Cavitation (CVAT) 10-Q 20 May 20 2020 Q3 Quarterly report Financial data

Document and Entity Information

Document and Entity Information	9 Months Ended
	Mar. 31, 2020shares
Cover [Abstract]
Entity Registrant Name	Cavitation Technologies, Inc.
Entity Central Index Key	0001376793
Document Type	10-Q
Document Period End Date	Mar. 31, 2020
Amendment Flag	false
Current Fiscal Year End Date	--06-30
Is Entity's Reporting Status Current?	Yes
Entity Filer Category	Non-accelerated Filer
Entity Emerging Growth Company	false
Entity Small Business	true
Entity Common Stock, Shares Outstanding	196,997,906
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2020
Interactive Data Current	Yes
Entity File Number	000-53239
Entity Incorporation State Code	NV
Entity Shell Company	false

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets (Unaudited) - USD ($)	Mar. 31, 2020	Jun. 30, 2019
Current assets
Cash and cash equivalents	$ 834,000	$ 649,000
Accounts receivable	23,000	240,000
Inventory	60,000	57,000
Total current assets	917,000	946,000
Property and equipment, net of accumulated depreciation of $486,000 and $457,000, respectively	36,000	65,000
Operating lease right-of-use asset	323,000	0
Other assets	10,000	10,000
Total assets	1,286,000	1,021,000
Current liabilities:
Accounts payable and accrued expenses	132,000	187,000
Accrued payroll and payroll taxes due to officers	889,000	892,000
Related party payable	1,000	1,000
Advances from distributors	1,137,000	760,000
Operating lease liability, current portion	54,000	0
Total current liabilities	2,213,000	1,840,000
Operating lease liability, net of current portion	273,000	0
Total Liabilities	2,486,000	1,840,000
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, 2020 and June 30, 2019, respectively	0	0
Common stock, $0.001 par value, 1,000,000,000 shares authorized, 196,997,906 shares issued and outstanding as of March 31, 2020 and June 30, 2019, respectively	197,000	197,000
Additional paid-in capital	23,284,000	23,090,000
Accumulated deficit	(24,681,000)	(24,106,000)
Total stockholders' deficit	(1,200,000)	(819,000)
Total liabilities and stockholders' deficit	$ 1,286,000	$ 1,021,000

Condensed Consolidated Balanc_2

Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($)	Mar. 31, 2020	Jun. 30, 2019
Statement of Financial Position [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	196,997,906	196,997,906
Common Stock, shares outstanding	196,997,906	196,997,906
Accumulated depreciation	$ 486,000	$ 457,000

Condensed Consolidated Statemen

Condensed Consolidated Statements of Operations (Unaudited) - USD ($)	3 Months Ended		9 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Mar. 31, 2020	Mar. 31, 2019
Income Statement [Abstract]
Revenue	$ 274,000	$ 252,000	$ 650,000	$ 692,000
Cost of revenue	16,000	14,000	28,000	22,000
Gross profit	258,000	238,000	622,000	670,000
General and administrative expenses	313,000	250,000	1,187,000	1,368,000
Research and development expenses	4,000	11,000	10,000	21,000
Total operating expenses	317,000	261,000	1,197,000	1,389,000
Net loss	$ (59,000)	$ (23,000)	$ (575,000)	$ (719,000)
Net loss per share, Basic and Diluted	$ 0	$ 0	$ 0	$ 0
Weighted average number of common shares outstanding, Basic and Diluted	196,997,906	196,997,906	196,997,906	196,997,906

Condensed Consolidated Statem_2

Condensed Consolidated Statement of Changes in Stockholder's Deficit (Unaudited) - USD ($)	Common Stock	Additional Paid-In Capital	Accumulated Deficit	Total
Beginning balance, shares at Jun. 30, 2018	196,997,906
Beginning balance, value at Jun. 30, 2018	$ 197,000	$ 22,641,000	$ (23,383,000)	$ (545,000)
Fair value of warrants granted for services		115,000		115,000
Fair value of amended warrants		333,000		333,000
Net loss			(719,000)	(719,000)
Ending balance, shares at Mar. 31, 2019	196,997,906
Ending balance, value at Mar. 31, 2019	$ 197,000	23,089,000	(24,102,000)	(816,000)
Beginning balance, shares at Dec. 31, 2018	196,997,906
Beginning balance, value at Dec. 31, 2018	$ 197,000	23,089,000	(24,079,000)	(793,000)
Net loss			(23,000)	(23,000)
Ending balance, shares at Mar. 31, 2019	196,997,906
Ending balance, value at Mar. 31, 2019	$ 197,000	23,089,000	(24,102,000)	(816,000)
Beginning balance, shares at Jun. 30, 2019	196,997,906
Beginning balance, value at Jun. 30, 2019	$ 197,000	23,090,000	(24,106,000)	(819,000)
Fair value of warrants granted for services		194,000		194,000
Net loss			(575,000)	(575,000)
Ending balance, shares at Mar. 31, 2020	196,997,906
Ending balance, value at Mar. 31, 2020	$ 197,000	23,284,000	(24,681,000)	(1,200,000)
Beginning balance, shares at Dec. 31, 2019	196,997,906
Beginning balance, value at Dec. 31, 2019	$ 197,000	23,284,000	(24,622,000)	(1,141,000)
Net loss			(59,000)	(59,000)
Ending balance, shares at Mar. 31, 2020	196,997,906
Ending balance, value at Mar. 31, 2020	$ 197,000	$ 23,284,000	$ (24,681,000)	$ (1,200,000)

