eligible assets. As of March 31, 2025, the Company had enough eligible assets to access approximately $3,000,000 of the credit line. The Company was in compliance with all loan covenants as of March 31, 2025. As of March 31, 2025, and September 30, 2024, this loan had a balance of $2,867,425, and $3,125,011, respectively.

 

Standstill Agreement

 

On April 30, 2024, the Company entered into a Standstill Agreement with Streeterville Capital, LLC (“Streeterville”) in which Streeterville agreed not to seek to redeem any portion of its two outstanding notes with the Company for a period of one year expiring on April 30, 2025, with $239,813 classified as short-term, and in exchange, the Company agreed to pay to Streeterville the greater of $4,000,000 or fifty percent (50%) of the net proceeds the Company receives from the sale of any of its common stock or preferred stock during the Standstill Period. During fiscal year 2024, the Company paid Streeterville $4,588,897 under this agreement.

 

Notes payable

 

On November 21, 2024, the Company issued a note payable to Streeterville Capital, LLC in the amount of $580,000. This note carries interest of 8% and matures on May 21, 2026. After deduction of an original issue discount of $75,000 and legal fees of $5,000, the Company received $500,000 in cash. As of March 31, 2025, this note had unamortized original issue discount balance of $58,333.

 

 

The following table outlines the Company’s secured liabilities:

 

   Interest Rate  Maturity  

March 31,

2025		  

September 30,

2024		 
Fulton Bank - $360,000 fund equipment for AIS. The Company was in compliance with loan covenants as of March 31, 2025. This loan is secured by certain assets of the Company.  SOFR plus 2.37% (6.78% as of March 31, 2025 and 7.33% as of September 30, 2024).  1/31/2025    -                    28,302 
                  
Fulton Bank - $312,000 fund equipment for AIS. The Company was in compliance with loan covenants as of March 31, 2025. This loan is secured by certain assets of the Company.  SOFR plus 2.37% (6.78% as of March 31, 2025 and 7.33% as of September 30, 2024).  9/30/2029    285,203    312,000 
                  
Fulton Bank mortgage $2,476,000. The Company was in compliance with loan covenants as of March 31, 2025. This loan is secured by the underlying asset.  SOFR plus 2.62% (7.03% on March 31, 2025 and 7.58% on September 30, 2024).   1/28/2040    2,073,854    2,113,337 
                  
Fulton Bank (HEISEY) - $1,200,000 mortgage loan; requires monthly principal and interest payments through August 1, 2043 with a final payment of remaining principal on September 1, 2043; The loan is collateralized by 615 Florence Street and 740 Barber Street and guaranteed by AIS and Cemtrex.  SOFR plus 2.80% per annum (7.21% as of March 31, 2025 and 7.76% as of September 30, 2024).  9/30/2043    1,161,568    1,176,112 
                  
Fulton Bank (HEISEY) - $2,160,000. promissory note related to purchase of Heisey; requires 84 monthly principal and interest payments; The note is collateralized by the Heisey assets and guaranteed by the Parent; matures in 2030.  SOFR plus 2.80% per annum (7.21% as of March 31, 2025 and 7.76% as of September 30, 2024).  7/1/2030    1,750,234    1,881,621 
                  
Note payable - $5,755,000 - Less original issue discount $750,000 and legal fees $5,000, net cash received $5,000,000 Unamortized original issue discount balance of $0, as of March 31, 2025 and September 30, 2024.  8% 6/30/2025    254,867    244,766 
                  
Note payable - $9,205,000. Less original issue discount $1,200,000 and legal fees $5,000,net cash received $8,000,000. 28,572 shares of common stock valued at $700,400 recognized as additional original issue discount. Unamortized original issue discount balance of $0 as of March 31, 2025 and September 30, 2024.  8% 2/22/2026    12,699,096    12,195,789 
                  
Note payable - $580,000. Less original issue discount $75,000 and legal fees $5,000,net cash received $500,000. Unamortized original issue discount balance of $70,833 as of March 31, 2025.  8% 5/21/2026    596,999    - 
                  
Paycheck Protection Program loan - $121,400 - The issuing bank determined that this loan qualifies for loan forgiveness; however the Company is awaiting final approval from the Small Business Administration.  1% 5/5/2025    30,381    50,628 
                  
Total debt         $18,852,202   $18,002,555 
Less: Current maturities          (9,301,045)   (4,732,377)
Less: Unamortized original issue discount          (58,333)   - 
Long-term debt         $9,492,824   $13,270,178