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Cavitation Technologies, Inc. - Quarter Report: 2020 December (Form 10-Q)

Table of Contents

 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

 

FORM 10-Q

 

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended December 31, 2020

 

Commission File Number: 000-53239

 

 

Cavitation Technologies, Inc.

(Exact name of Registrant as Specified in its Charter)

 

Nevada 20-4907818
(State or Other Jurisdiction of Incorporation or Organization) (I.R.S. Employer Identification Number)

 

10019 CANOGA AVENUE, CHATSWORTH, CALIFORNIA    91311

(Address, including Zip Code, of Principal Executive Offices)

 

(818) 718-0905

(Registrant's Telephone Number, Including Area Code)

 

SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:

NONE

 

SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:

Title of Each Class:   Name of Each Exchange on Which Registered:
Common Stock, $0.001 par value   Over the Counter (Bulletin Board)

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file reports), and (2) has been subject to such filing requirements for the past 90 days. YES    x        NO    ¨

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). YES  x     NO  ¨

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act. (Check one):

 

Large accelerated filer ¨ Accelerated filer ¨
Non–Accelerated filer Small reporting company x
    Emerging growth company  ¨

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

  

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). YES    ¨        NO    x

 

As of February 14, 2021, the issuer had 196,997,906 shares of common stock outstanding.

 

 

 

   

 

 

TABLE OF CONTENTS

 

    Page
PART I. FINANCIAL INFORMATION  
     
Item 1. Condensed Consolidated Financial Statements (unaudited) 3
     
  Condensed Consolidated Balance Sheets 3
     
  Condensed Consolidated Statements of Operations 4
     
  Condensed Consolidated Statements of Stockholders Deficit 5
     
  Condensed Consolidated Statements of Cash Flows 6
     
  Notes to Condensed Consolidated Financial Statements 7
     
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 16
     
Item 3. Quantitative and Qualitative Disclosures About Market Risk 20
     
Item 4. Controls and Procedures 20
     
PART II OTHER INFORMATION 21
     
Item 1. 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 23
   
Certifications  

 

 

 

 2 

 

 

PART I - FINANCIAL INFORMATION

 

ITEM 1 - Condensed Consolidated Financial Statements

 

CAVITATION TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS

 

   December 31,   June 30, 
   2020   2020 
    (unaudited)      
ASSETS          
           
Current assets:          
Cash and cash equivalents  $892,000   $759,000 
Account receivable   34,000    104,000 
Inventory   67,000    47,000 
Total current assets   993,000    910,000 
           
Property and equipment, net   188,000    76,000 
Operating lease right-of-use asset, net   277,000    308,000 
Other assets   10,000    10,000 
Total assets  $1,468,000   $1,304,000 
           
LIABILITIES AND STOCKHOLDERS' DEFICIT          
           
Current liabilities:          
Accounts payable and accrued expenses  $377,000   $316,000 
Accrued payroll and payroll taxes due to officers   667,000    693,000 
Related party payable   1,000    1,000 
Customer advances   506,000    368,000 
Operating lease liability, current portion   55,000    54,000 
Total current liabilities   1,606,000    1,432,000 
           
Operating lease liability, non-current   228,000    258,000 
Notes payable, non-current   254,000    104,000 
Total liabilities   2,088,000    1,794,000 
           
Commitments and contingencies          
           
Stockholders' deficit:          
Preferred stock, $0.001 par value, 10,000,000 shares authorized, no shares issued and outstanding as of December 31, 2020 and June 30, 2020 respectively        
Common stock, $0.001 par value, 1,000,000,000 shares authorized, 196,997,906 shares issued and outstanding as of December 31, 2020 and June 30, 2020, respectively   197,000    197,000 
Additional paid-in capital   23,291,000    23,291,000 
Accumulated deficit   (24,108,000)   (23,978,000)
Total stockholders' deficit   (620,000)   (490,000)
Total liabilities and stockholders' deficit  $1,468,000   $1,304,000 

 

See accompanying notes to the condensed consolidated financial statements

 

 

 

 3 

 

 

CAVITATION TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

 

   For the Three Months Ended   For the Six Months Ended 
   December 31,   December 31, 
   2020   2019   2020   2019 
                 
Revenue  $72,000   $25,000   $489,000   $376,000 
Cost of revenue   2,000        12,000    12,000 
Gross profit   70,000    25,000    477,000    364,000 
                     
Operating expenses:                    
General and administrative expenses   283,000    575,000    593,000    874,000 
Research and development expenses   5,000    4,000    11,000    6,000 
Total operating expenses   288,000    579,000    604,000    880,000 
                     
Loss from operations   (218,000)   (554,000)   (127,000)   (516,000)
                     
Interest expense   (3,000)       (3,000)    
                     
Net loss  $(221,000)  $(554,000)  $(130,000)  $(516,000)
                     
Net loss per share,                    
Basic and Diluted  $(0.00)  $(0.00)  $(0.00)  $(0.00)
                     
Weighted average number of common shares outstanding, Basic and Diluted   196,997,906    196,997,906    196,997,906    196,997,906 

 

 

See accompanying notes to the condensed consolidated financial statements

 

 

 

 4 

 

 

CAVITATION TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT (Unaudited)

 

Three Months Ended December 31, 2020

 

   Common Stock  

Additional

Paid-in

   Accumulated     
   Shares   Amount   Capital   Deficit   Total 
Balance at September 30, 2020   196,997,906   $197,000   $23,291,000   $(23,887,000)  $(399,000)
Net loss                  (221,000)   (221,000)
Balance at December 31, 2020   196,997,906   $197,000   $23,291,000   $(24,108,000)  $(620,000)

 

Six Months Ended December 31, 2020

 

