AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 22, 2008
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
  Washington, DC 20549
 
  FORM 10/A
(Amendment No. 1 to Form 10 Filed on May 14, 2008)
  
GENERAL FORM FOR REGISTRATION OF SECURITIES
Pursuant to Section 12(b) or (g) of the Securities Exchange Act of 1934
 
CEMTREX, INC.
 (Exact name of registrant as specified in its charter)

Delaware
 (State or other jurisdiction of
incorporation or organization)
 
30-0399914 
(I.R.S. Employer
Identification No.)
 
CEMTREX, INC.
19 Engineers Lane,
Farmingdale, New York 11735
631-756-9116
 (Address of principal executive offices)
 
Registrant’s telephone number, including area code: 631-756-9116 x 324
 
Securities to be registered pursuant to Section 12(b) of the Act:
None
 
Securities to be registered pursuant to Section 12(g) of the Act:

  Common Stock, $0.001 par value per share

REGISTRATION NO. ________
 


TABLE OF CONTENTS

PAGE

 
DESCRIPTION
PAGE
ITEM 1
Business
1
ITEM 1A
Risk Factors
8
ITEM 2
Financial Information
11
ITEM 3
Properties
15
ITEM 4
Security Ownership of Certain Beneficial Owners and Management
15
ITEM 5
Directors and Executive Officers
16
ITEM 6
Executive Compensation
17
ITEM 7
Certain Relations and Related Transactions, and Director Independence
18
ITEM 8.
Legal Proceedings
19
ITEM 9.
Market Price of and Dividends on the Registrant's Common Equity and Related Stockholder Matters
19
ITEM 10
Recent Sales of Unregistered Securities
19
ITEM 11
Description of Registrant’s Securities to be Registered
20
ITEM 12
Indemnification of Directors and Officers
21
ITEM 13
Financial Statements and Supplementary Data
22
ITEM 14
Changes in and Disagreements with Accountants
22
ITEM 15
Financial Statements and Exhibits
22
SIGNATURES
 
23
 
FORWARD-LOOKING STATEMENTS

In this prospectus, we include some forward-looking statements that involve substantial risks and uncertainties and other factors which may cause our operational and financial activity and results to differ from those expressed or implied by these forward-looking statements. In many cases, you can identify these statements by forward-looking words such as "may," "expect," "anticipate," "believe," "estimate," "plan," "intend" and "continue," or similar words. You should read statements that contain these words carefully because they discuss our future expectations, contain projections of our future results of operations or of our financial condition, or state other "forward-looking" information.

You should not place undue reliance on these forward-looking statements. The sections captioned "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Plan of Operations," as well as any cautionary language in this prospectus, provide examples of risks, uncertainties and events that may cause our actual results to differ materially from the expectations.

Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance, or achievements.

ITEM 1
BUSINESS

Cemtrex Inc. ("Cemtrex" or the "Company") is a Delaware corporation that designs, engineers, assembles and sells emission monitoring equipment and instruments to the chemicals, pulp and paper, steel, power, coal and petrochemical industries, as well as to municipalities, hospitals, and state and federal governments.

The Company's current products include the following:

o
Opacity monitor: Compliance & non-compliance types
o
Extractive Continuous Emission Monitors
o
Ammonia Analyzer
o
Mercury Analyzer
o
Insitu Process Analyzers

We experienced increased revenues (and expenses) in each year as compared to the preceding year. For the fiscal year ended September 30, 2007, we incurred revenues of $3,533,621 which is an increase $2,809,412 from the fiscal year ended September 30, 2006. For the fiscal year ended, September 30, 2007, we incurred a net loss of $123,565. For the fiscal year ended September 30, 2006, we generated a net income of $2,222. The following table summarizes these results:
 

 
 
 
Year Ended September 30,
 
 
 
2007
 
2006
 
           
Revenues
 
$
3,533,621
 
$
724,209
 
Operating Expenses
 
$
1,253,417
   
444,718
 
Net Income (Loss)
   
($ 123,565
)
$
2,222
 
Net Income Per Common Share, Basic and Diluted
 
$
0.0002
 
$
0.0001
 
Weighted Average Number of Shares
   
24,024,912
   
6,584,323
 
               
 
 
September 30,
     
2007
 
 
2006
 
               
Current Assets
 
$
1,180,972
 
$
332,451
 
Total Assets
 
$
4,238,532
 
$
607,333
 
Total Liabilities
 
$
2,758,046
 
$
131,782
 
Total Stockholders' Equity
 
$
1,480,486
 
$
475,551
 

On April 27, 1998, the Company was incorporated in the state of Delaware under the name “Diversified American Holdings, Inc.” On November 13, 1998, the Company’s name was changed to “Strateginet, Inc.” The Company subsequently changed its name to “Cemtrex Inc.” on December 16, 2004.

On December 30, 2004, the Company purchased certain assets from Ducon Technologies, Inc., which related to a business engaged in designing, assembling, selling and maintaining emission monitors to utilities and industries. Ducon Technologies Inc. is owned by Texxar Inc. a private corporation. The sole owner of Texxar, Inc. is Arun Govil, the Chairman, Chief Executive Officer, Treasurer and President of the Company. In consideration for the asset purchase, the Company issued to Ducon Technologies, Inc. 3,250,000 shares of its common stock. The shares were issued under Section 4(2) of the Securities Act of 1933, as amended, and/or Regulation D promulgated by the Securities and Exchange Commission.

On April 30, 2007, the Company purchased all of the issued and outstanding membership interests of Griffin Filters LLC, (“Griffin”) a company established since 1971 and engaged in the design, engineering & supplying of industrial air filtration equipment from its President. Arun Govil, the Chairman, Chief Executive Officer, Treasurer and President of the Company, was the owner of 100% of the issued and outstanding membership interests of Griffin. The Company purchased 100% ownership in Griffin for a purchase price of $ 2,750,000.00. The Company completed the Griffin purchase by (i) paying cash of $700,000.00, (ii) issuing 20,000,000 shares of common stock valued at $750,000.00 and (iii) issuing a four year convertible debenture in the amount of $1,300,000.00, paying interest of 8.0% per year and convertible into 30,000,000 shares of common stock. Griffin had sales and net income of $3,297,409 and $145, 981 respectively for fiscal year ended September 30, 2006. Griffin is now a wholly-owned subsidiary of the Company.

The Company designs, engineers, assembles and sells emission monitoring equipment and instruments to the chemicals, pulp and paper, steel, power, coal and petrochemical industries, as well as to municipalities, hospitals, and state and federal governments. Our emission monitoring systems are installed at the exhaust stacks of industrial facilities and are used to measure the outlet flue gas concentrations of regulated pollutants, such as sulfur dioxide, hydrogen chloride, hydrogen sulfide, nitrous oxides, ammonia, nitrogen oxide, carbon dioxide, carbon monoxide and other regulated pollutants. Through use of our equipment and instrumentation, our clients can monitor the exhausts to the atmosphere from their facilities and comply with Environmental Protection Agency and state and local emission regulations on dust, particulate, fumes, acid gases and other regulated pollutants into the atmosphere.
 
The Company is also getting involved in providing turnkey services for carbon credit projects from abatement of greenhouse gases pursuant to Kyoto protocol and assists project owners in selling of carbon credits globally. Carbon Credits are emission offsets that are generated from greenhouse gases abatement, renewable energy such as solar & wind, and energy efficiency projects which displace carbon emissions from traditional fossil fuel sources like coal, oil or gas with the subsequent reduction in greenhouse gas emissions. Companies, agencies and governments buy, sell, bank and trade Carbon Credits called Certified Emission Reductions or CERs.   Cemtrex provides consulting services for such projects and arranges for investment equity and the sales of CERs for its customers.
 
2


INDUSTRY BACKGROUND

The market for environmental control systems and technologies is directly dependent upon governmental regulations and their enforcement. During the past three decades, federal, state and local governments have realized the contaminated air poses significant threats to public health and safety, and, in response, have enacted legislation designed to curb emissions of a variety of air pollutants. Management believes that the existence of governmental regulations creates demand for Company’s emission monitoring equipment and environmental control systems.

These governmental regulations affect nearly every industrial activity. The principal federal legislation that was created is the Clean Air Act of 1970, as amended 9th Clean Air Act). This legislation requires compliance with ambient air quality standards and empowers the Environmental Protection Agency (EPA) to establish and enforce limits on the emissions of various pollutants from specific types of facilities. The states have primary responsibility for implementing these standards and, in some cases, have adopted standards more stringent than those established by the EPA. In 1990, amendments to the Clean Air Act were adopted which address, among other things, the country acid rain problem by imposing strict control on the emissions of sulfur dioxide from power plants. During 1997, EPA approved regulations for ozone related emissions and in 1998 EPA issued regulations requiring utilities in 22 states to significantly reduce Nitrogen oxides emissions.

According to scientists, the Earth's surface has risen in temperature by about 1 degree Fahrenheit in the past century. There is increasing evidence that certain human activities are contributing to this change in temperature through activities that increase the levels of greenhouse gases, primarily carbon dioxide, methane, and nitrous oxide, in the atmosphere. Greenhouse gases trap heat that would normally escape back into the atmosphere, thus increasing the Earth's natural greenhouse effect and increasing temperature over time.

The Earth's climate is predicted to change because human activities are altering the chemical composition of the atmosphere through the buildup of greenhouse gases—primarily carbon dioxide (CO 2 ), methane (CH 4 ), and nitrous oxide (NO x ). The heat-trapping property of these gases is undisputed. Although uncertainty exists about exactly how Earth's climate responds to these gases, global temperatures are rising.

EPA Clean Air market Programs
 
EPA’s Clean air market programs include various market-based regulatory programs designed to improve air quality. Clean air markets include various market-based regulatory programs designed to improve air quality by reducing outdoor concentrations of fine particles, sulfur dioxide, nitrogen oxides, mercury, ozone and other significant air emissions. The most well-known of these programs are EPA’s Acid Rain Program and the NO x Trading Programs , which reduce emissions of sulfur dioxide (SO 2 ) and nitrogen oxides (NO x )–compounds produced by fossil fuel combustion.
 
Acid Rain Program
 
The goal of the Acid Rain Program is to achieve significant environmental and public health benefits through reductions in emissions of sulfur dioxide (SO 2 ) and nitrogen oxides (NO x ), the primary causes of acid rain. To achieve this goal at the lowest cost to society, the program employs both traditional and innovative, market-based approaches for controlling air pollution. In addition, the program encourages energy efficiency and pollution prevention.
 
"Acid rain" is a broad term referring to a mixture of wet and dry deposition (deposited material) from the atmosphere containing higher than normal amounts of nitric and sulfuric acids. The precursors, or chemical forerunners, of acid rain formation result from both natural sources, such as volcanoes and decaying vegetation, and man-made sources, primarily emissions of SO 2 and NO x resulting from fossil fuel combustion. In the United States, roughly 2/3 of all SO 2 and 1/4 of all NO x come from electric power generation that relies on burning fossil fuels, like coal.  Acid rain occurs when these gases react in the atmosphere with water, oxygen, and other chemicals to form various acidic compounds. The result is a mild solution of sulfuric acid and nitric acid. When sulfur dioxide and nitrogen oxides are released from power plants and other sources, prevailing winds blow these compounds across state and national borders, sometimes over hundreds of miles.
 
NOx Trading Program
 
The goal of the NOx Trading Program is to reduce the transport of ground-level ozone across large distances. The Ozone Transport Commission (OTC) NO x Budget Program was implemented from 1999 to 2002 and was replaced by the NO x Budget Trading Program —also known as the “NO x SIP Call”—in 2003. The NO x SIP Call Program is a market-based cap and trade program created to reduce emissions of nitrogen oxides (NO x ) from power plants and other large combustion sources in the eastern United States. NOx is a prime ingredient in the formation of ground-level ozone (smog), a pervasive air pollution problem in many areas of the eastern United States. The NO x Budget Trading Program was designed to reduce NO x emissions during the warm summer months, referred to as the ozone season, when ground-level ozone concentrations are highest.
 
3

 
Clean Air Interstate Rule (CAIR)
 
On March 10, 2005, EPA issued the Clean Air Interstate Rule (CAIR). This rule provides states with a solution to the problem of power plant pollution that drifts from one state to another. CAIR covers 28 eastern states and the District of Columbia. The rule uses a cap and trade system to reduce the target pollutants—sulfur dioxide (SO 2 ) and nitrogen oxides (NO x )—by 70 percent.
 
The goal of the Clean Air Interstate Rule (CAIR) is to permanently cap emissions of SO 2 and NO x in the eastern U.S. States must achieve the required emission reductions using one of two compliance options: (1) meet the state’s emission budget by requiring power plants to participate in an EPA-administered interstate cap and trade system, or (2) meet an individual state emissions budget through measures of the state’s choosing.
 
Clean Air Mercury Rule (CAMR)  
 
On March 15, 2005, EPA issued the Clean Air Mercury Rule (CAMR) to permanently cap and reduce mercury emissions from coal-fired power plants for the first time ever. This rule makes the United States the first country in the world to regulate mercury emissions from utilities.
 
The goal of the Clean Air Mercury Rule (CAMR) is to reduce mercury emissions from coal-fired power plants through “standards of performance” for new and existing utilities and a market-based cap and trade program.
 
CAMR establishes “standards of performance” limiting mercury emissions from new and existing coal-fired power plants, and creates a market-based cap and trade program that will reduce nationwide utility emissions of mercury in two distinct phases. The first phase cap is 38 tons and emissions will be reduced by taking advantage of “co-benefit” reductions—that is, mercury reductions achieved by reducing sulfur dioxide (SO 2 ) and nitrogen oxides (NO x ) emissions under Clean Air Interstate Rule (CAIR) . In the second phase, due in 2018, coal-fired power plants will be subject to a second cap, which will reduce emissions to 15 tons upon full implementation.
 
EPA Emission Monitoring Requirements
 
EPA’s emissions monitoring requirements are designed to ensure the compliance with its current regulations pursuant to various programs. The emission monitoring requirements ensure that the emissions data collected is of a known, consistent, and high quality, and that the mass emissions data from source to source are collected in an equitable manner. This is essential to support the Clean Air Markets Program’s mission of promoting market-based trading programs as a means for solving air quality problems
 
Continuous emissions monitoring (CEM) is instrumental in ensuring that the mandated reductions of SO 2 , NO x mercury and other pollutants are achieved. While traditional emissions limitation programs have required facilities to meet specific emissions rates, the current Program requires an accounting of each ton of emissions from each regulated unit. Compliance is then determined through a direct comparison of total annual emissions reported by CEM and allowances held for the unit.
 
