# EDGAR Filing Document

**Accession Number:** 0001376793
**File Stem:** 0001683168-23-000731
**Filing Date:** 2023-2
**Character Count:** 84577
**Document Hash:** 5c8e3ff413be37efe683989a1d63657a
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001683168-23-000731.hdr.sgml**: 20230210

**ACCESSION NUMBER**: 0001683168-23-000731

**CONFORMED SUBMISSION TYPE**: 10-Q

**PUBLIC DOCUMENT COUNT**: 51

**CONFORMED PERIOD OF REPORT**: 20221231

**FILED AS OF DATE**: 20230210

**DATE AS OF CHANGE**: 20230210

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** Cavitation Technologies, Inc.
- **CENTRAL INDEX KEY:** 0001376793
- **STANDARD INDUSTRIAL CLASSIFICATION:** AGRICULTURE SERVICES [0700]
- **IRS NUMBER:** 204907818
- **FISCAL YEAR END:** 0630

**FILING VALUES:**
- **FORM TYPE:** 10-Q
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 000-53239
- **FILM NUMBER:** 23609727

**BUSINESS ADDRESS:**
- **STREET 1:** 10019 CANOGA AVENUE
- **CITY:** CHATSWORTH,
- **STATE:** CA
- **ZIP:** 91311
- **BUSINESS PHONE:** 818-718-0905

**MAIL ADDRESS:**
- **STREET 1:** 10019 CANOGA AVENUE
- **CITY:** CHATSWORTH,
- **STATE:** CA
- **ZIP:** 91311

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** Bioenergy Inc.
- **DATE OF NAME CHANGE:** 20060927

?xml version="1.0" encoding="utf-8"?

[**Table of Contents**](#q2_001)

**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** 

**☐**&nbsp;&nbsp;&nbsp;&nbsp; **TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**

**For the quarterly period ended December 31, 2022**

**<u>Commission File Number: 000-53239</u>**

**Cavitation Technologies, Inc.** 

 *(Exact name of Registrant as Specified in its Charter)*

---

| | |
|:---|:---|
| **<u>Nevada</u>** | **<u>20-4907818</u>** |
| *(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)*

**<u>(818) 718-0905</u>**

 *(Registrant's Telephone Number, Including Area Code)*

Securities registered pursuant to Section 12(b) of the Act:

Title of each class <u>Trading Symbol</u> <u>Name of each exchange on which registered</u> <br>      

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 ☒ &nbsp;&nbsp;&nbsp;&nbsp; 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 ☒ &nbsp;&nbsp;&nbsp;&nbsp;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 ☐ <br> Non-accelerated Filer ☒ Small reporting company ☒ <br> 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 ☐ &nbsp;&nbsp;&nbsp;&nbsp; No ☒

As of February 7, 2023, the issuer had 276,698,831 shares of common stock outstanding.

**TABLE OF CONTENTS**

---

| | | |
|:---|:---|:---|
|  |  | **<u>Page</u>** |
| PART I. | [FINANCIAL INFORMATION](#q2_002) | 3 |
| Item 1. | [Condensed Consolidated Financial Statements (unaudited)](#q2_003) | 3 |
|  | [Condensed Consolidated Balance Sheets](#q2_008) | 3 |
|  | [Condensed Consolidated Statements of Operations](#q2_009) | 4 |
|  | [Condensed Consolidated Statement of Stockholders' Equity](#q2_010) | 5 |
|  | [Condensed Consolidated Statements of Cash Flows](#q2_011) | 6 |
|  | [Notes to Condensed Consolidated Financial Statements](#q2_012) | 7 |
| Item 2. | [Management's Discussion and Analysis of Financial Condition and Results of Operations](#q2_013) | 17 |
| Item 3. | [Quantitative and Qualitative Disclosures About Market Risk](#q2_014) | 22 |
| Item 4. | [Controls and Procedures](#q2_015) | 22 |
| PART II | [OTHER INFORMATION](#q2_016) | 23 |
| Item 1. | [Legal Proceedings](#q2_017) | 23 |
| Item 2. | [Unregistered Sales of Equity Securities and Use of Proceeds](#q2_018) | 23 |
| Item 3. | [Defaults Upon Senior Securities](#q2_019) | 23 |
| Item 4. | [Mine Safety Disclosure](#q2_020) | 23 |
| Item 5. | [Other Information](#q2_021) | 23 |
| Item 6. | [Exhibits](#q2_022) | 24 |
| [Signatures](#q2_023) | [Signatures](#q2_023) | 25 |
| [Certifications](cavitation_ex3101.htm) | [Certifications](cavitation_ex3101.htm) |  |

---

**PART I - FINANCIAL INFORMATION**

**ITEM 1 - Condensed Consolidated Financial Statements**

**CAVITATION TECHNOLOGIES, INC.**

**CONDENSED CONSOLIDATED BALANCE SHEETS**

---

| | | |
|:---|:---|:---|
|  | **December 31,**<br>**2022** | **June 30,**<br>**2022** |
|  | **(unaudited)** |  |
| **ASSETS** |  |  |
| Current assets: |  |  |
| &nbsp;&nbsp;&nbsp;Cash and cash equivalents | $343000 | $441000 |
| &nbsp;&nbsp;&nbsp;Accounts receivable |  | 1000 |
| &nbsp;&nbsp;&nbsp;Inventory | 48000 | 48000 |
| &nbsp;&nbsp;&nbsp;Prepaid expenses | – | 38000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total current assets | 391000 | 528000 |
| Property and equipment, net | 3000 | 4000 |
| Equity method investment | 1120000 | 1149000 |
| Operating lease right of use asset, net | 147000 | 180000 |
| Other assets | 10000 | 10000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total assets | $1671000 | $1871000 |
| **LIABILITIES AND STOCKHOLDERS' EQUITY** |  |  |
| Current liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;Accounts payable and accrued expenses | $164000 | $135000 |
| &nbsp;&nbsp;&nbsp;Accrued payroll and payroll taxes due to officers | 280000 | 280000 |
| &nbsp;&nbsp;&nbsp;Operating lease liability, current portion | 63000 | 63000 |
| &nbsp;&nbsp;&nbsp;Advances from distributor | 257000 | 80000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total current liabilities | 764000 | 558000 |
| Notes payable, non-current | 150000 | 150000 |
| Operating lease liability, non-current portion | 93000 | 127000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total liabilities | 1007000 | 835000 |
| Commitments and contingencies | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**–** | **–** |
| Stockholders' equity: |  |  |
| &nbsp;&nbsp;&nbsp;Preferred stock, $0.001 par value, 10,000,000 shares authorized, no shares issued and outstanding as of December 31, 2022 and June 30, 2022, respectively |  |  |
| &nbsp;&nbsp;&nbsp;Common stock, $0.001 par value, 1,000,000,000 shares authorized, 276,698,831shares issued and outstanding as of December 31, 2022 and June 30, 2022 | 277000 | 277000 |
| &nbsp;&nbsp;&nbsp;Additional paid-in capital | 26005000 | 26005000 |
| &nbsp;&nbsp;&nbsp;Accumulated deficit | (25618000) | (25246000) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total stockholders' equity | 664000 | 1036000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total liabilities and stockholders' equity | $1671000 | $1871000 |

