What changed in this filing

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Item 1A. Risk Factors

2024-12-30 compared with 2023-12-28 · 1055 added, 863 removed, 20 unchanged (99% of the section changed)

Investing in our common stock

involves a high degree of risk.

Our business, reputation, results of operations, financial condition and stock price can be affected by

a number of factors, whether currently known or unknown, including those described below.

When any one or more of these risks materialize

from time to time, our business, reputation, results of operations, financial condition and stock price can be materially and adversely

Because of the following factors,

as well as other factors affecting the Company’s results of operations and financial condition, past financial performance should

not be considered to be a reliable indicator of future performance, and investors should not use historical trends to anticipate results

or trends in future periods.

in our common stock involves a high degree of risk.

Our business, reputation, results of operations, financial condition and stock price

can be affected by a number of factors, whether currently known or unknown, including those described below.

When any one or more of

these risks materialize from time to time, our business, reputation, results of operations, financial condition and stock price can be

materially and adversely affected.

of the following factors, as well as other factors affecting the Company’s results of operations and financial condition, past

financial performance should not be considered to be a reliable indicator of future performance, and investors should not use historical

trends to anticipate results or trends in future periods.

This discussion of risk factors contains forward-looking statements.

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 affected.

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

and you could lose part or all 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.

Risks Related to Macroeconomics Conditions and

International Operations

Our operations and performance depend significantly

on global and regional economic conditions and adverse economic conditions can materially adversely affect our business, results of operations

and financial condition.

Adverse macroeconomic conditions,

including slow growth or recession, high unemployment, inflation, tighter credit, higher interest rates, and currency fluctuations, can

adversely impact consumer confidence and spending and materially adversely affect demand for our products and services.

In addition, consumer

confidence and spending can be materially adversely affected in response to changes in fiscal and monetary policy, financial market volatility,

declines in income or asset values, and other economic factors.

In addition to an adverse impact

on demand for our products and services, uncertainty about, or a decline in, global or regional economic conditions can have a significant

impact on our suppliers, contract manufacturers, logistics providers, distributors, and other channel partners, and developers.

outcomes include financial instability;

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 affected.

In that event, the market price of our common stock

could decline, and you could lose part or all 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 Macroeconomics Conditions and International Operations

operations and performance depend significantly on global and regional economic conditions and adverse economic conditions can materially

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

macroeconomic conditions, including slow growth or recession, high unemployment, inflation, tighter credit, higher interest rates, and

currency fluctuations, can adversely impact consumer confidence and spending and materially adversely affect demand for our products

and services.

In addition, consumer confidence and spending can be materially adversely affected in response to changes in fiscal and

monetary policy, financial market volatility, declines in income or asset values, and other economic factors.

addition to an adverse impact on demand for our products and services, uncertainty about, or a decline in, global or regional economic

conditions can have a significant impact on our suppliers, contract manufacturers, logistics providers, distributors, and other channel

partners, and developers.

Potential outcomes include financial instability;

inability to obtain credit to finance business operations;

and insolvency.

Adverse economic conditions can

also lead to increased credit and collectability risk on our trade receivables;

the failure of derivative counterparties and other financial

institutions;

economic conditions can also lead to increased credit and collectability risk on our trade receivables;

the failure of derivative counterparties

and other financial institutions;

limitations on our ability to issue new debt;

reduced liquidity;

and declines in the fair values of our financial instruments.

These and other impacts can materially adversely affect our business, results of operations, financial condition and stock price.

Our business can be impacted by political events,

trade and other international disputes, war, terrorism, natural disasters, public health issues, industrial accidents and other business

interruptions.

Political events, trade and other

international disputes, war, terrorism, natural disasters, public health issues (such as COVID-19), industrial accidents and other business

interruptions can harm or disrupt international commerce and the global economy and could have a material adverse effect on us and our

customers, suppliers, contract manufacturers, logistics providers, distributors, and other channel partners.

Restrictions on international

trade, such as tariffs and other controls on imports or exports of goods, technology or data, can materially adversely affect our operations

and supply chain and limit our ability to offer and distribute products and services to customers.

The impact can be particularly significant

if these restrictive measures apply to countries and regions where we derive a significant portion of our revenues and/or have significant

supply chain operations.

Restrictive measures can require us to take various actions, including changing suppliers and restructuring business

relationships.

Changing our operations in accordance with new or changed restrictions on international trade can be expensive, time-consuming

and disruptive to our operations.

Such restrictions can be announced with little or no advance notice and we may not be able to effectively

mitigate all adverse impacts from such measures.

For example, tensions between governments, including the U.S.

and China, have in the

past led to tariffs and other restrictions being imposed on our business.

If disputes and conflicts further escalate in the future, actions

by governments in response could be significantly more severe and restrictive and could materially adversely affect our business.

uncertainty surrounding trade and other international disputes could also have a negative effect on consumer confidence and spending,

which could adversely affect our business.

Many of our operations and facilities,

as well as critical business operations of our suppliers and contract manufacturers, are in locations that are prone to earthquakes and

other natural disasters.

In addition, such operations and facilities are subject to the risk of interruption by fire, power shortages,

nuclear power plant accidents and other industrial accidents, terrorist attacks and other hostile acts, ransomware and other cybersecurity

attacks, labor disputes, public health issues, including pandemics such as the COVID-19 pandemic, and other events beyond our control.

Global climate change is resulting in certain types of natural disasters, such as droughts, floods, hurricanes and wildfires, occurring

more frequently or with more intense effects.

Such events can make it difficult or impossible for us to manufacture and deliver products

to our customers, create delays and inefficiencies in our supply and manufacturing chain, and result in slowdowns and outages to our product

and service offerings, and negatively impact consumer spending and demand in affected areas.

Following an interruption to our business,

we can require substantial recovery time, experience significant expenditures to resume operations, and lose significant sales.

Our operations are also subject

to the risks of industrial accidents at our suppliers and contract manufacturers.

While our suppliers are required to maintain safe working

environments and operations, an industrial accident could occur and could result in serious injuries or loss of life, disruption to our

business, and harm to our reputation.

Major public health issues, including pandemics such as the COVID-19 pandemic, have adversely affected,

and could in the future materially adversely affect, us due to their impact on the global economy and demand for consumer products;

imposition of protective public safety measures, such as stringent employee travel restrictions and limitations on freight services and

the movement of products between regions;

and disruptions in our operations, supply chain and sales and distribution channels, resulting

in interruptions to the supply of current products and offering of existing services, and delays in production ramps of new products and

development of new services.

