Cavitation (CVAT) 10-Q/A 3 Nov 17 2017 Q3 Quarterly report (amended) Financial data

Document and Entity Information

Document and Entity Information - shares	9 Months Ended
	Mar. 31, 2017	May 18, 2017
Document and Entity Information:
Entity Registrant Name	Cavitation Technologies, Inc.
Entity Trading Symbol	cvat
Document Type	10-Q/A
Document Period End Date	Mar. 31, 2017
Amendment Flag	true
Entity Central Index Key	1,376,793
Current Fiscal Year End Date	--06-30
Entity Common Stock, Shares Outstanding		194,197,906
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	2,017
Document Fiscal Period Focus	Q3
Amendment Description	revised financials

CONDENSED CONSOLIDATED BALANCE

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($)	Mar. 31, 2017	Jun. 30, 2016
Current assets
Cash and cash equivalents	$ 566,488	$ 657,396
Inventory	229,740	153,811
Total current assets	796,228	811,207
Property and equipment, net	144,474	122,641
Patents, net	6,262	16,336
Other assets	9,500	9,500
Total assets	956,464	959,684
Current liabilities:
Accounts payable and accrued expenses	149,877	171,029
Accrued payroll and payroll taxes due to officers	994,033	994,033
Related party payable	1,147	1,147
Advances from distributor, net	700,000	436,250
Total current liabilities	1,845,057	1,602,459
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, 2017 and June 30, 2016, respectively	0	0
Common stock, $0.001 par value, 1,000,000,000 shares authorized, 194,197,906 and 193,997,906 shares issued and outstanding as of March 31, 2017 and June 30, 2016, respectively	194,198	193,998
Additional paid-in capital	22,457,688	22,062,888
Accumulated deficit	(23,540,479)	(22,899,661)
Total stockholders' deficit	(888,593)	(642,775)
Total liabilities and stockholders' deficit	$ 956,464	$ 959,684

CONDENSED CONSOLIDATED BALANCE3

CONDENSED CONSOLIDATED BALANCE SHEETS PARENTHETICALS - $ / shares	Mar. 31, 2017	Jun. 30, 2016
Stock Transactions, Parenthetical Disclosures [Abstract]
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	194,197,906	193,997,906
Common Stock, shares outstanding	194,197,906	193,997,906

CONDENSED CONSOLIDATED STATEMEN

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($)	3 Months Ended		9 Months Ended
	Mar. 31, 2017	Mar. 31, 2016	Mar. 31, 2017	Mar. 31, 2016
Revenues [Abstract]
Revenue	$ 681,873	$ 85,000	$ 801,873	$ 725,666
Cost of revenue	39,561	19,446	55,385	85,737
Gross profit	642,312	65,554	746,488	639,929
General and administrative expenses	765,758	280,946	1,372,732	903,272
Research and development expenses	6,894	4,502	14,574	19,330
Total operating expenses	772,652	285,448	1,387,306	922,602
Net Loss	$ (130,340)	$ (219,894)	$ (640,818)	$ (282,673)
Net loss per share, Basic and Diluted	$ 0	$ 0	$ 0	$ 0
Weighted average shares outstanding, Basic and Diluted	195,444,573	193,997,906	194,473,088	193,997,906

CONDENSED CONSOLIDATED STATEME5

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' DEFICIT (Unaudited) - 9 months ended Mar. 31, 2017 - USD ($)	Series A Preferred Shares	Series A Preferred Amount	Common Stock Shares	Common Stock Amount	Additional Paid-in Capital	Accumulated Deficit	Total
Balance at Jun. 30, 2016	0	0	193,997,906	193,998	22,062,888	(22,899,661)	(642,775)
Fair value of common stock issued to a director			$ 200,000	$ 200	$ 7,800		$ 8,000
Fair value of warrants granted					$ 387,000		387,000
Net loss						$ (640,818)	$ (640,818)
Balance at Mar. 31, 2017	0	0	194,197,906	194,198	22,457,688	(23,540,479)	(888,593)

CONDENSED CONSOLIDATED STATEME6

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($)	9 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Net Cash Provided by (Used in) Operating Activities, Continuing Operations [Abstract]
Net loss	$ (640,818)	$ (282,673)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Depreciation and amortization	30,086	45,873
Fair value of warrants and common stock granted	395,000	0
Changes in:
Accounts receivable	0	(154,388)
Inventory	(75,929)	(75,220)
Accounts payable and accrued expenses	(21,152)	28,001
Advances from distributor	1,065,623	300,000
Reduction in distributor advances from recognition of revenues	(801,873)	(548,150)
Net cash used in operating activities	(49,063)	(686,557)
Investing activities:
Purchase of property and equipment	(41,845)	(61,565)
Net cash used in investing activities	(41,845)	(61,565)
Net decrease in cash	(90,908)	(748,122)
Cash, beginning of period	657,396	1,478,565
Cash, end of period	566,488	730,443
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, 2017
Organization and Basis of Presentation
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, 2017 are not indicative of the results that may be expected for the fiscal year ending June 30, 2017. 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, 2016 filed on October 13, 2016. The condensed consolidated balance sheet as of June 30, 2016 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. As of March 31, 2017, the Company had a working capital deficiency of $1,048,829 and a stockholders' deficit of $888,593. 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, 2016 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, 2017, we had cash and cash equivalents on hand of $566,488. 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). In addition, Desmet has agreed to provide us monthly advances of $50,000 (see Note 4). During the nine months ended March 31, 2017, the Company received $450,000 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, 2017
Significant Accounting Policies:
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. 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. 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 During the nine months ended March 31, 2017 and 2016, we recorded amortization expense of $10,074 and $16,401, respectively relating to our capitalized patent costs. As of March 31, 2017 and June 30, 2016 the Company had remaining unamortized patent costs of $6,262 and $16,336 respectively. 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. 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, 2017. 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 Income (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. As of March 31, 2017, the Company had 11,685,852 stock options and 74,126,509 stock warrants outstanding to purchase shares of common stock that were not included in the diluted net income per common share because their effect would be anti-dilutive since the exercise price of these stock options and warrants were greater than the average market price of the Company’s stock. Recent Accounting Pronouncements 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 In March 2016, the FASB issued the ASU 2016-09, Compensation - Stock Compensation (Topic 718) 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 a financial institution at times may exceed federally insured limits. As of March 31, 2017, and June 30, 2016, before adjustments for outstanding checks and deposits in transit, the Company had approximately $566,000 and $657,000, 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, 2017 of $801,873 were attributable to one customer (see Note 4).

Restatement

Restatement	9 Months Ended
	Mar. 31, 2017
Accounting Changes and Error Corrections [Abstract]
Restatement	The Company has restated its unaudited condensed consolidated balance sheet as of March 31, 2017, and the related condensed consolidated statements of operations, stockholders’ deficiency and cash flows for the three and nine-month periods ending March 31, 2017. The restatement corrects an accounting error in the recognition of revenues that resulted from miscommunication with the Company’s distributor related to the ultimate delivery of products sold to their customers, and restates previously reported revenues in the Condensed Consolidated Statement of Operations to $681,873 from the previous amount of $1,381,873 for the three-months ended March 31, 2017 and to $801,873 from previously reported amount of $1,501,873 for the nine months ended March 31, 2017. As such, this restatement restates previously reported net income in the Condensed Consolidated Statement of Operations to a net loss of $130,340 from the previous net income amount of $569,660 for the three-months ended March 31, 2017 and to a net loss of $640,818 from previously reported net income amount of $59,182 for the nine months ended March 31, 2017. The effects of the discrepancy discovered related to the accounting error on the previously filed Form 10-Q for the three and nine months ended March 31, 2017 are summarized as follows: Condensed Consolidated Balance Sheets as of March 31, 2017 Previously Adjustment As Restated Advances from distributor, net - 700,000 (1) 700,000 Total current liabilities 1,145,057 700,000 (1) 1,845,057 Accumulated deficit (22,840,479 ) (700,000 )(1) (23,540,479 ) Total stockholders' deficit (188,593 ) (700,000 )(1) (888,593 ) Condensed Consolidated Statement of Operations for the three-month ended March 31, 2017 Previously Adjustment As Restated Revenues 1,381,873 (700,000 )(1) 681,873 Gross Profit 1,342,312 (700,000 )(1) 642,312 Net income (loss) 569,660 (700,000 )(1) (130,340 ) Weighted average shares outstanding, Basic and Diluted 194,169,017 1,275,556 195,444,573 Condensed Consolidated Statement of Operations for the nine-month ended March 31, 2017 Previously Adjustment As Restated Revenues 1,501,873 (700,000 )(1) 801,873 Gross Profit 1,446,488 (700,000 )(1) 746,488 Net income (loss) 59,182 (700,000 )(1) (640,818 ) Weighted average shares outstanding, Basic and Diluted 194,054,110 418,978 194,473,088 Condensed Consolidated Statement of Cash Flows for the nine-month ended March 31, 2017 Previously Adjustment As Restated Net income (loss) 59,182 (700,000 )(1) (640,818 ) Reduction in distributor advances from recognition of revenues (1,501,873 ) 700,000 (1) (801,873 ) (1) - To reduce revenues by $700,000 related to the Company’s gross profit share from the sale of reactors as the amount was not yet fixed and determinable per confirmation with distributor accordance with Staff Accounting Bulletin 101 and Staff Accounting Bulletin 104, Revenue Recognition in Financial Statements. (2) – To account the effect of anti-dilutive stock options and warrants in the weighted average shares - basic and diluted common computation.

Agreement with Desmet Ballestra

Agreement with Desmet Ballestra and Revenue Recognition	9 Months Ended
	Mar. 31, 2017
Agreement with Desmet Ballestra and Revenue Recognition
Agreement with Desmet Ballestra and Revenue Recognition	On January 22, 2016, the Company signed a three-year agreement with Desmet effective August 1, 2015 for the sale and marketing of the Company’s Nano reactor system. As part of the agreement, Desmet will provide, under certain conditions, limited monthly advance payments of $50,000 against our share of gross profit earned on future sales of CTi upon installation. 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 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. As of June 30, 2016, total outstanding advances from Desmet amounted to $500,000. In addition, the Company also recorded accounts receivable from Desmet of $63,750 from the sale of reactors. For financial reporting purposes, the Company deducted this amount from the advance payments received which resulted in a net balance of $436,250 as of June 30, 2016. During the nine months ended March 31, 2017, the Company recognized revenue of $635,000 related to the shipment and acceptance of reactors to Desmet and share in gross profit of $166,873 for a total of $801,873. In addition, the Company also received advance payments amounting to $450,000, some of which were applied to the recorded gross profit revenues. As of March 31, 2017, outstanding advances from Desmet amounted to $700,000.

Property and Equipment

Property and Equipment	9 Months Ended
	Mar. 31, 2017
Property and Equipment
Property and Equipment	Note 4 - Property and Equipment Property and equipment consisted of the following as of March 31, 2017 and June 30, 2016: March 31, June 30, 2017 2016 Leasehold improvement $ 2,475 $ 2,475 Furniture 26,837 26,837 Office equipment 1,499 1,499 Equipment 276,015 234,170 Systems 186,881 186,881 493,707 451,862 Less: accumulated depreciation and amortization (349,233 ) (329,221 ) Property & Equipment, net $ 144,474 $ 122,641 Depreciation expense for the nine months ended March 31, 2017 and 2016 amounted to $20,012 and $29,472, respectively.

Accrued Payroll and Payroll Tax

Accrued Payroll and Payroll Taxes	9 Months Ended
	Mar. 31, 2017
Accrued Payroll and Payroll Taxes
Accrued Payroll and Payroll Taxes	Note 5 - Accrued Payroll and Payroll Taxes As of March 31, 2017 and June 30, 2016, the Company had accrued salaries to current and former officers of the Company amounting to $916,864. In addition, the Company also accrued the estimated payroll taxes due to this unpaid payroll of $77,169. The accrued payroll is unsecured and is due upon demand.

Stockholders' Deficit

Stockholders' Deficit	9 Months Ended
	Mar. 31, 2017
Stockholders' Deficit
Stockholders' Deficit	Note 6 - Stockholders’ Deficit Common Stock On January 13, 2017, the Company granted 200,000 shares of common stock to a Director for services rendered with a fair value at grant date of $8,000. 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, 2017 is as follows: Weighted- Average Weighted- Remaining Average Contractual Exercise Life Options Price (Years) Outstanding June 30, 2016 12,595,992 $ 0.10 4.96 - Granted - - Forfeited (910,140 ) - - - Exercised - - - - Expired - - - Outstanding and exerciseable at March 31, 2017 11,685,852 $ 0.07 4.52 There was no intrinsic value for all the outstanding options at March 31, 2017 since the exercise price of these options were greater than the March 31, 2017 closing stock price of $0.03 per share. The following table summarizes additional information concerning options outstanding and exercisable at March 31, 2017. Options Outstanding Weighted Weighted Average Average Exercise Number Remaining Exercise Price of Shares Life (Years) Price $ 0.03 11,000,000 5.21 $ 0.03 0.33 174,022 1.60 0.33 0.67 511,830 1.50 0.67 11,685,852 Warrants A summary of the Company’s warrant activity for the nine months ended on March 31, 2017 is as follows. Weighted- Average Weighted- Remaining Average Contractual Exercise Life Warrants Price (Years) Outstanding at June 30, 2016 64,326,510 $ 0.07 5.09 Granted 9,800,000 0.03 9.80 Exercised - - Expired - - Outstanding and exercisable at March 31, 2017 74,126,510 $ 0.06 5.08 In January 2017, the Company granted employees and a consultant warrants to purchase a total of 9.8 million shares of common stock. The warrants vest immediately, exercisable at $0.03 per share and will expire in 10 years. The Company estimated the fair value of the warrants to be $387,000 using the Black-Scholes Option Pricing Model and was expensed upon grant. The average assumptions the Company used as inputs to the Black-Scholes pricing model included stock price of $0.04 per share, dividend yield of zero, a risk-free interest rate of 2.31%, expected term of 8.75 years and an expected volatility of 162%. There was no intrinsic value for all the outstanding warrants at March 31, 2017 since the exercise price of these warrants was greater than the March 31, 2017 closing stock price of $0.03 per share. The following table summarizes additional information concerning warrants outstanding and exercisable at March 31, 2017. Warrants Outstanding Weighted Weighted Average Average Exercise Number Remaining Exercise Price of Shares Life (Years) Price $ 0.03 9,800,000 9.80 $ 0.03 $ 0.04 - 0.07 43,999,851 5.44 $ 0.05 $ 0.12 20,326,659 2.75 $ 0.12 74,126,510

