What changed in this filing

/stocks — the workspaceLOADING

Item 1A. Risk Factors

2022-01-21 compared with 2021-01-05 · 656 added, 335 removed, 63 unchanged (94% of the section changed)

in our common stock involves a high degree of risk.

You should consider carefully the risks and uncertainties described below,

together with all of the other information in this report, including the consolidated audited financial statements and the related

notes appearing at the end of this annual report on Form 10-K, with respect to any investment in shares of our common stock.

any of the following risks actually occurs, our business, financial condition, results of operations and future prospects would

likely be materially and adversely affected.

In that event, the market price of our common stock could decline, and you could

lose all or part of your investment.

These statements, like all statements in this report, speak only as of the date of this report

(unless another date is indicated) and we undertake no obligation to update or revise the statements in light of future development.

Related to our Business

You should carefully consider the risks and uncertainties described below, together

with all of the other information in this report, including the consolidated audited financial statements and the related notes appearing

at the end of this annual report on Form 10-K, with respect to any investment in shares of our common stock.

If any of the following

risks actually occurs, our business, financial condition, results of operations and future prospects would likely be materially and adversely

In that event, the market price of our common stock could decline, and you could lose all or part of your investment.

statements, like all statements in this report, speak only as of the date of this report (unless another date is indicated) and we undertake

no obligation to update or revise the statements in light of future development.

Related to Covid-19

global pandemic may disrupt our business or the business of our customers.

December 2019, a novel strain of corona virus, which causes the infectious disease known as COVID-19 was reported.

The World Health Organization

declared COVID-19 a Public Health Emergency and Global Pandemic.

COVID-19 has severely impacted economies around the world.

current COVID-19 pandemic has impacted our business operations and the results of our operations in this fiscal year, primarily with

delays in expected orders by many customers and new product development, including newer versions of surveillance software since our

technical facility in Pune, India has been under lock down on multiple occasions.

Overall bookings level in the IS segment of our business

were down by more than 20%, however our AT segment has experienced relatively less slow down.

In addition, due to delays in certain supply

chain areas, the expected launch times of our new products and new versions has resulted in delays of several months.

broader implications of COVID-19 on our results from operations going forward remains uncertain.

The COVID-19 pandemic has the potential

to cause adverse effects to our customers, suppliers or business partners in locations that have or will experience more pronounced disruptions,

which could result in a reduction to future revenue and manufacturing output as well as delays in our new product development activities.

However, on the other hand, opportunities in the video surveillance field have been growing for Vicon products.

extent of the pandemic’s effect on our operational and financial performance will depend in large part on future developments, which

cannot be reasonably estimated at this time.

Future developments include the duration, scope and severity of the pandemic, the emergence

of new virus variants that are more contagious or harmful than prior variants, the actions taken to contain or mitigate its impact both

within and outside the jurisdictions where we operate, the impact on governmental programs and budgets, the development of treatments

or vaccines, and the resumption of widespread economic activity.

Due to the inherent uncertainty of the unprecedented and rapidly evolving

situation, we are unable to predict with any confidence the likely impact of the COVID-19 pandemic on our future operations.

materially impact our results of operations, cash flows, and financial condition.

Related to our Financial Condition

is no guarantee that cash flow from operations and/or debt and equity financings will provide sufficient capital to meet our expansion

goals and working capital needs.

current strategic plan includes the expansion of our company both organically and through acquisitions if market conditions and

competitive conditions allow.

Due to the long-term nature of investments in acquisitions and other financial needs to support

organic growth, including working capital, we expect our long-term and working capital needs to periodically exceed the short-term

fluctuations in cash flow from operations.

We anticipate that we will likely raise additional external capital from the sale of

common stock, preferred stock and debt instruments as market conditions may allow, in addition to cash flow from operations (which

may not always be sufficient), to fund our growth and working capital needs.

the event that we need to raise significant amounts of external capital at any time or over an extended period, we face a risk

that we may need to do so under adverse capital market conditions with the result that our existing shareholders, as well as persons

who acquire our common stock, may incur significant and immediate dilution should we raise capital from the sale of our common

or preferred stock.

Similarly, we may need to meet our external capital needs from the sale of secured or unsecured debt instruments

at interest rates and with such other debt covenants and conditions as the market then requires.

In all of these transactions

we anticipate that we will likely need to raise significant amounts of additional external capital to support our growth.

there can be no guarantee that we will be able to raise external capital on terms that are reasonable in light of current market

In the event that we are not able to do so, those who acquire our common stock may face significant and immediate

dilution and other adverse consequences.

Further, debt covenants contained in debt instruments that we issue may limit our financial

and operating flexibility with consequent adverse impact on our common stock market price.

are substantially dependent upon the success and continued market acceptance of our technology;

the absence of which may significantly

reduce our sales, profits and cash flow and adversely impact our financial condition.

addition to overall reduced market demand, other competing technologies may be offered by both existing competitors or by those

that enter the market and these competing technologies may offer a better cost-benefit ratio than our products and/or at lower

prices with the result that our sales, profits, and cash flow may suffer significantly over an extended period with serious adverse

impact on our financial condition.

future operating results depend in part on continued successful research, development and marketing of new and improved products

and services through our subsidiary Cemtrex Advanced Technologies, and there can be no assurance that we will successfully introduce

new products and services into the market.

success of new and improved products and services through our Cemtrex Advanced Technologies Inc.

subsidiary depends on our research

and development efforts and the initial acceptance of our products by consumers.

This is a new line of business for our company,

and our management has limited experience with consumer products in general, and with IoT products in particular.

is affected by varying degrees of technological change and corresponding shifts in customer demand, which result in unpredictable

product transitions, shortened life cycles and increased importance of being first to market with new products and services.

may experience difficulties or delays in the research & development, production and/or marketing of new products and services

due to lack of capital, which may negatively impact our operating results and prevent us from recouping or realizing a return

on the investments required to continue to bring new products and services to market.

failure to successfully develop, sell and market our new SmartDesk in a timely and cost-effective manner could adversely affect

our future profitability.

believe that our profitability will depend in part on our ability to effectively (i) market and sell SmartDesk, (ii) continue

our engineering effort to develop new features for the SmartDesk as requested by customers, (iii) market SmartDesk through our

own marketing organization and via third-party distribution channels in the United States and internationally, and (iv) deliver

SmartDesk to customers with appropriate installation and service.

Failure to successfully execute these tasks in a timely and

cost-effective manner could adversely affect profitability.

There can be no assurance that we will be successful in these efforts

or that even when our SmartDesk is delivered, it will achieve market acceptance in a timely fashion.

Further, there can be no

assurance that expenses incurred in connection with the development, sales and marketing of SmartDesk will not exceed our expectations,

or that SmartDesk will generate revenues sufficient to offset these expenses.

In addition, although we have filed numerous U.S.

patent applications relating to various aspects and features of our SmartDesk, there can be no assurance that any patents will

issue on any of the pending patent applications.

have broad discretion in the use of the net proceeds from our universal shelf registration statement and may not use them effectively.

intend to continue to allocate the net proceeds that we received from our registered shelf offering that went effective with

the SEC on June 14, 2017 (i) to further the development, and sales and marketing of our new smart device, known as the

SmartDesk, a proprietary advanced technology workspace solution developed entirely by our Advanced Technologies business

segment, and (ii) for general corporate purposes, including for working capital purposes, to increase sales and operational

capabilities in each of our market segments.

The Company on an on-going basis invests its excess cash in large cap

securities, both stocks and options, listed on major exchanges pending use of net proceeds for business matters.

investments may prove to be lucrative to the company, these investments may prove to be disappointing and we could lose some

or all of the net proceeds in this fashion.

management will have broad discretion in the actual application of the net proceeds, and the failure by our management to

apply these funds effectively could have a material adverse effect on our business.

goals working capital needs, or fund our operations.

current strategic plan includes the expansion of our company both organically and through acquisitions if market conditions and competitive

conditions allow.