---

See accompanying notes to the condensed consolidated financial statements

**CAVITATION TECHNOLOGIES, INC.**

**CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)** 

**AS OF DECEMBER 31, 2022 AND 2021**

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **For the Three Months Ended** | **For the Three Months Ended** | **For the Six Months Ended** | **For the Six Months Ended** |
|  | **December 31,** | **December 31,** | **December 31,** | **December 31,** |
|  | **2022** | **2021** | **2022** | **2021** |
|  | **(unaudited)** | **(unaudited)** | **(unaudited)** | **(unaudited)** |
| Revenue | $58000 | $109000 | $303000 | $660000 |
| Revenue from joint venture | – | 4000 | 17000 | 4000 |
| Total revenue | 58000 | 113000 | 320000 | 664000 |
| Cost of revenue | (13000) | (3000) | (62000) | (26000) |
| Cost of revenue – related party | – | – | – | – |
| Gross profit | 45000 | 110000 | 258000 | 638000 |
| General and administrative expenses | 332000 | 546000 | 598000 | 852000 |
| Research and development expenses | – | 2000 | – | 2000 |
| Total operating expenses | 332000 | 548000 | 598000 | 854000 |
| Loss from operations | (287000) | (438000) | (340000) | (216000) |
| Other income (expense) |  |  |  |  |
| Gain on forgiveness of PPP note payable |  |  |  | 104000 |
| Loss from equity method investment | (11000) |  | (29000) |  |
| Interest expense | (1000) | (1000) | (3000) | (3000) |
| Net Loss | $(299000) | $(439000) | $(372000) | $(115000) |
| Net Loss per share, |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Basic and diluted | $(0.00) | $(0.00) | $(0.00) | $(0.00) |
| Weighted average shares outstanding, |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Basic and diluted | 276698831 | 232704916 | 276698831 | 225805937 |

---

See accompanying notes to the condensed consolidated financial statements

**CAVITATION TECHNOLOGIES, INC.**

**CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (Unaudited) AS OF DECEMBER 31, 2022 AND 2021**

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Three Months Ended December 31, 2022 (unaudited)** | **Three Months Ended December 31, 2022 (unaudited)** | **Three Months Ended December 31, 2022 (unaudited)** | **Three Months Ended December 31, 2022 (unaudited)** | **Three Months Ended December 31, 2022 (unaudited)** |
|  | **Common Stock** | **Common Stock** | | | |
|  | **Shares** | **Amount** | **Additional**<br> **Paid-in**<br>**Capital** | **Accumulated**<br>**Deficit** |<br>**Total** |
| Balance at September 30, 2022 | 276698831 | $277000 | $26005000 | $(25319000) | $963000 |
| &nbsp;&nbsp;&nbsp;Net loss | – | – | – | (299000) | (299000) |
| Balance at December 31, 2022 | 276698831 | $277000 | $26005000 | $(25618000) | $664000 |

---

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Six Months Ended December 31, 2022 (unaudited)** | **Six Months Ended December 31, 2022 (unaudited)** | **Six Months Ended December 31, 2022 (unaudited)** | **Six Months Ended December 31, 2022 (unaudited)** | **Six Months Ended December 31, 2022 (unaudited)** |
|  | **Common Stock** | **Common Stock** | | | |
|  | **Shares** | **Amount** | **Additional**<br> **Paid-in**<br>**Capital** | **Accumulated**<br>**Deficit** |<br>**Total** |
| Balance at June 30, 2022 | 276698831 | $277000 | $26005000 | $(25246000) | $1036000 |
| &nbsp;&nbsp;&nbsp;Net loss | – | – | – | (372000) | (372000) |
| Balance at December 31, 2022 | 276698831 | $277000 | $26005000 | $(25618000) | $664000 |

---

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Three Months Ended December 31, 2021 (unaudited)** | **Three Months Ended December 31, 2021 (unaudited)** | **Three Months Ended December 31, 2021 (unaudited)** | **Three Months Ended December 31, 2021 (unaudited)** | **Three Months Ended December 31, 2021 (unaudited)** |
|  | **Common Stock** | **Common Stock** | | | |
|  | **Shares** | **Amount** | **Additional**<br> **Paid-in**<br>**Capital** | **Accumulated**<br>**Deficit** |<br>**Total** |
| Balance at September 30, 2021 | 220339229 | $220000 | $24781000 | $(24303000) | $698000 |
| &nbsp;&nbsp;&nbsp;Common stock issued upon exercise of warrants | 28090790 | 28000 | 42000 |  | 70000 |
| &nbsp;&nbsp;&nbsp;Common stock issued upon exercise of options | 6267946 | 6000 | 3000 |  | 9000 |
| &nbsp;&nbsp;&nbsp;Fair value of warrants granted for services |  |  | 40000 |  | 40000 |
| &nbsp;&nbsp;&nbsp;Net loss | – | – | – | (439000) | (439000) |
| Balance at December 31, 2021 | 254697965 | $254000 | $24866000 | $(24742000) | $378000 |

---

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Six Months Ended December 31, 2021 (unaudited)** | **Six Months Ended December 31, 2021 (unaudited)** | **Six Months Ended December 31, 2021 (unaudited)** | **Six Months Ended December 31, 2021 (unaudited)** | **Six Months Ended December 31, 2021 (unaudited)** |
|  | **Common Stock** | **Common Stock** | | | |
|  | **Shares** | **Amount** | **Additional**<br> **Paid-in**<br>**Capital** | **Accumulated**<br>**Deficit** |<br>**Total** |
| Balance at June 30, 2021 | 208267444 | $208000 | $24008000 | $(24627000) | $(411000) |
| &nbsp;&nbsp;&nbsp;Common stock issued for cash | 12071785 | 12000 | 773000 |  | 785000 |
| &nbsp;&nbsp;&nbsp;Common stock issued upon exercise of warrants | 28090790 | 28000 | 42000 |  | 70000 |
| &nbsp;&nbsp;&nbsp;Common stock issued upon exercise of options | 6267946 | 6000 | 3000 |  | 9000 |
| &nbsp;&nbsp;&nbsp;Fair value of warrants granted for services |  |  | 40000 |  | 40000 |
| &nbsp;&nbsp;&nbsp;Net loss | – | – | – | (115000) | (115000) |
| Balance at December 31, 2021 | 254697965 | $254000 | $24866000 | $(24742000) | $378000 |

