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EX-32.2 - EXHIBIT 32.2 - Cavitation Technologies, Inc.v410649_ex32-2.htm

 

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

_________________________

 

FORM 10-Q 

__________________________

 

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

 

For the quarterly period ended March 31, 2015

 

Commission File Number: 0-29901

 

 

Cavitation Technologies, Inc.
(Exact name of Registrant as Specified in its Charter)

 

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

 

10019 CANOGA AVENUE, CHATSWORTH, CALIFORNIA    91311
(Address, including Zip Code, of Principal Executive Offices)

 

(818) 718-0905
(Registrant's Telephone Number, Including Area Code)

______________________

 

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

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted 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 and post such files).     YES  x     NO  ¨

 

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

 

Large accelerated filer    ¨ Accelerated filer    ¨ Non-accelerated filer    ¨
(Do not check if a smaller reporting company)
Smaller reporting company    x

 

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

 

As of May 13, 2015, the issuer had 184,167,694 shares of common stock outstanding.

 

 
 

 

TABLE OF CONTENTS

 

  Page
PART I. FINANCIAL INFORMATION    
       
Item 1. Condensed Consolidated Financial Statements   3
       
  Condensed Consolidated Balance Sheets at March 31, 2015 (unaudited) and June 30, 2014   3
       
  Condensed Consolidated Statements of Operations - Three Months Ended March 31, 2015 (unaudited) and
March 31, 2014 (unaudited), and Nine Months Ended March 31, 2015 (unaudited) and March 31, 2014 (unaudited)
  4
     
  Condensed Consolidated Statement of Stockholders' Deficit - through March 31, 2015 (unaudited)   5
       
  Condensed Consolidated Statements of Cash Flows - Nine Months Ended March 31, 2015 (unaudited) and
March 31, 2014 (unaudited),
  6
       
  Notes to Condensed Consolidated Financial Statements (unaudited)   7
       
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations   14
       
Item 3. Quantitative and Qualitative Disclosures About Market Risk   17
       
Item 4. Controls and Procedures   17
       
PART II OTHER INFORMATION    
       
Item 1. Legal Proceedings   18
       
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds   18
       
Item 3. Defaults Upon Senior Securities   18
       
Item 4. (Removed and Reserved)   18
       
Item 5. Other Information   18
       
Item 6. Exhibits   19
       
  Signatures   20
       
  Certifications    

 

2
 

 

PART I - FINANCIAL INFORMATION

 

ITEM 1 - Condensed Consolidated Financial Statements

 

CAVITATION TECHNOLOGIES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

 

   March 31,   June 30, 
   2015   2014 
   (unaudited)     
ASSETS          
           
Current assets:          
Cash and cash equivalents  $1,530,105   $1,226,508 
Inventory, net   113,576    116,644 
Total current assets   1,643,681    1,343,152 
           
Property and equipment, net   91,462    137,095 
Patents, net   48,715    67,473 
Other assets   9,500    9,500 
Total assets  $1,793,358   $1,557,220 
           
LIABILITIES AND STOCKHOLDERS' DEFICIT          
           
Current liabilities:          
Accounts payable and accrued expenses  $155,630   $173,110 
Accrued payroll and payroll taxes due - officers   1,016,223    1,030,031 
Related party payable   1,147    1,147 
Advances from distributor   1,401,294    734,956 
Total current liabilities   2,574,294    1,939,244 
           
Commitments and contingencies          
           
Stockholders' deficit:          
Preferred stock, $0.001 par value, 10,000,000 shares authorized, no shares issued and outstanding as of March 31, 2015 and June 30, 2014, respectively.   -    - 
Common stock, $0.001 par value, 1,000,000,000 shares authorized, 184,167,694 and 177,906,365 shares issued and outstanding as of March 31, 2015 and June 30, 2014, respectively   184,167    177,906 
Additional paid-in capital   21,249,272    20,580,952 
Common stock issuable, 9,029,251 shares   812,633    812,633 
Accumulated deficit   (23,027,008)   (21,953,515)
Total stockholders' deficit   (780,936)   (382,024)
Total liabilities and stockholders' deficit  $1,793,358   $1,557,220 

 

See accompanying notes, which are an integral part of these condensed consolidated financial statements

 

3
 

 

CAVITATION TECHNOLOGIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

 

    For the Three Months Ended      For the Nine Months Ended 
   March 31,    March 31, 
   2015   2014   2015   2014 
                 
Revenue  $333,662   $1,360,441   $333,662    1,855,707 
Cost of revenue   52,038    102,625    52,038    119,258 
Gross profit   281,624    1,257,816    281,624    1,736,449 
Operating Expenses                    
General and administrative expenses   331,850    425,504    1,336,924    1,832,959 
Research and development expenses   2,742    2,044    16,746    28,812 
Total operating expenses   334,592    427,548    1,353,670    1,861,771 
Loss from operations   (52,968)   830,268    (1,072,047)   (125,322)
Interest expense and other   (2)   (6,586)   (1,446)   (81,931)
Net Income (Loss)  $(52,970)  $823,682   $(1,073,493)   (207,253)
                     