Due to the long-term nature of investments in acquisitions and other financial needs to support organic growth, including

working capital, we expect our long-term and working capital needs to periodically exceed the short-term fluctuations in cash flow from

We anticipate that we will likely raise additional external capital from the sale of common stock, preferred stock and debt

instruments as market conditions may allow, in addition to cash flow from operations (which may not always be sufficient), to fund our

growth and working capital needs.

the event that we need to raise significant amounts of external capital at any time or over an extended period, we face a risk that we

may need to do so under adverse capital market conditions with the result that our existing shareholders, as well as persons who acquire

our common stock, may incur significant and immediate dilution should we raise capital from the sale of our common or preferred stock.

Similarly, we may need to meet our external capital needs from the sale of secured or unsecured debt instruments at interest rates and

with such other debt covenants and conditions as the market then requires.

In all of these transactions we anticipate that we will likely

need to raise significant amounts of additional external capital to support our growth.

However, there can be no guarantee that we will

be able to raise external capital on terms that are reasonable in light of current market conditions.

In the event that we are not able

to do so, those who acquire our common stock may face significant and immediate dilution and other adverse consequences.

Further, debt

covenants contained in debt instruments that we issue may limit our financial and operating flexibility with consequent adverse impact

on our common stock market price.

We have a history of losses and may experience

losses in the future, which could result in the market price of our common stock declining.

We have incurred net losses, including net losses

of $7.8 million in 2021, $10.5 million in 2020 and $21.8 million in 2019.

We expect to continue to incur significant product development,

sales and marketing and administrative expenses.

As a result, we will need to generate significant revenues to achieve profitability.

We cannot be certain that we will achieve profitability in the future or, if we achieve profitability, to sustain it.

If we do not achieve

and maintain profitability, the market price for our common stock may decline, perhaps substantially.

Company is exposed to credit risk, market risk, and fluctuations in the values of its investment portfolio.

Company invests excess cash that the Company has on hand in large cap securities listed on major exchanges, including

stocks and options.

The Company’s investments can be negatively affected by liquidity, credit deterioration, financial

results, market and economic conditions, political risk, sovereign risk, interest rate fluctuations or other factors.

the value and liquidity of the Company’s cash, cash equivalents, and marketable securities may fluctuate substantially.

Therefore, although the Company has not realized any significant losses on its cash, cash equivalents, and marketable securities,

future fluctuations in their value could result in significant losses and could have an adverse impact on the Company’s

financial condition and operating results.

have substantial debt which could adversely affect our ability to raise additional capital to fund operations and prevent us from

meeting our obligations under outstanding indebtedness.

Company invests excess cash that the Company has on hand in large cap securities listed on major exchanges, including stocks and options.

The Company’s investments can be negatively affected by liquidity, credit deterioration, financial results, market and economic

conditions, political risk, sovereign risk, interest rate fluctuations or other factors.

we have not recognized any material losses related to our cash equivalents, short-term investments, or long-term investments, future

declines in the market values of such investments could have an adverse effect on our financial condition and operating results.

a result, the value and liquidity of the Company’s cash, cash equivalents, and marketable securities may fluctuate substantially.

Therefore, although the Company has not realized any significant losses on its cash, cash equivalents, and marketable securities, future

fluctuations in their value could result in significant losses and could have an adverse impact on the Company’s financial condition

and operating results.

have substantial debt which could adversely affect our ability to raise additional capital to fund operations and prevent us from meeting

our obligations under outstanding indebtedness.

of September 30, 2021, our total indebtedness was approximately $16.4 million, including notes payable of $11.3 million, mortgage

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the following:

(i) a substantial portion of our cash flow from operations may be dedicated to the payment of principal and interest

on indebtedness, thereby reducing the funds available for operations, future business opportunities and capital expenditures;

(ii) our ability to obtain additional financing for working capital, debt service requirements and general corporate purposes

in the future may be limited;

(i) a substantial portion of our cash flow from operations may be dedicated to the payment of principal and interest on

indebtedness, thereby reducing the funds available for operations, future business opportunities and capital expenditures;

(ii) our ability

to obtain additional financing for working capital, debt service requirements and general corporate purposes in the future may be limited;

(iii) we may face a competitive disadvantage to lesser leveraged competitors;

(iv) our debt service

requirements could make it more difficult to satisfy other financial obligations;

and (v) we may be vulnerable in a downturn in

general economic conditions or in our business and we may be unable to carry out activities that are important to our growth.

ability to make scheduled payments of the principal of, or to pay interest on, or to refinance our indebtedness depends on and

is subject to our financial and operating performance, which in turn is affected by general and regional economic, financial,

competitive, business and other factors beyond management’s control.

If we are unable to generate sufficient cash flow to

service our debt or to fund our other liquidity needs, we will need to restructure or refinance all or a portion of our debt,

which could impair our liquidity.

Any refinancing of indebtedness, if available at all, could be at higher interest rates and

may require us to comply with more onerous covenants that could further restrict our business operations.

Despite our significant

amount of indebtedness, we may need to incur significant additional amounts of debt, which could further exacerbate the risks

associated with our substantial debt.

ability to secure and maintain sufficient credit arrangements is key to our continued operations and there is no assurance we

will be able to obtain sufficient additional equity or debt financing in the future.

(iv) our debt service requirements could make it more difficult

to satisfy other financial obligations;

and (v) we may be vulnerable in a downturn in general economic conditions or in our business

and we may be unable to carry out activities that are important to our growth.

ability to make scheduled payments of the principal of, or to pay interest on, or to refinance our indebtedness depends on and is subject

to our financial and operating performance, which in turn is affected by general and regional economic, financial, competitive, business

and other factors beyond management’s control.

If we are unable to generate sufficient cash flow to service our debt or to fund

our other liquidity needs, we will need to restructure or refinance all or a portion of our debt, which could impair our liquidity.

refinancing of indebtedness, if available at all, could be at higher interest rates and may require us to comply with more onerous covenants

that could further restrict our business operations.

Despite our significant amount of indebtedness, we may need to incur significant

additional amounts of debt, which could further exacerbate the risks associated with our substantial debt.

ability to secure and maintain sufficient credit arrangements is key to our continued operations and there is no assurance we will be

able to obtain sufficient additional equity or debt financing in the future.

is no assurance that we will be able to retain or renew our credit agreements and other finance agreements in the future.

event our company grows rapidly, the uncertain economic climate continues, or we acquire one or more other companies, additional

financing resources will likely be necessary in the current or future fiscal years.

As a smaller public company with a limited

ability to attract and obtain financing, there is no assurance that we will be able to obtain sufficient additional equity or

debt financing in the future on terms that are reasonable in light of current market conditions.

are involved in an ongoing SEC investigation, which could divert management’s focus, result in substantial investigation

expenses and have an adverse impact on our reputation, financial condition, results of operations and cash flows.

Company has received subpoenas from the Securities and Exchange Commission (“SEC”).

The subpoenas request documents

and information concerning, among other things, a company known as Telidyne Inc., a company controlled by our prior officer and

director, Aron Govil, securities offerings related to Telidyne, and the Company’s own product and services, business operations,

securities’

offerings and use of proceeds.

Although the Company is not currently the subject of any enforcement proceedings,

the investigation could lead to enforcement proceedings if the SEC contends that the Company has not complied with securities

The Company is fully cooperating with the SEC's requests.

The Company has incurred legal expenses and may incur significant

legal and accounting expenditures in connection with the SEC’s investigation.

The Company is unable to predict how long

the SEC’s investigation will continue or its outcome.

our company grows rapidly, the uncertain economic climate continues, or we acquire one or more other companies, additional financing

resources will likely be necessary in the current or future fiscal years.

As a smaller public company with a limited ability to attract

and obtain financing, there is no assurance that we will be able to obtain sufficient additional equity or debt financing in the future

on terms that are reasonable in light of current market conditions.