   Common Stock  

Additional

Paid-in

   Accumulated     
   Shares   Amount   Capital   Deficit   Total 
Balance at June 30, 2020   196,997,906   $197,000   $23,291,000   $(23,978,000)  $(490,000)
Net loss                  (130,000)   (130,000)
Balance at December 31, 2020   196,997,906   $197,000   $23,291,000   $(24,108,000)  $(620,000)

 

Three Months Ended December 31, 2019

 

   Common Stock  

Additional

Paid-in

   Accumulated     
   Shares   Amount   Capital   Deficit   Total 
Balance at September 30, 2019   196,997,906   $197,000   $23,090,000   $(24,068,000)  $(781,000)
Fair value of warrants granted for services             194,000         194,000 
Net loss                  (554,000)   (554,000)
Balance at December 31, 2019   196,997,906   $197,000   $23,284,000   $(24,622,000)  $(1,141,000)

 

Six Months Ended December 31, 2019

 

   Common Stock  

Additional

Paid-in

   Accumulated     
   Shares   Amount   Capital   Deficit   Total 
Balance at June 30, 2019   196,997,906   $197,000   $23,090,000   $(24,106,000)  $(819,000)
Fair value of warrants granted for services             194,000         194,000 
Net loss                  (516,000)   (516,000)
Balance at December 31, 2019   196,997,906   $197,000   $23,284,000   $(24,622,000)  $(1,141,000)

 

See accompanying notes to the condensed consolidated financial statements

 

 

 

 5 

 

 

CAVITATION TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

 

   Six Months Ended
December 31,
 
   2020   2019 
         
Cash flows from operating activities:          
Net loss  $(130,000)  $(516,000)
Adjustments to reconcile net loss to net cash provided by operating activities:          
Depreciation and amortization   13,000    19,000 
Fair value of warrants issued for services       194,000 
Amortization of operating lease right-of-use assets   31,000    30,000 
Change in operating assets and liabilities:          
Accounts receivable   70,000    224,000 
Inventory   (20,000)   (12,000)
Accounts payable and accrued expenses   61,000    (56,000)
Accrued payroll and payroll taxes due to officers   (26,000)    
Customer advances   138,000    232,000 
Operating lease liability   (29,000)   (27,000)
Net cash provided by operating activities   108,000    88,000 
           
Cash flows from investing activities:          
Deposit for the purchase of property and equipment   (125,000)    
Net cash used in investing activities   (125,000)    
           
Cash flows from financing activities:          
Proceeds from issuance of a note payable   150,000     
Cash provided by financing activities   150,000     
           
Net increase in cash   133,000    88,000 
Cash, beginning of period   759,000    649,000 
Cash, end of period  $892,000   $737,000 
           
Supplemental disclosures of cash flow information:          
Cash paid for interest  $   $ 
Cash paid for income taxes  $   $ 

 

See accompanying notes to the condensed consolidated financial statements

 

 

 

 6 

 

 

CAVITATION TECHNOLOGIES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
As of and for the six months ended December 31, 2020 and 2019

 

Note 1 - Organization and Summary of Significant Accounting Policies

 

Cavitation Technologies, Inc. (referred to herein, unless otherwise indicated, as "the Company," "CTi," "we," "us," and "our") is a Nevada corporation originally incorporated under the name Bio Energy, Inc. CTi has developed, patented, and commercialized proprietary technology that may be used in liquid processing applications.

 

Basis of Presentation

 

The accompanying condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles ("GAAP") as promulgated in the United States of America ("U.S.") and with instructions to Form 10-Q pursuant to the rules and regulations of Securities and Exchange Act of 1934, as amended (the "Exchange Act") and Article 8-03 of Regulation S-X under the Exchange Act. Accordingly, these condensed consolidated financial statements do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, we have included all adjustments considered necessary (consisting of normal recurring adjustments) for a fair presentation. Operating results for the six months ended December 31, 2020 are not indicative of the results that may be expected for the fiscal year ending June 30, 2021. You should read these unaudited condensed consolidated financial statements in conjunction with the audited financial statements and the notes thereto included in the Company's annual report on Form 10-K for the year ended June 30, 2020 filed on October 13, 2020. The condensed consolidated balance sheet as of June 30, 2020 has been derived from the audited financial statements included in the Form 10-K for that year.

 

Going Concern

 

The accompanying condensed consolidated financial statements have been prepared in conformity with generally accepted accounting principles which contemplates continuation of the Company as a going concern. During the six months ended December 31, 2020, the Company incurred a loss of $130,000 and at December 31, 2020, the Company had a stockholders’ deficit of $620,000 and a working capital deficit of $613,000. These factors, among others, raise substantial doubt about the Company's ability to continue as a going concern. In addition, our independent registered public accounting firm, in their report on our audited financial statements for the fiscal year ended June 30, 2020, raised substantial doubt about the Company’s ability to continue as a going concern. The accompanying condensed consolidated financial statements do not include adjustments that might be necessary if the Company is unable to continue as a going concern.

 

As of December, 31 2020 we had cash and cash equivalents on hand of $892,000 and are not generating sufficient funds to cover operations. In addition to the cash on hand, management believes we may require additional funds to continue to operate our business. Management's plan is to generate income from operations by continuing to license our technology globally through our strategic partners, including the extension or renewal of our existing global R and D, Marketing and Technology License Agreement with Desmet Ballestra Group (Desmet), agreement with Alchemy Beverages, Inc (ABI), and agreement with Enviro Watertek, LLC (EWT).

 

We may also attempt to raise additional debt and/or equity financing to fund operations and provide additional working capital. However, there is no assurance that such financing will be consummated or obtained in sufficient amounts necessary to meet the Company's needs, that the Company will be able to achieve profitable operations or that the Company will be able to meet its future contractual obligations. Should management fail to obtain such financing, the Company may curtail its operations.

