CEMTREX INC

The Company’s corporate segment leases approximately 4,900 square feet of office space in Springfield, New Jersey from a third party in a sixty-two (62) month lease at a monthly rent of $9,192.88 which expires on July 31, 2030.

The Company’s Industrial Services segment owns approximately (i) 25,000 square feet of warehouse space in Manchester, PA (ii) approximately 43,000 square feet of office and warehouse space in York, PA (iii) approximately 33,500 square feet of office and warehouse space and 0.71 acres of land in a non-contiguous lot utilized for outdoor storage space in Columbia, PA. The Industrial Services segment also leases approximately 15,500 square feet of warehouse space in Emigsville, PA from a third party in a three-year lease at a monthly rent of $5,784 expiring on August 31, 2026.

The Company’s Security segment leases (i) approximately 6,700 square feet of office and warehouse space in Pune, India from a third party in an five year lease at a monthly rent of $6,048 (INR504,150) expiring on February 28, 2027, (ii) approximately 30,000 square feet of office and warehouse space in Hauppauge, NY from a third party in a seven-year lease at a monthly rent of $28,719 expiring on March 31, 2027, (iii) approximately 911 square feet of office space in Clovis, CA on a month-to-month lease at a monthly rent of $4,930, and (iv) approximately 9,400 square feet of office and warehouse space in Hampshire, England in a fifteen-year lease with at a monthly rent of $9,821 (£7,669) which expires on March 24, 2031 and contains provisions to terminate in 2026.

• 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.
• Risks Related to Our Investment in Digital Assets
• The value of our digital asset holdings is highly volatile and may decline significantly.
• Our digital assets are subject to risks associated with staking and the Solana network.
• Regulatory developments could adversely affect our digital asset holdings.
• We face cybersecurity, custody, and theft risks with our digital assets.
• Valuation, accounting, and liquidity risks associated with digital assets could impact our financial reporting.
• Our digital asset strategy may distract management or fail to deliver expected benefits.
• 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.
• 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.
• 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.
• 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.
• 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.
• We operate in a cyclical business, which could result in significant fluctuations in demand for our products.
• Our sales and gross margins depend significantly on market demand for our products, as to which there can be no assurance.
• Our products face intense competitive challenges, including rapid technological changes, and pricing pressure from competitors, which could adversely affect our business.
• Factors affecting the industries that utilize our products could negatively impact our customers and us.
• 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.
• 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.
• Security 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 results.
• Our operating results are sensitive to raw material and resale product availability, quality, and cost
• 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.
• 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.
• 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 impacted.
• 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.
• 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.
• 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.
• 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 may fail to successfully integrate our acquisitions or otherwise be unable to benefit from pursuing acquisitions.
• 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.
• 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 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.
• Liability of directors for breach of duty is limited under Delaware law.
• Risks Related to Our Securities and the Markets for Our Securities
• Sales of substantial amounts of our securities in the public market could depress the market price of our common stock.
• 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.
• We 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.
• Provisions of the Series A Warrants and Series B Warrants could discourage an acquisition of us by a third-party.
• The 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.
• We will likely not receive any additional funds upon the exercise of the Series A Warrants.
• 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.
• Our common stockholders may be adversely affected by the issuance of any subsequent series of preferred stock.
• The public trading market for the common stock may be limited in the future.
• We may not pay cash dividends on our common stock.
• If 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.
• If our shares become subject to the penny stock rules, it would become more difficult to trade our shares.
• FINRA sales practice requirements may limit a stockholder’s ability to buy and sell our securities.
• Future 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.
• Although 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.
• Trading 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.