Cavitation Technologies, Inc 10-K for FY2024

Cavitation Technologies, Inc. (CVAT)

10-K 2024-09-30 For: 2024-06-30

Added on April 06, 2026

About this 10-K

Cavitation Technologies, Inc filed this 10-K on September 30, 2024, covering the fiscal year ended June 30, 2024 (FY2024).

Headline figures

Fiscal year ended June 30, 2024, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $1.36M; up 214.8% from $433K a year earlier
Net income: $439K; compared with a net loss of $2.04M a year earlier
Diluted EPS: $0.00; compared with -$0.01 a year earlier

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Nevada		20-4907818
(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification No.)

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

Large accelerated filer ☐	Accelerated filer ☐	Non-accelerated filer ☒	Smaller reporting company ☒
			Emerging growth company ☐

	Page
PART I
Item 1. Business	1
Item 1A. Risk Factors	5
Item 1B. Unresolved Staff Comments	5
Item 1C. Cybersecurity	5
Item 2. Properties	5
Item 3. Legal Proceedings	5
Item 4. Mine Safety Disclosures	5

PART II
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	6
Item 6. Reserved	6
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations	7
Item 7A. Quantitative and Qualitative Disclosures About Market Risk	11
Item 8. Financial Statements and Supplementary Data	12
Item 9. Changes In and Disagreements With Accountants on Accounting and Financial Disclosure	30
Item 9A. Controls and Procedures	30
Item 9B. Other Information	31
Item 9C. Disclosure Regarding Foreign Jurisdictions That Prevent Inspections	31

PART III
Item 10. Directors, Executive Officers and Corporate Governance	32
Item 11. Executive Compensation	33
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	35
Item 13. Certain Relationships and Related Transactions, and Director Independence	36
Item 14. Principal Accounting Fees and Services	36

PART IV
Item 15. Exhibits, Financial Statement Schedules	38
Item 16. Form 10-K Summary	39

Signatures	40

	For the Years Ended
	June 30,
	2024			2023			$ Change			% Change

Revenue	$	1,363,000		$	413,000		$	950,000			230.0%
Revenue-related party		–			20,000			(20,000	)		(100.0)%
Cost of revenue		(156,000	)		(121,000	)		(35,000	)		28.9%
Gross profit		1,207,000			312,000			895,000			286.9%

General and administrative expenses		708,000			1,195,000			(487,000	)		(40.8)%
Research and development expenses		61,000			3,000			58,000			1933.3%
Total operating expenses		769,000			1,198,000			(429,000	)		(35.8)%

Income (loss) from operations		438,000			(886,000	)		1,324,000			149.4%

Loss from equity method investment		–			(1,148,000	)		1,148,000			100%
Interest income (expense), net		1,000			(6,000	)		7,000			116.7%
Net income (loss)	$	439,000		$	(2,040,000	)	$	2,479,000			121.5%

		Page
Report of the Independent, Registered Public Accounting firm PCAOB #572		13
Consolidated Balance Sheets as of June 30, 2024 and June 30, 2023		14
Consolidated Statements of Operations for the years ended June 30, 2024 and June 30, 2023		15
Consolidated Statements of Changes in Stockholders’ Equity (Deficit) for the years ended June 30, 2024 and June 30, 2023		16
Consolidated Statements of Cash Flows for the years ended June 30, 2024 and June 30, 2023		17
Notes to the Consolidated Financial Statements		18


	June 30, 2024			June 30, 2023
ASSETS

Current assets:
Cash and cash equivalents	$	179,000		$	18,000
Prepaid expenses		16,000			–
Total current assets		195,000			18,000

Property and equipment, net		–			1,000
Equity method investment		1,000			1,000
Operating lease right-of-use asset		42,000			113,000
Other assets		10,000			10,000
Total assets	$	248,000		$	143,000

LIABILITIES AND STOCKHOLDERS' DEFICIT

Current liabilities:
Accounts payable and accrued expenses	$	129,000		$	120,000
Accrued payroll and payroll taxes – related parties		414,000			280,000
Notes payable		9,000			5,000
Advances from distributor		–			391,000
Operating lease liability, current portion		46,000			68,000
Total current liabilities		598,000			864,000

Notes payable, non-current		130,000			145,000
Operating lease liability, non-current portion		–			53,000
Total liabilities		728,000			1,062,000

Commitments and contingencies		–			–

Stockholders' deficit:
Preferred stock, $0.001 par value, 10,000,000 shares authorized, no shares issued and outstanding as of June 30, 2024 and 2023.		–			–
Common stock, $0.001 par value, 1,000,000,000 shares authorized, 284,289,740 shares issued and outstanding as June 30, 2024 and 2023.		284,000			284,000
Additional paid-in capital		26,083,000			26,083,000
Accumulated deficit		(26,847,000	)		(27,286,000	)
Total stockholders' deficit		(480,000	)		(919,000	)
Total liabilities and stockholders' deficit	$	248,000		$	143,000


