UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
SCHEDULE
14C
(Rule
14c-101)
SCHEDULE
14C INFORMATION STATEMENT
January
28, 2025
Information
Statement Pursuant to Section 14(c) of the Securities Exchange Act of 1934
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Filed by the registrant |
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Filed by a party other
than the registrant |
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Preliminary Information
Statement |
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Confidential, for Use of
the Commission Only (as permitted by Rule 14c-5(d)(2)) |
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Definitive Information
Statement |
CEMTREX,
INC.
(Name
of Registrant as Specified In Charter)
Payment
of Filing Fee (Check the appropriate box):
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No fee required. |
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Fee computed on table below per Exchange Act Rules
14c-5(g) and 0-11. |
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Title of each class of Securities to which transaction
applies: |
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Aggregate number of securities to which transaction
applies: |
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Per unit price or other
underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated
and state how it was determined): |
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Proposed maximum aggregate value of transaction : $____________
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Total fee paid: $_____________ |
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Fee paid previously with preliminary materials. |
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Check box if any part of
the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously.
Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. |
1)
Amount Previously Paid:
2)
Form, Schedule or Registration Statement No.
3)
Filing Party:
4)
Date Filed:
CEMTREX,
INC.
135
Fell Court
Hauppauge,
NY 11788
(631)756-9116
INFORMATION
STATEMENT PURSUANT TO SECTION 14 OF THE SECURITIES EXCHANGE ACT
OF
1934 AND REGULATION 14C AND SCHEDULE 14C THEREUNDER
WE
ARE NOT ASKING YOU FOR A PROXY
AND
YOU ARE NOT REQUESTED TO SEND US A PROXY
NOTICE
OF STOCKHOLDER ACTION BY WRITTEN CONSENT
To
our Stockholders:
NOTICE
IS HEREBY GIVEN that the Board of Directors (the “Board”) of Cemtrex, Inc., a Delaware corporation (“we”, “us”
or “our”), has approved, and the holder of an excess of a majority of the outstanding shares of our classes of voting stock
of the Company, Common Stock, par value $0.001 per share (the “Common Stock”), Series C Preferred Stock, par value $0.001
(the “Series C Preferred”), and Series 1 Preferred Stock, par value $0.001(the “Series 1 Preferred”) has executed
a written consent in lieu of a special meeting approving an amendment to our Certificate of Incorporation to authorize a reverse split
of the Company’s outstanding shares of Common Stock, with a split ratio of between 1 for 5 and 1 for 100, which will be determined
by the Board of Directors at any time or times for a period of 12 months after the date of the written consent (the “Reverse Split”).
The
accompanying Information Statement, which describes the above corporate action in more detail, is being furnished to our stockholders
for informational purposes only, pursuant to Section 14(c) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”),
and the rules and regulations prescribed thereunder. Under the Delaware General Corporation Law and our bylaws, stockholder action may
be taken by written consent without a meeting of stockholders. The written consent of the holder of a majority of our outstanding voting
stock is sufficient under the Delaware General Corporation Law and our bylaws to approve the actions described above. Accordingly, the
actions described above will not be submitted to our other stockholders for a vote. Pursuant to Rule 14c-2 under the Exchange Act, these
corporate actions will not be effected until at least twenty (20) calendar days after the mailing of the Information Statement to our
stockholders.
This
letter is the notice required by Section 228(e) of the Delaware General Corporation Law. We will first mail the Information Statement
on or about February 3, 2025 to our stockholders of record as of January 13, 2025.
By
Order of the Board of Directors of Cemtrex, Inc.
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/s/
Saagar Govil |
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Name: |
Saagar Govil |
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Title: |
Chairman, President and CEO |
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Date: |
January 28, 2025 |
CEMTREX,
INC.
135
Fell Court
Hauppauge,
NY 11788
(631)756-9116
INFORMATION
STATEMENT PURSUANT TO SECTION 14(c)
OF
THE SECURITIES EXCHANGE ACT OF 1934 AND RULE 14c-2 THEREUNDER
NO
VOTE OR OTHER ACTION OF STOCKHOLDERS IS REQUIRED IN CONNECTION WITH THIS INFORMATION STATEMENT.
WE
ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND US A PROXY.
Cemtrex,
Inc., a Delaware corporation (“we”, “us” or “our”) is sending this Information Statement solely for
the purpose of informing our stockholders in the manner required under Regulation 14(c) of the Securities Exchange Act of 1934, as amended
(the “Exchange Act”), of the actions taken by the holder of a majority of our outstanding shares of our classes of voting
stock of the Company, Common Stock, par value $0.001 per share (the “Common Stock”), Series C Preferred Stock, par value
$0.001 (the “Series C Preferred”), and Series 1 Preferred Stock, par value $0.001(the “Series 1 Preferred”),
by written consent in lieu of a special meeting. No action is requested or required on your part.
What
actions were taken by written consent in lieu of a special meeting?
Our
Board of Directors (the “Board”) has approved, and stockholder holding at least a majority of the issued and outstanding
shares of our classes of voting stock has approved, by written consent in lieu of a special meeting, an amendment to our Certificate
of Incorporation to authorize a reverse split of our outstanding shares of Common Stock, with a split ratio of between 1 for 5 and 1
for 100, which will be determined by the Board of Directors at any time or times for a period of 12 months after the date of the written
consent (the “Reverse Split”).
Additional
information regarding the Reverse Split is set forth below under “APPROVAL OF THE REVERSE SPLIT”.
What
vote was obtained to approve the Reverse Split described in this Information Statement?