---

See accompanying notes to the condensed consolidated financial statements

**CAVITATION TECHNOLOGIES, INC.**

**CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)**

---

| | | |
|:---|:---|:---|
|  | **Six Months Ended December 31,** | **Six Months Ended December 31,** |
|  | **2022** | **2021** |
| Operating activities: |  |  |
| Net loss | $(372000) | $(115000) |
| Adjustments to reconcile net loss to net cash provided by (used in) operating activities: |  |  |
| &nbsp;&nbsp;&nbsp;Depreciation | 1000 |  |
| &nbsp;&nbsp;&nbsp;Stock compensation |  | 119000 |
| &nbsp;&nbsp;&nbsp;Amortization of right of use Asset | 33000 | 32000 |
| &nbsp;&nbsp;&nbsp;Loss from equity method of investment | 29000 |  |
| &nbsp;&nbsp;&nbsp;Gain on forgiveness of note payable |  | (104000) |
| Effect of changes in: |  |  |
| &nbsp;&nbsp;&nbsp;Accounts receivable | 1000 | (2000) |
| &nbsp;&nbsp;&nbsp;Inventory |  | 25000 |
| &nbsp;&nbsp;&nbsp;Accounts payable and accrued expenses | 29000 | (27000) |
| &nbsp;&nbsp;&nbsp;Advances from distributor | 177000 | 232000 |
| &nbsp;&nbsp;&nbsp;Operating lease liability | (34000) | (29000) |
| &nbsp;&nbsp;&nbsp;Prepaid expenses | 38000 | – |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash provided by (used in) operating activities | (98000) | 131000 |
| Cash flow from investing activities: |  |  |
| &nbsp;&nbsp;&nbsp;Capital contribution for equity method investment | – | (1179000) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cash used in investing activities | – | (1179000) |
| Cash flow from financing activities: |  |  |
| &nbsp;&nbsp;&nbsp;Proceeds from sale of common stock with warrants | – | 785000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cash provided by financing activities | – | 785000 |
| Net decrease in cash and cash equivalents | (98000) | (263000) |
| Cash and cash equivalents, beginning of period | 441000 | 1363000 |
| Cash and cash equivalents, end of period | $343000 | $1100000 |
| *Supplemental disclosures of cash flow information:* |  |  |
| &nbsp;&nbsp;&nbsp;Cash paid for interest | $– | $– |
| &nbsp;&nbsp;&nbsp;Cash paid for income taxes | $– | $– |
| *Supplemental disclosures of non-cash investing and financing activities:* |  |  |
| &nbsp;&nbsp;&nbsp;Issuance of note payable to settle accrued payroll and liability – related party | $– | $139000 |

---

See accompanying notes to the condensed consolidated financial statements

**CAVITATION TECHNOLOGIES, INC.**

**NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) Six months ended December 31, 2022 and 2021**

**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.

<u>Basis of Presentation</u>

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 three and six months ended December 31, 2022 are not indicative of the results that may be expected for the fiscal year ending June 30, 2023. 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, 2022 filed on October 13, 2022. The condensed consolidated balance sheet as of June 30, 2022 has been derived from the audited financial statements included in the Form 10-K for that year.

<u>Going Concern</u>

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, 2022, the Company incurred a loss of $(372,000), used cash in operations of $(98,000) and at December 31, 2022, the Company had a working capital deficit of $(373,000). 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, 2022, 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 2022 we had cash and cash equivalents on hand of $343,000 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.

<u>Covid-19</u>

 ****

During the six months ended December 31, 2022, 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, 2022, 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.

***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, deferred tax assets and 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").

Revenue from the sale of the Company's 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.

Revenue from the Company's share of gross profit to be earned from distributors, as defined, which the Company treats as variable consideration, is recognized using the most likely amount method. Estimates are available from our distributor which are considered in the determination of the most likely amount.

Revenue from usage fees is recognized by the Company based on actual usage by the customer.

The Company provides a limited warranty with every set of reactors sold, typically 2 to 5 years. The Company has not experienced significant claims under its warranty policy, and management determined no accrual for warranty reserve was necessary at December 31, 2022 or June 30, 2022.

***Equity Method Investment***

The Company accounts for investments in entities in which the Company has significant influence over the entity's financial and operating policies, but does not control, using the equity method of accounting. The equity method investments are initially recorded at cost, and subsequently increased for capital contributions and allocations of net income, and decreased for capital distributions and allocations of net loss. Equity in net income (loss) from the equity method investment is allocated based on the Company's economic interest. The Company assesses its investment in equity method investments for recoverability, and if it is determined that a loss in value of the investment is other than temporary, the Company writes down the investment to its fair value.

Management reviews the equity method investment for impairment at least annually or whenever events or circumstances indicate a potential impairment and when circumstances indicate that their carrying values may not be recoverable.

At December 31, 2022, management concluded that there were no impairment indicators. If economic uncertainty increases and/or the global economy worsens, the Company's business, financial condition and results of operations may be sufficiently impacted to result in future impairment charges in the short-term. Management will continue to monitor the effects that macroeconomic conditions have on its business and operations, and will review impairment indicators to the extent necessary in the upcoming months.

***Loss Per Share***

The Company's computation of loss per share (EPS) includes basic and diluted EPS. Basic EPS is calculated by dividing the Company's net loss 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 loss 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, 2022, the Company had 1,250,000 stock options and 53,927,834 stock warrants outstanding 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 June 30, 2022, were due from Desmet (see Note 2).

Accounts Payable and Accrued Expenses – three vendors accounted for 41%, 26%, and 20% of accounts payable and accrued expenses as of December 31, 2022, respectively. Three vendors accounted for 32%, 29% and 24% of accounts payable and accrued expenses as of June 30, 2022.

Revenues – during the three and six months periods ended December 31, 2022 were 100% and 95% of revenues, respectively, were from Desmet. Revenue during the three and six months periods ended December 31, 2021 were 96% and 99% of revenues, respectively, were 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.

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

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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· 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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· 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.

On December 31, 2022 and June 30, 2022, 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 Financial Accounting Standards Board (the "FASB") issued ASU No. 2016-13, Credit Losses - Measurement of Credit Losses on Financial Instruments ("ASU 2016-13"). 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 July 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 Desmet Ballestra Group**

 

In October 2021, the Company executed a three-year agreement with Desmet Ballestra Group (Desmet) that is a continuation of the October 2018 agreement for the sale of the Company's reactors. In accordance with ASC 606, the Company recognizes revenue from the sale of reactors at the time of shipment of the Nano reactor hardware as shipment is deemed to be the Company's only performance obligation and the Company had no more continuing obligation other than the reactor's two-year standard warranty. Desmet pays for such reactors on credit terms and the amount of a sale is recorded as a receivable upon acceptance by Desmet. In addition, Desmet agreed to provide the Company monthly advances of $40,000 through October 1, 2024 to be applied against future sales of reactors.