Related to our Business

are substantially dependent upon the success and continued market acceptance of our technology;

the absence of which may significantly

reduce our sales, profits and cash flow and adversely impact our financial condition.

addition to overall reduced market demand, other competing technologies may be offered by both existing competitors or by those that

enter the market and these competing technologies may offer a better cost-benefit ratio than our products and/or at lower prices with

the result that our sales, profits, and cash flow may suffer significantly over an extended period with serious adverse impact on our

financial condition.

have taken a multi-operational approach, and some of our business segments have historically failed to benefit our company, and there

remains a risk that our remaining segments may not prove to be successful.

We may divest or expand into new areas that are outside

of our current business activities and those activities may not prove to be successful.

continuously assess the composition of our portfolio businesses to ensure it is aligned with our strategic objectives and positioned

to maximize growth and return in the coming years.

Since our business concerns new and developing technologies, and many of these endeavors

fail, some of the businesses in our portfolio may not be successful in generating sufficient revenue to be a viable option for our company.

fiscal 2018, for instance, we made a strategic decision to exit the Electronics Manufacturing group by selling all companies in that

business segment on August 15, 2019.

Similarly, during fiscal 2019, we also reached a strategic decision to exit the environmental products

business, which was part of the Industrial Services Segment.

the Company has two business segments, consisting of (i) Advanced Technologies (AT) and (ii) Industrial Services (IS).

Within these segments

there are a number of technologies that we are pursuing, as discussed in this annual report under “Item 1.

Business.” There

is a risk that one or more of our technologies will not be successful in generating revenue to sustain the expenditures associated with

its existence.

Moreover, having multiple business segments may present challenges, such as fluctuations in our operating results, using

the company’s limited resources on less worthy business pursuits, and distracting management from obtaining its goals with respect

to our overall operations.

If we are unable to establish our technologies in the market, and overcome the challenges of doing so, we

could go out of business.

we continuously review our portfolio of businesses we may exit or enter into new business activities which may ultimately prove to be

unsuccessful.

future operating results depend in part on continued successful research, development and marketing of new and improved products and

services through our Advanced Technologies segment, and there can be no assurance that we will successfully introduce

new products and services into the market.

success of new and improved products and services through our Advanced Technologies segment depends on our research and development efforts

and the initial acceptance of our products and solutions by consumers.

In most instances these are all new lines of business for our

company, and IoT, VR & AR industries are changing rapidly, and our management has limited experience with consumer products in general.

Our business is affected by varying degrees of technological change and corresponding shifts in customer demand, which result in unpredictable

product transitions, shortened life cycles and increased importance of being first to market with new products and services.

We may experience

difficulties or delays in the research & development, production and/or marketing of new products and services due to lack of capital,

which may negatively impact our operating results and prevent us from recouping or realizing a return on the investments required to

continue to bring new products and services to market.

future operating results depends in part on the continued successful operation of our Industrial Services segment, and there can be no

assurance that we will be successful in this business.

success of selling services through our Industrial Services segment depends on our ability to hire and retain talent, our ability to

market these services successfully to clients, the overall demand for these services, and the quality of our workmanship by our customers,

among other factors.

Our business is affected by varying degrees of technological change and corresponding shifts in customer demand,

which result in unpredictable product transitions, shortened life cycles and increased importance of being first to market with new products

and services.

We may experience difficulties or delays in the delivery of services due to lack of capital or lack of adequate talent,

which may negatively impact our operating results and prevent us from recouping or realizing a return on the investments required to

continue to compete in our markets.

failure to successfully develop, sell and market our SmartDesk in a timely and cost-effective manner could adversely affect our future

profitability.

believe that our profitability will depend in part on our ability to effectively (i) market and sell SmartDesk, (ii) continue our engineering

effort to develop new features for the SmartDesk as requested by customers, (iii) market SmartDesk through our own marketing organization

and via third-party distribution channels in the United States and internationally, and (iv) deliver SmartDesk to customers with appropriate

installation and service.

Failure to successfully execute these tasks in a timely and cost-effective manner could adversely affect profitability.

There can be no assurance that we will be successful in these efforts or that even when our SmartDesk is delivered, it will achieve market

acceptance in a timely fashion.

Further, there can be no assurance that expenses incurred in connection with the development, sales and

marketing of SmartDesk will not exceed our expectations, or that SmartDesk will generate revenues sufficient to offset these expenses.

In addition, although we have filed numerous U.S.

patent applications relating to various aspects and features of our SmartDesk, there

can be no assurance that any patents will issue on any of the pending patent applications.

operating results may fluctuate, which could have a negative impact on our ability to grow our client base, establish sustainable revenues

and succeed overall.

results of operations may fluctuate as a result of a number of factors, some of which are beyond our control including but not limited

economic conditions in the geographies and industries where we sell our services and conduct operations;

legislative policies where

we sell our services and conduct operations;

budgetary constraints of our customers;

of our strategic growth initiatives;

associated with the launching or integration of new or acquired businesses;

of new product introductions by us, our suppliers and our competitors;

product and service mix, availability, utilization and pricing;

mix, by state and country, of our revenues, personnel and assets;

in interest rates or tax rates;

in, and application of, accounting rules;

in the regulations applicable to us;

a result of these factors, we may not succeed in our business and we could go out of business.

operate in a cyclical business, which could result in significant fluctuations in demand for our products

changes in our customers’ businesses have, in the past, resulted in, and may in the future result in, significant fluctuations

in demand for our products, selling prices, and our profitability.

Most of our customers operate in cyclical industries.

Their requirements

for our technologies fluctuate significantly as a result of changes in general economic conditions, technological changes, customer demand,

and other factors.

During periods of increasing demand, our customers typically seek to increase their inventory of our products to avoid

production bottlenecks.

When demand for their products peaks and begins to decline, as has happened in the past, they tend to reduce

or cancel orders for our products while they use up accumulated inventory.

Business cycles vary somewhat in different geographical regions

and customer industries.

Significant fluctuations in sales of our products affect our unit manufacturing costs and affect our profitability

by making it more difficult for us to predict our production, raw materials, and shipping needs.

Changes in demand mix, needed technologies,

and end-use markets may adversely affect our ability to match our products, inventory, and capacity to meet customer demand and could

adversely affect our operating results and financial condition.

We are also vulnerable to general economic events or trends beyond our

control, and our sales and profits may suffer in periods of weak demand.

sales and gross margins depend significantly on market demand for our products, as to which there can be no assurance.

uncertainty in the United States and in the international economic and political environment could result in a decline in demand

for our products in any industry.

Our gross margins are dependent upon our ability to maintain sales volumes at levels that allow

us to cover our fixed costs and variable costs per unit.

To the extent that one or more product lines experience a significant

and protracted decline in sales volume, we may experience significant declines in our gross margins that may result in losses.

Further, any adverse changes in tax rates and laws affecting our customers could result in decreases in demand of our products

and thus decrease our gross margins.

Any of these factors could negatively impact our business, results of operations and financial

uncertainty in the United States and in the international economic and political environment could result in a decline in demand for

our products in any industry.

Our gross margins are dependent upon our ability to maintain sales volumes at levels that allow us to cover

our fixed costs and variable costs per unit.

To the extent that one or more product lines experience a significant and protracted decline

in sales volume, we may experience significant declines in our gross margins that may result in losses.

Further, any adverse changes

in tax rates and laws affecting our customers could result in decreases in demand of our products and thus decrease our gross margins.

Any of these factors could negatively impact our business, results of operations and financial condition.

these circumstances, we anticipate that we could be required to increase or decrease staffing and more closely manage other expenses

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Orders from our customers are subject to cancellation,

and delivery schedules from our customers fluctuate as a result of changes in our customers’

demand, thereby adversely affecting

and delivery schedules from our customers fluctuate as a result of changes in our customers’ demand, thereby adversely affecting

our results of operations, and may result in higher inventory levels.

