CEMTREX INC Debt Disclosure
NOTE 15 – LONG-TERM LIABILITIES
Loans payable to bank
On December15, 2015, the Company acquired a loan from Fulton Bank in the amount of $5,250,000 in order to fund the purchase of Advanced Industrial Services, Inc. $5,000,000 of the proceeds went to direct purchase of AIS. This loan carries interest of LIBOR plus 2.25% per annum (4.29% as of September 30, 2019) and is payable on December 15, 2022. This loan carries loan covenants which the Company was in compliance with as of September 30, 2019.
On December15, 2015, the Company acquired a loan from Fulton Bank in the amount of $620,000 in order to fund the operations of Advanced Industrial Services, Inc. This loan carries interest of LIBOR plus 2.00% per annum (4.04% as of September 30, 2019) and is payable on December 15, 2020. This loan carries loan covenants which the Company was in compliance with as of September 30, 2019.
On May 1, 2018, the Company acquired a loan from Fulton Bank in the amount of $400,000 in order to fund new equipment for Advanced Industrial Services, Inc. This loan carries interest of LIBOR plus 2.00% per annum (4.04% as of September 30, 2019) and is payable on May 1, 2023. This loan carries loan covenants which the Company was in compliance with as of September 30, 2019.
Notes payable
On December 15, 2015, the Company issued promissory notes payable to the sellers of AIS for $1,500,000 to fund the purchase of AIS. These notes carry interest of 6% and are due September 2022.
Upon acquisition of AIS, the Company assumed a promissory note related to the purchase of shares from a former shareholder in 2011. The note requires ten annual payments of principal plus interest at treasury bill rates. The note matures in 2022.
On June 17, 2019, Cemtrex Inc., issued a note payable to an independent third-party in the amount of $1,528,000. This note carries interest of 10% an matures on December 17, 2020.
On July 15, 2019, Cemtrex Inc., issued a note payable to an independent third-party in the amount of $1,725,000. This note carries interest of 8% an matures on January 15, 2021.
Estimated maturities of our long-term debt over the next 5 years are as follows;
| 2020 | 2021 | 2022 | 2023 | Total | ||||||||||||||||
| Fulton Bank - $5,250,000 | 719,863 | 749,519 | 782,269 | 427,758 | $ | 2,679,409 | ||||||||||||||
| Fulton Bank - $620,000 | 130,157 | 37,564 | - | - | $ | 167,721 | ||||||||||||||
| Fulton Bank - $400,000 | 78,613 | 82,141 | 85,792 | 75,483 | $ | 322,029 | ||||||||||||||
| Promisorry Note - AIS | 17,185 | 17,185 | 17,269 | - | $ | 51,639 | ||||||||||||||
| Capital Lease Obligations | 22,452 | 20,061 | - | - | $ | 42,513 | ||||||||||||||
| Notes Payable Cemtrex, Inc. (1) | - | 2,783,207 | - | - | $ | 2,783,207 | ||||||||||||||
| TOTAL | $ | 968,270 | $ | 3,689,677 | $ | 885,330 | $ | 503,241 | $ | 6,046,518 | ||||||||||
(1) Net of unamortized original issue discounts of $544,778
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About Debt Disclosures
Debt disclosures detail a company's borrowing structure — the types of instruments, interest rates, maturity schedule, and covenant restrictions that define its financial obligations and flexibility. This section is essential for assessing refinancing risk, interest rate exposure, and the margin of safety against financial distress.
Key signals: the maturity schedule reveals concentration risk — large maturities within 1-2 years during tight credit markets can force dilutive refinancing or asset sales. Compare the fair value of debt against carrying amount to gauge whether the market views the company's credit risk differently than the balance sheet suggests. Watch covenant compliance disclosures for tightening cushions, especially leverage and interest coverage ratios. Variable-rate debt exposure quantifies sensitivity to interest rate changes. Secured versus unsecured mix affects recovery rates and future borrowing capacity. Compare net debt-to-EBITDA against industry peers and covenant limits to assess financial health.