This agreement replaced an earlier agreement which provided the Company a share of gross profit from the sale of the reactors and also provided the Company monthly advances of $50,000 through October 1, 2021 that was applied against the Company's gross profit share.

During the three and six months ended December 31, 2022, the Company recorded total revenue from Desmet of $58,000 and $303,000 from reactor sales, respectively.

During the three and six months ended December 31, 2021, the Company recorded total revenue from Desmet of $109,000 and $660,000 from reactor sales, respectively.

As of June 30, 2022, outstanding balance of monthly advances received from Desmet amounted to $80,000. During the period ended December 31, 2022, the Company received advances in the aggregate of $480,000 and applied a total of $303,000 to the sales of reactors. As of December, 31, 2022, outstanding balance of the advances amounted to $257,000.

**Note 3 - Investment in equity method investment**

In 2019, the Company and Delaware Water Company, LLC (Delaware) formed a limited liability company called Enviro WaterTek LLC ("Enviro"). Enviro is owned 50% by the Company and 50% by Delaware, and the Company accounts for its investment in Enviro under the equity method. From 2019 to 2021, Enviro had no operations.

In September 2021, the Company and Delaware entered into a separate agreement under Enviro for a specific project (referred to as "Ameredev"). Delaware has certain contracts in place to provide recycled water to operators of certain active oil and gas wells. Under the agreement, the Company contributed $1.2 million that was used by Ameredev to increase the capacity of certain pipelines and water treatment facilities operated by Delaware. Pursuant to the agreement, for each barrel of recycled water that Ameredev sells, Delaware will receive $0.10 per barrel, and the Company will receive $0.05 per barrel (referred to as usage fees), with the balance of net income (loss) from Ameredev being allocated 70% to Delaware and 30% to the Company. The Ameredev agreement will terminate the earlier of three years (unless extended by unanimous agreement of the Board and Members of Ameredev) from the date of the agreement or by unanimous agreement of the Board and Members of Ameredev.

During the six months ended December 31, 2022, the Company recorded total revenues from Ameredev of $17,000 from usage fees. There was no usage fee recorded during the three months ended December 31, 2022.

During the three and six months ended December 31, 2022, the Company recognized a loss of $11,000 and $29,000, respectively, to account for the Company's 30% share in the net loss from the equity method investment.

The following table summarizes the activity of the Company's equity method investment:

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| | |
|:---|:---|
|  | **December 31, 2022** |
| **Balance at beginning of period** | $1149000 |
| Contributions to equity method investment |  |
| Equity in earnings and losses of equity method investment | (29000) |
| **Balance at end of period** | $1120000 |

---

A summarized balance sheet as of December 31, 2022, for Ameredev, and a summarized statement of operations for the six-months ended December 31, 2022, for Ameredev is presented below:

<u>Balance Sheet:</u>

---

| | |
|:---|:---|
|  | Amount |
| Cash | $1000 |
| Accounts receivable | 23000 |
| Property and equipment | 1190000 |
| Total assets | $1214000 |
| Partners equity | $1214000 |
| Total liabilities and equity | $1214000 |

---

<u>Income Statement</u>:

---

| | |
|:---|:---|
|  | Amount |
| Revenue | $24000 |
| Usage fees paid to Cavitation and Delaware | (62000) |
| Operating expenses | (57000) |
| Net loss | $(95000) |

---

**Note 4 – 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.

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:

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| | |
|:---|:---|
|  | **Six Months Ended**<br> **December 31, 2022** |
| <u>Lease cost</u> |  |
| Operating lease cost (included in general and administrative in the Company's unaudited condensed statement of operations) | $38000 |
| <u>Other information</u> |  |
| Cash paid for amounts included in the measurement of lease liabilities | $38000 |
| Weighted average remaining lease term – operating leases (in years) | 2.0 |
| Average discount rate – operating leases | 4% |

---

The supplemental balance sheet information related to leases for the period is as follows:

---

| | |
|:---|:---|
|  | **At December 31, 2022** |
| <u>Operating leases</u> |  |
| Long-term right-of-use assets | $147000 |
| Short-term operating lease liabilities | $63000 |
| Long-term operating lease liabilities | 93000 |
| Total operating lease liabilities | $156000 |

---

---

| | |
|:---|:---|
| **Period ending Dec 31** | **Operating Lease** |
| 2023 (remaining 6 months) | $38000 |
| 2024 | 78000 |
| 2025 | 47000 |
| Total lease payments | 163000 |
| Less: Imputed interest/present value discount | (7000) |
| Present value of lease liabilities | $156000 |

---

**Note 5 – Related Party Transactions**

**Accrued Payroll and Payroll Taxes**

In prior periods, the Company accrued salaries and estimated payroll taxes due to a former officer of the Company. As of December 31, 2022 and June 30, 2022, total accrued payroll and payroll taxes-related parties amounted to $280,000 for both periods presented.

**Note 6 – Notes Payable**

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, 2022 and June 30, 2022, the outstanding balance of the note payable amounted to $150,000.

**Note 7 - Stockholders' Equity** 

***Common Stock***

During the period ended December 31, 2021, the Company sold 12,071,785 shares of common stock and warrants to purchase 12,071,785 shares of common stock in a private placement for $0.065 per unit, for net cash proceeds of $785,000. The warrants have an exercise price of $0.09 per share, were fully vested upon issuance, and have a term of five years. In addition, the Company also issued an aggregate of 34,358,736 shares of common stock upon an exercise of stock options and warrants.

***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 three months ended December 31, 2022 is as follows:

---

| | | | |
|:---|:---|:---|:---|
|  | **Options** | **Weighted-<br> Average<br> Exercise<br> Price** | **Weighted-<br> Average<br> Remaining<br> Contractual<br> Life<br> (Years)** |
| Outstanding at June 30, 2022 | 1250000 | $0.03 | 0.87 |
| - Granted |  |  |  |
| - Forfeited |  |  |  |
| - Exercised |  |  |  |
| - Expired | – |  |  |
| Outstanding at December 31, 2022 vested and exercisable | 1250000 | $0.03 | 0.36 |

---

There was no intrinsic value of the outstanding options as of December 31, 2022 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, 2022.