Higher inventory levels may cause us to need greater external

financing, which adversely affects our financial performance.

products face competitive challenges, including rapid technological changes, and pricing pressure from competitors, which could

Higher inventory levels may cause us to need greater external financing,

which adversely affects our financial performance.

products face intense competitive challenges, including rapid technological changes, and pricing pressure from competitors, which could

adversely affect our business.

of our product lines are subject to significant competition from existing and future competitors, market conditions and technological

change, or a combination of them, and our sales revenues and gross margins may suffer protracted and serious declines with the

result that we would likely incur protracted losses.

Further, the barriers to entry in several of our lines of business are not

so significant that we may be facing competition from others who see significant opportunities to enter the market and undercut

our prices with products that possess superior technological attributes at prices that offer our customers a better value.

this instance, we could incur protracted and significant losses and persons who acquire our common stock would suffer losses thereby.

change, or a combination of them, and our sales revenues and gross margins may suffer protracted and serious declines with the result

that we would likely incur protracted losses.

Further, the barriers to entry in several of our lines of business are not so significant

that we may be facing competition from others who see significant opportunities to enter the market and undercut our prices with products

that possess superior technological attributes at prices that offer our customers a better value.

In this instance, we could incur protracted

and significant losses and persons who acquire our common stock would suffer losses thereby.

time to time, we may need to reduce our prices in response to competitive and customer pressures and to maintain our market share.

and customer pressures may also restrict our ability to increase prices in response to commodity and other input cost increases.

results of operations will suffer if profit margins decrease, as a result of a reduction in prices, increased input costs or other factors,

and if we are unable to increase sales volumes to offset those profit margin decreases.

We may also need to increase spending on marketing,

advertising and new product innovation to protect existing market share or increase market share.

The success of our investments is subject

to risks, including uncertainties about trade and consumer acceptance.

As a result, our increased expenditures may not maintain or enhance

market share and could result in lower profitability.

affecting the industries that utilize our products could negatively impact our customers and us.

have no real control over factors affecting the industries that utilize our products and to the extent that any one or more of

these industries change dramatically, we may be facing significant financial challenges that are in excess of our existing capabilities.

These factors include:

have no real control over factors affecting the industries that utilize our products and to the extent that any one or more of these

industries change dramatically, we may be facing significant financial challenges that are in excess of our existing capabilities.

factors include:

competition among our customers and their competitors;

inability of our customers to develop and market their products;

periods in our customers’

potential that our customers’

products become obsolete;

customers’

inability to react to rapidly changing technology;

customers’

inability to pay for our products, which could, in turn, affect the company’s results of operations.

we are unable to develop new products, our competitors may develop and market products with better features that may reduce demand

for our existing and potential products or otherwise result in our products becoming obsolete and could materially and adversely

affect our ability to sustain profitability.

are many larger competitors who compete directly with us and who have significantly greater financial, technological and research

This may serve to severely damage our ability to market and sell our products at price levels that would allow us to

achieve and maintain profit margins and positive cash flow.

periods in our customers’ markets;

potential that our customers’ products become obsolete;

customers’ inability to react to rapidly changing technology;

customers’ inability to pay for our products, which could, in turn, affect the company’s results of operations.

we are unable to develop new products, our competitors may develop and market products with better features that may reduce demand for

our existing and potential products or otherwise result in our products becoming obsolete and could materially and adversely affect our

ability to sustain profitability.

are many larger competitors who compete directly with us and who have significantly greater financial, technological and research resources.

This may serve to severely damage our ability to market and sell our products at price levels that would allow us to achieve and maintain

profit margins and positive cash flow.

are a smaller public company, and we face rapid technological change in many of our product markets and we may not be able to introduce

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and significant losses.

In addition, our introduction of new products could adversely affect sales of certain of our existing

products if these new products directly compete with our existing products.

If our competitors develop innovative technologies

that are superior to our products or if we fail to accurately anticipate market trends and respond on a timely basis with our

own innovations, we may not achieve sufficient growth in its revenues to attain profitability or if we do, we may not be able

sustain profitability.

In addition, our introduction of new products could adversely affect sales of certain of our existing products

if these new products directly compete with our existing products.

If our competitors develop innovative technologies that are superior

to our products or if we fail to accurately anticipate market trends and respond on a timely basis with our own innovations, we may not

achieve sufficient growth in its revenues to attain profitability or if we do, we may not be able sustain profitability.

success of new product introductions is dependent on a number of factors, including, but not limited to, timely and successful development

of new products, including software development, market acceptance of these products and our ability to manage the risks associated with

these introductions.

These risks include development and production capabilities, management of inventory levels to support anticipated

demand, the risk that new products may have quality defects in the early stages of introduction, and obsolescence risk of existing products.

and maintaining a patent portfolio is an expensive and time-consuming process and there is no assurance the Company will successfully

develop patents to protect the intellectual property it is working on.

we fail to establish, maintain and enforce intellectual property rights with respect to our technology, our financial condition,

results of operations and business could be negatively impacted.

ability to establish, maintain and enforce intellectual property rights with respect to our proprietary technologies, patents,

patent applications, software and other rights will be a significant factor in determining our future financial and operating

We seek to protect our intellectual property rights by relying on a combination of patent, trade secret and copyright

We also use confidentiality and other provisions in our agreements that restrict access to and disclosure of our confidential

know-how and trade secrets.

are increasingly dependent on information technology, and if we are unable to protect against service interruptions, data corruption,

cyber-based attacks, or network security breaches our operations could be disrupted and we could incur significant costs and reputational

harm as a result

rely on information technology networks and systems, including the Internet, to process, transmit, and store electronic and financial

to manage a variety of business processes and activities;

and to comply with regulatory, legal, and tax requirements.

also depend on our information technology infrastructure for digital marketing and sales activities and for electronic communications

among our locations, personnel, customers, and suppliers around the world.

Many of the information technology systems used by us globally

have been in place for many years and not all hardware and software is currently supported by vendors.

These information technology systems

are susceptible to damage, disruptions, or shutdowns due to failures during the process of upgrading or replacing software, databases

or components thereof, power outages, hardware failures, computer viruses, cyber-attacks, telecommunication failures, user errors, or

catastrophic events.

If our information technology systems suffer severe damage, disruption, or shutdown and our business continuity

plans do not effectively resolve the issues in a timely manner, our product sales, financial condition, and results of operations may

be materially affected, and we could experience delays in reporting our financial results.

have been, and likely will continue to be, subject to various cyber-attacks.

To date, we have seen no material impact on our business

or operations from these attacks or events.

Any future significant compromise, breach, or misuse of our data security could result in

significant costs and damage to our reputation.

The ever-evolving threats mean us and our third-party service providers must continually

evaluate and adapt our respective systems and processes and overall security environment, as well as those of any companies we acquire.

There is no guarantee that these measures will be adequate to safeguard against all data security compromises, breaches, or misuses.

In addition, as the regulatory environment related to information security, data collection and use, and privacy becomes increasingly

rigorous, compliance with those requirements could also result in additional costs.

service providers, such as distributors, subcontractors, vendors, and data processors have access to certain portions of our sensitive

In the event that these service providers do not appropriately protect our data, the result could be a security breach or loss

Any such loss of data by our third-party service providers could have a material adverse impact on our business and results

of operations.

addition, if we are unable to prevent security breaches, we may suffer financial and reputational damage or penalties because of the

unauthorized disclosure of confidential information belonging to us or to our customers or suppliers.

Furthermore, the disclosure of

non-public sensitive information through external media channels could lead to the loss of intellectual property or damage our reputation

and brand image.

are also in the process of converting certain information technology networks and systems and consolidating certain global systems.

such projects fail, or if unexpected technical difficulties arise, our operations and financial systems could be adversely affected.

Further, we could incur additional costs or require additional technical support to resolve such difficulties.

operating results are sensitive to raw material and resale product availability, quality, and cost

seek to have many sources of supply for each of our major requirements in order to avoid significant dependence on any one or a few suppliers.

