Cavitation Technologies' Losses Widen Amid Cash Crunch

TL;DR

**CVAT is burning cash at an alarming rate and is a high-risk bet with only enough cash to last until December 2025.**

AI Summary

Cavitation Technologies, Inc. (CVAT) reported a net loss of $258,000 for the three months ended September 30, 2025, an increase from a net loss of $227,000 in the same period of 2024. Revenue significantly increased to $3,000 in Q3 2025 from $0 in Q3 2024, primarily from a short-term rental agreement. However, total operating expenses rose to $252,000 in Q3 2025 from $226,000 in Q3 2024, driven by an increase in general and administrative expenses to $245,000 from $218,000. The company's cash and cash equivalents plummeted from $249,000 at June 30, 2025, to $30,000 at September 30, 2025, with net cash used in operating activities totaling $219,000. CVAT also reported an accumulated deficit of $27,218,000 as of September 30, 2025, and its independent auditor raised substantial doubt about its ability to continue as a going concern. Management plans to increase revenues through its Reserved Grant Back License in water/wastewater processing and alcoholic beverages, and believes it has enough cash to sustain operations only through December 2025.

Why It Matters

This filing reveals a company teetering on the brink, with a significant cash burn and an auditor's going concern warning. For investors, the rapid depletion of cash from $249,000 to $30,000 in one quarter signals extreme financial instability, making future equity raises highly dilutive or debt financing difficult. Employees face job insecurity given the limited cash runway through December 2025. Customers and the broader market should note the company's struggle to commercialize its technology effectively, despite a patent assignment and license-back agreement with Desmet Ballestra, indicating a competitive disadvantage or market adoption challenges in its niche.

Risk Assessment

Risk Level: high — The company's cash and cash equivalents decreased from $249,000 to $30,000 in three months, and it used $219,000 in operating activities. This, coupled with an accumulated deficit of $27,218,000 and the auditor's 'substantial doubt' about its going concern ability, indicates severe financial distress and a very short liquidity runway through December 2025.

Analyst Insight

Investors should avoid CVAT given its critical liquidity issues and going concern warning. The company's inability to generate significant revenue ($3,000 in Q3 2025) while burning substantial cash ($219,000 in operating activities) suggests a high probability of further dilution or bankruptcy in the near term.

Financial Highlights

debt To Equity

N/A

revenue

$3,000

operating Margin

N/A

total Assets

$60,000

total Debt

$249,000

net Income

$ (258,000)

eps

$ (0.00)

gross Margin

N/A

cash Position

$30,000

revenue Growth

N/A

Revenue Breakdown

Key Numbers

• $30,000 — Cash and cash equivalents (As of September 30, 2025, down from $249,000 at June 30, 2025)
• $258,000 — Net loss (For the three months ended September 30, 2025, an increase from $227,000 in Q3 2024)
• $3,000 — Revenue (For the three months ended September 30, 2025, up from $0 in Q3 2024)
• $219,000 — Net cash used in operating activities (For the three months ended September 30, 2025)
• $27,218,000 — Accumulated deficit (As of September 30, 2025)
• 289,156,340 — Common stock outstanding (As of November 12, 2025)
• $150,000 — Note payable - EIDL (Non-current liability as of September 30, 2025)
• 3.75% — Interest rate (On the EIDL loan)

Key Players & Entities

• Cavitation Technologies, Inc. (company) — Registrant
• Desmet Ballestra (company) — Recipient of patent assignment and license back agreement
• Hydrodynamic Technology, Inc. (company) — Wholly owned subsidiary of Cavitation Technologies, Inc.
• Alchemy Beverages, Inc. (company) — Business venture partner for alcoholic beverages
• SBA (regulator) — Provider of EIDL loan
• Chief Executive Officer (person) — Chief Operating Decision Maker (CODM)
• Desmet Belgium (company) — Customer accounting for 98% of Q3 2024 revenue
• Permian Basin (location) — Target market for water treatment and remediation