CEM is the continuous measurement of pollutants emitted into the atmosphere in exhaust gases from combustion or industrial processes. EPA has established requirements for the continuous monitoring of SO 2 , volumetric flow, NO x , diluent gas, and opacity for units regulated under the Acid Rain Program. In addition, procedures for monitoring or estimating carbon dioxide (CO 2 ) are specified. The CEM rule also contains requirements for equipment performance specifications, certification procedures, and recordkeeping and reporting.
 
The Acid Rain Program uses a market-based approach to reduce SO 2 emissions in a cost-effective manner. (One allowance is an authorization to emit 1 ton of SO 2 during or after a specified calendar year; a utility may buy, sell, or hold allowances as part of its compliance strategy.) Complete and accurate emissions data are key to implementing this market-based approach.
 
An essential feature of smoothly operating markets is a method for measuring the commodity being traded. The CEM data supplies the gold standard to back up the paper currency of emissions allowances. The CEM requirements, therefore, management believes instills confidence in the market-based approach by verifying the existence and value of the traded allowance.
 
The owner or operator of a unit regulated under the Acid Rain Program must install CEM systems on the unit unless otherwise specified in the regulation. CEM systems include:
 
 
·
An SO 2 pollutant concentration monitor.
 
 
·
A NO x pollutant concentration monitor.
 
 
·
A volumetric flow monitor.
 
 
·
An opacity monitor.
 
 
·
A diluent gas (O 2 or CO 2 ) monitor.
 
 
·
A computer-based data acquisition and handling system (DAHS) for recording and performing calculations with the data.
 
All CEM systems must be in continuous operation and must be able to sample, analyze, and record data at least every 15 minutes. All emissions and flow data will be reduced to 1-hour averages. The rule specifies procedures for converting the hourly emissions data into the appropriate units of measure.
 
4

 
The following is a summary of monitoring method requirements and options:
 
 
·
All existing coal-fired units serving a generator greater than 25 megawatts and all new coal units must use CEMs for SO 2 , NO x , flow, and opacity.
 
 
·
Units burning natural gas may determine SO 2 mass emissions by: (1) measuring heat input with a gas flowmeter and using a default emission rate; or (2) sampling and analyzing gas daily for sulfur and using the volume of gas combusted; or (3) using CEMs.
 
 
·
Units burning oil may monitor SO 2 mass emissions by one of the following methods:
 
 
1.
daily manual oil sampling and analysis plus oil flow meter (to continuously monitor oil usage)
 
 
2.
sampling and analysis of diesel fuel oil as-delivered plus oil flow meter
 
 
3.
automatic continuous oil sampling plus oil flow meter
 
 
4.
SO 2 and flow CEMs.
 
 
·
Gas-fired and oil-fired base-loaded units must use NO x CEMs.
 
 
·
Gas-fired peaking units and oil-fired peaking units may either estimate NO x emissions by using site-specific emission correlations and periodic stack testing to verify continued representativeness of the correlations, or use NO x CEMS. The emission correlation method has been significantly streamlined in the revised rule.
 
 
·
All gas-fired units using natural gas for at least 90 percent of their annual heat input and units burning diesel fuel oil are exempt from opacity monitoring.
 
 
·
For CO 2 all units can use either (1) a mass balance estimation, or (2) CO 2 CEMs, or (3) O 2 CEMs in order to estimate CO 2 emissions.
 
PRODUCTS

The Company offers a range of products and systems, incorporating diverse technologies, to address the needs of a wide variety of industries and their environmental regulations. Management believes that the Company provides a single source responsibility for design, engineering, assembly, installation and maintenance of systems to its customers.   The Company’s products are designed to operate so as to allow its users to determine their compliance with the latest governmental emissions regulations. The Company’s products measure the concentrations of various regulated pollutants in the flue gases discharging the exhaust stacks at various utilities and industries.

The Company's current products include the following:

Opacity monitor: Compliance & non-compliance types

Management believes that the Company’s Laser Opacity monitor provides the highest accuracy and long-term reliability available for stack opacity and dust measurements. An EPA-compliant monitoring system, the monitor is a lightweight, efficient solution for determining opacity or dust concentration in stack gases. Proven in many installations worldwide, it advances the state of opacity monitoring with higher levels of accuracy, flexible installation and reduced long-term maintenance

Extractive Continuous Emission Monitors (CEMS)

Cemtrex provides direct-extractive and dilution-extractive CEMS equipment & systems that are applicable for utilities, industrial boilers, FGD systems, SCR-NOx control, furnaces, gas turbines, process heaters, incinerators, and process controls. In addition to traditional CEMS designed for maximum reliability and minimal maintenance in monitoring criteria pollutants, the Company can also accurately quantify other gaseous compounds through in-situ or extractive FTIR systems. The Company’s Extractive CEMS can be configured to monitor for one or all of the following: • NOx • SO2 • CO2 • O2 • CO • THC • Mercury • H2S • HCl & HF Acid • NH3 • Particulate • Opacity • Volumetric Flow and Moisture.

Ammonia Analyzer

The flue gas stream which contain ammonia, nitrogen oxides and in some cases sulfur dioxide utilize Ultra Violet radiation techniques for measurements. All these components absorb UV radiation, and therefore can be monitored by process analyzers that utilize UV absorbance techniques for detection.

Mercury Analyzer
 
The EPA Clean Air Mercury rule requires that all coal fired power plants must provide continuous mercury monitoring by 2009. Management believes that Cemtrex's SM4 mercury monitor, a result of 10 years experience in mercury monitoring business, provides reliable online measurements at a much lower cost than any other competing model in the market. Cemtrex SM4 is the first instrument working on a thermo catalytic principle avoiding wet chemical sample treatment. As a consequence, the Company has found that maintenance demand has been drastically minimized. We believe that it is the only monitor that required no maintenance at a coal fired utility wet stack, no carrier gases, no water and 95% data availabilitySM4 uses straight extractive Teflon sheathed Hastelloy probe with no plugging or corrosion.

5

 
PRODUCT DEVELOPMENT

There are no products under development at the present time.

The Company is not dependent on, nor expects to become dependent on, any one or a limited number of suppliers. The Company buys parts and components to assemble its equipment and products. The Company does not manufacture or fabricate its own products or systems. The Company relies on sub-suppliers and third party vendors to procure from or fabricate its components based on its design, engineering and specifications. The Company also enters into subcontracts for field installation, which the Company supervises; and Company manages all technical, physical and commercial aspects of the performance of the Company contracts. To date, the Company has not experienced difficulties either in obtaining fabricated components and other materials and parts or in obtaining qualified subcontractors for installation work.

PARTS, REPAIR AND REFURBISHMENT SERVICES

The Company also provide replacement and spare parts and repair and refurbishment services for our emission monitoring systems following the expiration of our warranties which generally range up to 12 months. The Company has experienced only minimal costs from its warranties.

The Company’s standard terms of sale disclaim any liability for consequential or indirect losses or damages stemming from any failure of our products or systems or any component thereof. The Company seeks indemnification from its subcontractors for any loss, damage or claim arising from the subcontractors' failure to perform.

COMPETITION

The Company faces substantial competition in each of its principal markets. Most of its competitors are larger and have greater financial resources than the Company; several are divisions of multi-national companies. The Company competes on the basis of price, engineering and technological expertise, know-how and the quality of our products, systems and services. Additionally, the Company’s management believes that the successful performance of the Company’s installed products and systems is a key factor in gaining business as customers typically prefer to make significant purchases from a company with a solid performance history.

We obtain virtually all our contracts through competitive bidding. Although price is an important factor and may in some cases be the governing factor, it is not always determinative, and contracts are often awarded on the basis of the efficiency or reliability of products and the engineering and technical expertise of the bidder.   Several companies market products that compete directly with our products.  Other companies offer products that potential customers may consider to be acceptable alternatives to our products and services.  We face direct competition from companies with far greater financial, technological, manufacturing and personnel resources, including Thermo Fisher Scientific Inc., Tekran Instruments Corporation, Altech Environment USA, Shaw Group, and Horiba Instruments Inc. in the emissions monitoring business.

INTELLECTUAL PROPERTY

Over the years, the Company has developed proprietary technologies that give us an edge in competing with its competitors. Thus, the Company relies on a combination of trade secrets and know-how to protect its intellectual property. The Company has not filed any patents.

MARKETING

The Company relies on manufacturing representatives, distributors, direct salespersons, magazine advertisements, internet advertising, trade shows, trade directories and catalogue listings to market our products and services. The Company uses more than eight manufacturing sales representatives in the United States backed by our senior management and technical professionals. The Company’s arrangements with independent sales representatives accord each a defined territory within which to sell some or all of our products and systems, provide for the payment of agreed-upon sales commissions and are terminable at will. The Company’s sales representatives do not have authority to execute contracts on the Company’s behalf.

The Company’s sales representatives also serve as ongoing liaison function between us and our customers during the installation phase of our products and systems and address customers' questions or concerns arising thereafter. The Company selects representatives based upon industry reputation, prior sales performance including number of prospective leads generated and sales closure rates, and the breadth of territorial coverage, among other criteria.

Technical inquiries received from potential customers are referred to our engineering personnel. Thereafter, the Company’s sales and engineering personnel jointly prepare a budget for future planning, a proposal, or a final bid . The period between initial customer contact and issuance of an order is generally between two and twelve months.

6

 
CUSTOMERS

The Company’s principal customers are engaged in refining, power, chemical, mining and metallurgical processing. Historically, most of our customers have purchased individual products or systems which, in many instances, operate in conjunction with products and systems supplied by others. For several years, the Company has marketed its products as integrated custom engineered emission monitoring systems and environmental management solutions. No one single customer accounts for a large percentage of our annual sales.

On most projects, the Company is responsible to its customers for all phases of the design, assembly, supply and, if included, field installation of its products and systems. The successful completion of a project is generally determined by a successful operational test of the supplied equipment conducted by our field service technician in the presence of the customer.

TECHNOLOGY

The Company has developed a broad range of emission monitoring technological base. The Company’s equipment and instruments are used: (i) to measure particulate, carbon dioxide, nitrogen oxides, mercury and sulfur dioxide from coal-fired power plants, (ii) to measure particulate from cement plants, (iii) to measure hydrocarbons, particulate and sulfur dioxide from refineries, (iv) to measure hydrogen sulfide, carbon monoxide, ammonia, hydrocarbons and other regulated pollutants from chemical plants, steel plants, incinerators and other industrial exhausts. Our emission monitors are capable of meeting all current federal and local emission monitoring standards. The Company has not filed any patents with respect to its technology.
 
BONDING AND INSURANCE

While only a very few of our contracts require the Company to procure bid and performance bonds, such requirements are prevalent for large projects or projects partially or fully funded by federal, state or local governments. A bid bond guarantees that a bidder will execute a contract if it is awarded the job and a performance bond guarantees performance of the contract. The Company does not presently have a bank credit line to back bid or performance bonds. Thus, the Company cannot bid on certain contracts.

In certain cases, the Company is able to secure large contracts by accepting progress payments with retention provisions in lieu of bonds.

The Company currently maintains different types of insurance, including general liability and property coverage. The Company does not maintain product liability insurance with respect to its products and equipment. Management believes that the insurance coverage that it is adequate for our current business needs.

GOVERNMENT REGULATION

Significant environmental laws, particularly the Federal Clean Air Act, have been enacted in response to public concern about the environment. The Company believe that compliance with and enforcement of these laws and regulations create the demand for our products and systems and largely determine the level of expenditures that customers will make to monitor the emissions from their facilities. The Federal Clean Air Act, initially adopted in 1970 and extensively amended in 1990, requires compliance with ambient air quality standards and empowers the EPA to establish and enforce limits on the emission of various pollutants from specific types of industrial facilities. States have primary responsibility for implementing these standards, and, in some cases, have adopted more stringent standards.

The 1990 amendments to the Federal Clean Air Act require, among other matters, reductions in the emission of sulfur oxides, believed to be the cause of "acid rain," in the emission of 189 identified hazardous air pollutants and toxic substances and the installation of equipment and systems which will contain certain named toxic substances used in industrial processes in the event of sudden, accidental, high-volume releases. Such amendments also extend regulatory coverage to many facilities previously exempt due to their small size and require the EPA to identify those industries which will be required to install the mandated control technology for the industry to reduce the emission of hazardous air pollutants from their respective plants and facilities. The Montreal Protocol, adopted in 1987, as well as EPA regulations issued in 1992, call for the phase-out of CFCs. In addition, regulations promulgated by the EPA in 1993 further limit the concentration of pollutants, such as hydrogen chloride, sulfur dioxide, chlorine, heavy metals and hazardous solid substances in the form of extremely fine dust, from sewage sludge incinerators. Sewage sludge facilities are required to comply with these regulations. Compliance with all these regulations can only be achieved by first monitoring the pertinent emission levels.

EMPLOYEES

The Company employs 21 full time and three part time employees, consisting of one executive officer, five managers, ten technical engineers, and five clerical and administrative support persons. None of our employees are represented by a labor union. In addition, the Company utilizes commission sales personnel and contract design engineers, on an as needed basis. There are no employment agreements.
 
FACILITIES

The Company does not own any real estate.

7

 
The Company leases its principal office at Farmingdale, New York, 4000 square feet of office and warehouse/shop space in a single story commercial structure on a month to month lease from Ducon Technologies Inc., at a monthly rental of 2,157.00. The Company’s subsidiary Griffin Filters LLC leases approx. 10,000 sq. ft. of office and warehouse space in Liverpool, New York from a third party in a five year lease at a monthly rent of $ 4,225.00 expiring on March 30, 2012. The Company has no plans to acquire any property in the immediate future. The Company believes that its current facilities are adequate for its needs through the next six months, and that, should it be needed, suitable additional space will be available to accommodate expansion of the Company's operations on commercially reasonable terms, although there can be no assurance in this regard. There are no written agreements.

ITEM 1A
RISK FACTORS

An Investment in our common stock involves risks. You should carefully consider the following risks, as well as the other information contained in this prospectus. If any of the following risks actually occur, our business could be materially harmed.

