DEF: Cemtrex Inc. Sets 2026 Annual Shareholder Meeting Agenda

Cemtrex Inc. announces its Annual Meeting of Shareholders for May 15, 2026, to elect directors and ratify its independent accounting firm.

Summary

• The Annual Meeting of Shareholders will be held on Friday, May 15, 2026, at 9:30 a.m. Eastern Daylight Time.
• Shareholders of record as of March 17, 2026, are entitled to vote at the Annual Meeting.
• The meeting agenda includes the election of four directors to the Board of Directors and the ratification of Grassi Co. Certified Public Accountants as the independent registered public accounting firm for the fiscal year ending September 30, 2026.
• The Company had 10,078,089 shares of common stock outstanding as of the record date, each entitled to one vote.
• There were 50,000 shares of Series C Preferred Stock outstanding, each entitled to 2,017.6334 votes, totaling 100,881,671 votes.
• There were 2,776,819 shares of Series 1 Preferred Stock outstanding, each entitled to two votes, totaling 5,553,638 votes.
• The total aggregate votes that may be cast at the Annual Meeting are 116,513,398.
• The Board of Directors recommends voting FOR the election of all four nominees (Saagar Govil, Metodi Filipov, Brian Kwon, and Manpreet Singh) and FOR the ratification of Grassi Co. Certified Public Accountants.
• The Company reported a net loss of $(28,333,817) for Fiscal Year 2025, a significant increase from $(7,635,505) in Fiscal Year 2024.
• Total Shareholder Return (TSR) was $0.19 for Fiscal Year 2025, down from $2.53 in Fiscal Year 2024.
• Receivables of $637,208 due from Ducon Technologies, Inc., a related party, matured on July 31, 2024, were not paid, and a full allowance was placed on the note in fiscal year 2024.
• The sale of subsidiaries (Cemtrex Advanced Technologies, Inc. and Cemtrex XR, Inc.) to CEO Saagar Govil was revised, removing a minimum payment guarantee of $820,000 and resulting in the removal of a $280,545 royalty receivable from financial statements as of December 31, 2024.
• As of September 30, 2025, royalties receivable from the Cemtrex XR sale totaled $460,475, with a $165,771 allowance for expected credit losses.
• Trade receivables from CXR, Inc. (Cemtrex XR successor) amounted to $405,493, with $60,628 recorded in current expected credit losses.
• CEO Saagar Govil made a $200,000 short-term loan to the Company on May 5, 2025, which was repaid on August 1, 2025.
• One Form 4 report by CEO Saagar Govil was filed late for the year ended September 30, 2025.

Sentiment

Score: 2

Explanation: StockSavvy.ai views this filing negatively due to the substantial increase in net losses, sharp decline in Total Shareholder Return, and concerning related party transactions that resulted in significant write-offs and revised, less favorable terms for the company.

Positives

• The Board of Directors recommends the re-election of all four incumbent directors, suggesting continuity in leadership.
• The Audit Committee is composed of independent directors, meets NASDAQ and SEC requirements, and includes an identified financial expert, Metodi Filipov.
• The Company has adopted a Code of Ethics and maintains an insider trading policy, demonstrating a commitment to corporate governance.
• CEO Saagar Govil provided a short-term loan of $200,000 to the Company for operating needs, which was subsequently repaid, indicating support from management during a period of need.

Negatives

• The Company reported a substantial net loss of $(28,333,817) for Fiscal Year 2025, significantly worse than the $(7,635,505) loss in Fiscal Year 2024.
• Total Shareholder Return (TSR) declined sharply to $0.19 in Fiscal Year 2025 from $2.53 in Fiscal Year 2024.
• A $637,208 receivable from Ducon Technologies, Inc., a related party controlled by a former director, was not paid at maturity and resulted in a full allowance being placed on the note.
• The terms for the sale of subsidiaries to CEO Saagar Govil were revised, removing a minimum payment guarantee of $820,000 and leading to the removal of a $280,545 royalty receivable from the financial statements.
• The Company recorded a $165,771 allowance for expected credit losses against royalties receivable from the Cemtrex XR sale and $60,628 in current expected credit losses on receivables due from CXR Inc.
• One Form 4 report by CEO Saagar Govil was filed late for the year ended September 30, 2025, indicating a lapse in compliance.
• Three directors (Metodi Filipov, Brian Kwon, and Manpreet Singh) did not attend the previous year's annual meeting, despite an expectation for director attendance.

Risks

• Significant ongoing net losses and declining Total Shareholder Return pose a risk to the Company's financial viability and shareholder value.
• High exposure to related party transactions, particularly those with a history of non-payment or revised, less favorable terms, introduces financial and governance risks.
• The potential for further credit losses on related party receivables could negatively impact future financial performance.
• The dual role of CEO Saagar Govil as Chairman of the Board may present risks related to independent oversight and corporate governance.
• Lapses in compliance, such as the late Form 4 filing by the CEO, could lead to regulatory scrutiny or investor distrust.
• Lack of consistent director attendance at annual meetings may signal a lack of engagement or commitment from board members.