	Common Stock				Additional Paid-in			Accumulated
	Shares		Amount		Capital			Deficit			Total
Balance at June 30, 2022		276,698,831	$	277,000	$	26,005,000		$	(25,246,000	)	$	1,036,000
Cashless exercise of warrants		4,090,909		4,000		(4,000	)		–			–
Fair value of common stock issued for services		3,500,000		3,000		82,000			–			85,000
Net loss		–		–		–			(2,040,000	)		(2,040,000	)
Balance at June 30, 2023		284,289,740		284,000		26,083,000			(27,286,000	)		(919,000	)
Net income		–		–		–			439,000			439,000
Balance at June 30, 2024		284,289,740	$	284,000	$	26,083,000		$	(26,847,000	)	$	(480,000	)


	Years Ended June 30,
	2024			2023
Operating activities:
Net income (loss)	$	439,000		$	(2,040,000	)
Adjustments to reconcile net income (loss) to net cash generated by (used in) operating activities:
Depreciation		1,000			3,000
Fair value of common stock issued for services		–			85,000
Inventory reserve		–			48,000
Loss from equity method investment		–			1,148,000
Effect of changes in:
Accounts receivable		–			1,000
Prepaid expenses		(16,000	)		38,000
Operating lease right-of-use assets		71,000			67,000
Accounts payable and accrued expenses		9,000			(15,000	)
Accrued payroll and payroll taxes – related parties		134,000			–
Customer advances		(391,000	)		311,000
Operating lease liabilities		(75,000	)		(69,000	)
Net cash generated by (used in) operating activities		172,000			(423,000	)

Financing activities:
Repayment of notes payable		(11,000	)		–
Cash used in financing activities		(11,000	)		–

Net increase (decrease) in cash and cash equivalents		161,000			(423,000	)

Cash and cash equivalents, beginning of period		18,000			441,000
Cash and cash equivalents, end of period	$	179,000		$	18,000

Supplemental disclosures of cash flow information:
Cash paid for interest	$	–		$	3,000
Cash paid for income taxes	$	–		$	–

Schedule of anti-dilutive shares
	June 30, 2024		June 30, 2023
Warrants		28,841,323		53,657,234

Schedule of equity method investment
	Amount
Balance at June 30, 2022	$	1,149,000
Contributions to equity method investment		–
Loss from Company’s 30% share in the net loss of Ameredev		(36,000	)
Impairment of equity method investment		(1,112,000	)
Distribution from equity method investment		–
Balance at June 30, 2023		1,000
Contributions to equity method investment		–
Loss from Company’s 30% share in the net loss of Ameredev		–
Impairment of equity method investment		–
Distribution from equity method investment		–
Balance at June 30, 2024	$	1,000

Schedule of components of lease expense and supplemental cash flow information related to leases
	June 30,		June 30,
	2024		2023
Lease costs:
Operating lease (included in general and administrative in the Company’s consolidated statement of operations)	$	76,000	$	76,000

Other information:
Cash paid for amounts included in the measurement of lease liabilities	$	78,000	$	72,000

Weighted average remaining lease term – operating leases (in years)		0.6		1.6
Average discount rate – operating leases		4%		4%

The supplemental balance sheet information related to leases for the period is as follows:
Long-term right-of-use assets	$	42,000	$	113,000

Short-term operating lease liabilities	$	46,000	$	68,000
Long-term operating lease liabilities		–		53,000
Total operating lease liabilities	$	46,000	$	121,000

Schedule of supplemental cash flow information related to the lease liabilities
	Amount
Year Ending June 30:
2025	$	47,000
Total lease payments		47,000
Less: Imputed interest/present value		(1,000	)
Present value of lease liabilities	$	46,000

Schedule of property and equipment
	June 30,			June 30,
	2024			2023
Leasehold improvement	$	2,000		$	2,000
Furniture		27,000			27,000
Office equipment		2,000			2,000
Equipment		306,000			306,000
Systems		187,000			187,000
		524,000			524,000
Less: Accumulated depreciation and amortization		(524,000	)		(523,000	)
Property and equipment, net	$	–		$	1,000

Schedule of notes payable
	June 30,		June 30,
	2024		2023
Note payable - EIDL	$	139,000	$	150,000
Disclosed as:
Short-term note payable		9,000		5,000
Long-term note payable		130,000		145,000
Total note payable	$	139,000	$	150,000