RISKS RELATED TO OUR BUSINESS

o We are substantially dependent upon the success and market acceptance of our technology. The failure of the emissions monitoring and controls market to develop as we anticipate, would adversely affect our business .

The Company's success is largely dependent on increased market acceptance of our emission monitoring equipment and control systems.   . If acceptance of emissions monitoring equipment does not continue to grow, then the Company’s revenues may be significantly reduced .

o If we are unable to develop new products, our competitors may develop and market products with better features that may reduce demand for our potential products . The Company may not be able to introduce any new products or any enhancements to its existing products on a timely basis, or at all. In addition, the introduction by the Company of any new products could adversely affect the sales of certain of its existing products. If the Company's competitors develop innovative emissions testing technology that are superior to the Company's products or if the Company fails to accurately anticipate market trends and respond on a timely basis with its own innovations, the Company may not achieve sufficient growth in its revenues to attain profitability.

o We have incurred losses for the fiscal year ending September 30, 2007, and we may incur losses for the foreseeable future.  

We had net loss of $123,565 for the fiscal year ended September 30, 2007. These losses have resulted principally from expenses incurred in the extensive demonstration testing of its new SM4 compliance mercury monitors at various utility sites and the low gross margin product line of Griffin Filters. We may continue to incur significant expenditures related to research and development, selling and marketing and general and administrative activities as well as capital expenditures and anticipate that our expenses and losses may increase in the foreseeable future as we expand our business. Further, as a public company we will also incur significant legal, accounting and other expenses that we did not incur as a private company. To achieve profitability, we will need to generate significant additional revenues with significantly improved gross margins. It is uncertain when, if ever, we will return to profitability. Even if we were to become profitable, we might not be able to sustain or increase profitability on a quarterly or annual basis.

o The Company faces constant changes in governmental standards by which our products are evaluated.

The Company believes that, due to the constant focus on the environment and clean air standards throughout the world, a requirement in the future to adhere to new and more stringent regulations both domestically and abroad is possible as governmental agencies seek to improve standards required for certification of products intended to promote clean air.  In the event our products fail to meet these ever-changing standards, some or all of our products may become obsolete.

o The future growth of our business depends, in part, on enforcement of existing emissions-related environmental regulations and further tightening of emission standards worldwide.

The Company expects that the future business growth will be driven, in part, by the enforcement of existing emissions-related environmental regulations and tightening of emissions standards worldwide.  If such standards do not continue to become stricter or are loosened or are not enforced by governmental authorities, it could have a material adverse effect on our business, operating results, financial condition and long-term prospects.

o   We may incur substantial costs enforcing our proprietary information, defending against third-party patents, invalidating third-party patents or licensing third-party intellectual property, as a result of litigation or other proceedings relating to patent and other intellectual property rights .

The Company considers its technology and procedures proprietary. In particular, the Company depends substantially on its flexibility to develop custom engineered solutions for various applications and be responsive to customer needs. The Company has not filed for any patents for its technologies.

8

 
The Company may be notified of claims that it has infringed a third party's intellectual property. Even if such claims are not valid, they could subject the Company to significant costs. In addition, it may be necessary in the future to enforce the Company's intellectual property rights to determine the validity and scope of the proprietary rights of others. Litigation may also be necessary to defend against claims of infringement or invalidity by others. An adverse outcome in litigation or any similar proceedings could force the Company to take actions that could harm its business. These include: (i) ceasing to sell products that contain allegedly infringing property; (ii) obtaining licenses to the relevant intellectual property which the Company may not be able to obtain on terms that are acceptable, or at all; (iii) indemnifying certain customers or strategic partners if it is determined that the Company has infringed upon or misappropriated another party's intellectual property; and (iv) redesigning products that embody allegedly infringing intellectual property. Any of these results could adversely affect the Company's business, financial condition and results of operations. In addition, the cost of defending or asserting any intellectual property claim, both in legal fees and expenses, and the diversion of management resources, regardless of whether the claim is valid, could be significant.

o Product defects could cause the Company to incur significant product liability, warranty, repair and support costs and damage its reputation which would have a material adverse effect on its business.

Although the Company rigorously tests its products, defects may be discovered in future or existing products. These defects could cause the Company to incur significant warranty, support and repair costs and divert the attention of its research and development personnel. It could also significantly damage the Company's reputation and relationship with its distributors and customers which would adversely affect its business. In addition, such defects could result in personal injury or financial or other damages to customers who may seek damages with respect to such losses. A product liability claim against the Company, even if unsuccessful, would likely be time consuming and costly to defend.

o The markets in which we operate are highly competitive, and many of our competitors have significantly greater resources than we do.

There is significant competition among companies that provide emissions monitoring systems.  Several companies market products that compete directly with our products.  Other companies offer products that potential customers may consider to be acceptable alternatives to our products and services.  We face direct competition from companies with far greater financial, technological, manufacturing and personnel resources, including Thermo Fisher Scientific Inc., Tekran Instruments Corporation, Altech Environment USA, Shaw Group, and Horiba Instruments Inc. in the emissions monitoring business. Newly developed products could be more effective and cost efficient than our current or future products.  Many of the current and potential future competitors have substantially more engineering, sales and marketing capabilities and broader product lines than we have. 

o The Company’s results may fluctuate due to certain regulatory, marketing and competitive factors over which we have little or no control.

The factors listed below, some of which we cannot control, may cause our revenue and results of operations to fluctuate significantly:

 
·
the existence and enforcement of government environmental regulations. If these regulations are not maintained or enforced then the market for Company’s products could deteriorate;
 
·
Retaining and keeping qualified employees and management personnel;
 
·
Ability to upgrade our products to keep up with the changing market place requirements;
 
·
Ability to keep up with our competitors who have much higher resources than us;
 
·
Ability to find sub suppliers and sub contractors to assemble and install our products;
 
·
General economic conditions of the industry and the ability of potential customers to spend money on setting up new industries that require our products;
 
·
Ability to maintain or raise adequate working capital required for the operations and future growth; and
 
·
Ability to retain our CEO and other senior key personnel.

o The loss of our senior management and failure to attract and retain qualified personnel in a competitive labor market could limit our ability to execute our growth strategy, resulting a slower rate of growth.

We depend on the continued service of our senior management. Due to the nature of our business, we may have difficulty locating and hiring qualified personnel and retaining such personnel once hired. The loss of the services of any of our key personnel, or our failure to attract and retain other qualified and experienced personnel on acceptable terms, could limit our ability to execute our growth strategy resulting in a slower rate of growth.

o General economic downturns in general would have a material adverse effect on the Company's business, operating results and financial condition.

The Company's operations may in the future experience substantial fluctuations from period to period as a consequence of general economic conditions affecting consumer spending. Therefore, any economic downturns in general would have a material adverse effect on the Company's business, operating results and financial condition.

o A demand for payment of the outstanding loan or the conversion into non-assessable share of common stock of the Company may have an adverse effect on the Company.

9

 
On April 30, 2007, the Company issued a $1,300,000 Convertible Debenture to Arun Govil, the Company’s Chairman, CEO, President and Treasurer, in conjunction with the purchase of Griffin Filters, Inc. pursuant to the Agreement and Assignment of Membership Interests between Arun Govil and Cemtrex, Inc. The debenture carries an 8% annual interest rate with interest payable semiannually in arrears on the first business day of January and July each year. The debenture principle is due and payable on April 30, 2011.

The debenture has the right of conversion into 30,000,000 non-assessable shares of common stock of the Company at $0.001 (par value) per share. Conversion is not exercisable prior to December 31, 2007. Commencing December 31, 2007 and continuing to April 30, 2011, the Debenture Holder shall have the right of conversion subject o the terms and conditions of the debenture. In the event the face amount of the debenture is not fully converted on or before April 30, 2011, the conversion rights will lapse.

Risks related to investment in the common stock of the Company

o We may need additional funds in the future. We may be unable to obtain additional funds or if we obtain financing it may not be on terms favorable to us. You may lose your entire investment.

Based on our current plans, we believe our existing cash and cash equivalents along with cash generated from operations will be sufficient to fund our operating expenses and capital requirements through December 31, 2008, although there is no assurance of this result, we may need funds in the future. If our capital resources are insufficient to meet future capital requirements, we will have to raise additional funds. If we are unable to obtain additional funds on terms favorable to us, we may be required to cease or reduce our operating activities.

o If we raise additional funds by selling additional shares of our capital stock, the ownership interests of our stockholders will be diluted.

o Our stock trades on the Pink Sheets electronic quotation system.

The Company’s Common Stock currently trades on the Pink Sheets electronic quotation system under the symbol “CTEI.PK”. The Pink Sheets is a decentralized market regulated by the Financial Industry Regulatory Authority in which securities are traded via an electronic quotation system. There can be no assurance that a trading market for the Company's shares will continue to exist in the future, and there can be no assurance that an active trading market will develop or be sustained. The market price of the shares of Common Stock is likely to be highly volatile and may be significantly affected by factors such as actual or anticipated fluctuations in the Company's operating results, announcements of technological innovations, new products or new contracts by the Company or its competitors, developments with respect to proprietary rights, adoption of new government regulations affecting the environment, general market conditions and other factors. In addition, the stock market has from time to time experienced significant price and volume fluctuations that have particularly affected the market price for the common stocks of technology companies. These types of broad market fluctuations may adversely affect the market price of the Company's common stock. See Risk Factor “Our stock price may be highly volatile” below.

o Our shares of common stock are thinly traded, so stockholders may be unable to sell at or near ask prices or at all if they need to sell shares to raise money or otherwise desire to liquidate their shares.
 
Our common stock has from time to time been “thinly-traded,” meaning that the number of persons interested in purchasing our common stock at or near ask prices at any given time may be relatively small or non-existent. This situation is attributable to a number of factors, including the fact that we are a small company that is relatively unknown to stock analysts, stock brokers, institutional investors and others in the investment community that generate or influence sales volume, and that even if we came to the attention of such persons, they tend to be risk-averse and would be reluctant to follow an unproven company such as ours or purchase or recommend the purchase of our shares until such time as we become more seasoned and viable. As a consequence, there may be periods of several days or more when trading activity in our shares is minimal or non-existent, as compared to a seasoned issuer which has a large and steady volume of trading activity that will generally support continuous sales without an adverse effect on share price. We cannot give stockholders any assurance that a broader or more active public trading market for our common shares will develop or be sustained, or that current trading levels will be sustained.
 
o Our common stock will be subject to “penny stock” rules which may be detrimental to investors.
 
If our common stock is not listed on a national exchange or market, the trading market for our common stock may become illiquid. Our common stock trades on the over-the-counter electronic bulletin board and, therefore, is subject to the requirements of certain rules promulgated under the Securities Exchange Act of 1934, which require additional disclosure by broker-dealers in connection with any trades involving a stock defined as a "penny stock". The Securities and Exchange Commission has adopted regulations which generally define "penny stock" to be any equity security that has a market price (as defined) of less than $5.00 per share or an exercise price of less than $5.00 per share. The securities will become subject to rules that impose additional sales practice requirements on broker-dealers who sell such securities. For transactions covered by these rules, the broker-dealer must make a special suitability determination for the purchaser of such securities and have received the purchaser's written consent to the transaction prior to the purchase. Additionally, for any transaction involving a penny stock, unless exempt, the rules require the delivery, prior to the transaction, of a disclosure schedule prepared by the Securities and Exchange Commission relating to the penny stock market. The broker-dealer also must disclose the commissions payable to both the broker-dealer and the registered representative, current quotations for the securities and, if the broker-dealer is the sole market-maker, the broker-dealer must disclose this fact and the broker-dealer's presumed control over the market. Finally, among other requirements, monthly statements must be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stocks. Consequently, the "penny stock" rules may restrict the ability of purchasers in this offering to sell the Common Stock offered hereby in the secondary market.
 
10

 
o We do not anticipate paying any dividends.
 
No dividends have been paid on the common stock of the Company. The Company does not intend to pay cash dividends on its common stock in the foreseeable future, and anticipates that profits, if any, received from operations will be devoted to the Company's future operations. Any decision to pay dividends will depend upon the Company's profitability at the time, cash available and other relevant factors.  
 
o Our stock price may be highly volatile.

The market price of our common stock, like that of many other technology companies, has been highly volatile and may continue to be so in the future due to a wide variety of factors, including:

 
·
announcements of technological innovations by us, our collaborative partners or our present or potential competitors;
 
·
our quarterly operating results and performance;
 
·
developments or disputes concerning patents or other proprietary rights;
 
·
acquisitions;
 
·
litigation and government proceedings;
 
·
adverse legislation;
 
·
changes in government regulations;
 
·
economic and other external factors; and
 
·
general market conditions.

In addition, potential dilutive effects of future sales of shares of common stock by shareholders   and by the Company could have an adverse effect on the market price of our shares.

o Our principal shareholder has significant influence over our company which could make it impossible for the public stockholders to influence the affairs of the Company.

Approximately 74% of our outstanding voting capital stock is beneficially held by Arun Govil the Company’s Chairman, Chief executive officer, President and Treasurer. In addition, Mr. Govil holds a promissory note that may be convertible into 30,000,000 shares of common stock of the Company at his option. Consequently, Mr. Govil will be able to control substantially all matters requiring approval by the stockholders of the Company, including the election of all directors and approval of significant corporate transactions. This could make it impossible for the public stockholders to influence the affairs of the Company.
 
ITEM 2

           The following discussion of the financial condition and plan of operations contains forward-looking statements that involve risks and uncertainties. Please see “Risk Factors” and Forward-Looking Statements” elsewhere in this registration statement.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION ON PLAN OF OPERATION

The following discussion of our financial condition and plan of operations should be read in conjunction with the consolidated financial statements and the notes to those statements included elsewhere in this prospectus. This discussion includes forward-looking statements that involve risks and uncertainties. As a result of many factors, such as those set forth under "risk factors" and elsewhere in this prospectus, our actual results may differ materially from those anticipated in these forward-looking statements.
 
OVERVIEW
 
Cemtrex is a full-range of emission monitoring and air filtration Products Company engaged in designing, manufacturing and marketing emissions monitors and air filtration products and providing certain services for green house gases carbon credit generation projects. Our focus has evolved from expansion through acquisition to increasing the market share of products more effectively in the marketplace

Financial condition

The following table sets forth selected historical consolidated financial data from our consolidated financial statements and should be read in conjunction with our consolidated financial statements including the related notes and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” which are included below.
 