 

 

 

 7 

 

 

Covid-19

 

In March 2020, the World Health Organization declared coronavirus COVID-19 a global pandemic. This contagious disease outbreak, which has continued to spread, has adversely affected workforces, customers, economies, and financial markets globally. It has also disrupted the normal operations of many businesses. This outbreak could decrease spending, adversely affect demand for the Company’s products, and harm the Company’s business and results of operations. During the six months ended December 31, 2020, the Company believes the COVID-19 pandemic did not materially impact its operating results due to the nature of the Company’s business and its operations. The Company has not observed any impairments of its assets or a significant change in the fair value of its assets due to the COVID-19 pandemic. At this time, it is not possible for the Company to predict the duration or magnitude of the adverse results of the outbreak and its effects on the Company’s business or results of operations, financial condition, or liquidity.

 

As of December 31, 2020, the Company has been following the recommendations of local health authorities to minimize exposure risk for its employees, including the temporary closure of its corporate office and having employees work remotely. Most vendors have transitioned to electronic submission of invoices and payments.

 

Principles of Consolidation

 

The condensed consolidated financial statements include the accounts of Cavitation Technologies, Inc. and its wholly owned subsidiary Hydrodynamic Technology, Inc. Inter-company transactions and balances have been eliminated in consolidation.

 

Use of Estimates

 

The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the U.S requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the financial statement date, and reported amounts of revenue and expenses during the reporting period. Significant estimates are used in allowance for bad debts, reserve for inventory obsolescence, impairment analysis for fixed assets, accrual of potential liabilities, the valuation allowance for deferred tax assets, and assumptions used in valuing our stock options, warrants, and common stock issued for services, among other items. Actual results could differ from these estimates.

 

Revenue Recognition

 

The Company follows the guidance of Accounting Standards Codification (ASC) 606, Revenue from Contracts with Customers. ASC 606 creates a five-step model that requires entities to exercise judgment when considering the terms of contracts, which includes (1) identifying the contracts or agreements with a customer, (2) identifying our performance obligations in the contract or agreement, (3) determining the transaction price, (4) allocating the transaction price to the separate performance obligations, and (5) recognizing revenue as each performance obligation is satisfied. The Company only applies the five-step model to contracts when it is probable that the Company will collect the consideration it is entitled to in exchange for the services it transfers to its clients.

 

Revenue from sale of our Nano Reactors is recognized when products are shipped from our manufacturing facilities as this is our sole performance obligation under these contracts and we have no continuing obligation to the customer.

 

The Company also recognizes revenue from its share of gross profit to be earned from distributors, as defined, which we treat as variable consideration and recognize using the most likely amount method. Estimates are available from our distributor which are considered in the determination of the most likely amount. However, given the lack of control over the sale to the end customer and the lack of history of prior sales, the amount of gross profit revenue recognized is limited to the actual amount of cash received under the contract which the Company has determined is not refundable and that a significant future reversal of cumulative revenue under the contract will not occur.

 

In addition, the Company also recognizes revenues from usage fees of certain reactors. Usage fees are recognized based on actual usage by the customer.

 

 

 

 8 

 

 

Income Taxes

 

The Company follows the asset and liability method of accounting for income taxes.  The Company recognizes deferred tax assets and liabilities to reflect the estimated future tax effects, calculated at anticipated future tax rates, of future deductible or taxable amounts attributable to events that have been recognized on a cumulative basis in the financial statements. A valuation allowance related to a deferred tax asset is recorded when it is more likely than not that some portion of the deferred tax asset will not be realized. Deferred tax assets and liabilities are adjusted for the effects of the changes in tax laws and rates of the date of enactment.

 

The Company recorded no provision for income taxes during the three and six months ended December 31, 2020 and 2019 due to available Federal net operating loss (NOL) carryforwards of approximately $9 million that are available to reduce taxable income.

 

Earnings Per Share

 

The Company’s computation of earnings per share (EPS) includes basic and diluted EPS. Basic EPS is calculated by dividing the Company’s net income available to common stockholders by the weighted average number of common shares during the period. Shares of restricted stock subject to vesting are included in basic weighted average common shares outstanding from the time they vest. Diluted EPS reflects the potential dilution, using the treasury stock method that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the net income of the Company. In computing diluted EPS, the treasury stock method assumes that outstanding options and warrants are exercised, and the proceeds are used to purchase common stock at the average market price and there were no instruments that would result in issuance of additional shares during the period.  

 

As of December 31, 2020 and 2019, the Company had 11,000,000 stock options and 87,696,511 stock warrants outstanding (and out of the money) to purchase shares of common stock that were not included in the diluted net loss per common share because their effect would be anti-dilutive.

 

Concentrations

 

Cash - cash is deposited in one financial institution. The balances held at this financial institution at times may be in excess of Federal Deposit Insurance Corporation (“FDIC”) insurance limits of up to $250,000.

 

Accounts Receivable – accounts receivable at December 31, 2020 and June 30, 2020, were all due from Desmet.

 

Accounts Payable and Accrued Expenses – three vendors accounted 54%,11% and 10% of accounts payable and accrued expenses as of December 31, 2020. Two vendors accounted 64% and 14% of accounts payable and accrued expenses as of June 30, 2020 .

 

Revenues – revenues during the three and six months period ended December 31, 2020, were all from Desmet (see Note 2). Revenues for the three months ended December 31, 2019 were all derived from EWT. During the six months ended December 31, 2019, 94% of recorded revenues, were derived from Desmet.

 

Fair Value Measurement

 

FASB Accounting Standards Codification ("ASC") 820-10 requires entities to disclose the fair value of financial instruments, both assets and liabilities recognized and not recognized on the balance sheet for which it is practicable to estimate fair value. ASC 820-10 defines the fair value of a financial instrument as the amount at which the instrument could be exchanged in a current transaction between willing parties.