FAQ

Risk Factors

• Going Concern Uncertainty [high — financial]: The company's independent auditor has raised substantial doubt about its ability to continue as a going concern. As of September 30, 2025, cash and cash equivalents were $30,000, and management believes it has enough cash to sustain operations only through December 2025.
• Deteriorating Financial Performance [high — financial]: The company reported a net loss of $258,000 for Q3 2025, an increase from $227,000 in Q3 2024. Operating expenses rose to $252,000 from $226,000, driven by a significant increase in general and administrative expenses.
• Declining Cash Reserves [high — financial]: Cash and cash equivalents plummeted from $249,000 at June 30, 2025, to $30,000 at September 30, 2025. Net cash used in operating activities was $219,000 for the quarter.
• Accumulated Deficit [medium — financial]: The company has an accumulated deficit of $27,218,000 as of September 30, 2025, indicating a history of losses exceeding profits.
• Dependence on New Revenue Streams [medium — operational]: Management plans to increase revenues through its Reserved Grant Back License in water/wastewater processing and alcoholic beverages. The success of these initiatives is critical for future operations.
• EIDL Loan Obligation [low — financial]: The company has a $150,000 EIDL loan with a 3.75% interest rate, secured by all tangible and intangible property. While non-current, it represents a fixed obligation.

Industry Context

Cavitation Technologies operates in niche segments of the industrial processing market, including vegetable oil refining, renewable fuels, and water treatment. The company's proprietary Nano Reactor technology aims to offer cost and yield advantages over conventional methods. The market for advanced water treatment and sustainable fuel production is growing, but competitive pressures from established players and the need for significant capital investment for scaling remain key challenges.

Regulatory Implications

The company's focus on water/wastewater processing could expose it to evolving environmental regulations. Compliance with these regulations, which can be complex and costly, is crucial. Additionally, any expansion into the alcoholic beverage sector would require adherence to specific industry-specific regulations and licensing requirements.

What Investors Should Do

1. Monitor cash burn and runway closely.
2. Evaluate the viability of new revenue streams.
3. Assess the going concern risk.
4. Analyze the increase in General and Administrative (G&A) expenses.

Key Dates

• 2025-09-30: End of Q3 2025 — Reported $3,000 revenue, $258,000 net loss, and $30,000 cash. Auditor raised going concern doubts.
• 2025-12-31: Projected cash runway end — Management estimates current cash will only sustain operations through this date, highlighting immediate liquidity concerns.
• 2025-06-30: End of Q2 2025 — Cash and cash equivalents were $249,000, indicating a significant cash burn in Q3.
• 2024-09-30: End of Q3 2024 — Reported $0 revenue and a net loss of $227,000, showing revenue generation in the current period but also increased losses.
• 2020-07-01: EIDL Loan Origination (approximate) — Company received $150,000 EIDL loan, which remains a significant liability.

Glossary

Accumulated deficit

The total cumulative net losses of a company that have not been offset by net income. It represents a negative balance in retained earnings. (Indicates the company has historically incurred more losses than profits, standing at $27,218,000 as of September 30, 2025.)

Going concern

An accounting assumption that a company will continue to operate for the foreseeable future, able to meet its financial obligations. (The auditor's doubt about CVAT's ability to continue as a going concern is a critical warning sign for investors and creditors.)

Net cash used in operating activities

The amount of cash a company has spent on its core business operations during a period, after accounting for revenues and expenses. (CVAT used $219,000 in operating activities during Q3 2025, highlighting significant cash burn.)

EIDL

Economic Injury Disaster Loan, a program offered by the U.S. Small Business Administration to provide working capital to small businesses affected by disasters. (CVAT has a $150,000 EIDL loan, representing a significant portion of its total liabilities.)

Reserved Grant Back License

A licensing agreement where the company retains rights to its technology for specific applications, potentially generating future revenue. (This is management's primary strategy to increase future revenues, particularly in water/wastewater and alcoholic beverages.)

Year-Over-Year Comparison

Compared to the prior year's third quarter, Cavitation Technologies, Inc. has seen a significant shift from zero revenue to $3,000, driven by a short-term rental agreement. However, this revenue increase has been overshadowed by a widening net loss, from $227,000 to $258,000, and a substantial decrease in cash reserves from $179,000 to $30,000. Operating expenses have also risen, particularly general and administrative costs, exacerbating the financial strain and reinforcing the going concern warnings.

Filing Documents

• cavitation_i10q-093025.htm (10-Q) — 363KB
• cavitation_ex3101.htm (EX-31.1) — 7KB
• cavitation_ex3102.htm (EX-31.2) — 7KB
• cavitation_ex3201.htm (EX-32.1) — 3KB
• cavitation_ex3202.htm (EX-32.2) — 3KB
• image_001.jpg (GRAPHIC) — 7KB
• 0001683168-25-008299.txt ( ) — 2518KB
• cvat-20250930.xsd (EX-101.SCH) — 18KB
• cvat-20250930_cal.xml (EX-101.CAL) — 24KB
• cvat-20250930_def.xml (EX-101.DEF) — 70KB
• cvat-20250930_lab.xml (EX-101.LAB) — 204KB
• cvat-20250930_pre.xml (EX-101.PRE) — 166KB
• cavitation_i10q-093025_htm.xml (XML) — 258KB

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 14 Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 20 Item 4.