Volatility in currency exchange rates may adversely

affect our financial condition, results of operations and cash flows.

Our international operations accounted

for approximately 9.2% of our net sales in 2023.

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

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

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.

and declines in the fair values of

our financial instruments.

These and other impacts can materially adversely affect our business, results of operations, financial condition

and stock price.

business can be impacted by political events, trade and other international disputes, war, terrorism, natural disasters, public health

issues, industrial accidents and other business interruptions.

events, trade and other international disputes, war, terrorism, natural disasters, public health issues (such as COVID-19), industrial

accidents and other business interruptions can harm or disrupt international commerce and the global economy and could have a material

adverse effect on us and our customers, suppliers, contract manufacturers, logistics providers, distributors, and other channel partners.

on international trade, such as tariffs and other controls on imports or exports of goods, technology or data, can materially adversely

affect our operations and supply chain and limit our ability to offer and distribute products and services to customers.

The impact can

be particularly significant if these restrictive measures apply to countries and regions where we derive a significant portion of our

revenues and/or have significant supply chain operations.

Restrictive measures can require us to take various actions, including changing

suppliers and restructuring business relationships.

Changing our operations in accordance with new or changed restrictions on international

trade can be expensive, time-consuming and disruptive to our operations.

Such restrictions can be announced with little or no advance

notice, and we may not be able to effectively mitigate all adverse impacts from such measures.

For example, tensions between governments,

including the U.S.

and China, have in the past led to tariffs and other restrictions being imposed on our business.

If disputes and conflicts

further escalate in the future, actions by governments in response could be significantly more severe and restrictive and could materially

adversely affect our business.

Political uncertainty surrounding trade and other international disputes could also have a negative effect

on consumer confidence and spending, which could adversely affect our business.

of our operations and facilities, as well as critical business operations of our suppliers and contract manufacturers, are in locations

that are prone to earthquakes and other natural disasters.

In addition, such operations and facilities are subject to the risk of interruption

by fire, power shortages, nuclear power plant accidents and other industrial accidents, terrorist attacks and other hostile acts, ransomware

and other cybersecurity attacks , labor disputes, public health issues, including pandemics such as the COVID-19 pandemic,

and other events beyond our control.

Global climate change is resulting in certain types of natural disasters, such as droughts, floods,

hurricanes and wildfires, occurring more frequently or with more intense effects.

Such events can make it difficult or impossible for

us to manufacture and deliver products to our customers, create delays and inefficiencies in our supply and manufacturing chain, and

result in slowdowns and outages to our product and service offerings, and negatively impact consumer spending and demand in affected

Following an interruption to our business, we can require substantial recovery time, experience significant expenditures to resume

operations, and lose significant sales.

operations are also subject to the risks of industrial accidents at our suppliers and contract manufacturers.

While our suppliers are

required to maintain safe working environments and operations, an industrial accident could occur and could result in serious injuries

or loss of life, disruption to our business, and harm to our reputation.

Major public health issues, including pandemics such as the

COVID-19 pandemic, have adversely affected, and could in the future materially adversely affect, us due to their impact on the global

economy and demand for consumer products;

the imposition of protective public safety measures, such as stringent employee travel restrictions

and limitations on freight services and the movement of products between regions;

and disruptions in our operations, supply chain and

sales and distribution channels, resulting in interruptions to the supply of current products and offering of existing services, and

delays in production ramps of new products and development of new services.

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

international operations accounted for approximately 5.9% of our net sales in 2024.

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 operations.

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.

Our business and results of operations may be

materially adversely affected by compliance with import and export laws.

We must comply with various laws

and regulations relating to the import and export of products, services and technology from the U.S.

and 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

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.

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.

Any 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.

Risks Related to Covid-19

The global pandemic may disrupt our business

or the business of our customers.

In 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.

The 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.

Bookings and revenue have largely recovered in this calendar year compared to last year.

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.

The 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.

The 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.

This could materially impact our results of operations,

cash flows, and financial condition.

Risks Related to our Financial Condition

There is no guarantee that cash flow from operations and/or debt

and equity financings will provide sufficient capital to meet our expansion goals working capital needs or fund our operations.

Our current strategic plan includes

the expansion of our company both organically and through acquisitions if market conditions and competitive conditions allow.

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 may need to 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.

In 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.

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 attributable to Cemtrex, Inc.

shareholders of $9.2 million in 2023, $13.0 million in 2022, and $7.8 million in 2021.

an accumulated deficit of $64.2 million as of September 30, 2023.

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.

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.

The Company is exposed to credit risk, market risk, and fluctuations

in the value of its investment portfolio.

The Company may, from time to

time invest 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.

Although 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.

As 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.

We 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.

As of September 30, 2023, our

total indebtedness was approximately $24.4 million, including notes payable of $18.1 million, mortgage payable of $3.4 million, vendor

financed purchase of $0.7 million, and bank loans of $2.2 million, including $0.9 million of PPP loans that the Company expects

to be forgiven.

By comparison, as of September 30, 2022, our total indebtedness was approximately $20.6 million, including notes payable

of $17.7 million, mortgage payable of $2.3 million, and bank loans of $0.6 million, including $0.1 million of PPP loans.

2022 approximately $14.5 million and $16.9 million, respectively, of such debt is classified as current.

This substantial debt could have

important consequences, including 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;

(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.

Our 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

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.

Our 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.

There is no assurance that we

will be able to retain or renew our credit agreements and other finance agreements in the future.

In the 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.

Risks Related to our Business

We 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.

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.

We have taken a multi-operational approach, and some of our business

segments have historically failed to benefit our company to date, 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.

We 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.

Currently, the Company has the

following business segments, consisting of (i) Security, (ii) Industrial Services, and (iii) Cemtrex Corporate.

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.

As we continuously review our

portfolio of businesses we may exit or enter into new business activities which may ultimately prove to be unsuccessful.

Our future operating results depend in part on continued successful

research, development and marketing of new and improved products and services through our Security segment, and there can be no assurance

that we will successfully introduce new products and services into the market.

The success of new and improved

products and services through our Security segment depends on our research and development efforts and the initial acceptance of our products

and solutions by consumers.

result, fluctuating exchange rates may adversely impact our results of operations and cash flows.

business and results of operations may be materially adversely affected 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.

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

to our international 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

which 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.

Related to our Financial Condition

report of our independent registered public accounting firm contains an explanatory paragraph that expresses substantial doubt about

our ability to continue as a going concern.