 

 

 

 9 

 

 

The three levels of the fair value hierarchy are as follows:

 

  · Level 1 - Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities that the entity has the ability to access.

 

  · Level 2 - Valuations based on quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable data for substantially the full term of the assets or liabilities.

 

  · Level 3 - Valuations based on inputs that are unobservable, supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

 

At December 31, 2020 and June 30, 2020, the fair values of cash and cash equivalents, accounts receivable, inventory and accounts payable and accrued expenses approximate their carrying values due to their short-term nature.

  

Segments

 

The Company operates in one segment, its nano reactor technology business.  In accordance with the “Segment Reporting” Topic of the ASC, the Company’s chief operating decision maker has been identified as the Chief Executive Officer and President, who reviews operating results to make decisions about allocating resources and assessing performance for the entire Company. Existing guidance, which is based on a management approach to segment reporting, establishes requirements to report selected segment information quarterly and to report annually entity-wide disclosures about products and services, major customers, and the countries in which the entity holds material assets and reports revenue. All material operating units qualify for aggregation under “Segment Reporting” due to their similar customer base and similarities in: economic characteristics; nature of products and services; and procurement, manufacturing and distribution processes. Since the Company operates in one segment, all financial information required by “Segment Reporting” can be found in the accompanying consolidated financial statements.

 

Recent Accounting Pronouncements

 

In June 2016, the FASB issued ASU No. 2016-13, Credit Losses - Measurement of Credit Losses on Financial Instruments (“ASC 326”). ASU 2016-13 requires entities to use a forward-looking approach based on current expected credit losses (“CECL”) to estimate credit losses on certain types of financial instruments, including trade receivables. This may result in the earlier recognition of allowances for losses. ASU 2016-13 is effective for the Company beginning January 1, 2023, and early adoption is permitted. The Company does not believe the potential impact of the new guidance and related codification improvements will be material to its financial position, results of operations and cash flows.

 

Other recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the Securities and Exchange Commission did not or are not believed by management to have a material impact on the Company's present or future consolidated financial statements.

 

Note 2 – Contracts with Customers

 

Desmet Ballestra Agreement

 

In October 2018, we signed a three-year global R and D, Marketing and Technology License Agreement with Desmet Ballestra Group NV (Desmet) for the sale and licensing of our reactors. This agreement is a continuation of an original agreement we signed with Desmet in 2012, and amended in 2016. As part of the October 2018 agreement, Desmet agreed to provide us monthly advances of $50,000 through October 1, 2022 to be applied against gross profit share from future sales.

 

 

 

 10 

 

 

The Company recognizes revenue from sale of reactors upon shipment and acceptance by Desmet, as the Company has no further obligations to Desmet other than the reactor’s two-year standard warranty. In accordance with ASC 606, the Company recognizes the revenue from the sale of reactors at the time of shipment of the Nano reactor hardware as such shipment is deemed to be the Company’s only performance obligation and the Company has no more continuing obligation. Desmet pays for such reactors on credit terms and the amount of the sale is recorded as a receivable upon acceptance by Desmet.

 

The Company also receives a share in gross profit, as defined, from the sale of Desmet’s integrated neutralization system to its customers of which the reactors are an integral component. Such amount is subject to adjustment based on certain factors including cost overruns. The Company has no control with regards to the sale and installation of Nano Reactor® and CTi Nano Neutralization® System, between Desmet and the end customer. In accordance with ASC 606, the Company has determined that the gross profit to be earned from Desmet is variable consideration, and evaluates the amount of the potential payments and the likelihood that the payments will be received using the most likely amount approach (subject to the variable consideration constraint). Estimates are available from our distributor which are considered in the determination of the most likely amount. However, given the lack of control over the sale to the end customer and the lack of history of prior sales, the Company considered these as variable revenue constraints, and as such, the amount of gross profit share revenue recognized is limited to the actual amount of cash received under the contract which the Company has determined is not refundable and probable that a significant revenue reversal would not occur. Further, the Company has not been able to develop an expectation of the actual collection based on its historical experience.

  

During the three months ended December 31, 2020, the Company recorded sales of $36,000 from Nano Reactor® sales and $36,000 from gross profit share for a total revenue of $72,000 from Desmet. There were no revenues recognized from Desmet for the three months ended December 31, 2019.

 

During the six months ended December 31, 2020, the Company recorded sales of $276,000 from Nano Reactor® sales and $213,000 from gross profit share for a total revenue of $489,000 from Desmet. During the six months ended December 31, 2019, the Company recorded sales of $207,000 from Nano Reactor® sales and $144,000 from gross profit share for a total revenue of $351,000 from Desmet.

 

As of December 31, 2020 and June 30, 2020 and 2019, accounts receivable from Desmet related to the sale of Nano Reactor®  amounted to $34,000 and $104,000, respectively.

 

As of December 31, 2020 and June 30, 2020, advances received from Desmet related to the Company’s share in gross profit amounted to $506,000 and $368,000, respectively. These advances will only be recognized as revenues once the condition for revenue recognition have been met.

 

Enviro Watertek, LLC Agreement

 

In April 2019, we entered into a licensing and service contract agreement with Enviro Watertek, LLC (“EWT”). This agreement covers our industrial treatment of produced and frack water. Our agreement with EWT provides for sales of Nano Reactors® plus recurring revenue stream based on processing frack water volumes and utilization over a 15 year term but can be terminated by either party every anniversary.

 

There was no sale of reactors or usage fees earned during the three and six months ended December 31, 2020. During the three and six months ended December 31, 2019, the Company recorded revenues of $25,000 from the usage of reactors previously sold to EWT in fiscal 2020.

 

Note 3 – Operating Lease

 

The Company leases certain warehouse and corporate office space under operating lease agreement. We determine if an arrangement is a lease at inception. Lease assets are presented as operating lease right-of-use assets and the related liabilities are presented as lease liabilities in our consolidated balance sheets.