However, the supply of materials or other items could be disrupted by natural disasters, international trade tariffs, wars, pandemics,

disputes and or other events.

Despite market price volatility for certain requirements and materials pricing pressures at some of our

businesses, the raw materials and various purchased components needed for our products have generally been available in sufficient quantities.

In some instances lead times have extended beyond normal due to logistic delays and labor shortages occurring globally.

Some of our products,

however, require the use of raw materials that are available from only a limited number of regions around the world, are available from

only a limited number of suppliers, or may be subject to significant fluctuations in market prices.

Our results of operations may be

adversely affected if we have difficulty obtaining these raw materials, our key suppliers experience financial difficulties, the quality

of available raw materials deteriorates, or there are significant price increases for these raw materials.

Our inability to recover increased

costs through increased sales prices could have an adverse impact on our results of operations.

For periods in which the prices for these

raw materials rise, we may be unable to pass on the increased cost to our customers, which would result in decreased sales margins for

the products in which they are used.

For periods in which prices for these raw materials decline, we may be required, as has occurred

in the past, to write down our inventory carrying cost of these raw materials and products.

Depending on the extent of the difference

between market price and our carrying cost, the write-down could have a significant adverse effect on our results of operations.

resell products manufactured by other component and interconnect product manufacturers.

Should these manufacturers experience difficulties

supplying the products that we resell, or such suppliers use other channels to market their products, we could experience lower sales,

which could have an adverse effect on our results of operations.

operating results may be adversely affected by non-U.S.

have significant international operations and our operating results and financial condition could be adversely affected by economic,

political, health, regulatory, and other circumstances existing in foreign countries in which we operate.

International manufacturing

and sales are subject to inherent risks, including production disruption by employee union or works council actions, changes in local

economic or political conditions, the imposition of currency exchange restrictions, unexpected changes in regulatory environments, potentially

adverse tax law changes, changes in trade, import or export laws and regulations, and the exchange rate risk discussed above.

we have operations around the world, a significant natural event could disrupt supply or production or significantly affect the market

for some or all of our products.

There can be no assurance that these factors will not have an adverse impact on our production capabilities

or otherwise adversely affect our business and operating results.

addition to specific country risks, our operations and sales are dependent on an integrated global operation.

As a result, disruptions

resulting from inter-governmental trade disputes, imposition of tariffs, and imposition of trade sanctions could adversely affect our

operations, growth, or profitability.

in currency exchange rates may adversely affect our financial condition, results of operations and cash flows.

international operations accounted for approximately 8% of our net sales in 2021.

We are exposed to the effects (both positive and negative)

that fluctuating exchange rates have on translating the financial statements of our international operations, most of which are denominated

in local currencies, into the U.S.

Fluctuations in exchange rates may affect product demand and reported profits in our international

In addition, currency fluctuations may affect the prices we pay suppliers for materials used in our products, along with

other local costs incurred in foreign countries for foreign entities with U.S.

dollar functional currency.

As a result, fluctuating exchange

rates may adversely impact our results of operations and cash flows.

business and results of operations may be materially adversely effected by compliance with import and export laws.

must comply with various laws and regulations relating to the import and export of products, services and technology from the U.S.

other countries having jurisdiction over our operations, which may affect our transactions with certain customers, business partners

and other persons.

In certain circumstances, export control and economic sanctions regulations may prohibit the export of certain products,

services and technologies and in other circumstances, we may be required to obtain an export license before exporting a controlled item.

The length of time required by the licensing processes can vary, potentially delaying the shipment of products or performance of services

and the recognition of the corresponding revenue.

In addition, failure to comply with any of these regulations could result in civil

and criminal, monetary and non-monetary penalties, disruptions to our business, limitations on our ability to import and export products

and services and damage to our reputation.

Moreover, any changes in export control or sanctions regulations may further restrict the

export of our products or services, and the possibility of such changes requires constant monitoring to ensure we remain compliant.

restrictions on the export of our products or product lines could have a material adverse effect on our competitive position, results

of operations, cash flows or financial condition.

Related to Legal Uncertainty

are involved in an ongoing SEC investigation, which could divert management’s focus, result in substantial expenses, and have an

adverse impact on our reputation, financial condition, results of operations and cash flows.

Company has received subpoenas from the Securities and Exchange Commission (“SEC”).

The subpoenas request documents and

information concerning, among other things, a company known as Telidyne Inc., a company controlled by our prior officer and director,

Aron Govil, securities offerings related to Telidyne, and the Company’s own product and services, business operations, securities’

offerings and use of proceeds.

Although the Company is not currently the subject of any enforcement proceedings, the investigation could

lead to enforcement proceedings and substantial expenses if the SEC contends that the Company has not complied with securities laws.

The Company is fully cooperating with the SEC’s requests.

The Company has incurred legal and accounting expenses and may incur

significant legal and accounting expenditures in connection with the SEC’s investigation.

The Company is unable to predict how

long the SEC’s investigation will continue or its outcome.

global operations subject us to many different and complex laws and rules, and we may face difficulty in compliance.

to our global operations, we are subject to many laws governing international relations (including but not limited to the Foreign Corrupt

Practices Act, the U.S.

Export Administration Act the EU General Data Protection Regulation, and the U.K.

Modern Anti-Slavery Act);

prohibit improper payments to government officials and restrict where and how we can do business, what information or products we can

supply to certain countries, what personal information we can transfer, and what information we can provide to a non-U.S.

Although we have procedures and policies in place that should mitigate the risk of violations of these laws, there is no guarantee that

they will be sufficiently effective.

If, and when we acquire new businesses we may not be able to ensure that the pre-existing controls

and procedures meant to prevent violations of the rules and laws were effective, and we may not be able to implement effective controls

and procedures to prevent violations quickly enough when integrating newly acquired businesses.

Acquisitions of new businesses in new

jurisdictions may also subject us to new regulations and laws, and we may face difficulties ensuring compliance with these new

requirements.

in the Delaware law and our Bylaws could make it very difficult for an investor to bring any legal actions against our directors or officers

for violations of their fiduciary duties or could require us to pay any amounts incurred by our directors or officers in any such actions.

of our board of directors and our officers will have no liability for breaches of their fiduciary duty of care as a director or officer,

except in limited circumstances, pursuant to provisions in the Delaware law and our Bylaws.

Accordingly, you may be unable to prevail

in a legal action against our directors or officers even if they have breached their fiduciary duty of care.

In addition, our Bylaws

allow us to indemnify our directors and officers from and against any and all costs, charges and expenses resulting from their acting

in such capacities with us.

This means that if you were able to enforce an action against our directors or officers, in all likelihood,

we would be required to pay any expenses they incurred in defending the lawsuit and any judgment or settlement they otherwise would be

required to pay.

Accordingly, our indemnification obligations could divert needed financial resources and may adversely affect our business,

financial condition, results of operations and cash flows, and adversely affect prevailing market prices for our common stock.

we fail to establish, maintain and enforce intellectual property rights with respect to our technology, our financial condition, results

of operations and business could be negatively impacted.

ability to establish, maintain and enforce intellectual property rights with respect to our proprietary technologies, patents, patent

applications, software and other rights will be a significant factor in determining our future financial and operating performance.

seek to protect our intellectual property rights by relying on a combination of patent, trade secret and copyright laws.

confidentiality and other provisions in our agreements that restrict access to and disclosure of our confidential know-how and trade

have filed patent applications with respect to many aspects of our technologies.

However, we cannot provide any assurances that

any of these applications will ultimately result in issued patents or, if patents are issued, that they will provide sufficient

protections for our technology against competitors.

Although we have filed various patent applications for some of our core technologies,

we currently hold only six issued patents, with two in the United States and four in Canada, and we may face delays and

difficulties in obtaining our other filed patents, or we may not be able to obtain such patents at all.

However, we cannot provide any assurances that any of

these applications will ultimately result in issued patents or, if patents are issued, that they will provide sufficient protections

for our technology against competitors.