The
Reverse Split was approved by our Board and by our majority stockholder pursuant to action taken by written consent on January 9, 2025,
for notification to our stockholders of record as of the close of trading on January 13, 2025 (the “Record Date”). We are
permitted under Delaware General Corporation Law to approve the Reverse Split by written stockholder consent in lieu of a special meeting
if the consent obtained includes a majority of our outstanding voting stock as of the Record Date. As of the Record Date, 1,784,575 shares
of our Common Stock were issued and outstanding. Each share of our Common Stock is entitled to one vote. As of the Record Date 50,000
shares of our Series C Preferred were issued and outstanding. Each share of our Series C Preferred is entitled to the number of votes
equal to (i) the total number of shares of Common Stock outstanding at the time of such vote multiplied by 10.01 and divided by (ii)
the total number of shares of Series C Preferred Stock outstanding, which amounts to an aggregate of 17,863,596 votes as of the Record
Date. As of the Record date 2,579,994 shares of Series 1 Preferred were issued and 2,515,894 outstanding. Each share of Series 1 Preferred
is entitled to two votes, which amounts to an aggregate of 5,031,788 votes.
Based
on the foregoing, as of the Record Date, the total aggregate number of votes entitled to vote regarding the approval of the Reverse Split
was 24,679,959. Pursuant to Delaware General Corporation Law, at least a majority of the voting equity of the Company, or at least 12,339,980
votes are required to approve the Reverse Split by written consent. The majority shareholder, who holds 18,169,922 votes for approximately
73.62% of our voting stock, has voted in favor of the Reverse Split, thereby satisfying the requirement pursuant to Delaware General
Corporation Law that at least a majority of the voting stock vote in favor of a corporate action by written consent.
The
following table sets forth the name of the holder of the Common Stock, the Series 1 Preferred Stock and the Series C Preferred Stock,
the number of shares of Common Stock, the Series 1 Preferred Stock and the Series C Preferred Stock held by the holder, the total number
of votes that the holder voted in favor of the Reverse Split and the percentage of our issued and outstanding voting stock that voted
in favor thereof:
Name of Voting
Stockholder | |
Class of Stock | |
Number of
Shares held | | |
Number of
Votes held by
such Stockholder | | |
Number of
Votes that
Voted in
Favor of the
Reverse Split | | |
Percentage of
the Voting
Equity that
Voted in
Favor of the
Reverse Split | |
| Saagar Govil | |
Common Stock | |
| 20 | | |
| 20 | | |
| 20 | | |
| 0.00 | % |
| Saagar Govil | |
Series 1 Preferred Stock | |
| 153,153 | | |
| 306,306 | | |
| 306,306 | | |
| 1.24 | % |
| Saagar Govil | |
Series C Preferred Stock | |
| 50,000 | | |
| 17,863,596 | | |
| 17,863,596 | | |
| 72.38 | % |
| Total | |
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| | | |
| | | |
| 18,169,922 | | |
| 73.62 | % |
Who
is paying the cost of this Information Statement?
We
will pay for preparing, printing and mailing this Information Statement. Our costs are estimated at approximately $10,000.
Am
I entitled to dissenter’s rights?
The
Delaware General Corporation Law does not provide for dissenter’s rights for the Reverse Split.
APPROVAL
OF THE REVERSE SPLIT
The
Reverse Split Amendment
Our
Board and stockholders granted the Board discretionary authority within the next twelve (12) months to file a Certificate of Amendment
to our Certificate of Incorporation to effectuate the Reverse Split (the “Reverse Split Amendment”) of all of our issued
and outstanding shares of common stock at an exchange ratio of not less than 1-for-5 and not more than 1-for-100, which we refer to as
the Reverse Split. The form of the Reverse Split Amendment is attached to this Information Statement as Appendix A.
Background
and Reasons for the Reverse Split
The
Board of Directors has the authority, but not the obligation, in its sole discretion and without any further action on the part of the
stockholders, to effect the Reverse Split within this range at any time it believes to be most advantageous to our Company and stockholders
in the next 12 months. The exact ratio of the Reverse Split, if effected, would be set at a whole number within the range as determined
by the Board of Directors in its sole discretion. The Reverse Split Amendment would not change the number of authorized shares of our
common stock and the par value of our common stock would remain at $0.001 per share. As of the date of this Information Statement, we
do not have any current plans, arrangements or understandings related the issuance of any additional shares of common stock that will
become newly available as a result of the Reverse Split.
On
June 14, 2024, Staff notified the Company that its common stock failed to maintain a minimum bid price of $1.00 over the previous 30
consecutive business days as required by the Listing Rules of The Nasdaq Stock Market.
In
response, on October 2, 2024, the Company completed a 60 for 1 reverse stock split. Presplit, the Company had 17,437,456 shares of common
stock outstanding, along with 12,059,879 Series A Warrants and 13,529,410 Series B Warrants outstanding, both at an exercise price of
$0.85 per share. Post split, the Company had 496,130 shares of common stock outstanding, including roundup shares issued. According to
the terms of the Series A and Series B Warrants, in the event of a reverse stock split, the exercise price resets to the lowest VWAP
during the period commencing five (5) consecutive trading days immediately preceding and the five (5) consecutive trading days commencing
on the reverse stock split effective date and the number of warrants are adjusted as to keep the aggregate value of the warrants then
outstanding remains unchanged. On October 7, 2024, it was determined that the exercise price had reset to $0.7488.