11

 
   
Year Ended September 30,
 
 
 
2007
 
2006
 
           
Revenues
 
$
3,533,621
 
$
724,209
 
Operating Expenses
 
$
1,253,417
   
444,718
 
Net Income (Loss)
   
($ 123,565
)
$
2,222
 
Net Income Per Common Share, Basic and Diluted
 
$
0.0002
 
$
0.0001
 
Weighted Average Number of Shares
   
24,024,912
   
6,584,323
 
 
   
September 30,
 
 
 
2007
 
2006
 
           
Current Assets
 
$
1,180,972
 
$
332,451
 
Total Assets
 
$
4,238,532
 
$
607,333
 
 
$
2,758,046
 
$
131,782
 
Total Stockholders' Equity
 
$
1,480,486
 
$
475,551
 
 
12

 
 
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
 
The following discussion and analysis is based upon our consolidated financial statements which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of our financial statements requires management to make estimates and assumptions that affect the reported amounts of revenues and expenses, and assets and liabilities during the periods reported. Estimates are used when accounting for certain items such as revenues, allowances for returns, early payment discounts, customer discounts, doubtful accounts, employee compensation programs, depreciation and amortization periods, taxes, inventory values, and valuations of investments, goodwill, other intangible assets and long-lived assets. We base our estimates on historical experience, where applicable and other assumptions that we believe are reasonable under the circumstances. Actual results may differ from our estimates under different assumptions or conditions. We believe that the following critical accounting policies affect our more significant judgments and estimates used in preparation of our consolidated financial statements.
 
We maintain allowances for doubtful accounts for estimated losses resulting from the inability of our customers to make required payments. We base our estimates on the aging of our accounts receivable balances and our historical write-off experience, net of recoveries.
 
We value our inventories at the lower of cost or market. We write down inventory balances for estimated obsolescence or unmarketable inventory equal to the difference between the cost of the inventory and the estimated market value based upon assumptions about future demand and market conditions.
 
Goodwill is reviewed for possible impairment at least annually or more frequently upon the occurrence of an event or when circumstances indicate that the Company’s carrying amount is greater than the fair value. In accordance with SFAS 142, the Company examined goodwill for impairment and determined that the Company’s carrying amount did not exceed the fair value, thus, there was no impairment.
 
Generally, sales are recognized when shipments are made to customers. Rebates, allowances for damaged goods and other advertising and marketing program rebates are accrued pursuant to contractual provisions and included in accrued expenses. Certain amount of our revenues fall under the percentage-of-completion method of accounting used for long-term contracts. Under this method, sales and gross profit are recognized as work is performed based on the relationship between actual costs incurred and total estimated costs at completion. Sales and gross profit are adjusted prospectively for revisions in estimated total contract costs and contract values. Estimated losses are recorded when identified.

 
 
  Net Sales: Net sales for 2007 increased by $2,809,412 or 388%, to $3,533,621, from $724,209 for 2006. Sales growth increased during the year of 2007 primarily due to the acquisition of Griffin Filters in April 2007. The overall market demand for our existing business increased during the last year.
   
 
Gross Profit : Gross profit for 2007 increased $721,972 or 161%, to $1,169,344 which made up 33.1% of net sales, from $447,372 for 2006, which made up 61.8% of net sales. The lower gross margin in 2007 was a direct result of the low gross margin product line of Griffin Filters. In addition, gross profit in the existing product line decreased due to the extensive demonstration testing of its new SM4 compliance mercury monitors at various utility sites.
 
13

 
 
Operating Expenses: Operating expenses for 2007 increased $808,699, or 182%, to $1,253,417 from $444,718 in 2006. Operating expenses as a percentage of sales decreased in 2007 to 35.5% from 61.4% in 2006. The decrease in operating expenses was primarily due to acquisition of Griffin Filters and having a larger sales volume in relation to the same operating expenses for the existing product line.
 
 
Net Income/Loss: The Company had a   net loss of ($123, 565) for 2007 as compared to a net income of $2,222 for 2006. The net loss in 2007 was a result of several factors including: (i) increased expenses in demonstration testing of the new SM4 mercury product line, (ii) low bookings and sales of the acquired business of griffin Filters.
 
 
Provision for Income Taxes: Our effective state and federal tax rate, adjusted for the effect of certain credits and adjustments, was approximately 38% and 38% for 2007 and 2006, respectively.
 
EFFECTS OF INFLATION
 
The Company’s business and operations have not been materially affected by inflation during the periods for which financial information is presented.
 
LIQUIDITY AND CAPITAL RESOURCES  
 
Working capital was ($277,074) at September 30, 2007, compared to $200,669 at September 30, 2006. This included cash and cash equivalents of $143,830 and $29,279 at September 30, 2007 and 2006, respectively. The reason for the decrease in working capital was the acquisition of Griffin Filters and the cash flow of certain ongoing projects at Griffin Filters where by costs have been incurred prior to shipping and recognizing the related sale revenue.
 
Trade receivables increased $567,457, or 266% at September 30, 2007 to $780,474 at September 30, 2007 from $213,017 at September 30, 2006. The increase in accounts receivable is attributable to receivables of Griffin Filters.
 
Inventories increased $177,512 or 237% to $252,443 at September 30, 2007 from $74,931 at September 30, 2006. The increase inventory was due to acquisition of Griffin Filters.
 
Continuing operations used $443,017 of cash in 2007, compared to generating $4,343 of cash in 2006. The decrease in cash flows was primarily related to the increase in inventory combined with increase in accounts payable. Investing activities for continuing operations used $2,765,949 of cash during 2007, compared to no activity during 2006. The use of cash by investing activities was primarily attributable to the purchase of griffin Filters in April, 2007. The financing activities in 2007 generated $2,437,483 in cash from issuance of convertible debenture in the amount of $1,300,000 and sale of common stock in the amount of $1,128,500.  
 
We believe that our cash on hand, cash generated by operations, is sufficient to meet the capital demands of our current operations during the 2008 fiscal year. Any major increases in sales, particularly in new products, may require substantial capital investment. Failure to obtain sufficient capital could materially adversely impact our growth potential.
 
Outlook
 
We anticipate that the outlook for our products and services remains quite strong and we are positioned well to take advantage of it.
 
We believe there is currently a gradually increasing public awareness of the issues surrounding air quality and that this trend will continue for the next several years. We also believe there is an increase in public concern regarding the effects of air quality on society and future generations, as well as an increase in interest by standards-making bodies in creating specifications and techniques for detecting, defining and solving air quality problems. As a result, we believe there will be an increase in interest in our mercury monitors, opacity monitors, carbon credits and air filtration products of subsidiary Griffin Filters.
 
This Outlook section, and other portions of this document, include certain “forward-looking statements” within the meaning of that term in Section 27A of the Securities Act of 1933, and Section 21E of the Securities Exchange Act of 1934, including, among others, those statements preceded by, following or including the words “believe,” “expect,” “intend,” “anticipate” or similar expressions. These forward-looking statements are based largely on the current expectations of management and are subject to a number of assumptions, risks and uncertainties. Our actual results could differ materially from these forward-looking statements. Important factors to consider in evaluating such forward-looking statements include those discussed in Item 1A. Risk Factors as well as:
 
14


 
 
 
 
the shortage of reliable market data regarding the emission monitoring & air filtration market,
 
 
 
 
changes in external competitive market factors or in our internal budgeting process which might impact trends in our results of operations,
 
 
 
 
anticipated working capital or other cash requirements,
 
 
 
 
changes in our business strategy or an inability to execute our strategy due to unanticipated changes in the market,
 
 
 
 
product obsolescence due to the development of new technologies, and
 
 
 
 
Various competitive factors that may prevent us from competing successfully in the marketplace.
 
In light of these risks and uncertainties, there can be no assurance that the events contemplated by the forward-looking statements contained in this Form 10/A will in fact occur.
 
Item 7A.
Quantitative and Qualitative Disclosures About Market Risk
 
We are exposed to various market risks, primarily changes in interest rates. Market risk is the potential loss arising from adverse change in market rates and prices, such as foreign currency exchange and interest rates. For Cemtrex, these exposures are primarily related to changes in interest rates. We do not hold any derivatives or other financial instruments for trading or speculative purposes.
 
The Company’s financial position is not materially affected by fluctuations in currencies against the U.S. dollar, since there are no assets held outside the United States. Risks due to changes in foreign currency exchange rates are negligible, as the preponderance of our foreign sales occur over short periods of time or are demarcated in U.S. dollars.

ITEM 3
PROPERTIES

The Company does not own any real estate.

The Company leases its principal office at Farmingdale, New York, 4000 square feet of office and warehouse/shop space in a single story commercial structure on a month to month lease from Ducon Technologies Inc., at a monthly rental of 2,157.00. The Company’s subsidiary Griffin Filters LLC leases approx. 10,000 sq. ft. of office and warehouse space in Liverpool, New York from a third party in a five year lease at a monthly rent of $ 4,225.00 expiring on March 30, 2012. The Company has no plans to acquire any property in the immediate future. The Company believes that its current facilities are adequate for its needs through the next six months, and that, should it be needed, suitable additional space will be available to accommodate expansion of the Company's operations on commercially reasonable terms, although there can be no assurance in this regard. There are no written agreements.

ITEM 4
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth certain information known to us with respect to the beneficial ownership of our common stock as of March 31, 2008 by:

o all persons who are beneficial owners of five percent (5%) or more of our common stock;

o each of our directors;

o each of our executive officers; and

o all current directors and executive officers as a group.

15

 
Except as otherwise indicated, and subject to applicable community property laws, the persons named in the table below have sole voting and investment power with respect to all shares of common stock held by them.

As of January 31, 2008, 34,327,862 shares of common stock are issued and outstanding. Applicable percentage ownership in the following table is based on 64,327,862   shares of common stock outstanding as of January 31, 2008 which includes shares underlying a convertible debenture held by Mr. Govil, the President ,Chief Executive Officer and Chairman of the Board of the Company. (1)  

Beneficial ownership is determined in accordance with the rules of the SEC. In computing the number of shares beneficially owned by a person and the percentage ownership of that person, shares of common stock subject to options held by that person that are currently exercisable or exercisable within 60 days of January 31, 2008 are deemed outstanding. Such shares, however, are not deemed outstanding for the purpose of computing the percentage ownership of any other person.

 
Name and Address of
Owner
 
Title
 
Amount Owned
Before Offering
        
Percentage of Issued 
Common Stock  (1)
 
Common Stock
   
Arun Govil
19 Engineers Lane
Farmingdale, New York 11735
   
President ,Chief Executive Officer and Chairman of the Board
   
55,430,000
(2)(3)
 
86.2
%
Common Stock
   
Renato Dela Rama
19 Engineers Lane
Farmingdale, New York 11735
   
Vice President
   
0
   
0
 
Common Stock
   
Vandana Govil
19 Engineers Lane
Farmingdale, New York 11735
   
Secretary, Director
   
55,430,000
(2)(3)(4)
 
86.2
%
Common Stock
   
All directors and executive officers as a group (3 persons )
 
       
55,430,000
   
86.2
%
 
 
(1)
Except as otherwise noted herein, the percentage is determined on the basis of 64,327,862 shares of our common stock outstanding plus securities deemed outstanding pursuant to Rule 13d-3 promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Under Rule 13d-3, a person is deemed to be a beneficial owner of any security owned by certain family members and any security of which that person has the right to acquire beneficial ownership within 60 days, including, without limitation, shares of our common stock subject to currently exercisable options.
 
 
(2)
Includes the shares underlying the Convertible Debenture issued by the Company to Arun Govil the Company’s Chairman, CEO, President and Treasurer in conjunction with the purchase of Griffin Filters, Inc. The debenture has the right of conversion into 30,000,000 non-assessable shares of common stock of the Company at $0.001 (par value) per share. The Debenture Holder has the right of conversion, subject to the terms and conditions of the debenture, commencing December 31, 2007 and continuing to April 30, 2011, thus Arun Govil has the right to convert the 30,000,000 non-assessable shares of common stock of the Company within 60 days. In the event the face amount of the debenture is not fully converted on or before April 30, 2011, the conversion rights will lapse.
 
 
(3)
Includes the shares owned by Ducon Technologies Inc. Duncon Technologies, Inc. is owned by Texxar Inc. a private corporation. The principal of Texxar, Inc. is Arun Govil the Chairman, Chief Executive Officer, Treasurer and President of the Company.
 
 
(4)
Vanana Govil is the spouse of Arun Govil, the President, Chief Executive Officer and Chairman of the Board of the Company and his shares are attributed to Ms. Govil.

ITEM 5
DIRECTORS AND EXECUTIVE OFFICERS

The following persons are our executive officers and directors. Directors are elected to hold offices until the next annual meeting of Shareholders and until their successors are elected or appointed and qualified. Officers are appointed by the board of directors until a successor is elected and qualified or until resignation, removal or death.
 
16

 
Name and Address
 
Age
 
Positions and Offices
         
Arun Govil
19 Engineers Lane
Farmingdale, New York 11735
 
51
 
President, Chief Executive Officer, Treasurer, and Chairman of the Board of Directors
         
Renato Dela Rama
19 Engineers Lane
Farmingdale, New York 11735
 
58
 
Vice President of Finance
         
Vandana Govil
19 Engineers Lane
Farmingdale, New York 11735
 
46
 
Secretary and Director

Arun Govil has been our President since December 2004. Mr. Govil is also President of Ducon Technologies Inc., a privately held company engaged in air pollution Control systems business since 1996. Prior to 1996 Mr. Govil, Mr. Govil worked at various management and technical positions in the environmental industry. Mr. Govil holds a B.E. degree in Chemical Engineering and a M.B.A. in Finance. He is also a licensed Professional Engineer in New York State and New Jersey.

Renato Dela Rama has been our Vice President of Finance since December 2004. Mr. Dela Rama is also the Controller of Ducon Technologies Inc. since 2004. Prior to that he worked in various accounting and financial management positions. Mr. Dela Rama holds a B.S. degree in accounting.

Vandana Govil has served as secretary and Director of the Company since December 2004. Ms. Govil earned her B.S. in accounting and economics from State University of New York at Old Westbury in 2000. From 1987 to 1995, Ms. Govil was a realtor. Arun Govil and Vandana Govil are husband and wife.