Net Income (loss) per share,                    
Basic  $(0.00)  $0.01   $(0.01)  $(0.00)
Diluted  $(0.00)  $0.00   $(0.01)  $(0.00)
                     
Weighted average shares outstanding,                    
Basic   184,167,693    161,773,035    183,781,811    159,921,182 
Diluted   184,167,693    181,388,129    183,781,811    159,921,182 

 

See accompanying notes, which are an integral part of these condensed consolidated financial statements

 

4
 

 

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

 

   Series A
Preferred Stock
   Common Stock   Additional Paid-   Common Stock   Accumalated     
   Shares   Amount   Shares   Amount   in Capital   Issuable   Deficit   Total 
                                 
Balance at June 30, 2014   -   $-    177,906,365   $177,906   $20,580,952   $812,633   $(21,953,515)  $(382,024)
                                         
Common stock issued for cash             5,193,329    5,193    370,305              375,498 
Fair value of vested options and warrants                       235,003              235,003 
Common stock issued for services             1,068,000    1,068    63,012              64,080 
Net Loss                                 (1,073,493)   (1,073,493)
Balance at March 31, 2015   -   $-    184,167,694   $184,167   $21,249,272   $812,633   $(23,027,008)  $(780,936)

 

See accompanying notes, which are an integral part of these condensed consolidated financial statements

 

5
 

 

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

 

    Nine Months Ended March 31,  
   2015   2014 
Operating activities:          
Net loss  $(1,073,493)  $(207,253)
Adjustments to reconcile net loss to net cash used in operating activities:          
Depreciation and amortization   64,391    71,870 
Amortization of convertible notes discount        55,174 
Fair value of stock, options and warrants issued for services   299,083    927,208 
           
Effect of changes in:          
Inventory   3,068    (47,137)
Prepaid expenses and other current assets   -    3,125 
Accounts payable and accrued expenses   (17,480)   (19,001)
Accrued payroll and payroll taxes   (13,808)   - 
Advances from distributor   1,000,000    1,000,000 
Reduction in advances from distributor due to revenues   (333,662)   (1,855,707)
Net cash used in operating activities   (71,901)   (71,721)
           
Investing activities:          
Purchase of property and equipment   -    (31,717)
Payments for patents   -    (18,512)
Net cash used in investing activities   -    (50,229)
           
Financing activities:          
Proceeds from sale of common stock   375,498    - 
Net cash provided by financing activities   375,498    - 
           
Net increase (decrease) in cash   303,597    (121,950)
Cash, beginning of period   1,226,508    241,976 
Cash, end of period  $1,530,105   $120,026 
           
Supplemental disclosures of cash flow information:          
Cash paid for interest  $-   $6,000 
Cash paid for income taxes  $1,600   $  , 

 

See accompanying notes, which are an integral part of these condensed consolidated financial statements

 

6
 

 

CAVITATION TECHNOLOGIES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
Nine months ended March 31, 2015 and 2014

 

Note 1 - Organization and Basis of Presentation

 

Basis of Presentation

 

The accompanying condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles ("GAAP") as promulgated in the United States of America ("U.S.") and with instructions to Form 10-Q pursuant to the rules and regulations of Securities and Exchange Act of 1934, as amended (the "Exchange Act") and Article 8-03 of Regulation S-X under the Exchange Act. Accordingly, these condensed consolidated financial statements do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, we have included all adjustments considered necessary (consisting of normal recurring adjustments) for a fair presentation. Operating results for the nine months ended March 31, 2015 are not indicative of the results that may be expected for the fiscal year ending June 30, 2015. 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, 2014 filed on October 14, 2014. The condensed consolidated balance sheet as of June 30, 2014 has been derived from the audited financial statements included in the Form 10-K for that year.

 

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. CTi's patented Nano Reactor® is the critical component of CTi Nano Neutralization® System which is commercially proven to reduce operating costs and increase yields in refining vegetable oils. CTi has two patented systems and has filed several national and international patents to employ its proprietary technology in applications including, vegetable oil refining, waste water treatment, biodiesel, algae oil extraction, and alcoholic beverage enhancement.

 

Management's Plan Regarding Going Concern

 

The accompanying condensed consolidated financial statements have been prepared in conformity with generally accepted accounting principles which contemplate continuation of the Company as a going concern.  During the nine months ended March 31, 2015, the Company incurred a net loss of $1,073,493. As of March 31, 2015, the Company had a working capital deficiency of $930,613 and a stockholders' deficit of $780,936.   These factors, among others, raise substantial doubt about the Company's ability to continue as a going concern. In addition, our independent auditors, in their report on our audited financial statements for the fiscal year ended June 30, 2014 expressed substantial doubt about our ability to continue as a going concern. The accompanying condensed consolidated financial statements do not include adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from an inability of the Company to continue as a going concern.