The
following table illustrates the adjustment.
| | |
Warrants
outstanding | | |
Aggregate Value | | |
Adjusted
number of
warrants
outstanding | |
| Series A Warrants | |
| 12,059,879 | | |
$ | 10,250,897 | | |
| 13,766,999 | |
| Series B Warrants | |
| 13,529,410 | | |
$ | 11,499,999 | | |
| 15,444,550 | |
On
November 26, 2024, the Company completed a 35 for 1 reverse stock split. Presplit, the Company had 26,727,535 shares of common stock
outstanding, along with 1,201,932 Series A Warrants outstanding (after certain exercises of the Series A Warrants) and 15,444,550 Series
B Warrants outstanding, both at an exercise price of $0.7488. Post split, the had 875,960 shares of common stock outstanding, including
roundup shares issued. According to the terms of the Series A and Series B warrants, in the event of a reverse stock split, the exercise
price resets to the lowest VWAP during the period commencing five (5) consecutive trading days immediately preceding and the five (5)
consecutive trading days commencing on the reverse stock split effective date and the number of warrants are adjusted as to keep the
aggregate value of the warrants then outstanding remains unchanged. On December 2, 2024, it was determined that the exercise price has
reset to $3.1488.
The
following table illustrates the adjustment.
| | |
Warrants
outstanding | | |
Aggregate Value | | |
Adjusted
number of
warrants
outstanding | |
| Series A Warrants | |
| 1,201,932 | | |
$ | 894,954 | | |
| 284,225 | |
| Series B Warrants | |
| 15,444,550 | | |
$ | 11,499,999 | | |
| 3,652,206 | |
As
of January 13, 2025, the Company had 1,784,575 shares of common stock issued and outstanding and, after further exercises, the Company
had 82,722 Series A Warrants and 3,318,556 Series B Warrants outstanding, with an adjusted exercise price per share of $3.1488 as a result
of the split. We therefore have outstanding warrants as of January 13, 2025, to purchase 4,148,104 shares of common stock at an exercise
price of $3.1488 per share.
On
December 11, 2024, we received a notification letter from the Nasdaq notifying us that we have regained compliance with the Minimum Bid
Requirement. The Reverse Stock Split would potentially increase our bid price such that we maintain the Minimum Bid Requirement required
for maintaining the listing requirements for the Nasdaq Capital Market. Although we currently meet the Nasdaq Minimum Bid Requirement,
out of abundance of caution, we believe that a future reverse split may be necessary in the future if we were to fall short of the Minimum
Bid Price Requirement.
We
believe that enabling our Board of Directors to set the ratio within the stated range will provide us with the flexibility to implement
the Reverse Split in a manner designed to maximize the anticipated benefits for our stockholders. In determining a ratio, if any, our
Board of Directors may consider, among other things, factors such as:
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the listing requirements
of Nasdaq; |
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the historical trading
price and trading volume of our common stock; |
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the number of outstanding
shares of our common stock; |
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the number of shares of
our common stock available underlying outstanding options and warrants; |
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the then-prevailing trading
price and trading volume of our common stock and the anticipated impact of the Reverse Split on the trading market for our common
stock; and |
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prevailing general market
and economic conditions. |
Depending
on the ratio for the Reverse Split determined by our Board of Directors, no less than 5 and no more than 100 shares of existing issued
and outstanding common stock, as determined by our Board of Directors or a committee thereof, will be combined into one share of common
stock. The Reverse Split Amendment, if any, will effect only the Reverse Split Ratio within such range determined by our Board of Directors
to be in the best interests of our stockholders.
According
to the terms of the Series A and Series B Warrants, in the event of a reverse stock split, the exercise price resets to the lowest VWAP
during the period commencing five (5) consecutive trading days immediately preceding and the five (5) consecutive trading days commencing
on the reverse stock split effective date and the number of warrants are adjusted as to keep the aggregate value of the warrants then
outstanding remains unchanged. Depending on the reverse split ratio and the volatility of our common stock following the split, the number
of Series A and Series B Warrants outstanding will be effected.
The
following table illustrates the effect at different adjusted exercise prices.
| | |
Number of Warrants outstanding | |
| | |
As of the
Record date | | |
Estimated
reset strike
price of $2.00 | | |
Estimated
reset strike
price of $4.00 | | |
Estimated
reset strike
price of $6.00 | | |
Estimated
reset strike
price of $10.00 | |
| Series A Warrants | |
| 82,722 | | |
| 130,233 | | |
| 65,117 | | |
| 43,411 | | |
| 26,047 | |
| Series B Warrants | |
| 3,318,556 | | |
| 5,224,701 | | |
| 2,612,350 | | |
| 1,741,567 | | |
| 1,044,940 | |
The
Board will retain the authority not to effect the Reverse Split even though it has already obtained stockholder approval. Thus, the Board,
at its discretion, may cause the filing of the Reverse Split Amendment to effect a Reverse Split or abandon it and effect no Reverse
Split if it determines that such action is not in the best interests of our Company and stockholders.
Purpose
of the Reverse Split
The
Board of Directors is notifying stockholders of the proposed Reverse Split in connection with the plan to maintain listing our common
stock on Nasdaq. The Board believes the consummation of the Reverse Split and the continued listing of our common stock on Nasdaq will
make our common stock more attractive to a broader range of institutional and other investors. Accordingly, for these and other reasons
described in this Information Statement, we believe that effecting the Reverse Split is in the Company’s and our stockholders’
best interests.
We
believe that the Reverse Split will improve our ability to maintain listing on Nasdaq. Nasdaq requires, among other items, an initial
bid price of least $4.00 per share and following initial listing, maintenance of a continued price of at least $1.00 per share. A decrease
in the number of outstanding shares of our common stock resulting from a Reverse Split should, absent other factors, increase the per
share market price of our common stock, although we cannot provide any assurance that our minimum bid price would remain over the Minimum
Bid Price Requirement of Nasdaq following the Reverse Split.