Although we have filed various patent applications for some of our core technologies, we currently

hold only six issued patents, with two in the United States and four in Canada, and we may face delays and difficulties in obtaining

our other filed patents, or we may not be able to obtain such patents at all.

of these patent applications, we seek to protect our technology as trade secrets and technical know-how.

However, trade secrets

and technical know-how are difficult to maintain and do not provide the same legal protections provided by patents.

In particular,

only patents will allow us to prohibit others from using independently developed technology that are similar.

If competitors develop

knowledge substantially equivalent or superior to our trade secrets and technical know-how, or gain access to our knowledge through

other means such as observation of our technology that embodies trade secrets at customer sites which we do not control, the value

of our trade secrets and technical know-how would be diminished.

However, trade secrets and technical

know-how are difficult to maintain and do not provide the same legal protections provided by patents.

In particular, only patents will

allow us to prohibit others from using independently developed technology that are similar.

If competitors develop knowledge substantially

equivalent or superior to our trade secrets and technical know-how, or gain access to our knowledge through other means such as observation

of our technology that embodies trade secrets at customer sites which we do not control, the value of our trade secrets and technical

know-how would be diminished.

we strive to maintain systems and procedures to protect the confidentiality and security of our trade secrets and technical know-how,

these systems and procedures may fail to provide an adequate degree of protection.

For example, although we generally enter into

agreements with our employees, consultants, advisors, and strategic partners restricting the disclosure and use of trade secrets,

technical know-how and confidential information , we cannot provide any assurance that these agreements will be sufficient

to prevent unauthorized use or disclosure.

In addition, some of the technology deployed at customer sites in the future ,

which we do not control, may be readily observable by third parties who are not under contractual obligations of non-disclosure,

which may limit or compromise our ability to continue to protect such technology as a trade secret.

For example, although we generally enter into agreements

with our employees, consultants, advisors, and strategic partners restricting the disclosure and use of trade secrets, technical know-how

and confidential information, we cannot provide any assurance that these agreements will be sufficient to prevent unauthorized use or

In addition, some of the technology deployed at customer sites in the future, which we do not control, may be readily observable

by third parties who are not under contractual obligations of non-disclosure, which may limit or compromise our ability to continue to

protect such technology as a trade secret.

and policing unauthorized use and disclosure of intellectual property is difficult.

If we learned that a third party was in fact

infringing or otherwise violating our intellectual property, we may need to enforce our intellectual property rights through litigation.

Litigation relating to our intellectual property may not prove successful and might result in substantial costs and diversion

of resources and management attention.

our customers’

standpoint, the strength of the intellectual property under which we control can be a critical determinant

of the value of our products and services.

If we are unable to secure, protect and enforce our intellectual property, it may become

more difficult for us to attract new customers.

Any such development could have a material adverse effect on our business, prospects,

financial condition and results of operations.

may not have sufficient financial resources to defend our intellectual property rights or otherwise successfully defend against

claims that we have infringed on a third party’s intellectual property and, as a result, it may adversely affect our business,

financial condition and results of operations.

If we learned that a third party was in fact infringing

or otherwise violating our intellectual property, we may need to enforce our intellectual property rights through litigation.

relating to our intellectual property may not prove successful and might result in substantial costs and diversion of resources and management

our customers’ standpoint, the strength of the intellectual property under which we control can be a critical determinant of the

value of our products and services.

If we are unable to secure, protect and enforce our intellectual property, it may become more difficult

for us to attract new customers.

Any such development could have a material adverse effect on our business, prospects, financial condition

and results of operations.

may not have sufficient financial resources to defend our intellectual property rights or otherwise successfully defend against claims

that we have infringed on a third party’s intellectual property and, as a result, it may adversely affect our business, financial

condition and results of operations.

if such claims are not valid, they could subject us to significant costs.

In addition, it may be necessary in the future to enforce

our intellectual property rights to determine the validity and scope of the proprietary rights of others.

Litigation may also

be necessary to defend against claims of infringement or invalidity by others.

We may not have sufficient financial resources

to defend our intellectual property rights or otherwise to successfully defend the company against valid or spurious claims that

we have infringed upon the intellectual property rights of others.

An adverse outcome in litigation or any similar proceedings

could force us to take actions that could harm its business.

In addition, it may be necessary in the future to enforce our

intellectual property rights to determine the validity and scope of the proprietary rights of others.

Litigation may also be necessary

to defend against claims of infringement or invalidity by others.

We may not have sufficient financial resources to defend our intellectual

property rights or otherwise to successfully defend the company against valid or spurious claims that we have infringed upon the intellectual

property rights of others.

An adverse outcome in litigation or any similar proceedings could force us to take actions that could harm

its business.

These include:

(i) ceasing to sell products that contain allegedly

infringing property;

(ii) obtaining licenses to the relevant intellectual property which we may not be able to obtain on terms

that are acceptable, or at all;

(iii) indemnifying certain customers or strategic partners if it is determined that we have infringed

upon or misappropriated another party’s intellectual property;

and (iv) redesigning products that embody allegedly infringing

intellectual property.

Any of these results could adversely and significantly affect our business, financial condition and results

of operations.

In addition, the cost of defending or asserting any intellectual property claim, both in legal fees and expenses,

and the diversion of management resources, regardless of whether the claim is valid, could be significant and lead to significant

and protracted losses.

(i) ceasing to sell products that contain allegedly infringing property;

(ii) obtaining licenses to the

relevant intellectual property which we may not be able to obtain on terms that are acceptable, or at all;

(iii) indemnifying certain

customers or strategic partners if it is determined that we have infringed upon or misappropriated another party’s intellectual

and (iv) redesigning products that embody allegedly infringing intellectual property.

Any of these results could adversely

and significantly affect our business, financial condition and results of operations.

In addition, the cost of defending or asserting

any intellectual property claim, both in legal fees and expenses, and the diversion of management resources, regardless of whether the

claim is valid, could be significant and lead to significant and protracted losses.

liability lawsuits against us could cause us to incur substantial liabilities and to limit commercialization of our product or any future

products that we may develop.

face an inherent risk of product liability exposure related to the sale of our products and the future sale of planned products.

be sued if any of our products allegedly causes injury.

Any such product liability claims may include allegations of defects in manufacturing,

defects in design, a failure to warn of dangers inherent in the product, negligence, strict liability, and a breach of warranties.

may also be subject to liability for a misunderstanding of, or inappropriate reliance upon, the information we provide.

successfully defend ourselves against claims that our product or planned products caused injuries, we may incur substantial liabilities.

Regardless of merit or eventual outcome, liability claims may result in:

demand for our product or any planned products that we may develop;

to our reputation and significant negative media attention;

costs to defend the related litigation and distraction to our management team;

monetary awards to plaintiffs;

inability to commercialize any future products that we may develop.

events could subject us to costly litigation, require us to pay substantial amounts of money to injured parties, delay, negatively impact,

or end our opportunity to market those products, or require us to suspend or abandon our commercialization efforts.

Even in a circumstance

in which we do not believe that an adverse event is related to our product, the investigation into the circumstance may be time-consuming

or inconclusive.

These investigations may interrupt our sales efforts.

As a result of these factors, a product liability claim, even

if successfully defended, could harm our business.

currently maintain product liability insurance coverage, which may not be adequate to cover all liabilities that we may incur.

coverage is increasingly expensive.

We may not be able to maintain insurance coverage at a reasonable cost or in an amount adequate to

satisfy any liability that may arise.

we experience material weaknesses in the future or otherwise fail to maintain an effective system of internal control over financial

reporting in the future, we may not be able to accurately or timely report our financial condition or results of operations, which may

adversely affect investor confidence in us and, as a result, the value of our common stock.

a public company, we are required to maintain internal control over financial reporting and to report any material weaknesses in such

internal controls.

Section 404 of the Sarbanes-Oxley Act requires that we evaluate and determine the effectiveness of our internal control

over financial reporting and provide a management report on internal control over financial reporting.