Condensed Consolidated Statem_3

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)	9 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Cash flows from operating activities:
Net loss	$ (575,000)	$ (719,000)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization	29,000	31,000
Fair value of warrants granted for services	194,000	115,000
Fair value of modified warrants	0	333,000
Amortization of operating lease right-of-use asset	45,000	0
Change in operating assets and liabilities:
Accounts receivable	217,000	(207,000)
Inventory	(3,000)	(30,000)
Accounts payable and accrued expenses	(55,000)	(72,000)
Accrued payroll and payroll taxes due to officers	(3,000)	(26,000)
Advances from distributor	377,000	200,000
Operating lease liability	(41,000)	0
Net cash provided by (used in) operating activities	185,000	(375,000)
Cash flows from investing activities:
Purchase of property and equipment	0	(15,000)
Net cash used in investing activities	0	(15,000)
Net increase (decrease) in cash and cash equivalents	185,000	(390,000)
Cash and cash equivalents, beginning of period	649,000	945,000
Cash and cash equivalents, end of period	834,000	555,000
Supplemental disclosures of cash flow information:
Cash paid for interest	0	0
Cash paid for income taxes	0	1,600
Supplemental disclosures on non-cash investing and financing activities
Initial recognition of operating lease right-of-use assets and operating lease obligations upon adoption of ASC Topic 842	$ 368,000	$ 0

1. Organization and Summary of

1. Organization and Summary of Significant Accounting Policies	9 Months Ended
	Mar. 31, 2020
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Organization and Summary of Significant Accounting Policies	Note 1 - Organization and Summary of Significant Accounting Policies Cavitation Technologies, Inc. ("the Company," "CTi,") is a Nevada corporation originally incorporated under the name Bio Energy, Inc. The Company has developed, patented, and commercialized proprietary technology that can be used in liquid processing applications. 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, 2020 are not indicative of the results that may be expected for the fiscal year ending June 30, 2020. 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, 2019 filed on October 15, 2019. The condensed consolidated balance sheet as of June 30, 2019 has been derived from the audited financial statements included in the Form 10-K for that year. In March 2020 the World Health Organization declared coronavirus COVID-19 a global pandemic. This contagious disease outbreak, which has continued to spread, has adversely affected workforces, customers, economies, and financial markets globally. It has also disrupted the normal operations of many businesses, including ours. This outbreak could decrease spending, adversely affect demand for our product and harm our business and results of operations. It is not possible for us to predict the duration or magnitude of the adverse results of the outbreak and its effects on our business or results of operations at this time. 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, 2020, the Company recorded a net loss of $575,000, had a working capital deficiency of $1,296,000 and a stockholders' deficit of $1,200,000. These factors, among others, raise doubt about the Company's ability to continue as a going concern. In addition, our independent registered public accounting firm, in their report on our audited financial statements for the fiscal year ended June 30, 2019, expressed doubt about our ability to continue as a going concern. The accompanying condensed consolidated financial statements do not include adjustments that might be necessary if the Company is unable to continue as a going concern. Management's plan is to generate income from operations by continuing to license our technology globally through our strategic partner Desmet Ballestra Group (Desmet), and agreements with Enviro Watertek, LLC (EW) and Alchemy Beverages, Inc (ABI). Our Research and Development (R&D) Marketing and Technology License agreement with Desmet provides for advances of $50,000 per month through October 2021 to be applied against the Company’s gross profit share from future sales. We also had a R&D Marketing and Technology License agreement with GEA Westfalia AG (GEA) that began in January 2017 and expired in March 2020. Under this agreement, GEA provided us advances of $25,000 per month to be applied against the Company’s gross profit share from future sales. The Company and GEA have agreed to enter into negotiations for a new agreement in the second half of our fiscal 2021. In April 2019, the Company entered into a technology license and lease agreement with Enviro Watertek, LLC for the sale and licensing of the Company’s nano reactor system. In June 2018, we entered into two licensing agreements with ABI and anticipate to start receiving certain royalty payments and revenue in our fiscal 2021. We may also attempt to raise additional debt and/or equity financing to fund operations and 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. 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. Use of Estimates The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the U.S requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the financial statement date, and reported amounts of revenue and expenses during the reporting period. Significant estimates are used in allowance for bad debts, reserve for inventory obsolescence, impairment analysis for fixed assets, accrual of potential liabilities, valuation of deferred tax assets and valuing our stock options, warrants, and common stock issued for services, among other items. Actual results could differ from these estimates. Revenue Recognition The Company follows the guidance of Accounting Standards Codification (ASC) 606, Revenue from Contracts with Customers Revenue from sale of our Nano Reactors is recognized when products are shipped from our manufacturing facilities as this is our sole performance obligation under these contracts and we have no continuing obligation to the customer. The Company also recognizes revenue from its share of gross profit to be earned from distributors, as defined, which we treat as variable consideration and recognize using the most likely amount method. Estimates are available from our distributor which are considered in the determination of the most likely amount. However, given the lack of control over the sale to the end customer and the lack of history of prior sales, the amount of gross profit revenue recognized is limited to the actual amount of cash received under the contract which the Company has determined is not refundable and that a significant future reversal of cumulative revenue under the contract will not occur. In addition, the Company also recognizes revenues from usage fees of certain reactors. Usage fees are recognized based on actual usage by the customer. Leases Prior to July 1, 2019, start of our fiscal year, the Company accounted for leases under Accounting Standards Codification (“ASC”) 840, Accounting for Leases. Effective July 1, 2019, the Company adopted the guidance of ASC 842, Leases (“ASC 842”), which requires an entity to recognize a right-of-use asset and a lease liability for virtually all leases. The Company adopted ASC 842 using a modified retrospective approach. As a result, the comparative financial information has not been updated and the required disclosures prior to the date of adoption have not been updated and continue to be reported under the accounting standards in effect for those periods. Leases with an initial term of 12 months or less are not recorded on the balance sheet. The Company accounts for the lease and non-lease components of its office lease as a single lease component. Lease expense is recognized on a straight-line basis over the lease term. The adoption of ASC 842 on July 1, 2019 resulted in the initial recognition of operating lease right-of-use assets of $368,000, lease liabilities for operating leases of $368,000, and a zero cumulative-effect adjustment to accumulated deficit (see Note 3). Share-Based Compensation The Company accounts for share-based awards to employees and nonemployees and consultants in accordance with the provisions of ASC 718, Compensation-Stock Compensation. Stock-based compensation cost is measured at fair value on the grant date and that fair value is recognized as expense over the requisite service, or vesting, period. In periods through June 30, 2019, the Company accounted for share-based compensation issued to non-employees and consultants in accordance with the provisions of FASB ASC 505-50, Equity - Based Payments to Non-Employees. Measurement of share-based payment transactions with non-employees is based on the fair value of whichever is more reliably measurable: (a) the goods or services received; or (b) the equity instruments issued. The final fair value of the share-based payment transaction is determined at the performance completion date. For interim periods, the fair value is estimated, and the percentage of completion is applied to that estimate to determine the cumulative expense recorded. On July 1, 2019, the Company adopted ASU 2018-07, Compensation - Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting. ASU 2018-07 simplifies the accounting for share-based transactions by expanding the scope of Topic 718 from only being applicable to share-based payments to employees to also include share-based payment transactions for acquiring goods and services from nonemployees. As a result, nonemployee share-based transactions are measured by estimating the fair value of the equity instruments at the grant date, taking into consideration the probability of satisfying performance conditions. The adoption of ASU 2018-07 did not have a material impact on the Company’s financial statements for the period ended March 31, 2020 or the previously reported financial statements. The Company values its equity awards using the Black-Scholes option pricing model, and accounts for forfeitures when they occur. Use of the Black-Scholes option pricing model requires the input of subjective assumptions including expected volatility, expected term, and a risk-free interest rate. The Company estimates volatility using a blend of its own historical stock price volatility as well as that of market comparable entities since the Company's common stock has limited trading history and limited observable volatility of its own. The expected term of the options is estimated by using the simplified method to estimate expected term. The risk-free interest rate is estimated using comparable published federal funds rates. 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 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, 2020 and June 30, 2019, the fair values of cash and cash equivalents, accounts receivable, inventory, accounts payable and accrued expenses approximate their carrying values due to their short-term nature. Net 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. Shares of restricted stock subject to vesting are included in basic weighted average common shares outstanding from the time they vest. 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 and there were no instruments that would result in issuance of additional shares during the period. As of March 31, 2020, the Company had 11,000,000 stock options and 87,696,511 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. Concentrations Cash is deposited in one financial institution. The balances held at this financial institution at times may be in excess of Federal Deposit Insurance Corporation (“FDIC”) insurance limits of up to $250,000. The Company’s revenue was mainly derived from sales of its Nano Reactor® and Nano Neutralization® System At March 31, 2020, 100% of accounts receivable was due from EW. At June 30, 2019, 100% of accounts receivable was due from Desmet. As of March 31, 2020, three vendors accounted for 57%, 22% and 11% respectively, of accounts payable. As of June 30, 2019, three vendors accounted for 49%, 33% and 11%, respectively, of accounts payable. Segments The Company operates in one segment, its nano reactor technology business. In accordance with the “Segment Reporting” Topic of the ASC, the Company’s chief operating decision maker has been identified as the Chief Executive Officer and President, who reviews operating results to make decisions about allocating resources and assessing performance for the entire Company. Existing guidance, which is based on a management approach to segment reporting, establishes requirements to report selected segment information quarterly and to report annually entity-wide disclosures about products and services, major customers, and the countries in which the entity holds material assets and reports revenue. All material operating units qualify for aggregation under “Segment Reporting” due to their similar customer base and similarities in: economic characteristics; nature of products and services; and procurement, manufacturing and distribution processes. Since the Company operates in one segment, all financial information required by “Segment Reporting” can be found in the accompanying consolidated financial statements. Recent Accounting Pronouncements In June 2016, the FASB issued ASU No. 2016-13, Credit Losses - Measurement of Credit Losses on Financial Instruments ("ASC 326") 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.