Additionally,
we believe that the Reverse Split will make our common stock more attractive to a broader range of institutional and other investors,
as we have been advised that the current market price of our common stock may affect its acceptability to certain institutional investors,
professional investors and other members of the investing public. As previously discussed, many brokerage houses and institutional investors
have internal policies and practices that either prohibit them from investing in low-priced stocks or tend to discourage individual brokers
from recommending low-priced stocks to their customers. In addition, some of those policies and practices may function to make the processing
of trades in low-priced stocks economically unattractive to brokers. Moreover, because brokers’ commissions on low-priced stocks
generally represent a higher percentage of the stock price than commissions on higher-priced stocks, the current average price per share
of common stock can result in individual stockholders paying transaction costs representing a higher percentage of their total share
value than would be the case if the share price were substantially higher. We believe that the Reverse Split will make our common stock
a more attractive and cost-effective investment for many investors, which will enhance the liquidity of the holders of our common stock.
Reducing
the number of outstanding shares of our common stock through the Reverse Split is intended, absent other factors, to increase the per
share market price of our common stock in order to attract new investors and meet the Minimum Bid Price Requirement of Nasdaq. However,
other factors, such as our financial results, market conditions and the market perception of our business may adversely affect the market
price of our common stock. As a result, we cannot assure you that the Reverse Split, if completed, will result in the intended benefits
described above, that the market price of our common stock will increase following the Reverse Split or that the market price of our
common stock will not decrease in the future. Additionally, we cannot assure you that the market price per share of our common stock
after a Reverse Split will increase in proportion to the reduction in the number of shares of our common stock outstanding before the
Reverse Split. Accordingly, the total market capitalization of our common stock after the Reverse Split may be lower than the total market
capitalization before the Reverse Split.
Procedure
for Implementing the Reverse Split
The
Reverse Split, if effected, would become effective upon the filing (the “Effective Time”) of the Reverse Split Amendment
with the Office of the Secretary of State of the State of Delaware. The Reverse Split Amendment will implement the exchange ratio (of
not less than 1-for-5 nor more than 1-for-100) as determined by the Board of Directors prior to the Effective Time. The exact timing
of the filing of the Reverse Split Amendment will be determined by our Board of Directors based on its evaluation as to when such action
will be the most advantageous to the Company and our stockholders. In addition, our Board of Directors reserves the right, notwithstanding
stockholder approval and without further action by the stockholders, to elect not to proceed with the Reverse Split if, at any time prior
to filing the Reverse Split Amendment, our Board, in its sole discretion, determines that it is no longer in our best interest and the
best interests of our stockholders to proceed with the Reverse Split.
Effect
of the Reverse Split on Holders of Outstanding Common Stock
The
Reverse Split will not affect any stockholder’s percentage ownership interest in our Company, except as described below in “Fractional
Shares” and with respect to the Adjustable Warrants, also described below. Record holders of our common stock otherwise entitled
to a fractional share as a result of the Reverse Split because they hold a number of shares not evenly divisible by the Reverse Split
Ratio will automatically be entitled to receive an additional fraction of a share of our common stock to round up to the next whole share.
In addition, the Reverse Split will not affect any stockholder’s proportionate voting power (subject to the treatment of Fractional
Shares and Adjustable Warrants as discussed herein).
The
Reverse Split will not change the terms of our common stock. After the Reverse Split, the shares of our common stock will have the same
voting rights and rights to dividends and distributions and will be identical in all other respects to our common stock now authorized.
Our common stock will remain fully paid and non-assessable.
After
the effective time of the Reverse Split, we will continue to be subject to the periodic reporting and other requirements of the Exchange
Act. The Reverse Split is not intended as, and will not have the effect of, a “going private transaction” as described by
Rule 13e-3 under the Exchange Act.
After
the Effective Time of a Reverse Split, the post-split market price of our common stock may be less than the pre-split price multiplied
by the Reverse Split Ratio. In addition, a reduction in the number of shares of our common stock outstanding may impair the liquidity
for our common stock, which may reduce the value of our common stock.
The
availability of a substantial number of authorized but un-issued shares of our common stock resulting from the Reverse Split, under various
scenarios, may be construed as having an anti-takeover effect by permitting the issuance of shares of our common stock to purchasers
who might oppose a hostile takeover bid or oppose any efforts to amend or repeal certain provisions in our Articles of Incorporation
or bylaws as then in effect. The proposal to effectuate the Reverse Split did not result from our knowledge of any specific effort to
accumulate our securities or to obtain control of us by means of a merger, tender offer, proxy solicitation in opposition to management
or otherwise, and our Board of Directors did not authorize the Reverse Split to increase the authorized shares of our common stock to
enable us to frustrate any efforts by another party to acquire a controlling interest or to seek representation on our Board of Directors.
In
addition, the Reverse Split will increase the number of stockholders of the Company who own odd lots (less than 100 shares). Stockholders
who hold odd lots typically will experience an increase in the cost of selling their shares, as well as possible greater difficulty in
effecting such sales. Consequently, there can be no assurance that the Reverse Split will achieve the desired results that have been
outlined above.
The
principal effect of the Reverse Split will be that (i) the number of shares of common stock issued and outstanding will be reduced to
a number of shares between and including one-tenth to one-twentieth that amount, as the case may be based on the ratio for the Reverse
Split as determined by our Board, and (ii) all outstanding options and warrants (other than the Adjustable Warrants described below)
entitling the holders thereof to purchase shares of common stock will enable such holders to purchase, upon exercise of their options
or warrants (other than the Adjustable Warrants described below), as applicable, between and including one-tenth to one-twentieth of
the number of shares of common stock which such holders would have been able to purchase upon exercise of their options or warrants (other
than the Adjustable Warrants described below), as applicable, immediately preceding the Reverse Split at an exercise price equal to between
and including 5 to 100 times the exercise price specified before the Reverse Split, resulting in essentially the same aggregate price
being required to be paid therefor upon exercise thereof immediately preceding the Reverse Split, as the case may be based on the ratio
for the reverse stock split as determined by our Board. Other awards under our 2020 Equity Compensation Plan would be subject to proportionate
adjustments.