Commitment and Contingencies

Commitment and Contingencies	9 Months Ended
	Mar. 31, 2017
Commitment and Contingencies:
Commitments and Contingencies Disclosure	Note 7 - Commitments and Contingencies Royalty Agreements On July 1, 2008, our wholly owned subsidiary entered into Patent Assignment Agreements with two parties, our President and Technology Development Supervisor, where certain devices and methods involved in the hydrodynamic cavitation processes invented by the President and the Technology Development Supervisor have been assigned to the Subsidiary. In exchange, the Subsidiary agreed to pay a royalty of 5% of gross revenues to each of the President and Technology Development Supervisor for licensing of the technology and leasing of the related equipment embodying the technology. These agreements were subsequently assumed by Cavitation Technologies on May 13, 2010 from its subsidiary. The Company’s President and Technology Development Supervisor both waived their rights to receive royalty payments that have accrued, or that may accrue, on any gross revenue generated through December 31, 2016. On April 30, 2008 and as amended on November 22, 2010, our wholly owned subsidiary entered into an employment agreement with our former Director of Chemical and Analytical Department (the “Inventor”) to receive an amount equal to 5% of actual gross royalties received from the royalty stream in the first year in which the Company receives royalty payments from the patent which the Inventor was the legally named inventor, and 3% of actual gross royalties received by the Company resulting from the patent in each subsequent year. As of March 31, 2017, no patents have been granted in which this person is the 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 the accompanying balance sheet. In February 2016, the former employee and former Director 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 scheduled to begin sometime in 2018. 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, 2017
Income Taxes:
Income Tax Disclosure	Note 8 - Income Taxes As of March 31, 2017, 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 starting June 30, 2017, 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, 2017
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. Intercompany transactions and balances have been eliminated in consolidation.
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.
Patents	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 During the nine months ended March 31, 2017 and 2016, we recorded amortization expense of $10,074 and $16,401, respectively relating to our capitalized patent costs. As of March 31, 2017 and June 30, 2016 the Company had remaining unamortized patent costs of $6,262 and $16,336 respectively.
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.
Warranty Policy	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, 2017.
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
Income (Loss) Per Share	Income (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. As of March 31, 2017, the Company had 11,685,852 stock options and 74,126,509 stock warrants outstanding to purchase shares of common stock that were not included in the diluted net income per common share because their effect would be anti-dilutive since the exercise price of these stock options and warrants were greater than the average market price of the Company’s stock.
Recent Accounting Pronouncements , Policy	Recent Accounting Pronouncements 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 In March 2016, the FASB issued the ASU 2016-09, Compensation - Stock Compensation (Topic 718) 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	Business and Credit Concentrations The Company’s cash balances in a financial institution at times may exceed federally insured limits. As of March 31, 2017, and June 30, 2016, before adjustments for outstanding checks and deposits in transit, the Company had approximately $566,000 and $657,000, 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, 2017 of $1,671,940 were attributable to one customer (see Note 3).

Restatement (Tables)

Restatement (Tables)	9 Months Ended
	Mar. 31, 2017
Accounting Changes and Error Corrections [Abstract]
Restatement of financials	Condensed Consolidated Balance Sheets as of March 31, 2017 Previously Adjustment As Restated Advances from distributor, net - 700,000 (1) 700,000 Total current liabilities 1,145,057 700,000 (1) 1,845,057 Accumulated deficit (22,840,479 ) (700,000 )(1) (23,540,479 ) Total stockholders' deficit (188,593 ) (700,000 )(1) (888,593 )

Schedule Of Property and Equipm

Schedule Of Property and Equipment (Tables)	9 Months Ended
	Mar. 31, 2017
Schedule Of Property and Equipment (Tables):
Schedule Of Property and Equipment (Tables)	Property and equipment consisted of the following as of March 31, 2017 and June 30, 2016: March 31, June 30, 2017 2016 Leasehold improvement $ 2,475 $ 2,475 Furniture 26,837 26,837 Office equipment 1,499 1,499 Equipment 276,015 234,170 Systems 186,881 186,881 493,707 451,862 Less: accumulated depreciation and amortization (349,233 ) (329,221 ) Property & Equipment, net $ 144,474 $ 122,641

Schedule Of Stock Option Activi

Schedule Of Stock Option Activity (Tables)	9 Months Ended
	Mar. 31, 2017
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, 2017 is as follows: Weighted- Average Weighted- Remaining Average Contractual Exercise Life Options Price (Years) Outstanding June 30, 2016 12,595,992 $ 0.10 4.96 - Granted - - Forfeited (910,140 ) - - - Exercised - - - - Expired - - - Outstanding and exerciseable at March 31, 2017 11,685,852 $ 0.07 4.52
Schedule Of Options Outstanding And Exercisable (Tables)	The following table summarizes additional information concerning options outstanding and exercisable at March 31, 2017. Options Outstanding Weighted Weighted Average Average Exercise Number Remaining Exercise Price of Shares Life (Years) Price $ 0.03 11,000,000 5.21 $ 0.03 0.33 174,022 1.60 0.33 0.67 511,830 1.50 0.67 11,685,852

Schedule Of Warrants Activity (

Schedule Of Warrants Activity (Tables)	9 Months Ended
	Mar. 31, 2017
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, 2017 is as follows. Weighted- Average Weighted- Remaining Average Contractual Exercise Life Warrants Price (Years) Outstanding at June 30, 2016 64,326,510 $ 0.07 5.09 Granted 9,800,000 0.03 9.80 Exercised - - Expired - - Outstanding and exercisable at March 31, 2017 74,126,510 $ 0.06 5.08
Schedule Of Warrants Outstanding And Exercisable (Tables)	The following table summarizes additional information concerning warrants outstanding and exercisable at March 31, 2017. Warrants Outstanding Weighted Weighted Average Average Exercise Number Remaining Exercise Price of Shares Life (Years) Price $ 0.03 9,800,000 9.80 $ 0.03 $ 0.04 - 0.07 43,999,851 5.44 $ 0.05 $ 0.12 20,326,659 2.75 $ 0.12 74,126,510

Going Concern (Narrative) (Deta

Going Concern (Narrative) (Details)	9 Months Ended
	Mar. 31, 2017USD ($)
Going Concern Narrative Details
Cash and cash equivalents on hand	$ 566,488
Working capital deficiency	1,048,829
Total stockholders' deficit	888,593
Minimum monthly advances from Desmet	50,000
Received Advances from Desmet	$ 450,000

Significant Accounting polici22

Significant Accounting policies-Patents (Details) - USD ($)	9 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Significant Accounting policies-Patents Details
Patent amortization expense	$ 10,074	$ 16,401
Remaining unamortized patent costs	6,262	16,336
Revenues attributable to one customer	1,671,940
The deposits are federally insured up to an amount	250,000
Company had outstanding checks and deposits in transit approximately deposited in one financial institution	$ 566,000	$ 657,000
Company had stock options outstanding to purchase shares of common stock that were not included	11,685,852	12,595,992
Company had stock warrants outstanding to purchase shares of common stock that were not included	74,126,509	64,926,510

Agreement with Desmet Ballest23

Agreement with Desmet Ballestra (Narrative) (Details) - USD ($)	Mar. 31, 2017	Jun. 30, 2016	Jan. 22, 2016
Agreement with Desmet Ballestra Details
Limited monthly advance payments against future sales			$ 50,000
Outstanding advances from Desmet		$ 500,000
Accounts receivable from Desmet		63,750
Net balance after deducting advance payments received		$ 436,250
Revenues from Desmet	$ 635,000
Received advances payments	450,000
Company recorded receivable from Desmet	11,877
Share in gross margin	166,873
Total gross profit recorded	$ 801,873

Property and equipment consiste

Property and equipment consisted of the following (Details) - USD ($)	Mar. 31, 2017	Jun. 30, 2016
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	276,015	234,170
Systems	186,881	186,881
Property and equipment, gross	493,707	451,862
Less: accumulated depreciation and amortization	(349,233)	(329,221)
Property & Equipment, net	$ 144,474	$ 122,641

Property, Plant and Equipment (

Property, Plant and Equipment (Depreciation Expense Narrative) (Details) - USD ($)	9 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Property and equipment - Depreciation expense
Depreciation expense	$ 20,012	$ 29,472

Accrued Payroll and Payroll T26

Accrued Payroll and Payroll Taxes (Narrative) (Details) - USD ($)	Mar. 31, 2017	Jun. 30, 2016
Accrued Payroll And Payroll Taxes Narrative Details
Accrued salaries of officers	$ 916,864	$ 916,864
Accrued payroll taxes	$ 77,169	$ 77,169

Summary of the Company's Option

Summary of the Company's Options activity (Details)	Mar. 31, 2017$ / sharesshares	Jun. 30, 2016$ / sharesshares
Options
Options Outstanding		12,595,992
Options Expired	(910,140)
Options Exercisable and vested	11,685,852
Weighted Average Exercise Price
Weighted- Average Exercise Price - Options Outstanding | $ / shares		$ 0.1
Weighted- Average Exercise Price - Exercisable and vested | $ / shares	$ 0.07
Weighted- Average Remaining Contractual Life (Years)
Weighted- Average Remaining Contractual Life - Options Outstanding		4.96
Weighted- Average Remaining Contractual Life - Exercisable and vested	4.52

Summary of additional informati

Summary of additional information concerning options outstanding and exercisable (Details)	Mar. 31, 2017$ / sharesshares
Options Outstanding - Number of shares
Options outstanding and exercisable with Exercise Price 0.03 - Number of shares	11,000,000
Options outstanding and exercisable with Exercise Price 0.33 - Number of shares	174,022
Options outstanding and exercisable with Exercise Price 0.67 - Number of shares	511,830
Total Options outstanding and exercisable	11,685,852
Options Outstanding - Weighted Average Remaining Life (Years)
Options outstanding and exercisable with Exercise Price 0.03 - Weighted Average Remaining Life (Years)	5.21
Options outstanding and exercisable with Exercise Price 0.33 - Weighted Average Remaining Life (Years)	1.60
Options outstanding and exercisable with Exercise Price 0.67 - Weighted Average Remaining Life (Years)	1.50
Options Outstanding - Weighted-Average Exercise Price
Options outstanding and exercisable with Exercise Price 0.03 - Weighted-Average Exercise Price | $ / shares	$ 0.03
Options outstanding and exercisable with Exercise Price 0.33 - Weighted-Average Exercise Price | $ / shares	0.33
Options outstanding and exercisable with Exercise Price 0.67 - Weighted-Average Exercise Price | $ / shares	$ 0.67

Summary of the Company's warran

Summary of the Company's warrant activity (Details)	Mar. 31, 2017$ / sharesshares	Jun. 30, 2016$ / sharesshares
Warrants
Warrants Outstanding | shares		64,326,510
Warrants Granted | shares		9,800,000
Warrants Vested and exercisable | shares	74,126,510
Warrants - Weighted-Average Exercise Price
Outstanding Warrants Weighted-Average Exercise Price | $ / shares		$ 0.07
Warrants Granted Weighted-Average Exercise Price | $ / shares		$ 0.03
Warrants Vested and exercisable Weighted-Average Exercise Price | $ / shares	$ 0.06
Warrants - Weighted- Average Remaining Contractual Life (Years)
Outstanding Warrants Weighted- Average Remaining Contractual Life (Years)		5.09
Warrants Granted Weighted- Average Remaining Contractual Life (Years)		9.80
Warrants Vested and exercisable Weighted- Average Remaining Contractual Life (Years)	5.08

Summary of additional informa30

Summary of additional information concerning Warrants outstanding and exercisable (Details)	Mar. 31, 2017$ / sharesshares
Warrants Outstanding - Number of shares
Warrants outstanding and exercisable with Exercise Price 0.03 - Number of shares	9,800,000
Warrants outstanding and exercisable with Exercise Price 0.04 - 0.07 - Number of shares	43,999,851
Warrants outstanding and exercisable with Exercise Price 0.12 - Number of shares	20,326,659
Total Warrants outstanding and exercisable	74,126,510
Warrants Outstanding - Weighted Average Remaining Life (Years)
Warrants outstanding and exercisable with Exercise Price 0.03 - Weighted Average Remaining Life (Years)	9.80
Warrants outstanding and exercisable with Exercise Price 0.04 - 0.07 - Weighted Average Remaining Life (Years)	5.44
Warrants outstanding and exercisable with Exercise Price 0.12 - Weighted Average Remaining Life (Years)	2.75
Warrants Outstanding - Weighted-Average Exercise Price
Warrants outstanding and exercisable with Exercise Price 0.03 - Weighted-Average Exercise Price | $ / shares	$ 0.03
Warrants outstanding and exercisable with Exercise Price 0.04 - 0.07 - Weighted-Average Exercise Price | $ / shares	0.05
Warrants outstanding and exercisable with Exercise Price 0.12 - Weighted-Average Exercise Price | $ / shares	$ 0.12