Company has incurred substantial losses of $7.2 million and $9.2 million for fiscal years 2024 and 2023, respectively, and working capital

of $8.1 million as at the end of fiscal 2024, that raise substantial doubt with respect to the Company’s ability to continue as

a going concern.

our working capital and current debt indicate a substantial doubt regarding the Company’s ability to continue as a going concern,

the Company has historically, from time to time, satisfied and may continue to satisfy certain short-term liabilities through the issuance

of common stock, thus reducing our cash requirement to meet our operating needs.

The Company has approximately $3.9 million in cash as

of September 30, 2024.

Additionally, the Company has (i) secured a line of credit for its Vicon brand to fund operations, which as of

September 30, 2024, has available capacity of $1.9 million, and a line of credit for its AIS brand with a $3.5 million capacity that

has not been drawn upon, (ii) continually reevaluate our pricing model on our Vicon brand to improve margins on those products and introducing

new innovative products to grow revenues, (iii) raised approximately $9.0 million in net proceeds through our May 2024 equity financing

and anticipate an additional $5 to $10 million when the Series B warrants are exercised, and (iv) subsequent to the balance sheet date

has effected a 60:1 and a 35:1 reverse stock split on our common stock to remain trading on the Nasdaq Capital Markets, and improve our

ability to potentially raise capital through equity offerings that we may use to satisfy debt.

In the event additional capital is raised

through equity offerings and/or debt is satisfied with equity, it may have a dilutive effect on our existing stockholders.

Company believes these plans if successful, would be sufficient to meet the capital demands of our current operations for at least the

next twelve months, there is no guarantee that we will succeed.

Overall, there is no guarantee that cash flow from our existing or future

operations and any external capital that we may be able to raise will be sufficient to meet our working capital needs.

The Company currently

does not have adequate cash or available liquidity/available capacity on our lines of credit to meet our long-term needs and our above

plans in the short term may prove to be inadequate to continue as a going concern.

Thus, despite our cash on hand, our ability to draw

on our credit line, or changes to our pricing models, and other safeguards, we may be unable to meet our obligations as they become due

over the next twelve months beyond the issuance date .

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

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 may need to 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.

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.

have a history of losses and may experience losses in the future, which could result in the market price of our common stock declining.

have incurred net losses, including net losses attributable to Cemtrex, Inc.

shareholders of $7.2 million in 2024, $9.2 million in 2023,

and $13.0 million in 2022.

We have an accumulated deficit of $71.4 million as of September 30, 2024.

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 value of its investment portfolio.

Company may, from time to time invest 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.

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, 2024, our total indebtedness was approximately $21.05 million, including notes payable of $12.4 million, revolving

line of credit of $3.1 million, mortgage payable of $3.3 million, bank loans of $2.2 million, and $0.05 million of PPP loans.

comparison, as September 30, 2023, our total indebtedness was approximately $24.4 million, including notes payable of $18.1 million,

mortgage payable of $3.4 million, vendor financed purchase of $0.7 million, bank loans of $1.3 million, and $0.9 million of PPP

For 2024 and 2023 approximately $7.9 million and $14.5 million, respectively, of such debt is classified as current.

substantial debt could have important consequences, including 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;

(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.

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.

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.

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 to date, 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.

the Company has the following business segments, consisting of (i) Security and (ii) Industrial Services.

In addition, there is Cemtrex

Corporate, which reports unallocated corporate expenses.

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 Security segment, and there can be no assurance that we will successfully introduce new products and services into

success of new and improved products and services through our Security segment depends on our research and development efforts and the

initial acceptance of our products and solutions by consumers.

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 and 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,

1 unchanged sentence

and services.

We may experience difficulties or delays in the research and 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.

Our 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.

The 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.

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.

Our operating results may fluctuate, which could

have a negative impact on our ability to grow our client base, establish sustainable revenues and succeed overall.

Our results of operations may

fluctuate as a result of a number of factors, some of which are beyond our control including but not limited to:

general 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;

the budgetary constraints of our customers;

success of our strategic growth initiatives;

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

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

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.

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;

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

movements in interest rates or tax rates;

changes in, and application of, accounting rules;

changes in the regulations applicable to us;

litigation matters.

As a result of these factors, we may not succeed in

our business, and we could go out of business.

We operate in a cyclical business, which could result in significant

fluctuations in demand for our products.

Cyclical 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.

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.

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.

Our sales and gross margins depend significantly on market demand

for our products, as to which there can be no assurance.

The 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.

In these circumstances, we anticipate

that we could be required to increase or decrease staffing and more closely manage other expenses in order to meet the anticipated demand

of our existing and future customers.

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 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

Our products face intense competitive challenges, including rapid

technological changes, and pricing pressure from competitors, which could adversely affect our business.

All 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

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.

From time to time, we may need

to reduce our prices in response to competitive and customer pressures and to maintain our market share.

Competition and customer pressures

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

Our 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.

Factors affecting the industries that utilize our products could

negatively impact our customers and us.

We 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:

increased competition among our customers and their competitors;

the inability of our customers to develop and market their products;

recessionary periods in our customers’ markets;

the potential that our customers’ products become obsolete;

our customers’ inability to react to rapidly changing technology;

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

If 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.

There 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

We 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 any successful new products

or any enhancements to our existing products on a timely basis, or at all.

This could result in prolonged and significant losses.

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.

The 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.

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.

Developing 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 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

We rely on information technology

networks and systems, including the Internet, to process, transmit, and store electronic and financial information;

to manage a variety

of business processes and activities;

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 condition.

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

in order to meet the anticipated demand of our existing and future customers.

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

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 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.

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.

factors include:

competition among our customers and their competitors;

inability of our customers to develop and market their products;

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

any successful new products or any enhancements to our existing products on a timely basis, or at all.

This could result in prolonged

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.

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.

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.

We 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.

We 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

Any future significant compromise, breach, or misuse of our data security could result in significant costs and damage to our

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.

Third-party service providers,

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

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

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

In 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.

We are also in the process of

converting certain information technology networks and systems and consolidating certain global systems.

If 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.

Our operating results are sensitive to raw material

and resale product availability, quality, and cost

We 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

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.

We 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.

Risks Related to Legal Uncertainty

We could be subject to additional civil penalties

or face criminal penalties and sanctions if we violate the terms of settlement with the SEC.