The
following table, which is for illustrative purposes only, illustrates the effects of Reverse Split at certain exchange ratios within
the foregoing range, without giving effect to any adjustments for fractional shares of common stock, on our outstanding shares of common
stock and authorized shares of capital stock as of the Record Date.
| | |
Before Reverse Split | | |
After Reverse Stock Split | |
| | |
| | |
1-for-5 | | |
1-for-100 | |
| Common Stock Authorized | |
| 70,000,000 | | |
| 70,000,000 | | |
| 70,000,000 | |
| | |
| | | |
| | | |
| | |
| Preferred Stock Authorized | |
| 10,000,000 | | |
| 10,000,000 | | |
| 10,000,000 | |
| | |
| | | |
| | | |
| | |
| Common Stock Issued and Outstanding | |
| 1,784,575 | | |
| 356,915 | | |
| 17,846 | |
| | |
| | | |
| | | |
| | |
| Common Stock Underlying Options and Warrants (1) | |
| 19,770,313 | | |
| 3,954,063 | | |
| 197,703 | |
| | |
| | | |
| | | |
| | |
| Common Stock Available for Grant under 2020 Equity Compensation Plan | |
| 28 | | |
| 6 | | |
| 1 | |
(1)
The number of shares in the table above, does not take into account any adjustments that may occur after the completion of the Reverse
Split in the Adjustable Warrants outstanding as described in the section “Certain Risk Associated with the Reverse Split”
below.
Certain
Risk Associated with the Reverse Split
There
are certain risks associated with the implementation of the Reverse Split, including as follows.
| |
■ |
While the Board believes
that a higher stock price may help generate investor interest, there can be no assurance that the Reverse Split will result in any
particular price for our common stock or result in a per share price that will attract institutional investors or investment funds
or that such share price will satisfy the investing guidelines of institutional investors or investment funds. As a result, the trading
liquidity of our common stock may not necessarily improve. |
| |
■ |
There can be no assurance
that the market price per new share of our common stock after a Reverse Split will remain unchanged or increase in proportion to
the reduction in the number of old shares of our common stock outstanding before the reverse stock split. We completed prior reverse
splits in October 2024 and November 2024, after which the trading price of our common stock fell significantly. Accordingly, the
total market capitalization of our common stock after the Reverse Split may be lower than the total market capitalization before
the Reverse Split. Moreover, in the future, the market price of our common stock following the Reverse Split may not exceed or remain
higher than the market price prior to the Reverse Split. |
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■ |
Although we expect that
the Reverse Split will result in an increase in the market price of our common stock, we cannot assure you that the Reverse Split,
if implemented, will increase the market price of our common stock in proportion to the reduction in the number of shares of common
stock outstanding or result in a permanent increase in the market price. The effect the Reverse Split may have upon the market price
of our common stock cannot be predicted with any certainty, and the history of similar reverse stock splits for companies in similar
circumstances to ours is varied. Our company has conducted two recent reverse splits in recent months to retain listing with Nasdaq
in response to warning letters from Nasdaq for lack of compliance with the minimum bid requirements. Each of those splits resulting
in a decline of the trading price of our common stock. While we have regained compliance minimum bid requirements, if the Reverse
Split is effected and the market price of our common stock declines, the percentage decline may be greater than would occur in the
absence of a Reverse Split. The market price of our common stock will, however, also be based on performance and other factors, which
are unrelated to the number of shares outstanding. Furthermore, the liquidity of our common stock could be adversely affected by
the reduced number of shares that would be outstanding after the Reverse Split. |
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|
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The Reverse Split may result
in some stockholders owing “odd lots” of less than 100 shares of our common stock on a post-split basis. These odd lots
may be more difficult to sell, or require greater transaction costs per share to sell, than shares in “round lots” of
even multiples of 100 shares. |
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|
|
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On October 2, 2024, we
completed a one-for-sixty reverse stock split of our outstanding shares of common stock. On November 26, 2024, we completed a one-for-thirty-five
reverse stock split of our outstanding shares of common stock. As of January 13, 2025, the Company had 82,722 Series A Warrants and
3,318,556 Series B Warrants outstanding, with an adjusted exercise price per share of $3.1488 as a result of the split. We therefore
have outstanding warrants to purchase 4,148,104 shares of common stock at an exercise price of $3.1488 per share (the “Adjustable
Warrants”) that provide that upon the completion of any Reverse Split the exercise price of warrants will be reduced to the
lowest daily volume weighted average price during the five consecutive trading days prior to the date of such Reverse Split and the
five consecutive trading days after the date of such Reverse Split (assuming such price is less than the exercise price then in effect),
and the number of warrant shares issuable shall be increased such that the aggregate exercise price payable thereunder, after taking
into account the decrease in the exercise price, shall be equal to the aggregate exercise price on the date of issuance. If we complete
a Reverse Split, this provision will likely result in the post-split exercise price of the Adjustable Warrants being reduced and
the number of shares of common stock underlying the Adjustable Warrants being significantly increased. By approving the Reverse Split,
our Board and majority shareholder have approved the foregoing adjustments. |
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Nasdaq may also decline
to continue our listing if we undertake multiple reverse stock splits for compliance with the Minimum Bid Requirement. While Nasdaq
rules do not impose a specific limit on the number of times a listed company may effect a reverse stock split to maintain or regain
compliance with the Minimum Bid Requirement, Nasdaq has stated that a series of reverse stock splits may undermine investor confidence
in securities listed on Nasdaq. Accordingly, Nasdaq may determine that it is not in the public interest to maintain our listing,
even if we regain compliance with the Minimum Bid Requirement as a result of the Reverse Split. Nasdaq rules also provide that any
listed company that fails to meet the Minimum Bid Requirement after effecting one or more reverse stock splits over the prior two-year
period with a cumulative ratio of 250 shares or more to one, then the company is not eligible for a compliance period to cure. As
mentioned in this Information Statement, we have already undertaken two reverse splits, and if we subsequently fail to satisfy the
Minimum Bid Requirement, Nasdaq may begin the process of delisting our common stock without a compliance period to cure, although
we are still eligible to request a hearing before the Nasdaq Panel to present a plan for regaining and sustaining compliance with
the Minimum Bid Requirement. |
Beneficial
Holders of Common Stock
Upon
the implementation of the Reverse Split, we intend to treat shares held by stockholders through a bank, broker, custodian or other nominee
in the same manner as registered stockholders whose shares are registered in their names. Banks, brokers, custodians or other nominees
will be instructed to effect the Reverse Split for their beneficial holders holding our common stock in street name. However, these banks,
brokers, custodians or other nominees may have different procedures than we have instituted for registered stockholders for processing
the Reverse Split. Stockholders who hold shares of our common stock with a bank, broker, custodian or other nominee and who have any
questions in this regard are encouraged to contact their banks, brokers, custodians or other nominees.
