CEMTREX INC Leases Disclosure
NOTE 15 – LEASES
The Company is party to contracts where we lease property from others under contracts classified as operating leases. The Company primarily leases office and operating facilities, vehicles, and office equipment. The weighted average remaining term of our operating leases was approximately 2.52 years at September 30, 2025, and 3.3 years at September 30, 2024. The weighted average discount rate used to measure lease liabilities was approximately 6.23% at September 30, 2025, and 6.54% at September 30, 2024. The Company used the rate implicit in the lease, where known, or its incremental borrowing rate as the rate used to discount the future lease payments.
The Company’s corporate segment leased approximately 100 square feet of office space in Brooklyn, NY on a month-to-month lease, which the Company ended in June 2025, at a rent of $600 per month with $5,400 of expense for the year ended September 30, 2025 and approximately 350 square feet of office space in Clovis, CA on a month-to-month lease at a monthly rent of $1,933 with $33,797 of expense for the year ended September 30, 2025. The expense is under the caption “General and administrative” on the Company’s Consolidated Statements of Operations.
A reconciliation of undiscounted cash flows to operating lease liabilities recognized in the Consolidated Balance Sheet at September 30, 2025, is set forth below.
| Years ending September 30, | Operating Leases | |||
| 2026 | 1,030,742 | |||
| 2027 | 607,015 | |||
| 2028 | 347,775 | |||
| 2029 | 211,805 | |||
| 2030 | 310,075 | |||
| Undiscounted lease payments | 2,507,412 | |||
| Amount representing interest | (435,800 | ) | ||
| Discounted lease payments | 2,071,612 | |||
| Less short-term operating lease liabilities | 918,391 | |||
| Long-term operating lease liabilities | $ | 1,153,221 | ||
Lease costs for the years ended September 30, 2025, and 2024 are set forth below.
| For the year ended | ||||||||
| September 30, | ||||||||
| 2025 | 2024 | |||||||
| Operating lease costs | 950,011 | 831,536 | ||||||
| Short-term lease costs | 163,429 | 66,196 | ||||||
| Total lease cost | $ | 1,113,440 | $ | 897,732 | ||||
Cemtrex Inc. and Subsidiaries
About Leases Disclosures
Lease disclosures under ASC 842 provide a comprehensive view of a company's leased asset portfolio, including the split between operating and finance leases, discount rates used to present-value future payments, and the maturity schedule of lease obligations. This section reveals a significant source of off-balance-sheet commitments that were largely hidden before the current standard.
Key signals: the weighted-average discount rate affects the size of recorded lease liabilities — a higher rate reduces the reported obligation, so compare the chosen rate against the company's incremental borrowing rate. The operating versus finance lease mix affects both EBITDA and operating income presentation. Watch the maturity table for concentration risk: large payment cliffs in specific years may create cash flow pressure. Variable lease payments excluded from the liability measurement represent real obligations that do not appear on the balance sheet. Compare total lease costs against prior-year operating lease expense to assess the true economic burden.