Greetings and welcome to the Cemtrex Inc., Second Quarter 2017 Conference Call. [Operator Instructions] It is now pleasure to introduce your host Garth Russell of KCSA Strategic Communications. Please go ahead sir.

Thank you. Before I turn the call over to management I’d like to make the following remarks concerning forward-looking statements. All statements in this conference call other than historical facts are forward-looking statements. The words anticipate, beliefs, estimate, fact, intend, guidance, confidence, target, project and other similar expressions typically are used to identify forward-looking statements. These forward-looking statements are not guarantees of future performances and may involve and are subject to risk and uncertainties and other factors that may affect Cemtrex’s business, financial condition and other operating results which includes that are not limited to the risk factors and other qualifications described in the risk factor section of our Form 10-K and Form 10-Q as filed with the SEC. Therefore, actual outcomes and results may differ materially from others expressed or implied by these forward-looking statements. Cemtrex expressly disclaims any intent or obligation to update these forward-looking statements. At this time it is now my pleasure to turn the call over to Saagar Govil, Chairman and Chief Executive Officer of Cemtrex. Saagar, the floor is yours.

Thank you Garth and thank you everyone for joining our call today. I’m joined by Aron Govil, Executive Director and Renato Delrama, our CFO. We’ll begin by providing you with an overview of our performance during the second quarter of fiscal 2017 which will be followed by the details of our financial results. After our prepared remarks I’ll be happy to answer any of your questions. With that let’s get started. This is another strong quarter for Cemtrex as we continue to advance our growth strategy. We reported a 61% increase in total revenue to $30.5 million for the second quarter of fiscal year 2017. We’re pleased with the activity across both business segments as the electronics manufacturing services division and the industrial product and services division contributed $15.2 million and $15.3 million to the top line respectively. The acquisition of Periscope nearly a year ago continues to add value and will be a major contributor to our organic expansion as we reach further into the higher margin, higher complexity, lower volume electronics manufacturing services market. As a remainder this acquisition significantly enhanced our electronic manufacturing capabilities and know how to support customers end-to-end needs. We’re now able to provide our product design and sustaining engineering services, electronic assembly and production, cabling and wire harnessing, comprehensive testing services and completely assemble the electronic products to multiple industries we were not in previously including the highly attractive automotive electronics market. During the quarter we announced the multi-million dollar order from a new customer HBH GmbH which we plan to execute over the next 12 to 18 months. Under the terms of this agreement we will build electronic components for high-power HF amplifiers to be used in the FRIB particle accelerator at Michigan State University. Our ability to support the development and…

[Operator Instructions] Our first question today is coming from John Noble from Taglich Brothers. Please proceed with your question.

Hello, good morning Saagar. Couple of questions. First question, your news lately, it’s been mostly related to your electronics and industrial contracting businesses. I was wondering if you could talk a little about your environmental products and your outlook for this business in 2017 and beyond?

Sure, absolutely. The environmental business we’re excited about, we’ve some strong contracts with our new opportunities, with our new products for monitoring specifically for greenhouse gases. However, with the current Trump administration it’s unclear as how the global environment will sort of proceed on a lot of these initiatives. To-date the Trump administration hasn’t set a clear policy about what they will do regarding the Paris Climate agreement and as a result we remain cautious about this business. So, that just continues to remain steady and grow incrementally but we’re not – we’re sort of cautious approaching that market.

Okay. And I was wondering if you could provide an update on your planned electronics manufacturing plant in India. Last call you had mentioned us that you anticipated being finished this year and I think there are total CapEx on that about a $1 million so is there anything more to report on this?

At this point we’re still in the planning stages, so we haven’t incurred expenses really in regard to that. It takes a little bit of time for us to put those plans in motion. But as we make progress on that front we will make announcements accordingly.

Okay. But do you still anticipate this year 2017 or your fiscal year which is September having this plant up and running in India?

I think it would likely extend into the next calendar year.

Okay, into calendar year. Okay. And could you talk about what the primary factors that drove second quarter operating expenses, they were up over 75% about $8.6 million in the second quarter. What level of operating expenses should we expect going forward, is this an anomaly or what really was in this that cause it to be that high?

Yes, I think we incurred some additional expenses as we mentioned relating to investing in our business. We spent on sales and marketing activities to pursue new opportunities in the different markets that we’re aggressively going after whether it’s automotive, electronics or on the industrial side with the oil and gas market opportunities and so forth. So, it’s really a variety of expenses. I think our goal is to keep those expenses in-line and you can look towards the past quarter to kind of see where we would like to be and additionally we had some one-time expenses related to some of the legal matters that we’ve had to deal with over the last quarter. So it was really just a combination of those factors.

Okay. That would be broken up more into the 10-Q that comes out shortly I believe, hopefully?

Yes, the Q was filed so it should be available to read.

Okay. Just one final question. You talked about acquisitions, I don’t know if there is anything new to report regarding potential acquisition candidates if you could just shed some light on that?

We’ve completed the rights offering, we’re constantly evaluating new opportunities as I usually mention to you and others and the investment community that we’re always evaluating new opportunities and as we get to high level of certainty with the status of an acquisition then we make an appropriate announcement. So, while we’ve opportunities in front of us as they become little bit more substantial in nature then we will comment on those and make announcements accordingly.

Okay, well great, thank you, that’s all I have.

[Operator Instructions] Our next question is coming from Andrew Hanson from Redwood Investment Management, please proceed with your question.

Yes, congratulations Saagar on all you’ve accomplished, you’ve come a long way in a year and a half. I’ve got two questions, the first has to do with SG&A, should we interpret some of your comments as saying that you’re going to be investing higher amounts in sales and marketing in the future in anticipation of building sales based on those efforts that’s the first question? And then second, with regard to improving shareholder value, have you considered among other things buying the warrants, which are in overhang to some extent on the stock and are relatively more efficient use of funds and buying in the stock itself?

