RELATED PARTY TRANSACTIONS |
6 Months Ended | |||||||||
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Mar. 31, 2026 | ||||||||||
| 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 March 31, 2026, there were royalties receivable from the sale of Cemtrex, XR, Inc. of $664,000, all of which 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 $381,550 allowance for expected credit losses against these royalties.
As of March 31, 2026, there was $548,554 in trade receivables due from the Cemtrex XR successor company, CXR, Inc. Of these receivables $282,450 is the net due on the royalties on CXR Inc.’s revenues. The remaining $266,104 is related to the services provided by Vicon Security Technologies Pvt Ltd. (formerly Cemtrex Technologies Pvt. Ltd.) in the normal course of business. During the year ended September 30, 2025, the Company recorded $60,628 in current expected credit losses on receivables due from CXR Inc.
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