Except for Mr. and Mrs. Govil, there are no family relationships among our directors and officers. None of our directors or officers is a director in any other reporting companies. None of our directors or officers has been affiliated with any company that has filed for bankruptcy within the last five years. The Company is not aware of any proceedings to which any of the Company’s officers or directors, or any associate of any such officer or director, is a party adverse to the Company or any of the Company’s subsidiaries or has a material interest adverse to it or any of its subsidiaries.

Each director of the Company serves for a term of one year or until the successor is elected at the Company's annual shareholders' meeting and is qualified, subject to removal by the Company's shareholders. Each officer serves, at the pleasure of the board of directors, for a term of one year and until the successor is elected at the annual meeting of the board of directors and is qualified.

The Board of Directors has not established an audit committee and does not have an audit committee financial expert. The Board is of the opinion that an audit committee is not necessary since the company has only two directors to date and such directors have been performing the functions of an audit committee

The business address for each of our officers and directors is 19 Engineers Lane, Farmingdale, NY 11735 .

ITEM 6
EXECUTIVE COMPENSATION

BOARD OF DIRECTORS

All of our directors hold office until the next annual meeting of stockholders and the election and qualification of their successors. Our executive officers are elected annually by the board of directors to hold office until the first meeting of the board following the next annual meeting of stockholders and until their successors are chosen and qualified.

DIRECTORS' COMPENSATION

We reimburse our directors for expenses incurred in connection with attending board meetings but we do not pay our directors fees or other cash compensation for services rendered as a director.

EXECUTIVE COMPENSATION

The compensation discussion addresses all compensation awarded to, earned by, or paid to the Cemtrex's named executive officers. As of March 31, 2007, two of our executive officers are currently earning compensation. Set forth below is the aggregate compensation for services rendered in all capacities to us during our fiscal years ended September 30, 2004, 2005 and 2006 by our executive officers. Except as indicated below, none of our executive officers were compensated in excess of $100,000.

17


   
SUMMARY COMPENSATION TABLE
 
                   
LONG-TERM
 
NAME AND PRINCIPAL
 
ANNUAL COMPENSATION TABLE
 
COMPENSATION AWARDS
 
                       
                   
SECURITIES UNDERLYING
 
POSITION
 
YEAR
 
SALARY
 
BONUS
 
OTHER
 
OPTIONS/SARS
 
                       
Arun Govil
   
2006
 
$
   
 
   
   
 
Chairman, Chief Executive
Officer and Treasurer and
President
   
2007
 
$
125,000
 
$
000
   
   
 
                                 
Vandana Govil
   
2006
 
$
 
   
   
   
 
Secretary, Director
   
2007
 
$
125,000
 
$
000
   
   
 

OPTIONS/SAR GRANTS IN THE LAST FISCAL YEAR

On April 30, 2007, the Company issued a $1,300,000 Convertible Debenture to Arun Govil the Company’s Chairman, CEO, President and Treasurer in conjunction with the purchase of Griffin Filters, Inc. pursuant to the Agreement and Assignment of Membership Interests between Arun Govil and Cemtrex, Inc. The debenture carries an 8% annual interest rate with interest payable semiannually in arrears on the first business day of January and July each year. The debenture principle is due and payable on April 30, 2011.

The debenture has the right of conversion into 30,000,000 non-assessable shares of common stock of the Company at $0.001 (par value) per share. Conversion is not exercisable prior to December 31, 2007. Commencing December 31, 2007 and continuing to April 30, 2011, the Debenture Holder shall have the right of conversion subject to the terms and conditions of the debenture. In the event the face amount of the debenture is not fully converted on or before April 30, 2011, the conversion rights will lapse.

AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR END OPTION/SAR VALUES

None.

ITEM 7
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

On December 30, 2004, the Company purchased certain assets from Ducon Technologies, Inc., which related to a business engaged in designing, assembling, selling and maintaining emission monitors to utilities and industries. Ducon Technologies Inc. is owned by Texxar Inc. a private corporation. The sole owner of Texxar, Inc. is Arun Govil, the Chairman, Chief Executive Officer, Treasurer and President of the Company. In consideration for the asset purchase, the Company issued to Ducon Technologies, Inc. 3,250,000 shares of its common stock. The shares were issued under Section 4(2) of the Securities Act of 1933, as amended, and/or Regulation D promulgated by the Securities and Exchange Commission.

On April 30, 2007, the Company purchased all of the issued and outstanding membership interests of Griffin Filters LLC, (“Griffin”) a company established since 1971 and engaged in the design, engineering & supplying of industrial air filtration equipment from its President. Arun Govil, the Chairman, Chief Executive Officer, Treasurer and President of the Company, was the owner of 100% of the issued and outstanding membership interests of Griffin. The Company purchased 100% ownership in Griffin for a purchase price of $ 2,750,000.00. The Company completed the Griffin purchase by (i) paying cash of $700,000.00, (ii) issuing 20,000,000 shares of common stock valued at $750,000.00 and (iii) issuing a four year convertible debenture in the amount of $1,300,000.00, paying interest of 8.0% per year and convertible into 30,000,000 shares of common stock. Griffin had sales and net income of $3,297,409 and $145, 981 respectively for fiscal year ended September 30, 2006. Griffin is now a wholly-owned subsidiary of the Company.
 
Ducon Technologies, Inc. is owned by Texxar Inc. a private corporation. Texxar Inc. is 100% owned by Arun Govil the Chairman, Chief Executive Officer, Treasurer and President of the Company.
 
Renato Dela Rama the Vice President of Finance of the Company is also the Controller of Ducon Technologies Inc.
 
Mrs. Vandana Govil, a director and the Secretary of the Company is the wife of Arun Gonvil the Chairman, Chief Executive Officer, Treasurer and President of the Company.

18

 
ITEM 8
LEGAL PROCEEDINGS

The Company is not currently a party to any material legal action.

ITEM 9
MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT'S COMMON EQUITY AND OTHER SHAREHOLDER MATTERS

On January 31, 2008, there were 34,327,862 s hares of common stock issued and outstanding and no shares of preferred stock issued or outstanding.

APPROXIMATE NUMBER OF COMMON STOCK HOLDERS

As of January 31, 2008, there were approximately 84 holders of record of the Company's common stock as determined from the Company’s transfer agent’s list. Such list does not include beneficial owners of securities whose shares are held in the names of various dealers and clearing agencies.

Of the 34,327,862   shares of common stock outstanding, 25,430,000 shares of common stock are beneficially held by "affiliates" of the company.

As of January 31, 2008, there is a convertible debenture of value $1,300,000 outstanding that are convertible into 30,000,000 shares of our common stock.

Under certain circumstances, restricted shares may be sold without registration, pursuant to the provisions of rule 144. In general Rule 144 permits the sale of restricted securities without any quantity limitations by a person who is not an affiliate of ours and has satisfied a six month holding period under certain circumstances (including the requirement that the Company has been subject to the reporting requirements of the Securities Act of 1934, as amended, for a period of one year, and the Company is current with respect to such reporting requirements). Any sales of shares by shareholders pursuant to rule 144 may have a depressive effect on the price of our common stock.

DETERMINATION OF OFFERING PRICE

The Company’s common stock currently trades on the pink sheets under the symbol: CTEI.pk.

As of January 31, 2008, there were approximately 84 holders of record of the Company's common stock as determined from the Company’s transfer agent’s list. Such list does not include beneficial owners of securities whose shares are held in the names of various dealers and clearing agencies.

No shares are being sold with this registration statement.
 
On August 21, 2007 the Company completed a 1:25 reverse split of our common stock. The Company is authorized to issue 60,000,000 shares of common stock, $0.001 par value per share. On April 10, 2008, there were   34,327,861 s hares of common stock issued and outstanding and no shares of preferred stock issued or outstanding.

The Company's Common Stock trades on the over-the-counter Pink Sheets. The price ranges presented below represent the highest and lowest quoted bid prices during the third and fourth quarter for 2006 and the first and second quarters of 2007 reported by Pink Sheets. The quotes represent prices between dealers and do not reflect mark-ups, markdowns or commissions and therefore may not necessarily represent actual transactions.
 
Common Stock
 
Year
 
Period
 
Stock Price
 
 
 
 
 
High
 
Low
 
       
 
     
2006
   
3 rd Quarter
 
$
0.80
 
$
0.70
 
 
   
4 th Quarter  
 
$
0.75
 
$
0.19
 
2007
   
1 st Quarter
 
$
0.25
 
$
0.12
 
 
   
2 nd Quarter  
 
$
0.11
 
$
0.03
 
 
   
3 rd Quarter  
 
$
0.03
 
$
0.02
 
 
   
4 th Quarter  
 
$
0.01
 
$
0.005
 

As reported by the over-the-counter Pink Sheets, on April 8, 2008 the closing sales price of the Company’s Common Stock was $0.006 per share.

We will bear all expenses in connection with the registration.

ITEM 10
RECENT SALES OF UNREGISTERED SECURITIES
 
Set forth below is information regarding the issuance and sales of our securities without registration for the past three (3) years from the date of this Registration Statement. No such sales involved the use of an underwriter, no advertising or public solicitation were involved, and no commissions were paid in connection with the sale of any securities. The securities marked with an “*” bore a restrictive legend
 
19

 
Names/Identities of Persons to
whom Securities Issued
 
Title of
Security 
 
Amount of
Securities Issued
 
Issue Date
 
Aggregate
Price of
Security ($)
 
Mazuma Corp.
    Common    
300,000
   
9/25/2006
   
50,000
 
Mazuma Corp.
    Common    
280,000
   
11/15/2006
   
25,000
 
Mazuma Corp.
    Common    
280,000
   
12/1/2006
   
25,000
 
Mazuma Corp.
    Common    
400,000
   
12/12/2006
   
25,000
 
Mazuma Corp.
    Common    
363,636
   
1/12/2007
   
25,000
 
Mazuma Corp.
    Common    
400,000
   
1/22/2007
   
20,000
 
Mazuma Corp.
    Common    
400,000
   
2/2/2007
   
30,000
 
Mazuma Corp.
    Common    
400,000
   
2/12/2007
   
27,500
 
Mazuma Corp.
    Common    
800,000
   
3/5/2007
   
40,000
 
Mazuma Corp.
    Common    
457,143
   
3/27/2007
   
20,000
 
Mazuma Corp.
    Common    
800,000
   
4/25/2007
   
26,000
 
Prye Funding Corp.
    Common    
789,091
   
5/3/2007
   
25,000
 
*Arun Govil
    Common    
20,000,000
   
4/19/2007
   
750,000
 
Mazuma Corp.
    Common    
1,777,778
   
5/16/2007
   
40,000
 

The transactions described above (other than the transaction marked with an “*”) were exempt from registration pursuant to Section 3(b) of the Securities Act of 1933, as amended, and Rule 504 of Regulation D promulgated thereunder.

The transaction marked with an “*” to Mr. Govil, the Company’s President, Chief Executive Officer, Treasurer, and Chairman of the Board of Directors, was exempt from registration pursuant to Section 4(2) of the Securities Act of 1933 by reason that: (i) no commissions were paid for the issuance of security; (ii) the issuance of such security by the Company did not involve a "public offering"; (iii) the purchaser was sophisticated and accredited investors; (iv) the offerings were not a "public offering" as defined in Section 4(2) due to the insubstantial numbers of persons involved in such sales, size of the offering, manner of the offering and number of securities offered; and (v) in addition, the purchaser had the necessary investment intent as required by Section 4(2) since the purchaser agreed to and received security bearing a legend stating that such security is restricted pursuant to Rule 144 of the 1933 Securities Act. (These restrictions ensure that this security would not be immediately redistributed into the market and therefore not be part of a "public offering").

ITEM 11
 
Authorized Capital Stock  
 
On August 21, 2007 the Company completed a 1:25 reverse split of our common stock.   The Company is authorized to issue 60,000,000 shares of common stock, $0.001 par value per share. On April 10, 2008, there were   34,327,861 s hares of common stock issued and outstanding and no shares of preferred stock issued or outstanding.
 
Our Common Stock  
 
Holders of our common stock are entitled to one vote for each share held of record on all matters to be submitted to a vote of the stockholders and do not have pre-emptive rights. Cumulative voting is not permitted. This means that the holders of shares entitled to exercise more than 50% of the voting rights in the election of directors, for example, will be able to elect all of our directors.
 
The holders of our common stock are entitled to dividends and other distributions as and if declared by our board of directors out of funds legally available therefor. All outstanding shares of our common stock are, and the shares to be issued in the merger will be, when issued pursuant to the merger agreement, fully paid and nonassessable. Upon our liquidation, dissolution or winding up, the holders of our common stock would be entitled to share pro rata in the distribution of all of our assets, if any, remaining after payment or provision for payment of all our debts and obligations and preferred liquidation payments, if any, to holders of any outstanding shares of preferred stock. Shares of our common stock are not subject to any redemption provisions and are not convertible into any other security or other property of us. No share of our common stock is subject to any call or assessment.
 
Certain Provisions of Our Certificate of Incorporation and Delaware Law  
 
No Classified Board of Directors. Our Certificate of Incorporation and Bylaws provide for our directors to be elected annually for a term of one year.
 
20

 
Advance Notice Provisions for Stockholder Proposals and Stockholder Nominations of Directors. Our Certificate of Incorporation provides that at an annual meeting of stockholders, only such business will be conducted as will have been properly brought before the meeting. To be properly brought before an annual meeting, business must be (a) specified in the notice of such meeting (or any supplement thereof, given by or at the direction of the board of directors of us), (b) otherwise properly brought before the meeting by or at the direction of the board of directors of us, or (c) otherwise properly brought before the meeting by a stockholder. For business to be properly brought before an annual meeting by a stockholder, the stockholder must have given timely notice thereto in writing to our Secretary.
 
  Delaware Takeover Statute . We are subject to Section 203 of the Delaware General Corporation Law which, subject to certain exceptions, prohibits a Delaware corporation from engaging in any of a broad range of business combinations with any “interested stockholder” for a period of three years following the date that such stockholder became an interested stockholder, unless:

 
 
 
 
 
before that date, our board of directors has approved either the business combination or the transaction which resulted in the stockholder becoming an interested stockholder;
 
 
 
 
 
 
upon consummation of the transaction which resulted in the stockholder becoming an “interested stockholder,” the interested stockholder owned at least 85% of our voting stock outstanding at the time the transaction commenced, excluding for purposes of determining the number of shares outstanding those shares owned:
 
 
 
 
 
 
by persons who are directors and also officers; and
 
 
 
 
 
 
by employee stock plans in which employee participants do not have the right to determine confidentially whether shares held subject to the plan will be tendered in a tender or exchange offer; or
 
 
 
 
 
 
on or after such date, the business combination is approved by our board of directors and authorized at an annual or special meeting of stockholders, and not by written consent, by the affirmative vote of at least 66-2/3% of the outstanding voting stock which is not owned by the interested stockholder.
 