 

 

 

 11 

 

 

Operating lease right-of-use (“ROU”) assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Generally, the implicit rate of interest in lease arrangements is not readily determinable and the Company utilizes its incremental borrowing rate in determining the present value of lease payments. The Company’s incremental borrowing rate is a hypothetical rate based on its understanding of what its credit rating would be. The operating lease ROU asset includes any lease payments made and excludes lease incentives.

 

The components of lease expense and supplemental cash flow information related to leases for the period are as follows:

 

  

Six Months Ended

December 31,

2020

 
Lease cost     
Operating lease cost (included in general and administrative in the Company’s unaudited condensed consolidated statements of operations)  $37,000 
      
Other information     
Cash paid for amounts included in the measurement of lease liabilities  $35,000 
Weighted average remaining lease term – operating leases (in years)   3.6 
Average discount rate – operating leases   4% 

 

Maturity of the Company’s lease liabilities are as follows:

  

At December 31,

2020

 
     
Operating leases     
Long-term right-of-use assets  $277,000 
      
Short-term operating lease liabilities  $55,000 
Long-term operating lease liabilities   228,000 
Total operating lease liabilities  $283,000 

 

Year ending June 30   Operating Lease 
      
2021(remaining 6 months)   $36,000 
2022    72,000 
2023    75,000 
2024    78,000 
2025 and thereafter    47,000 
Total lease payments    308,000 
Less: Imputed interest/present value discount    (25,000)
Present value of lease liabilities   $283,000 

 

 

 

 12 

 

 

Note 4 – Related Party Transactions

 

Accrued Payroll and Payroll Taxes Due to Officers

 

In prior periods, the Company accrued salaries and estimated payroll taxes due to current and former officers of the Company. As of December 31, 2020 and June 30, 2020, total accrued payroll and payroll taxes-related parties amounted to $667,000 and $693,000, respectively.

 

Note 5 – Notes Payable

 

   December 31, 2020   June 30, 2020 
Note Payable - PPP  $104,000   $104,000 
Note Payable - EIDL   150,000     
Total  $254,000   $104,000 

 

A.On April 16, 2020, the Company received loan proceeds in the amount of $104,000 pursuant to the Paycheck Protection Program (“PPP”) under the Coronavirus Aid, Relief and Economic Security Act (the “Cares Act”), which was enacted on March 27, 2020. The note is scheduled to mature in April 2022 and has a 1% interest rate and is subject to the terms and conditions applicable to loans administered by the Small Business Administration (SBA) under the CARES Act. The Company applied ASC 470, Debt, to account for the PPP loan. The loan and accrued interest are forgivable as long as the Company uses the loan proceeds for eligible purposes, including payroll, benefits, rent and utilities, and maintains its payroll levels. Forgiveness of the note is only available for principal that is used for the limited purposes that qualify for forgiveness under SBA requirements, and that to obtain forgiveness, the Company must request it and must provide documentation in accordance with the SBA requirements, and certify that the amounts the Company is requesting to be forgiven qualify under those requirements. The Company also understands that it shall remain responsible under the note for any amounts not forgiven, and that interest payable under the note will not be forgiven but that the SBA may pay the loan interest on forgiven amounts.
   
  As of December 31, 2020 and June 30, 2020, the outstanding balance of the note payable amounted to $104,000. The Company is currently in the process of applying for forgiveness of the entire PPP loan with respect to these qualifying expenses, however, the Company cannot assure that such forgiveness of any portion of the PPP loan will occur. As for the potential loan forgiveness, once the PPP loan is, in part or wholly, forgiven and a legal release is received, the liability would be reduced by the amount forgiven and a gain on extinguishment would be recorded.

 

B.In July 2020, the Company received a loan of $150,000 from the Small Business Association 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 December 31, 2020, the outstanding balance of the note payable amounted to $150,000.

 

 

 

 13 

 

 

Note 6 - Stockholders' Deficit

 

Stock Options

 

The Company has not adopted a formal stock option plan. However, it has assumed outstanding stock options resulting from the acquisition of its wholly-owned subsidiary, Hydrodynamic Technology, Inc. In addition, the Company has made periodic non- plan grants. A summary of the stock option activity during the six months ended December 31, 2020 is as follows:

 

   Options  

Weighted-

Average

Exercise

Price

  

Weighted-

Average

Remaining

Contractual

Life

(Years)

 
             
Outstanding at June 30, 2020   11,000,000   $0.03    6.07 
- Granted            
- Forfeited            
- Exercised            
- Expired            
Outstanding at December 31, 2020, vested and exercisable   11,000,000   $0.03    5.57 

 

There was no intrinsic value of the outstanding options as of December 31, 2020 as the exercise price of these options were greater than the market price. The following table summarizes additional information concerning options outstanding and exercisable at December 31, 2020.

 

      Options Outstanding    Options Exercisable 
 

Exercise

Price

    

Number

of Shares

    

Weighted

Average

Remaining

Life (Years)

    

Weighted

Average

Exercise

Price

    

Number

of Shares

    

Weighted

Average

Remaining

Life (Years)

 
                            
$0.03    11,000,000    5.57   $0.03    11,000,000    5.57 

 

 

 

 14 

 

 

Stock Warrants

 

A summary of the Company's warrant activity and related information for the six months ended on December 31, 2020 is as follows:

 

Warrants 

Number

of Shares

  

Weighted-

Average

Exercise

Price

  

Weighted-

Average

Remaining

Contractual

Life

(Years)

 
             
Outstanding at June 30, 2020   87,696,511   $0.07    5.64 
Granted              
Exercised              
Expired              
Outstanding at December 31, 2020 vested and exercisable   87,696,511   $0.07    5.14 

 

There was no intrinsic value of the outstanding warrants as of December 31, 2020 as the exercise price of these warrants were greater than the market price. The following table summarizes additional information concerning warrants outstanding and exercisable at December 31, 2020.