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | **Options Outstanding** | **Options Outstanding** | **Options Outstanding** | **Options Exercisable** | **Options Exercisable** |
| <br>**Exercise**<br> **Price** | **Number**<br> **of Shares** | **Weighted-**<br> **Average**<br> **Remaining**<br> **Life (Years)** | **Weighted-**<br> **Average**<br> **Exercise**<br> **Price** | **Number**<br> **of Shares** | **Weighted-**<br> **Average**<br> **Remaining**<br> **Life (Years)** |
| $0.03 | 1250000 | 0.36 | $0.03 | 1250000 | 0.36 |

---

 ****

***Stock Warrants***

A summary of the Company's warrant activity and related information for the three months ended on December 31, 2022 is as follows:

---

| | | | |
|:---|:---|:---|:---|
|  | **Warrants** | **Weighted-**<br> **Average**<br> **Exercise**<br> **Price** | **Weighted- <br> Average <br> Remaining <br> Contractual <br> Life <br> (Years)** |
| Outstanding at June 30, 2022 | 61427834 | $0.09 | 2.81 |
| Granted |  |  |  |
| Exercised |  |  |  |
| Expired | (7500000) | 0.05 |  |
| Outstanding at December 31, 2022 vested and exercisable | 53927834 | $0.09 | 2.66 |

---

There was no intrinsic value of the outstanding warrants as of December 31, 2022, 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, 2022.

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | **Warrants Outstanding** | **Warrants Outstanding** | **Warrants Outstanding** | **Warrants Exercisable** | **Warrants Exercisable** |
|<br><br>**Exercise**<br>**Price** |<br>**Number**<br>**of Shares** | **Weighted**<br>**Average**<br>**Remaining**<br>**Life (Years)** | **Weighted**<br>**Average**<br>**Exercise**<br>**Price** |<br>**Number**<br>**of Shares** | **Weighted**<br>**Average**<br>**Remaining**<br>**Life (Years)** |
| $0.03 - 0.05 | 11126518 | 3.71 | $0.03 – 0.05 | 11126518 | 3.71 |
| $0.09 | 23841323 | 3.55 | $0.09 | 23841323 | 3.55 |
| $0.12 | 18959993 | 0.99 | $0.12 | 18959993 | 0.99 |
|  | 53927834 |  |  | 53927834 |  |

---

**Note 8 - Commitments and Contingencies**

<u>Royalty Agreements</u>

On July 1, 2008, the Company 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 Technology Development Supervisor both waived their rights to receive royalty payments that have accrued, or that may accrue, on any gross revenue generated through December 31, 2018.

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, 2022 no patents have been granted in which this person is the legally named inventor.

**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 and EW.

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 2020. 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 (EW) 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.

**Inflation**

Global inflation also increased during 2021 and in 2022. The Russia and Ukraine conflict and other geopolitical conflicts, as well as related international response, have exacerbated inflationary pressures, including causing increases in the price for goods and services and global supply chain disruptions, which have resulted and may continue to result in shortages in food products, materials and services. Such shortages have resulted and may continue to result in inflationary cost increases for labor, fuel, food products, materials and services, and could continue to cause costs to increase as well as result in the scarcity of certain materials. We cannot predict any future trends in the rate of inflation or other negative economic factors or associated increases in our operating costs and how that may impact our business. To the extent we and our customers we service are unable to recover higher operating costs resulting from inflation or otherwise mitigate the impact of such costs on our and their business, our revenues and gross profit could decrease, and our financial condition and results of operations could be adversely affected.

**Results of Operations**

**Results of Operations for the Three Months Ended December 31, 2022 Compared to the Three Months Ended December 31, 2021**

The following is a comparison of our results of operations for the three months ended December 31, 2022 and 2021.

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **For the Three Months Ended** | **For the Three Months Ended** | | |
|  | **December 31,** | **December 31,** | | |
|  | **2022** | **2021** |<br>**$ Change** |<br>**% Change** |
| Revenue | $58000 | $109000 | $(51000) | (47)% |
| Revenue from related party |  | 4000 | (4000) | (100)% |
| Cost of revenue | (13000) | (3000) | (10000) | 333% |
| Gross profit | 45000 | 110000 | (65000) | (59)% |
| General and administrative expenses | 332000 | 546000 | (214000) | (39)% |
| Research and development expenses | – | 2000 | (2000) | (100)% |
| Total operating expenses | 332000 | 548000 | (216000) | (39)% |
| Loss from operations | (287000) | (438000) | 151000 | (34)% |
| Income from equity method investment | (11000) |  | (11000) | – % |
| Interest expense | (1000) | (1000) | – | – % |
| Net loss | $(299000) | $(439000) | $140000 | (32)% |

---

 

*Revenue*

The Company generates revenues from the sale of the *Nano Reactor®* to customers/distributor. Additionally, the Company generates revenues from its equity method investment, specifically fees from usage of reactors or usage fees.

During the three months ended December 31, 2022 we recorded $58,000 in revenue compared to $113,000 for months ended December 31, 2021. Revenues decreased since the Company received only one purchase order from Desmet during the current period compared to three purchase orders in prior period. In addition, the Company also recognized usage fees of $4,000 during the prior period while none during the current period.

 

 

 

 

*Cost of Revenue*

During the three months ended December 31, 2022 and 2021, our cost of sales amounted to $13,000 and $3,000 respectively 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, 2022 amounted to $332,000 compared with $546,000 for the same period in 2021, a decrease of $214,000 or 39%. Decrease in general and administrative expense due to decrease in salary and professional expenses.

Research and development (R&D) expenses for the three months ended December 31, 2022 and 2021 were $0 and $2,000, respectively. R&D expenses remained relatively low as we continued to rely on Desmet for support in R&D and development of new applications for our technology. It is our intention to pursue R&D as our cash position permits.

*Other income (expense)*

Other income (expense) for the three months ended December 31, 2022 and 2021, amounted to$(1,000) of interest expense for both periods presented. For the three months ended December 31, 2022 and 2021, the Company recognized a loss of $11,000 and $0, respectively, to account for its 30% share in the net loss from the equity method investment.

**Results of Operations for the Six Months Ended December 31, 2022 Compared to the Six Months Ended December 31, 2021**

The following is a comparison of our results of operations for the six months ended December 31, 2022 and 2021.

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **For the Six Months Ended** | **For the Six Months Ended** | | |
|  | **December 31,** | **December 31,** | | |
|  | **2022** | **2021** |<br>**$ Change** |<br>**% Change** |
| Revenue | $303000 | $660000 | $(357000) | (54)% |
| Revenue from related party | 17000 | 4000 | 13000 | 325% |
| Cost of revenue | (62000) | (26000) | (36000) | 138% |
| Gross profit | 258000 | 638000 | (380000) | (60)% |
| General and administrative expenses | 598000 | 852000 | (254000) | (30)% |
| Research and development expenses | – | 2000 | (2000) | (100)% |
| Total operating expenses | 598000 | 854000 | (256000) | (30)% |
| Loss from operations | (340000) | (216000) | (124000) | 57% |
| Income from equity method investment | (29000) |  | (29000) | 100% |
| Gain on forgiveness of note payable |  | 104000 | (104000) | (100)% |
| Interest expense | (3000) | (3000) | – | –% |
| Net loss | $(372000) | $(115000) | $(257000) | 223% |

---

 

 

 

 

*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. Additionally, the Company generates revenues from its equity method investment.