 

Management's plan is to generate income from operations by continuing to license our technology globally through our strategic partner, Desmet Ballestra Group (Desmet). Desmet has agreed to provide us monthly advances of $125,000 against future sales. During the nine months ended March 31, 2015, advances received from Desmet amounted to $1,000,000. We will also attempt to raise additional debt and/or equity financing to fund operations and to 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.

 

Note 2 - Significant Accounting Policies

 

Principles of Consolidation

 

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

 

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.

 

7
 

 

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

 

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

 

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

 

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

 

At March 31, 2015 and June 30, 2014, the fair values of cash and cash equivalents, inventory and accounts payable and accrued expenses approximate their carrying values due to their short term nature.

 

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 valuing our stock options, warrants, convertible notes, and common stock issued for services, among other items. Actual results could differ from these estimates.

 

Revenue Recognition

 

Revenue from the sale of our Nano Reactor® Systems is recognized when persuasive evidence of an agreement exists; shipment has occurred, including transfer of title and risk of loss for product sales, or services have been rendered for service revenues; the price to the buyer is fixed or determinable; and collectability is reasonably assured.

 

The Company is also entitled to certain profit sharing from its distributor from the sale of the reactors. The profit share is non-refundable and is recorded upon shipment and acceptance of the reactors by our distributor.

 

Patents

 

Capitalized patent costs represent legal fees associated with procuring and filing patent applications. The Company accounts for patents in accordance with ASC 350-30, General Intangibles Other Than Goodwill. The Company has two patents issued in fiscal 2012 and another three in fiscal 2014. As of March 31, 2015, we have a total of 25 patents pending. The patents have duration of twenty years from filing date.

 

Based upon our estimate, we believe that our patents have an estimated life of four years before the next generation of reactors is developed or until other forms of competition appear. During the nine months ended March 31, 2015 and 2014, we recorded amortization expense of $18,758 and $19,401 respectively.

 

As of March 31, 2015 and June 30, 2014 the Company had remaining unamortized patent costs of $48,715 and $67,473 respectively.

 

Impairment of Intangible and Long-Lived Assets

 

In accordance with ASC 350-30 (General Intangibles Other than Goodwill), the Company evaluates amortizable intangibles and long-lived assets for impairment whenever events or changes in circumstances indicate that their net book value may not be recoverable. When such factors and circumstances exist, the Company compares the projected undiscounted future cash flows associated with the related asset or group of assets over their estimated useful lives against their respective carrying amount. Impairment, if any, is based on the excess of the carrying amount over the fair value, based on market value when available, or discounted expected cash flows, of those assets and is recorded in the period in which the determination is made. Based on our impairment tests, management believes there is no impairment of its intangibles and long-lived assets as of March 31, 2015. There can be no assurance, however, that market conditions will not change or demand for the Company's products under development will continue. Either of these could result in future impairment of intangibles and long-lived assets.

 

8
 

 

Share-Based Compensation

 

The Company periodically issues stock options and warrants to employees and non-employees in non-capital raising transactions for services and for financing costs. The Company accounts for stock option and warrant grants issued and vesting to employees based on the authoritative guidance provided by the Financial Accounting Standards Board whereas the value of the award is measured on the date of grant and recognized over the vesting period. The Company accounts for stock option and warrant grants issued and vesting to non- employees in accordance with the authoritative guidance of the Financial Accounting Standards Board whereas the value of the stock compensation is based upon the measurement date as determined at either a) the date at which a performance commitment is reached, or b) at the date at which the necessary performance to earn the equity instruments is complete. Non-employee stock-based compensation charges generally are amortized over the vesting period on a straight-line basis. In certain circumstances where there are no future performance requirements by the non-employee, option grants are immediately vested and the total stock-based compensation charge is recorded in the period of the measurement date.

 

The fair value of the Company's common stock option and warrant grants is estimated using the Black-Scholes option pricing model, which uses certain assumptions related to risk-free interest rates, expected volatility, expected life of the common stock options, and future dividends. Compensation expense is recorded based upon the value derived from the Black-Scholes option pricing model, and based on actual experience. The assumptions used in the Black-Scholes option pricing model could materially affect compensation expense recorded in future periods.

 

Income Taxes

 

The Company accounts for income taxes in accordance with ASC 740-10, Income Taxes.  The Company recognizes deferred tax assets and liabilities to reflect the estimated future tax effects, calculated at anticipated future tax rates, of future deductible or taxable amounts attributable to events that have been recognized on a cumulative basis in the financial statements. A valuation allowance related to a deferred tax asset is recorded when it is more likely than not that some portion of the deferred tax asset will not be realized. Deferred tax assets and liabilities are adjusted for the effects of the changes in tax laws and rates of the date of enactment.