2. Agreement with Distributors

2. Agreement with Distributors	9 Months Ended
	Mar. 31, 2020
Revenue from Contract with Customer [Abstract]
Agreement with Distributors	Note 2 - Agreement with Distributors Desmet Ballestra Agreement In October 2018, we signed a three-year global R and D, Marketing and Technology License Agreement with Desmet Ballestra Group NV (Desmet) for the sale and licensing of our reactors. This agreement is a continuation of an original agreement we signed with Desmet in 2012, and amended in 2016. As part of the October 2018 agreement, Desmet agreed to provide us monthly advances of $50,000 through October 1, 2022 to be applied against gross profit share from future sales. During the nine months ended March 31, 2020, the Company recorded $380,000 from reactor sales and $224,000 from the share of gross profit for a total revenue of $604,000 from Desmet. During the three months ended March 31, 2020, the Company recorded $172,000 from reactor sales and $80,000 from the share of gross profit for a total revenue of $252,000. During the nine months ended March 31, 2019, the Company recorded sales of $292,000 from reactor sales and share of gross profit of $400,000 for a total revenue of $692,000 from Desmet. During the three months ended March 31, 2019, the Company recorded $207,000 from reactor sales and the share of gross profit of $45,000 for a total revenue of $252,000 from Desmet. As of June 30, 2019, outstanding advances from Desmet amounted to $34,000. During the nine months ended March 31, 2020, the Company received advances of $830,000 and recorded as revenues of $604,000. As of March 31, 2020, outstanding advances from Desmet totaled $260,000. GEA Westfalia Agreement In January 2017 we entered into a global technology license, R&D and marketing agreement with GEA with respect to our patented Nano Reactor™ technology, processes and applications. Under the agreement, GEA has been granted a worldwide exclusive license to integrate our patented technology into water treatment application, milk and juice pasteurization, and certain food related processes. The license agreement between us and GEA had a three-year term and provides for the payment of $300,000 per year in advanced license fees or share in gross margin or profit to us. As of March 31, 2020 and June 30, 2019, outstanding advances from GEA amounted to $877,000 and $726,000, respectively. Our agreement with GEA expired in March 2020. The Company and GEA have agreed to continue collaboration and will re-open negotiations on a new contract and applications in the second half of our fiscal 2021. Enviro Watertek, LLC Agreement In April 2019, we entered into a licensing and service contract agreement with Enviro Watertek, LLC (“EW”) that covers industrial treatment of produced and frack water. Our agreement with EW provides for sales of Nano Reactors® plus recurring revenue stream is based on produced and frack water volumes; and utilization of technology over a 15 years term. This agreement can be terminated by either party at each anniversary date. During the three and nine months ended March 31, 2020, the Company recorded revenues of $22,000 and $46,000 from the sale of reactors and usage fees. There was no revenues recognized during the three and nine months ended March 31, 2019. Alchemy Beverages, Inc. Agreement In June 2018, the Company entered into licensing agreements with Alchemy Beverages Inc. (ABI). Pursuant to the licensing agreements, ABI has the exclusive global distribution rights for the Company’s patented and patent pending technology for the processing of alcoholic beverages. There was no revenue recognized during the periods ended March 31, 2020 and 2019 pursuant to these agreements. As of March 31, 2020, the Company owns 19.9% of ABI. The investment in ABI has no value assigned to it, which approximates its fair value. Disaggregation of Revenues The following table provides information about disaggregated revenue based on revenue by service lines: Nine Months Ended March 31, 2020 2019 Revenues: Sale of reactors $ 393,000 $ 292,000 Share of gross profit 224,000 400,000 Usage fees 33,000 – Total $ 650,000 $ 692,000 Three Months Ended March 31, 2020 2019 Revenues: Sale of reactors $ 185,000 $ 207,000 Share of gross profit 80,000 45,000 Usage fees 9,000 – Total $ 274,000 $ 252,000 Advances from distributors Our contracts include advances from certain distributors. For contracts where the performance obligation is not completed, advances are recorded for any payments received in advance of the performance obligation. Changes in advances from distributors were as follows at March 31, 2020 and 2019: Nine Months Ended March 31, 2020 2019 Advances from distributors, beginning of period $ 760,000 $ 427,000 New contract liabilities 981,000 892,000 Performance obligations satisfied (604,000 ) (692,000 ) Advances from distributors, end of period $ 1,137,000 $ 627,000