On September 30, 2022, acting

pursuant to an offer of settlement submitted by the Company, the SEC issued an order pursuant to Section 8A of the Securities Act, directing

the Company to cease and desist from committing or causing any violations and any future violations of Section 17(a) of the Securities

Act and Section 10(b) of the Exchange Act and Rule 10b-5 thereunder (the “SEC Order”).

While we have already paid

the penalties imposed by the order into which we entered pursuant to the SEC Order, it contains ongoing and continuing requirements that

we refrain from violating the Securities Act.

Any future violation of applicable securities laws by us or management could result in

harsher sanctions and fines, which would have a material adverse effect on our ability to implement our business plans.

SEC staff can

make reasonable requests from us for further evidence of compliance.

Such requests for further information, record-keeping requirements

and others generally could divert management’s attention from implementing its business plans and could require additional material

expenditures by us to legal counsel or other advisors and service providers.

Further issues could reduce investor and shareholder confidence

in our company and could result in a failure to execute on our business plan, which would negatively impact our business.

A copy of the

SEC Order can be found at www.sec .gov.

Our global operations subject us to many different

and complex laws and rules, and we may face difficulty in compliance.

Due 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);

which 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 non-U.S.

jurisdictions may also subject us to

new regulations and laws, and we may face difficulties ensuring compliance with these new requirements.

Provisions 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.

Members 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.

If 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

Our 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.

We seek to protect our intellectual

property rights by relying on a combination of patent, trade secret and copyright laws.

We also use confidentiality and other provisions

in our agreements that restrict access to and disclosure of our confidential know-how and trade secrets.

We 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.

Outside 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

While 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.

Monitoring 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.

From 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.

We 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.

Even 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.

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 are 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.

breaches, denial of service attacks, or other hacking and phishing attacks on our systems or other security breaches, including internal

security failures, could harm our reputation or subject us to significant liability, and adversely affect our business and financial

operate in an industry that is prone to cyberattacks.

Failure to prevent or mitigate security breaches and improper access to or disclosure

of our data, customer data, or the data of their consumers, could result in the loss or misuse of such data, which could harm our business

and reputation.

The security measures we have integrated into our internal networks and platforms are designed to prevent or minimize

security breaches but may not function as expected or may not be sufficient to protect our internal networks and platforms against certain

In addition, incidents can originate on our partners’ websites or systems, which can then be leveraged to access our website

or systems, further preventing our ability to successfully identify and mitigate an attack.

Threat actors are rapidly evolving the techniques

used to sabotage or to obtain unauthorized access to networks in which data is stored or through which data is transmitted.

we may be unable to anticipate these techniques or implement adequate preventative measures to prevent an electronic intrusion into our

While we have established cyberattack remediation plans to guide us in triaging and responding to such attacks, there can be

no assurance that the measures set forth under such plan will be adequate in all circumstances nor that they will be effective in mitigating,

or allowing us to recover from, the effects of such attacks.

While we do not yet have specific insurance coverage and while we plan to

obtain coverage in the near future, any coverage we acquire may be insufficient to compensate us for all liabilities that we may incur.

customers’ storage and use of data to operate their businesses and deliver services to their consumers is essential to their use

of our platform, which stores, transmits and processes our customers’ proprietary information and personal information relating

to them, their employees and their consumers.

If a security breach were to occur, as a result of third-party action, employee error,

breakdown of our internal security processes and procedures, malfeasance or otherwise, and the confidentiality, integrity or availability

of our customers’ data were disrupted, we could incur significant liability to our customers, to partners and to individuals whose

information was being stored by our customers, and our platform may be perceived as less desirable, which could negatively affect our

business and damage our reputation.

platform and third-party applications available on, or that interface with, our platform have been and, in the future, may be subject

to distributed denial of service attacks (“DDoS”), a technique used by hackers to take an internet service offline by overloading

its services.

Since techniques used to deliver DDoS attacks are evolving, we may be unable to implement adequate preventative measures

or stop DDoS attacks or security breaches while they are occurring.

We cannot guarantee that applicable recovery systems, security protocols,

network protection mechanisms and other procedures are or will be adequate to prevent network and service interruption, system failure

or data loss.

In addition, computer malware, viruses, ransomware, extortion, and hacking and phishing attacks or social engineering incidents

by third parties are prevalent in our industry.

Any actual or perceived DDoS attack or security breach could damage our reputation and

brand, expose us to a risk of litigation and possible liability and require us to expend significant capital and other resources to respond

to and/or alleviate problems caused by the DDoS attack or security breach.

our platform and third-party applications available on, or that interface with, our platform could be breached if vulnerabilities in

our platform or third-party applications are exploited by unauthorized third parties or due to employee error, breakdown of our internal

security processes and procedures, malfeasance, or otherwise.

If these third parties fail to adhere to adequate data security practices,

or in the event of a breach of their networks, our own and our customers’ data may be improperly accessed, used or disclosed.

threat actors may attempt to fraudulently induce employees or customers into disclosing sensitive information such as usernames, passwords

or other information or otherwise compromise the security of our internal networks, electronic systems and/or physical facilities in

order to gain access to our data or our customers’ data.

As a result of our increased visibility, the size of our customer base,

and the increasing amount of confidential information we process, we believe that we are increasingly a target for such breaches and

This threat may intensify in the event of retaliatory cyberattacks stemming from geopolitical events such as Russia’s

invasion of Ukraine.

In addition to our own platform and applications, some of the third parties we work with may receive information

provided by us, by our customers, or by our customers’ consumers through web or mobile applications.

If these third parties fail

to adhere to adequate data security practices, or in the event of a breach of their networks, our own and our customers’ data may

be improperly accessed, used or disclosed.

jurisdictions have enacted laws requiring companies to notify individuals and authorities of data security breaches involving certain

types of personal or other data and our agreements with certain customers and partners require us to notify them in the event of a security

Similarly, if our suppliers experience data breaches and do not notify us or honor their notification obligations to authorities

or users, we could be held liable for the breach.

We may not be in a position to assess whether a data breach at one of our suppliers

would trigger an obligation or liability on our part.

Such mandatory disclosures are costly, could lead to negative publicity, and may

cause our customers to lose confidence in the effectiveness of our data security measures.

Moreover, if a high-profile security breach

occurs with respect to another SaaS provider, customers may lose trust in the security of the SaaS business model generally, which could

adversely impact our ability to retain revenue from existing customers or attract new ones.

Similarly, if a high-profile security breach

occurs with respect to a retailer or eCommerce platform, customers may lose trust in eCommerce more generally, which could adversely

impact our customers’ businesses.