During the six months ended December 31, 2022 we recorded $303,000 in revenue compared to $660,000 for months ended December 31, 2021. Revenues decreased since the Company received four purchase orders from Desmet in during the current period compared five purchase order in the prior period. In addition, the Company also recognized usage fees of $4,000 during the prior period compared to $17,000 during the current period.

*Cost of Revenue*

During the six months ended December 31, 2022 and 2021, our cost of sales amounted to $62,000 and $26,000 respectively 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, 2022 amounted to $598,000 compared with $852,000 for the same period in 2021, a decrease of $254,000 or 30%. Decrease in general and administrative expense due to decrease in salary and professional expenses.

Research and development (R&D) expenses for the six months ended December 31, 2022 and 2021 were $0 and $2,000, respectively. R&D expenses remained relatively low as we continued to rely on Desmet and for support in R&D and development of new applications for our technology. It is our intention to pursue R&D as our cash position permits.

*Other income (expense)*

Other income (expense) for the six months ended December 31, 2022 and 2021, amounted to $(32,000) and $101,000, respectively. The decrease in other income (expense) of $(132,000) was the result of a $29,000 loss from an equity method investment in 2022, offset by a gain on forgiveness of PPP note payable of $104,000 in 2021.

***Liquidity and Capital Resource***

During the six months ended December 31, 2022 the Company incurred a net loss of $372,000 and used cash from operations of $98,000 and had a working capital deficit of $373,000 as of December 31, 2022. 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, 2022 financial statements, has expressed substantial doubt about the Company's ability to continue as a going concern.

As of December 31, 2022 we had cash and cash equivalents on hand of $343,000 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 (EW) and Alchemy Beverages, Inc. (ABI). Pursuant to our contract with Desmet, Desmet has been providing us monthly advances of $40,000 through October 1, 2024 to be applied against from future reactor 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 used in operating activities during the six months ended December 31, 2022 amounted to $98,000 compared to net cash provided by operating activities of $131,000 for the same period in fiscal 2021. Funding for the operating activities was provided primarily by sales of our systems to Desmet, advances from distributor and cash reserve.

Net cash used in investing activities during the six months ended December 31, 2022 and 2021 were $0 and $1,179,000 respectively. In 2021, the Company had a capital contribution from an investment in an unconsolidated joint venture.

Net cash provided by financing activities during the six months ended December 31, 2022 and 2021 were $0 and $785,000, respectively. In 2021, the Company received proceeds from the sale of common stock with warrants.

***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.

***Revenue Recognition***

The Company follows the guidance of Accounting Standards Codification (ASC) 606, Revenue from Contracts with Customers. ASC 606.

Revenue from the sale of the Company's 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 recognized revenue from its share of gross profit to be earned from distributors, as defined, which we treated as variable consideration and recognized using the most likely amount method.

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 September 30, 2022 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, 2022.

*Changes in Internal Control over Financial Reporting*

 

There were no changes in internal control over financial reporting during the second quarter of fiscal 2022 that have materially affected or are reasonably likely to materially affect the company's internal control over financial reporting.