 

ASC 740-10 prescribes a recognition threshold that a tax position is required to meet before being recognized in the financial statements and provides guidance on recognition, measurement, classification, interest and penalties, accounting in interim periods, disclosure and transition issues. The Company classifies interest and penalties as a component of interest and other expenses. To date, there have been no interest or penalties assessed or paid.

 

The Company measures and records uncertain tax positions by establishing a threshold for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return.  Only tax positions meeting the more-likely-than-not recognition threshold at the effective date may be recognized or continue to be recognized.

 

Warranty Policy

 

The Company provides a limited warranty with every set of reactors sold, typically two years. The Company has not experienced significant claims under its warranty policy, and management determined no accrual for warranty reserve was necessary at March 31, 2015.

 

Dependence on Desmet Ballestra

 

Our revenue is almost entirely dependent on Desmet Ballestra who is our exclusive distribution agent with regard to the CTi Nano Neutralization® System for edible oils. During fiscal 2015, 100% of our revenue was derived from Desmet sales efforts (see Note 3).

 

Basic Loss Per Share

 

The Company computes the loss per common share using ASC 260, Earnings per Share.  The net loss per common share, both basic and diluted, is computed based on the weighted average number of shares outstanding for the period.  The diluted loss per common share is computed by dividing the net loss attributable to common stockholders by the weighted average shares outstanding assuming all potential dilutive common shares were issued.

 

As of March 31, 2015, the Company had 13,611,815 stock options and 68,259,843 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.

 

9
 

 

Recent Accounting Pronouncements

 

On August 27, 2014, the FASB issued ASU 2014-15, Disclosures of Uncertainties about and Entity's Ability to Continue as a Going Concern, which provides guidance on determining when and how to disclose going-concern uncertainties in the financial statements. The new standard requires management to perform interim and annual assessments of an entity's ability to continue as a going concern within one year of the date the financial statements is issued. An entity must provide certain disclosures if conditions or events raise substantial doubt about the entity's ability to continue as a going concern. The ASU applies to all entities and is effective for annual periods ending after December 15, 2016, and interim periods thereafter, with early adoption permitted. The Company is currently evaluating the impact of adopting ASU 2014-15 on its results of operations or financial condition.

 

In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers.  ASU 2014-09 is a comprehensive revenue recognition standard that will supersede nearly all existing revenue recognition guidance under current U.S. GAAP and replace it with a principle based approach for determining revenue recognition.  ASU 2014-09 will require that companies recognize revenue based on the value of transferred goods or services as they occur in the contract.  The ASU also will require additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract.  ASU 2014-09 is effective for interim and annual periods beginning after December 15, 2016, however, the FASB has proposed a one-year deferral.   Early adoption is not permitted, and either full retrospective adoption or modified retrospective adoption is permitted. The Company is in the process of evaluating the impact of ASU 2014-09 on the Company’s financial statements and disclosures.

 

In January 2015, the FASB issued Accounting Standards Update No. 2015-01 (Subtopic 225-20) - Income Statement - Extraordinary and Unusual Items.  ASU 2015-01 eliminates the concept of an extraordinary item from GAAP.  As a result, an entity will no longer be required to segregate extraordinary items from the results of ordinary operations, to separately present an extraordinary item on its income statement, net of tax, after income from continuing operations or to disclose income taxes and earnings-per-share data applicable to an extraordinary item.  However, ASU 2015-01 will still retain the presentation and disclosure guidance for items that are unusual in nature and occur infrequently.  ASU 2015-01 is effective for periods beginning after December 15, 2015.  Early adoption is permitted.  The adoption of ASU 2015-01 is not expected to have a material effect on the Company’s consolidated financial statements. 

 

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.

 

Business and Credit Concentrations

 

The Company’s cash balances in financial institutions at times may exceed federally insured limits. As of March 31, 2015 and June 30, 2014, before adjustments for outstanding checks and deposits in transit, the Company had approximately $1.5 million and $1.2 million, respectively, deposited in one financial institution. The deposits are federally insured up to $250,000. The Company believes that no significant concentration of credit risk exists with respect to these cash balances because of its assessment of the creditworthiness and financial viability of this financial institution.

 

All recorded revenues during the nine months ended March 31, 2015 and 2014 of $333,662 and $1,855,707, respectively, were attributable to one customer (see Note 3).

 

Note 3 - Agreement with Desmet Ballestra

 

On May 14, 2012, we signed a global Research and Development, Marketing and Technology License Agreement (“Agreement”) with the n.v. Desmet Ballestra Group s.a. (Desmet), a Belgian company that is actively marketing the NANO Neutralization System, the key component of which is the Company's reactor to soybean and other vegetable oil refiners. Desmet, together with its affiliates, is a global engineering and equipment supply company engaged in the development, design and supply of process equipment for oils and fats processing facilities including vegetable oil refining, biofuel, oleo chemical, seed crushing, surfactant and detergent markets. Desmet supplies these markets with competitive services based on the latest globally sourced technologies.