 
An “interested stockholder” is defined as any person that is (a) the owner of 15% or more of the outstanding voting stock of the corporation or (b) an affiliate or associate of the corporation and was the owner of 15% or more of our outstanding voting stock at any time within the three-year period immediately prior to the date on which it is sought to be determined whether such person is an interested stockholder.
 
Transfer Agent and Registrar  
 
The transfer agent and registrar for our common stock is First American Stock Transfer Company, 706 E. Bell Road, Suite 202, Phoenix, AZ 85022. Telephone number: (602)485-1346.

ITEM 12
INDEMNIFICATION OF DIRECTORS AND OFFICERS
 
Cemtrex, as a Delaware corporation, are empowered by the Delaware General Corporation Law (“DGCL”), subject to the procedures and limitations stated therein, to indemnify any person against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with any threatened, pending or completed action, suit or proceeding in which such person is made a party by reason of his being or having been our director, officer, employee or agent. The statute provides that indemnification pursuant to its provisions is not exclusive of other rights of indemnification to which a person may be entitled under any by-law, agreement, vote of stockholders or disinterested directors, or otherwise. Cemtrex pursuant to the DGCL indemnifies a director, provided that such indemnity shall not apply on account of:

(a) any breach of the director's duty of loyalty to us or our stockholders;
(b) acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law; or
(c) unlawful payments of dividends or unlawful stock repurchases or redemptions as provided in the DGCL.

Our Bylaws provide that we will indemnify our officers and directors for costs and expenses incurred in connection with the defense of actions, suits, or proceedings against them on account of their being or having been directors or officers of Cemtrex, absent a finding of negligence or misconduct in office.

Our Bylaws also permit us to maintain insurance on behalf of our officers, directors, employees and agents against any liability asserted against and incurred by that person whether or not we have the power to indemnify such person against liability for any of those acts.

Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers, or persons controlling us pursuant to the foregoing provisions, we have been informed that, in the opinion of the SEC, that type of indemnification is against public policy as expressed in the Act and is therefore unenforceable.
 
21

 
ITEM 13
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The financial statements required to be included in this registration statement appear at the end of the registration statement beginning on page F-1. The following information sets forth certain quarterly data over the last two years, 2007 and 2006.

ITEM 14
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS

There have been no changes in and/or disagreements with   Gruber & Company, LLC, our independent registered public accountants, on accounting and financial disclosure matters.

ITEM 15
FINANCIAL STATEMENTS AND EXHIBITS
 
Report of Independent Registered Public Accounting Firm – September 2007  
F-1
   
Audited Consolidated Balance Sheets as of September 30, 2006 and September 30, 2007
F-2
   
Audited Consolidated Statements of Operations for the Year Ended September, 2007 and 2006
F-3
 
 
Audited Consolidated Statements of Stockholders’ Equity (Deficit) for the Years Ended September 30, 2007, 2006 and 2005
F-4
   
Audited Consolidated Statements of Cash Flows for the Year Ended September 30, 2007 and 2006
F-5
   
Notes to Audited Consolidated Financial Statements
F-6
   
Consolidated Balance Sheets as of December 31, 2007  
F-12
   
Consolidated Statements of Operations for the Three Months Ended December 31, 2007 and 2006  
F-13
   
Consolidated Statements of Stockholders’ Equity (Deficit) for the Three Months Ended December 31, 2007  
F-14
   
Consolidated Statements of Cash Flows for the Three Months Ended December 31, 2007 and 2006  
F-15
   
Notes to Consolidated Financial Statements  
F-16

REPORTS TO SECURITIES HOLDERS

We have filed with the SEC a registration statement on Form 10 under the Securities Act with respect to the issuance of shares of our common stock being offered by this registration statement. We are not currently subject to the informational requirements of the Securities Exchange Act of 1934. As a result of the offering of the shares of our common stock, we will become subject to the informational requirements of the Exchange Act, and, in accordance therewith, will file quarterly and annual reports and other information with the SEC; and send a copy of our annual report together with audited consolidated financial statements to each of our shareholders. The registration statement, such reports and other information can be inspected and copied at the Public Reference Room of the SEC located at 100 F Street N.E., Washington D.C. 20549. Copies of such materials, including copies of all or any portion of the registration statement, can be obtained from the Public Reference Room of the SEC at prescribed rates. You can call the SEC at 1-800-SEC-0330 to obtain information on the operation of the Public Reference Room. Such materials may also be accessed electronically by means of the SEC's home page on the internet ( http://www.sec.gov ).

22

 
 
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
THE BOARD OF CEMTREX, INC.
 
We have audited the accompanying consolidated balance sheet of Cemtrex, Inc. and Subsidiary as of September 30, 2007 and 2006, and the related consolidated statements of operations, stockholders equity and cash flows for the periods then ended. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.
 
We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform our audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
 
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Cemtrex, Inc. and Subsidiary at September 30, 2007 and 2006 and the results of its’ consolidated operations and its’ stockholders equity and cash flows for the periods then ended in conformity with accounting principles generally accepted in the United States of America.
 
Gruber & Company, LLC Saint Louis, Missouri
 
March 10, 2008
 
F-1


Cemtrex, Inc. and Subsidiary
Consolidated Balance Sheets

   
September 30,
 
   
2007
 
2006
 
Assets
         
Current Assets
         
Cash & Equivalents
 
$
143,830
 
$
29,279
 
Accounts Receivable
   
780,474
   
213,017
 
Inventory
   
252,443
   
74,931
 
Prepaid Expenses & Other Assets
   
4,225
   
15,224
 
Total Current Assets
   
1,180,972
   
332,451
 
               
Property & Equipment, Net
   
61,723
   
-
 
Other
   
22,024
   
-
 
Goodwill, Net
   
2,973,813
   
274,882
 
               
Total Assets
 
$
4,238,532
 
$
607,333
 
               
Liabilities & Stockholders' Equity (Deficit)
             
Current Liabilities
             
Accounts Payable
 
$
914,907
 
$
131,782
 
Accrued Expenses
   
448,640
   
-
 
Customer Deposits
   
85,516
   
-
 
Notes Payable-Shareholder
   
8,983
   
-
 
Total Current Liabilities
   
1,458,046
   
131,782
 
               
Convertible Debenture
   
1,300,000
    -  
Total Liabilities
   
2,758,046
       
               
Commitments & Contingencies
   
-
   
-
 
               
Stockholders' Equity (Deficit)
             
Preferred Stock, $0.001 par value, 10,000,000 shares authorized, no shares issued and outstanding
 
$
-
 
$
-
 
Common Stock, $0.001 par value, 60,000,000 shares authorized; 34,327,862 and 6,880,213 shares issued and outstanding, respectively.
   
34,328
   
6,880
 
Additional Paid-in Capital
   
1,644,172
   
543,120
 
Accumulated Deficit
   
(198,014
)
 
(74,449
)
Total Stockholders' Equity (Deficit)
   
1,480,486
   
475,551
 
               
Total Liabilities & Stockholders' Equity (Deficit)
 
$
4,238,532
 
$
607,333
 

The accompanying notes are an integral part of these financial statements
 
F-2

 
Cemtrex, Inc. and Subsidiary
Consolidated Statements of Operations

   
For the Year Ended September 30,
 
   
2007
 
2006
 
           
Revenues
 
$
3,533,621
 
$
724,209
 
               
Cost of Goods Sold
   
2,364,277
   
276,837
 
               
Gross Profit
   
1,169,344
   
447,372
 
               
Operating Expenses
   
1,253,417
   
444,718
 
               
Operating Income (Loss)
   
(84,073
)
 
2,654
 
               
Other Income (Expense)
             
Other Income
   
4,290
   
-
 
Interest Income
   
-
   
-
 
Interest Expense
   
(43,782
)
 
-
 
Total Other Income (Expense)
   
(39,492
)
 
-
 
               
Net Income (Loss) Before Income Taxes
   
(123,565
)
 
2,654
 
               
Provision for Income Taxes
   
-
   
(432
)
               
Net Income (Loss)
 
$
(123,565
)
$
2,222
 
               
Income (Loss) Per Share-Basic
 
$
(0.01
)
$
0.00
 
               
Weighted Average Number of Shares
   
24,024,912
   
6,584,323
 

The accompanying notes are an integral part of these financial statements
 
F-3


Cemtrex, Inc. and Subsidiary
Consolidated Statements of Stockholders' Equity (Deficit)
 
   
Preferre d Stock
 
Common Stock
         
  Total
 
 
 
Number of
 
Par  Value
 
Number of
 
Par Value
 
Additional Paid-
 
Accumulated
 
Stockholders'
 
 
 
Shares
 
($0.001) Amount
 
Shares
 
($0.001) Amount
 
In-Capital
 
Deficit
 
Equity (Deficit)
 
Balance at September 30, 2005
   
-
 
$
-
   
6,280,213
 
$
6,280
 
$
493,720
 
$
(76,671
)
$
423,329
 
Common Stock Issued to Investors for Cash
   
-
   
-
   
600,000
   
600
   
49,400
   
-
   
50,000
 
Capital Contributed by Officers
   
-
   
-
   
-
   
-
   
-
   
-
   
-
 
Net Loss
   
-
-
   
-
-
   
-
-
   
-
-
   
-
-
   
2,222
   
2,222
 
Balance at September 30, 2006
   
-
 
$
-
   
6,880,213
 
$
6,880
 
$
543,120
 
$
(74,449
)
$
475,551
 
Common Stock Issued to Investors for Cash
   
-
   
-
   
7,447,649
   
7,448
   
371,052
   
-
   
378,500
 
Common Stock Issued for Purchase of Assets
   
-
   
-
   
20,000,000
   
20,000
   
730,000
   
-
   
750,000
 
Net Loss
   
-
   
-
   
-
   
-
   
-
   
(123,565
)
 
(123,565
)
Balance at September 30, 2007
   
-
 
$
-
   
34,327,862
 
$
34,328
 
$
1,644,172
 
$
(198,014
)
$
1,480,486
 

The accompanying  notes are an integral part of these financial statements
 
F-4

 
Cemtrex, Inc. and Subsidiary
Consolidated Statements of Cash Flows
 
   
For the Year Ended September 30,
 
   
2007
 
2006
 
Cash Flows from Operating Activities
         
Net Income (Loss)
 
$
(123,565
)
$
2,222
 
               
Adjustments to reconcile net loss to net cash used in operating activities:
             
Depreciation & Amortization
   
5,295
   
7,186
 
               
Changes in operating assets and liabilities:
             
Accounts Receivable
   
(567,457
)
 
(94,833
)
Inventory
   
(177,512
)
 
29,518
 
Prepaid Expenses & Other Assets
   
10,999
   
(15,224
)
Other Assets
   
(22,024
)
 
-
 
Accounts Payable
   
783,125
   
66,788
 
Accrued Expenses
   
448,640
   
-
 
Customer Deposits
   
85,516
   
-
 
               
Net Cash Used in Operating Activities
   
443,017
   
(4,343
)
               
Cash Flows from Investing Activities
             
Purchase of Property and Equipment
   
(67,018
)
 
-
 
Net Purchase of Griffin Filters
   
(2,556,430
)
 
-
 
Goodwill from Ducon
   
(142,501
)
 
-
 
               
Net Cash Used in Investing Activities
   
(2,765,949
)
 
-
 
               
Cash Flows from Financing Activities
             
Repayment of Notes Payable
   
-
   
(45,000
)
Net Loans from Shareholders
   
8,983
   
(54,863
)
Convertible Debentures issued for Griffin Purchase
   
1,300,000
   
-
 
Common Stock Issued for Griffin Purchase
   
750,000
   
-
 
Common Stock Issued for Cash
   
378,500
   
50,000
 
               
Net Cash Provided by Financing Activities
   
2,437,483
   
(49,863
)
               
Net Increase (Decrease) in Cash
   
114,551
   
(54,206
)
               
Cash Beginning of Period
   
29,279
   
83,485
 
               
Cash End of Year
 
$
143,830
 
$
29,279
 
               
Supplemental Disclosure of Cash Flow Information:
             
Cash Paid during the period for interest
 
$
-
 
$
-
 
Cash Paid during the period for income taxes
   
-
   
432
 
               
Supplemental Disclosure of Non-Cash Items:
             
Convertible Debentures issued for Griffin Purchase
 
$
1,300,000
 
$
-
 
Common Stock Issued for Griffin Acquisition
   
750,000
   
-
 

The accompanying notes are an integral part of these financial statements
 
F-5

 
CEMTREX, INC.
(A Development Stage Enterprise)
NOTES TO FINANCIAL STATEMENTS
 
Note 1 – Organization, Business & Operations
 
Cemtrex, Inc. and its Subsidiary is engaged in manufacturing and selling the most advanced instruments for emission monitoring of particulate, opacity, mercury, sulfur dioxide, nitrogen oxides, etc. Cemtrex also provides turnkey services for carbon creation projects from abatement of greenhouse gases pursuant to Kyoto protocol and assists project owners in selling of carbon credits globally.   Company's products are sold to power plants, refineries, chemical plants, cement plants & other industries including federal and state Governmental agencies. Through its wholly-owned subsidiary Griffin Filters, Company designs, manufactures and sells air filtration equipment and systems to control particulate emissions from a variety of industries.
 
Cemtrex, Inc. was incorporated as Diversified American Holding, Inc. on April 27, 1998. On December 16, 2004 the Company changed its name to Cemtrex, Inc. On April 30, 2007, Cemtrex, Inc. acquired Griffin Filters, LLC (see Note 4 Acquisitions and Goodwill).
 
Note 2 - Summary of Significant Accounting Policies
 
Use of Estimates
 
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. Actual results could differ from those estimates.
 
Cash and Cash Equivalents
 
The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents.
 
Concentrations of Credit Risk - Cash
 
The Company maintains its cash with various financial institutions, which may exceed federally insured limits throughout the period.
 