**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

**Item 6 - EXHIBITS, FINANCIAL STATEMENT SCHEDULES**

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  |  |  | **Incorporated by Reference** | **Incorporated by Reference** | **Incorporated by Reference** | **Incorporated by Reference** |
| **Exhibit** |  | **Filed** |  |  |  |  |
| **Number** | **Exhibit Description** | **Herewith** | **Form** | **Pd. Ending** | **Exhibit** | **Filing Date** |
| [3(i)(a)](http://www.sec.gov/Archives/edgar/data/1376793/000106299306003200/exhibit3-1.htm) | [Articles of Incorporation - original name of Bioenergy, Inc.](http://www.sec.gov/Archives/edgar/data/1376793/000106299306003200/exhibit3-1.htm) |  | [SB-2](http://www.sec.gov/Archives/edgar/data/1376793/000106299306003200/exhibit3-1.htm) | [N/A](http://www.sec.gov/Archives/edgar/data/1376793/000106299306003200/exhibit3-1.htm) | [3.1](http://www.sec.gov/Archives/edgar/data/1376793/000106299306003200/exhibit3-1.htm) | [October 19, 2006](http://www.sec.gov/Archives/edgar/data/1376793/000106299306003200/exhibit3-1.htm) |
| [3(i)(b)](http://www.sec.gov/Archives/edgar/data/1376793/000114420409008706/v140273_ex3-1.htm) | [Articles of Incorporation - Amended and Restated](http://www.sec.gov/Archives/edgar/data/1376793/000114420409008706/v140273_ex3-1.htm) |  | [10-Q](http://www.sec.gov/Archives/edgar/data/1376793/000114420409008706/v140273_ex3-1.htm) | [December 31, 2008](http://www.sec.gov/Archives/edgar/data/1376793/000114420409008706/v140273_ex3-1.htm) | [3-1](http://www.sec.gov/Archives/edgar/data/1376793/000114420409008706/v140273_ex3-1.htm) | [February 17, 2009](http://www.sec.gov/Archives/edgar/data/1376793/000114420409008706/v140273_ex3-1.htm) |
| [3(i)(c)](http://www.sec.gov/Archives/edgar/data/1376793/000114420409026436/v149355_ex3-1.htm) | [Articles of Incorporation - Amended and Restated](http://www.sec.gov/Archives/edgar/data/1376793/000114420409026436/v149355_ex3-1.htm) |  | [10-Q](http://www.sec.gov/Archives/edgar/data/1376793/000114420409026436/v149355_ex3-1.htm) | [June 30, 2009](http://www.sec.gov/Archives/edgar/data/1376793/000114420409026436/v149355_ex3-1.htm) | [3-1](http://www.sec.gov/Archives/edgar/data/1376793/000114420409026436/v149355_ex3-1.htm) | [May 14, 2009](http://www.sec.gov/Archives/edgar/data/1376793/000114420409026436/v149355_ex3-1.htm) |
| [3(i)(d)](http://www.sec.gov/Archives/edgar/data/1376793/000114420409055293/v164156_8k.htm) | [Articles of Incorporation - Amended; increase in authorized shares](http://www.sec.gov/Archives/edgar/data/1376793/000114420409055293/v164156_8k.htm) |  | [8-K](http://www.sec.gov/Archives/edgar/data/1376793/000114420409055293/v164156_8k.htm) | [N/A](http://www.sec.gov/Archives/edgar/data/1376793/000114420409055293/v164156_8k.htm) | [N/A](http://www.sec.gov/Archives/edgar/data/1376793/000114420409055293/v164156_8k.htm) | [October 29, 2009](http://www.sec.gov/Archives/edgar/data/1376793/000114420409055293/v164156_8k.htm) |
| [3(i)(e)](http://www.sec.gov/Archives/edgar/data/1376793/000114420409059212/v166223_ex3-1.htm) | [Articles of Incorporation - Certificate of Amendment; forward split](http://www.sec.gov/Archives/edgar/data/1376793/000114420409059212/v166223_ex3-1.htm) |  | [10-Q](http://www.sec.gov/Archives/edgar/data/1376793/000114420409059212/v166223_ex3-1.htm) | [December 31, 2009](http://www.sec.gov/Archives/edgar/data/1376793/000114420409059212/v166223_ex3-1.htm) | [3-1](http://www.sec.gov/Archives/edgar/data/1376793/000114420409059212/v166223_ex3-1.htm) | [November 16, 2009](http://www.sec.gov/Archives/edgar/data/1376793/000114420409059212/v166223_ex3-1.htm) |
| [10.1](http://www.sec.gov/Archives/edgar/data/1376793/000114420410028648/v185660_ex10-1.htm) | [Patent Assignment Agreement between the Company and Roman Gordon dated July 1, 2008.](http://www.sec.gov/Archives/edgar/data/1376793/000114420410028648/v185660_ex10-1.htm) |  | [8-K](http://www.sec.gov/Archives/edgar/data/1376793/000114420410028648/v185660_ex10-1.htm) | [June 30, 2009](http://www.sec.gov/Archives/edgar/data/1376793/000114420410028648/v185660_ex10-1.htm) | [10.1](http://www.sec.gov/Archives/edgar/data/1376793/000114420410028648/v185660_ex10-1.htm) | [May 18, 2010](http://www.sec.gov/Archives/edgar/data/1376793/000114420410028648/v185660_ex10-1.htm) |
| [10.2](http://www.sec.gov/Archives/edgar/data/1376793/000114420410028648/v185660_ex10-2.htm) | [Patent Assignment Agreement between the Company and Igor Gorodnitsky dated July 1, 2008.](http://www.sec.gov/Archives/edgar/data/1376793/000114420410028648/v185660_ex10-2.htm) |  | [8-K](http://www.sec.gov/Archives/edgar/data/1376793/000114420410028648/v185660_ex10-2.htm) | [June 30, 2009](http://www.sec.gov/Archives/edgar/data/1376793/000114420410028648/v185660_ex10-2.htm) | [10.2](http://www.sec.gov/Archives/edgar/data/1376793/000114420410028648/v185660_ex10-2.htm) | [May 18, 2010](http://www.sec.gov/Archives/edgar/data/1376793/000114420410028648/v185660_ex10-2.htm) |
| [10.3](http://www.sec.gov/Archives/edgar/data/1376793/000114420410028648/v185660_ex10-3.htm) | [Assignment of Patent Assignment Agreement between the Company and Roman Gordon](http://www.sec.gov/Archives/edgar/data/1376793/000114420410028648/v185660_ex10-3.htm) |  | [8-K](http://www.sec.gov/Archives/edgar/data/1376793/000114420410028648/v185660_ex10-3.htm) | [June 30, 2009](http://www.sec.gov/Archives/edgar/data/1376793/000114420410028648/v185660_ex10-3.htm) | [10.3](http://www.sec.gov/Archives/edgar/data/1376793/000114420410028648/v185660_ex10-3.htm) | [May 18, 2010](http://www.sec.gov/Archives/edgar/data/1376793/000114420410028648/v185660_ex10-3.htm) |
| [10.4](http://www.sec.gov/Archives/edgar/data/1376793/000114420410028648/v185660_ex10-4.htm) | [Assignment of Patent Assignment Agreement between the Company and Igor Gorodnitsky](http://www.sec.gov/Archives/edgar/data/1376793/000114420410028648/v185660_ex10-4.htm) |  | [8-K](http://www.sec.gov/Archives/edgar/data/1376793/000114420410028648/v185660_ex10-4.htm) | [June 30, 2009](http://www.sec.gov/Archives/edgar/data/1376793/000114420410028648/v185660_ex10-4.htm) | [10.4](http://www.sec.gov/Archives/edgar/data/1376793/000114420410028648/v185660_ex10-4.htm) | [May 18, 2010](http://www.sec.gov/Archives/edgar/data/1376793/000114420410028648/v185660_ex10-4.htm) |
| [10.5](http://www.sec.gov/Archives/edgar/data/1376793/000114420411058544/v237484_ex10-3.htm) | [Employment Agreement between the Company and Roman Gordon date March 17, 2008](http://www.sec.gov/Archives/edgar/data/1376793/000114420411058544/v237484_ex10-3.htm) |  | [10K/A](http://www.sec.gov/Archives/edgar/data/1376793/000114420411058544/v237484_ex10-3.htm) | [June 30, 2009](http://www.sec.gov/Archives/edgar/data/1376793/000114420411058544/v237484_ex10-3.htm) | [10.3](http://www.sec.gov/Archives/edgar/data/1376793/000114420411058544/v237484_ex10-3.htm) | [October 20, 2011](http://www.sec.gov/Archives/edgar/data/1376793/000114420411058544/v237484_ex10-3.htm) |
| [10.6](http://www.sec.gov/Archives/edgar/data/1376793/000114420411058544/v237484_ex10-4.htm) | [Employment Agreement between the Company and Igor Gorodnitsky dated March 17, 2008](http://www.sec.gov/Archives/edgar/data/1376793/000114420411058544/v237484_ex10-4.htm) |  | [10K/A](http://www.sec.gov/Archives/edgar/data/1376793/000114420411058544/v237484_ex10-4.htm) | [June 30, 2009](http://www.sec.gov/Archives/edgar/data/1376793/000114420411058544/v237484_ex10-4.htm) | [10.4](http://www.sec.gov/Archives/edgar/data/1376793/000114420411058544/v237484_ex10-4.htm) | [October 20, 2011](http://www.sec.gov/Archives/edgar/data/1376793/000114420411058544/v237484_ex10-4.htm) |
| [10.7](http://www.sec.gov/Archives/edgar/data/1376793/000114420411007782/v210847_ex10-3.htm) | [Employment and Confidentiality and Invention Assignment Agreement between the Company and Varvara Grichko dated April 30, 2008](http://www.sec.gov/Archives/edgar/data/1376793/000114420411007782/v210847_ex10-3.htm) |  | [10-Q](http://www.sec.gov/Archives/edgar/data/1376793/000114420411007782/v210847_ex10-3.htm) | [December 31, 2010](http://www.sec.gov/Archives/edgar/data/1376793/000114420411007782/v210847_ex10-3.htm) | [10.3](http://www.sec.gov/Archives/edgar/data/1376793/000114420411007782/v210847_ex10-3.htm) | [February 11, 2011](http://www.sec.gov/Archives/edgar/data/1376793/000114420411007782/v210847_ex10-3.htm) |
| [10.8](http://www.sec.gov/Archives/edgar/data/1376793/000113626111000591/exh10-12.htm) | [Board of Director Agreement - James Fuller](http://www.sec.gov/Archives/edgar/data/1376793/000114420411058544/v237484_ex10-12.htm) |  | [10-Q](http://www.sec.gov/Archives/edgar/data/1376793/000113626111000591/exh10-12.htm) | [December 31, 2011](http://www.sec.gov/Archives/edgar/data/1376793/000113626111000591/exh10-12.htm) | [10.12](http://www.sec.gov/Archives/edgar/data/1376793/000113626111000591/exh10-12.htm) | [October 20, 2011](http://www.sec.gov/Archives/edgar/data/1376793/000113626111000591/exh10-12.htm) |
| [10.9](http://www.sec.gov/Archives/edgar/data/1376793/000113626112000531/exh10-10.htm) | [Technology and License Agreement with Desmet Ballestra dated 14 May 2012](http://www.sec.gov/Archives/edgar/data/1376793/000113626112000531/exh10-10.htm) |  | [10-K](http://www.sec.gov/Archives/edgar/data/1376793/000113626112000531/exh10-10.htm) | [June 30, 2012](http://www.sec.gov/Archives/edgar/data/1376793/000113626112000531/exh10-10.htm) | [10.1](http://www.sec.gov/Archives/edgar/data/1376793/000113626112000531/exh10-10.htm) | [October 15, 2012](http://www.sec.gov/Archives/edgar/data/1376793/000113626112000531/exh10-10.htm) |
| [10.10](http://www.sec.gov/Archives/edgar/data/1376793/000113626112000531/exh10-11.htm) | [Short Term Loan Agreement - CEO](http://www.sec.gov/Archives/edgar/data/1376793/000113626112000531/exh10-11.htm) |  | [10-K](http://www.sec.gov/Archives/edgar/data/1376793/000113626112000531/exh10-11.htm) | [June 30, 2012](http://www.sec.gov/Archives/edgar/data/1376793/000113626112000531/exh10-11.htm) | [10.11](http://www.sec.gov/Archives/edgar/data/1376793/000113626112000531/exh10-11.htm) | [October 15, 2012](http://www.sec.gov/Archives/edgar/data/1376793/000113626112000531/exh10-11.htm) |
| [10.11](http://www.sec.gov/Archives/edgar/data/1376793/000114420411007782/v210847_ex10-1.htm) | [Loan Agreement - Desmet Ballestra - Oct. 26, 2010](http://www.sec.gov/Archives/edgar/data/1376793/000114420411007782/v210847_ex10-1.htm) |  |  |  |  |  |
| [14.1](http://www.sec.gov/Archives/edgar/data/1376793/000114420411055252/v235403_ex14-1.htm) | [Code of Business Conduct and Ethics\*](http://www.sec.gov/Archives/edgar/data/1376793/000114420411055252/v235403_ex14-1.htm) |  | [10-K](http://www.sec.gov/Archives/edgar/data/1376793/000114420411055252/v235403_ex14-1.htm) | [June 30, 2011](http://www.sec.gov/Archives/edgar/data/1376793/000114420411055252/v235403_ex14-1.htm) | [14.1](http://www.sec.gov/Archives/edgar/data/1376793/000114420411055252/v235403_ex14-1.htm) | [September 28, 2011](http://www.sec.gov/Archives/edgar/data/1376793/000114420411055252/v235403_ex14-1.htm) |
| [31.1](cavitation_ex3101.htm) | [Certificate of Principal Executive Officer pursuant to Section 302 of Sarbanes-Oxley Act of 2002](cavitation_ex3101.htm) | [X](cavitation_ex3101.htm) |  |  |  |  |
| [31.2](cavitation_ex3102.htm) | [Certificate of Principal Financial Officer pursuant to Section 302 of Sarbanes-Oxley Act of 2002](cavitation_ex3102.htm) | [X](cavitation_ex3102.htm) |  |  |  |  |
| [32.1](cavitation_ex3201.htm) | [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.](cavitation_ex3201.htm) | [X](cavitation_ex3201.htm) |  |  |  |  |
| [32.2](cavitation_ex3202.htm) | [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.](cavitation_ex3202.htm) | [X](cavitation_ex3202.htm) |  |  |  |  |
| 101.INS | Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document) | X |  |  |  |  |
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document | X |  |  |  |  |
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document | X |  |  |  |  |
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document | X |  |  |  |  |
| 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document | X |  |  |  |  |
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document | X |  |  |  |  |
| 104 | Cover Page Interactive Data File (formatted in inline XBRL, and included in exhibit 101). |  |  |  |  |  |