 

10
 

 

The Agreement provides Desmet (licensee) a limited, exclusive license and right to develop, design and supply Nano Reactor® systems which incorporate Nano Reactor® devices on a global basis but is limited to oils and fats and oleo chemical applications. CTi (licensor) remains owner of the current patents and patent applications but Desmet will be co-owner of any new process patent applications jointly developed. Desmet has agreed to provide, under certain conditions, limited monthly advance payments of $125,000 against future sales to CTi. Desmet shall be entitled to immediately terminate the present agreement in case the claims of current US Patent Application Number 12/484,981 are not granted as such or are cancelled. In addition, Desmet may terminate the agreement on August 1 of any particular year if they have not installed at least 6 Nano Reactor® devices in the previous 12 month period. CTi may terminate the Agreement for material default. This Agreement supersedes a previous agreement dated November 1, 2010, amended on June 1, 2011 and on September 2, 2011. As of the date of this report, the Company or Desmet has not indicated any intention to terminate the Agreement.

 

The Company and Desmet have worked together to determine the appropriate sales approach and installation process. The Company's Nano Neutralization is designed to be used as an add-on process to an existing neutralization system within soybean and other vegetable oil refineries. Desmet purchases Nano Reactor Systems from the Company and installs them at the refinery as part of an integrated neutralization system. We are therefore substantially dependent on Desmet to identify prospects, complete sales contracts, install the system and manage relationships with end-users.

 

During the nine months ended March 31, 2015, we recorded $333,662 in revenues from Desmet. Sales to Desmet represent 100% of our revenues. During the nine months ended March 31, 2014, we recorded $1,855,707 of revenues from Desmet. During the three months ended March 31, 2015, the Company recorded $333,662 in revenues from Desmet, and $1,360,441 in the same period ended March 31, 2014The Company received advances of $1,000,000 during the nine months ended March 31, 2015 and 2014. As of March 31, 2015, Desmet has advanced to us an excess of funds of $1,401,294 which is presented in the accompanying balance sheet as “Advances from distributor” and will be recognized as revenue in future periods upon shipment and acceptance of our reactors.

 

Note 4 - Property and Equipment

 

Property and equipment consisted of the following as of March 31, 2015 and June 30, 2014:

 

   March 31,   June 30, 
   2015   2014 
   (unaudited)     
         
Leasehold  improvement  $2,475   $2,475 
Furniture   26,837    26,837 
Office equipment   1,499    1,499 
Equipment   68,380    68,380 
Systems   268,340    268,340 
    367,531    367,531 
Less: accumulated depreciation and amortization   (276,069)   (230,436)
Property & Equipment, net  $91,462   $137,095 

 

Depreciation expense for the nine months ended March 31, 2015 and 2014 amounted to $45,633 and $52,469, respectively. For the three months ended March 31, 2015 and 2014 depreciation expense amounted to $13,245and $17,212, respectively.

 

Note 5 - Accrued Payroll and Payroll Taxes

 

As of March 31, 2015 and June 30, 2014, the Company had accrued unpaid salaries due to current and former officers of the Company amounting to $936,866 and $950,674 respectively. In addition, the Company also accrued the estimated payroll taxes due to this unpaid payroll of $79,357 and $79,357 respectively. The accrued payroll is unsecured and is due upon demand.

 

11
 

 

Note 6 - Stockholders' Deficit

 

Common Stock

 

In July 2014 we issued 5,193,329 shares of common stock at $0.08/share and warrants to purchase 5,193,329 shares of common stock at $0.12 per share, vesting immediately and expiring in 5 years from grant date to various entities and individuals in exchange for cash of $375,498, net of commission of $14,002. The shares were issued in reliance on Section 4(2) of the Securities Act of 1933, as amended. The shares were not offered via general solicitation to the public. The Company issued rule 144 shares in connection with these issuances.

 

In October of 2014, the Company issued 1,068,000 shares of common stock with a fair value of $0.06/share or $64,080 to a consultant for Investor Relation services. The shares of common stock were valued to market at the date of its issuance.

 

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 for the nine months ended March 31, 2015 is as follows:

 

           Weighted- 
           Average 
       Weighted-   Remaining 
       Average   Contractual 
       Exercise   Life 
   Options   Price   (Years) 
             
Outstanding June 30, 2014   13,611,815   $0.10    6.37 
                
- Granted   -           
- Forfeited   -    -    - 
- Exercised   -    -    - 
- Expired   -    -    - 
Outstanding March 31, 2015   13,611,815   $0.10    5.62 
Exercisable and vested at March 31, 2015   13,611,815   $0.10    5.62 

 

The intrinsic value of the outstanding options was approximately $354,000 as of March 31, 2015. The following table summarizes additional information concerning options outstanding and exercisable at March 31, 2015.