Marketable Securities Available for Sale
 
The Company evaluates its investment policies and the appropriate classification of securities at the time of purchase consistent with Statement of Financial Accounting Standards ("SFAS") No. 115, "Accounting for Certain investments in Debt and Equity Securities," at each balance sheet date and determined that all of its investment securities are to be classified as available-for-sale. Available-for-sale securities are carried at fair value, with the unrealized gains and losses, net of tax, reported in stockholders' deficiency under the caption "Accumulated Other Comprehensive Loss". Realized gains and losses and declines in value judged to be other than-temporary on available-for-sale securities are included in net gain on sale of marketable securities. The cost of securities sold is based on the specific identification method.
 
Inventories
 
Inventories are comprised of replacement parts, system components and finished systems, which are stated at lower of cost or market. Cost is determined on a first-in, first-out (FIFO) basis.
 
Property and Equipment
 
Property and equipment are stated at cost and are depreciated using the straight-line method over their estimated useful lives, generally five to seven years. Leasehold improvements are amortized over the shorter of the useful life or the remaining lease term. Upon retirement or other disposition of these assets, the cost and related accumulated depreciation are removed from the accounts and the resulting gains or losses are reflected in operations. Expenditures for maintenance and repairs are charged to operations as incurred. Renewals and betterments are capitalized.
 
F-6

 
CEMTREX, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 
Revenue Recognition
 
Revenue is recognized in accordance with SEC Staff Accounting Bulletin No. 101, “Revenue Recognition in Financial Statements.” The Company recognizes revenue when the significant risks and rewards of ownership have been transferred to the customer pursuant to applicable laws and regulations, including factors such as when there has been evidence of a sales arrangement, delivery has occurred, or service have been rendered, the price to the buyer is fixed or determinable, and collectibility is reasonably assured.
 
Income Taxes
 
The Company accounts for income taxes using the liability method as required by Statement of Financial Accounting Standards ("FASB") No. 109, Accounting for Income Taxes ("SFAS 109"). Under this method, deferred tax assets and liabilities are determined based on differences between their financial reporting and tax basis of assets and liabilities. The Company was not required to provide for a provision for income taxes for the periods ended September 30, 2007 and 2006, as a result of net operating losses incurred during the periods. As of September 30, 2007, the Company has available approximately $198,000 of net operating losses ("NOL") available for income tax purposes that may be carried forward to offset future taxable income, if any. These carryforwards expire in various years through 2026. At September 31, 2007 and 2006, the Company has a deferred tax asset of approximately $82,000 and $31,000, relating to the Company's net operating losses., respectively. The Company's deferred tax asset has been fully reserved by a valuation allowance since realization of its benefit is uncertain. The Company's ability to utilize its NOL carryforwards may be subject to an annual limitation in future periods pursuant to Section 382 of the Internal Revenue Code of 1986, as amended.
 
The provision for income taxes using the federal and state tax rates as compared to the Company's effective tax rate is summarized as follows:
 
   
September 30,
 
   
2007
 
2006
 
           
Statutory Federal Tax (Benefit) Rate
   
-34.0
%
 
-34.0
%
Statutory State Tax (Benefit) Rate
   
-7.5
%
 
-7.5
%
Effective Tax (Benefit) Rate
   
-41.5
%
 
-41.5
%
               
Valuation Allowance
   
41.5
%
 
41.5
%
               
Effective Income Tax
   
0.0
%
 
0.0
%
 
Significant components of the Company's deferred tax assets at September 30, 2007 and 2006 are as follows:
 
 
   
September 30,
 
 
2007
 
2006
 
Deferred Tax Asset
             
               
Net Operating Loss Carryforward
 
$
82,176
   
30,896
 
               
Valuation Allowance
   
(82,176
)
 
(30,896
)
               
Net Deferred Tax Asset
 
$
-
   
-
 
 
Guarantee Expense
 
In accordance with FASB Interpretation No. 45 ("Fin 45"), the Company recognizes, at the inception of a guarantee, the cost of the fair value of the obligation undertaken in issuing the guarantee.
 
F-7

 
CEMTREX, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 
Fair Value of Financial Instruments
 
The reported amounts of the Company's financial instruments, including accounts payable and accrued liabilities, approximate their fair value due to their short maturities. The carrying amounts of debt approximate fair value since the debt agreements provide for interest rates that approximate market.
 
Stock Based Compensation
 
Effective January 1, 2006, the Company adopted Statement of Financial Accounting Standards ("SFAS") No. 123R, "Share Based Payment," using the modified-prospective-transition method. There was no effect to the accompanying financial statements pursuant to the adoption of SFAS No. 123R. SFAS No. 123R is a revision of SFAS No. 123, and supersedes APB Opinion No. 25, and its related implementation guidance. SFAS No. 123R addresses all forms of share-based payment awards including shares issued under employee stock purchase plans, stock options, restricted stock and stock appreciation rights. Under SFAS No. 123R, stock based awards result in a cost that will be measured at fair value on the award's grant date, based on the estimated number of awards that are expected to vest that will result in a charge to operations.
 
Prior to January 1, 2006, the Company accounted for employee stock transactions in accordance with Accounting Principles Board ("APB") Opinion No. 25. "Accounting for Stock Issued to Employees." The Company had adopted the pro forma disclosure requirements of SFAS No. 123, "Accounting for Stock-Based Compensation."
 
Prior to the Company's adoption of SFAS No. 123R, SFAS No. 123 required that the Company provide pro forma information regarding net earnings and net earnings per share as if the Company's stock-based awards had been determined in accordance with the fair value method prescribed therein. The Company had previously adopted the disclosure portion of SFAS No. 148 "Accounting for Stock-based Compensation - Transition and Disclosure," requiring quarterly SFAS No. 123 pro-forma disclosures. The pro-forma charge for compensation cost related to stock-based awards granted was recognized over the service period. For stock options, the service period represents the period of time between the date of grant and the date each option becomes exercisable without consideration of acceleration provisions (e.g., retirement, change of control, etc.).
 
There were no stock options granted to employees during the year ended December 31, 2007 and 2006, accordingly, there was no difference between the reported net income (loss) and pro forma net income (loss).
 
The cost of stock-based compensation awards issued to non-employees for services is recorded at either the fair value of the services rendered or of the instruments issued in exchange for such services, whichever is more readily determinable, using the measurement date guidelines enumerated in Emerging Issues Task Force ("EITF") Issue No. 96-18, "Accounting for Equity Instruments That Are Issued to Other Than Employees for Acquiring, or in Conjunction with Selling, Goods or Services.
 
Recently Issued Accounting Pronouncements
 
In February 2007, the FASS issued SFAS No. 159, "The Fair Value Option for Financial Assets and Liabilities" ("SFAS No. 159"). SFAS No. 159 provides companies with an option to report selected financial assets and liabilities at fair value, and establishes presentation and disclosure requirements designed to facilitate comparisons between companies that choose different measurement attributes for similar types of assets and liabilities. The new guidance is effective for fiscal years beginning after November 15, 2007. The Company is currently evaluating the potential impact of the adoption of SFAS No. 159 on its financial position and results of operations.
 
In December 2006, the FASS approved FASS Staff Position (FSP) No. EITF 00-19-2, "Accounting for Registration Payment Arrangements" ("FSP EITF 00-19-2"), which specifies that the contingent obligation to make future payments or otherwise transfer consideration under a registration payment arrangement, whether issued as a separate agreement or included as a provision of a financial instrument or other agreement, should be separately recognized and measured in accordance with SFAS No.5, "Accounting for Contingencies". FSP EITF 00- I9-2 also requires additional disclosure regarding the nature of any registration payment arrangements, alternative settlement methods, the maximum potential amount of consideration and the current carrying amount of the liability, if any. The guidance in FSP EITF 00-19-2 amends FASB Statements No. 133, "Accounting for Derivative Instruments and Hedging Activities", and No. 150, "Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity", and FASS Interpretation No. 45, "Guarantor's Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others", to include scope exceptions for registration payment arrangements. The adoption of this pronouncement did not have an impact on the company's financial position, results or operations or cash flows.
 
F-8

 
CEMTREX, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 
In September 2006, the FASB issued Statement of Financial Accounting Standard No. 157, "Fair Value Measurements." This statement defines fair value, establishes a fair value hierarchy to be used in generally accepted accounting principles and expands disclosures about fair value measurements. Although this statement does not require any new fair value measurements, the application could change current practice. The statement is effective for fiscal years beginning after November 15, 2007. The Company is currently evaluating the impact of this statement to its financial position and results of operations.
 
In September 2006, the staff of the Securities and Exchange Commission issued SAB No. 108 which provides interpretive guidance on how the effects of the carryover or reversal of prior year misstatements should be considered in quantifying a current year misstatement. SAS 108 becomes effective in fiscal 2007. The adoption of this pronouncement is not expected to have an impact on the Company's financial position, results of operation or cash flows.
 
In July 2006, the Financial Accounting Standards Board issued Interpretation No. 48, "Accounting for Uncertainty in Income Taxes - an Interpretation of FASS Statement No. 109" (the "Interpretation"). The Interpretation establishes for all entities a minimum threshold for financial statement recognition of the benefit of tax positions, and requires certain expanded disclosures. The Interpretation is effective for fiscal years beginning after December 31, 2006, and is to be applied to all open tax years as of the date of effectiveness. The Company is in the process of evaluating the impact of the application of the Interpretation to its financial statements.
 
In March 2006, the FASS issued SFAS 156 - "Accounting for Servicing of Financial Assets - an amendment of FASS Statement No. 140" ("SFAS 156"). SFAS 156 is effective for the first fiscal year beginning after September 15, 2006. SFAS 156 changes the way entities account for servicing assets and obligations associated with financial assets acquired or disposed of. The Company has not yet completed its evaluation of the impact of adopting SFAS 156 on its results of operations or financial position, but does not expect that the adoption of SFAS 156 will have a material impact.
 
In February 2006, the FASB issued SFAS No. 155 "Accounting for Certain Hybrid Financial Instruments-an amendment of FASB Statements No. 133 and 140" ("FAS 155"). FAS 155 addresses the following: a) permits fair value re-measurement for any hybrid financial instrument that contains an embedded derivative that otherwise would require bifurcation; b) clarifies which interest-only strips and principal-only strips are not subject to the requirements of Statement 133; c) establishes a requirement to evaluate interests in securitized financial assets to identify interests that are freestanding derivatives or that are hybrid financial instruments that contain an embedded derivative requiring bifurcation; d) clarifies that concentrations of credit risk in the form of subordination are not embedded derivatives; and e) amends Statement 140 to eliminate the prohibition on a qualifying special-purpose entity from holding a derivative financial instrument that pertains to a beneficial interest other than another derivative financial instrument. FAS 155 is effective for all financial instruments acquired or issued after the beginning of an entity's first fiscal year that begins after September 15, 2006. The Company has not yet completed its evaluation of the impact of adopting SFAS 155 on its results of operations or financial position, but does not expect that the adoption of SFAS 155 will have a material impact.
 
F-9

 
CEMTREX, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 
Note 3 - Property and Equipment
 
At September 30, 2007 and 2006, property and equipment are comprised of the following:
 
   
September 30,
 
   
2007
 
2006
 
           
Furniture and Office Equipment
 
$
62,993
 
$
-
 
Computer Software
   
4,025
   
-
 
               
Less: Accumulated Depreciation
   
(5,295
)
 
-
 
               
Net Property & Equipment
 
$
61,723
 
$
-
 
 
Depreciation for the year ended September 30, 2007 and 2006 was $5,295 and $0, respectively.
 
Note 4 – Acquisitions and Goodwill
 
On May 1, 2007, Cemtrex, Inc. purchased Griffin Filters, LLC for $2,750,000 for a combination of stock ($750,000), a convertible debenture ($1,300,000) and cash of $700,000.
 
Note 5 – Customer Deposits
 
The Company accounts for payments received prior to shipment as a liability and recognizes revenue when the products are shipped.
 
Note 6 – Note Payable Shareholder
 
A Note Payable to a shareholder is due within the next year and accrues interest at 5%.
 
Note 7 – Convertible Debenture
 
On April 30, 2007, the Company issued a $1,300,000 Convertible Debenture to an Officer of the Company in conjunction with the Purchase of Griffin Filters, Inc. The debenture caries an 8% annual interest rate with interest payable semiannually in arrears on the first business day of January and July each year. The debenture principle is due and payable on April 30, 2011.
 
The debenture has the right of conversion into non-assessable shares of common stock of the Company at $0.001 (par value) per share. Conversion is not exercisable prior to December 31, 2007. Commencing December 31, 2007 and continuing to April 30, 2011, the Debenture Holder shall have the right of conversion subject o the terms and conditions of the debenture. In the event the face amount of the debenture is not fully converted on or before April 30, 2011, the conversion rights will lapse.
 
Note 8 – Stockholders’ Equity
 
Preferred Stock
 
The Company is authorized to issue 10,000,000 shares of preferred stock, $0.001 par value. As of September 30, 2007 and 2006, there were no shares issued and outstanding.
 
Common Stock
 
The Company is authorized to issue 60,000,000 shares of common stock, $0.001 par value. As of September 30, 2007 and 2006, there were 34,327,862 and 6,880,213 shares issued and outstanding, respectively.
 
2006
 
For the year ended September 30, 2006, the Company issued 600,000 shares of Common Stock to investors for cash totaling $50,000.
 
2007
 
For the year ended September 30, 2007, the Company issued 7,447,649 shares of Common Stock to investors for cash totaling $378,500. In addition, the Company issued 20,000,000 shares of Common Stock to an Officer in conjunction with the acquisition of Griffin Filters totaling $750,000.
 
F-10

 
CEMTREX, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 
Note 9 – Commitments & Contingencies
 
Lease Obligations  
 
The Company leases its Corporate office space on a month-to-month basis with minimum monthly payments of $2,157.
 
The Company leases its Manufacturing office space on a 5 year lease agreement with minimum monthly payments of $4.225. This lease expires March 30, 2012.
 
Legal Proceedings
 
The Company is not currently involved in any lawsuits or litigation.
 
Note 10 - Subsequent Events
 
There are no material subsequent events.
 
F-11

 
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
THE BOARD OF CEMTREX, INC.
 
We have audited the accompanying consolidated balance sheets of Cemtrex, Inc. and Subsidiary as of December 31, 2007 and September 30, 2007, and the related consolidated statements of operations, stockholders equity and cash flows for the periods then ended. These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.
 
