“Trends in the surveillance industry are rapidly moving toward Video Surveillance as a Service (VSaaS) as end users seek a reliable source for video surveillance and access control technologies suited to today’s highly dynamic environment,” said Saagar Govil, Chairman and CEO by Cemtrex. “We continue to see increasing demand from large customers for Vicon’s expanding range of Valerus products and software services, with Allied Market Research forecasting the global VSaaS and video surveillance market to reach over $83 billion by 2030, at a CAGR of 10, 9% between 2021 and 2030.
“We believe Vicon is on track to achieve $5-10 million in recurring revenue in the next three to five years as the industry shifts to SaaS solutions leveraging AI and cloud technology solutions. We believe this shift in focus to unlocking meaningful near-term recurring revenue opportunities at Vicon will maximize shareholder value for years to come.
“For AIS, the company continues to be a strong source of cash flow with many repeat business and a well-established reputation. We expect continued growth in this segment, driven by increasing demand for industrial contracting and predictive maintenance services as the US industrial economy continues to thrive.”
As part of the strategic restructuring, on November 22, 2022, Cemtrex completed a divestment of its assets and trading liabilities Smartdesk, CXR Services, Cemtrex Labs, Virtual Driver Interactive and Bravo Strong, allowing Cemtrex to focus on the Vicon and AIS businesses. The divestment of the subsidiaries was accomplished through a sale to existing Cemtrex management led by Mr. Saagar Govil. The Company’s independent board and management worked with independent third parties to prepare valuations for the assets involved in the transaction. The Company’s board of directors approved these actions and agreements, with the exception of Saagar Govil, who abstained on all votes related to these agreements.
Govil continued, “In the current environment, our smart desk and AR/VR businesses have proven difficult to generate attractive returns and are better suited to be private companies. This divestiture will allow us to focus on helping Vicon accelerate the implementation of VSaaS and AI-based video analytics for our global customer base and grow AIS industrial contract services in a high-repeat business.”
On November 22, 2022, the Company completed the sale of assets and certain liabilities for the following consideration:
- Centrex XR, Inc.
- $895,000 consisting of:
- $75,000 in cash, payable at closing
- 5% royalty on all income from the business, payable 90 days after the end of each calendar year for the next three years; If the total amount of royalties due at the end of the three-year period is less than $820,000, purchaser will be required to pay the difference between $820,000 and the royalties paid.
- Centrex Advanced Technologies, Inc.
- $10,000 in cash, payable at closing
- 5% royalty on all income from the business, payable 90 days after the end of each calendar year for the next 5 years; and
- $1,600,000 in “SAFE” (share capital) on any subsequent fundraising or exit over $5M, capped at $10M.
“Once the divestitures are complete we will be able to direct growth capital to Vicon and focus on returning to profitability. We will invest in Vicon’s state-of-the-art end-to-end video surveillance security system, offering customers a complete solution with the ability to monitor LPR, access control and video management from Valerus. Collectively, we are excited to embark on this transformation of our business and believe our shareholders will better appreciate the long-term value and growth potential they enable. I look forward to providing more updates throughout 2023,” concluded Govil.
About Centrex
Cemtrex, Inc. (CETX) is a leading cross-industry technology company innovating in markets such as the Internet of Things (IoT), Augmented and Virtual Reality (AR & VR), and Artificial Intelligence and Computer Vision (AI & CV) in a variety of Sectors including but not limited to consumer goods, industrial manufacturing, digital applications and intelligent security and surveillance systems. www.cemtrex.com