 

    Options Outstanding   Options 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    11,800,858    6.21   $0.03    11,800,858    6.21 
$0.33    637,297    1.56   $0.33    637,297    1.56 
$0.67    1,173,660    1.93   $0.67    1,173,660    1.93 
      13,611,815              13,611,815      

 

12
 

 

Warrants

 

On July 1 of 2014, the Company granted warrants to purchase 5,193,329 shares of common stock to the purchasers of our common stock offering at $0.12 per share, vesting immediately and expiring in five years from grant date. Pursuant to the term of the grant, the underlying shares of common stock must be registered with the SEC within one year after its purchase otherwise, the warrant will be considered cashless.

 

During the nine months ended on March 31, 2015, the Company recognized $235,003 of compensation costs as part of general and administrative expenses related to the vesting of warrants granted in prior periods. To compute compensation expense, the Company estimated the fair value of each warrant award on the date of grant using the Black-Scholes-Merton option pricing model for employees, and calculated the fair value of each warrant award at the end of the period for non-employees. The following average assumptions were used in the Black-Scholes-Merton valuation model: risk-free interest rate of 3.25%; dividend yield of 0%; volatility of 184%; and an expected life of 8.75 years.

 

A summary of the Company's warrant activity for the nine months ended on March 31, 2015 is as follows.

 

           Weighted- 
           Average 
       Weighted-   Remaining 
       Average   Contractual 
       Exercise   Life 
   Warrants   Price   (Years) 
             
Outstanding at June 30, 2014   63,066,514   $0.06    6.91 
                
Granted   5,193,329   $0.12    5.00 
Exercised   -           
Expired   -           
Outstanding at March 31, 2015   68,259,843   $0.07    6.02 
Vested and expected to vest at March 31, 2015   68,051,510   $0.07    5.95 

 

As of March 31, 2015, total compensation cost related to non-vested warrant awards not yet recorded is approximately $12,454. The intrinsic value of the outstanding warrants was approximately $652,000 as of March 31, 2015. The following table summarizes additional information concerning warrants outstanding and exercisable at March 31, 2015.

 

    Warrants Outstanding   Warrants Exercisable 
        Weighted   Weighted       Weighted 
        Average   Average       Average 
Exercise   Number   Remaining   Exercise   Number   Exercise 
Price   of Shares   Life (Years)   Price   of Shares   Price 
                      
$0.04 - 0.07    47,933,184    7.00   $0.05    47,724,851   $0.05 
$0.12    20,326,659    4.50   $0.12    20,326,659   $0.12 
      68,259,843              68,051,510      

 

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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.

 

During the nine months ended March 31, 2015, we recorded revenues of $333,662 and incurred a net loss of $1,073,493. We spent a net of $71,901 in cash for our operating activities, and financing activities provided net cash of $375,498.

 

Management's Plan

 

We are engaged in merchandising our Neutralization System which is designed to help refine vegetable oils such as soybean, canola, sunflower and rapeseed.  Our near term goal is to continue to merchandise our systems through our partner, Desmet Ballestra. During the nine months ended March 31, 2015, we recorded revenues of $333,662 and incurred a net loss of $1,073,493. As of March 31, 2015, the Company had a working capital deficiency of $930,613 and a stockholders' deficit of $780,936.   The accompanying condensed consolidated financial statements have been prepared in conformity with generally accepted accounting principles which contemplate continuation of the Company as a going concern.

 

Management's plan is to generate income from operations by licensing our technology globally through our strategic partner, the Desmet Ballestra Group (Desmet). Desmet has agreed to provide us monthly advances of $125,000 against future sales. During the nine months ended March 31, 2015, advances received from Desmet amounted to $1,000,000 and approximately $4,250,000 as of April 30, 2015. These funds service portion of operational expenses on a monthly basis. Desmet shall be entitled to immediately terminate the present agreement in case the claims of current US Patent Application Number 12/484,981 are not granted as such or are cancelled. In addition, Desmet may terminate the agreement on August 1 of any particular year if they have not installed at least 6 Nano Reactor® devices in the previous 12 month period. CTi may terminate the Agreement for material default. This Agreement supersedes a previous agreement dated November 1, 2010, amended on June 1, 2011 and on September 2, 2011. As of the date of this report, the Company or Desmet has not indicated any intention to terminate the agreement. In addition to these advances, we anticipate that we will need additional funding, and we will attempt to raise additional debt and/or equity financing to fund operations and to 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, 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.

 

The accompanying condensed consolidated financial statements do not include adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from an inability of the Company to continue as a going concern. As a result of the aforementioned factors, our independent auditors, in their report on our audited financial statements for the fiscal year ended June 30, 2014, expressed substantial doubt about our ability to continue as a going concern.

 

Critical Accounting Policies

 

CTi's critical accounting policies and estimates are included in its Annual Report on Form 10-K for the year ended June 30, 2014, and did not change for the nine months ended March 31, 2015.