A material weakness is a deficiency,

or combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material

misstatement of our financial statements will not be prevented or detected on a timely basis.

Ensuring that we have adequate internal

financial and accounting controls and procedures in place so that we can produce accurate financial statements on a timely basis is a

costly and time-consuming effort.

Our internal control over financial reporting is designed to provide reasonable assurance regarding

the reliability of financial reporting and the preparation of financial statements in accordance with Generally Accepted Accounting Principles.

We may not be able to complete our evaluation, testing and any required remediation in a timely fashion.

During the evaluation and testing

process, if we identify one or more material weaknesses in our internal control over financial reporting, we will be unable to assert

that our internal controls are effective.

The identification of one or more material weaknesses would preclude a conclusion that we maintain

effective internal control over financial reporting.

Accordingly, there could continue to be a reasonable possibility that a material

misstatement of our financial statements would not be prevented or detected on a timely basis.

Our management, including our principal executive officer and principal accounting officer, conducted an evaluation of the effectiveness

of our internal control over financial reporting using the criteria set forth by the Committee of Sponsoring Organizations of the Treadway

Commission (“COSO”) in Internal Control—Integrated Framework (2013).

Based on its evaluation, our management concluded

that as of September 30, 2021, there are material weaknesses in our internal control over financial reporting.

The material weaknesses

relates to the Company lacking sufficient, qualified, accounting personnel and the associated sufficient processes and systems.

of qualified accounting personal resulted in the Company lacking entity level controls around the review of period-end reporting processes,

accounting policies and public disclosures.

Additionally, the Company’s current processes and systems do not provide for necessary,

timely reconciliation of certain accounts and sufficient consideration regarding recoverability of certain assets.

These deficiencies

are common in small companies, similar to us, with limited personnel.

are required to disclose changes made in our internal control and procedures on a quarterly basis.

However, our independent registered

public accounting firm will not be required to report on the effectiveness of our internal control over financial reporting pursuant

to Section 404 of the Sarbanes-Oxley Act until we are no longer an “smaller reporting company.” At such time, our independent

registered public accounting firm may issue a report that is adverse in the event it is not satisfied with the level at which our controls

are documented, designed or operating.

Our remediation efforts may not enable us to avoid a material weakness in the future.

unable to assert that our internal control over financial reporting is effective, or when required in the future, if our independent

registered public accounting firm is unable to express an unqualified opinion as to the effectiveness of our internal control over financial

reporting, investors may lose confidence in the accuracy and completeness of our financial reports and the market price of our common

stock could be adversely affected, and we could become subject to investigations by the stock exchange on which our securities are listed,

the SEC, or other regulatory authorities, which could require additional financial and management resources.

Related to Acquisitions

have grown through acquisitions and are continuously looking to fund other acquisitions;

2 unchanged sentences

intend to make acquisitions of complementary (including competitive) businesses, products and technologies.

However, any future

acquisitions may result in material transaction costs, increased interest and amortization expenses related to goodwill and other

intangible assets, increased depreciation expense and increased operating expenses, any of which could have an adverse effect

on our operating results and financial position.

Acquisitions will require integration of acquired assets and management into

our operations to realize economies of scale and control costs.

Acquisitions may involve other risks, including diversion of management

attention that would otherwise be available for ongoing internal development of our business and risks inherent in entering markets

in which we have no or limited prior experience.

In connection with future acquisitions, we may make potentially dilutive issuances

of equity securities.

In addition, consummation of acquisitions may subject us to unanticipated business uncertainties, contingent

liabilities or legal matters relating to those acquired businesses for which the sellers of the acquired businesses may not fully

indemnify us.

There can be no assurance that our business will grow through acquisitions, as anticipated.

However, any future acquisitions

may result in material transaction costs, increased interest and amortization expenses related to goodwill and other intangible assets,

increased depreciation expense and increased operating expenses, any of which could have an adverse effect on our operating results and

financial position.

Acquisitions will require integration of acquired assets and management into our operations to realize economies

of scale and control costs.

Acquisitions may involve other risks, including diversion of management attention that would otherwise be

available for ongoing internal development of our business and risks inherent in entering markets in which we have no or limited prior

In connection with future acquisitions, we may make potentially dilutive issuances of equity securities.

In addition, consummation

of acquisitions may subject us to unanticipated business uncertainties, contingent liabilities or legal matters relating to those acquired

businesses for which the sellers of the acquired businesses may not fully indemnify us.

There can be no assurance that our business will

grow through acquisitions, as anticipated.

may fail to successfully integrate our acquisitions or otherwise be unable to benefit from pursuing acquisitions.

believe there are meaningful opportunities to grow through acquisitions and joint ventures across all product categories and we expect

to continue a strategy of selectively identifying and acquiring businesses with complementary products.

We may be unable to identify,

negotiate, and complete suitable acquisition opportunities on reasonable terms.

There can be no assurance that any business acquired

by us will be successfully integrated with our operations or prove to be profitable to us.

We may incur future liabilities related to

acquisitions.

Should any of the following problems, or others, occur as a result of our acquisition strategy, the impact could be material:

integrating personnel from acquired entities and other corporate cultures into our business;

integrating information systems;

potential loss of key employees of acquired companies;

assumption of liabilities and exposure to undisclosed or unknown liabilities of acquired companies;

diversion of management attention from existing operations.

Related to Our Management and Control Persons

loss of the services of Saagar Govil for any reason would materially and adversely affect our business operations and prospects.

financial success is dependent to a significant degree upon the efforts of Saagar Govil, our Chairman, President and Chief Executive

Saagar Govil possesses engineering, sales and marketing experience concerning our company that our other officers do

Saagar Govil possesses engineering, sales and marketing experience concerning our company that our other officers do not have.

We have not entered into an employment arrangement with Mr.

Govil, and we have not obtained key man insurance over him.

There can be no assurance that Saagar Govil will continue to provide services to us.

A voluntary or involuntary departure by Saagar

Govil could have a materially adverse effect on our business operations if we were not able to attract a qualified replacement

for them in a timely manner.

Related to Our Common Stock

management stockholders have significant stockholdings in and influence over our company which could make it impossible for public

stockholders to influence the affairs of our company.

are a “controlled company”

under Nasdaq Listing Rules.

no assurance that Saagar Govil will continue to provide services to us.

A voluntary or involuntary departure by Saagar Govil could have

a materially adverse effect on our business operations if we were not able to attract a qualified replacement for him in a timely manner.

we are unable to attract and retain qualified personnel, especially our design and technical personnel, we may not be able to execute

our business strategy effectively.

future success depends on our ability to retain, attract and motivate qualified personnel, including our management, sales and marketing,

finance, and especially our design and technical personnel.

As the source of our technological and product innovations, our design and

technical personnel represent a significant asset.

Any inability to retain, attract or motivate such personnel could have a material

adverse effect on our business and results of operations.

management stockholders have significant stockholdings in and influence over our company which could make it impossible for public stockholders

to influence the affairs of our company.

are a “controlled company” under Nasdaq Listing Rules.

Approximately 90% of our outstanding voting shares, which includes

our common stock, Series A preferred stock, Series C preferred stock and Series 1 preferred stock, are beneficially held by Aron

Govil, our Founder, former officer and Director, and Saagar Govil, our Chairman, President and Chief Executive Officer

and Director.

Pursuant to the certificate of designation for our Series A preferred stock, each outstanding share of Series

A preferred stock is entitled to the number of votes equal to the result of (i) the total number of shares of our common stock

outstanding at the time of such vote multiplied by 1.01, divided by (ii) the total number of shares of our Series A preferred

stock outstanding at the time of such vote, at each meeting of stockholders of our company with respect to any and all matters

presented to our stockholders for their action or consideration, including the election of directors.

Pursuant to certificate

of designation for our Series C preferred, each outstanding share of Series C Preferred Stock is entitled to the number of votes

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.