Any of these events could harm our reputation or subject us to significant liability, and materially

and adversely affect our business and financial results.

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.

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.

Related to Legal Uncertainty

could be subject to additional civil penalties or face criminal penalties and sanctions if we violate the terms of settlement with the

September 30, 2022, acting pursuant to an offer of settlement submitted by the Company, the SEC issued an order pursuant to Section 8A

of the Securities Act, directing the Company to cease and desist from committing or causing any violations and any future violations

of Section 17(a) of the Securities Act and Section 10(b) of the Exchange Act and Rule 10b-5 thereunder (the “SEC Order”).

we have already paid the penalties imposed by the order into which we entered pursuant to the SEC Order, it contains ongoing and continuing

requirements that we refrain from violating the Securities Act.

Any future violation of applicable securities laws by us or management

could result in harsher sanctions and fines, which would have a material adverse effect on our ability to implement our business plans.

SEC staff can make reasonable requests from us for further evidence of compliance.

Such requests for further information, record-keeping

requirements and others generally could divert management’s attention from implementing its business plans and could require additional

material expenditures by us to legal counsel or other advisors and service providers.

Further issues could reduce investor and shareholder

confidence in our company and could result in a failure to execute on our business plan, which would negatively impact our business.

A copy of the SEC Order can be found at www.sec.gov .

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.

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.

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

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.

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.

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.

Product 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.

We face an inherent risk of product

liability exposure related to the sale of our products and the future sale of planned products.

We may 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.

We may also be subject to liability

for a misunderstanding of, or inappropriate reliance upon, the information we provide.

If we cannot 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:

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

injury to our reputation and significant negative media attention;

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

substantial monetary awards to plaintiffs;

loss of revenue;

the inability to commercialize any future products that we may develop.

Such 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.

(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.

We currently maintain product

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

Insurance coverage is increasingly

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

If 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.

As 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

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.

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, 2023,

that our internal control over financial reporting were effective.

We 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.

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.

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, 2024, that our internal control over financial reporting were effective.

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.

If we are 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.

Risks Related to Acquisitions

We have grown through acquisitions and are continuously looking to

fund other acquisitions;

our failure to raise funds for acquisitions may have the effect of slowing down our growth and our use of funds

for acquisitions subjects us to acquisition-related risks.

We 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.

will require integration of acquired assets and management into our operations to realize economies of scale and control costs.

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.

We may fail to successfully integrate our acquisitions

or otherwise be unable to benefit from pursuing acquisitions.

We 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:

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

difficulties integrating information systems;

the potential loss of key employees of acquired companies;

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

the diversion of management attention from existing operations.

Risks Related to Our Management and Control Persons

The loss of the services of Saagar Govil for any reason would materially

and adversely affect our business operations and prospects.

Our financial success is dependent

to a significant degree upon the efforts of Saagar Govil, our Chairman, President and Chief Executive Officer.

Saagar Govil possesses

management, financial expertise, engineering, sales and marketing experience concerning our company that our other officers do not have.

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;

our failure to raise funds for acquisitions

may have the effect of slowing down our growth and our use of funds for acquisitions subjects us to acquisition-related risks.

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

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 management, financial expertise, 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.

If 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.

Our 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.

Our 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.

We are a “controlled company”

under Nasdaq Listing Rules.

Approximately 90% of our outstanding voting shares, which includes 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.

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

Govil, and we have not obtained key man insurance

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 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.

Risks Related to Our Securities

Sales of substantial amounts of our common stock in the public market

could depress the market price of our common stock.

Our common stock 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.

Our securities may experience extreme price and volume fluctuations,

which could lead to costly litigation for us and make an investment in us less appealing.

The market price of our securities

may fluctuate substantially due to a variety of factors, including:

our business strategy and plans;

changing factors related to doing business in various jurisdictions within the United States;

new regulatory pronouncements and changes in regulatory guidelines and timing of regulatory approvals;

general and industry-specific economic conditions;

additions to or departures of our key personnel;

variations in our quarterly financial and operating results;

changes in market valuations of other companies that operate in our business segments or in our industry;

lack of trading liquidity;

announcements about our business partners;

Intellectual property disputes;

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

Whether we achieve profits or not;

changes in accounting principles;

general market conditions, economic and other external factors.

The 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

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.

Our 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.

In 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, 2023, we had total consolidated debt of approximately $37.8 million and 2,293,116 shares issued and 2,229,016 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.

Our common stockholders may be adversely affected by the issuance

of any subsequent series of preferred stock.

Our 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.

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.

The public trading market for the common stock may be limited in

Our 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

are a “controlled company” under Nasdaq Listing Rules.

Approximately 90% of our outstanding voting shares, which includes

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.

of directors for breach of duty is limited under Delaware law.

certificate of incorporation limits the liability of directors to the maximum extent permitted by Delaware law.

Delaware law provides

that directors of a corporation will not be personally liable for monetary damages for breach of their fiduciary duties as directors,

except for liability for any:

of their duty of loyalty to us or our stockholders;

or omission not in good faith or that involves intentional misconduct or a knowing violation of law;

payments of dividends or unlawful stock repurchases, or redemptions as provided in Section 174 of the Delaware General Corporation

from which the directors derived an improper personal benefit.

limitations of liability do not apply to liabilities arising under the federal or state securities laws and do not affect the availability

of equitable remedies such as injunctive relief or rescission.

bylaws provide that we will indemnify for our directors and officers to the fullest extent permitted by law and may indemnify employees

and other agents.

Our bylaws also provide that we are obligated to advance expenses incurred by a director or officer in advance of the

final disposition of any action or proceeding.

limitation of liability and indemnification provisions in our certificate of incorporation and bylaws may discourage stockholders from

bringing a lawsuit against directors for breach of their fiduciary duties.

They may also reduce the likelihood of derivative litigation

against directors and officers, even though an action, if successful, might provide a benefit to us and our stockholders.

of operations and financial condition may be harmed to the extent we pay the costs of settlement and damage awards against directors

and officers pursuant to these indemnification provisions.

as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers or persons controlling us,

we have been informed that, in the opinion of the SEC, such indemnification is against public policy as expressed in the Securities Act

and is therefore unenforceable.

present, there is no pending litigation or proceeding involving any of our directors or officers as to which indemnification is required

or permitted, and we are not aware of any threatened litigation or proceeding that may result in a claim for indemnification.

Related to Our Securities and the Markets for Our Securities

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

common stock is listed for trading on the Nasdaq Capital Market and our Series 1 Preferred Stock is quoted on the OTC Markets.