Future minimum payments on note payable
Year Ending	Amount
June 30, 2025	$	9,000
June 30, 2026		9,000
June 30, 2027		9,000
June 30, 2028		9,000
June 30, 2029 and thereafter		103,000
Total	$	139,000

Schedule of warrants outstanding and exercisable
		Warrants Outstanding						Warrants Exercisable
				Weighted		Weighted				Weighted
				Average		Average				Average
Exercise		Number		Remaining		Exercise		Number		Remaining
Price		of Shares		Life (Years)		Price		of Shares		Life (Years)

$	0.03		5,000,000		5.51				5,000,000		5.51
$	0.09		23,841,323		2.00				23,841,323		2.00
			28,841,323		2.61	$	0.08		28,841,323		2.61

Schedule of reconciliation of effective income tax
	June 30,		June 30,
	2024		2023
Federal statutory rate		21 %		(21)%
State income taxes, net of Federal benefit		7 %		(7)%
Net operating loss utilized		(28)%		– %
Prior year net operating loss true up		(93)%		– %
Valuation allowance		93 %		28 %
Income tax provision		–		–

Schedule of deferred tax assets and liabilities
	June 30,			June 30,
	2024			2023
Net Operating loss carryforwards	$	2,971,000		$	3,505,000
Stock compensation expense		962,000			962,000
Total net deferred tax assets		3,933,000			4,467,000
Less valuation discount		(3,933,000	)		(4,467,000	)
Net deferred tax assets	$	–		$	–

	1.	We do not employ full time in-house personnel with the technical knowledge to identify and address some of the reporting issues surrounding certain complex or non-routine transactions. With respect to material, complex and non-routine transactions, management has and will continue to seek guidance from third-party experts and/or consultants to gain a thorough understanding of these transactions;

	2.	We have ineffective controls over segregation of duties due to limited resources and number of employees; and

	3.	The Company did not maintain a functioning independent audit committee.

Person	Age	Position

Naum Voloshin	61	President, PEO, Principal Accounting Officer Secretary and Director
Peter N. Christos	67	Director
James Fuller	84	Director
Jerry Bailey PhD	84	Director

	Year	Salary		Bonus		Stock Awards (1)		Warrant Awards		Non-Equity Incentive Plan Compensation		Changes in Pension Value and Non-Qualified Deferred Compensation		All Other Compensation		Totals
Naum Voloshin	2024	$	166,305	$	–	$	–	$	–	$	–	$	–	$	–	$	166,305
Principal Executive & Principal Accounting Officer	2023	$	203,140	$	–	$	–	$	–	$	–	$	–	$	–	$	203,140

James W. Creamer	2024	$	20,000	$	–	$	–	$	–	$	–	$	–	$	–	$	20,000
Chief Financial Officer (1)	2023	$	32,645	$	–	$	–	$	–	$	–	$	–	$	–	$	32,645

		Amount and
		Nature of
		Beneficial		Percent of
Name of Beneficial Owner		Ownership		Class (1)
Naum Voloshin	(2)		10, 212,390		3.6	%
President, Principal Executive Officer, Principal Accounting Officer and Director

James Fuller	(3)		2,337,500		*
Chairman of Audit Committee, Director (Resigned effective August 22, 2024)

Dr. Gerald Bailey	(4)		400,000		*
Director

Directors and Officers			12,949,890		4.5	%
(as a group, four individuals)

*	Less than 1%
(1)	Unless otherwise set forth below, the mailing address of Executive Officers, Directors and 5% or greater holders is in care of the Company.
(2)	Consists of 10,212,390 shares of common stock, including 4,000,000 restricted shares granted to Mr. Voloshin on June 21, 2022.
(3)	Consists of 837,500 shares of common stock and warrants exercisable for 1,000,000 shares of common stock, all of which are vested.
(4)	Consists of warrants exercisable for 400,000 shares of common stock.

	June 30, 2024		June 30, 2023

Audit Fees and Expenses (1)	$	86,000	$	87,000
All Other Fees	$	9,000	$	20,000

SIGNATURE	TITLE	DATE


/s/ N. Voloshin	President; Member of Board of Directors	September 30, 2024
N. Voloshin	(Principal Executive Officer)

/s/ N. Voloshin	Chief Financial Officer	September 30, 2024
N. Voloshin	(Principal Financial Officer)

/s/ James Fuller	Audit Committee Chairman,	September 30, 2024
James Fuller	Independent Financial Expert

/s/ Dr. Gerald Bailey	Independent Director	September 30, 2024
Dr. Gerald Bailey

/s/ Peter N Christos	Independent Director	September 30, 2024
Peter N. Christos

Date: September 30, 2024	/s/ N. VOLOSHIN
	Name: N. Voloshin
	Title: Chief Executive Officer