Registered
“Book-Entry” Holders of Common Stock (i.e., stockholders that are registered on the transfer agent’s books and records
but do not hold stock certificates)
Some
of our registered holders of common stock may hold their shares electronically in book-entry form with the transfer agent. These stockholders
do not have stock certificates evidencing their ownership in our common stock. They are, however, provided with a statement reflecting
the number of shares registered in their accounts.
If
your shares of common stock are held in book-entry form, you will receive a transmittal letter from our transfer agent, who is also acting
as our exchange agent in connection with our Reverse Split, as soon as practicable after the Effective Time. The letter of transmittal
will contain instructions on how to receive your post-Reverse Split shares of common stock electronically in book-entry form under the
Direct Registration System (DRS). Shareholders will need to return to our transfer agent a properly executed and completed letter of
transmittal in order to receive their new book-entry statement representing post-reverse split shares of common stock. The post-reverse
split shares of common stock will contain the same restrictive legends as the pre-reverse split shares.
Holders
of Certificated Shares of Common Stock
Shareholders
holding shares of the Company’s common stock in certificated form will be sent a transmittal letter by the Company’s transfer
agent after the Reverse Split is effective. The letter of transmittal will specify instructions regarding how a shareholder should surrender
his, her or its certificate(s) representing the Company’s common stock to our transfer agent in exchange for certificates representing
the appropriate number of whole shares of post-Reverse Split common stock. No new certificates will be issued to a shareholder until
such shareholder has surrendered all old certificates, together with a properly completed and executed letter of transmittal, to our
transfer agent. No shareholder will be required to pay a transfer or other fee to exchange his, her or its old certificate(s). Shareholders
will then receive new certificates representing the number of whole common shares that they are entitled to as a result of the Reverse
Split, subject to the treatment of fractional shares. Until surrendered, the Company will deem outstanding old certificates held by shareholders
to be cancelled and only represent the number of whole post-Reverse Split shares of our common stock to which those shareholders are
entitled, subject to such treatment of fractional shares. Any old certificates submitted for exchange, whether because of a sale, transfer
or other disposition, will automatically be exchanged for new certificates. If an old certificate has a restrictive legend, the new certificate
will be issued with the same restrictive legend.
STOCKHOLDERS
SHOULD NOT DESTROY ANY STOCK CERTIFICATE(S) AND SHOULD NOT SUBMIT ANY STOCK CERTIFICATE(S) UNTIL REQUESTED TO DO SO.
Fractional
Shares
We
do not currently intend to issue fractional shares in connection with the Reverse Split. Therefore, we will not issue certificates representing
fractional shares. For any shareholder that held at least one (1) whole share pre-split, any post-split fractional shares will be rounded
up to the nearest whole share. For any shareholder that held less than one (1) share pre-split on the Effective Date, the post-split
fractional shares will be rounded down.
Accounting
Matters
The
proposed Reverse Split Amendment will not affect the par value of our common stock per share, which will remain $0.001 par value per
share. Reported per share net income or loss will be higher because there will be fewer shares of common stock outstanding.
Board
Discretion to Implement the Reverse Split
The
Board of Directors, in its sole discretion, may determine to implement the Reverse Split. Notwithstanding the approval of the Reverse
Split by our majority shareholders, the Board of Directors, in its sole discretion, may determine not to implement the Reverse Split.
Transfer
Agent and Registrar
The
transfer agent and registrar for our common stock is Clear Trust, LLC, having an address at 16540 Pointe Village Dr. Ste 205 Lutz, FL
33558 and telephone number (813) 235.4490.
Consequences
if the Reverse Split Amendment is Not Filed
The
Reverse Split Amendment to effect the proposed Reverse Split of our issued and outstanding common stock is an important corporate action
for us to use, if needed, to increase the trading price of our common stock and maintain the Minimum Bid Price Requirement of Nasdaq.
In order to move forward with our business strategy, key initiatives and plans to grow our business, we must raise additional funds and
increase the price-per-share of our common stock. If we do not effect the Reverse Split, in all likelihood we would be unable to maintain
our common stock on Nasdaq and we may be unable to obtain adequate capital to expand our sales and marketing efforts, increase our product
offerings and grow our business. Without such additional capital, we may be required to scale back or eliminate some or all of our operations,
which may have a material adverse effect on our business.