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

exercise of our stock options, those under our 2020 Equity Compensation Plan, 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.

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.

We may not pay cash dividends on our common stock.

Our 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 Annual Report.

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.

If our shares become subject to the penny stock

rules, it would become more difficult to trade our shares.

The SEC has adopted rules that

regulate broker-dealer practices in connection with transactions in penny stocks.

Penny stocks are generally equity securities with a

price of less than $5.00, other than securities registered on certain national securities exchanges or authorized for quotation on certain

automated quotation systems, provided that current price and volume information with respect to transactions in such securities is provided

by the exchange or system.

If the price of our Common Stock is less than $5.00, our Common Stock will be deemed a penny stock.

stock rules require a broker-dealer, before a transaction in a penny stock not otherwise exempt from those rules, to deliver a standardized

risk disclosure document containing specified information.

In addition, the penny stock rules require that before effecting any transaction

in a penny stock not otherwise exempt from those rules, a broker-dealer must make a special written determination that the penny stock

is a suitable investment for the purchaser and receive (i) the purchaser’s written acknowledgment of the receipt of a risk disclosure

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

business strategy and plans;

factors related to doing business in various jurisdictions within the United States;

regulatory pronouncements and changes in regulatory guidelines and timing of regulatory approvals;

and industry-specific economic conditions;

to or departures of our key personnel;

in our quarterly financial and operating results;

in market valuations of other companies that operate in our business segments or in our industry;

of trading liquidity;

announcements

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, 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.

have issued Series A Warrants and Series B Warrants in connection with the public offering completed in May 2024 that have provisions

that can increase the number of warrants and reduce the exercise price if we complete certain transactions.

public offering completed in May 2024 included Series A and Series B warrants (“Series A Warrants” and “Series B Warrants”)

to purchase our common stock with initial exercise prices of $0.85 per share.

As of December 2024, approximately 82,722 and 3,318,556

Series A Warrants and Series B Warrants, respectively, remain outstanding and the Series A Warrants have a current exercise price of

$3.1488 and the Series B Warrants have a current exercise price of $3.1488.

Series A Warrants may be exercised on an alternative cash

basis where each warrant exercised will result in the Company issuing three shares of common stock.

Series B Warrants provide, subject to certain exemptions, that if we sell or issue, any common stock or convertible securities, at an

effective price per share less than the exercise price of the Series B Warrant then in effect, or a Dilutive Issuance, the exercise price

of the Series B Warrant will be reduced to an amount equal to the lowest daily volume weighted average price (“VWAP”) during

the period commencing five consecutive trading days following the Dilutive Issuance and the number of shares issuable upon exercise of

the Series B Warrant shall be proportionally adjusted so that the aggregate exercise price of the Series B Warrant shall remain unchanged.

if at any time on or after the date of issuance there occurs any share split, share dividend, share combination, recapitalization or

other similar transaction involving our common stock and the lowest daily VWAP during the five consecutive trading days prior to the

date of such event and the five consecutive trading days after the date of such event is less than the exercise price then in effect,

then the exercise price on the Series A Warrants and Series B Warrants shall be reduced to the lowest daily VWAP during such period and

the number of warrant shares issuable shall be increased such that the aggregate exercise price payable thereunder, after taking into

account the decrease in the exercise price, shall be equal to the aggregate exercise price on the date of issuance.

a result of the 1 for 60 reverse stock split we completed on October 2, 2024, the exercise price of approximately 12,059,879 Series A

Warrants were reset to $0.7466 and 13,529,410 Series B Warrants were reset to $0.7466 based on the lowest VWAP over the course of the

five day trading period and the new amount of Series A Warrants as of this date became approximately 13,766,999 million, and the new

amount of Series B Warrants as of this date became approximately 15,444,550.

a result of the 1 for 35 reverse stock split we completed on November 26, 2024, the exercise price of approximately 1,201,932 Series

A Warrants were reset to $3.1488 and 15,444,550 Series B Warrants were reset to $3.1488 based on the lowest VWAP over the course of the

five day trading period and the new amount of Series A Warrants as of this date became approximately 284,225, and the new amount of Series

B Warrants as of this date became approximately 3,652,206.

adjustments to the Series A Warrants and Series B Warrant exercise price and number of warrants may occur if we complete any additional

transactions or complete another reverse stock split per the terms of the Series A Warrants and Series B Warrants.

some of the holders of Series A and Series B Warrants have ownership limitations, if and when we do issue shares of common stock to holders

of the Series A Warrants and Series B Warrants upon the exercise by the holder, such stockholders may resell all, some or none of those

shares of common stock at any time or from time to time at their discretion.

Resales of our common stock may cause the market price of

our securities to drop significantly, regardless of the performance of our business.

of the Series A Warrants and Series B Warrants could discourage an acquisition of us by a third-party.

provisions of the Series A Warrants and Series B Warrants could make it more difficult or expensive for a third-party to acquire us.

The Series A Warrants and Series B Warrants prohibit us from engaging in certain transactions constituting “fundamental transactions”

unless, among other things, the surviving entity assumes our obligations under the Series A Warrants and Series B Warrants.

other provisions of the Series A Warrants and Series B Warrants could prevent or deter a third-party from acquiring us even where the

acquisition could be beneficial to you.

Series A Warrants and Series B Warrants may have an adverse effect on the market price of our common stock and make it more difficult

to effect a business combination.

the extent we issue shares of common stock to effect a future business combination, the potential for the issuance of a substantial number

of additional shares of common stock upon exercise of the Series A Warrants and Series B Warrants could make us a less attractive acquisition

vehicle in the eyes of a target business.

Such Series A Warrants and Series B Warrants, when exercised, will increase the number of issued

and outstanding shares of common stock and reduce the value of the shares issued to complete the business combination.

Accordingly, the

Series A Warrants and Series B Warrants may make it more difficult to effectuate a business combination or increase the cost of acquiring

a target business.

Additionally, the sale, or even the possibility of a sale, of the shares of common stock underlying the Series A Warrants

and Series B Warrants could have an adverse effect on the market price for our securities or on our ability to obtain future financing.

If and to the extent the Series A Warrants and Series B Warrants are exercised, you may experience dilution to your holdings.

will likely not receive any additional funds upon the exercise of the Series A Warrants.

Series A Warrants may be exercised by way of an alternative cashless exercise, meaning that the holder may not pay a cash purchase price

upon exercise, but instead would receive upon such exercise the net number of shares of our common stock determined according to the

formula set forth in the Series A Warrants.

