RELATED PARTY TRANSACTIONS |
9 Months Ended | |||||||||
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Jun. 30, 2025 | ||||||||||
| Related Party Transactions [Abstract] | ||||||||||
| RELATED PARTY TRANSACTIONS | NOTE 17 – RELATED PARTY TRANSACTIONS
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:
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 June 30, 2025, there were royalties receivable from the sale of Cemtrex, XR, Inc. of $410,143, of which $130,000 is considered short-term and is presented on the Company’s unaudited Condensed Consolidated Balance Sheet under the caption “Trade receivables, net – related party. The Company has taken a $50,000 allowance for expected credit losses against these royalties.
As of June 30, 2025, there was $513,263 in trade receivables due from the Cemtrex XR successor company, CXR, Inc. Of these receivables $60,628 are related to costs paid by Cemtrex and $130,000 is the short term due on the royalties on CXR, Inc.’s revenues. The remaining $322,635 is related to the services provided by Cemtrex Technologies Pvt. Ltd. in the normal course of business.
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.
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