As a result of Aron Govil’s and Saagar Govil’s ownership of our common stock and Aron Govil’s

ownership of our Series A and Series C preferred stock and Series 1 preferred stock, our management stockholders control, and

will control in the future, substantially all matters requiring approval by the stockholders of our company, including the election

of all directors and approval of significant corporate transactions.

This could make it impossible for public stockholders to

influence the affairs of our company.

our common stock, Series C preferred stock and Series 1 preferred stock, are beneficially held by Saagar Govil, our Chairman, President

and Chief Executive Officer .

Pursuant to certificate of designation for our Series C preferred, each outstanding share of Series C Preferred

Stock is entitled to the number of votes 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.

As a result of Saagar Govil’s ownership of our common stock, Series C preferred

stock, and Series 1 preferred stock, he controls, and will control in the future, substantially all matters requiring approval by the

stockholders of our company, including the election of all directors and approval of significant corporate transactions.

This could make

it impossible for public stockholders to influence the affairs of our company.

Related to Our Securities

of substantial amounts of our common stock in the public market could depress the market price of our common stock.

common stock is listed for trading on the Nasdaq Capital Market.

If our stockholders sell substantial amounts of our common stock

in the public market, including the shares of common stock issuable upon the exercise of our Series 1 warrants and stock options,

and shares issued as consideration in future acquisitions, or the market perceives that such sales may occur, the market price

of our common stock could fall and we may be unable to sell our common stock in the future.

common stock may experience extreme price and volume fluctuations, which could lead to costly litigation for us and make an investment

common stock, Series 1 warrants and Series 1 Preferred Stock are listed for trading on the Nasdaq Capital Market.

If our stockholders

sell substantial amounts of our securities in the public market, including the shares of common stock issuable upon the exercise of our

Series 1 warrants and stock options, and shares issued as consideration in future acquisitions, or the market perceives that such sales

may occur, the market price of our securities could fall and we may be unable to sell our securities in the future.

securities may experience extreme price and volume fluctuations, which could lead to costly litigation for us and make an investment

in us less appealing.

market price of our common stock may fluctuate substantially due to a variety of factors, including:

market price of our securities may fluctuate substantially due to a variety of factors, including:

business strategy and plans;

8 unchanged sentences

about our business partners;

property disputes;

results below or exceeding expectations or period-to-period fluctuations in our financial results;

we achieve profits or not;

in accounting principles;

market conditions.

market prices of the securities of early-stage companies, particularly companies like ours without consistent product revenues

and earnings, have been highly volatile and are likely to remain highly volatile in the future.

This volatility has often been

unrelated to the operating performance of particular companies.

In the past, companies that experience volatility in the market

price of their securities have often faced securities class action litigation.

Whether or not meritorious, litigation brought

against us could result in substantial costs, divert our management’s attention and resources and harm our financial condition

and results of operations.

market conditions, economic and other external factors.

market prices of the securities of early-stage companies, particularly companies like ours without consistent product revenues and earnings,

have been highly volatile and are likely to remain highly volatile in the future.

This volatility has often been unrelated to the operating

performance of particular companies.

In the past, companies that experience volatility in the market price of their securities have often

faced securities class action litigation.

Whether or not meritorious, litigation brought against us could result in substantial costs,

divert our management’s attention and resources and harm our financial condition and results of operations.

Series 1 preferred stock and all of our existing and future indebtedness rank senior to our common stock in the event of a liquidation,

winding up or dissolution of our business.

the event of our liquidation, winding up or dissolution, our assets would be available to make payments to holders of all existing

and future indebtedness and Series 1 preferred stock before payments to holders of our common stock.

In the event of our bankruptcy,

liquidation or winding up, there may not be sufficient assets remaining, after paying amounts to the holders of our indebtedness

and Series 1 preferred stock, to pay anything to common stockholders.

As of September 30, 2020, we had total consolidated debt

of approximately $19.4 million and 2,156,784 shares of Series 1 preferred stock outstanding.

Any liquidation, winding up or dissolution

of our company or of any of our wholly or partially owned subsidiaries would have a material adverse effect on holders of our

common stock.

the event of our liquidation, winding up or dissolution, our assets would be available to make payments to holders of all existing and

future indebtedness and Series 1 preferred stock before payments to holders of our common stock.

In the event of our bankruptcy, liquidation

or winding up, there may not be sufficient assets remaining, after paying amounts to the holders of our indebtedness and Series 1 preferred

stock, to pay anything to common stockholders.

As of September 30, 2021, we had total consolidated debt of approximately $16.4 million

and 2,156,784 shares of Series 1 preferred stock outstanding.

Any liquidation, winding up or dissolution of our company or of any

of our wholly or partially owned subsidiaries would have a material adverse effect on holders of our common stock.

common stockholders may be adversely affected by the issuance of any subsequent series of preferred stock.

certificate of incorporation does not restrict our ability to offer one or more additional new series of preferred stock, any

or all of which may rank equally with or have preferences over our common stock as to dividend payments, voting rights, rights

upon liquidation or other types of rights.

We would have no obligation to consider the specific interests of the holders of common

stock in creating any such new series of preferred stock or engaging in any such offering or transaction.

Our creation of any

new series of preferred stock or our engaging in any such offering or transaction could have a material adverse effect on holders

of our common stock.

certificate of incorporation does not restrict our ability to offer one or more additional new series of preferred stock, any or all

of which may rank equally with or have preferences over our common stock as to dividend payments, voting rights, rights upon liquidation

or other types of rights.

We would have no obligation to consider the specific interests of the holders of common stock in creating any

such new series of preferred stock or engaging in any such offering or transaction.

Our creation of any new series of preferred stock

or our engaging in any such offering or transaction could have a material adverse effect on holders of our common stock.

public trading market for the common stock may be limited in the future.

common stock is listed for trading on the Nasdaq Capital Market under the symbol CETX.

The trading volume fluctuates and there

have been time periods during which the common stock trading volume has been limited.

Management can make no assurances that trading

volume will not be similarly limited in the future.

Without an active trading market, there can be no assurance of any liquidity

or resale value of the common stock, and stockholders may be required to hold their shares of common stock for an indefinite period

The trading volume fluctuates and there have been

time periods during which the common stock trading volume has been limited.

Management can make no assurances that trading volume will

not be similarly limited in the future.

Without an active trading market, there can be no assurance of any liquidity or resale value

of the common stock, and stockholders may be required to hold their shares of common stock for an indefinite period of time.

may not pay cash dividends on our common stock.

board of directors declared a one-time cash dividend on our common stock in April 2017.

The terms of our series 1 preferred stock

provide for the payment of semiannual dividends on the last day of March and September in each year, which began in March 2017.

No other cash dividends have been declared or paid by us on our stock during either of the two most recent fiscal years or the

period through the date of this prospectus.

Other than with respect to our series 1 preferred stock, our board of directors declares

dividends when, in its discretion, it determines that a dividend payment, as opposed to another use of cash, is in the best interests

of the stockholders.

Such decisions are based on the facts and circumstances then existing including, without limitation, our

results of operations, financial condition, contractual restrictions, restrictions imposed by applicable law and other factors

our board of directors deems relevant.

As a result, we cannot predict when, or whether, another dividend on our common stock will

be declared in the future.

The terms of our series 1 preferred stock provide

for the payment of semiannual dividends on the last day of March and September in each year, which began in March 2017.

No other cash

dividends have been declared or paid by us on our stock during either of the two most recent fiscal years or the period through the date

of this prospectus.

Other than with respect to our series 1 preferred stock, our board of directors declares dividends when, in its discretion,

it determines that a dividend payment, as opposed to another use of cash, is in the best interests of the stockholders.

Such decisions

are based on the facts and circumstances then existing including, without limitation, our results of operations, financial condition,

contractual restrictions, restrictions imposed by applicable law and other factors our board of directors deems relevant.

we cannot predict when, or whether, another dividend on our common stock will be declared in the future.

UNRESOLVED STAFF COMMENTS

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What changed 10-K

Item 1A. Risk Factors