Cavitation Technologies Reports 76.5% Revenue Decline but Net Income Increase in Latest Quarter

Cavitation Technologies, Inc. (CTi) reported significant financial changes in its latest 10-Q filing for the quarter ending March 31, 2025. The company generated revenues of $122,000 for the three months ended March 31, 2025, a decrease of 76.5% compared to $519,000 in the same period last year. For the nine months ending March 31, 2025, revenues totaled $198,000, down 72.2% from $711,000 in the prior year. The decline in revenue is attributed to the October 2024 patent assignment and license agreement with Desmet Ballestra, which effectively terminated the previous Technology License Agreement and reduced sales of Nano Reactors.

Despite the drop in revenue, CTi reported a net income of $122,000 for the nine months ended March 31, 2025, compared to a net income of $64,000 for the same period in 2024. This increase in net income is primarily due to an $880,000 gain from the patent assignment to Desmet, which was not present in the prior year. However, the company incurred a net loss of $230,000 for the three months ended March 31, 2025, compared to a net income of $331,000 in the same quarter of 2024, reflecting a significant operational loss driven by increased general and administrative expenses and research and development costs.

Operationally, CTi's total operating expenses rose to $325,000 for the three months ended March 31, 2025, up from $179,000 in the same period last year. This increase was largely due to a $90,000 rise in stock compensation expenses and a $41,000 increase in payroll expenses related to hiring a former officer for product development. Research and development expenses also surged to $42,000 from $9,000, reflecting ongoing investments in new technology projects.

As of March 31, 2025, CTi's total assets increased to $576,000 from $248,000 as of June 30, 2024, primarily due to cash reserves of $432,000, up from $179,000. The company’s liabilities decreased significantly to $277,000 from $728,000, largely due to the settlement of accrued payroll and payroll taxes. The company’s stockholders' equity improved to $299,000, compared to a deficit of $480,000 in the previous fiscal period.

Looking ahead, CTi plans to leverage its Reserved Grant Back License to explore new markets, including water and wastewater processing and the alcoholic beverage industry. The company is optimistic about its ability to generate revenue from these sectors, although it acknowledges the need for additional financing to support its operations and growth initiatives. The management believes that the current cash reserves are sufficient to sustain operations through June 30, 2025, but future financing will be critical for long-term viability.