 

14
 

 

Results of Operations

 

Results of Operations for the Three Months Ended March 31, 2015 Compared to the Three Months Ended March 31, 2014

 

The following is a comparison of our results of operations for the three months ended March 31, 2015 and 2014.

 

   For the Three Months Ended         
   March 31,         
   2015   2014   $ Change   % Change 
   (Unaudited)   (Unaudited)         
                 
Revenue  $333,662   $1,360,441   $(1,026,779)   -75.5%
Cost of sales   52,038    102,625    (50,587)   -49.3%
Gross profit   281,624    1,257,816    (976,192)   -77.6%
General and administrative expenses   331,850    425,504    (93,654)   -22.0%
Research and development expenses   2,742    2,044    698    34.1%
Total operating expenses   334,592    427,548    (92,956)   -21.7%
Loss from operations   (52,968)   830,268    (883,236)   -106.4%
Interest expense & other   (2)   (6,586)   6,584    -100.0%
Net Loss  $(52,970)  $823,682    (876,652)   -106.4%

 

Revenue

 

During the three months ended March 31, 2015, our revenue consisted of NANO Neutralization System reactor sales of $333,662 to Desmet customers in Mexico. This compares with $1,360,441 recorded during the same period in fiscal 2014 from reactor sales to Desmet customers in India, Brazil and the US.

 

Cost of Revenue

 

During the three months ended March 31, 2015, our cost of sales amounted to $52,038 which was the result of the revenue transactions described above.

 

Operating Expenses

 

Operating expenses for the three months ended March 31, 2015 amounted to $334,592 compared with $427,548 for the same period in 2014, a decrease of $92,956, or 22%. In both periods, the major expense component was salaried compensation. In the third quarter of fiscal 2015, compensation amounted to $112,287 or 34% of total costs compared with $89,034 or 21% of total costs in the same period of fiscal 2014. This increase in compensation in the third quarter of fiscal 2015 was attributable largely to an increase in salaried officer compensation. Also, the decrease in expenses in the current period as compared to fiscal 2014 was attributable largely to a decrease in fair value of warrants vested to a consultant, which amounted to $182,902 or 44% of total operating expenses in fiscal 2014, and was only $14,944 in the current period.

 

Research and Development (R&D) expenses remained relatively low as we continued to rely on Desmet Ballestra for support in R&D. R&D expenses amounted to $2,742 in the third quarter of fiscal 2015, as compared to $2,044 in the same period in the prior fiscal year. It is our intention to pursue R&D as our cash position permits.

 

Interest Expense

 

The Company did not incur any interest expense in the three months ended on March 31, 2015. Interest expense of $6,586 during the same period of the prior fiscal year was composed entirely of non-cash expenses related to accrued interest on short term loans that were fully settled in FY 2014.

 

15
 

 

Results of Operations for the Nine Months Ended March 31, 2015 Compared to the Nine Months Ended March 31, 2014

 

The following is a comparison of our results of operations for the nine months ended March 31, 2015 and 2014.

 

   For the Nine Months Ended         
   March 31,         
   2015   2014   $ Change   % Change 
   (Unaudited)   (Unaudited)         
                 
Revenue  $333,662   $1,855,707   $(1,522,045)   -82.0%
Cost of sales   52,038    119,258    (67,220)   -56.4%
Gross profit   281,624    1,736,449    (1,454,825)   -83.8%
General and administrative expenses   1,336,924    1,832,959    (496,035)   -27.1%
Research and development expenses   16,746    28,812    (12,066)   -41.9%
Total operating expenses   1,353,670    1,861,771    (508,101)   -27.3%
Loss from operations   (1,072,047)   (125,322)   (946,725)   755.4%
Interest expense   (1,446)   (81,931)   80,485    -98.2%
Net Loss  $(1,073,493)  $(207,253)   (866,240)   418.0%

 

Revenue

 

During the nine months ended March 31, 2015, our revenue consisted of NANO Neutralization System reactor sales to Desmet customers in Mexico, and amounted to $333,662. This compares with $1,855,707 recorded during the same period in fiscal 2014 associated with the sale of a NANO Neutralization System to customers located in the US, Brazil, Uruguay, South Korea, India and Ecuador.

 

Cost of Revenue

 

During the nine months ended March 31, 2015, our cost of sales amounted to $52,038 which was the result of the revenue transactions described above.

 

Operating Expenses

 

Operating expenses for the nine months ended March 31, 2015 amounted to $1,353,670 compared with $1,861,771 for the same period in 2014, a decrease of $508,101, or 27%. The decrease was attributable largely to a $496,035 decrease in General & Administrative Expenses (G&A) (attributable in turn mostly to non-cash costs relating to the vesting of options and warrants and granting of stock issued for services) and $12,066 decrease in R&D expenses.