Yes, thanks for the questions Andy, I appreciate it. So to answer your first question, yes, absolutely we’re investing in sales and marketing due to the opportunities that we see so that’s an area that we like to see ongoing expansion of our activities so that we can continue to grow our brand and grow our presence in the various markets where we see most opportunities. So, that’s absolutely correct. And then, regarding your second question, regarding open market purchases of the warrants it’s certainly something that we’re considering. The company had been in a blackout period for the last several weeks so we hadn’t really initiated something like that right now the board is on the authorized common stock purchases, but it’s something that we’re slated to discuss in the near term as far as, we’re still in that avenue.

Great, thank you.

[Operator Instructions] Our next question is coming from Matt Morrison from Morgan Stanley, please proceed with your question.

Hi Saagar. It looks like a nice quarter. I just have a question, the net was $0.04 and I'm not an expert at analyzing income statements but I did look at the Q and everything was up across the board revenues and some expenses and what have you and the area that showed a reversal was the other income/expenses which showed a loss of 294 and change versus a gain of 113 last year and you've kind of touched on where that came from, some of it was litigation and maybe some other SG&A expenses that are part of growing your business because you bought a couple companies last year that were responsible for the growth and revs but if you stripped out kind of onetime items or maybe non-recurring items at the same level, what would have the earnings may you have been because I did see some prints on the web that your number actually was $0.18 up from the expectation of 10, Is that accurate? Can you just help clarify that point place?

Sure. I know sometimes their web sites they grab the wrong information and so it can get a little bit confusing. So there was a few parts to that question so I'll just try to address it systematically here. So just to be clear the $0.18 per share is over our six months and so not to be confused with $0.10 the year-over-year like our 2016 Q2 $0.10 per share. So that's maybe where there's some confusion but our [indiscernible] right now we're at $0.18. Now to address your other question about adjusting for one time cost, so we don't typically put out adjusted operating income numbers and so forth. We had, if you look at our other expenses we had took a loss on the sale and assets so that 294 it too is a one-time event and then you can also look at some additional expenses in the SG&A which were attributable to dealing with legal and marketing related to the lawsuits and so forth that we've been facing. So you can estimate some modest expand there as well to sort of get back to maybe what would be representative without those onetime expenses for us.

All right and as far as the litigation expenses, there's a deductible you have on that as far as ultimately having insurance coverage on expenses that might balloon, could you go over what the deductible is? Your exposure for [indiscernible].

Our deductible on our D&O policy is about 150k.

Alright, so that’s obviously very manageable and if indeed the lawsuit is [indiscernible] out or what have you then? That would be your max which is not that material in the long term that's good to hear and then just I guess to address the previous caller's comment that it might be more strategic to buying some of the warrants. Actually I kind of wonder why that would be better the warrants aren't dilute of until they're sick the stock is a six and change I would assume right so that why would one buy those because we would love to have the stock back up at six I mean ultimately we'd love to have it a lot higher but wouldn't it be better to buy just the comment in here I mean it reduces your flow and things like that which has a negative but you don't have to necessarily retire the shares you could buy them in and maybe buy some of the preferred which saves you a lot of dividend expense and then as your company recovers stock price wise the fear is abate hopefully of some of the negativity that surrounded the company due to this one particular blogger, would you be in a position to resell the securities you bought a lower price, I mean isn't that a better strategy than buying out of the many warrants that they may never be exercise and you might want to be exercised because that would be interesting capital to have it six in change you might want to that point.

You're right. That's actually correct. So I guess I wasn't clear in the last point but we hadn't authorized the buyback for preferred or warrants which why I wanted to clarify but that's accurate and it wouldn't necessarily be the best use and you're right we do and I mean that's part of the reason why we bought over 250,000 common stock over this calendar year and we will take a close look at the preferred as well as another option so those are on the table and I agree with your thoughts there as well and we also weigh those decisions against potential acquisitions that are front us. So these are all the decisions that we're looking at and continue to evaluate as continue.

Alright and I will just close with this I mean since this whole event has occurred which is you're dealing with the questions put forth by this blogger and what have. Really to keep handling very well. You haven’t been caught up in too much hype verbally or whining about short sales and things like that. You've simply addressed it I think on an [indiscernible] manner, you've had some share buybacks, you paid dividends, you've led the investment community understand that you feel it's meritless on every level and that you expect to win. And that's about all you can do at this juncture. And then to operate the company in a way that shut organic growth and so far that's exactly what you've done. So, my apology for that and hopefully we see higher stock prices in the meantime which would just validate that notion?

Yes, absolutely man. We 100% agree, the outlook for the company is quite compelling and we have, we believe that there are a lot of great opportunities are out in front of us and so we try to deal with the backlash from that article as best as we can. And we're going to continue to fight. As we mentioned, we do believe those allegations and the losses are meritless. So, we're going to continue to focus on growing our business and keep executing and continuing to build. So, that's our objective and we're looking forward to it.

Great, that's all you can do. Thanks, so much.

Thank you.

Thank you. We reached end of our question and answer session. I just want to fall back over to management for any further or closing comments.

At this point, we're looking forward to continuing and growing our business as I just mentioned. We have a lot of great opportunities, and so I just want to thank everybody for participating in the call. And see you next quarter. And as always, please feel free to reach out at investors@cemtrex.com or call the company for any information or questions that you might have. Thank you for your time.

Thank you. And that concludes the teleconference. You may disconnect your lines at this time. And you have a wonderful day. We thank you for your participation today.