---

\* 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.

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/ N. Voloshin* | President; Member of Board of Directors | February 10, 2023 |
| N. Voloshin | (Principal Executive Officer) |  |
| */s/ James W. Creamer III* | Chief Financial Officer | February 10, 2023 |
| James W. Creamer III | (Principal Financial Officer) |  |

---

## Exhibit 31.1

**Exhibit 31.1**

**Certification**

I, N. Voloshin, certify that:

1. I have reviewed this quarterly report for the period ending December 31, 2022 on Form 10-Q of Cavitation Technologies, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

---

| | |
|:---|:---|
| Date: February 10, 2023 | /s/ *N. Voloshin* |
|  | Name: N. Voloshin<br> Title: Principal Executive Officer |

---

## Exhibit 31.2

**Exhibit 31.2**

**Certification**

I, James W. Creamer III, certify that:

1. I have reviewed this quarterly report for the period ending December 31, 2022 on Form 10-Q of Cavitation Technologies, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

---

| | |
|:---|:---|
| Date: February 10, 2023 | /s/ *James W. Creamer III* |
|  | Name: James W. Creamer III<br> Title: Chief Financial Officer |

---

## Exhibit 32.1

**Exhibit 32.1**

**CERTIFICATION**

I, N. Voloshin, Principal Executive Officer of Cavitation Technologies, Inc. (the "Company"), certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350, that:

The Quarterly Report on Form 10-Q of the Company for the quarter ended December 31, 2022 (the "Report") fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934 (15 U.S.C. 78m); and

The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

---

| | |
|:---|:---|
| Date: February 10, 2023 | <u>/s/ *N. Voloshin*</u> |
|  | Name: N. Voloshin<br> Title: Principal Executive Officer |

---

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

## Exhibit 32.2

**Exhibit 32.2**

**CERTIFICATION**

I, James W. Creamer III, Chief Financial Officer of Cavitation Technologies, Inc. (the "Company"), certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350, that:

The Quarterly Report on Form 10-Q of the Company for the quarter ended December 31, 2022 (the "Report") fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934 (15 U.S.C. 78m); and

The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

---

| | |
|:---|:---|
| Date: February 10, 2023 | /s/ *James W. Creamer III* |
|  | Name: James W. Creamer III<br> Title: Chief Financial Officer |

---

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.