Accordingly, we will likely not receive any additional funds upon the exercise of the Series

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, 2024, we had total consolidated liabilities of approximately $39.2

million and 2,456,827 shares issued and 2,392,727 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

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.

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 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.

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

securities or industry analysts do not publish research or publish inaccurate or unfavorable research about our business, our stock price

and trading volume could decline.

trading market for our Common Stock will depend in part on the research and reports that securities or industry analysts publish about

us or our business.

Securities and industry analysts do not currently, and may never, publish research on our Company.

If no securities

or industry analysts commence coverage of our Company, the trading price for our stock would likely be negatively impacted.

securities or industry analysts initiate coverage, if one or more of the analysts who covers us downgrades our stock or publishes inaccurate

or unfavorable research about our business, our stock price may decline.

If one or more of these analysts ceases coverage of our Company

or fails to publish reports on us regularly, demand for our stock could decrease, which might cause our stock price and trading volume

our shares become subject to the penny stock rules, it would become more difficult to trade our shares.

SEC has adopted rules that regulate broker-dealer practices in connection with transactions in penny stocks.

Penny stocks are generally

equity securities with a price of less than $5.00, other than securities registered on certain national securities exchanges or authorized

for quotation on certain automated quotation systems, provided that current price and volume information with respect to transactions

in such securities is provided by the exchange or system.

If the price of our Common Stock is less than $5.00, our Common Stock will

be deemed a penny stock.

The penny stock rules require a broker-dealer, before a transaction in a penny stock not otherwise exempt from

those rules, to deliver a standardized risk disclosure document containing specified information.

In addition, the penny stock rules

require that before effecting any transaction in a penny stock not otherwise exempt from those rules, a broker-dealer must make a special

written determination that the penny stock is a suitable investment for the purchaser and receive (i) the purchaser’s written acknowledgment

of the receipt of a risk disclosure statement;

(ii) a written agreement to transactions involving penny stocks;

and (iii) a signed and dated copy of a written suitability

These disclosure requirements may have the effect of reducing the trading activity in the secondary market for our Common Stock,

and therefore shareholders may have difficulty selling their shares.

Although our Common Stock and Series 1 Preferred

Stock are listed on the Nasdaq Capital Market, the exchange may subsequently delist our Common Stock or Series 1 Preferred Stock if we

fail to comply with ongoing listing standards.

Although our Common Stock and

Series 1 Preferred Stock are listed on the Nasdaq Capital Market, the exchange will require us to meet certain financial, public float,

bid price and liquidity standards on an ongoing basis in order to continue the listing of our Common Stock and Series 1 Preferred Stock.

If we fail to meet these continued listing requirements, our Common Stock and/or our Series 1 Preferred stock may be subject to delisting.

If our Common Stock and/or our Series 1 Preferred Stock are delisted and we are not able to list such Common Stock or Series 1 Preferred

Stock on another national securities exchange, we expect our securities would be quoted on an over-the-counter market;

However, if this

were to occur, our stockholders could face significant material adverse consequences, including limited availability of market quotations

for our Common Stock and Series 1 Preferred Stock and reduced liquidity for the trading of our securities.

In addition, in the event of

such delisting, we could experience a decreased ability to issue additional securities and obtain additional financing in the future.

Even though our securities are listed on the Nasdaq Capital Market, there can be no assurance that an active trading market for our securities

will develop or be sustained after our initial listing.

UNRESOLVED STAFF COMMENTS

Cybersecurity

Not Applicable.

and (iii) a signed and

dated copy of a written suitability statement.

These disclosure requirements may have the effect of reducing the trading activity in

the secondary market for our Common Stock, and therefore shareholders may have difficulty selling their shares.

sales practice requirements may limit a stockholder’s ability to buy and sell our securities.

June 30, 2020, the SEC implemented Regulation Best Interest requiring that “A broker, dealer, or a natural person who is an associated

person of a broker or dealer, when making a recommendation of any securities transaction or investment strategy involving securities

(including account recommendations) to a retail customer, shall act in the best interest of the retail customer at the time the recommendation

is made, without placing the financial or other interest of the broker, dealer, or natural person who is an associated person of a broker

or dealer making the recommendation ahead of the interest of the retail customer.” This is a significantly higher standard for

broker-dealers to recommend securities to retail customers than before under FINRA “suitability rules.

FINRA suitability rules

do still apply to institutional investors and require that in recommending an investment to a customer, a broker-dealer must have reasonable

grounds for believing that the investment is suitable for that customer.

Prior to recommending securities to their customers, broker-dealers

must make reasonable efforts to obtain information about the customer’s financial status, tax status, investment objectives and

other information, and for retail customers determine the investment is in the customer’s “best interest” and meet

other SEC requirements.

Both SEC Regulation Best Interest and FINRA’s suitability requirements may make it more difficult for broker-dealers

to recommend that their customers buy speculative, low-priced securities.

They may affect investing in our common stock or our preferred

stock, which may have the effect of reducing the level of trading activity in our securities.

As a result, fewer broker-dealers may be

willing to make a market in our common stock or our preferred stock, reducing a stockholder’s ability to resell shares of our common

stock or our preferred stock.

sales and issuances of our Common Stock or rights to purchase Common Stock, including pursuant to our equity incentive plans and outstanding

options could result in additional dilution of the percentage ownership of our stockholders and could cause our stock price to fall.

expect that significant additional capital may be needed in the future to continue our planned operations, expanded research and development

activities and costs associated with operating a public company.

The Company may also require capital to acquire or invest in complementary

businesses, products, or technologies, or to obtain the right to use such complementary technologies.

We have no commitments with respect

to any acquisition or investment;

however, we seek opportunities and transactions that management believes will be advantageous to the

Company and its operations or prospects.

To raise capital, we may sell Common Stock, convertible securities or other equity securities

in one or more transactions at prices and in a manner we determine from time to time.

If we sell Common Stock, convertible securities

or other equity securities, investors may be materially diluted by subsequent sales.

Such sales may also result in material dilution

to our existing stockholders, and new investors could gain rights, preferences and privileges senior to the holders of our Common Stock,

including the securities sold in this offering.

The aggregate number of shares of our Common Stock that may be issued pursuant to stock

awards under our 2020 Equity Compensation Plan as of September 30, 2024, is 28 shares.