3. Operating Lease

3. Operating Lease	9 Months Ended
	Mar. 31, 2020
Lessee Disclosure [Abstract]
Operating Lease	Note 3 - Operating Lease The Company leases certain warehouse and corporate office space under operating lease agreement. We determine if an arrangement is a lease at inception. Lease assets are presented as operating lease right-of-use assets and the related liabilities are presented as lease liabilities in our consolidated balance sheets. Operating lease right-of-use (“ROU”) assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Generally, the implicit rate of interest in lease arrangements is not readily determinable and the Company utilizes its incremental borrowing rate in determining the present value of lease payments. The Company’s incremental borrowing rate is a hypothetical rate based on its understanding of what its credit rating would be. The operating lease ROU asset includes any lease payments made and excludes lease incentives. The components of lease expense and supplemental cash flow information related to leases for the period are as follows: Nine Months Ended March 31, 2020 Lease cost Operating lease cost (included in general and administrative in the Company’s unaudited condensed statement of operations) $ 55,000 Other information Cash paid for amounts included in the measurement of lease liabilities $ 52,000 Weighted average remaining lease term – operating leases (in years) 4.8 Average discount rate – operating leases 4% The supplemental balance sheet information related to leases for the period is as follows: At March 31, 2020 Operating leases Long-term right-of-use assets $ 323,000 Short-term operating lease liabilities $ 54,000 Long-term operating lease liabilities 273,000 Total operating lease liabilities $ 327,000 Maturity of the Company’s lease liabilities are as follows: Year ending June 30 Operating Lease 2020 (remaining 3 months) $ 18,000 2021 71,000 2022 72,000 2023 75,000 2024 78,000 2025 and thereafter 47,000 Total lease payments 361,000 Less: Imputed interest/present value discount (34,000 ) Present value of lease liabilities $ 327,000

4. Stockholders' Deficit

4. Stockholders' Deficit	9 Months Ended
	Mar. 31, 2020
Equity [Abstract]
Stockholders' Deficit	Note 4 - Stockholders' Deficit 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 during the nine months ended March 31, 2020. is as follows: Weighted- Average Weighted- Remaining Average Contractual Exercise Life Options Price (Years) Outstanding at June 30, 2019 11,000,000 $ 0.03 3.36 - Granted – – – - Forfeited – – – - Exercised – – – - Expired – – – Outstanding at March 31, 2020 vested and exercisable 11,000,000 $ 0.03 2.86 There was no intrinsic value of the outstanding options as of March 31, 2020 as the exercise price of these options were greater than the market price. The following table summarizes additional information concerning options outstanding and exercisable at March 31, 2020. 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 2.86 $ 0.03 11,000,000 2.86 Warrants A summary of the Company's warrant activity and related information for the nine months ended on March 31, 2020 is as follows: Weighted- Average Weighted- Remaining Average Contractual Exercise Life Warrants Price (Years) Outstanding at June 30, 2019 79,263,176 $ 0.08 4.36 Granted 9,800,000 0.03 – Exercised – – – Expired (1,366,665 ) – – Outstanding at March 31, 2020 vested and exercisable 87,696,511 $ 0.07 4.09 During the nine months ended March 31, 2020 the Company granted employees warrants to purchase 9,800,000 shares of common stock for services rendered. The warrants were fully vested upon issuance, exercisable at $0.03 per share, and will expire in ten years. The total fair value of the warrants was determined to be $194,000 and was expensed immediately. The fair value of the warrants was based upon a Black-Scholes Option Pricing model using the following weighted-average assumptions: March 31, 2020 Risk-free interest rate 1.72% Expected term (years) 5 Expected volatility 250% Expected dividend yield 0% The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of measurement corresponding with the expected term of the award; the expected term represents the weighted-average period of time the awards granted are expected to be outstanding giving consideration to vesting schedules, contractual terms, and historical participant exercise behavior; the expected volatility is based upon historical volatility of the Company’s Common Stock; and the expected dividend yield is based on the fact that the Company has not paid dividends in the past and does not expect to pay dividends in the future. There was no intrinsic value of the outstanding warrants as of March 31, 2020 as the exercise price of these warrants were greater than the market price. The following table summarizes additional information concerning warrants outstanding and exercisable at March 31, 2020. 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 $ 0.03 - 0.08 68,103,184 4.88 $ 0.03-0.08 68,103,184 $ 4.88 $ 0.12 19,593,327 4.00 $ 0.12 19,593,327 $ 4.00 87,696,511 87,696,511

5. Commitments and Contingencie

5. Commitments and Contingencies	9 Months Ended
	Mar. 31, 2020
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	Note 5 - Commitments and Contingencies Royalty Agreements On July 1, 2008, the Company 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 March 31, 2020. 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, 2020 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. There are no legal proceedings involving the company or its employees at this time.