Controls and Procedures

Controls and Procedures 20 PART II OTHER INFORMATION 21 Item 1.

Legal Proceedings

Legal Proceedings 21 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 21 Item 3. Defaults Upon Senior Securities 21 Item 4. Mine Safety Disclosures 21 Item 5. Other Information 21 Item 6. Exhibits 22

Signatures

Signatures 23 Certifications 2

- FINANCIAL

PART I - FINANCIAL INFORMATION

Condensed Consolidated Financial

Item 1. Condensed Consolidated Financial CAVITATION TECHNOLOGIES, INC. CONDENSED CONSOLIDATED BALANCE SHEETS September 30, 2025 June 30, 2025 ASSETS (unaudited) Current assets: Cash and cash equivalents $ 30,000 $ 249,000 Accounts receivable 5,000 10,000 Prepaid expenses 14,000 27,000 Total current assets 49,000 286,000 Other assets 11,000 11,000 Total assets $ 60,000 $ 297,000 LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) Current liabilities: Accounts payable and accrued expenses $ 99,000 $ 78,000 Total current liabilities 99,000 78,000 Note payable, non-current 150,000 150,000 Total liabilities 249,000 228,000 Commitments and contingencies – – Stockholders' equity (deficit): Preferred stock, $ 0.001 par value, 10,000,000 shares authorized, no shares issued and outstanding as of September 30, 2025 and June 30, 2025 – – Common stock, $ 0.001 par value, 1,000,000,000 shares authorized, 289,156,340 shares issued and outstanding as of September 30, 2025 and June 30, 2025 289,000 289,000 Additional paid-in capital 26,740,000 26,740,000 Accumulated deficit ( 27,218,000 ( 26,960,000 ) Total stockholders' equity (deficit) ( 189,000 ) 69,000 Total liabilities and stockholders' equity (deficit) $ 60,000 $ 297,000 See accompanying notes to the condensed consolidated

financial statements

financial statements 3 CAVITATION TECHNOLOGIES, INC. CONDENSED CONSOLIDATED FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2025 AND 2024 For the Three Months Ended September 30, 2025 2024 Revenue $ 3,000 $ – Operating expenses: General and administrative expenses 245,000 218,000 Research and development expenses 7,000 8,000 Total operating expenses 252,000 226,000 Loss from operations ( 249,000 ) ( 226,000 ) Other Expense Interest expense ( 9,000 ) ( 1,000 ) Net loss $ ( 258,000 ) $ ( 227,000 ) Net loss per share Basic and diluted $ ( 0.00 ) $ ( 0.00 ) Weighted average shares outstanding, Basic and diluted 289,156,340 284,289,740 See accompanying notes to the condensed consolidated financial statements 4 CAVITATION TECHNOLOGIES, INC. CONDENSED CONSOLIDATED (Unaudited) FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2025 AND 2024 Three Months Ended September 30, 2025 (unaudited) Common Stock Additional Paid-in Accumulated Shares Amount Capital Deficit Total Balance at June 30, 2025 289,156,340 $ 289,000 $ 26,740,000 $ ( 26,960,000 ) $ 69,000 Net loss – – – ( 258,000 ) ( 258,000 ) Balance at September 30, 2025 289,156,340 $ 289,000 $ 26,740,000 $ ( 27,218,000 ) $ ( 189,000 ) Three Months Ended September 30, 2024 (unaudited) Common Stock Additional Paid-in Accumulated Shares Amount Capital Deficit Total Balance at June 30, 2024 284,289,740 $ 284,000 $ 26,083,000 $ ( 26,847,000 ) $ ( 480,000 ) Net loss – – – ( 227,000 ) ( 227,000 ) Balance at September 30, 2024 284,289,740 $ 284,000 $ 26,083,000 $ ( 27,074,000 ) $ ( 707,000 ) See accompanying notes to the condensed consolidated financial statements 5 CAVITATION TECHNOLOGIES, INC. CONDENSED CONSOLIDATED Three Months Ended September 30, 2025 2024 Operati