We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform our audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
 
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of Cemtrex, Inc. and Subsidiary at December 31, 2007 and September 30, 2007, and the results of its’ consolidated operations and its’ stockholders equity and cash flows for the periods then ended in conformity with accounting principles generally accepted in the United States of America.
 
Gruber & Company, LLC Saint Louis, Missouri
May 2, 2008
 
F-12

 
Cemtrex, Inc. and Subsidiary
Consolidated Balance Sheets

   
December 31,
2007
 
September 30,
2007
 
           
Assets
         
Current Assets
         
Cash & Equivalents
 
$
133,861
 
$
143,830
 
Accounts Receivable
   
896,597
   
780,474
 
Inventory
   
314,937
   
252,443
 
Prepaid Expenses & Other Assets
   
4,225
   
4,225
 
Total Current Assets
   
1,349,620
   
1,180,972
 
               
Property & Equipment, Net
   
59,816
   
61,723
 
Other
   
23,334
   
22,024
 
Goodwill, Net
   
2,973,813
   
2,973,813
 
Total Assets
 
$
4,406,583
 
$
4,238,532
 
               
               
Liabilities & Stockholders' Equity (Deficit)
             
Current Liabilities
             
Accounts Payable
 
$
960,208
 
$
914,907
 
Accrued Expenses
   
31,635
   
448,640
 
Customer Deposits
   
52,392
   
85,516
 
Notes Payable-Shareholder
   
450,825
   
8,983
 
Total Current Liabilities
   
1,495,060
   
1,458,046
 
               
Convertible Debenture
   
1,300,000
   
1,300,000
 
Total Liabilities
   
2,795,060
   
2,758,046
 
               
Commitments & Contingencies
   
-
   
-
 
               
Stockholders' Equity (Deficit)
             
Common Stock, $0.001 par value, 60,000,000 shares authorized; 34,327,862 shares issued and outstanding.
   
34,328
   
34,328
 
Additional Paid-in Capital
   
1,644,172
   
1,644,172
 
Accumulated Deficit
   
(66,977
)
 
(198,014
)
Total Stockholders' Equity (Deficit)
   
1,611,523
   
1,480,486
 
Total Liabilities & Stockholders' Equity (Deficit)
 
$
4,406,583
 
$
4,238,532
 

The accompanying notes are an integral part of these financial statements

F-13


Cemtrex, Inc. and Subsidiary
Consolidated Statements of Operations

   
For the Three Months Ended
December 31,
 
   
2007
 
2006
 
Revenues
 
$
1,238,435
 
$
237,332
 
               
Cost of Goods Sold
   
560,219
   
160,663
 
               
Gross Profit
   
678,216
   
76,669
 
Operating Expenses
   
516,114
   
71,929
 
                 
Operating Income (Loss)
   
162,102
   
4,740
 
               
Other Income (Expense)               
Other Income
   
570
   
6,056
 
Interest Expense
   
(31,635
)
 
-
 
Total Other Income (Expense)
   
(31,065
)
 
6,056
 
Net Income (Loss) Before Income Taxes
   
131,037
   
10,796
 
               
Provision for Income Taxes
   
-
   
-
 
Net Income (Loss)
 
$
131,037
 
$
10,796
 
                 
Income (Loss) Per Share-Basic and Diluted
 
$
0.00
 
$
0.00
 
Weighted Average Number of Shares                 
     
34,327,862
   
6,880,213
 
 
The accompanying notes are an integral part of these financial statements

F-14


Cemtrex, Inc. and Subsidiary
Consolidated Statements of Stockholders' Equity (Deficit)

   
Common Stock
         
Total
 
   
Number of
 
Par Value
 
Additional Paid-
 
Accumulated
 
Stockholders'
 
   
Shares
 
($0.001) Amount
 
In-Capital
 
Deficit
 
Equity (Deficit)
 
Balance at September 30, 2005
   
6,280,213
 
$
6,280
 
$
493,720
 
$
(76,671
)
$
423,329
 
Common Stock Issued to Investors for Cash
   
600,000
   
600
   
49,400
   
-
   
50,000
 
Capital Contributed by Officers
   
-
   
-
   
-
   
-
   
-
 
Net Loss
   
-
   
-
   
-
   
2,222
   
2,222
 
Balance at September 30, 2006
   
6,880,213
 
$
6,880
 
$
543,120
 
$
(74,449
)
$
475,551
 
Common Stock Issued to Investors for Cash
   
7,447,649
   
7,448
   
371,052
   
-
   
378,500
 
Common Stock Issued for Purchase of Assets
   
20,000,000
   
20,000
   
730,000
   
-
   
750,000
 
Net Loss
   
-
   
-
   
-
   
(123,565
)
 
(123,565
)
Balance at September 30, 2007
   
34,327,862
 
$
34,328
 
$
1,644,172
 
$
(198,014
)
$
1,480,486
 
Net Loss
   
-
   
-
   
-
   
131,037
   
131,037
 
Balance at December 31, 2007
   
34,327,862
 
$
34,328
 
$
1,644,172
 
$
(66,977
)
$
1,611,523
 

The accompanying notes are an integral part of these financial statements

F-15


Cemtrex, Inc. and Subsidiary
Consolidated Statements of Cash Flows

   
For the Three Months Ended
December 31,
 
   
2007
 
2006
 
Cash Flows from Operating Activities
         
Net Income (Loss)
 
$
131,037
 
$
10,796
 
               
Adjustments to reconcile net loss to net cash used in operating activities:
             
Depreciation & Amortization
   
1,907
   
-
 
               
Changes in operating assets and liabilities:
             
Accounts Receivable
   
(116,123
)
 
(115,575
)
Inventory
   
(62,494
)
 
74,931
 
Prepaid Expenses & Other Assets
   
-
   
15,224
 
Other Assets
   
(1,310
)
 
(15,425
)
Accounts Payable
   
45,301
   
(46,928
)
Accrued Expenses
   
(417,005
)
 
4,832
 
Customer Deposits
   
(33,124
)
 
692
 
               
Net Cash Used in Operating Activities
   
(451,811
)
 
(71,453
)
               
Cash Flows from Financing Activities
             
Net Loans from Shareholders
   
441,842
   
-
 
APIC Error
   
-
   
-
 
Common Stock Issued for Cash
   
-
   
75,000
 
               
Net Cash Provided by Financing Activities
   
441,842
   
75,000
 
               
Net Increase (Decrease) in Cash
 
 
(9,969
)
 
3,547
 
               
Cash Beginning of Period
   
143,830
   
29,279
 
               
Cash End of Year
  $
133,861
  $
32,826
 
               
Supplemental Disclosure of Cash Flow Information:
             
Cash Paid during the period for interest
 
$
-
 
$
-
 
Cash Paid during the period for income taxes
   
-
   
-
 

The accompanying notes are an integral part of these financial statements

F-16

 
CEMTREX, INC.
(A Development Stage Enterprise)
NOTES TO FINANCIAL STATEMENTS
 
Note 1 – Organization, Business & Operations
 
Cemtrex, Inc. and its Subsidiary is engaged in manufacturing and selling the most advanced instruments for emission monitoring of particulate, opacity, mercury, sulfur dioxide, nitrogen oxides, etc. Cemtrex also provides turnkey services for carbon creation projects from abatement of greenhouse gases pursuant to Kyoto protocol and assists project owners in selling of carbon credits globally.   Company's products are sold to power plants, refineries, chemical plants, cement plants & other industries including federal and state Governmental agencies. Through its wholly-owned subsidiary Griffin Filters, Company designs, manufactures and sells air filtration equipment and systems to control particulate emissions from a variety of industries.
 
Cemtrex, Inc. was incorporated as Diversified American Holding, Inc. on April 27, 1998. On December 16, 2004 the Company changed its name to Cemtrex, Inc. On April 30, 2007, Cemtrex, Inc. acquired Griffin Filters, LLC (see Note 4 Acquisitions and Goodwill).
 
Note 2 - Summary of Significant Accounting Policies
 
Accounting Method
 
The Company’s financial statements are prepared using the accrual method of accounting. The Company has elected a September 30 year-end.
 
Principles of Consolidation
 
The accompanying consolidated financial statements for the periods ended December 31, 2007 and September 30, 2007, include the accounts of Cemtrex, Inc and its wholly owned subsidiary Griffin Filters, LLC, (collectively the “Company”). All significant inter-company accounts and transactions have been eliminated in consolidation.
 
Use of Estimates
 
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. Actual results could differ from those estimates.
 
Cash and Cash Equivalents
 
The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents.
 
Concentrations of Credit Risk - Cash
 
The Company maintains its cash with various financial institutions, which may exceed federally insured limits throughout the period.
 
Marketable Securities Available for Sale
 
The Company evaluates its investment policies and the appropriate classification of securities at the time of purchase consistent with Statement of Financial Accounting Standards ("SFAS") No. 115, "Accounting for Certain investments in Debt and Equity Securities," at each balance sheet date and determined that all of its investment securities are to be classified as available-for-sale. Available-for-sale securities are carried at fair value, with the unrealized gains and losses, net of tax, reported in stockholders' deficiency under the caption "Accumulated Other Comprehensive Loss". Realized gains and losses and declines in value judged to be other than-temporary on available-for-sale securities are included in net gain on sale of marketable securities. The cost of securities sold is based on the specific identification method.
 
F-17

 
CEMTREX, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 
Inventories
 
Inventories are comprised of replacement parts and system, which are stated at lower of cost or market. Cost is determined on a first-in, first-out (FIFO) basis.
 
Property and Equipment
 
Property and equipment are stated at cost and are depreciated using the straight-line method over their estimated useful lives, generally five to seven years. Leasehold improvements are amortized over the shorter of the useful life or the remaining lease term. Upon retirement or other disposition of these assets, the cost and related accumulated depreciation are removed from the accounts and the resulting gains or losses are reflected in operations. Expenditures for maintenance and repairs are charged to operations as incurred. Renewals and betterments are capitalized.
 
Revenue Recognition
 
Revenue is recognized in accordance with SEC Staff Accounting Bulletin No. 101, “Revenue Recognition in Financial Statements.” The Company recognizes revenue when the significant risks and rewards of ownership have been transferred to the customer pursuant to applicable laws and regulations, including factors such as when there has been evidence of a sales arrangement, delivery has occurred, or service have been rendered, the price to the buyer is fixed or determinable, and collectibility is reasonably assured.
 
Income Taxes
 
The Company accounts for income taxes using the liability method as required by Statement of Financial Accounting Standards ("FASB") No. 109, Accounting for Income Taxes ("SFAS 109"). Under this method, deferred tax assets and liabilities are determined based on differences between their financial reporting and tax basis of assets and liabilities. The Company was not required to provide for a provision for income taxes for the periods ended December 31, 2007 and September 30, 2007, as a result of net operating losses incurred during the periods. As of September 30, 2007, the Company has available approximately $67,000 of net operating losses ("NOL") available for income tax purposes that may be carried forward to offset future taxable income, if any. These carryforwards expire in various years through 2026. At December 31, 2007, the Company has a deferred tax asset of approximately $28,000 relating to the Company's net operating losses, respectively. The Company's deferred tax asset has been fully reserved by a valuation allowance since realization of its benefit is uncertain. The Company's ability to utilize its NOL carryforwards may be subject to an annual limitation in future periods pursuant to Section 382 of the Internal Revenue Code of 1986, as amended.
 
The provision for income taxes using the federal and state tax rates as compared to the Company's effective tax rate is summarized as follows:

   
December 31,
 
September 30,
 
   
2007
 
2007
 
Statutory Federal Tax (Benefit) Rate
   
-34.0
%
 
-34.0
%
Statutory State Tax (Benefit) Rate
   
-7.5
%
 
-7.5
%
Effective Tax (Benefit) Rate
   
-41.5
%
 
-41.5
%
               
Valuation Allowance
   
41.5
%
 
41.5
%
               
Effective Income Tax
   
0.0
%
 
0.0
%
 
Significant components of the Company's deferred tax assets at December 31, 2007 and September 30, 2007, are as follows:
 
F-18

 
CEMTREX, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

   
December 31,
 
September 30,
 
Deferred Tax Asset
 
2007
 
2007
 
               
Net Operating Loss Carryforward
 
$
27,795
 
$
82,176
 
               
Valuation Allowance
   
(27,795
)
 
(82,176
)
               
Net Deferred Tax Asset
 
$
-
 
$
-
 
 
Guarantee Expense
 
In accordance with FASB Interpretation No. 45 ("Fin 45"), the Company recognizes, at the inception of a guarantee, the cost of the fair value of the obligation undertaken in issuing the guarantee.
 
Fair Value of Financial Instruments
 
The reported amounts of the Company's financial instruments, including accounts payable and accrued liabilities, approximate their fair value due to their short maturities. The carrying amounts of debt approximate fair value since the debt agreements provide for interest rates that approximate market.
 
Stock Based Compensation
 
The Company has adopted the disclosure provisions only of SFAS 123 and continues to account for stock based compensation using the intrinsic value method prescribed in accordance with the provisions of APB No. 25, Accounting for Stock Issued to Employees, and related interpretations. Common stock issued to employees for compensation is accounted for based on the market price of the underlying stock, generally the average low bid price.
 
The Company accounts for stock-based compensation issued to non-employees and consultants in accordance with the provisions of SFAS 123 and the Emerging Issues Task Force consensus in Issue No. 96-18 ("EITF 96-18"), "Accounting for Equity Instruments that are Issued to Other Than Employees for Acquiring or in Conjunction with Selling, Goods or Services". Common stock issued to non-employees in exchange for services is accounted for based on the fair value of the services received.
 
Allowance for doubtful accounts
 
In determining the allowance to be maintained, management evaluates many factors including industry and historical loss experience. The allowance for doubtful accounts is maintained at an amount management deems adequate to cover estimated losses. At December 31, 2007 and September 30. 2007, the Company has reserved $100,000 for doubtful accounts.
 
Advertising
 
The Company incurred no advertising expenses for the periods ended December 31, 2007 and September 30, 2007.
 
Research and development costs
 
Expenditures for research & development are expensed as incurred. Such costs are required to be expensed until the point that technological feasibility is established. The Company incurred no research and development costs for the periods ended December 31, 2007 and September 30, 2007.
 
Reclassifications