6. Subsequent Events

6. Subsequent Events	9 Months Ended
	Mar. 31, 2020
Subsequent Events [Abstract]
Subsequent Events	Note 6 - Subsequent Events On April 16, 2020, the Company received loan proceeds in the amount of $104,000 pursuant to the Paycheck Protection Program under the Coronavirus Aid, Relief and Economic Security Act (the “Cares Act”), which was enacted on March 27, 2020. The note is scheduled to mature in April 2022 and has a 1% interest rate and is subject to the terms and conditions applicable to loans administered by the Small Business Administration (SBA) under the CARES Act. The loan and accrued interest are forgivable as long as the Company uses the loan proceeds for eligible purposes, including payroll, benefits, rent and utilities, and maintains its payroll levels. Forgiveness of the note is only available for principal that is used for the limited purposes that qualify for forgiveness under SBA requirements, and that to obtain forgiveness, the Company must request it and must provide documentation in accordance with the SBA requirements, and certify that the amounts the Company is requesting to be forgiven qualify under those requirements. The Company also understands that it shall remain responsible under the note for any amounts not forgiven, and that interest payable under the note will not be forgiven but that the SBA may pay the loan interest on forgiven amounts.

1. Organization and Summary o_2

1. Organization and Summary of Significant Accounting Policies (Policies)	9 Months Ended
	Mar. 31, 2020
Accounting Policies [Abstract]
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, 2020 are not indicative of the results that may be expected for the fiscal year ending June 30, 2020. 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, 2019 filed on October 15, 2019. The condensed consolidated balance sheet as of June 30, 2019 has been derived from the audited financial statements included in the Form 10-K for that year. In March 2020 the World Health Organization declared coronavirus COVID-19 a global pandemic. This contagious disease outbreak, which has continued to spread, has adversely affected workforces, customers, economies, and financial markets globally. It has also disrupted the normal operations of many businesses, including ours. This outbreak could decrease spending, adversely affect demand for our product and harm our business and results of operations. It is not possible for us to predict the duration or magnitude of the adverse results of the outbreak and its effects on our business or results of operations at this time.
Going Concern	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, 2020, the Company recorded a net loss of $575,000, had a working capital deficiency of $1,296,000 and a stockholders' deficit of $1,200,000. These factors, among others, raise doubt about the Company's ability to continue as a going concern. In addition, our independent registered public accounting firm, in their report on our audited financial statements for the fiscal year ended June 30, 2019, expressed doubt about our ability to continue as a going concern. The accompanying condensed consolidated financial statements do not include adjustments that might be necessary if the Company is unable to continue as a going concern. Management's plan is to generate income from operations by continuing to license our technology globally through our strategic partner Desmet Ballestra Group (Desmet), and agreements with Enviro Watertek, LLC (EW) and Alchemy Beverages, Inc (ABI). Our Research and Development (R&D) Marketing and Technology License agreement with Desmet provides for advances of $50,000 per month through October 2021 to be applied against the Company’s gross profit share from future sales. We also had a R&D Marketing and Technology License agreement with GEA Westfalia AG (GEA) that began in January 2017 and expired in March 2020. Under this agreement, GEA provided us advances of $25,000 per month to be applied against the Company’s gross profit share from future sales. The Company and GEA have agreed to enter into negotiations for a new agreement in the second half of our fiscal 2021. In April 2019, the Company entered into a technology license and lease agreement with Enviro Watertek, LLC for the sale and licensing of the Company’s nano reactor system. In June 2018, we entered into two licensing agreements with ABI and anticipate to start receiving certain royalty payments and revenue in our fiscal 2021. We may also attempt to raise additional debt and/or equity financing to fund operations and 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.
Principles of Consolidation	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.
Use of Estimates	Use of Estimates The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the U.S requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the financial statement date, and reported amounts of revenue and expenses during the reporting period. Significant estimates are used in allowance for bad debts, reserve for inventory obsolescence, impairment analysis for fixed assets, accrual of potential liabilities, valuation of deferred tax assets and valuing our stock options, warrants, and common stock issued for services, among other items. Actual results could differ from these estimates.
Revenue Recognition	Revenue Recognition The Company follows the guidance of Accounting Standards Codification (ASC) 606, Revenue from Contracts with Customers Revenue from sale of our Nano Reactors is recognized when products are shipped from our manufacturing facilities as this is our sole performance obligation under these contracts and we have no continuing obligation to the customer. The Company also recognizes revenue from its share of gross profit to be earned from distributors, as defined, which we treat as variable consideration and recognize using the most likely amount method. Estimates are available from our distributor which are considered in the determination of the most likely amount. However, given the lack of control over the sale to the end customer and the lack of history of prior sales, the amount of gross profit revenue recognized is limited to the actual amount of cash received under the contract which the Company has determined is not refundable and that a significant future reversal of cumulative revenue under the contract will not occur. In addition, the Company also recognizes revenues from usage fees of certain reactors. Usage fees are recognized based on actual usage by the customer.
Lease	Leases Prior to July 1, 2019, start of our fiscal year, the Company accounted for leases under Accounting Standards Codification (“ASC”) 840, Accounting for Leases. Effective July 1, 2019, the Company adopted the guidance of ASC 842, Leases (“ASC 842”), which requires an entity to recognize a right-of-use asset and a lease liability for virtually all leases. The Company adopted ASC 842 using a modified retrospective approach. As a result, the comparative financial information has not been updated and the required disclosures prior to the date of adoption have not been updated and continue to be reported under the accounting standards in effect for those periods. Leases with an initial term of 12 months or less are not recorded on the balance sheet. The Company accounts for the lease and non-lease components of its office lease as a single lease component. Lease expense is recognized on a straight-line basis over the lease term. The adoption of ASC 842 on July 1, 2019 resulted in the initial recognition of operating lease right-of-use assets of $368,000, lease liabilities for operating leases of $368,000, and a zero cumulative-effect adjustment to accumulated deficit (see Note 3).
Share-Based Compensation	Share-Based Compensation The Company accounts for share-based awards to employees and nonemployees and consultants in accordance with the provisions of ASC 718, Compensation-Stock Compensation. Stock-based compensation cost is measured at fair value on the grant date and that fair value is recognized as expense over the requisite service, or vesting, period. In periods through June 30, 2019, the Company accounted for share-based compensation issued to non-employees and consultants in accordance with the provisions of FASB ASC 505-50, Equity - Based Payments to Non-Employees. Measurement of share-based payment transactions with non-employees is based on the fair value of whichever is more reliably measurable: (a) the goods or services received; or (b) the equity instruments issued. The final fair value of the share-based payment transaction is determined at the performance completion date. For interim periods, the fair value is estimated, and the percentage of completion is applied to that estimate to determine the cumulative expense recorded. On July 1, 2019, the Company adopted ASU 2018-07, Compensation - Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting. ASU 2018-07 simplifies the accounting for share-based transactions by expanding the scope of Topic 718 from only being applicable to share-based payments to employees to also include share-based payment transactions for acquiring goods and services from nonemployees. As a result, nonemployee share-based transactions are measured by estimating the fair value of the equity instruments at the grant date, taking into consideration the probability of satisfying performance conditions. The adoption of ASU 2018-07 did not have a material impact on the Company’s financial statements for the period ended March 31, 2020 or the previously reported financial statements. The Company values its equity awards using the Black-Scholes option pricing model, and accounts for forfeitures when they occur. Use of the Black-Scholes option pricing model requires the input of subjective assumptions including expected volatility, expected term, and a risk-free interest rate. The Company estimates volatility using a blend of its own historical stock price volatility as well as that of market comparable entities since the Company's common stock has limited trading history and limited observable volatility of its own. The expected term of the options is estimated by using the simplified method to estimate expected term. The risk-free interest rate is estimated using comparable published federal funds rates.
Fair Value Measurement	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 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, 2020 and June 30, 2019, the fair values of cash and cash equivalents, accounts receivable, inventory, accounts payable and accrued expenses approximate their carrying values due to their short-term nature.
Net Loss Per Share	Net 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. Shares of restricted stock subject to vesting are included in basic weighted average common shares outstanding from the time they vest. 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 and there were no instruments that would result in issuance of additional shares during the period. As of March 31, 2020, the Company had 11,000,000 stock options and 87,696,511 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.
Concentrations	Concentrations Cash is deposited in one financial institution. The balances held at this financial institution at times may be in excess of Federal Deposit Insurance Corporation (“FDIC”) insurance limits of up to $250,000. The Company’s revenue was mainly derived from sales of its Nano Reactor® and Nano Neutralization® System At March 31, 2020, 100% of accounts receivable was due from EW. At June 30, 2019, 100% of accounts receivable was due from Desmet. As of March 31, 2020, three vendors accounted for 57%, 22% and 11 % respectively, of accounts payable. As of June 30, 2019, three vendors accounted for 49%, 33% and 11%, respectively, of accounts payable.
Segments	Segments The Company operates in one segment, its nano reactor technology business. In accordance with the “Segment Reporting” Topic of the ASC, the Company’s chief operating decision maker has been identified as the Chief Executive Officer and President, who reviews operating results to make decisions about allocating resources and assessing performance for the entire Company. Existing guidance, which is based on a management approach to segment reporting, establishes requirements to report selected segment information quarterly and to report annually entity-wide disclosures about products and services, major customers, and the countries in which the entity holds material assets and reports revenue. All material operating units qualify for aggregation under “Segment Reporting” due to their similar customer base and similarities in: economic characteristics; nature of products and services; and procurement, manufacturing and distribution processes. Since the Company operates in one segment, all financial information required by “Segment Reporting” can be found in the accompanying consolidated financial statements.
Recent Accounting Pronouncements	Recent Accounting Pronouncements In June 2016, the FASB issued ASU No. 2016-13, Credit Losses - Measurement of Credit Losses on Financial Instruments ("ASC 326") 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.

2. Agreements with Distributors

2. Agreements with Distributors (Tables)	9 Months Ended
	Mar. 31, 2020
Revenue from Contract with Customer [Abstract]
Disaggregated revenue based on service lines	Nine Months Ended March 31, 2020 2019 Revenues: Sale of reactors $ 393,000 $ 292,000 Share of gross profit 224,000 400,000 Usage fees 33,000 – Total $ 650,000 $ 692,000 Three Months Ended March 31, 2020 2019 Revenues: Sale of reactors $ 185,000 $ 207,000 Share of gross profit 80,000 45,000 Usage fees 9,000 – Total $ 274,000 $ 252,000
Advances from distributors	Nine Months Ended March 31, 2020 2019 Advances from distributors, beginning of period $ 760,000 $ 427,000 New contract liabilities 981,000 892,000 Performance obligations satisfied (604,000 ) (692,000 ) Advances from distributors, end of period $ 1,137,000 $ 627,000

3. Operating Lease (Tables)

3. Operating Lease (Tables)	9 Months Ended
	Mar. 31, 2020
Weighted average remaining contractual life, warrants exercisable
Lease cost	Nine Months Ended March 31, 2020 Lease cost Operating lease cost (included in general and administrative in the Company’s unaudited condensed statement of operations) $ 55,000 Other information Cash paid for amounts included in the measurement of lease liabilities $ 52,000 Weighted average remaining lease term – operating leases (in years) 4.8 Average discount rate – operating leases 4%
Schedule of Operating Lease Liabilities	At March 31, 2020 Operating leases Long-term right-of-use assets $ 323,000 Short-term operating lease liabilities $ 54,000 Long-term operating lease liabilities 273,000 Total operating lease liabilities $ 327,000
Schedule of Future Minimum Operating lease payments	Year ending June 30 Operating Lease 2020 (remaining 3 months) $ 18,000 2021 71,000 2022 72,000 2023 75,000 2024 78,000 2025 and thereafter 47,000 Total lease payments 361,000 Less: Imputed interest/present value discount (34,000 ) Present value of lease liabilities $ 327,000