Increases in the number of shares available for

future grant or purchase may result in additional dilution, which could cause our stock price to decline.

our Common Stock is listed on the Nasdaq Capital Market, the exchange may subsequently delist our Common Stock as it has with our Series

1 Preferred Stock if we fail to comply with ongoing listing standards.

previously received a deficiency letter from Nasdaq on our Series 1 Preferred Stock.

Having failed to meet the ongoing listing requirements,

on January 18, 2024, the Company received a letter from The Nasdaq Stock Market LLC’s Hearings Panel notifying the Company that

it has determined to delist the Company’s shares of Series 1 Preferred Stock from the exchange, due to the Company’s inability

to meet the terms of the exception granted by the Panel on September 8, 2023, as amended.

Suspension of trading in the Company’s

Series 1 Preferred Stock was effective at the open of business on January 22, 2024.

The Series 1 Preferred Stock is now quoted on the

OTC Markets under the symbol “CETXP”.

Nasdaq filed a Form 25 on March 21, 2024, and the deregistration of the Company’s

Series 1 Preferred Stock under Section 12(b) of the Exchange Act became effective for 90 days after filing of the Form 25.

have also received a deficiency letter for our Common Stock.

On June 14, 2024, the Company received a notification letter from the Listing

Qualifications Department of Nasdaq notifying the Company that, because the closing bid price for the Company’s common stock listed

on Nasdaq was below $1.00 for 30 consecutive trading days, the Company no longer meets the minimum bid price requirement for continued

listing on The Nasdaq Capital Market under Nasdaq Marketplace Rule 5550(a)(2), requiring a minimum bid price of $1.00 per share.

notification letter also disclosed that in the event the Company does not regain compliance with the Minimum Bid Price Requirement by

December 11, 2024, the Company may be eligible for additional time.

To qualify for additional time, the Company would be required to

meet the continued listing requirement for market value of publicly held shares and all other initial listing standards for The Nasdaq

Capital Market, with the exception of the bid price requirement, and would need to provide written notice of its intention to cure the

deficiency during the second compliance period, by effecting a reverse stock split, if necessary.

August 21, 2024, the Company received a notification letter from the Listing Qualifications Department of Nasdaq notifying the Company

that, because the stockholder’s equity for the Company was below $2,500,000 as reported on our Form 10-Q for the period ended June

30, 2024, the Company no longer meets the minimum shareholder’s equity requirement for continued listing on The Nasdaq Capital

Market under Nasdaq Marketplace Rule 5550(b)(1), requiring a minimum stockholder’s equity of $2,500,000 (the “Minimum Stockholder’s

Equity Requirement”).

October 23, 2024, the Company received a letter from Nasdaq that it had been granted an extension to regain compliance with the Minimum

Stockholder’s Equity Requirement.

terms of the extension are as follows:

on or before February 17, 2025, the Company must complete the submitted plan and opt for one of

the two following alternatives to evidence compliance with the Rule:

The Company must furnish to the SEC and Nasdaq a publicly available report (e.g., a Form 8-K) including:

A disclosure of Staff’s deficiency letter and the specific deficiency(ies) cited;

A description of the completed transaction or event that enabled the Company to satisfy the stockholders’ equity requirement for

continued listing;

An affirmative statement that, as of the date of the report, the Company believes it has regained compliance with the stockholders’

equity requirement based upon the specific transaction or event referenced in Step 2;

A disclosure stating that Nasdaq will continue to monitor the Company’s ongoing compliance with the stockholders’ equity

requirement and, if at the time of its next periodic report the Company does not evidence compliance, that it may be subject to delisting.

The Company must furnish to the SEC and Nasdaq a publicly available report including:

Steps 1 & 2 set forth above;

A balance sheet no older than 60 days with pro forma adjustments for any significant transactions or event occurring on or before the

The pro forma balance sheet must evidence compliance with the stockholders’ equity requirement;

A disclosure that the Company believes it also satisfies the stockholders’ equity requirement as of the report date and that Nasdaq

will continue to monitor the Company’s ongoing compliance with the stockholders’ equity requirement and, if at the time of

its next periodic report the Company does not evidence compliance, that it may be subject to delisting.

of which alternative the Company chooses, if the Company fails to evidence compliance upon filing its periodic report for the March 31,

2025, with the SEC and Nasdaq, the Company may be subject to delisting.

our Common Stock is listed on the Nasdaq Capital Market, the exchange will require us to meet certain financial, public float, bid price

and liquidity standards on an ongoing basis in order to continue the listing of our Common Stock.

If we fail to meet these continued

listing requirements, our Common Stock may be subject to delisting.

Delisting from the Nasdaq Capital Market could make trading our common

stock more difficult for investors, potentially leading to declines in our share price and liquidity.

Without a Nasdaq Capital Market

listing, stockholders may have a difficult time getting a quote for the sale or purchase of our stock, the sale or purchase of our stock

would likely be made more difficult and the trading volume and liquidity of our stock could decline.

Delisting from the Nasdaq Capital

Market could also result in negative publicity and could also make it more difficult for us to raise additional capital.

of such a listing may adversely affect the acceptance of our common stock as currency or the value accorded by other parties.

if we are delisted, we would also incur additional costs under state blue sky laws in connection with any sales of our securities.

requirements could severely limit the market liquidity of our common stock and the ability of our stockholders to sell our common stock

in the secondary market.

If our common stock is delisted by Nasdaq, our common stock may be eligible to trade on an over-the-counter

quotation system, such as the OTC Pink, OTCQB and OTCQX markets, where an investor may find it more difficult to sell our stock or obtain

accurate quotations as to the market value of our common stock.

In the event our common stock is delisted from the Nasdaq Capital Market,

we may not be able to list our common stock on another national securities exchange or obtain quotation on an over-the counter quotation

on the OTC Pink Market is volatile and sporadic, which could depress the market price of the Series 1 Preferred Stock and make it difficult

for the holders to resell their Series 1 Preferred Stock.

of January 22, 2024, the Series 1 Preferred Stock of the Company is quoted on the OTC Pink Market.

Trading in securities quoted on the

OTC Pink Open Market is often thin and characterized by wide fluctuations in trading prices, due to many factors, some of which may have

little to do with our operations or business prospects.

This volatility could depress the market price of the Series 1 Preferred Stock

for reasons unrelated to operating performance.

Moreover, the OTC Pink Market is not a stock exchange, and trading of securities on the

OTC Pink Market is often more sporadic than the trading of securities listed on Nasdaq.

These factors may result in shareholders having

difficulty reselling any Series 1 Preferred Stock.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors