Cavitation (CVAT) 10-Q 20 May 16 2016 Q3 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	9 Months Ended
	Mar. 31, 2016	May. 16, 2016
Document and Entity Information:
Entity Registrant Name	Cavitation Technologies, Inc.
Entity Trading Symbol	cvat
Document Type	10-Q
Document Period End Date	Mar. 31, 2016
Amendment Flag	false
Entity Central Index Key	1,376,793
Current Fiscal Year End Date	--06-30
Entity Common Stock, Shares Outstanding		193,997,906
Entity Filer Category	Smaller Reporting Company
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Well-known Seasoned Issuer	No
Document Fiscal Year Focus	2,016
Document Fiscal Period Focus	Q3

CONDENSED CONSOLIDATED BALANCE

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($)	Mar. 31, 2016	Jun. 30, 2015
Current assets:
Cash and cash equivalents	$ 730,443	$ 1,478,565
Accounts receivable	154,388	0
Inventory, net	210,819	135,599
Total current assets	1,095,650	1,614,164
Property and equipment, net	132,465	100,372
Patents, net	20,765	37,166
Other assets	9,500	9,500
Total assets	1,258,380	1,761,202
Current liabilities:
Accounts payable and accrued expenses	226,687	198,686
Accrued payroll and payroll taxes due to officers	1,016,223	1,016,223
Related party payable	1,147	1,147
Advances from distributor	1,372,551	1,620,701
Total current liabilities	$ 2,616,608	$ 2,836,757
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, 2016 and June 30, 2015, respectively.	$ 0	$ 0
Common stock, $0.001 par value, 1,000,000,000 shares authorized, 193,997,906 and 184,968,551 shares issued and outstanding as of March 31, 2016 and June 30, 2015, respectively	193,999	184,968
Additional paid-in capital	22,062,887	21,259,285
Common stock issuable, 9,029,251 shares	0	812,633
Accumulated deficit	(23,615,113)	(23,332,441)
Total stockholders' deficit	(1,358,228)	(1,075,555)
Total liabilities and stockholders' deficit	$ 1,258,380	$ 1,761,202

CONDENSED CONSOLIDATED BALANCE3

CONDENSED CONSOLIDATED BALANCE SHEETS PARENTHETICALS - $ / shares	Mar. 31, 2016	Jun. 30, 2015
Parentheticals
Preferred Stock, par value	$ 0.001	$ 0.001
Preferred Stock, shares authorized	10,000,000	10,000,000
Preferred Stock, shares issued	0	0
Preferred Stock, shares outstanding	0	0
Common Stock, par value	$ 0.001	$ 0.001
Common Stock, shares authorized	1,000,000,000	1,000,000,000
Common Stock, shares issued	193,997,906	184,968,551
Common Stock, shares outstanding	193,997,906	184,968,551
Common Stock, shares issuable	9,029,251	9,029,251

CONDENSED CONSOLIDATED STATEMEN

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($)	3 Months Ended		9 Months Ended
	Mar. 31, 2016	Mar. 31, 2015	Mar. 31, 2016	Mar. 31, 2015
Revenues:
Revenue	$ 85,000	$ 333,662	$ 725,666	$ 333,662
Cost of revenue	19,446	52,038	85,737	52,038
Gross profit	65,554	281,624	639,929	281,624
General and administrative expenses	280,946	331,850	903,272	1,336,924
Research and development expenses	4,502	2,742	19,330	16,746
Total operating expenses	285,448	334,592	922,602	1,353,670
Loss from operations	(219,894)	(52,968)	(282,673)	(1,072,046)
Interest expense and other	0	(2)	0	(1,447)
Net Loss	$ (219,894)	$ (52,970)	$ (282,673)	$ (1,073,493)
Net Ioss per share, Basic and diluted	$ 0	$ 0	$ 0	$ (0.01)
Weighted average shares outstanding, Basic and diluted	193,997,906	184,167,693	193,997,906	183,781,811

CONDENSED CONSOLIDATED STATEME5

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' DEFICIT (Unaudited) - 9 months ended Mar. 31, 2016 - USD ($)	Common Stock Shares	Common Stock Amount	Additional Paid-in Capital	Common Stock Issuable	Accumulated Deficit	Total
Balance at Jun. 30, 2015	184,968,551	184,968	21,259,285	812,633	(23,332,441)	(1,075,555)
Common stock issued to Note holders	9,029,355	9,031	803,602	(812,633)	0	0
Net loss		$ 0	$ 0	$ 0	$ (282,673)	$ (282,673)
Balance at Mar. 31, 2016	193,997,906	193,999	22,062,887	0	(23,615,114)	(1,358,228)

CONDENSED CONSOLIDATED STATEME6

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($)	9 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Operating activities:
Net loss	$ (282,673)	$ (1,073,493)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization	45,873	64,391
Fair value of stock, options and warrants issued for services	0	299,083
Effect of changes in:
Inventory	(75,220)	3,068
Accounts payable and accrued expenses	28,001	(17,480)
Accrued payroll and payroll taxes	0	(13,809)
Accounts receivable	(154,388)	0
Advances from distributor	300,000	1,000,000
Reduction in distributor advances from recognition of revenues	(548,150)	(333,662)
Net cash used in operating activities	(686,557)	(71,901)
Investing activities:
Purchase of property and equipment	(61,565)	0
Net cash used by investing activities	(61,565)	0
Financing activities:
Proceeds from sale of common stock	0	375,498
Net cash provided by financing activities	0	375,498
Net increase (decrease) in cash	(748,122)	303,597
Cash, beginning of period	1,478,565	1,226,508
Cash, end of period	730,443	1,530,105
Supplemental disclosures of cash flow information:
Cash paid for interest	0	0
Cash paid for income taxes	$ 1,600	$ 1,600

Organization and Basis of Prese

Organization and Basis of Presentation	9 Months Ended
	Mar. 31, 2016
Organization and Basis of Presentation
Organization and Basis of Presentation	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, 2016 are not indicative of the results that may be expected for the fiscal year ending June 30, 2016. 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, 2015 filed on October 13, 2015. The condensed consolidated balance sheet as of June 30, 2015 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® Nano Neutralization® System 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, 2016, the Company incurred a net loss of $282,673 and used $688,557 of cash in operating activities. As of March 31, 2016, the Company had a working capital deficiency of $1,520,958 and a stockholders' deficit of $1,358,228. 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, 2015 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. As of March 31, 2016, we had cash and cash equivalents on hand of $730,443 and are not generating sufficient funds to cover operations. In addition to the funds on hand, Management believes we will 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 partner, the Desmet Ballestra Group (Desmet). Desmet has agreed to provide us monthly advances of $50,000 to be applied against future sales pursuant to a January of 2016 agreement. This new agreement replaces the agreement dated on May 12, 2012 that ended on May 12, 2015. During the nine months ended March 31, 2016, the Company received $300,000 advances from Desmet. 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.

Significant Accounting Policies

Significant Accounting Policies	9 Months Ended
	Mar. 31, 2016
Significant Accounting Policies:
Significant Accounting Policies	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. Intercompany 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. The following table presents information about the Company's assets and liabilities measured and reported in the financial statements at fair value on a recurring basis as of March 31, 2016 and indicates the fair value hierarchy of the valuation techniques utilized to determine such fair value. 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, 2016 and June 30, 2015, 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. 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. Estimates and assumptions used by management affected impairment analysis for fixed assets, capitalized patent cost, amounts of potential liabilities and valuation of issuance of equity securities. Actual results could differ from these estimates. Revenue Recognition Revenue from the sale of our Nano Reactor® Systems The Company is also entitled to certain non-refundable profit share from our distributor from the sale of the reactors. Pursuant to the May 2012 agreement with our distributor, the profit share was fixed and determinable at the time of shipment, and as such, recorded upon shipment and acceptance of the reactors by the distributor. Pursuant to the January 2016 agreement with our distributor, the profit share is not fixed at the time of delivery, and as such, revenue will be recognized when the profit shares is fixed and determinable, which will generally be upon delivery of the NANO Neutralization System 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 options and warrants grant 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. 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 Basic Loss Per Share The Company’s computation of earnings (loss) per share (EPS) includes basic and diluted EPS. Basic EPS is calculated by dividing the Company’s net income (loss) available to common stockholders by the weighted average number of common shares during the period. Diluted EPS reflects the potential dilution, using the treasury stock method that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the net income (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 during the period. As of March 31, 2016, the Company had 12,595,992 stock options and 64,926,510 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. 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 No. 2014-09 (ASU 2014-09), Revenue from Contracts with Customers. ASU 2014-09 will eliminate transaction- and industry-specific 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 reporting periods beginning after December 15, 2016, and early adoption is not permitted. Entities can transition to the standard either retrospectively or as a cumulative-effect adjustment as of the date of adoption. Management is currently assessing the impact the adoption of ASU 2014-09 and has not determined the effect of the standard on our ongoing financial reporting. In February 2016, the FASB issued Accounting Standards Update (ASU) No. 2016-02, Leases 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.

Agreement with Desmet Ballestra

Agreement with Desmet Ballestra and Revenue Recognition	9 Months Ended
	Mar. 31, 2016
Agreement with Desmet Ballestra and Revenue Recognition
Agreement with Desmet Ballestra and Revenue Recognition	Note 3 - Agreement with Desmet Ballestra and Revenue Recognition During the nine months ended on March 31, 20016 the Company recorded a total of $725,666 in revenue, of which $548,150 was recorded under the provisions of May 2012 agreement, and $177,516 under the terms of the new January 2016 agreement. Please see below for a further discussion of agreements with Desmet Ballestra. 2012 Agreement On May 14, 2012 the Company signed a three year global Research and Development, Marketing and Technology License Agreement NANO Neutralization System Pursuant to the 2012 Agreement, the Company was recognizing revenue from the sale of the reactors upon shipment and acceptance by Desmet as the Company had no further obligations to Desmet other than the reactor’s two year standard warranty. In addition, the Company was also entitled to a share in gross margin or profit from the sale of Desmet’s integrated neutralization system to its customer of which the reactors are an integral component. Such revenues were recognized upon shipment of the reactors to Desmet as these amounts were fixed and the Company had no further obligation or commitment in the installation of the integrated neutralization system to Desmet’s customer, other than the reactors warranty. As of June 30, 2015, outstanding advances due to Desmet amounted to $1,620,701. During the nine months ended March 31, 2016, the Company recognized revenue of $548,150 related to the shipment and acceptance of reactors to Desmet, including the Company’s share in gross margin or profit. As of March 31, 2016, the outstanding advances from Desmet under the May 2012 agreement amounted to $1,072,551. Although the agreement expired in May 2015, as of March 31, 2016, there are still open purchase orders from Desmet under this agreement for the delivery of approximately 15 more reactors during 2016. Once these reactors are shipped and accepted by Desmet, the corresponding revenues will be recognized and the advance due Desmet eliminated. 2016 Agreement On January 22, 2016, the Company signed a similar three year agreement with Desmet effective August 1, 2015. As part of the agreement, Desmet will provide, under certain conditions, limited monthly advance payments of $50,000 against future sales to CTi. The agreement may be terminated by Desmet every August 1 should Desmet and its affiliates fail to convert a minimum of six Nano Reactors System to sold status during the period of June 1 to May 31. The agreement may also be terminated in case the Company loses ownership of patents and patent applications being used in the NANO Neutralization System. Pursuant to the 2016 Agreement, the Company recognizes revenue from sale of reactors upon shipment and acceptance by Desmet, as the Company has no further obligations to Desmet other than the reactor’s two year standard warranty. In addition, Desmet now pays for such reactors on credit terms and the amount of the sale is recorded as a receivable upon acceptance by Desmet. The Company also continues to receive a share in gross margin or profit from the sale of Desmet’s integrated neutralization system to its customer of which the reactors are an integral component, however, such amount is now subject to adjustment based on certain factors including costs over run. The Company deemed that such amount is not yet fixed and determinable upon shipment of the reactors. As a result, the corresponding revenue is now being recognized upon installation and acceptance of the integrated neutralization system by Desmet’s customer. During the nine months ended March 31, 2016, the Company recognized revenue of $177,516 related to the shipment and acceptance of reactors to Desmet. In addition, the Company also received advances in the aggregate of $300,000 which has not been recorded as revenue, but reported as part of Advances from distributor in the accompanying balance sheet as of March 31, 2016. The Company expects to recognize approximately $295,000 from its share in gross margin in future periods upon delivery and acceptance of the NANO Neutralization System

Property and Equipment

Property and Equipment	9 Months Ended
	Mar. 31, 2016
Property and Equipment
Property and Equipment	Note 4 - Property and Equipment Property and equipment consisted of the following as of March 31, 2016 and June 30, 2015: March 31 June 30, 2016 2015 Leasehold improvement $ 2,475 $ 2,475 Furniture 26,837 26,837 Office equipment 1,499 1,499 Equipment 129,945 68,380 Systems 291,084 291,084 451,840 390,275 Less: accumulated depreciation and amortization (319,375 ) (289,903 ) Property & Equipment, net $ 132,465 $ 100,372 Depreciation expense for the nine months ended March 31, 2016 and 2015 amounted to $29,472 and $45,633, respectively.

Accrued Payroll and Payroll Tax

Accrued Payroll and Payroll Taxes	9 Months Ended
	Mar. 31, 2016
Accrued Payroll and Payroll Taxes
Accrued Payroll and Payroll Taxes	Note 5 - Accrued Payroll and Payroll Taxes As of March 31, 2016 and June 30, 2015, the Company had accrued unpaid salaries due to current and former officers of the Company amounting to $936,866 respectively. In addition, the Company also accrued the estimated payroll taxes due to this unpaid payroll of $79,357 respectively. The accrued payroll is unsecured, non-interest bearing and is due upon demand.

Stockholders' Deficit

Stockholders' Deficit	9 Months Ended
	Mar. 31, 2016
Stockholders' Deficit
Stockholders' Deficit	Note 6 - Stockholders' Deficit Common Stock During the nine months ended on March 31, 2016, the Company issued 9,029,355 shares of common stock pursuant to a settlement of notes payable in April 2014. These shares were reflected as Common Stock issuable in the accompanying Statement of Changes in Stockholders’ Deficit as of June 30, 2015 and such amount was reclassified to additional paid in capital during the period ended March 31, 2016. 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, 2016 is as follows: Weighted- Average Weighted- Remaining Average Contractual Exercise Life Options Price (Years) Outstanding June 30, 2015 12,810,957 $ 0.10 5.35 - Granted - - Forfeited - - - - Exercised - - - - Expired (214,965 ) - - Outstanding March 31, 2016 12,595,992 $ 0.11 5.19 Exercisable and vested at March 31, 2016 12,595,992 $ 0.11 5.19 The intrinsic value of the outstanding options was $110,000 as of March 31, 2016. The following table summarizes additional information concerning options outstanding and exercisable at March 31, 2016. 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 11,000,000 5.21 $ 0.03 11,000,000 5.21 $ 0.33 422,332 0.56 $ 0.33 422,332 0.56 $ 0.67 1,173,660 0.93 $ 0.67 1,173,660 0.93 12,595,922 12,595,922 Warrants A summary of the Company's warrant activity for the nine months ended on March 31, 2016 is as follows. Weighted- Average Weighted- Remaining Average Contractual Exercise Life Warrants Price (Years) Outstanding at June 30, 2015 68,259,843 $ 0.07 5.77 Granted - $ - - Exercised - $ - Expired 3,333,333 $ 0.12 Outstanding at March 31, 2016 64,926,510 $ 0.07 5.04 Vested and exercisable at March 31, 2016 64,926,510 $ 0.07 5.04 As of March 31, 2016, all warrants granted were vested. The intrinsic value of the outstanding warrants was $0 as of March 31, 2016. The following table summarizes additional information concerning warrants outstanding and exercisable at March 31, 2016. 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 44,599,851 6.00 $ 0.05 44,599,851 $ 0.05 $ 0.12 20,326,659 3.50 $ 0.12 20,326,659 $ 0.12 64,926,510 64,926,510

Commitment and Contingencies

Commitment and Contingencies	9 Months Ended
	Mar. 31, 2016
Commitment and Contingencies:
Commitments and Contingencies Disclosure	Note 7 - Commitments and Contingencies Royalty Agreements On July 1, 2008, the Company’s wholly owned subsidiary entered into Patent Assignment Agreements with two parties, our President as well as our former Chief Executive Officer (CEO) and current Chief Technology Officer (CTO), where certain devices and methods involved in the hydrodynamic cavitation processes invented by the President and former CEO/current CTO have been assigned to the subsidiary. In exchange, that subsidiary agreed to pay a royalty of 5% of gross revenues to each of the CTO and President and former CEO for licensing of the technology and leasing of the related equipment embodying the technology. These agreements were subsequently assumed by the Company on May 13, 2010 from its subsidiary. The Company's CTO and President both waived their rights to receive royalty payments that have accrued, or that may accrue, on any gross revenue generated through March 31, 2016. On April 30, 2008 and as amended on November 22, 2010, the Company’s wholly owned subsidiary entered into an employment agreement with its former Director of Chemical and Analytical Department (the "Inventor") to pay, in the first year, an amount equal to 5% of actual gross revenue received by the Company on any patent for which the Inventor was a legally named inventor, and, in each subsequent year, 3% of actual gross revenue received by the Company on any such patent. Since entering into that employment agreement, and during the term of this employment agreement, the Company has not received any revenue on any patents for which the Inventor was a legally named inventor. Litigation The Company may be involved in certain legal proceedings that arise from time to time in the ordinary course of its business. Except for income tax contingencies (commencing April 1, 2009), the Company records accruals for contingencies to the extent that management concludes that the occurrence is probable and that the related amounts of loss can be reasonably estimated. Legal expenses associated with the contingency are expensed as incurred. In August 2014, a former employee and former Director filed an administrative Complaint for approximately $179,000 in unpaid wages, plus penalties and interest, with the California Labor Commissioner’s Office (CLCO). In January 2016, the CLCO ruled in favor of the Company and dismissed the case. As a result of this ruling, the Company’s obligation to the former employee and former Director only amounted to approximately $134,000 which was already accrued in prior periods and included as part of Accrued Payroll and payroll taxes due to officers in a the accompanying balance sheet. In February 2016, the former employee and former Director has now appealed this ruling to the Los Angeles County Superior Court. In addition to defending itself, the Company also has filed a cross-complaint against the former employee and former Director for breach of contract and breach of fiduciary duty as a Director. Trial is currently scheduled to begin in August 2016. Based upon available information at this very early stage of litigation, Management believes the likelihood of material loss resulting from this lawsuit to be remote.

Income Taxes

Income Taxes	9 Months Ended
	Mar. 31, 2016
Income Taxes:
Income Tax Disclosure	Note 8 – Income Taxes At June 30, 2015, the Company had Federal and State net operating loss (NOL) carry forwards available to offset future taxable income of approximately $8.4 million and $8.3 million, respectively. These carry forwards will begin to expire in the years ending June 30, 2027 and June 30, 2017, respectively, subject to statutory limitations, including change in ownership. Authoritative guidance issued by the ASC Topic 740 – Income Taxes In assessing the realize-ability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. The Company has existing limitations on its available federal NOL due to its previous changes in ownership under Internal Revenue Service Section 382 guidelines. These restrictions limit the amount of NOL the Company can utilize over the next several years.

Accounting Policies (Policies)

Accounting Policies (Policies)	9 Months Ended
	Mar. 31, 2016
Accounting Policies (Policies):
Principles of Consolidation , Policy	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, Policy	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 following table presents information about the Company's assets and liabilities measured and reported in the financial statements at fair value on a recurring basis as of March 31, 2016 and indicates the fair value hierarchy of the valuation techniques utilized to determine such fair value. 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, 2016 and June 30, 2015, 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.
Use of Estimates, Policy	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. Estimates and assumptions used by management affected impairment analysis for fixed assets, capitalized patent cost, amounts of potential liabilities and valuation of issuance of equity securities. Actual results could differ from these estimates.
Revenue Recognition , Policy	Revenue Recognition Revenue from the sale of our Nano Reactor® Systems The Company is also entitled to certain non-refundable profit share from our distributor from the sale of the reactors. Pursuant to the May 2012 agreement with our distributor, the profit share was fixed and determinable at the time of shipment, and as such, recorded upon shipment and acceptance of the reactors by the distributor. Pursuant to the January 2016 agreement with our distributor, the profit share is not fixed at the time of delivery, and as such, revenue will be recognized when the profit shares is fixed and determinable, which will generally be upon delivery of the NANO Neutralization System
Share-Based Compensation Policy	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 options and warrants grant 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.
Dependence on Desmet Ballestra , Policy	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
Basic Loss Per Share	Basic Loss Per Share The Company’s computation of earnings (loss) per share (EPS) includes basic and diluted EPS. Basic EPS is calculated by dividing the Company’s net income (loss) available to common stockholders by the weighted average number of common shares during the period. Diluted EPS reflects the potential dilution, using the treasury stock method that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the net income (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 during the period. As of March 31, 2016, the Company had 12,595,992 stock options and 64,926,510 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.
Recent Accounting Pronouncements , Policy	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 No. 2014-09 (ASU 2014-09), Revenue from Contracts with Customers. ASU 2014-09 will eliminate transaction- and industry-specific 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 reporting periods beginning after December 15, 2016, and early adoption is not permitted. Entities can transition to the standard either retrospectively or as a cumulative-effect adjustment as of the date of adoption. Management is currently assessing the impact the adoption of ASU 2014-09 and has not determined the effect of the standard on our ongoing financial reporting. In February 2016, the FASB issued Accounting Standards Update (ASU) No. 2016-02, Leases 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.

Schedule Of Property and Equipm

Schedule Of Property and Equipment (Tables)	9 Months Ended
	Mar. 31, 2016
Schedule Of Property and Equipment (Tables):
Schedule Of Property and Equipment (Tables)	Property and equipment consisted of the following as of March 31, 2016 and June 30, 2015: March 31 June 30, 2016 2015 Leasehold improvement $ 2,475 $ 2,475 Furniture 26,837 26,837 Office equipment 1,499 1,499 Equipment 129,945 68,380 Systems 291,084 291,084 451,840 390,275 Less: accumulated depreciation and amortization (319,375 ) (289,903 ) Property & Equipment, net $ 132,465 $ 100,372

Schedule Of Stock Option Activi

Schedule Of Stock Option Activity (Tables)	9 Months Ended
	Mar. 31, 2016
Schedule Of Stock Option Activity (Tables):
Schedule Of Stock Option Activity (Tables)	A summary of the stock option activity for the nine months ended March 31, 2016 is as follows: Weighted- Average Weighted- Remaining Average Contractual Exercise Life Options Price (Years) Outstanding June 30, 2015 12,810,957 $ 0.10 5.35 - Granted - - Forfeited - - - - Exercised - - - - Expired (214,965 ) - - Outstanding March 31, 2016 12,595,992 $ 0.11 5.19 Exercisable and vested at March 31, 2016 12,595,992 $ 0.11 5.19
Schedule Of Options Outstanding And Exercisable (Tables)	The following table summarizes additional information concerning options outstanding and exercisable at March 31, 2016. 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 11,000,000 5.21 $ 0.03 11,000,000 5.21 $ 0.33 422,332 0.56 $ 0.33 422,332 0.56 $ 0.67 1,173,660 0.93 $ 0.67 1,173,660 0.93 12,595,922 12,595,922

Schedule Of Warrants Activity (

Schedule Of Warrants Activity (Tables)	9 Months Ended
	Mar. 31, 2016
Schedule Of Warrants Activity (Tables):
Schedule Of Warrants Activity (Tables)	A summary of the Company's warrant activity for the nine months ended on March 31, 2016 is as follows. Weighted- Average Weighted- Remaining Average Contractual Exercise Life Warrants Price (Years) Outstanding at June 30, 2015 68,259,843 $ 0.07 5.77 Granted - $ - - Exercised - $ - Expired 3,333,333 $ 0.12 Outstanding at March 31, 2016 64,926,510 $ 0.07 5.04 Vested and exercisable at March 31, 2016 64,926,510 $ 0.07 5.04
Schedule Of Warrants Outstanding And Exercisable (Tables)	As of March 31, 2016, all warrants granted were vested. The intrinsic value of the outstanding warrants was $0 as of March 31, 2016. The following table summarizes additional information concerning warrants outstanding and exercisable at March 31, 2016. 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 44,599,851 6.00 $ 0.05 44,599,851 $ 0.05 $ 0.12 20,326,659 3.50 $ 0.12 20,326,659 $ 0.12 64,926,510 64,926,510

Going Concern (Narrative) (Deta

Going Concern (Narrative) (Details)	9 Months Ended
	Mar. 31, 2016USD ($)
Going Concern Narrative Details
Working capital deficiency	$ 1,520,958
Total stockholders' deficit	1,358,228
Minimum monthly advances from Desmet	50,000
Company incurred a net loss	282,673
Received Advances from Desmet	300,000
Cash and cash equivalents on hand	$ 730,443

Significant Accounting Polici20

Significant Accounting Policies (Details)	Mar. 31, 2016shares
Significant Accounting Policies Details
Stock options shares	12,595,992
Stock warrants outstanding to purchase shares of common stock	64,926,510

Agreement with Desmet Ballest21

Agreement with Desmet Ballestra (Narrative) (Details) - USD ($)	3 Months Ended	9 Months Ended
	Mar. 31, 2016	Mar. 31, 2016	Jan. 22, 2016	Jun. 30, 2015
Agreement With Desmet Ballestra Details
Limited monthly advance payments against future sales	$ 177,516	$ 125,000
Outstanding advances due to Desmet amounted	1,072,551	1,072,551		$ 1,620,701
Recognized revenue related to the shipment		548,150
Limited monthly advance payments against future sales			$ 50,000
The Company expects to recognize from Desmet revenues,its share in gross margin in future periods approximately		295,000
Received Advances from Desmet	$ 300,000	$ 300,000

Property and equipment consiste

Property and equipment consisted of the following (Details) - USD ($)	Mar. 31, 2016	Jun. 30, 2015
Property and equipment consisted of the following
Leasehold improvement	$ 2,475	$ 2,475
Furniture	26,837	26,837
Office equipment	1,499	1,499
Equipment	129,945	68,380
Systems	291,084	291,084
Property and equipment, gross	451,840	390,275
Less: accumulated depreciation and amortization	(319,375)	(289,903)
Property and Equipment, net	$ 132,465	$ 100,372

Property, Plant and Equipment (

Property, Plant and Equipment (Depreciation Expense Narrative) (Details) - USD ($)	9 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Property and equipment - Depreciation expense
Depreciation expense	$ 29,472	$ 45,633

Accrued Payroll and Payroll T24

Accrued Payroll and Payroll Taxes (Narrative) (Details) - USD ($)	Mar. 31, 2016	Jun. 30, 2015
Accrued Payroll And Payroll Taxes Narrative Details
Accrued salaries of officers	$ 936,866	$ 936,866
Accrued payroll taxes	$ 79,357	$ 79,357

Common Stock (Details)

Common Stock (Details)	9 Months Ended
	Mar. 31, 2016USD ($)shares
Common Stock details
Company issued shares of common stock | shares	9,029,355
The intrinsic value of the outstanding options	$ 110,000
The intrinsic value of the outstanding warrants	$ 0

Summary of the Company's Option

Summary of the Company's Options activity (Details)	Mar. 31, 2016$ / sharesshares	Jun. 30, 2015$ / sharesshares
Options
Options Outstanding	12,595,992	12,310,957
Options Granted		0
Options Exercised		0
Options Expired	(214,965)	(214,965)
Exercisable and vested	12,595,992
Weighted Average Exercise Price
Weighted- Average Exercise Price - Options Outstanding | $ / shares	$ 0.11	$ 0.10
Weighted- Average Exercise Price - Options Vested and exercisable | $ / shares	$ 0.11
Weighted- Average Remaining Contractual Life (Years)
Weighted- Average Remaining Contractual Life - Options Outstanding	5.19	5.35
Weighted- Average Remaining Contractual Life - Options Vested and exercisable	5.19

Summary of additional additiona

Summary of additional additional information concerning options outstanding and exercisable (Details)	9 Months Ended
	Mar. 31, 2016$ / sharesshares
Options Exercise Price
Options Outstanding and Exercisable Exercise Price | $ / shares	$ 0.03
Options Outstanding and Exercisable Exercise Price | $ / shares	0.33
Options Outstanding and Exercisable Exercise Price | $ / shares	$ 0.67
Options Outstanding Number of Shares:
Options Outstanding Number of Shares at exercise price 0.03	11,000,000
Options Outstanding Number of Shares at exercise price 0.33	422,332
Options Outstanding Number of Shares at exercise price 0.67	1,173,660
Total Options Outstanding Number of Shares	12,595,922
Options Outstanding Weighted Average Remaining Life (Years)
Options Outstanding Weighted Average Remaining Life (Years)	5.21
Options Outstanding Weighted Average Remaining Life (Years)	0.56
Options Outstanding Weighted Average Remaining Life (Years)	0.93
Options Outstanding Weighted Average Exercise Price
Options Outstanding Weighted Average Exercise Price | $ / shares	$ 0.03
Options Outstanding Weighted Average Exercise Price | $ / shares	0.33
Options Outstanding Weighted Average Exercise Price | $ / shares	$ 0.67
Options Exercisable Number of Shares
Options Exercisable Number of Shares	11,000,000
Options Exercisable Number of Shares	422,332
Options Exercisable Number of Shares	1,173,660
Total Options Exercisable Number of Shares	12,595,922
Options Exercisable Weighted Average Remaining Life (Years)
Options Exercisable Weighted Average Remaining Life (Years)	5.21
Options Exercisable Weighted Average Remaining Life (Years)	0.56
Options Exercisable Weighted Average Remaining Life (Years)	0.93