Future Outlook

The filing primarily details past performance, corporate governance, and upcoming shareholder votes. It does not provide explicit forward-looking statements or guidance, beyond the scheduled royalty payments from subsidiary sales extending to December 31, 2026.

Management Comments

• The Board believes that the Company and its shareholders are best served by having the Chief Executive Officer also serve as Chairman of the Board.
• The Board also believes that this structure is appropriate in light of the size of our Company and corresponding size of our Board and the complexity of our business.
• We believe that Mr. Govil is best positioned to develop agendas that ensure that our Boards time and attention are focused on the matters that are most critical to us.

Industry Context

StockSavvy.ai notes that for a company experiencing significant net losses and declining shareholder returns, strong corporate governance and transparent financial dealings are paramount. The issues with related party receivables and the revision of subsidiary sale terms could raise concerns among investors regarding financial stability and management's accountability, especially in a challenging economic environment.

Comparison to Industry Standards

• The significant increase in net loss from $(7,635,505) in 2024 to $(28,333,817) in 2025 is substantially worse than industry averages for profitable growth companies, which typically aim for positive net income or a reduction in losses as they mature.
• A Total Shareholder Return (TSR) of $0.19 in 2025, down from $2.53 in 2024, indicates severe underperformance compared to broader market indices (e.g., S&P 500, Nasdaq Composite) and most industry peers, which generally saw positive returns or smaller declines during this period.
• The non-payment of a $637,208 related party receivable from Ducon Technologies, Inc. and the subsequent full allowance is a red flag, suggesting poor credit risk management or potential governance issues, which is not standard practice for healthy companies.
• The revision of subsidiary sale terms to CEO Saagar Govil, removing a minimum payment guarantee of $820,000, deviates from arm's-length transaction standards and could be viewed unfavorably compared to typical M&A deals where guaranteed payments are common.
• The late Form 4 filing by CEO Saagar Govil, while a single instance, indicates a lapse in compliance that is generally not seen in well-governed public companies.

Management Changes

Corporate Governance

Related Party Transactions

• As of September 30, 2023, $637,208 of receivables were due from Ducon Technologies, Inc., controlled by Aron Govil (Company's Founder and Former Director and CFO). A promissory note for this amount matured on July 31, 2024, was not paid, and a full allowance was placed on the note in fiscal year 2024.
• On November 22, 2022, the Company entered into Asset Purchase Agreements and a Simple Agreement for Future Equity (SAFE) with CEO Saagar Govil for the sale of subsidiaries Cemtrex Advanced Technologies, Inc. and Cemtrex XR, Inc. On January 6, 2025, the purchase price structure was revised to solely consist of royalties based on actual revenues, removing a minimum payment guarantee of $820,000.
• The revision of the subsidiary sale terms led to the removal of a previously recognized royalty receivable of $280,545 from the financial statements as of December 31, 2024.
• As of September 30, 2025, royalties receivable from the sale of Cemtrex XR, Inc. totaled $460,475, with $104,229 considered short-term and $190,475 long-term. A $165,771 allowance for expected credit losses was taken against these royalties.
• As of September 30, 2025, there was $405,493 in trade receivables due from CXR, Inc. (the Cemtrex XR successor company), including $104,229 in short-term royalties and $301,264 related to services provided by Cemtrex Technologies Pvt. Ltd. The Company recorded $60,628 in current expected credit losses on these receivables.
• On May 5, 2025, CEO Saagar Govil made a short-term loan of $200,000 to the Company for operating needs, which was repaid on August 1, 2025.

Stakeholder Impact

• Shareholders face significant negative impact due to substantial net losses, a sharp decline in Total Shareholder Return, and the write-off of a large related party receivable, which could erode investor confidence and share value.
• Creditors may view the company with increased scrutiny given the history of uncollected related party receivables and ongoing financial losses, potentially impacting future financing terms.
• Employees and management may experience uncertainty due to the company's financial performance, although executive compensation remains high despite the losses.

Next Steps

• Elect four directors at the Annual Meeting on May 15, 2026.
• Ratify Grassi Co. Certified Public Accountants as the independent registered public accounting firm for fiscal year 2026.
• Report voting results in a Form 8-K within four business days after the Annual Meeting.
• Shareholder proposals for the next Annual Meeting must be received by January 15, 2027.
• Royalty payments from subsidiary sales to CEO Saagar Govil will continue, with a balloon payment due December 31, 2026.

Key Dates

Recommendation

The filing reveals a company in significant financial distress, marked by a substantial increase in net losses and a dramatic decline in Total Shareholder Return. The problematic related party transactions, including a large write-off and revised, less favorable terms for subsidiary sales to the CEO, raise serious governance and financial integrity concerns. These factors suggest a high level of risk and poor operational performance, making the stock a strong sell for seasoned investors.

Keywords

Cemtrex, CETX, Proxy Statement, Annual Meeting, Director Election, Auditor Ratification, Corporate Governance, Related Party Transactions, Executive Compensation, Net Loss, Shareholder Return, SEC Filing, DEF 14A