Black-Scholes pricing model (De

Black-Scholes pricing model (Details)	Mar. 31, 2017USD ($)$ / sharesshares
Black-Scholes pricing model Details
Stock price per share | $ / shares	$ 0.04
Dividend yield | $	$ 0
Risk-free interest rate	2.31%
Expected term	8.75
Expected volatility	162.00%
Company granted employees and a consultant warrants to purchase shares of common stock | shares	9,800,000
The Company estimated the fair value of the warrants | $	$ 387,000
Warrants vest immediately, exercisable at a price per share | $ / shares	$ 0.03
Weighted Average of Life of warrants (Years)	10

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 (Details)

Income Taxes (Details) - USD ($)	Mar. 31, 2017	Jun. 30, 2016
Income Taxes Details
Federal and State net operating loss (NOL)	$ 84,000,000
Net operating loss carry forwards to offset future taxable income	83,000,000
Company's NOL is limited per year	84,000,000
NOL incurred subsequent to the latest change in control, are not subject to per year limitation	$ 18,000,000
Valuation allowance against net deferred tax assets	100.00%	100.00%

Uncategorized Items - cvat-2017

Label	Element	Value
Scenario, Previously Reported [Member]
Weighted average shares outstanding, Basic and Diluted	us-gaap_WeightedAverageNumberOfShareOutstandingBasicAndDiluted	194,169,017
Weighted average shares outstanding, Basic and Diluted	us-gaap_WeightedAverageNumberOfShareOutstandingBasicAndDiluted	194,054,110
Accumulated deficit	us-gaap_RetainedEarningsAccumulatedDeficit	$ (22,840,479)
Gross Profit	us-gaap_GrossProfit	1,342,312
Gross Profit	us-gaap_GrossProfit	1,446,488
Total current liabilities	us-gaap_LiabilitiesCurrent	1,145,057
Total stockholders' deficit	us-gaap_StockholdersEquityIncludingPortionAttributableToNoncontrollingInterest	(188,593)
Net Loss	us-gaap_NetIncomeLoss	569,660
Net Loss	us-gaap_NetIncomeLoss	59,182
Advances from distributor, net	us-gaap_AdvanceRoyaltiesCurrent	0
Revenue	us-gaap_Revenues	1,381,873
Revenue	us-gaap_Revenues	1,501,873
Reduction in distributor advances from recognition of revenues	us-gaap_IncreaseDecreaseInDeferredRevenue	$ (1,501,873)
Restatement Adjustment [Member]
Weighted average shares outstanding, Basic and Diluted	us-gaap_WeightedAverageNumberOfShareOutstandingBasicAndDiluted	1,275,556
Weighted average shares outstanding, Basic and Diluted	us-gaap_WeightedAverageNumberOfShareOutstandingBasicAndDiluted	418,978
Accumulated deficit	us-gaap_RetainedEarningsAccumulatedDeficit	$ (700,000)
Gross Profit	us-gaap_GrossProfit	(700,000)
Gross Profit	us-gaap_GrossProfit	(700,000)
Total current liabilities	us-gaap_LiabilitiesCurrent	700,000
Total stockholders' deficit	us-gaap_StockholdersEquityIncludingPortionAttributableToNoncontrollingInterest	(700,000)
Net Loss	us-gaap_NetIncomeLoss	(700,000)
Net Loss	us-gaap_NetIncomeLoss	(700,000)
Advances from distributor, net	us-gaap_AdvanceRoyaltiesCurrent	700,000
Revenue	us-gaap_Revenues	(700,000)
Revenue	us-gaap_Revenues	(700,000)
Reduction in distributor advances from recognition of revenues	us-gaap_IncreaseDecreaseInDeferredRevenue	$ 700,000