 

    Warrants Outstanding   Warrants Exercisable 

Weighted

Average

Exercise

Price

  

Number

of Shares

  

Weighted

Average

Remaining

Life (Years)

  

Weighted

Average

Exercise

Price

  

Number

of Shares

  

Weighted

Average

Remaining

Life (Years)

 
                      
$$0.03 - 0.05    68,736,518    7.3   $0.03 - 0.05    68,736,518    7.3 
$0.12    18,959,993    2.9   $0.12    18,959,993    2.9 
      87,696,511              87,696,511      

 

Note 7 - Commitments and Contingencies

 

Royalty Agreements

 

On July 1, 2008, our wholly owned subsidiary entered into Patent Assignment Agreements with two parties, our President and Technology Development Supervisor, where certain devices and methods involved in the hydrodynamic cavitation processes invented by the President and the Technology Development Supervisor have been assigned to the Subsidiary. In exchange, the Subsidiary agreed to pay a royalty of 5% of gross revenues to each of the President and Technology Development Supervisor for licensing of the technology and leasing of the related equipment embodying the technology. These agreements were subsequently assumed by Cavitation Technologies on May 13, 2010 from its subsidiary. The Company's President and Global Technology Manager both waived their rights to receive royalty payments that have accrued, or that may accrue, on any gross revenue generated through December 31, 2020 and in the foreseeable future.

 

On April 30, 2008 and as amended on November 22, 2010, our wholly owned subsidiary entered into an employment agreement with our former Director of Chemical and Analytical Department (the "Inventor") to receive an amount equal to 5% of actual gross royalties received from the royalty stream in the first year in which the Company receives royalty payments from the patent which the Inventor was the legally named inventor, and 3% of actual gross royalties received by the Company resulting from the patent in each subsequent year. As of December 31, 2020, no patents have been granted in which this person is the legally named inventor.

 

 

 

 15 

 

 

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 statements based upon current expectations that involve risks and uncertainties, such as its plans, objectives, expectations and intentions. 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 are engaged in manufacturing our Nano-Reactors, which are designed to help refine vegetable oils, biodiesel transesterification and treatment of produced and frack water. Our near-term goal is to continue to sell our systems through our partners, Desmet Ballestra, EWT.

 

During the past several years we have developed a number of new applications utilizing the core principal of our technology. Our low pressure non-reactors (LPN) can be utilized in multiple industries that process large volumes of fluids and we anticipate accelerated commercial sales in our fiscal 2021. Further, we have miniaturized our non-reactors to be utilized in various consumer oriented products, such as, processing and enhancing spirits and wines, drinking water with infusion of vitamins, minerals and cannabidiol (CBD) oil.

 

We have agreements to license our technology globally through our strategic partners, Desmet Ballestra Group (Desmet) and Enviro Watertek, LLC (EWT) and Alchemy Beverages, Inc (ABI). Desmet have been providing monthly advances of $50,000. We may need additional funding, and may attempt to raise additional debt and/or equity financing to fund operations and additional working capital. However, there is no assurance that we will be successful in obtaining such financing or obtained sufficient amounts necessary to meet our business needs, or that we will be able to meet our future contractual obligations.

 

In March 2020 the World Health Organization declared coronavirus COVID-19 a global pandemic. This contagious disease outbreak, which has continued to spread, has adversely affected workforces, customers, economies, and financial markets globally. It has also disrupted the normal operations of many businesses, including ours. This outbreak could decrease spending, adversely affect demand for our product and harm our business and results of operations. It is not possible for us to predict the duration or magnitude of the adverse results of the outbreak and its effects on our business or results of operations at this time. 

 

 

 

 16 

 

 

Results of Operations

 

Results of Operations for the Three Months Ended December 31, 2020 Compared to the Three Months Ended December 31, 2019

 

The following is a comparison of our results of operations for the three months ended December 31, 2020 and 2019.

 

   For the Three Months Ended         
   December 31,         
   2020   2019   $ Change   % Change 
                 
Revenue  $72,000   $25,000   $47,000    188  % 
Cost of revenue   2,000        2,000    100  % 
Gross profit   70,000    25,000    45,000    180  % 
                     
General and administrative expenses   283,000    575,000    (292,000)   (51) % 
Research and development expenses   5,000    4,000    1,000    25  % 
Total operating expenses   288,000    579,000    (291,000)   (50) % 
Interest expense   3,000        3,000    100  % 
Net loss  $(221,000)  $(554,000)  $333,000    60  % 

 

Revenue

 

The Company generates revenues from the sale of the Nano Reactor® to customers/distributor as well as share in gross profit from the sale of such reactors by our distributors to their customers.

 

During the three months ended December 31, 2020, we recorded $36,000 in revenue from sale of reactors to our distributor Desmet pursuant to four purchase orders and corresponding share in gross profit of 36,000 for a total of $72,000.

 

During the three months ended December 31, 2019, the Company recognized usage fees revenues of $25,000 from Enviro Watertek, LLC.  There was no reactors sold or gross profit recognized.

 

Cost of Revenue

 

During the three months ended December 31, 2020, our cost of sales amounted to $2,000 and to $0 during the same period in prior year, which was the result of the revenue transactions described above.

 

Operating Expenses

 

Operating expenses for the three months ended December 31, 2020 amounted to $283,000 compared with $575,000 for the same period in 2019, a decrease of $292,000 or 51%. The decrease was mainly due to decrease in stock compensation expense of approximately $194,000 and payroll of $26,000.

 

 

 

 17 

 

 

Research and development (R&D) expenses remain low and it is our intention to pursue R&D as our cash position improves.