4. Stockholders' Deficit (Table

4. Stockholders' Deficit (Tables)	9 Months Ended
	Mar. 31, 2020
Equity [Abstract]
Stock Option activity table	Weighted- Average Weighted- Remaining Average Contractual Exercise Life Options Price (Years) Outstanding at June 30, 2019 11,000,000 $ 0.03 3.36 - Granted – – – - Forfeited – – – - Exercised – – – - Expired – – – Outstanding at March 31, 2020 vested and exercisable 11,000,000 $ 0.03 2.86
Schedule of options outstanding and exercisable	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 2.86 $ 0.03 11,000,000 2.86
Schedule of warrant activity	Weighted- Average Weighted- Remaining Average Contractual Exercise Life Warrants Price (Years) Outstanding at June 30, 2019 79,263,176 $ 0.08 4.36 Granted 9,800,000 0.03 – Exercised – – – Expired (1,366,665 ) – – Outstanding at March 31, 2020 vested and exercisable 87,696,511 $ 0.07 4.09
Assumptions	March 31, 2020 Risk-free interest rate 1.72% Expected term (years) 5 Expected volatility 250% Expected dividend yield 0%
Schedule of warrants outstanding and exercisable	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 $ 0.03 - 0.08 68,103,184 4.88 $ 0.03-0.08 68,103,184 $ 4.88 $ 0.12 19,593,327 4.00 $ 0.12 19,593,327 $ 4.00 87,696,511 87,696,511

1. Organization and Summary o_3

1. Organization and Summary of Significant Accounting Policies (Details Narrative) - USD ($)	3 Months Ended		9 Months Ended		12 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Mar. 31, 2020	Mar. 31, 2019	Jun. 30, 2019	Dec. 31, 2019	Jul. 02, 2019	Dec. 31, 2018	Jun. 30, 2018
Net loss	$ (59,000)	$ (23,000)	$ (575,000)	$ (719,000)
Stockholders' deficit	(1,200,000)	$ (816,000)	(1,200,000)	$ (816,000)	$ (819,000)	$ (1,141,000)		$ (793,000)	$ (545,000)
Right of use operating asset	323,000		323,000		$ 0
Right of use operating lease liability	$ 327,000		$ 327,000
Revenues [Member] | Desmet [Member]
Concentration percentage	92.00%	100.00%	93.00%	100.00%
Accounts Receivable [Member] | Desmet [Member]
Concentration percentage					100.00%
Accounts Receivable [Member] | Enviro [Member]
Concentration percentage			100.00%
Accounts Payable [Member] | A Vendor [Member]
Concentration percentage			57.00%		49.00%
Accounts Payable [Member] | A Vendor [Member]
Concentration percentage			22.00%		33.00%
Accounts Payable [Member] | A Vendor [Member]
Concentration percentage			11.00%		11.00%
Options [Member]
Antidilutive shares outstanding			11,000,000
Warrants [Member]
Antidilutive shares outstanding			87,696,511
ASC 842 [Member]
Right of use operating asset							$ 368,000
Right of use operating lease liability							$ 368,000

2. Agreement with Distributors

2. Agreement with Distributors (Details - Disaggregated Revenue) - USD ($)	3 Months Ended		9 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Mar. 31, 2020	Mar. 31, 2019
Revenues	$ 274,000	$ 252,000	$ 650,000	$ 692,000
Sale of Reactors [Member]
Revenues	185,000	207,000	393,000	292,000
Share of Gross Profit [Member]
Revenues	80,000	45,000	224,000	400,000
Usage Fees [Member]
Revenues	$ 9,000	$ 0	$ 33,000	$ 0

2. Agreement with Distributor_2

2. Agreement with Distributors (Details - Advances from Distributors) - USD ($)	9 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Revenue from Contract with Customer [Abstract]
Advances from distributors, beginning of period	$ 760,000	$ 427,000
New contract liabilities	981,000	892,000
Performance obligations satisfied	(604,000)	(692,000)
Advances from distributors, end of period	$ 1,137,000	$ 627,000

2. Agreement with Distributor_3

2. Agreement with Distributors (Details Narrative) - USD ($)	3 Months Ended		9 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Mar. 31, 2020	Mar. 31, 2019	Jun. 30, 2019
Revenues	$ 274,000	$ 252,000	$ 650,000	$ 692,000
Advances from distributor	1,137,000		1,137,000		$ 760,000
Desmet [Member]
Revenues		252,000	604,000	692,000
Advances from distributor					34,000
Proceeds from distributors			260,000
GEO Westfalia [Member]
Advances from distributor	$ 877,000		$ 877,000		$ 726,000
Alchemy Beverages [Member]
Investment percentage	19.90%		19.90%
Reactor Sales [Member] | Desmet [Member]
Revenues	$ 172,000	207,000	$ 380,000	292,000
Reactor Sales [Member] | GEO Westfalia [Member]
Revenues			0
Reactor Sales [Member] | Envirot [Member]
Revenues	22,000	0	46,000	0
Gross Profit Share [Member] | Desmet [Member]
Revenues	$ 252,000	$ 45,000	224,000	400,000
Gross Profit Share [Member] | GEO Westfalia [Member]
Revenues			0
Licensing Agreement [Member] | Alchemy Beverages [Member]
Revenues			$ 0	$ 0

3. Operating Lease (Details - L

3. Operating Lease (Details - Lease Cost)	9 Months Ended
	Mar. 31, 2020USD ($)
Lessee Disclosure [Abstract]
Operating lease cost	$ 55,000
Cash paid for amounts included in measurement of lease liabilities	$ 52,000
Weighted average remaining lease term- operating leases (in years)	4 years 9 months 18 days
Average discount rate- operating leases	4.00%