SECURITIES
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The
following table sets forth, as of the Record Date, certain information as to shares of our common stock, Series 1 Preferred Stock and
Series C Preferred Stock, all voting capital of the Company, owned by (i) each person known by us to beneficially own more than 5% of
our outstanding common stock, Series 1 Preferred Stock and Series C Preferred Stock (ii) each of our directors, and (iii) all of our
executive officers and directors as a group. Unless otherwise stated, the address for each beneficial owner is at 135 Fell Court Hauppauge,
NY 11788.
| Name of Beneficial Owner | |
Common Stock | | |
Series 1 Preferred
Stock | | |
Series C Preferred
Stock | |
| Directors and Executive Officers | |
Number
of Shares
Owned | | |
Percent of Class(1) | | |
Number
of Shares
Owned | | |
Percent of Class(1)(2) | | |
Number
of Shares
Owned | | |
Percent of Class(1)(3) | |
| Saagar Govil | |
| 30 | | |
| * | | |
| 153,153 | | |
| 6.09 | % | |
| 50,000 | | |
| 100 | % |
| Paul J. Wyckoff | |
| - | | |
| * | | |
| - | | |
| * | | |
| - | | |
| * | |
| Brian Kwon | |
| 2 | | |
| * | | |
| - | | |
| * | | |
| - | | |
| * | |
| Manpreet Singh | |
| 2 | | |
| * | | |
| - | | |
| * | | |
| - | | |
| * | |
| Metodi Filipov | |
| 2 | | |
| * | | |
| - | | |
| * | | |
| - | | |
| * | |
| All Directors and Executive Officers as a Group (5 persons) | |
| 36 | | |
| * | | |
| 153,153 | | |
| 6.40 | % | |
| 50,000 | | |
| 100 | % |
| Greater than 5% stockholders | |
Number
of Shares
Owned | | |
Percent of Class(1) | | |
Number
of Shares
Owned | | |
Percent of Class(1)(2) | | |
Number
of Shares
Owned | | |
Percent of Class(1)(3) | |
| | |
| | |
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| Altium Capital Management, LP (5) | |
| 178,279 | | |
| 9.99 | % | |
| - | | |
| * | | |
| - | | |
| * | |
| L1 Capital Global Opportunities Master Fund, Ltd. (6) | |
| 178,279 | | |
| 9.99 | % | |
| - | | |
| * | | |
| - | | |
| * | |
| S.H.N. Financial Investments Ltd. (7) | |
| 178,279 | | |
| 9.99 | % | |
| - | | |
| * | | |
| - | | |
| * | |
| Michael Bigger (8) | |
| 178,279 | | |
| 9.99 | % | |
| - | | |
| * | | |
| - | | |
| * | |
| Hal Mintz (9) | |
| 178,279 | | |
| 9.99 | % | |
| - | | |
| * | | |
| - | | |
| * | |
| All greater than 5% shareholders | |
| 891,395 | | |
| 50 | % | |
| - | | |
| * | | |
| - | | |
| * | |
| * |
Less than one percent of
outstanding shares. |
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(1) |
Except as otherwise noted
herein, the percentage is determined on the basis of 1,784,575 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. |
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(2) |
This percentage is based
on the 1,784,575 shares of our Common Stock outstanding, the 17,863,596 votes that the Series C Preferred Stock is entitled to vote,
and the 5,031,788 votes that the Series 1 Preferred Stock is entitled to vote based on 2 votes per share. |
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(3) |
Pursuant to the Certificate
of Designation of the Series C Preferred Stock, each issued and outstanding share of Series C Preferred Stock are entitled to the
number of votes per share equal to the result of (i) the total number of shares of Common Stock outstanding at the time of such vote
multiplied by 10.01, and divided by (ii) the total number of shares of Series C Preferred Stock outstanding at the time of such vote,
at each meeting of our shareholders with respect to any and all matters presented to our shareholders for their action or consideration,
including the election of directors. |
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(4) |
Consists of actual amount
of Common Stock, Series C, and Series 1 Preferred Stock owned. As described above each share of Series C is entitled to 357.27192
votes. Series 1 Preferred Stock is entitled to 2 votes per share. |
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(5) |
Share ownership information
is based on information contained in a Schedule 13G filed with the Securities and Exchange Commission on May 8, 2024, by Altium Growth
Fund, LP, Altium Capital Management, LLC, and Altium Growth GP, LLC (collectively, the “Altium Entities”). Altium Growth
Fund, LP is the record and direct beneficial owner of these securities. Altium Capital Management, LP is the investment adviser of,
and may be deemed to beneficially own securities, owned by, Altium Growth Fund, LP. Altium Growth GP, LLC is the general partner
of, and may be deemed to beneficially own securities owned by, Altium Growth Fund, LP. The address of the principal business office
of each of the Altium Entities is 152 West 57 Street, FL 20, New York, NY 10019. |
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(6) |
Share ownership information
is based on information contained in a Schedule 13G filed with the Securities and Exchange Commission on May 10, 2024, by L1 Capital
Global Opportunities Master Fund, Ltd. David Feldman and Joel Arber are the Directors of L1 Capital Global Opportunities Master Fund,
Ltd. As such, L1 Capital Global Opportunities Master Fund, Ltd., Mr. Feldman, and Mr. Arber may be deemed to beneficially own (as
that term is defined in Rule 13d-3 under the Securities Exchange Act of 1934) the Company’s securities. The address of the
principal business office of by L1 Capital Global Opportunities Master Fund, Ltd. is 161A Shedden Road, 1 Artillery Court PO Box
10085 Grand Cayman, Cayman Islands KY1-1001. |
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(7) |
Share ownership information
is based on information contained in a Schedule 13G filed with the Securities and Exchange Commission on May 13, 2024, by S.H.N.