 

Interest Expense

 

During the three months ended December 31, 2020, the Company recognized interest expense of $3,000 pursuant to the terms of our outstanding notes payable. There was no interest expense recognized in prior period as there were no outstanding notes payable

 

 

Results of Operations for the Six Months Ended December 31, 2020 Compared to the Six Months Ended December 31, 2019

 

The following is a comparison of our results of operations for the six months ended December 31, 2020 and 2019.

 

   For the Six Months Ended         
   December 31,         
   2020   2019   $ Change   % Change 
                 
Revenue  $489,000   $376,000   $113,000    30  % 
Cost of revenue   12,000    11,000    1,000    9  % 
Gross profit   477,000    364,000    113,000    31  % 
                     
General and administrative expenses   593,000    874,000    (281,000)   (32) % 
Research and development expenses   11,000    6,000    5,000    83  % 
Total operating expenses   604,000    880,000    (276,000)   (31) % 
Interest expense   3,000        3,000    100  % 
Net loss  $(130,000)  $(516,000)  $386,000    75  % 

 

Revenue

 

The Company generates revenues from the sale of the Nano Reactor® to customers/distributor as well as share in gross profit from the sale of such reactors by our distributors to their customers. 

 

During the six months ended December 31, 2020, the Company recognized revenues of $277,000 from sale of reactors and $212,000 from share in gross profit to Desmet for a total revenues of $489,000

 

During the six months ended December 31, 2019 the Company recognized revenues of $351,000 from reactor sales to Desmet and usage fee of $25,000 from Enviro Watertek for the use of reactors for a total revenues of $376,000.

 

Cost of Revenue

 

During the six months ended December 31, 2020, our cost of sales amounted to $12,000 and to $11,000 during the same period in prior year, which was the result of the revenue transactions described above.

 

 

 

 18 

 

 

Operating Expenses

 

Operating expenses for the six months ended December 31, 2020 amounted to $604000 compared with $880,000 for the same period in 2019, a decrease of $276,000 or 31%. The decrease was mainly due to decrease in stock compensation expense of approximately $194,000 and payroll of $52,000.

 

Research and development (R&D) expenses remained low and it is our intention to pursue R&D as our cash position permits.

 

Liquidity and Capital Resource

 

During the six months ended December 31, 2020 the Company incurred a net loss of $130,000, had a working capital deficiency of $613,000 and a stockholders' deficit of $620,000 as of December 31, 2020. 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. In addition, the Company’s independent registered public accounting firm, in its report on the Company’s June 30, 2020 financial statements, has expressed substantial doubt about the Company’s ability to continue as a going concern.

 

As of December 31, 2020, we had cash and cash equivalents on hand of $892,000 and are not generating sufficient revenues to fund operations. In addition, management believes we may require additional funds to continue to operate our business. Management's plan is to generate income from operations by continuing to license our technology globally through our strategic partners, Desmet Ballestra Group (Desmet), Enviro Watertek (EWT), and Alchemy Beverages, Inc. (ABI). Desmet has been providing us monthly advances of $50,000 and will continue through October 1, 2022 to be applied against gross profit share from future sales.

 

We may also attempt to raise additional debt and/or equity financing to fund operations and provide additional working capital. However, there is no assurance that such financing will be consummated or obtained in sufficient amounts necessary to meet the Company's needs, that the Company will be able to achieve profitable operations or that the Company will be able to meet its future contractual obligations. Should management fail to obtain such financing, the Company may curtail its operations.

 

Cash Flow

 

Net cash generated from operating activities during the six months ended December 31, 2020 amounted to $108,000 compared to net cash used in operating activities of $88,000 for the same period in fiscal 2020.

 

Critical Accounting Policies

 

Use of Estimates

 

The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the U.S requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the financial statement date and reported amounts of revenue and expenses during the reporting period. Significant estimates are used for allowance for doubtful accounts, reserve for inventory obsolescence, impairment analysis for property and equipment, accrual of potential liabilities, valuation allowance for deferred tax assets, and assumption in valuing our stock options, warrants, and common stock issued for services, among other items. Actual results could differ from these estimates.

 

 

 

 19 

 

 

Revenue Recognition

 

The Company follows the guidance of Accounting Standards Codification (ASC) 606, Revenue from Contracts with Customers. ASC 606 creates a five-step model that requires entities to exercise judgment when considering the terms of contracts, which includes (1) identifying the contracts or agreements with a customer, (2) identifying our performance obligations in the contract or agreement, (3) determining the transaction price, (4) allocating the transaction price to the separate performance obligations, and (5) recognizing revenue as each performance obligation is satisfied. The Company only applies the five-step model to contracts when it is probable that the Company will collect the consideration it is entitled to in exchange for the services it transfers to its clients.

 

Revenue from sale of our Nano Reactors is recognized when products are shipped from our manufacturing facilities as this is our sole performance obligation under these contracts and we have no continuing obligation to the customer.

 

The Company also recognizes revenue from its share of gross profit to be earned from distributors, as defined, which we treat as variable consideration and recognize using the most likely amount method. Estimates are available from our distributor which are considered in the determination of the most likely amount. However, given the lack of control over the sale to the end customer and the lack of history of prior sales, the amount of gross profit revenue recognized is limited to the actual amount of cash received under the contract which the Company has determined is not refundable and that a significant future reversal of cumulative revenue under the contract will not occur.

 

In addition, the Company also recognizes revenues from usage fees of certain reactors. Usage fees are recognized based on actual usage by the customer.

 

Recently Issued Accounting Standards

 

See Note 1 of the Condensed Consolidated Financial Statements for a discussion of recently issued accounting standards.

 

ITEM 3.  Quantitative and Qualitative Disclosures about Market Risk.

 

Not applicable for smaller reporting companies.