Summary of the Company's warran

Summary of the Company's warrant activity (Details)	Mar. 31, 2016$ / sharesshares	Jun. 30, 2015$ / sharesshares
Warrants
Warrants Outstanding	64,926,510	68,259,843
Warrants Granted		0
Warrants Exercised		0
Warrants Expired	(3,333,333)	(3,333,333)
Warrants Vested and exercisable	64,926,510	64,926,510
Warrants Weighted Average Exercise Price
Weighted- Average Exercise Price - Warrants Outstanding | $ / shares	$ 0.07	$ 0.07
Weighted- Average Exercise Price - Warrants Expired | $ / shares	0.12	$ 0.12
Weighted- Average Exercise Price - Warrants Vested and exercisable | $ / shares	$ 0.07
Weighted- Average Remaining Contractual Life (Years)
Weighted- Average Remaining Contractual Life - Warrants Outstanding	5.04	5.77
Weighted- Average Remaining Contractual Life - Warrants Vested and exercisable	5.04

Warrants Outstanding And Exerci

Warrants Outstanding And Exercisable (Details)	9 Months Ended
	Mar. 31, 2016$ / sharesshares
Warrants Outstanding And Exercisable Exercise Price
Warrants Outstanding And Exercisable Exercise Price Minimum	$ 0.04
Warrants Outstanding And Exercisable Exercise Price Maximum	0.07
Warrants Outstanding And Exercisable Exercise Price	$ 0.12
Warrants Outstanding Number of Shares
Warrants Outstanding Number of Shares | shares	44,599,851
Warrants Outstanding Number of Shares | shares	20,326,659
Total Warrants Outstanding Number of Shares | shares	64,926,510
Warrants Outstanding Weighted Average Remaining Life (Years)
Warrants Outstanding Weighted Average Remaining Life (Years)	6
Warrants Outstanding Weighted Average Remaining Life (Years)	3.50
Warrants Outstanding Weighted Average Exercise Price
Warrants Outstanding Weighted Average Exercise Price	$ 0.05
Warrants Outstanding Weighted Average Exercise Price	$ 0.12
Warrants Exercisable Number of Shares
Warrants Exercisable Number of Shares | shares	44,599,851
Warrants Exercisable Number of Shares | shares	20,326,659
Total Warrants Exercisable Number of Shares | shares	64,926,510
Warrants Exercisable Weighted Average Exercise Price
Warrants Exercisable Weighted Average Exercise Price	$ 0.05
Warrants Exercisable Weighted Average Exercise Price	$ 0.12

Royalty Agreements (Details)

Royalty Agreements (Details)	Nov. 22, 2010	Jul. 01, 2008	Apr. 30, 2008
Royalty Agreements
Subsidiary agreed to pay a royalty of gross revenues to each for licensing of the technology and leasing of the related equipment		5.00%
Actual gross royalties received by the Company resulting from the patents payable to Inventor in the first year	3.00%
Actual gross royalties received by the Company resulting from the patents payable to Inventor in the subsequent year			5.00%

Litigation (Details)

Litigation (Details) - USD ($)	Jan. 31, 2016	Aug. 31, 2014
Litigation Details
A former employee and former Director filed an administrative Complaint in unpaid wages for approximately		$ 179,000
Obligation to the former employee and former Director only amounted which was amounted to approximately	$ 134,000

Income Taxes (Narrative) (Detai

Income Taxes (Narrative) (Details) - USD ($)	Mar. 31, 2016	Jun. 30, 2015
Income Taxes Narrative Details
Net operating loss carry forwards to offset future taxable income	$ 8,400,000	$ 8,300,000
Company's NOL is limited per year	1,800,000
NOL incurred subsequent to the latest change in control, are not subject to per year limitation	8,400,000
Valuation allowance against net deferred tax assets	$ 1