Financial Investments Ltd. S.H.N. Financial Investments Ltd. is the record and direct beneficial owner of these securities. The address
of the principal business office of S.H.N. Financial Investments Ltd.is Herzliya Hills, Arik Einstein 3, Israel, 4610301. |
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(8) |
Mr. Bigger serves as the
managing member of Bigger Capital Fund GP, LLC and the managing member of District 2 Holdings LLC, which may be deemed to beneficially
own the shares underlying warrants. The address for Mr. Bigger is 2250 Red Springs Drive, Las Vegas, NV 89135. |
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(9) |
Shares underlying warrants
held by Sabby Volatility Warrant Master Fund, Ltd. Hal Mintz has control over Sabby Management LLC that has voting and control over
the shares held by Sabby Volatility Warrant Master Fund, Ltd. The address of Sabby Volatility Warrant Master Fund, Ltd. is c/o Ogier
Fiduciary Services (Cayman) Limited 89 Nexus Way, Camana Bay, Grand Cayman KY1-9007 Cayman Islands.. |
EXPENSE
OF INFORMATION STATEMENT
The
expenses of mailing this Information Statement will be borne by us, including expenses in connection with the preparation and mailing
of this Information Statement and all documents that now accompany or may after supplementing it. It is contemplated that brokerage houses,
custodians, nominees, and fiduciaries will be requested to forward the Information Statement to the beneficial owners of our Common Stock
held of record by such persons and that we will reimburse them for their reasonable expenses incurred in connection therewith. Additional
copies of this Information Statement may be obtained at no charge by writing to us at: 135 Fell Court Hauppauge, NY 11788.
MISCELLANEOUS
One
Information Statement will be delivered to multiple stockholders sharing an address unless we receive contrary instructions from one
or more of the stockholders sharing such address. Upon receipt of such notice, we will undertake to promptly deliver a separate copy
of this Information Statement to the stockholder at the shared address to which a single copy of the Information Statement was delivered
and provide instructions as to how the stockholder can notify us that the stockholder wishes to receive a separate copy of this Information
Statement or other communications to the stockholder in the future. In the event a stockholder desires to provide us with such notice,
it may be given verbally by telephoning our offices at (631) 756-9116 or by mail to our address at 135 Fell Court Hauppauge, NY 11788,
and Attn: Investor Relations.
We
file annual, quarterly and current reports, proxy statements, and registration statements with the SEC. These filings are available to
the public over the Internet at the SEC’s website at http://www.sec.gov. You may also read and copy any document we file with the
SEC without charge at the public reference facility maintained by the SEC at 100 F Street, N.E., Washington, D.C. 20549. You may also
obtain copies of the documents at prescribed rates by writing to the Public Reference Section of the SEC at 100 F Street, N.E., Washington,
D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information on the operation of the public reference facilities.
| January 28, 2025 |
By Order of the Board of Directors
of Cemtrex, Inc. |
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/s/ Saagar
Govil |
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Saagar Govil |
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Chairman, CEO, & President |
APPENDIX
A
FORM
OF CERTIFICATE OF AMENDMENT TO
CERTIFICATE
OF INCORPORATION
OF
CEMTREX, INC.
Cemtrex,
Inc.
| 2. |
The articles have been
amended as follows (provide article numbers, if available): |
Fourth
Article:
Effective
at 12:01 a.m. on [ ], 2025 (the “Effective Time”), every [ ] shares of common stock issued and outstanding immediately prior
to the Effective Time (“Old Common Stock”) shall automatically be combined, without any action on the part of the holder
thereof, into one (1) validly issued, fully paid and non-assessable share of common stock (“New Common Stock”), subject to
the treatment of fractional share interests as described below (the “Reverse Stock Split”). No fractional shares of common
stock shall be issued in connection with the Reverse Stock Split. No stockholder of the Corporation shall transfer any fractional shares
of common stock. No certificates representing fractional shares of New Common Stock will be issued in connection with the Reverse Stock
Split. Holders prior to the Reverse Stock Split who have held at least (1) one whole share of common stock and who otherwise would be
entitled to receive fractional share interests of New Common Stock because they hold a number of shares not evenly divisible by the Reverse
Stock Split ratio will automatically be entitled to receive an additional fraction of a share of New Common Stock to round up to the
next whole share of New Common Stock in lieu of any fractional share created as a result of such Reverse Stock Split. On the other hand,
holders prior to the Reverse Stock Split who have held less than one (1) whole share of common stock shall not be entitled to receive
an additional fraction of a share and will be automatically rounded down. Each certificate that immediately prior to the Effective Time
represented shares of Old Common Stock (“Old Certificates”), shall thereafter represent that number of shares of New Common
Stock into which the shares of Old Common Stock represented by the Old Certificate shall have been combined.
| 3. |
The vote by which the stockholders
holding shares in the corporation entitling them to exercise at least a majority of the voting power, or such greater proportion
of the voting power as may be required in the case of a vote by classes or series, or as may be required by the provisions of the
articles of incorporation have voted in favor of the amendment is: 20 shares of common stock, 50,000 shares Series C Preferred Stock
and 153,153 shares of Series 1 Preferred Stock, voting as a single class, for 73.62% of the voting capital of the Corporation. |
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| 4. |
Effective date of filing
(optional): to be effective at 12:01 a.m. on [*], 2025 |
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| 5. |
Officer Signature (Required): |
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| Saagar Govil, Chairman, President and Executive Officer |
|
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