 

ITEM 4.  Controls and Procedures

 

Evaluation of Disclosure Controls and Procedures

 

In accordance with rule 13a-15(a), CTi management must maintain disclosure controls and procedures as defined in Rule 13a-15(e) of the Securities and Exchange Act of 1934, or the Exchange Act, to provide reasonable assurance that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission rules and forms, and accumulated and communicated to the Company's management, including its principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.

 

In accordance with Rule 13a-15(b) and (c), management must also evaluate the effectiveness of these disclosure control and procedures at the end of each fiscal year. As of December 31, 2020, the Company carried out an evaluation, under the supervision and with the participation of its principal executive officer and principal financial officer, of the effectiveness of the design and operation of the Company's disclosure controls and procedures. Based upon that evaluation, the Company's principal executive officer and principal financial officer concluded that these disclosure controls and procedures were not effective as of December 31, 2020.

 

Changes in Internal Control over Financial Reporting

 

There were no changes in internal control over financial reporting during the second quarter of fiscal 2021 that have materially affected or are reasonably likely to materially affect the company's internal control over financial reporting.

 

 

 

 20 

 

 

PART II - OTHER INFORMATION

 

Item 1  Legal Proceedings

 

We know of no material, existing or pending legal proceeding against our Company, nor are we involved as a plaintiff in any material proceeding or pending litigation. There are no proceedings in which any of our directors, officers or affiliates, or any registered or beneficial shareholder, is an adverse party or has a material interest adverse to our interest.

 

Item 2  Unregistered Sales of Equity Securities and Use of Proceeds

 

None

 

Item 3 - Defaults Upon Senior Securities

 

None

 

Item 4 - Mine Safety Disclosures

 

None

 

Item 5 - Other Information

 

None

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 21 

 

 

Item 6 - EXHIBITS, FINANCIAL STATEMENT SCHEDULES

 

      Incorporated by Reference
Exhibit   Filed        
Number Exhibit Description Herewith Form Pd. Ending Exhibit Filing Date
             
3(i)(a) Articles of Incorporation - original name of Bioenergy, Inc.   SB-2 N/A 3.1 October 19, 2006
3(i)(b) Articles of Incorporation - Amended and Restated   10-Q December 31, 2008 3-1 February 17, 2009
3(i)(c) Articles of Incorporation - Amended and Restated   10-Q June 30, 2009 3-1 May 14, 2009
3(i)(d) Articles of Incorporation - Amended; increase in authorized shares   8-K N/A N/A October 29, 2009
3(i)(e) Articles of Incorporation - Certificate of Amendment; forward split   10-Q December 31, 2009 3-1 November 16, 2009
             
10.1 Patent Assignment Agreement between the Company and Roman Gordon dated July 1, 2008.   8-K June 30, 2009 10.1 May 18, 2010
10.2 Patent Assignment Agreement between the Company and Igor Gorodnitsky dated July 1, 2008.   8-K June 30, 2009 10.2 May 18, 2010
10.3 Assignment of Patent Assignment Agreement between the Company and Roman Gordon   8-K June 30, 2009 10.3 May 18, 2010
10.4 Assignment of Patent Assignment Agreement between the Company and Igor Gorodnitsky   8-K June 30, 2009 10.4 May 18, 2010
10.5 Employment Agreement between the Company and Roman Gordon date March 17, 2008   10K/A June 30, 2009 10.3 October 20, 2011
10.6 Employment Agreement between the Company and Igor Gorodnitsky dated March 17, 2008   10K/A June 30, 2009 10.4 October 20, 2011
10.7 Employment and Confidentiality and Invention Assignment Agreement between the Company and Varvara Grichko dated April 30, 2008   10-Q December 31, 2010 10.3 February 11, 2011
10.8 Board of Director Agreement - James Fuller   10-Q December 31, 2011 10.12 October 20, 2011
10.9 Technology and License Agreement with Desmet Ballestra dated 14 May 2012   10-K June 30, 2012 10.1 October 15, 2012
10.10 Short Term Loan Agreement - CEO    10-K June 30, 2012 10.11 October 15, 2012
10.11 Loan Agreement - Desmet Ballestra - Oct. 26, 2010          
             
14.1 Code of Business Conduct and Ethics*   10-K June 30, 2011 14.1 September 28, 2011
31.1 Certificate of Principal Executive Officer pursuant to Section 302 of Sarbanes-Oxley Act of 2002 X        
31.2 Certificate of Principal Financial Officer pursuant to Section 302 of Sarbanes-Oxley Act of 2002 X        
32.1 Certification of Principal Executive Officer pursuant to 18 U.S.C Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. X        
32.2 Certification of Principal Financial Officer pursuant to 18 U.S.C Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. X        
             
101.INS XBRL Instance Document X        
101.SCH XBRL Taxonomy Extension Schema X        
101.CAL XBRL Taxonomy Extension Calculation Linkbase X        
101.DEF XBRL Taxonomy Extension Definition Linkbase X        
101.LAB XBRL Taxonomy Extension Label Linkbase X        
101.PRE XBRL Taxonomy Extension Presentation Linkbase X        
             
* In accordance with Regulation S-K 406 of the Securities Act of 1934, we undertake to provide to any person          
  without charge, upon request, a copy of our "Code of Business Conduct and Ethics". A copy may be requested           
  by sending an email to info@cavitationtechnologies.com.          

 

 

 

 22 

 

 

SIGNATURES

 

Pursuant to the requirements of the securities Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

SIGNATURE   TITLE   DATE
         
/s/ Igor Gorodnitsky   President; Member of Board of Directors   February 19, 2021
Igor Gorodnitsky   (Principal Executive Officer)    
         
/s/ N. Voloshin   Chief Financial Officer   February 19, 2021
N. Voloshin    (Principal Financial Officer)    
         
/s/ Jim Fuller   Audit Committee Chairman, Independent Financial Expert   February 19, 2021
Jim Fuller        

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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