 

The primary expenditures during the first three quarters of fiscal 2015 were $103,876 for professional service fees such as auditors, attorneys, and SEC related services, $117,595 in consulting and service fees excluding items relating to vested options and warrants, $74,374 in Insurance expenses, $346,847 in salaries and salary related expenses and $235,003 relating to the vesting of options and warrants issued for services. The expenses for the same period of fiscal 2014 were $154,000 for professional service fees such as auditors, attorneys, and SEC related services, $89,000 in consulting fees excluding items relating to vested options and warrants, $82,000 in Interest expenses, $63,000 in Insurance expenses and $272,000 in salary related expenses and $927,209 relating to the vesting of options and warrants issued for services. The increase in salaried compensation in the first nine months of fiscal 2015 was attributable largely to an increase in salaries of the management.

 

Interest Expense

 

The Company did not incur any Interest expenses in fiscal 2015 to date. Interest expense for the fiscal 2014 consisted of a non-cash expense of $55,174 relating to convertible notes, $19,756 in mostly non-cash, accrued interest relating primarily to short term loans, and cash interest paid to convertible note holders in the amount of $5,000, all of which were settled in FY 2014.

 

16
 

 

Liquidity and Capital Resources

 

The accompanying condensed consolidated financial statements have been prepared in conformity with generally accepted accounting principles which contemplate continuation of the Company as a going concern.  During the nine months ended March 31, 2015, we recorded revenues of $333,662 and incurred a net loss of $1,073,493. As of March 31, 2015, the Company had a working capital deficiency of $930,613 and a stockholders' deficit of $780,936.   These factors, among others, raise substantial doubt about the Company's ability to continue as a going concern. In addition, our independent auditors, in their report on our audited financial statements for the fiscal year ended June 30, 2014 expressed substantial doubt about our ability to continue as a going concern. The accompanying condensed consolidated financial statements do not include adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from an inability of the Company to continue as a going concern.

 

Management's plan is to generate income from operations by continuing to license our technology globally through our strategic partner, the Desmet Ballestra Group (Desmet). Desmet has agreed to provide us monthly advances of $125,000 against future sales. During the nine months ended March 31, 2015, advances received from Desmet amounted to $1,000,000. In July 2014, we also received approximately $375,000 from sale of our shares of common stock and warrants. We will also attempt to raise additional debt and/or equity financing to fund operations and to 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.

 

On March 31, 2015, we had cash on hand in the amount of $1,530,105. In addition to the funds on hand, we will require additional funds to continue to operate our business. This includes expenses we will incur in connection with costs to manufacture and ship our products; costs to design and implement an effective system of internal controls and disclosure controls and procedures; costs of maintaining our status as a public company by filing periodic reports with the SEC and costs required to protect our intellectual property. In addition, we have contractual commitments for salaries to our executive officers. In light of our financial commitments over the next several months and its liquidity constraints, we have implemented cost reduction measures in all areas of operations. We intend to review these measures on an ongoing basis and make additional decisions as may be required.

 

Cash Flow

 

Net cash used in operating activities during the nine months ended March 31, 2015 amounted to $71,901, compared with $71,721 used in these activities for the same period in fiscal 2014. Funding for the operating activities was provided by $1,000,000 in advances from our distributor, from cash reserves and financing activities to the tune of $375,498. For the first nine months of fiscal 2015, we paid $346,847 in employees' compensation, $103,876 for professional service fees such as auditors, attorneys, and SEC related services, $117,595 in consulting and service fees, $74,374 in insurance expenses and about $430,000 in various operating costs and other obligations. For the first nine months of fiscal 2014, we paid approximately $272,000 in compensation, $250,000 in various operating costs, $150,000 in professional services fees, $63,000 in various insurance premiums, and $5,000 in interest payments, and other obligations, including consulting fees, of about $360,000.

 

There was no cash used in investing activities in fiscal year 2015. Net cash used in investing activities during the nine months ended March 31, 2014 was relating to $18,512 in capitalized patents and $31,717 for property, plant, and equipment.

 

For the period ended March 31, 2015, financing activities provided a net cash of $375,498. There was no similarly financing activity in FY 2014.

 

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.

 

17
 

 

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 March 31, 2015, 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 March 31, 2015.

 

Changes in Internal Control over Financial Reporting

 

There were no changes in internal control over financial reporting during the third quarter of fiscal 2015 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

 

18
 

 

Item 6 - EXHIBITS, FINANCIAL STATEMENT SCHEDULES

 

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

 

19
 

 

SIGNATURES

 

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

 

SIGNATURE   TITLE   DATE
         
/s/ Igor Gorodnitsky   President; Member of Board of Directors   May 14, 2015
Igor Gorodnitsky   (Principal Executive Officer)    
         
/s/ N. Voloshin   Chief Financial Officer   May 14, 2015
N. Voloshin    (Principal Financial Officer)    
         
/s/ Jim Fuller   Audit Committee Chairman, Independent Financial Expert   May 14, 2015
Jim Fuller        

 

20