financial statements

financial statements 6 CAVITATION TECHNOLOGIES, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) Three months ended September 30, 2025 and 2024 Note 1 – Organization and Summary of Significant Accounting Policies Cavitation Technologies, Inc. ("the Company," "CTi," "we," "us," and "our") is a Nevada corporation originally incorporated in January 2007 under the name Bio Energy, Inc. The Company had originally developed, patented, and commercialized proprietary technology, which has subsequently been sold to Desmet Ballestra in the patent assignment and license back agreement disclosed below. Basis of Presentation The unaudited condensed consolidated financial transactions and balances have been eliminated in consolidation. Going Concern The accompanying unaudited condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. During the three months ended September 30, 2025, the Company incurred loss from operations of $ 258,000 used cash in operations of $ 219,000 and had accumulated deficit of $ 27,218,000 as of September 30, 2025. In addition, the Company's independent registered public accounting firm, in its report on the Company's June 30, 2025, financial statements, raised substantial doubt about the Company's ability to continue as a going concern. These factors, among others, raise substantial doubt about the Company's ability to continue as a going concern within one year of the date that the financial statements are issued. The accompanying unaudited condensed consolidated financial statements do not include any adjustments that may result from an inability of the Company to continue as a going concern. As of September 30, 2025,

financial statements

financial statements. Note 2 – Segment Information The Company operates and manages its business as one reportable and operating segment. The Company's CODM reviews financial information presented and decides how to allocate resources based on net income (loss). Net income (loss) is used for evaluating financial performance. Significant segment expenses include research and development, salaries, insurance, and stock-based compensation. Operating expenses include all remaining costs necessary to operate the business, which primarily include external professional services and other administrative expenses. The following table presents the significant segment expenses and other segment items regularly reviewed by our CODM: Schedule of segment information Three months Ended September 30, 2025 2024 Revenue $ 3,000 $ – Research and development ( 7,000 ) ( 8,000 ) Salaries ( 123,000 ) ( 118,000 ) Consulting fees ( 25,000 ) ( 16,000 ) Professional fees ( 51,000 ) ( 56,000 ) Rent expense ( 9,000 ) ( 19,000 ) Travel expense ( 18,000 ) – Other operating expenses ( 19,000 ) ( 9,000 ) Total operating expenses ( 252,000 ) ( 226,000 ) Interest expense ( 9,000 ) ( 1,000 ) Net loss $ ( 258,000 ) $ ( 227,000 ) 11 Note 3 – Notes Payable Schedule of notes payable September 30, June 30, 2025 2025 Note payable - EIDL $ 150,000 $ 150,000 In July 2020, the Company received a loan of $ 150,000 from the SBA under its Economic Injury Disaster Loan (EIDL) assistance program. The EIDL loan is payable over 30 years, bears interest at a rate of 3.75 % per annum and secured by all tangible and intangible property of the Company. As of September 30, 2025 and June 30, 2025, the outstanding balance of the note payable was $ 150,000 and $ 150,000 , respectively. In the prior periods, the SBA was applying all payments received to principal. During the current period the loan was reconciled with the SBA. As a result the C

financial statements presented herein

financial statements presented herein. 13

Management's

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. The following discussion and analysis should be read in conjunction with our financial statements and the related notes. This discussion contains forward-looking Its actual results and the timing of certain events could differ materially from those anticipated in these forward-looking statements. Overview of our Business Cavitation Technologies, Inc. ("CTi"), a Nevada corporation, was originally incorporated under the name Bio Energy, Inc. We design and engineer environmentally friendly technology-based systems that are designed to serve large, growing, global markets such as vegetable oil refining, renewable fuels, water treatment, algae oil extraction, biodiesel production, water-oil emulsions and crude oil yield enhancement. Our systems are designed to process industrial liquids at a lower cost and higher yield than conventional technology. We are a process and product development firm that has developed, patented, and commercialized proprietary technology. CTi has developed, patented, and commercialized proprietary technology that can be used for processing of industrial fluids. CTi's patented Nano Reactor is the critical components of the CTi Nano Neutralization System which is commercially proven to reduce operating costs and increase yields in processing oils and fats. CTi has two issued patents relating to our Nano Reactor systems and has filed several national and international patents to employ its proprietary technology in applications including, vegetable oil refining, biodiesel production, waste water treatment, algae oil extraction, and alcoholic beverage enhancement. We were engaged in manufacturing our Nano-Reactors, which are designed to help refine vegetable oils, biodiesel transesterification and treatment o

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