3. Operating Lease (Details - O

3. Operating Lease (Details - Operating Leases) - USD ($)	Mar. 31, 2020	Jun. 30, 2019
Lessee Disclosure [Abstract]
Long-term right-of-use assets	$ 323,000	$ 0
Short-term operating lease liabilities	54,000	0
Long-term operating lease liabilities	273,000	$ 0
Total operating lease liabilities	$ 327,000

3. Operating Lease (Details -_2

3. Operating Lease (Details - Operating Lease Minimum payments)	Mar. 31, 2020USD ($)
Lessee Disclosure [Abstract]
2020 (remaining 3 months)	$ 18,000
2021	71,000
2022	72,000
2023	75,000
2024	78,000
2025 and thereafter	47,000
Total lease payments	361,000
Less: imputed interest/present value discount	(34,000)
Operating Lease liability	$ 327,000

4. Stockholders' Deficit (Detai

4. Stockholders' Deficit (Details - Option activity) - $ / shares	9 Months Ended	12 Months Ended
	Mar. 31, 2020	Jun. 30, 2019
Weighted Average Remaining Contractual Life (Years)
Weighted average remaining contractual life, options outstanding		3 years 4 months 9 days
Options [Member]
Options
Options outstanding, beginning balance	11,000,000
Options granted	0
Options forfeited	0
Options exercised	0
Options expired	0
Options outstanding, ending balance	11,000,000	11,000,000
Options exercisable	11,000,000	11,000,000
Weighted Average Exercise Price
Weighted average exercise price, options outstanding, beginning price	$ 0.03
Weighted average exercise price, options granted
Weighted average exercise price, options forfeited
Weighted average exercise price, options exercised
Weighted average exercise price, options expired
Weighted average exercise price, options outstanding, ending price	0.03	$ 0.03
Weighted average exercise price, options exercisable	$ 0.03
Weighted Average Remaining Contractual Life (Years)
Weighted average remaining contractual life, options outstanding	2 years 10 months 10 days
Weighted average remaining contractual life, options exercisable	2 years 10 months 10 days

4. Stockholders' Deficit (Det_2

4. Stockholders' Deficit (Details - Options by exercise price) - $ / shares	9 Months Ended	12 Months Ended
	Mar. 31, 2020	Jun. 30, 2019
Weighted average remaining life options outstanding		3 years 4 months 9 days
$0.03 Exercise Price [Member]
Weighted average remaining life options outstanding	2 years 10 months 10 days
Weighted average exercise price options outstanding	$ 0.03
Weighted average remaining life options exercisable	2 years 10 months 10 days
Options [Member]
Number of shares outstanding	11,000,000	11,000,000
Weighted average remaining life options outstanding	2 years 10 months 10 days
Weighted average exercise price options outstanding	$ 0.03	$ 0.03
Number of shares exercisable	11,000,000	11,000,000

4. Stockholders' Deficit (Det_3

4. Stockholders' Deficit (Details - Warrant activity) - $ / shares	9 Months Ended	12 Months Ended
	Mar. 31, 2020	Jun. 30, 2019
Weighted Average Remaining Contractual Life
Weighted average remaining contractual life		4 years 4 months 9 days
Warrants [Member]
Warrants
Warrants outstanding, beginning balance	79,263,176
Warrants granted	9,800,000
Warrants exercised	0
Warrants expired	(1,366,665)
Warrants outstanding, ending balance	87,696,511	79,263,176
Warrants exercisable	87,696,511
Weighted Average Exercise Price
Weighted average exercise price, warrants outstanding, beginning price	$ 0.08
Weighted average exercise price, warrants granted	0.03
Weighted average exercise price, warrants outstanding, ending price	0.03	$ 0.08
Weighted average exercise price, warrants exercisable	$ 0.07
Weighted Average Remaining Contractual Life
Weighted average remaining contractual life	4 years 1 month 2 days
Weighted average remaining contractual life, warrants exercisable	4 years 1 month 2 days

4. Stockholders' Deficit (Det_4

4. Stockholders' Deficit (Details - Assumptions)	9 Months Ended
	Mar. 31, 2020
Equity [Abstract]
Risk-free interest rate	1.72%
Expected term (years)	5 years
Expected volatility	250.00%
Expected dividend yield	0.00%

4. Stockholders' Deficit (Det_5

4. Stockholders' Deficit (Details - Warrants by exercise price) - $ / shares	9 Months Ended	12 Months Ended
	Mar. 31, 2020	Jun. 30, 2019
Weighted average remaining life warrants outstanding		4 years 4 months 9 days
$0.03-$0.08 [Member]
Number of warrant shares outstanding	68,103,184
Weighted average remaining life warrants outstanding	4 years 10 months 17 days
Number of warrant shares exercisable	68,103,184
$0.12 [Member]
Number of warrant shares outstanding	19,593,327
Weighted average remaining life warrants outstanding	4 years
Weighted average exercise price warrants outstanding	$ 0.12
Number of warrant shares exercisable	19,593,327
Weighted average exercise price warrants exercisable	$ 0.12
Warrants [Member]
Number of warrant shares outstanding	87,696,511	79,263,176
Weighted average remaining life warrants outstanding	4 years 1 month 2 days
Weighted average exercise price warrants outstanding	$ 0.03	$ 0.08
Number of warrant shares exercisable	87,696,511
Weighted average exercise price warrants exercisable	$ 0.07

4. Stockholders' Deficit (Det_6

4. Stockholders' Deficit (Details Narrative) - USD ($)	9 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Jun. 30, 2019
Fair value of warrants	$ 194,000	$ 115,000
Warrants [Member]
Warrants vested	9,800,000
Warrants granted	9,800,000
Warrant exercisable price per share	$ 0.03		$ 0.08
Warrants [Member] | Employees [Member]
Warrants granted	9,800,000
Warrant exercisable price per share	$ 0.03
Warrant expiration term	10 years
Fair value of warrants	$ 194,000
Options [Member]
Options vested	11,000,000